ARM Holdings plc Results for the Quarter Ended March 31, 2001

ARM Holdings plc Announces 52% Growth

In Revenues and 39% Increase in Pre-Tax Profit



Apr 11, 2001, 01:00 ET from ARM Holdings plc

    CAMBRIDGE, England, April 11 /PRNewswire/ --
 ARM Holdings plc (Nasdaq: ARMHY), (LSE:   ARM) announces its unaudited financial
 results for the first quarter ended March 31, 2001.
 
     FINANCIAL HIGHLIGHTS (US GAAP)
     -- First quarter ended March 31, 2001
     -- Revenues up 52% to 32.5 million pounds sterling (Q1 2000:
        21.4 million pounds) ; 9% higher than Q4 2000
     -- Profit before taxation up 39% to 11.4 million pounds (Q1 2000:
        8.2 million pounds); 13% higher than Q4 2000
     -- Earnings per fully diluted share 0.8 pence (3.2 cents per ADS*)
        (Q1 2000: 0.6 pence and 2.8 cents respectively(1)(2))
     -- Strong growth in license bookings, deferred revenues almost doubling
        compared to Q4, 2000
     -- Record quarter for sales of development systems, with revenues
        increasing 187% to 6.1 million pounds (Q1 2000: 2.1 million pounds),
        39% higher than Q4 2000
     -- Unit shipments in Q4 2000 increased to 123 million
        (Q4 1999: 72 million)
 
     1.) Establishment of a Qualifying Employee Share Ownership Trust (QUEST)
         in the first quarter of 2000 resulted in a tax saving of
         1.1 million pounds and an increase of 0.1 pence in earnings per fully
         diluted share (0.4 cents per ADS*) in the first quarter of 2000
     2.) 2000 figures are adjusted for the five-for-one stock split which took
         place in April 2000
 
     * Each American Depositary Share (ADS) represents three shares
 
     Commenting on the first quarter's results, Robin Saxby, Chairman and Chief
 Executive Officer, said:
     "As an intellectual property licensing business, we have not been directly
 exposed to the inventory corrections seen by many technology companies in the
 last few months and have experienced a strong quarter, with 20 licenses
 signed.  Development systems, a leading indicator of design wins, continued
 their upward trend, almost trebling their revenues compared to the
 corresponding period for last year, and rising 39% compared to the previous
 quarter.  The announcements we are making this week at the Embedded Systems
 Conference in San Francisco demonstrate the momentum that is building in our
 business."
 
     Jonathan Brooks, Chief Financial Officer, added:
     "Given the high increase in our headcount during last year and the
 difficulties reported by other technology companies, we decided early in the
 quarter that it would be prudent to moderate our headcount growth plans for
 the year until market conditions improve.  This has resulted in slightly lower
 costs for the quarter allowing operating margins to rise to 32% compared to
 30% in the fourth quarter of 2000.  With continuing strong demand for our
 products and services, we remain confident about the outlook for the next two
 quarters."
 
