MOSAID Announces Second Quarter Results for Fiscal 2008 and Dividend



    Quarterly dividend of $0.25 per share payable on January 21, 2008

    OTTAWA, Nov. 27 /CNW Telbec/ - MOSAID Technologies Incorporated (TSX:MSD)
today announced financial results for the second quarter of fiscal 2008, ended
October 31, 2007.

    
    - Q2 revenues within guidance: $11.5 million
    - Q2 pro forma income at top end of guidance: $3.8 million or $0.34 per
      diluted share
    - Maintaining fiscal 2008 full year guidance for revenue and pro forma
      income

    "I am pleased that MOSAID delivered solid financial results for the second
quarter, meeting revenue guidance and delivering the top end of the range on
pro forma income guidance, despite challenges posed by the rapid appreciation
of the Canadian dollar," said John Lindgren, President and Chief Executive
Officer, MOSAID. "Moving into the second half of fiscal 2008, we are on plan
and confident in achieving our guidance targets for the full year. We are
making good progress in our wireless/wireline and semiconductor licensing
programs, as we are in various stages of communication and negotiations with
more than 50 companies."
    Revenues for the second quarter of fiscal 2008 were $11.5 million,
compared to $14.8 million in the second quarter of fiscal 2007. Revenues in
the second quarter a year ago were higher primarily as a result of a double
payment by one licensee and a higher foreign exchange rate.
    Pro forma income was $3.8 million or $0.34 per diluted share in the second
quarter of fiscal 2008, compared to $6.2 million or $0.55 per diluted share in
the same period a year ago. Pro forma income for the second quarter of fiscal
2008 was less than the same period in the prior year primarily due to reduced
revenue. Slightly higher operating expenses and reduced net interest income in
Q2 fiscal 2008, as compared to the same period in the prior year, also
contributed to the reduced pro forma income result. A reconciliation of pro
forma income to Canadian generally accepted accounting principles (GAAP) net
income is included in the notes to the financial statements accompanying this
press release.
    GAAP net income for the second quarter of fiscal 2008 was $4.7 million or
$0.43 per diluted share, as compared to net income of $4.7 million or $0.42
per diluted share reported in the same quarter last year. For the second
quarter of fiscal 2008, GAAP net income significantly exceeded the Company's
guidance of $900,000 primarily due to downward revaluation of U.S. dollar
denominated liabilities, resulting in a foreign exchange gain.
    MOSAID's balance of cash and marketable securities at the end of the
second quarter of fiscal 2008 was $56.8 million, compared to $62.5 million at
the end of the first quarter of fiscal 2008. During the second quarter, the
Company expended $4.5 million of cash to repurchase and cancel 224,000 shares
under the normal course issuer bid announced on September 10, 2007, and
returned $2.8 million to shareholders in quarterly dividend payments. It is
the intention of the Board of Directors to continue the Company's previously
announced normal course issuer bid.
    Today the Company also announced that it is in active discussions with
respect to the potential sale of its Ottawa head office campus, on terms that
would allow the Company to remain as a tenant in part of the premises. MOSAID
hopes to complete a transaction on these terms, and in the price range of
$10.0 million to $12.0 million, before the end of fiscal 2008.
    On November 27, 2007, MOSAID Technologies declared a quarterly dividend of
$0.25 per share. The dividend, which is an eligible dividend, is payable on
January 21, 2008 to shareholders of record as of January 2, 2008.

    Guidance

    Management offers the following guidance for the third quarter of fiscal
2008:

    - Q3 revenues of $11.5 million to $12.5 million
    - Q3 pro forma income of $3.5 million to $4.5 million, or $0.31 to $0.40
      per diluted share

    MOSAID is maintaining its guidance for fiscal 2008:

    - Fiscal 2008 revenues in the range of $55 million
    - Fiscal 2008 pro forma income of $20.0 million to $22.0 million, or
      $1.77 to $1.95 per diluted share

    -------------------------------------------------------------------------
    Conference Call and Webcast
    Management will hold a conference call and analyst webcast on Tuesday,
    November 27, 2007 at 5:00 p.m. EDT. Analysts may access the conference
    call by dialing 1-800-732-9382. The webcast will be live at
    www.mosaid.com and available on MOSAID's web site for 90 days following
    the event.
    -------------------------------------------------------------------------

    About MOSAID

    MOSAID Technologies Inc. is one of the world's leading intellectual
property companies. MOSAID develops semiconductor memory technology and
licenses patented intellectual property in the areas of semiconductors, and
wired and wireless communications systems. MOSAID counts many of the world's
largest semiconductor companies among its customers. Founded in 1975, MOSAID
is based in Ottawa, Ontario. For more information, visit www.mosaid.com.

