MIPS Technologies, Inc. Reports Fourth Quarter and Fiscal 1999 Financial Results.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--July 20, 1999--

MIPS Technologies, Inc. (NASDAQ: MIPS) today reported its fourth quarter and fiscal year ended June 30, 1999 financial results. The company is a primary architect of embedded 32- and 64-bit RISC processor intellectual property and core technology for the digital consumer, network systems, mobile and office automation markets.

Revenue for the fourth quarter of fiscal 1999 was $17.8 million, an increase of $6.8 million or 62 percent compared with the same quarter a year ago. Contract revenue increased by $6.5 million over the comparable period in 1998 due to fees generated from licensing agreements.

Income before taxes for the fourth quarter of fiscal 1999 was $7.6 million compared with $4.6 million for the same quarter a year ago. The company recorded a provision for income taxes of $3.0 million for the fourth quarter of fiscal 1999. No provision for income taxes was recorded for periods prior to the completion of the company's initial public offering in July 1998. Net income for the fourth quarter of fiscal 1999 was $4.6 million compared to $4.6 million for the same quarter a year ago. The diluted net income per share for the fourth quarter of fiscal 1999 was $0.12 compared to $0.13 for the same quarter a year ago. On a proforma basis, the tax affected net income and diluted net income per share for the fourth fiscal quarter of 1998 would have been $2.8M and $0.08, respectively.

"I am pleased with our financial performance for our first fiscal year as a public company," said Casey Eichler, chief financial officer. "The fourth quarter provided solid financial results, and we successfully completed a secondary offering of approximately $220 million of common stock."

Total revenue for fiscal year 1999 grew 26% to a record $71.7 million, when compared to revenue of $56.8 million in fiscal 1998. Contract revenue increased by $11.5 million to $12.3 million and accounted for 17% of total revenue for fiscal 1999 compared to 1% in fiscal 1998. Net income for fiscal 1999 was $22.7 million compared to $376,000 for fiscal 1998. Diluted net income per share was $0.58 for fiscal 1999 compared to $0.01 for fiscal 1998.

"MIPS Technologies has now completed its first fiscal year as a public company with another strong quarter," said John Bourgoin, CEO. "I am particularly pleased at the strength of our licensing activity during the fourth quarter and with the fact that our overall execution continues to be solid. During the quarter, we brought into the MIPS community industry leaders with ATI Technologies and Chartered Semiconductor and two respected design teams with Alchemy and SiByte. Our cash position has more than tripled to nearly $50 million since our IPO. In addition, the number of shares publicly traded for MIPS Technologies more than doubled during the quarter as a result of the successful secondary stock offering.

Additional Q4 1999 Highlights

- MIPS Technologies gains four new licensees. Alchemy and SiByte who will focus on low power system-on-a-chip designs; ATI Technologies who will focus on set-top box applications; and Chartered Semiconductor manufacturing who is the first dedicated foundry to obtain a 32-bit MIPS(R) RISC architecture.

- The MIPS(R) architecture is the number one choice for Windows(R) CE. At the recent Windows CE Developers Conference, 70 percent of the Windows CE products were MIPS-based(TM).

- The second generation of the ATI Set-top Wonder features a 250 MHz MIPS-based(TM) processor and ATI 3D graphics.

- Hewlett-Packard's MIPS-based(TM) HP LaserJet 4050 printer series is the world's best-selling network printer.

- Sony's home entertainment robot makes a splash with MIPS-based(TM) processing power and artificial intelligence. The pet-like system that looks like a metalic canine, called Aibo, sold out in Japan the first day it hit the market.

- IBM enters the Windows CE fray with the new MIPS-based(TM) IBM Workpad z50, a mobile PC companion designed to give users easy access to email, the Internet and other network-based information while out of the office.

- NEC addresses the broadband access market with a MIPS-based(TM) solution.

- Electronics For Imaging is using a 64-bit MIPS-based(TM) processor to add Fiery imaging technology to Canon imageCLASS C2100 printer/copier.

- MIPS Technologies introduced the MIPS32(TM) and MIPS64(TM) architectures that add powerful new features, simplify development of operating systems and development tools and support the growing need for IP re-use and integration.

- MIPS Technologies sets a new performance benchmark with the introduction of the first, MIPS32(TM) 4Kc(TM) and the MIPS32(TM) 4Kp(TM) synthesizable processor cores, that are compatible with the MIPS32(TM) architecture.

- Philips Semiconductors moves to volume production of the integrated MIPS-based(TM) MPEG2 transport processor.

- A 32-bit MIPS(R) RISC processor powers the set-top box solution from LSI Logic.

- A new system controller from Galileo simplifies the task of designing a high performance 64-bit MIPS-based system. The first implementation of this system is a controller driving an advanced fingerprint authentication system.

