MathStar Announces Third Quarter 2007 Financial Results

HILLSBORO, Ore., Nov. 7 /PRNewswire-FirstCall/ -- MathStar, Inc. (Nasdaq: MATH), a fabless semiconductor company specializing in high-performance programmable logic, today announced results for its third quarter of 2007, ended Sept. 30, 2007 . Revenues in the third quarter were $63,000, compared with $28,000 in the same period last year. During the three months ending Sept. 30, 2007 , the company completed and invoiced the first phase of a multiple element arrangement for $78,000. The amount was not recognized as revenue during the quarter as not all of the criteria for revenue recognition were met. The company will recognize the full value of the arrangement, totaling $156,000, upon completion of the remaining elements, which is expected to occur in the fourth quarter.

Net loss per share was $0.10 in the third quarter of 2007, compared with a loss of $0.39 per share in the same quarter a year ago.

"We are starting to see the revenue ramp on our Arrix(TM) FPOA products," said Doug Pihl , president and chief executive officer. "We believe that 2008 will be the year we prove to the programmable logic market that a new player has arrived," he said.

For the quarter ended Sept. 30, 2007 , research and development expenses decreased $1.6 million or 38 percent to $2.7 million, from $4.3 million reported in the same quarter a year ago. The decrease was a result of reductions in engineering material of $1.3 million due to the tapeout of the Arrix chip last year, combined with lower outside development costs and lower administrative costs. The decrease was partially offset by the increase in employee related expenses.

Selling, general and administrative expenses decreased $0.4 million or 16 percent to $2.2 million, compared with $2.5 million in the same quarter a year ago. The decrease was a result of lower non-cash charges related to restricted stock issued in earlier periods offset by increased employee recurring charges.

The company will present a full business update during a conference call today, Wednesday, Nov. 7 , at 1:30 p.m. PST . To listen to the call, please dial 303-262-2050 or 800-257-6607 (toll free). A replay of the call will be available on the company's website at http://www.mathstar.com.

About MathStar, Inc.

MathStar is a fabless semiconductor company offering best-in-class, high performance programmable logic solutions. MathStar's Field Programmable Object Array (FPOA) can process arithmetic and logic operations at clock rates at 1 gigahertz, which is up to four times faster than even the most advanced FPGA architectures in many applications. MathStar's Arrix family of FPOAs are high-performance programmable solutions that enable customers in the machine vision, high-performance video, medical imaging, security and surveillance and military markets to rapidly and cost effectively innovate and differentiate their products. FPOAs are available now and are supported by development tools, IP libraries, application notes and technical documentation. For more information, please visit www.mathstar.com.

Statements in this press release, other than historical information, may be "forward-looking" in nature within the meaning of Section 21E the Private Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and assumptions. These statements are based on management's current expectations, estimates and projections about MathStar and its industry and include, but are not limited to, those set forth in the section of MathStar's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2007 under the heading "Risk Factors." MathStar undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

MathStar, Inc. Condensed Balance Sheet (Unaudited) (in thousands) December 31, September 30, 2006 2007 Assets Current assets Cash and cash equivalents $12,891 $14,283 Restricted cash 103 106 Investment Securities - short term 14,250 Accounts receivable 14 144 Inventory 610 702 Prepaid expenses and other current assets 1,231 796 Total current assets 14,849 30,281 Property and equipment, net 487 430 Investment Securities - long term - 5,431 Other assets 278 454 Total assets $15,614 $36,596 Liabilities and Stockholders' Equity Current liabilities Accounts payable $1,791 $410 Deferred revenue - 162 Accrued expenses 1,206 1,216 Total liabilities 2,997 1,788 Commitments and contingencies Stockholders' equity Preferred stock, $0.01 par value; 10,000 shares authorized; no shares issued and outstanding - - Common stock, $0.01 par value; 90,000 shares authorized; 20,922 and 45,907 shares issued and outstanding at December 31, 2006 and September 30, 2007, respectively 209 459 Additional paid-in capital 118,545 154,881 Accumulated deficit (106,137) (120,532) Total stockholders' equity 12,617 34,808 Total liabilities and stockholders' equity $15,614 $36,596 MathStar, Inc. Condensed Statements of Operations (Unaudited) (in thousands except for per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2006 2007 2006 2007 Revenue $28 $63 $46 $275 Cost of goods sold 21 58 27 181 Gross margin 7 5 19 94 Operating expenses: Research and development 4,267 2,655 10,293 8,387 Selling, general and administrative 2,581 2,164 7,132 6,733 6,848 4,819 17,425 15,120 Operating loss (6,841) (4,814) (17,406) (15,026) Interest income 112 426 462 652 Other income /(loss), net -- (5) -- (21) Net loss $(6,729) $(4,393) $(16,944) $(14,395) Basic and diluted net loss per share $(0.39) $(0.10) $(0.99) $(0.47) Weighted average basic and diluted shares outstanding 17,259 45,907 17,112 30,405

SOURCE MathStar, Inc.

Copyright © 2007 PR Newswire Association LLC. All Rights Reserved.