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Exhibit 99.1
{Logo]
2933 Bunker Hill Lane
Suite 201
Santa Clara CA 95054
USA
VIRATA CORPORATION REPORTS RECORD SECOND QUARTER RESULTS
Revenues up 52% to $42.2 million
EPS as adjusted up to $0.13 from $0.02 in the Prior Quarter
SANTA CLARA, CA, October 25, 2000 - Virata(R) Corporation (Nasdaq: VRTA), a
leading semiconductor supplier for broadband communications, today reported
record results for its fiscal second quarter ended October 1, 2000. Revenues
for the second quarter of fiscal 2001 were $42.2 million, an increase of 1,301
percent over net revenues for the second fiscal quarter of 2000; and an increase
of 52.4 percent over the revenues of $27.7 million for the first fiscal quarter
2001.
On an as adjusted basis, excluding acquired in-process research and development,
amortization of purchased intangible assets, stock compensation expense and
National Insurance Contribution on stock options, Virata reported adjusted net
income of $8.5 million, or $0.13 per adjusted diluted share, compared with a
$4.1 million adjusted net loss for the same quarter one year ago, or a loss of
$0.15 per adjusted basic and diluted share. The company reported a GAAP net
loss per basic and diluted share of $1.56 for the second fiscal quarter of 2001,
compared to a net loss per basic and diluted share of $0.26 for the prior
quarter and $1.14 for the same quarter one year ago.
"We are delighted to report new records in terms of as adjusted profits,
revenue, design wins and total customer base," said Charles Cotton, Chief
Executive Officer. "We continued to experience strong demand for our products,
participated in the world's major DSL deployments and captured important new
strategic customers including Acer, Hyundai and Samsung. Virata's Integrated
Software on Silicon (ISOS) is now the industry leading platform on which OEMs
are developing DSL and broadband wireless equipment."
Revenues for the six months ended October 1, 2000 were $69.9 million, an
increase of 1,131 percent over revenues of $5.7 million for the first half of
fiscal 2000. On an as adjusted basis, excluding acquired in-process research
and development, amortization of purchased intangible assets, stock compensation
expense and National Insurance Contribution on stock options, Virata reported
adjusted net income of $9.5 million, or $0.16 per adjusted diluted share, for
the six months ended October 1, 2000 compared with a $6.7 million adjusted net
loss, or a loss of $0.25 per adjusted basic and diluted share for the first half
of fiscal 2000. GAAP net loss per basic and diluted share was $1.94 for the
first half of fiscal 2001, compared to a net loss per basic and diluted share of
$1.90 for the same period one year ago.
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Recent highlights include:
. Shipped more than two million Helium chips in the quarter
. Raised $462 million in a successful follow-on offering giving the company
record balance sheet strength
. Deepened penetration of Asian markets by announcing several important new
customers including Acer, Creative Labs' Digicom, Hyundai and Samsung
. Enhanced position in Europe with Siemens announcing a multi-year contract
with Deutsche Telekom in Germany for deployment of Virata-based products
. Completed acquisitions of Excess Bandwidth and Agranat Systems and made
significant progress integrating their technologies into Virata's leading
ISOS solutions
Commenting further on trends in the business, Cotton added "Design wins were
especially strong for our Azurite chip set and integrated vCore software which
deliver voice and data solutions. Moving forward, our product and marketing
initiatives in Voice over IP position Virata for success in this important new
market."
Financial Results Detailed
The company reported a GAAP net loss of $90.3 million, or $1.56 per basic and
diluted share for the quarter. These results include a $79.9 million charge for
in-process research and development relating to the acquisition accounting for
Excess Bandwidth and Agranat Systems, $16.6 million of amortization of
intangible assets, $0.6 million of stock compensation expense and a $1.7 million
charge for National Insurance Contribution on stock options.