    Forward Looking Information

    This document and certain other public documents incorporated by reference
in this document, contain forward-looking statements to the extent they relate
to MOSAID or its management, including those identified by the expressions
"anticipate," "believe," "foresee," "estimate," "expect," "intend," "could,"
"may," "plan," "will," "would" and similar expressions. Similarly, statements
in this document that describe MOSAID's business strategy, outlook,
objectives, plans, intentions or goals also are forward-looking statements.
These forward-looking statements are not historical facts, but rather reflect
MOSAID's current expectations regarding future events. These forward-looking
statements are subject to a number of risks and uncertainties that could cause
actual results, performance or achievements to differ materially from those in
such forward-looking statements. Assumptions made in preparing forward-looking
statements and financial guidance include, but are not limited to, the
following: MOSAID's continued expansion of its patent portfolio and of its
opportunities for future patent licensing revenue as a result of MOSAID's
acquisition of patents from third parties and from development of new
inventions; DRAM manufacturers continuing to infringe MOSAID's patents; the
timing and amount of MOSAID's litigation expenses; MOSAID's ability to sign
new patent licensees; current assumptions as to the identification of products
that are unlicensed to MOSAID's wireless patents; and the timing and amount of
MOSAID's Research & Development expenses.
    Factors that could cause actual results to differ materially from expected
results include, but are not limited to, the following: the extent of embedded
DRAM proliferation in the System-on-a-Chip markets; legal rulings and/or
regulatory investigations or complaints having an adverse impact on the
validity, enforceability, potential royalty rates, and strength or breadth of
coverage of MOSAID's essential and/or nonessential patents (including, but not
limited to, adverse results from litigation or proceedings in patent offices
and government regulatory agencies in various countries around the world);
judicial, legislative or regulatory changes that impair the ability of patent
holders to earn licensing revenues; economic, social, and political conditions
in the countries in which MOSAID or patent licensees operate, including
security risks, health conditions, possible disruptions in transportation
networks and fluctuations in foreign currency exchange rates; non-payment or
delays in payment by licensees; variability in patent licensees' sales of
licensed products, failure to maintain and enforce MOSAID's existing patent
portfolio, or failure to obtain valuable patents as a result of research and
development activities, or failure to acquire valuable patents from third
parties; MOSAID's ability to recruit and retain skilled personnel; change in
MOSAID's financial position; consolidation of MOSAID's licensees; natural
events, such as severe weather and earthquakes in the locations in which
MOSAID or patent licensees operate; and changes in the tax rate applicable to
MOSAID as the result of changes in the tax law in the jurisdictions in which
profits are determined to be earned and taxed, the outcome of tax audits and
the ability to realize deferred tax assets.
    MOSAID assumes no obligation to update or revise any forward-looking
statements. Additional information identifying risks and uncertainties
affecting MOSAID's business and other factors that could cause MOSAID's
financial results to fluctuate are contained in MOSAID's Annual Information
Form, under the section entitled "Risk Factors," and in MOSAID's other public
filings available online at www.sedar.com.