     Financial Review
     Review of First Quarter ended March 31, 2001
 Total revenues for the first quarter ended March 31, 2001 amounted to
 32.5 million pounds, representing a 9% increase from 29.8 million pounds in
 the fourth quarter of 2000, and a 52% increase over first quarter 2000
 revenues of 21.4 million pounds.
     License revenues amounted to 13.9 million pounds representing 43% of
 revenues with 20 licenses signed in the period, six from new licensees and
 14 from existing partners.  Of the six new licensees, one took a license to
 the ARM7TDMI(R) core; one took a license to the ARM946E-S(TM) solution and
 four 'per use' licenses were signed, two for the ARM7TDMI core and two for the
 ARM922T(TM) core.  Two existing partners, Philips and ST Microelectronics,
 signed 'broad' agreements giving them access to a wide range of cores over the
 next few years.  Three further existing partners upgraded to cores from the
 ARM9(TM) family, one took a license to the ARM7TDMI core having previously
 taken a core in the ARM9 family and eight took licenses to products within the
 same microprocessor core families that they had previously licensed. Toppan, a
 company based in Japan, joined our ATAP(TM) technology access program which
 enables design houses to undertake ARM core-based designs for third parties.
 This brings the total number of ATAP design houses to eleven.
     Royalty revenues were 8.3 million pounds accounting for 26% of revenues
 compared to 8.1 million pounds or 27% of revenues for the fourth quarter of
 2000 and 4.7 million pounds or 22% of revenues in the first quarter of 2000.
 Sales of development systems, a leading indicator of design activity, amounted
 to 6.1 million pounds, representing 19% of total revenues compared to
 4.4 million pounds or 15% of revenues in the fourth quarter of 2000 and
 2.1 million pounds or 10% of revenues in the first quarter of 2000. Service
 revenues, which comprise revenues from consulting fees and support,
 maintenance and training amounted to 4.2 million pounds compared to
 3.0 million pounds in the first quarter of 2000. This figure was slightly down
 from the 4.4 million pounds of service revenues in the fourth quarter of 2000,
 reflecting the conscious shift away from consulting services to higher margin
 IP generation.
     Gross margins for the first quarter of 2001 remained at 88%, the same
 level as in the fourth quarter of 2000, and slightly up on the 87% for the
 first quarter of 2000.
     Research and development expenses were 8.8 million pounds in the first
 quarter of 2001 representing 27% of revenues.  This increased from
 7.7 million pounds or 26% of revenues in the fourth quarter of 2000 as we
 continued our investment in developing next generation products. Sales and
 marketing costs for the first quarter of 2001 were 4.5 million pounds compared
 to 5.9 million pounds in the fourth quarter of 2000, which had been unusually
 high due to expenditure on major trade shows and advertising. General and
 administration expenses increased from 3.2 million pounds in the fourth
 quarter of 2000 to 4.3 million pounds in the first quarter of 2001.  The
 largest components of this increase included foreign exchange losses of
 0.1 million pounds in the quarter compared to a gain of 0.2 million pounds in
 the fourth quarter and higher legal costs in the quarter of 0.2 million
 pounds.  Headcount rose from 619 at the end of 2000 to 659 at the end of the
 first quarter.
     Operating margin for the first quarter of 2001 was 32% compared with 30%
 in the fourth quarter of 2000 and 33% in the first quarter of 2000.
     Income before income tax for the first quarter of 2001 was
 11.4 million pounds or 35% of revenues compared to 10.1 million pounds or 34%
 of revenues in the fourth quarter of 2000 and 8.2 million pounds or 38% of
 revenues in the first quarter of 2000.  Income before income tax in the first
 quarter of 2000 included a profit of 0.5 million pounds on the disposal of
 part of the Company's shareholding in Palmchip Corporation.
     First quarter fully diluted earnings per share prepared under US GAAP were
 0.8 pence (3.2 cents per ADS*) compared to 0.6 pence (2.8 cents) for the
 corresponding period in 2000.  Tax savings arising on a contribution to the
 QUEST in March 2000 resulted in an increase in earnings per fully diluted
 share of 0.1 pence (0.4 cents per ADS*) in the first quarter of 2000.
 
     * Each ADS represents three shares
 
     Balance Sheet and Cash Flow
     Total assets rose to 146.6 million pounds compared to 127.3 million pounds
 at 31 December 2000.  Deferred revenues, which represent revenues invoiced but
 not yet recognized, grew to their highest level ever of 23.9 million pounds at
 the end of the quarter compared to 12.7 million pounds at 31 December, 2000,
 reflecting the strong increase in licensing activity.  Accounts receivable
 increased by 72% to 32.5 million pounds compared to 18.9 million pounds at
 31 December 2000.  This reflected very high invoicing levels towards the end
 of the quarter, the majority of which is included within deferred revenues.
 Debtor days rose slightly to 55 days compared to 51 days in the fourth quarter
 and 64 days for the corresponding period in 2000.
     Net cash flow from operating activities was 7.0 million pounds in the
 quarter, with an additional 1.0 million pounds of cash generated from interest
 received.  Capital expenditure for the quarter amounted to 4.1 million pounds
 and 1.4 million pounds was spent on the purchase of part of the business of
 Noral Micrologics Limited.  Cash balances increased from 75.3 million pounds
 at 31 December 2000 to 78.4 million pounds.
 