The National Insurance Contribution on stock options for the quarter was $1.7
million. The allocation of the expense, by function, is $0.4 million to research
and development, $0.2 million to sales and marketing, and $1.1 million to
general and administrative. The provision is calculated as the difference
between the market value of Virata stock at the close of the period and the
strike price of the option multiplied by the 12.2 percent tax rate. The
calculation is applied to stock options granted to Virata's UK employees, vested
and unvested. The $1.7 million charge is the change to the provision as a result
of the movement in Virata's stock price from July 2, 2000 to October 1, 2000.
On an as adjusted basis, excluding acquired in-process research and development,
amortization of purchased intangible assets, stock compensation expense and
National Insurance Contribution on stock options, Virata reported adjusted net
income of $8.5 million, or $0.13 per adjusted diluted share for the quarter,
compared with a $4.1 million adjusted net loss for the quarter ended October 3,
1999, or a loss of $0.15 per adjusted basic and diluted share. Adjusted net
income for the previous quarter was $1.0 million or $0.02 per adjusted diluted
share. At October 1, 2000, Virata had $527.9 million in cash and short-term
investments and working capital of $524.6 million.
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About Virata
Virata provides communications software and semiconductors to manufacturers of
DSL, wireless, and other broadband networking equipment. Virata's suite of
processor-independent software products provide developers with complete, field-
proven implementations of networking functions, including ATM, MPLS, and web
servers, removing the need to write and validate new software code.
Virata also pre-integrates its extensive suite of communications software with
its powerful and cost-effective communications processors to create "integrated
software on silicon" (ISOS) products. These ISOS solutions enable customers to
develop a diverse range of broadband wireless and wireline equipment including
DSL modems, gateways, routers, and integrated access devices targeted at the
voice and high-speed data network access and customer premises markets.
Virata's products enable equipment manufacturers to simplify product
development, reduce the time it takes for products to reach the market and focus
resources on product differentiation and improvement.
Virata is a principal member of the ATM Forum, Bluetooth SIG organization, the
DSL Forum, HomePNA, ITU, MPLS Forum, OpenDSL Alliance and UPnP Forum. A publicly
traded company on the Nasdaq Stock Market, Virata was founded in 1993 and is
headquartered in Santa Clara, California.
Forward Looking Statement
Except for historical information contained herein, this press release contains
forward-looking statements that involve risks and uncertainties. Actual results
may differ materially. Factors that might cause a difference include, but are
not limited to, those relating to general business and economic conditions,
evolving industry standards, the pace of development and market acceptance of
our products and the DSL market generally, commercialization and technological
delays or difficulties, changes in customer order patterns and risks of customer
loss, the impact of competitive products and technologies, competitive pricing
pressures, manufacturing availability and risks, dependence on third party
suppliers, the uncertainties associated with international operations, the
possibility of our products infringing patents and other intellectual property
of third parties, risks due to limited protection of our intellectual property,
product defects, costs of product development, our ability to attract and retain
employees, the company's ability to extract value from acquisitions,
manufacturing and government regulation and other risk factors listed from time
to time in the reports and other documents Virata files with the Securities and
Exchange Commission, including without limitation, the report on Form 10-Q for
the quarter ended July 2, 2000. Virata assumes no obligation to revise or update
the forward-looking statements contained in this press release to reflect events
or circumstances after the date hereof.