                   FINANCIAL STATEMENTS AND NOTES TO FOLLOW


    MOSAID TECHNOLOGIES INCORPORATED
    (Subject to the Canada Business Corporations Act)
    CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
    (In thousands of Canadian dollars, except per share amounts)
    (Unaudited)

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Revenues              $ 11,526      $ 14,838      $ 24,121      $ 33,947

    Operating expenses
      Patent portfolio
       management            1,356         1,025         2,318         1,916
      Patent licensing
       and litigation        2,711         2,204         5,149         3,707
      Research and
       development             599           255         1,091           515
      General and
       administration          945         1,679         2,158         3,483
      Foreign exchange
       expense (gain)          487          (227)          675           (93)
      Special committee        101         1,124           112         1,124
    -------------------------------------------------------------------------
                             6,199         6,060        11,503        10,652
    -------------------------------------------------------------------------

    Pro forma income
     from operations         5,327         8,778        12,618        23,295
    Net interest income        565           674           963         1,260
    -------------------------------------------------------------------------
    Pro forma income
     before income tax       5,892         9,452        13,581        24,555
    Income tax expense       2,096         3,297         4,875         8,565
    -------------------------------------------------------------------------
    Pro forma income
     (Note 6)             $  3,796      $  6,155      $  8,706      $ 15,990
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Pro forma earnings
     per share
      Basic               $   0.34      $   0.56      $   0.78      $   1.43
      Diluted             $   0.34      $   0.55      $   0.76      $   1.41


    Weighted average
     number of shares
      Basic             11,125,423    11,053,768    11,118,138    11,174,697
      Diluted           11,125,423    11,240,281    11,489,775    11,380,477

    See accompanying Notes to the Consolidated Financial Statements


    MOSAID TECHNOLOGIES INCORPORATED
    CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
    (In thousands of Canadian dollars, except per share amounts)
    (Unaudited)

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Revenues              $ 11,526      $ 14,838      $ 24,121      $ 33,947

    Operating expenses
      Patent portfolio
       management            1,356         1,025         2,318         1,916
      Patent licensing
       and litigation        2,711         2,204         5,149         3,707
      Research and
       development             599           255         1,091           515
      General and
       administration          945         1,679         2,158         3,483
      Foreign exchange
       (gain)               (4,253)         (227)       (5,743)          (93)
      Restructuring              -             -            19             -
      Special committee        101         1,124           112         1,124
      Stock-based
       compensation            137           169           235           318
      Patent
       amortization and
       imputed interest      3,436           418         6,836           557
    -------------------------------------------------------------------------
                             5,032         6,647        12,175        11,527
    -------------------------------------------------------------------------

    Income from
     operations              6,494         8,191        11,946        22,420
    Net interest income
     (Note 3)                  565           674           963         1,260
    -------------------------------------------------------------------------
    Income before income
     tax expense and
     discontinued
     operations              7,059         8,865        12,909        23,680
    Income tax expense       2,561         3,039         4,676         9,376
    -------------------------------------------------------------------------
    Income before
     discontinued
     operations              4,498         5,826         8,233        14,304
    Discontinued
     operations income
     (loss)(net of tax)
     (Note 5)                  236        (1,111)        6,036        (2,932)
    -------------------------------------------------------------------------
    Net income               4,734         4,715        14,269        11,372
    Dividends                2,779         2,766         5,558         5,597
    Normal course
     issuer bid              2,418         5,399         2,418         6,582
    Retained earnings,
     beginning of
     period                 23,657        12,519        16,901         9,876
    -------------------------------------------------------------------------
    Retained earnings,
     end of period        $ 23,194      $  9,069      $ 23,194      $  9,069
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share
     (Note 4)
      Basic - before
       discontinued
       operations         $   0.40      $   0.53      $   0.74      $   1.28
      Diluted - before
       discontinued
       operations         $   0.40      $   0.52      $   0.72      $   1.26

      Basic - net
       earnings           $   0.43      $   0.43      $   1.28      $   1.02
      Diluted - net
       earnings           $   0.43      $   0.42      $   1.24      $   1.00

    Weighted average
     number of shares
      Basic             11,125,423    11,053,768    11,118,138    11,174,697
      Diluted           11,125,423    11,240,281    11,489,775    11,380,477

    See accompanying Notes to the Consolidated Financial Statements


    MOSAID TECHNOLOGIES INCORPORATED
    CONSOLIDATED BALANCE SHEETS
    (In thousands of Canadian dollars)

                                                         As at         As at
                                                    October 31,     April 30,
                                                          2007          2007
    -------------------------------------------------------------------------
                                                    (unaudited)     (audited)