     About ARM
     ARM is the industry's leading provider of 16/32-bit embedded RISC
 microprocessor solutions.  ARM licenses its high-performance, low-cost,
 power-efficient RISC processors, peripherals, and system-on-chip designs to
 leading electronics companies.  The company also provides comprehensive
 support required in developing a complete system.  ARM's microprocessor cores
 are rapidly becoming the volume RISC standard in applications such as consumer
 entertainment, encryption, imaging, industrial, mass storage, networking and
 wireless.
     ARM and ARM7TDMI are registered trademarks of ARM Limited. ARM9, ARM922T,
 ARM946E-S, ARM10, SecurCore, and ATAP are all trademarks of ARM Limited, All
 other brands or product names are the property of their respective holders.
 "ARM" refers to ARM Holdings plc (Nasdaq: ARMHY) (LSE:   ARM) together with its
 subsidiaries including ARM Limited; ARM, INC.; ARM KK; ARM Korea Ltd, ARM
 France SAS and ARM Taiwan Limited.
 
     This announcement contains "forward-looking statements" including
 statements concerning plans, future events or performance and underlying
 assumptions and other statements which are other than statements of historical
 fact.  The Company's actual results for future periods may differ materially
 from those expressed in any forward-looking statements made by or on behalf of
 the Company.  The factors that could cause actual results to differ materially
 include, without limitation, potential for significant fluctuation in and
 unpredictability of results, the ability of semiconductor partners to
 manufacture and market microprocessors based on the ARM(R) architecture; the
 acceptance of ARM technology by systems companies; the availability of
 development tools, systems software and operating systems; the rapid change in
 technology in the industry and ARM' s ability to develop new products in a
 timely manner; management of growth; competition from other architectures;
 general business and economic conditions; the growth in the semiconductor
 industry; the Company's ability to protect its intellectual property; and
 ARM's ability to attract and retain employees.
 
     More information on ARM is available at http://www.arm.com
 
 
                                ARM Holdings plc
                        First Quarter Results - US GAAP
                      (in thousands except per share data)
 
                                     Quarter          Quarter      Quarter
                                      Ended            Ended        Ended
                                      Mar 31           Mar 31       Mar 31
                                       2001             2000         2001 (1)
                                    Unaudited        Unaudited     Unaudited
                                   pounds'000       pounds'000      $'000
     Revenues
     Product revenues                 28,311          18,421        40,250
     Service revenues                  4,193           2,998         5,961
     Total revenues                   32,504          21,419        46,211
 
     Cost of revenues
     Product costs                     2,041           1,174         2,902
     Service costs                     1,992           1,538         2,832
     Total cost of revenues            4,033           2,712         5,734
 
     Gross profit                     28,471          18,707        40,477
 
     Research and development          8,750           5,382        12,440
     Sales and marketing               4,467           3,427         6,351
     General and administration        4,332           2,397         6,159
     Amortization of goodwill            476             516           676
     Total operating expenses         18,025          11,722        25,626
 
     Income from operations           10,446           6,985        14,851
 
     Interest                          1,021             809         1,452
     Loss from equity affiliate           --             (85)           --
     Gain on partial disposal
      of equity affiliate                 --             512            --
     Minority interest                   (80)            (46)         (114)
     Income before income tax         11,387           8,175        16,189
     Provision for income taxes        3,658           1,507         5,201
 
     Net income                        7,729           6,668        10,988
 
     Net income                        7,729           6,668        10,988
     Other comprehensive income:
     Foreign currency adjustments        158              84           225
     Unrealized holding
      loss on available for sale
      securities                      (1,692)             --        (2,406)
                                       6,195           6,752         8,807
     Earnings per share
      (assuming dilution)
     Shares outstanding ('000)     1,025,391       1,028,640
     Earnings per
      share -- pence(2)                  0.8             0.6
     Earnings per ADS
      (assuming dilution)
     ADS's outstanding ('000)        341,797         342,880
     Earnings per ADS - cents (1)        3.2             2.8
 
     (1) Translated solely for the convenience of the reader at March 31, 2001
 closing rate of $1.4217 = 1 pound
     (2) The comparatives have been restated to reflect the five for one stock
 split in April 2000.
 
