32% growth in year-on-year dollar revenues. Strong bookings drive order backlog approximately 30% higher at the end of 2004 compared to the end of 2003
CAMBRIDGE, UK, 26 January 2005 - ARM Holdings plc [(LSE: ARM); (Nasdaq: ARMHY)] announces its unaudited financial results for the fourth quarter and twelve months ended 31 December 2004
HIGHLIGHTS (Figures in US GAAP)
Fourth quarter ended 31 December 2004
Note: The acquisition of Artisan Components, Inc. was completed on 23 December 2004. The Q4 profit and loss account reported below does not include any material trading results in respect of Artisan. However, the balance sheet at 31 December 2004 does reflect the acquisition of Artisan. References to the order backlog at 31 December 2004 relate to legacy ARM business only. Comparisons in this statement to Q3 2004, Q4 2003 and full year 2003 results are also to ARM legacy business only.
Twelve months ended 31 December 2004
* Dollar revenues are based on the group’s actual dollar invoicing, where applicable, and using the rate of exchange applicable on the date of the transaction for invoicing in currencies other than dollars. Approximately 90% of invoicing is in dollars.
** The actual average dollar exchange rates were $1.87 in Q4 2004 (compared to the effective average rate for ARM of $1.80), $1.82 in Q3 2004 and $1.64 in full year 2003
*** Net cash generation is the movement in cash, cash equivalents, short-term investments and long-term marketable securities as per the balance sheets at the beginning and end of the relevant periods
**** Each American Depositary Share (ADS) represents three shares
Commenting on the fourth quarter and full year results, Sir Robin Saxby, Chairman, said:
"We are delighted that a year of strong operational performance for ARM was concluded with the completion of our merger with Artisan. I would like to thank the management and employees of both companies who worked tirelessly to make the merger happen. The combination of ARM® microprocessor IP with the physical IP provided by Artisan accelerates ARM’s momentum towards becoming the architecture for the digital age. We also are pleased that the ARM Board has been strengthened by the appointment of 4 new directors; their knowledge and experience will be invaluable assets."
Warren East, Chief Executive Officer, added:
"32% year-on-year growth in dollar revenues in 2004 and the positive trend in our order backlog indicate that the ARM stand-alone business is in robust shape. We look forward to 2005 with confidence as we start to realise the benefits arising from the merger with Artisan at the end of last year. Against a likely flatter trading environment in our industry, we expect dollar revenues in the underlying businesses to grow by at least 20% in 2005."
Tim Score, Chief Financial Officer, added:
"Again in Q4, revenue growth and careful cost control have combined to yield strong cash generation from ARM’s business. We were also particularly encouraged by the strong sequential improvement in licensing revenues, demonstrating that ARM continues to develop a broad range of new technologies which bring real benefit to the ARM Connected Community and end customers."
Market conditions, current trading and prospects
After strong year-on-year growth for the semiconductor industry in 2004, current expectations for 2005 are that there will be little or no growth over 2004. Despite this likely flatter trading environment, we expect 2005 to be a year of growth in dollar revenues for the company.
Both the former ARM and Artisan stand-alone businesses enter 2005 with healthy order backlogs and sales pipelines which underpin licensing revenues this year. In addition, both companies continue to enjoy good momentum in royalty revenues based on the increasing adoption of ARM and Artisan technology by semiconductor and OEM companies in recent years. The healthy order backlog and sales pipeline and strong momentum in royalty revenues gives confidence that dollar revenues in both underlying businesses are capable of growing by at least 20% in 2005.
The group remains exposed to any further weakening in the US dollar against sterling given that more than 90% of total group revenues are earned in US dollars. Following the acquisition of Artisan, approximately 45% of the group’s cost base will be incurred in US dollars, compared to approximately 25% for ARM prior to the acquisition of Artisan.