    Current Assets
      Cash and cash equivalents                       $ 19,050      $ 23,396
      Marketable securities                             37,728        26,876
      Accounts receivable                                7,457        12,626
      Prepaid expenses                                     620           618
      Future income taxes recoverable                   10,278        10,278
      Other asset                                        1,215             -
    -------------------------------------------------------------------------
                                                        76,348        73,794

    Capital assets                                       1,093         1,067
    Acquired intangibles                                74,838        76,823
    Long-term receivable                                 1,734         1,734
    Goodwill                                                 -         1,786
    Long-term assets held for sale                       5,284         7,028
    Future income taxes recoverable                     21,201        24,468
    -------------------------------------------------------------------------
                                                      $180,498      $186,700
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Current Liabilities
      Accounts payable and
       accrued liabilities                            $  6,966      $ 16,091
      Deferred revenue                                     896           542
      Mortgage payable                                   4,216         4,346
      Current portion of other
       long-term liabilities                             6,230         5,239
    -------------------------------------------------------------------------
                                                        18,308        26,218
    Other long-term liabilities                         32,518        38,313
    -------------------------------------------------------------------------

                                                        50,826        64,531
    -------------------------------------------------------------------------

    Shareholders' Equity (Note 2)
      Share capital                                    102,119       102,276
      Contributed surplus                                3,144         2,992
      Retained earnings                                 23,194        16,901
      Accumulated other comprehensive income             1,215             -
    -------------------------------------------------------------------------
                                                       129,672       122,169
    -------------------------------------------------------------------------

                                                      $180,498      $186,700
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to the Consolidated Financial Statements


    MOSAID TECHNOLOGIES INCORPORATED
    CONSOLIDATED STATEMENT OF CASH FLOWS
    (In thousands of Canadian dollars)
    (Unaudited)

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Operating
      Income before
       discontinued
       operations         $  4,498      $  5,826      $  8,233      $ 14,304
      Items not
       affecting cash
        Amortization         2,431           507         4,750           726
        Stock option
         expense               137           343           235           679
        Future income
         tax recoverable     1,366           995         3,267         4,641
    -------------------------------------------------------------------------
                             8,432         7,671        16,485        20,350
    Change in non-cash
     working capital
     items from
     continuing
     operations             (1,823)       (1,184)       (6,018)       (7,112)
    -------------------------------------------------------------------------
                             6,609         6,487        10,467        13,238
    -------------------------------------------------------------------------

    Investing
      Acquisition of
       capital assets
       and acquired
       intangibles              (3)          (16)       (2,667)      (13,550)
      Acquisition of
       short-term
       marketable
       securities          (34,506)      (12,081)      (81,407)      (46,150)
      Proceeds on
       disposal/maturity
       of short-term
       marketable
       securities           34,108        22,885        70,555        62,749
    -------------------------------------------------------------------------
                              (401)       10,788       (13,519)        3,049
    -------------------------------------------------------------------------

    Financing
      Repayment of
       mortgage                (65)          (61)         (130)         (120)
      Long-term
       liabilities          (4,491)        2,667        (4,804)       12,233
      Repurchase of
       shares               (4,501)       (8,084)       (4,501)       (9,997)
      Dividends             (2,779)       (2,766)       (5,558)       (5,597)
      Issue of
       common shares           176           327         1,926           791
    -------------------------------------------------------------------------
                           (11,660)       (7,917)      (13,067)       (2,690)
    -------------------------------------------------------------------------

    Net cash (outflow)
     inflow from
     continuing
     operations             (5,452)        9,358       (16,119)       13,597
    Net cash inflow
     (outflow) from
     discontinued
     operations               (662)          (19)       11,773        (1,120)
    -------------------------------------------------------------------------
    Net cash (outflow)
     inflow                 (6,114)        9,339        (4,346)       12,477
    Cash and cash
     equivalents,
     beginning of
     period                 25,164        18,680        23,396        15,542
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end
     of period            $ 19,050      $ 28,019      $ 19,050      $ 28,019
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to the Consolidated Financial Statements