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VIRATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
October 1, April 2,
2000 2000
(unaudited) (audited)
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 133,579 $ 60,193
Short-term investments 394,330 18,006
Accounts receivable, net 28,092 7,524
Inventories 10,577 409
Other current assets 2,832 2,895
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Total current assets 569,410 89,027
Property and equipment, net 10,099 3,222
Intangible assets 402,820 89,113
Long-term investments 2,000 --
Other assets 1,057 --
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Total assets $ 985,386 $ 181,362
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,536 $ 4,887
Accrued liabilities 7,914 3,484
Accrued employee benefits 3,900 2,555
Accrued National Insurance Contribution on options 8,244 4,471
Deferred revenue 4,889 2,215
Capital lease obligation, current 1,325 784
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Total current liabilities 44,808 18,396
Capital lease obligation, long-term 2,097 1,178
Other long-term liabilities 209 --
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Total liabilities 47,114 19,574
Stockholders' equity:
Common stock 63 23
Additional paid-in capital 1,137,048 238,857
Accumulated other comprehensive income 791 335
Unearned stock compensation (19,799) (691)
Accumulated deficit (179,831) (76,736)
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Total stockholders' equity 938,272 161,788
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Total liabilities and stockholders' equity $ 985,386 $ 181,362
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VIRATA CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data, unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
October 1, October 3, October 1, October 3,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Revenues:
Semiconductor $ 36,158 $ 2,074 $ 57,623 $ 3,493
License 3,953 254 8,110 528
Services and royalty 1,183 435 2,151 808
Systems 913 249 2,019 848
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Total revenues 42,207 3,012 69,903 5,677
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Cost of revenues:
Semiconductor 20,644 1,130 34,736 1,941
License 462 -- 586 --
Services and royalty 741 200 927 338
Systems 459 167 917 491
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Total cost of revenues 22,306 1,497 37,166 2,770
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Gross profit 19,901 1,515 32,737 2,907
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Operating expenses:
Research and development 8,031 2,581 13,063 5,130
Selling and marketing 5,977 973 10,343 1,896
General and administrative 4,623 1,400 7,941 2,303
National Insurance Contribution on options 1,684 -- 4,204 --
Amortization of intangible assets and other 17,194 415 27,293 875
Acquired in-process research and development 79,892 -- 81,062 --
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Total operating expenses 117,401 5,369 143,906 10,204
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Loss from operations (97,500) (3,854) (111,169) (7,297)
Interest expense (148) (43) (173) (92)
Interest and other income (expense), net 7,338 (660) 8,247 (183)
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Net loss $ (90,310) $ 4,557) $103,095) $ 7,572)
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Basic and diluted net loss per share $ (1.56) $ (1.14) $ (1.94) $ (1.90)
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Weighted average common shares - basic and diluted 57,711 3,994 53,064 3,988
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Pro forma basic and diluted net loss per share (A) $ (1.56) $ (0.17) $ (1.94) $ (0.28)
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Pro forma weighted average common shares - basic and diluted (A) 57,711 27,058 53,064 27,053
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Adjusted basic net earnings (loss) per share (B) $ 0.15 $ (0.15) $ 0.18 (0.25)
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Adjusted diluted net earnings (loss) per share (B) $ 0.13 $ (0.15) $ 0.16 (0.25)
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Weighted average common shares - basic 57,711 27,058 53,064 27,053
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Weighted average common shares - diluted (C) 63,373 27,058 58,571 27,053
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</TABLE>
(A) Pro forma basic and diluted net loss per share assumes that the conversion
of the outstanding shares of convertible preferred stock into common stock
that occurred upon the closing of the initial public offering occurred as of
the beginning of the three month and the six month periods ended October 3,
1999.
(B) Adjusted net income (loss) per share excludes the National Insurance
Contribution on options, amortization of intangible assets and other, and
acquired in-process research and development charges. Total charges of
$98,770 and $415 were excluded for the three month periods ended October 1,
2000 and October 3, 1999, respectively. Total charges of $112,559 and $875
were excluded for the six month periods ended October 1, 2000 and October 3,
1999, respectively.
(C) Weighted average diluted shares include approximately 5,662 and 5,507
potential common shares issuable upon the exercise of stock options and
warrants for the three month and the six month periods ended October 1,
2000, respectively, using the treasury stock method.
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Virata is a registered trademark, and Helium and Azurite are trademark of Virata
Corporation. All other trade, product, or service names referenced in this
release may be trademarks or registered trademarks of their respective holders.
Virata PR Contacts: Kelly Karr Desiree Russell
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Director, Public Relations Manager, Public Relations
408-566-1026 919-790-7100
[email protected] [email protected]
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Virata Investor Contact: James Fraser, CFA
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Director, Investor Relations
408-566-1098
[email protected]
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Web Site: www.virata.com
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