Licensing and product development
Taking into account the 19 licenses for microprocessor cores that were signed in Q4 2004, a total of 65 licenses were signed in 2004 (compared to 51 licenses in 2003), comprising 31 multi-use licenses and 34 per-use licenses. Of the 65 licenses signed in 2004, 15 were for products in the ARM11™ family, 31 were for products in the ARM9™ family, 15 were for products in the ARM7 family, 3 were for next-generation ARM processors and one was an architecture license. 15 companies became new ARM partners in the year, bringing the total number of semiconductor partners at the end of 2004 to 140. Of the 15 new partners signed in 2004, 2 took multi-use licenses and 13 took per-use licenses.
Licensing activity in 2004 demonstrates both the breadth of ARM’s technology offer as well as the longevity of the products. For example, our partners have now been licensing products in the ARM7 family for more than 11 years, including an incremental 13 ARM7 family licenses in 2004. We expect that licensing of ARM7 family products will continue for some time, demonstrating the relevance of having leading-edge technology at all performance points in the embedded microprocessor space.
Licensing of products in the ARM11 family continues to gather momentum with a further 15 licenses being signed in 2004, making a total of 25 licenses signed to date. As ARM11 products move into the mainstream licensing phase, it is encouraging that licensing of the next generation of ARM technology has commenced in 2004. We have now signed 3 lead partners for our "Tiger" product. Other new technologies planned for delivery in 2005 are now available for licensing. Further details of these products will be disclosed later in 2005.
The strong licensing performance has driven a further increase in the order backlog in the quarter, resulting in backlog at the end of Q4 being up some 15% sequentially and being approximately 30% higher than at the end of 2003.
Revenues from licensing of products other than microprocessors comprised 18% of total license revenues in 2004, compared to 17% in 2003.
Following the acquisition of Adelante Technologies N.V., now ARM Belgium, in 2003, we formally announced the launch of our OptimoDE™ embedded signal processing technology in May 2004. This new technology, having undergone a series of rigorous benchmarking evaluations by our partners and potential partners, is now beginning to generate license revenues. In November 2004, we announced that Thomson had licensed our OptimoDE Data Engine for the development of broadcast video processing integrated circuits (ICs) and in January 2005, we announced that LG Electronics had licensed the OptimoDE solution for use in its video encoding and decoding product lines, with the first LG product scheduled to benefit from the technology being an H.264 based high-definition digital television. ARM has introduced this disruptive technology to address the processing requirements of very data-intensive applications across all end markets, which are often outstripping the capabilities of general-purpose digital signal processors (DSPs). The OptimoDE product, which comprises a configurable data engine (signal processor) together with related IP and tools, will be deployed in systems alongside existing ARM microprocessor cores and other ARM technology, including the electronic system level (ESL) design tools from Axys, acquired in August 2004.
The acquisition of Axys, a provider of fast, accurate, integrated, processor and system modelling and simulation solutions, brings ESL expertise to our RealView® design tools portfolio. Axys’ ESL products reduce overall system costs by allowing designs to be modelled early in the development cycle, decreasing time-to-market and minimising design errors.
In the second quarter 2004 we established an embedded software group within ARM to capitalise on the opportunities we see to generate revenues from software. This team will drive growth in embedded software revenue, building on the strong foundation of the existing Jazelle® acceleration technology, Intelligent Energy Manager (IEM) technology, TrustZone™ security software and Swerve (co-developed with Superscape Group plc) technologies and bring more focus to the development of enabling software technology to support further growth of microprocessor and physical IP licensing, development systems and data engines revenues.
Royalty revenues and unit shipments
Royalty revenues have grown strongly in 2004. Royalty revenues earned in 2004 were £59.6 million on 1,272 million units shipped compared to £44.3 million on 782 million units shipped in 2003. Dollar royalty revenues earned in 2004 were $107.1 million, up 50% on 2003 compared to the increase in year-on-year unit shipments of 63%. Over the last 3 years average royalty rates per unit have been 8.4 cents in 2004, 9.1 cents in 2003 and 8.3 cents in 2002, indicating that whilst average royalty rates may move up or down in the short term, they have tended to remain stable over a longer period.