    MOSAID TECHNOLOGIES INCORPORATED
    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
    (In thousands of Canadian dollars)
    (Unaudited)

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Net income            $  4,734      $  4,715      $ 14,269      $ 11,372

    Other Comprehensive
     Income, net of tax:
    Gains and losses on
     derivatives
     designated as cash
     flow hedges               871             -         1,657             -
    Gains and losses on
     derivatives
     designated as cash
     flow hedges in
     prior periods
     transferred to net
     income in the
     current period           (276)            -          (442)            -
    -------------------------------------------------------------------------
      Change in gains
       and losses on
       derivatives as
       cash flow hedges        595             -         1,215             -
    -------------------------------------------------------------------------

    Comprehensive
     income               $  5,329      $  4,715      $ 15,484      $ 11,372
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to the Consolidated Financial Statements


    MOSAID TECHNOLOGIES INCORPORATED
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    Quarter ended October 31, 2007
    (tabular dollar amounts in thousands of Canadian Dollars,
    except per share amounts)

    1.  Basis of Presentation

    The accompanying unaudited financial statements have been prepared in
accordance with Canadian generally accounting principles (GAAP) for interim
financial information. Accordingly, they do not include all of the information
and notes required by GAAP for annual financial statements.
    In the opinion of management, all adjustments consisting of normal
recurring adjustments, considered necessary for a fair presentation of the
Company's financial position, results of operations and cash flows have been
included. Operating results for the interim period presented are not
necessarily indicative of the results to be expected for any subsequent
quarter or for the full fiscal year ending April 30, 2008.
    The accounting policies used in preparing these interim financial
statements are consistent with those used in preparing the annual financial
statements, except as follows:

    Comprehensive Income
    --------------------

    The CICA issued section 1530 of the CICA Handbook, Comprehensive Income.
The section is effective for fiscal years beginning on or after October 1,
2006. It describes how to report and disclose comprehensive income and its
components.
    Comprehensive income is the change in a company's net assets that results
from transactions, events and circumstances from sources other than the
company's shareholders. It includes items that would not normally be included
in net earnings, such as:

    - Changes in the currency translation adjustment relating to
      self-sustaining foreign operations; and
    - Unrealized gains or losses on available-for-sale investments.

    The CICA also made changes to section 3250 of the CICA Handbook, Surplus,
and reissued it as section 3251, Equity. The section is also effective for
fiscal years beginning on or after October 1, 2006. The changes in how to
report and disclose equity and changes in equity are consistent with the new
requirements of section 1530, Comprehensive Income.

    Financial Instruments - Recognition and Measurement
    ---------------------------------------------------

    The CICA issued section 3855 of the CICA Handbook, Financial Instruments -
Recognition and Measurement. The section is effective for fiscal years
beginning on or after October 1, 2006. It describes the standards for
recognizing and measuring financial assets, financial liabilities and
non-financial derivatives. This section requires that:

    - All financial assets be measured at fair value, with some exceptions
      such as loans and investments that are classified as held to maturity;
    - All financial liabilities be measured at fair value if they are
      derivatives or classified as held for trading purposes. Other financial
      liabilities are measured at their carrying value; and
    - All derivative financial instruments be measured at fair value, even
      when they are part of a hedging relationship.

    The CICA has also reissued section 3860 of the CICA Handbook as section
3861, Financial Instruments - Disclosure and Presentation, which establishes
standards for presentation of financial instruments and non-financial
derivatives, and identifies the information that should be disclosed about
them. These revisions come into effect for fiscal years beginning on or after
October 1, 2006.

    Hedges
    ------

    The CICA issued section 3865 of the CICA Handbook, Hedges. The section is
effective for fiscal years beginning on or after October 1, 2006, and
describes when and how hedge accounting can be used.
    Hedging is an activity used by a company to change an exposure to one or
more risks by creating an offset between:

    - Changes in the fair value of a hedged item and a hedging item;
    - Changes in the cash flows attributable to a hedged item and a hedging
      item; or
    - Changes resulting from a risk exposure relating to a hedged item and a
      hedging item.

