[February 15, 2012]

NetLogic Microsystems Announces Fourth Quarter 2011 and Fiscal Year 2011 Financial Results

NetLogic Microsystems (News - Alert), Inc. (NASDAQ:NETL), a worldwide leader in high performance intelligent semiconductor solutions for next-generation Internet networks, today announced financial results for its fourth quarter and fiscal year ended Dec. 31, 2011.

Revenue for the fourth quarter of 2011 was $96.2 million, a 9.9% sequential decrease from $106.8 million for the third quarter of 2011 and a 4.2% decrease from $100.4 million for the fourth quarter of 2010.

Fourth quarter 2011 net loss, determined in accordance with generally accepted accounting principles (GAAP), was $30.1 million or $0.43 per diluted share. By comparison, GAAP net loss was $9.4 million or $0.14 per diluted share for the fourth quarter of 2010. GAAP net income for fourth quarter 2011 included stock-based compensation and related payroll taxes, changes in contingent earn-out liability, amortization of intangible assets, acquisition-related costs, and establishment of deferred tax asset valuation allowance. Excluding these items, non-GAAP net income for the fourth quarter of 2011 was $24.6 million or $0.32 per diluted share, compared with $0.45 per diluted share for the fourth quarter of 2010.

For the fiscal year 2011, revenue was $405.4 million, a 6.2% increase from $381.7 million for fiscal year 2010.

Fiscal year 2011 GAAP net loss was $56.7 million or $0.82 per diluted share. By comparison, GAAP net loss for fiscal year 2010 was $66.4 million or $1.10 per diluted share. GAAP net income for fiscal year 2011 included stock-based compensation and related payroll taxes, changes in contingent earn-out liability, amortization of intangible assets, inventory fair value adjustments and related taxes, acquisition-related costs, and establishment of deferred tax asset valuation allowance. Excluding these items, non-GAAP net income for fiscal year 2011 was $123.0 million or $1.62 per diluted share, compared with $1.58 per diluted share for fiscal year 2010.

Merger Update

As previously announced on September 12, 2011, NetLogic Microsystems, Inc entered into an Agreement and Plan of Merger with Broadcom (News - Alert) Corporation and I&N Acquisition Corp., a wholly owned subsidiary of Broadcom, pursuant to which NetLogic Microsystems would be acquired by Broadcom for $50.00 per share in cash.

Consummation of the merger remains subject to the satisfaction of customary closing conditions, other than conditions requiring stockholder approval and required regulatory approvals and clearances, all of which have been satisfied including the approval of the transaction without conditions from the Ministry of Commerce of the People's Republic of China. Both companies anticipate closing the transaction shortly subject to satisfaction or waiver of all conditions to close.

Recent Operating Highlights

• NetLogic Microsystems announced the industry's first open-source Xen® hypervisor for high-performance multi-core MIPS64® processors. The new Xen hypervisor enables highly efficient virtualization for next-generation communications, networking and server platforms using the industry's best-in-class XLP® and XLP II multi-core, multi-threaded processors.
• The company expanded its intellectual property portfolio to now include over 800 worldwide patents, filings and international registrations covering a broad range of innovations for its industry-leading products for networking infrastructure. The extraordinary strength of its intellectual property portfolio has enabled NetLogic Microsystems to be at the forefront of innovation and technology leadership in high-performance multi-core processing, knowledge-based processing, digital front-end processing and 10/40/100 Gigabit Ethernet PHY solutions.
• NetLogic Microsystems received the distinguished 2011 Most Respected Emerging Public Semiconductor Company Award for the third consecutive year from the Global Semiconductor Alliance (GSA (News - Alert)). It was recognized by its industry peers, customers, partners and the GSA as the most respected public semiconductor company with revenue up to $500 million.

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, digital front-end 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 Santa Clara, California, and has offices and design centers throughout North America, Asia and Europe. For more information about products offered by NetLogic Microsystems, call +1-408-454-3000 or visit the NetLogic Microsystems Web site at http://www.netlogicmicro.com.

NetLogic Microsystems and the NetLogic Microsystems logo are trademarks of NetLogic Microsystems, Inc. XLP is a registered trademarks of NetLogic Microsystems, Inc. All other trademarks are the properties of their respective owners.

Non-GAAP Financial Information

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), this announcement of operating results contains non-GAAP financial measures that exclude the income statement effects of stock-based compensation and related payroll taxes, change in contingent earn-out liability, amortization of intangible assets, fair value adjustments of acquired inventory and related taxes, acquisition-related costs, lease termination costs, a gain recognized on a pre-acquisition investment in Optichron, Inc., an impairment charge on another investment, release and establishment of deferred tax asset valuation allowance, and the effects of excluding stock-based compensation upon the number of diluted shares used in calculating non-GAAP earnings per share.

We have excluded stock-based compensation expense and changes in contingent earn-out liability in calculating these non-GAAP financial measures. These expenses rely on valuations based on future events such as the market price of our common stock and revenue generated from products acquired in the RMI and Optichron acquisitions during a defined period following the close that are difficult to predict and are affected by market factors that are largely not within the control of management. We have excluded stock related payroll taxes, amortization of intangible assets, fair value adjustments related to acquired inventory and the related tax effect, acquisition-related costs, lease termination costs, gain recognized on investment in Optichron, Inc., impairment charge on other investment and changes in deferred tax asset valuation allowance because we do not consider them to be related to our core operating performance.

We use the non-GAAP financial measures that exclude these items to make strategic decisions, forecast future results and evaluate the Company's current performance. We believe that the presentation of non-GAAP financial measures that exclude these items is useful to investors because we do not consider these charges either part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that are used to evaluate management's operating performance.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information regarding these non-GAAP financial measures, and management's explanation of why it considers such measures to be useful, refer to the Form 8-K dated February 15, 2012 that the Company has submitted to the Securities and Exchange Commission.

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