Royalty revenues recognised in the quarter ended 31 December 2004 (we receive and report royalty data one quarter in arrears) were $29.4 million on 367 million units shipped, up 37% and 56%, respectively, on the same period a year ago. The average royalty rate per unit reported in the fourth quarter was 8.0 cents compared to 8.4 cents per unit in the third quarter. The sequential reduction in average royalty rate is due to several of our partners shipping higher volumes of more mature ARM7 and ARM9 family-based product in the third quarter. Of the total unit shipments reported in the fourth quarter, 24% related to units based on ARM9 family technology. As products based on the older ARM9 family technologies have only been shipping for a relatively short period, a number of our partners are moving through volume-related price breaks that is having an impact on the weighted average royalty rate. Unit shipments based on the ARM926EJ-S™ microprocessor accounted for approximately 3% of total shipments in the quarter. The proportion of ARM926EJ-S processor-based devices is expected to increase over the next several quarters.
In 2004, the proportion of total unit shipments accounted for by the wireless segment was 68%, representing 868 million units. The 32% relating to the aggregate shipments in all sectors other than wireless represents 405 million units in 2004, more than triple the 119 million units shipped in 2002, demonstrating the increasing penetration of ARM technology in the full range of digital products. In 2004 unit shipments have grown strongly across all segments with particularly strong growth in the microcontroller, storage and consumer segments.
Acquisition of Artisan Components, Inc.
The acquisition of Artisan was completed on 23 December 2004. The combination of ARM and Artisan’s complementary product portfolios, sales channels and customer bases allows the combined company to provide one of the broadest offerings of system-on-chip (SoC) IP to their expanded customer base. The combination of ARM and Artisan’s complementary and innovative business models is expected to generate revenue benefits, some cost savings from the consolidation of selected corporate functions, an attractive margin structure and strong cash flow generation.
From a technology standpoint, the combined company will seek to leverage Artisan’s expertise in designing physical IP components, essential building blocks of ICs, with ARM’s complementary expertise in designing microprocessors. As a result, alongside the physical IP available for use with third party microprocessors, the combined company will be able to develop IP components that are highly optimised for use in and with ARM microprocessor cores. The opportunities for tighter integration and finer tuning of the IP components with the microprocessor cores has the potential to produce substantial benefits for end users, such as reduced power consumption and increased processor speed.
The integration of the two businesses is proceeding as planned. The former Artisan business now forms the Physical IP division of ARM, with one unified worldwide sales force being responsible for selling the full range of products offered by the combined company. ARM’s office in Los Gatos, California will close in March 2005, with employees relocating to Artisan’s Sunnyvale facility, the new headquarters for ARM in the US.
Good momentum was maintained in the Artisan business during the fourth quarter with total bookings being consistent with the levels achieved in recent quarters. In anticipation of the acquisition of the company by ARM, Artisan elected to carry forward as much backlog as possible into 2005. Total revenues in the quarter were $15 million, comprising license revenues of $7 million and royalty revenues of $8 million. A significant proportion of engineering effort in the quarter was directed towards research and development projects and technical marketing activity, rather than converting order backlog into revenue. As a result of the good bookings in the quarter and the decision not to convert backlog into revenue, the backlog at 31 December is well ahead of the prior quarter.
Mark Templeton and Lucio Lanza joined the Board on completion of the acquisition of Artisan on 23 December 2004. Mark Templeton, the former Chief Executive Officer of Artisan, has become the General Manager of ARM’s Physical IP division and an executive director of ARM Holdings plc. Lucio Lanza, the former Chairman of Artisan, is serving as a non-executive director.
On 4 January 2005, ARM announced the appointments of Simon Segars as an executive director and Philip Rowley as an independent non-executive director.
Simon Segars joined ARM's engineering team in 1991. He has worked on many ARM CPU products and has held a number of engineering management positions. In January 2002 he was appointed Executive Vice President, Engineering and in January 2004 became Executive Vice President, Worldwide Sales.