    Hedge accounting makes sure that all gains, losses, revenues and expenses
from the derivative and the item it hedges are recorded in the statement of
operations in the same period.
    As a result of adopting the above, the Company has:

    - Recorded its foreign exchange risk management derivatives at fair value
      as at the reporting date on the balance sheet as "Other assets;"
    - Recorded the effective portion of its derivatives on the balance sheet
      in "Accumulated other comprehensive income;"
    - Classified all of its cash equivalents and marketable securities as
      "Held-for-trading" and recorded those securities at their fair value as
      at the reporting date, with changes in fair value being recognized in
      income immediately;
    - Classified its long-term liabilities as "Other liabilities," which are
      recorded at amortized cost using the effective interest method; and
    - Reported comprehensive income and its components and accumulated other
      comprehensive income and its components in the Notes to the
      consolidated financial statements.

    As a result of adoption of the above policies, there was no material
impact on the Statement of Operations.


    2. Shareholders' equity

    The following are the changes in shareholders' equity for the six months
ended October 31, 2007:

    -------------------------------------------------------------------------
                                                            Accumu-
                                                             lated
                                                             other
                                        Contri-             compre-
                    Common    Common     buted  Retained   hensive
                    shares    shares   surplus  earnings    income     Total
                   (number)       ($)       ($)       ($)       ($)       ($)
    -------------------------------------------------------------------------
    Balance at
     April 30,
     2007       11,055,376  $102,276  $  2,992  $ 16,901  $      -  $122,169
    -------------------------------------------------------------------------
    Net income           -         -         -    14,269         -    14,269
    -------------------------------------------------------------------------
    Dividends            -         -         -    (5,558)        -    (5,558)
    -------------------------------------------------------------------------
    Employee
     Stock
     Option
     Program       147,558     1,893         -         -         -     1,893
    -------------------------------------------------------------------------
    Employee
     Share
     Purchase
     Program         2,910        33         -         -         -        33
    -------------------------------------------------------------------------
    Stock-based
     compensation        -         -       152         -         -       152
    -------------------------------------------------------------------------
    Normal course
     issuer bid   (224,000)   (2,083)        -    (2,418)        -    (4,501)
    -------------------------------------------------------------------------
    Unrealized
     derivative
     gains on
     cash flow
     hedges -
     net                 -         -         -         -     1,215     1,215
    -------------------------------------------------------------------------
    Balance at
     October
     31, 2007   10,981,844  $102,119  $  3,144  $ 23,194  $  1,215  $129,672
    -------------------------------------------------------------------------


    3. Net Interest Income

    Net interest income comprises the following:

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
                      -------------------------------------------------------

    Interest income       $    651      $    765      $  1,136      $  1,443
    Interest expense            86            91           173           183
                      -------------------------------------------------------
                          $    565      $    674      $    963      $  1,260
                      -------------------------------------------------------


    4. Earnings per Share

    The following is a reconciliation of the numerator and denominator of the
basic and diluted per share computations:

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
                      -------------------------------------------------------

    Income before
     discontinued
     operations           $  4,498      $  5,826      $  8,233      $ 14,304
    Discontinued
     operations
     (net of tax)              236        (1,111)        6,036        (2,932)
                      -------------------------------------------------------
    Net income            $  4,734      $  4,715      $ 14,269      $ 11,372
                      -------------------------------------------------------

    Weighted average
     number of
     common shares
     outstanding        11,125,423    11,053,768    11,118,138    11,174,697
    Net effect of
     stock options               -       186,513       371,637       205,780
                      -------------------------------------------------------
    Weighted average
     diluted number
     of common shares
     outstanding        11,125,423    11,240,281    11,489,775    11,380,477
                      -------------------------------------------------------

    Earnings per share
      Basic - before
       discontinued
       operations         $   0.40      $   0.53      $   0.74      $   1.28
      Diluted -
       before
       discontinued
       operations         $   0.40      $   0.52      $   0.72      $   1.26

      Basic - net
       income             $   0.43      $   0.43      $   1.28      $   1.02
      Diluted -
       net income         $   0.43      $   0.42      $   1.24      $   1.00


    For the quarter ended October 31, 2007 and October 31, 2006, 289,456 and
15,000 options respectively were excluded from the calculation of diluted
earnings per share as the exercise price of these options exceeded the average
market price of the Company's common stock during this period and were
therefore anti-dilutive.
    For the six months ended October 31, 2007 and October 31, 2006, 17,000 and
15,000 options respectively were excluded from the calculation of diluted
earnings per share as the exercise price of these options exceeded the average
market price of the Company's common stock during this period and were
therefore anti-dilutive.
    There were 503,369 and 647,948 options issued and outstanding as at
October 31, 2007 and October 31, 2006 respectively.


