MIPS Technologies Reports Fourth Quarter and Fiscal 2005 Financial Results

MIPS Technologies Reports Fourth Quarter and Fiscal 2005
Financial Results
Fiscal Year Return to Profitability with Revenue Growth of 28 Percent 


MOUNTAIN VIEW, Calif., July 27  /PRNewswire-FirstCall/ -- MIPS Technologies,
Inc. (NASDAQ:MIPS), today reported financial results for its fourth quarter and
fiscal year ended June 30, 2005. Revenue for the fiscal year 2005 grew 28
percent in both royalties and contract revenue compared to fiscal year 2004.

Total revenue for the fourth quarter of fiscal 2005 was $14.3 million compared
to $14.2 million for the same quarter a year ago.  Royalties were $7.1 million,
an increase of nine percent compared to $6.5 million in the same quarter a year
ago.  Contract revenue was $7.2 million, a decrease of six percent compared to
$7.7 million in the comparable period in fiscal 2004.  Net income for the
fourth quarter of fiscal 2005 was $2.7 million compared to a net income of $2.6
million for the same quarter a year ago. Net income per share on a diluted basis
for the fourth quarter of fiscal 2005 was $0.06 compared to a net income per
share on a diluted basis of $0.06 for the same quarter a year ago.

Total revenue for fiscal year 2005 was $61.2 million, an increase of 28 percent
compared to $47.9 million in fiscal 2004. Royalties were $30.0 million, an
increase of 28 percent compared to $23.4 million in fiscal 2004. Contract
revenue was $31.2 million, an increase of 28 percent compared to $24.4 million
in 2004. Net income for fiscal 2005 was $13.4 million compared to a net loss of
$1.5 million in fiscal 2004. Fiscal 2005 net income per share on a diluted basis
was $0.30 compared to a net loss per share of $0.04 in fiscal 2004.

"We are pleased with our annual revenue growth and return to fiscal year
profitability.  With ten new licenses this quarter, bringing our total to 43
for the fiscal year, we realized 28 percent growth in our annual contract
revenue," said Casey Eichler, chief financial officer of MIPS Technologies.
"Although license fees were lower than expected this last quarter, the digital
consumer and networking markets in which the MIPS architecture is so
successful, continue to offer growth from which we expect to benefit."

"Fiscal year 2005 was marked by the strongest revenue growth in our seven year
history, despite a soft fourth quarter," said John Bourgoin, president and CEO
of MIPS Technologies.  "Our 24K core family continues to beat the competition
in the market, and our new multithreading technology has strong promise as a
winner and driver of growth in fiscal year 2006."

MIPS Technologies invites you to listen to management's discussion of Q4 and
fiscal 2005 results and guidance for Q1 fiscal 2006 in a live conference call
today beginning at 1:45 p.m. Pacific. Conference call number is 1-719-457-2642.
Replay number is 1-719-457-0820 and will be available for five days, beginning
shortly after the end of the conference call. The access code is 3917430. An
audio replay of the conference call will be posted on the Company's website
(http://www.mips.com/content/Corporate/InvestorRelations/ir) soon thereafter.

Q4 FY2005 Highlights:

From its inception over 20 years ago, the MIPS(R) architecture has represented
innovation and performance. Today, MIPS Technologies and its licensees continue
to lead in system-performance and innovative solutions for established and
emerging markets. With ten design teams actively developing the architecture,
hundreds of successful implementations throughout the world, and a vibrant
ecosystem of third-party tools and software -- MIPS continues to be at the core
of the user experience. Following are selected press release headlines from MIPS
Technologies, and the company's licensees, systems vendors and third party
providers.

  HDTV & DTV News

   *    JVC Reaffirms ATI's Digital TV Technology Leadership; High-
        Definition Displays Feature ATI's MIPS-Based(TM) Xilleon 226 and
        other Products

  Set Top Box News

   *    NEC Electronics Introduces MIPS-Based(TM) Single-Chip Secure MPEG
        Decoder for Set Top Boxes
   *    Broadcom MIPS-Based(TM) IPTV Set-Top Box Silicon Used in World's
        First Demonstration of MPEG-4 High Definition Live TV Broadcasting
        Over an ADSL2+ Network
   *    Philips Announces Single Chip Solution for Satellite Set-Top Boxes;
        Solution Contains MIPS-Based(TM) Philips PR1910 CPU
   *    Equator Introduces Sailfish Set-Top Box Reference Platform at NAB;
        Utilizes MIPS-Based Alchemy(TM) Au1550(TM) CPU
   *    Alpha Networks Unveils High-Definition VC-1 and H.264/AVC Set-top
        Box at NAB 2005 Utilizing MIPS-Based(TM) Equator Set-Top Box
        Reference Platform