Philip Rowley is President and CEO of AOL Europe, the interactive services, web brands, internet technologies and e-commerce provider. He is a qualified chartered accountant and was Group Finance Director of Kingfisher plc from August 1998 to March 2001. Prior to that his roles have included Executive Vice President and Chief Financial Officer of EMI Music Worldwide.
These appointments recognise the valuable contribution that Simon is already making to the direction of the business and Philip’s broad industry experience which will further strengthen the non-executive team.
ARM had 1,171 full time employees at the end of 2004 including 347 employees who joined the group as part of the Artisan acquisition. At the year-end, the group had 546 employees based in the UK, 454 in the US, 79 in Continental Europe, 51 in India and 41 in the Asia Pacific region.
In May 2002, Nazomi Communications, Inc. filed suit against ARM alleging willful infringement of Nazomi’s US Patent No. 6,332,215. ARM answered Nazomi’s complaint in July 2002 denying infringement. ARM moved for summary judgement and a ruling that the accused technology does not infringe. In September 2003, the United States District Court of Northern California granted ARM’s motion, holding that the accused technology does not infringe Nazomi’s patent. Nazomi appealed the District Court’s ruling. On 7 September 2004, the Court of Appeals for the Federal Circuit heard the appeal and the decision of the Court is expected in the first half of 2005. Based on legal advice received to date, ARM has no cause to believe that the effect of the original ruling by the District Court will not be upheld.
(US GAAP unless otherwise stated)
Fourth quarter ended 31 December 2004
Total revenues for the fourth quarter ended 31 December 2004 amounted to £41.5 million, representing a 5% increase from £39.4 million in the third quarter of 2004 and a 22% increase over fourth quarter 2003 revenues of £34.0 million. In US dollar terms*, fourth quarter revenues of $74.7 million were 7% up on Q3 2004 and 31% up on Q4 2003. The effective US dollar to sterling exchange rate for ARM in Q4 2004 was $1.80 compared to $1.78 in Q3 2004 and $1.68 in Q4 2003.
License revenues amounted to £16.2 million representing 39% of revenues compared to £14.6 million or 37% of revenues in the third quarter of 2004 and £12.9 million or 38% of revenues in Q4 2003. In US dollar terms*, license revenues of $28.8 million in Q4 2004 were 13% ahead of the $25.6 million reported in Q3 2004.
Nineteen licenses for microprocessor cores were signed in the fourth quarter of 2004. Four new partners took a total of five per use licenses; four to the ARM926EJ-S processor and one license to the ARM922T™ processor.
Nine existing partners took licenses to a further 14 cores, comprising 3 derivatives from the ARM7 family, 5 derivatives and 1 upgrade to the ARM9 family, 3 upgrades to the ARM11 family and 2 upgrades to next-generation ARM cores.
Royalty revenues in the fourth quarter were £16.3 million accounting for 39% of revenues compared to £16.0 million or 40% of revenues in the third quarter of 2004 and £12.8 million or 38% of revenues in Q4 2003.
Development Systems and Service revenues
Sales of development systems were £5.6 million, representing 14% of total revenues compared to £5.3 million or 14% of total revenues in the third quarter of 2004 and £4.0 million or 12% of revenues in the fourth quarter of 2003. In US dollar terms, development systems revenues were $10.4 million this quarter compared to $9.7 million in Q3. Service revenues were £3.4 million, representing 8% of total revenues, comprising consulting fees of £0.2 million and support, maintenance and training fees of £3.2 million compared to total service revenues of £3.5 million in the third quarter of 2004 and £4.3 million for the corresponding period in 2003.
Gross margins for the fourth quarter were 91.0%, compared to 92.8% in Q3 2004 and 90.6% in Q4 2003. The decrease from Q3 reflects the increased proportion of license revenues in the fourth quarter earned from our strategic relationship with Imagination Technologies for licensing of 3D graphics technology.