    5.   Discontinued operations

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
                      -------------------------------------------------------

    Revenues              $    (42)     $  4,753      $    340      $  8,626

    Expenses
      Labour and
       materials                 -         1,171             -         2,393
      Research and
       development             (46)        3,529         1,400         7,023
      Selling and
       marketing                (2)        1,628         1,006         3,330
      Bad debts                  -             -             -            88
      Restructuring             12             -           166             -
                      -------------------------------------------------------
                               (36)        6,328         2,572        12,834
                      -------------------------------------------------------

    Loss from operations        (6)       (1,575)       (2,232)       (4,208)
    (Loss) gain on sale
     of assets                  (9)            -         9,295             -
                      -------------------------------------------------------
    (Loss) earnings
     before tax                (15)       (1,575)        7,063        (4,208)
    Income tax
     (recovery) expense       (251)         (464)        1,027        (1,276)
                      -------------------------------------------------------
    Discontinued
     operations
     (net of tax)         $    236      $ (1,111)     $  6,036      $ (2,932)
                      -------------------------------------------------------


    6. Reconciliation of pro forma income with GAAP net income

                                   Quarter Ended            Six Months Ended
                                      October 31,                 October 31,
                              2007          2006          2007          2006
                      -------------------------------------------------------

    GAAP net income       $  4,734      $  4,715      $ 14,269      $ 11,372
    Add (deduct):
      Stock-based
       compensation            137           169           235           318
      Patent
       amortization
       and imputed
       interest              3,436           418         6,836           557
      Restructuring              -             -            19             -
      Discontinued
       operations
       (net of tax)           (236)        1,111        (6,036)        2,932
      Foreign
       exchange gain        (4,740)            -        (6,418)            -
      Income tax
       expense - for
       the above items         465          (258)         (199)          811
                      -------------------------------------------------------
    Pro forma income      $  3,796      $  6,155      $  8,706      $ 15,990
                      -------------------------------------------------------


    7.  Stock-based Compensation

    The Company has an employee stock purchase plan program whereby employees
may elect to designate up to 5% of their annual salary to purchase shares of
the Company at a 10% discount from the fair market value. The purchase price
is deducted over a six month period via payroll.
    Also, the Company has an Employee and Director Stock Option Plan. The
exercise price is no lower than the market price on the date of grant. Options
granted under the Plan expire within a period of six years of granting, with
vesting periods determined by the Compensation Committee.
    The Company employs a fair value method of accounting for all options
issued to employees or directors on or after April 27, 2002. The fair value of
options issued in the quarter was calculated using the Black-Scholes option
pricing model and the following assumptions:

                                                    Quarter Ended October 31,
                                                          2007          2006
                                                 ----------------------------
    Risk free interest rate                               4.25%         3.95%
    Expected life in years                                 5.5           5.5
    Expected dividend yield                               4.95%          3.7%
    Volatility                                           58.37%        59.57%

    For the quarter ended October 31, 2007, the Company issued 88,299 deferred
share units in lieu of options to directors and officers of the Company under
its Deferred Share Unit Plan. Those deferred share units vest evenly over a
four year period. Deferred share units do not have an exercise price and can
only be settled using cash consideration.


    8.  Business Segment Information

    The Company operates in one business segment as a developer and licensor
of semiconductor and communications technologies.
    
    %SEDAR: 00002240E




For further information:

For further information: Investor and Media Inquiries: Michael Salter,
Director, Investor Relations and Corporate Communications, (613) 599-9539
x1205, salter@mosaid.com

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MOSAID TECHNOLOGIES INCORPORATED

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