  Broadband News

   *    Corecess Chooses Wintegra for Next Generation IP-DSLAM Line Card;
        Will Utilize MIPS-Based(TM) WinPath CPUs
   *    Cavium Networks Announces Customer Sampling of OCTEON(TM) Multi-core
        MIPS64(TM) Processors; Demonstrates OCTEON at SuperComm 2005

  VoIP News

   *    D2 Technologies to Provide Optimized VoIP Algorithms for New High-
        Performance MIPS32(R) 24KE(TM) Cores
   *    Z-Com Selects Texas Instruments Embedded WLAN and MIPS-Based(TM)
        Voice over IP Solutions for Next Generation USB Adapters and
        Residential Gateway Modules
   *    3Com Selects Texas Instruments' Voice over IP Technology to Power
        3Com IP Phones; MIPS-Based TNETV1050 IP Phone Chip Utilized
   *    PMC-Sierra Announces MIPS-Based(TM) Wireless-Capable Voice Over IP
        'Router On A Chip'

  Office Automation

   *    MIPS-Based(TM) TX99/H4 RISC Microprocessor from Toshiba to Power New
        Canon Multi-function Digital Copier

  SOHO and Wireless News

   *    Z-Com Selects Texas Instruments Embedded WLAN and MIPS-Based(TM)
        Voice over IP Solutions for Next Generation USB Adapters and
        Residential Gateway Modules
   *    Metalink Unveils MIPS-Based(TM) Chipset For Emerging 802.11n
        Standard Supporting Breakthrough 240Mbps Wireless LAN Speed
   *    Atheros MIPS-Based(TM) USB2.0 802.11a/g WLAN Technology Unwires
        Desktop PCs in Japan
   *    Cavium Networks Delivers Highest Performance Airgo True MIMO(TM)
        Based 802.11 Secure Wireless Gateway Reference Design Utilizing
        MIPS-Based(TM) NITROX(TM) Soho Processors
   *    Cavium Networks & Atheros Communications Introduce Combined 802.11
        a/b/g Reference Design for Wireless Broadband Gateways; Design
        Utilizes MIPS-Based(TM) NITROX(TM) Soho Processors

  Corporate News

   *    EDA Consortium Appoints MIPS Technologies CEO to Board
   *    Wintegra Enters Into Strategic Relationship With PMC-Sierra to
        Develop MIPS-Based(TM) Multi-Service Access Systems Solutions
   *    CoWare, Magma Design Automation, MIPS Technologies and Virage Logic
        to Co-Host Hands-On Tutorial Session at Design Automation Conference
   *    MIPS Technologies Names Wind River as its Premier Device Software
        Optimization Solution Provider

  Security

   *    Uniform Industrial Corporation (UIC) selected USIP(R) Professional
        platform for its new range of secure PINPADs powered by the MIPS32
        4KSd Innova Card  Solution
   *    Elliptic Semiconductor launches Digital Rights Management Security
        Products

  Newly Announced Licenses

   *    Raza Microelectronics Licenses the MIPS64(R) Architecture for Next
        Generation Processors
   *    MIPS Technologies and ITE Technology, Inc. Announce Agreement to
        License MIPS32(R) 4KE(TM) Pro Core Family

  Product News

   *    MIPS Technologies Introduces the MIPS32(R) 24KE(TM) Core Family -
        the First DSP ASE Enabled MIPS(R) Cores
   *    Accelerated Technology's Nucleus EDGE Embedded Development
        Environment Supports MIPS Architecture
   *    Accelerated Technology's Nucleus PLUS Support for MIPS32 24K Core
        Family Supports Developers of Digital Consumer Devices

  Ecosystem News

   *    Toshiba Announces Availability of Reference Board for the MIPS-
        Based(TM) TX4939XBG-400 Embedded PCI-Based Microprocessor, Its
        Newest 64-Bit RISC Processor
   *    CoWare and MIPS Technologies to Automate Application-Optimized
        Processor Creation
   *    Virage Logic Accelerates Silicon Success with Integrated Partner
        Solutions at 2005 Design Automation Conference
   *    TSMC and RMI Collaborate on 90nm Process for New Throughput-
        Optimized MIPS-Based(TM) Thread Processor Solutions
   *    Wind River VxWorks 6.1 Delivers Unprecedented Interoperability and
        Compatibility Across Software Platforms and Hardware Architectures
   *    Wind River Raises the Bar in Linux Device Software Development;
        Introduces New Products, Services and Partnerships to Speed Linux
        Adoption in the Device Software Optimization Market
   *    Wind River Transforms Consumer Device Industry; Announces
        Comprehensive Suite of Products and Service Offerings, Expanded
        Partner Ecosystem and Reference Design Systems
   *    PMC-Sierra Demonstrates Micro Multi-Service Provisioning Platform
        Capabilities with New Evaluation System; Powered by PMC-Sierra's 64-
        bit MIPS-Based(TM) CPU

  MIPS Technologies, Inc.


