|
The Irish semiconductor designer said that in the second quarter of 2002, revenue amounted to USD10.8 million, up 6 percent year-on-year and up 1 percent over Q1 2002. Net losses in the quarter ending 30 June hit USD2.3 million, down 31 percent over last year, equating to a net loss per ordinary share of USD0.004 or USD0.039 per ADS. Per-share losses came in meeting analysts' expectations.
Importantly, the company said it had returned to profitability on a pro forma basis in the quarter with profits of USD66,000, compared to a pro forma loss of USD3.33 million a year ago and USD2.43 million sequentially. This return to pro forma profitability comes one quarter ahead of forecasts, president Kevin Fielding noted in a conference call.
Looking forward, Parthus said semiconductor industry visibility remains "challenging" but added "there appears to have been a stabilisation in market conditions in the first half of 2002." The firm declined to give specific figures for upcoming quarters, saying only that its short-term outlook reflects recent figures from the Semiconductor Industry Association, which revised forecasts downwards for 2002 overall, predicting flat growth for the second half of the year.
In a set of numbers closely watched by analysts, the firm said that IP licensing and royalty revenue, which now accounts for 91 percent of sales, was USD9.8 million in Q2, up 37 percent year-on-year and 10 percent higher sequentially. Parthus chief executive officer Brian Long pointed to royalty revenues specifically as an area where the company saw tremendous growth, up 193 percent over this time in 2001, reaching USD770,000.
Strong royalty revenues led to higher gross margins as well, which came in at 80 percent in the second quarter, up from 76 percent in Q1 2002 and from 70 percent last year. "The sequential increase is a result of the growth in royalty revenue in the quarter, which carries an effective gross margin of 100 percent," Parthus said.
The only two major segments of the company's revenue stream that fell were IP creation and hard IP revenue. IP creation dropped to only USD596,000 in the second quarter, down 69 percent year-on-year, reflecting "the challenge of maintaining jointly funded R&D activity in the current environment."
Other important figures in Parthus' results included a dramatic decline in operating costs, which fell USD2.3 million or 20 percent over the first three months of the year. Research and development investment decreased USD1.8 million, or 24 percent sequentially, as the firm reduced investment in 2.5G/3G development through the agreement with UbiNetics. Sales and marketing expenses decreased 7 percent sequentially, and general and administration expenses declined by 12 percent.
Discussing its pending merger with Ceva, the DSP cores licensing subsidiary of DSP Group, Fielding said, "The schedule for completing the merger [in Q3] is on schedule." The newly combined firm, to be called ParthusCeva, will create a combined company which Parthus believes will have leadership in the market for Digital Signal Processing (DSP) cores and platform-level IP -- the core technologies used in handheld communication devices.
The most recent development with regard to the merger was on 15 July, when the IRS in the US ruled that the contribution of the DSP cores licensing business of DSPG to Ceva and the distribution of the shares of Ceva to the stockholders of DSPG will be treated as a tax-free transaction for US income tax purposes. This ruling satisfies the final pre-condition of the proposed combination of Parthus with Ceva.
|
