NetLogic Microsystems Announces First Quarter 2010 Financial Results

• Q1 FY 2010 Net Revenues: $86.3 million
• Q1 FY 2010 GAAP Net Loss: $57.3 million; $0.99 per share (diluted)
• Q1 FY 2010 Non-GAAP Net Income: $20.1 million; $0.31 per share (diluted)

Mountain View, Calif. – April 29, 2010 – NetLogic Microsystems, Inc. (NASDAQ: NETL), a worldwide leader in high performance intelligent semiconductor solutions for next-generation Internet networks, today announced financial results for its first quarter ended March 31, 2010. 

Revenue for the first quarter of 2010 was $86.3 million, a 24.1 percent sequential increase from $69.5 million for the fourth quarter of 2009 and a 184 percent increase from $30.4 million for the first quarter of 2009.

First quarter 2010 net loss, determined in accordance with generally accepted accounting principles (GAAP), was $57.3 million or $0.99 per diluted share. By comparison, GAAP net loss was $3.9 million or $0.09 per diluted share for the first quarter of 2009.  GAAP net loss for first quarter 2010 included stock-based compensation and related payroll taxes, changes in contingent earn-out liability, amortization of intangible assets, fair value inventory adjustments, acquisition-related costs, tax effect of inventory fair value adjustments, and the establishment of deferred tax asset valuation allowance.  Excluding these items, non-GAAP net income for the first quarter of 2010 was $20.1 million or $0.31 per diluted share, compared with $0.14 per diluted share for the first quarter of 2009.

Cash and cash equivalents totaled $177.4 million as of March 31, 2010.  In March, NetLogic Microsystems raised $112.2 million in cash from issuing 4,083,626 common shares in a follow-on public offering, after paying underwriters’ commissions.   During March 2010, the Company also completed a 2-for-1 stock split of its common stock through issuance of a stock dividend.  All shares and per share amounts in this release have been retroactively adjusted to reflect the stock split for all periods presented. 
 
Management Qualitative Comments
“This is a very exciting time for us,” said Ron Jankov, president and CEO.  “We are seeing strong growth in our business as a result of the ramp of significant new designs for our advanced multi-core processors, knowledge-based processors and physical layer solutions that were won over the last several years and are now beginning to contribute to our results.  In addition, from the core to the edge of the network, exponential increases in performance and functionality requirements are driving greater adoption of our most valuable products and increasing the strategic importance of our advanced technologies and road maps with our customers.”

Recent Highlights

• NetLogic Microsystems and Taiwan Semiconductor Manufacturing Company (TSMC), announced an extension of their long-standing collaboration to include TSMC’s NEXSYS™ 28HP (28nm high performance) semiconductor process node for NetLogic Microsystems’ next-generation knowledge-based processors, multi-core processors and 10/40/100Gigabit PHY. 
• NetLogic Microsystems announced the launch of the eNsemble™ Multi-Core Alliance to drive best-in-class innovations in multi-core parallel processing platforms and software development. Supported by a broad base of industry-leading hardware and software providers, this Alliance provides a foundation upon which developers can create new, breakthrough solutions that take advantage of the superior performance and functionality of multi-core processors.
• The company also announced that ZTE Special Equipment Company (ZTESec), a subsidiary of ZTE Corporation, has selected NetLogic Microsystems' XLS® multi-core processors and 10 Gigabit Ethernet (10GbE) PHY devices for ZTESec's next-generation intelligent Layer 7 network interface cards (NICs).
• ZTE Corporation also selected NetLogic Microsystems' multi-core, multi-threaded XLR® processors and NL7000 knowledge-based processors for its next-generation mobile core network products across TD-SCDMA, CDMA2000, WiMax, WCDMA and GSM.
• Datang Mobile Communications Equipment Co., Ltd. selected NetLogic Microsystems’ multi-core, multi-threaded XLR®processors and knowledge-based processors to power Datang Mobile's advanced TD-SCDMA and LTE mobile infrastructure solutions.
• Lenovo Security Technologies has selected its market-leading XLR® and XLS® families of multi-core, multi-threaded processors for Lenovo's award-winning KingGuard Security Gateway product family.
• NetLogic Microsystems announced that its multi-core processors, knowledge-based processors and 10 Gigabit Ethernet PHY devices have been designed into high-performance LTE (Long Term Evolution) systems that are powering LTE trials worldwide. NetLogic Microsystems' market-leading products are designed into advanced LTE NodeB/base stations, cell-site routers, gateways, switches and routers that are part of LTE trials at leading carriers and service providers worldwide.
• The company announced the NL11K processor, the world's first knowledge-based processor with a high-speed serial interface, and a member of its sixth-generation knowledge-based processor family. The integration of high-speed serial interface delivers 225Gbps of raw chip-to-chip interconnect bandwidth to enable significantly richer services for LTE, IPTV and IPv6 services.