Total operating expenses in the quarter were £34.4 million compared to £25.2 million in the third quarter of 2004 and £29.6 million in Q4 2003. Operating expenses in Q4 2004 include total non-recurring and acquisition-related charges of £8.2 million, being £3.3 million for the write-off of in-process research and development costs on the acquisitions of Artisan and Axys, £0.4 million related to the amortisation of intangible assets arising on acquisitions and £4.5 million in respect of a technology license agreement (see below). Excluding non-recurring and acquisition-related charges, total operating expenses in the quarter were £26.2 million.
In November 2004, ARM entered into a technology license agreement whereby ARM will pay $13.3 million in four equal, semi-annual installments over the next two years. The first installment of $3.3 million was paid in Q4 2004. For accounting purposes, the agreement is deemed to comprise a retrospective element amounting to $8.6 million (£4.5 million), which has been charged to the profit and loss account as a non-recurring charge in Q4 2004, and a prospective element amounting to $4.7 million (£2.4 million), which has been accounted for as a prepayment at 31 December 2004.
Research and development expenses were £13.0 million in the fourth quarter of 2004, representing 31% of revenues. This compares to £13.0 million or 33% of revenues in Q3 2004. Sales and marketing costs for the fourth quarter were £6.3 million or 15% of revenues compared to £6.0 million or 15% of revenues in the third quarter of 2004. General and administration expenses in Q4 2004 were £11.3 million, including a non-recurring charge of £4.5 million in respect of a technology licensing agreement. Excluding this non-recurring charge, general and administration expenses in the quarter were £6.8 million or 16% of revenues compared to £6.2 million or 16% of revenues, in the third quarter of 2004.
The operating margin in Q4 was 8.2% compared to 3.5% in Q4 2003. The operating margin, excluding non-recurring and acquisition-related charges of £8.2 million, was 28.0%(6.1) compared to 30.0%(6.2) in Q3 2004, before acquisition-related charges of £0.4 million, and 22.4%(6.3), before non-recurring and acquisition-related charges of £6.4 million, in Q4 2003.
Interest receivable in the fourth quarter was £1.9 million, the same level as in Q3, with the benefit of higher average cash balances being offset by the impact of monies being invested for shorter periods in anticipation of the payment of the cash consideration for the acquisition of Artisan at the end of the quarter.
Earnings and taxation
Income before income tax for the fourth quarter of 2004 was £5.3 million compared to £2.5 million in Q4 2003. Income before income tax, excluding non-recurring and acquisition-related charges of £8.2 million, was £13.5 million or 33% of revenues compared to £13.7 million, excluding £0.4 million of acquisition-related charges, or 35% of revenues in the third quarter of 2004, and £8.9 million, before non-recurring and acquisition-related charges of £6.4 million, or 26% of revenues in Q4 2003.
Fourth quarter fully diluted earnings per share prepared under US GAAP were 0.4 pence (2.4 cents per ADS****) compared to a loss per share of 0.04 pence (loss of 0.2 cents per ADS****) in Q4 2003. Earnings per fully diluted share in Q4 2004, before non-recurring and acquisition-related charges of £8.2 million, were 1.2 pence(6.6) (6.8 cents per ADS****) (Q3 2004: 1.0 pence(6.7) and 5.2 cents) compared to 0.6 pence(6.8) (3.1 cents per ADS****), before non-recurring and acquisition-related charges of £6.4 million, in Q4 2003
Net cash generation*** in the quarter, before cash costs of £126.2 million related to the acquisition of Artisan, was £10.1 million(6.5). The consolidated cash, cash equivalents, short-term investments and long-term marketable securities balance was £142.8 million(6.4) at 31 December 2004. Further fees and expenses related to the acquisition of Artisan of approximately £14 million are expected to be paid subsequent to 31 December 2004 giving an adjusted opening cash, cash equivalents, short-term investments and long-term marketable securities balance of the enlarged group of £128.8 million (equivalent to $247 million at year end exchange rates) at the start of 2005.
