Successful year for ARC International

ARC International has published its unaudited financial results for the six months and full year ended 31st December 2004.

ARC International has published its unaudited financial results for the six months and full year ended 31st December 2004.

For the six months ended 31st December 2004, turnover was up 9% in sterling and 20% in dollars; GBP 6.0 million ($10.9 million) up from GBP 5.5 million ($9.1 million) in 2H 2003.

Operating costs before share based award expense, exceptional items, amortisation and depreciation were GBP 8.0 million; reduced by 39% over 2H 2003 (2H 2003: GBP 13.1 million).

Pre-exceptional net loss was GBP 3.0 million: improved 72% over 2H 2003 (2H 2003: GBP 10.7 million).

Net loss for the period was GBP 1.8 million, improved 88% over 2H 2003 (2H 2003: GBP 14.9 million).

Operating cash outflow was GBP 3.2 million, reduced 60% year over year (2H 2003: GBP 8.0 million); year end cash at GBP 34.1 million The company received additional proceeds of GBP 0.5 million from the sale of its USB business, and signed 21 new processor licences, including 10 new licences for the ARC and 3153; 600 and ARC 700 cores.

For the 12 months ended 31st December 2004, turnover was up 13% in sterling and 26% in US dollars: GBP 12.2 million ($22.2 million) up from GBP 10.7 million ($17.6 million) in 2003.

Operating costs before share-based award expense, exceptional items, amortisation and depreciation were GBP 18.4 million: reduced 32% (2003: GBP 27.1 million).

Pre-exceptional net loss was GBP 7.0 million: improved 66% on prior year (2003: GBP 20.7 million).

Net loss for the period was GBP 5.1, improved 79% over 2004 (2004: 24.6 million).

Net cash outflow was GBP 3.1 million: reduced 80% (2003: GBP 15.7 million, excluding share buyback).

Commenting on the results, Carl Schlachte, President and Chief Executive Officer, said: "2004 was a successful year for ARC International, and one that marked a significant turnaround for the company".

"Record revenues were driven by strong demand for multi-use and core family licences of our configurable processors".

"We sold 15 new licences for the recently introduced ARC 600 and ARC 700 cores, and our overall base of licensees grew to 96 companies".

"During 2005, we intend to expand our global customer base and deepen partner relationships to help further increase revenues".

"Additional application-specific subsystems currently in development will strengthen our competitive advantage and grow ARC's share of design starts in high-volume consumer markets".

Commenting on the financial results, Monica Johnson, Chief Financial Officer, added: "In the second half of 2004, turnover from ongoing operations grew 62% in US dollars from the first half of 2004, as licensing revenue from our SoC product line reached an all-time high".

"Operating costs (before share based award expense, exceptional items, amortisation and deprecation) reduced 39% as our net loss narrowed to GBP 1.8 million during the second half of 2004".

"Moving forward, we will maintain cost controls while continuing to ensure ARC's competitive position within the semiconductor IP industry".

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