Conference Call
NetLogic Microsystems will hold its first quarter 2010 financial results conference call today at 1:30 p.m. Pacific time.  To listen to the conference call, dial (866) 543-6403 ten minutes prior to the start of the call, using the passcode 12242654. International callers, dial (617) 213-8896. A taped replay will be made available approximately two hours after the conclusion of the call and will remain available for one week. To access the replay, dial (888) 286-8010 and enter passcode 10763265. International callers dial (617) 801-6888.

The conference call will be available via a live webcast on the investor relations section of NetLogic Microsystems’ web site at http://www.netlogicmicro.com.  Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software.  An archived webcast replay will be available on the web site for three months.

About NetLogic Microsystems
NetLogic Microsystems, Inc. (NASDAQ: NETL) is a worldwide leader in high-performance intelligent semiconductor solutions that are powering next-generation Internet networks.  NetLogic Microsystems’ best-in-class products perform highly differentiated tasks of accelerating complex network traffic to significantly enhance the performance and functionality of advanced 3G/4G mobile wireless infrastructure, data center, enterprise, metro Ethernet, edge and core infrastructure networks.  NetLogic Microsystems’ market-leading product portfolio includes high-performance multi-core processors, knowledge-based processors, content processors, network search engines, ultra low-power embedded processors and high-speed 10/40/100 Gigabit Ethernet PHY solutions.  These products are designed into high-performance systems such as switches, routers, wireless base stations, security appliances, networked storage appliances, service gateways and connected media devices offered by leading original equipment manufacturers (OEMs).  NetLogic Microsystems is headquartered in Mountain View, California, and has offices and design centers throughout North America, Asia and Europe.  For more information about products offered by NetLogic Microsystems, call +1-650-961-6676 or visit the NetLogic Microsystems Web site at http://www.netlogicmicro.com.

NetLogic Microsystems, the NetLogic Microsystems logo and eNsemble are trademarks of NetLogic Microsystems, Inc.  XLR and XLS are registered trademarks of NetLogic Microsystems, Inc. All other trademarks are the properties of their respective owners.

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“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding NetLogic Microsystems’ business which are not historical facts may be “forward-looking statements” that involve risks and uncertainties. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to, customer acceptance and demand for our products, the volume of sales to our principal product customers, the timing of our receipt of customer orders during the quarter, manufacturing yields for our products, the timing of manufacture and delivery of product by our foundry suppliers, potential warranty claims and product defects, the length of our sales cycles, our average selling prices, our ability to successfully develop and sell new products, the effects of any business acquisitions that we might make, the strength of the OEM networking equipment market and the cyclical nature of that market and the semiconductor industry. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s reports on Forms 10-K and 10-Q, as well as other reports that NetLogic Microsystems files from time to time with the Securities and Exchange Commission which are available at http://www.sec.gov. All forward-looking statements are qualified in their entirety by this cautionary statement, and NetLogic Microsystems undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.