Twelve months ended 31 December 2004
Total revenues for the twelve months ended 31 December 2004 amounted to £152.9 million, an increase of 19% over total revenues of £128.1 million in the twelve months ended 31 December 2003. The actual average dollar exchange rate in 2004 was $1.83 (with an effective average exchange rate for ARM of $1.78) compared to $1.64 in 2003. This has had the effect of reducing total reported revenues by approximately £13.2 million.
Licensing revenues in 2004 were £59.4 million, being 39% of total revenues, compared to £50.8 million or 40% of total revenues in 2003. Royalty revenues in 2004 were £59.7 million, representing 39% of total revenues, compared to £44.3 million or 34% of total revenues in 2003. Sales of development systems in 2004 were £19.7 million, being 13% of total revenues, compared to £17.9 million or 14% of total revenues in 2003. Service revenues, which include consulting services and revenues from support, maintenance and training, were £14.2 million in 2004, representing 9% of total revenues, compared to £15.1 million or 12% of total revenues in 2003.
Gross margins for the twelve months to 31 December 2004 were 92.3% compared to 91.4% in 2003.
Total operating expenses in the twelve months to 31 December 2004 were £109.6 million compared to £99.8 million in 2003. Operating expenses in 2004 include total non-recurring and acquisition-related charges of £8.7 million, being £3.6 million for the write-off of in-process research and development costs on the acquisitions of Artisan and Axys, £0.6 million related to the amortisation of intangible assets arising on acquisitions and £4.5 million in respect of a technology license agreement. Excluding non-recurring and acquisition-related charges, total operating expenses in 2004 were £100.9 million.
Research and development expenses were £50.1 million in 2004, representing 33% of revenues. This compares to £48.1 million or 38% of revenues in 2003. Sales and marketing costs in 2004 were £23.9 million or 16% of revenues compared to £23.0 million or 18% of revenues in 2003. General and administration expenses in 2004 were £31.3 million, including a non-recurring charge of £4.5 million in respect of a technology licensing agreement. Excluding this non-recurring charge, general and administration expenses in 2004 were £26.8 million or 18% of revenues compared to £22.3 million or 17% of revenues, before a non-recurring charge of £6.4 million, in 2003.
The operating margin in 2004 was 20.6% compared to 13.5% in 2003. The operating margin in 2004, excluding non-recurring and acquisition-related charges of £8.7 million, was 26.3%(6.11) compared to 18.5%(6.12), before non-recurring and acquisition-related charges of £6.4 million, in 2003.
Interest receivable was £6.9 million for the twelve months to 31 December 2004 compared to £4.8 million in 2003, reflecting the benefit of higher average cash balances and higher interest rates in 2004.
Earnings and taxation
Income before income tax in 2004 was £38.5 million compared to £22.0 million in 2003. Income before income tax in 2004, excluding non-recurring and acquisition-related charges of £8.7 million, was £47.2 million or 31% of revenues compared to £28.4 million, before non-recurring and acquisition-related charges of £6.4 million, or 22% of revenues in 2003.
The group’s taxation rate under US GAAP in 2004 was 27.2% compared to 40.7% in 2003. The reduction is due primarily to the lower level of disallowable items and increased availability of research and development tax credits in the UK in 2004 compared to 2003. The group’s taxation rate under UK GAAP in 2004 is 24.1%, reduced from 34.3% in 2003. The difference in the group’s tax rate under US and UK GAAP arises primarily from tax deductions arising on the exercise of employee share options being included in the tax charge under UK GAAP but being recorded as an increase in shareholders’ funds under US GAAP.
Fully diluted earnings per share prepared under US GAAP in 2004 were 2.7 pence (15.4 cents per ADS****) compared to 1.3 pence (6.8 cents per ADS****) in 2003. Earnings per fully diluted share in 2004, before non-recurring and acquisition-related charges of £8.7 million, were 3.5 pence(6.9) (20.1 cents per ADS****) compared to 1.9 pence(6.10) (10.1 cents per ADS****), before non-recurring and acquisition-related charges of £6.4 million, in 2003.