MIPS Technologies, Inc. is a leading provider of industry standard processor
architectures and cores for digital consumer and business applications. The
company drives the broadest architectural alliance that is delivering 32- and
64-bit embedded RISC solutions. The company licenses its intellectual property
to semiconductor companies, ASIC developers, and system OEMs. MIPS
Technologies, Inc. and its licensees offer the widest range of robust, scalable
processors in standard, custom, semi-custom and application- specific products.
MIPS Technologies, Inc. is based in Mountain View, California, and can be
reached at 650-567-5000 or http://www.mips.com/.

This press release contains forward-looking statements, including those
regarding MIPS Technologies' market growth. Actual events or results may differ
materially from those anticipated in these forward looking statements as a
result of a number of different risk and uncertainties, including but not
limited to: our products may fail to achieve market acceptance, changes in our
research and development expenses, the anticipated benefits of our partnering
relationships may be more difficult to achieve than expected, the timing of or
delays in customer orders, delays in the design process, the length of MIPS
Technologies' sales cycle, MIPS Technologies' ability to develop, introduce and
market new products and product enhancements, and the level of demand for
semiconductors and end-user products that incorporate semiconductors. For a
further discussion of risk factor affecting our business, we refer you to the
documents we file from time to time with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year ended June
30, 2004 and subsequent Forms 10-Q and 8-K.

                         MIPS TECHNOLOGIES, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)

                           Three Months Ended        Twelve Months Ended
                                June 30,                  June 30,
                          2005          2004         2005    2004

  Revenue:
   Royalties              $7,062       $6,485      $29,988      $23,439
   Contract Revenue        7,222        7,702       31,231       24,446
     Total revenue        14,284       14,187       61,219       47,885
  Costs and expenses:
   Research and
    development            5,853        5,230       21,911       23,962
   Sales and marketing     4,211        3,525       14,851       11,878
   General and
    administrative         2,552        2,459       10,029        8,486
   Restructuring              --           --          277        3,233
     Total costs and
      expenses            12,616       11,214       47,068       47,559
  Operating income         1,668        2,973       14,151          326
  Other income, net        1,217           93        2,412          591
  Income before income
   taxes                   2,885        3,066       16,563          917
  Provision for income
   taxes                     191          498        3,200        2,448
  Net income (loss)       $2,694       $2,568      $13,363     $(1,531)
  Net income (loss)
   per basic share         $0.06        $0.06        $0.32      $(0.04)
  Net income (loss)
   per diluted share       $0.06        $0.06        $0.30      $(0.04)
  Common shares
   outstanding - basic    42,121       40,634       41,501       40,434
  Common shares
   outstanding - diluted  45,003       43,562       44,465       40,434


                         MIPS TECHNOLOGIES, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)

                                                  June 30,       June 30,
                                                    2005           2004

                           Assets
   Current assets:
   Cash and cash equivalents                       $91,686        $78,335
   Short-term investments                           19,825         15,041
   Accounts receivable, net                          2,544          2,488
   Prepaid expenses and other current assets         2,813          3,159
     Total current assets                          116,868         99,023
  Equipment and furniture, net                       2,899          3,578
  Other assets                                       7,779          6,102
                                                  $127,546       $108,703
           Liabilities and Stockholders' Equity
  Current liabilities:
   Accounts payable                                 $1,346         $1,255
   Accrued liabilities                              13,604         12,344
   Deferred revenue                                  2,825          3,407
     Total current liabilities                      17,775         17,006
  Long-term liabilities                              2,938          2,038
  Stockholders' equity                             106,833         89,659
                                                  $127,546       $108,703


DATASOURCE: MIPS Technologies, Inc.



CONTACT:  investors, Bonnie Gardiner, Investor Relations,

[phone], or , or media, Kathleen Matthews, Corporate

Communications, [phone], or , both of MIPS

Technologies, Inc.



Web site:  http://www.mips.com/ 

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