SAN JOSE, Calif. -- Lately, Virage Logic Corp. has made big headlines.
Virage (Fremont, Calif.) has recently made two major acquisitions. And not long ago, the company was a mere memory and physical semiconductor IP house. Now, it has expanded into other new and growing fronts.
But the real question is clear: When will the IP house become profitable again? The company has posted a net loss for seven consecutive quarters. Its last profitable quarter was the second fiscal quarter of 2008.
Clearly, it's tough to make money in the semiconductor IP business. And the recent recession did not help matters.
So, has Virage reversed its fortunes? Finally. Wall Street predicts the company will show a profit of $0.05 a share on sales of $23.78 million for its second fiscal quarter.
In fact, the company itself is raising its second fiscal quarter revenue guidance to a range of $24.8-to-$25.0 million, compared to its previously announced estimates of $23.5-to-$24.0 million.
During the second quarter, the company expects to realize, before tax and any extraordinary charges, approximately $3.7-to-$4.1 million in non-GAAP adjustments, comprised primarily of stock-compensation, amortization and acquisition-related expenses.
"Rapid integration of our recent acquisitions, coupled with tight spending controls and a significant increase in royalty revenues, have contributed to improving both our top and bottom lines faster than we had forecasted," said J. Daniel McCranie, executive chairman of Virage Logic, in a statement.
"In addition, with a large shippable backlog and strong bookings performance in the second quarter, we expect to post total revenue for the third fiscal quarter of this year in a range of $26.0-to-$27.0 million,'' he said.
Total revenue for the first quarter of fiscal 2010 was $21.7 million, compared with $11.3 million for the first quarter of fiscal 2009 and $13.1 million for the fourth quarter of fiscal 2009. Net loss was $2.2 million, or minus $0.09 per share for the first quarter of fiscal 2010 compared to a net loss for the first quarter of fiscal 2009 of $2.6 million, or minus $0.11 per share, and net loss of $3.2 million or minus $0.14 per share for the fourth quarter of fiscal 2009.
Virage has also been on a buying spree. In 2008, Virage acquired Impinj Inc.'s logic non-volatile memory (NVM) IP business for $5.2 million. In 2007, Virage acquired Ingot Systems Inc., a provider of IP and design services to the semiconductor industry.
In August, Virage acquired ARC, with the all-cash transaction valuing the company at about $41 million on a fully-diluted basis.
Last year, Dutch chip company NXP BV (Eindhoven, The Netherlands) agreed to transfer part of its advanced CMOS intellectual property (IP) rights, 160 staff and certain engineering equipment to Virage. In a complex deal NXP is set to receive 2.5 million Virage Logic shares but must pay Virage $60 million for design services it expects to receive from Virage.