Balance sheet and cash flow
Intangible assets at 31 December 2004 were £414.3 million compared to £10.1 million at 31 December 2003, comprising goodwill of £339.7 million and other intangible assets of £74.6 million. Goodwill is no longer amortised under US GAAP but is subject to impairment on at least an annual basis. The other intangible assets will be amortised through the profit and loss account over a weighted average period of 5 years. Goodwill and intangible assets arising on the acquisition of Artisan amounted to £330.7 million and £70.1 million respectively.
Accounts receivable at 31 December 2004 were £34.3 million, including £14.0 million relating to Artisan, compared to £20.6 million at 30 September 2004 and £17.3 million at 31 December 2003. The allowance against receivables was £1.5 million at 31 December 2004. Deferred revenues were £21.4 million at 31 December 2004, including £7.3 million relating to Artisan, compared to £12.6 million at the end of Q3 2004 and £11.1 million at the end of 2003.
The consolidated cash, cash equivalents, short-term investments and long-term marketable securities balance was £142.8 million(6.4) at 31 December 2004 compared to £159.8 million(6.13) at 31 December 2003. In 2004, £122.3 million was paid as the cash element of the consideration for the acquisition of Artisan, £3.9 million of fees and expenses were paid in respect of the acquisition of Artisan prior to 31 December 2004 and net cash, cash equivalents, short-term investments and long-term marketable securities amounting to £82.6 million were acquired on completion of the Artisan transaction. A further £14 million of fees and expenses related to the Artisan transaction are expected to be paid subsequent to 31 December 2004.
Reconciliation of US and UK GAAP
Profit for the year to 31 December 2004 under US GAAP is £28.0 million compared to £32.0 million when measured under UK GAAP. The difference arises primarily as a result of in-process research and development costs of £3.6 million arising on acquisition being written off under US GAAP but not under UK GAAP.
A detailed reconciliation of profit for the year and shareholders’ funds at 31 December 2004 between US and UK GAAP is set out below.
The directors recommend payment of a final dividend in respect of 2004 of 0.42 pence per share, which taken together with the interim dividend of 0.28 pence per share paid in October 2004, gives a total dividend in respect of 2004 of 0.7 pence per share, an increase of 17% over 0.6 pence per share in 2003. Subject to shareholder approval, the final dividend will be paid on 6 May 2005 to shareholders on the register on 1 April 2005.
Sarah Marsland/James Melville-Ross/Juliet Clarke
ARM Holdings plc
+44 (0) 20 7831 3113
+44 (0)1223 400 432
The financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 240 (3) of the Companies Act 1985. Statutory accounts of the Company in respect of the financial year ended 31 December 2003 have been delivered to the Registrar of Companies, upon which the Company’s auditors have given a report which was unqualified and did not contain a statement under Section 237(2) or Section 237(3) of that Act.
ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM's comprehensive product offering includes 16/32-bit RISC microprocessors, data engines, 3D processors, digital libraries, embedded memories, peripherals, software and development tools, as well as analog functions and high-speed connectivity products. Combined with the company's broad Partner community, they provide a total system solution that offers a fast, reliable path to market for leading electronics companies. More information on ARM is available at <http://www.arm.com/>
ARM, Jazelle and RealView are registered trademarks of ARM Limited. ARM7, ARM9, ARM926EJ, ARM7, ARM9, ARM926EJ, ARM922T, ARM11, TrustZone and OptimoDE are trademarks of ARM Limited. Artisan Components and Artisan are registered trademarks of ARM Physical IP, Inc., a wholly owned subsidiary of ARM. All other brands or product names are the property of their respective holders. ARM refers to ARM Holdings plc (LSE: ARM and Nasdaq: ARMHY) together with its subsidiaries including ARM Limited, ARM Inc., ARM Physical IP Inc., Axys Design Automation Inc., Axys GmbH; ARM KK, ARM Korea Ltd, ARM Taiwan Ltd, ARM France SAS, ARM Consulting (Shanghai) Co. Ltd.; ARM Belgium NV.; and ARM Embedded Solutions Pvt. Ltd.