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Transmeta to focus on IP, evaluates processor business
Posted : 06 Jan 2005
In what portends a possible move to exit from its x86-based microprocessor products business, troubled Transmeta Corp. on Tuesday (Jan. 4) announced that it will increase its focus on the licensing of its intellectual property (IP) and advanced technologies in 2005.
Transmeta is actively engaged in discussions regarding strategic alliance opportunities for leveraging the company's microprocessor design and development capabilities to increase shareholder value. Transmeta has been working with Perseus Group LLC, a San Francisco-based investment banking firm, and other advisors, in that effort.
The company, which has lost millions of dollars since its inception, did not exactly say it would exit the microprocessor products business. But it did say that "it will complete a critical evaluation of the economics of its current business model of designing, developing and selling x86-compatible microprocessor products, including its Crusoe and Efficeon families, in January 2005."
"Transmeta has spent a decade developing world class microprocessor technology, microprocessor products and related intellectual property," stated Matthew R. Perry, president and CEO, in a statement. "By modifying our business model to focus more on our licensing opportunities, leveraging our substantial IP portfolio and our R&D capabilities, we would expect to reduce our cash needs substantially and to improve our results for our shareholders."
In 2004, Transmeta granted licenses to NEC Electronics and Fujitsu Ltd to use its proprietary LongRun2 technologies for power management and transistor leakage control. Fujitsu, along with Taiwan Semiconductor Manufacturing Co. Ltd, are also making processors on a foundry basis for Transmeta.
In October, Transmeta posted a wider loss in the third quarter and restated its results in the second period. Net revenues for the third quarter of fiscal 2004 were $7.0 million, up 17 percent from $6.0 million in the second quarter of 2004 and up 159 percent from $2.7 million in the third quarter of 2003.
GAAP net loss for the third quarter of 2004 was $27.5 million, or a loss of $0.16 per share, including $5.8 million in inventory-related charges. This compares with a GAAP net loss of $26.8 million, or a loss of $0.15 per share, in the second quarter of 2004 and a GAAP net loss of $23.7 million, or a loss of $0.17 per share, in the third quarter of 2003.
The company also announced that it expects to amend its financial statements for the second fiscal quarter of 2004 to reflect a $1.3 million adjustment relating to excess package substrate materials on hand and on order within that period and a related inventory adjustment.
Transmeta previously announced a second quarter 2004 GAAP net loss of $25.5 million, or a loss of $0.15 per share, which included inventory-related charges of $2.7 million. As a result of the expected additional adjustment of $1.3 million, the company now expects to report, for the second fiscal quarter of 2004, a GAAP net loss of $26.8 million, or a loss of $0.15 per share.
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