- IDT raises MIPS-based(TM) 64-bit RISC microprocessor speeds to 300 MHz.

- WebTV updates MIPS-based(TM) set-top boxes.

- Toshiba introduced a MIPS-based(TM) RISC MPU that is 170% faster than the prior generation.

- Accelerated Technology and Metrowerks announced optimum kernal support of CodeWarrior for the MIPS(R) architecture.

- General Instruments and Microsoft demonstrate their MIPS-based(TM) Microsoft TV.

- Insignia joins MIPS Technologies' Windows CE Development Alliance. The Jeode platform, Insignia's implementation of Sun's Java(TM) specifications, is ideally suited for MIPS-based(TM) Windows CE devices, including palm-sized and handheld PCs.

About MIPS Technologies, Inc.

MIPS Technologies, Inc. licenses its intellectual property to semiconductor manufacturing companies, ASIC developers, and system OEMs. MIPS Technologies, Inc. and its licensees offer a wide range of robust, scalable processors in standard, custom, semi-custom and application-specific products. Developers can choose from a broad menu of price/performance options that include execution units, clock speeds, instruction widths (16-, 32- or 64-bit), cache sizes, memory bandwidths, memory protection schemes, system interfaces, and on-chip system logic.

Licensees currently include: Alchemy (Cadence); ATI Technologies, Inc.; Broadcom Corporation; Chartered Semiconductor Manufacturing; CommQuest (IBM); Integrated Device Technology, Inc. (IDT); LSI Logic Corporation; Macronix; NEC Corporation; NKK Corporation; Philips Semiconductors; Quantum Effect Design, Inc. (QED); SiByte, Inc.; Sony Corporation; Synova; Texas Instruments Incorporated, and Toshiba Corporation. Numerous companies utilize MIPS intellectual property. 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 may contain forward-looking statements regarding future events or the future financial performance of MIPS Technologies, Inc. Actual events or results may differ materially. Many important factors could cause the actual results to differ materially from those contained in such forward-looking statements, including but not limited to the risks that products will fail to achieve market acceptance, the timing of 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, the timing of new product announcements and introductions by MIPS Technologies and its licensees and their competitors, the demand for semiconductors and end-user products that incorporate semiconductors, general economic conditions particularly in the markets of Asia, including Japan where a large portion of the Company's revenues are derived, and other risks. With respect to MIPS Technologies, Inc. we refer you to the documents that it files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended June 30, 1998; Form 10-Q for the quarter ended September 30, 1998, December 31, 1998 and March 31, 1999; and Form 8-K filed on March 1, 1999.

Note to Editors: MIPS is a registered trademark and MIPS-based is a trademark of MIPS Technologies, Inc. All other trademarks are the property of their respective companies. All press materials are available on the World Wide Web via: http://www.mips.com/. -0-

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

                             Three Months Ended       Years Ended
                                 June 30,               June 30,
                               1999       1998      1999      1998
                                 (unaudited)

Revenue:
Royalties                   $ 11,258   $ 10,990   $ 59,385   $ 55,980
Contract revenue               6,525          3     12,325        830
Total revenue                 17,783     10,993     71,710     56,810
Costs and expenses:
Cost of contract revenue        --         --          125        375
Research and development       6,026      3,873     21,069     43,446
Sales and marketing            2,539      1,123      7,359      5,307
General and administrative     2,329      1,404      7,002      4,685
Restructuring charges           --         --         --        2,614
Total costs and expenses      10,894      6,400     35,555     56,427

Operating income               6,889      4,593     36,155        383
Interest income (expense), net   711          6      1,614         (7)
Income before income taxes     7,600      4,599     37,769        376
Provision for income taxes     3,040       --       15,108       --
Net income                  $  4,560   $  4,599   $ 22,661   $    376

Net income per basic share  $   0.12   $   0.13   $   0.61   $   0.01
Net income per diluted
 share                      $   0.12   $   0.13   $   0.58   $   0.01
Common shares outstanding-
 basic                        37,307     36,000     37,258     36,000
Common shares outstanding-
 diluted                      39,296     36,132     38,762     36,033


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

                                                         June 30,
                                                     1999       1998
                                Assets

Current assets:
Cash and cash equivalents                           $49,916   $    45
Accounts receivable                                     425       250
Prepaid expenses and other current assets             2,989       618
Total current assets                                 53,330       913
Equipment and furniture, net                          5,123     2,787
Other assets                                            936       996
                                                    $59,389   $ 4,696


            Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
Accounts payable                                    $10,028   $ 3,087
Accrued liabilities                                   8,265     2,356
Total current liabilities                            18,293     5,443
Deferred revenue, less current portion                  375      --
Stockholders' equity (deficit)                       40,721      (747)
                                                    $59,389   $ 4,696