 
                                ARM Holdings plc
                       Consolidated Balance Sheet-US GAAP
 
                                       Mar 31         Dec 31         Mar 31
                                        2001           2000         2001 (1)
                                     Unaudited       Audited       Unaudited
                                    pounds'000     pounds'000       $'000
     Assets
     Current assets:
     Cash and cash equivalents        78,446          75,266       111,527
     Accounts receivable, net
      of allowance of 105,000 pounds
      in 2001 and 155,000 pounds
      in 2000                         32,542          18,913        46,265
     Inventory                           715             385         1,016
     Prepaid expenses and other
      assets                           6,154           4,652         8,749
     Income taxes receivable              --             439            --
     Total current assets            117,857          99,655       167,557
 
     Deferred income taxes             1,153             740         1,639
     Property and equipment, net      16,825          14,874        23,920
     Intangible assets                 6,081           5,440         8,646
     Investments                       4,696           6,634         6,676
     Total assets                    146,612         127,343       208,438
 
 
     Liabilities and shareholders'
      equity
     Accounts payable                  3,334           2,049         4,740
     Income taxes payable              4,900           1,621         6,966
     Personnel taxes                     704             590         1,001
     Accrued liabilities               5,827           9,128         8,284
     Deferred revenue                 23,858          12,677        33,919
     Total liabilities                38,623          26,065        54,910
 
     Minority interest                   386             306           549
                                      39,009          26,371        55,459
 
     Shareholders' equity
     Ordinary shares                     502             500           714
     Additional paid in capital       78,469          78,035       111,559
     Cumulative translation
      adjustment                         288             130           409
     Retained earnings                63,493          55,764        90,268
     Accumulated other
      comprehensive income               395           2,087           562
     Treasury stock, at cost         (35,544)        (35,544)      (50,533)
     Total shareholders' equity      107,603         100,972       152,979
 
     Total liabilities and
      shareholders' equity           146,612         127,343       208,438
 
     (1)Translated solely for the convenience of the reader at March 2001
     closing rate of $ 1.4217 = 1 pound
 
     The financial information contained in this announcement does not
 constitute statutory accounts within the meaning of Section 240 of the
 Companies Act 1985. Statutory accounts of the Company in respect of the
 financial year ended December 31,2000 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.
 
 

SOURCE ARM Holdings plc
    CAMBRIDGE, England, April 11 /PRNewswire/ --
 ARM Holdings plc (Nasdaq: ARMHY), (LSE:   ARM) announces its unaudited financial
 results for the first quarter ended March 31, 2001.
 
     FINANCIAL HIGHLIGHTS (US GAAP)
     -- First quarter ended March 31, 2001
     -- Revenues up 52% to 32.5 million pounds sterling (Q1 2000:
        21.4 million pounds) ; 9% higher than Q4 2000
     -- Profit before taxation up 39% to 11.4 million pounds (Q1 2000:
        8.2 million pounds); 13% higher than Q4 2000
     -- Earnings per fully diluted share 0.8 pence (3.2 cents per ADS*)
        (Q1 2000: 0.6 pence and 2.8 cents respectively(1)(2))
     -- Strong growth in license bookings, deferred revenues almost doubling
        compared to Q4, 2000
     -- Record quarter for sales of development systems, with revenues
        increasing 187% to 6.1 million pounds (Q1 2000: 2.1 million pounds),
        39% higher than Q4 2000
     -- Unit shipments in Q4 2000 increased to 123 million
        (Q4 1999: 72 million)
 
     1.) Establishment of a Qualifying Employee Share Ownership Trust (QUEST)
         in the first quarter of 2000 resulted in a tax saving of
         1.1 million pounds and an increase of 0.1 pence in earnings per fully
         diluted share (0.4 cents per ADS*) in the first quarter of 2000
     2.) 2000 figures are adjusted for the five-for-one stock split which took
         place in April 2000
 
     * Each American Depositary Share (ADS) represents three shares
 
     Commenting on the first quarter's results, Robin Saxby, Chairman and Chief
 Executive Officer, said:
     "As an intellectual property licensing business, we have not been directly
 exposed to the inventory corrections seen by many technology companies in the
 last few months and have experienced a strong quarter, with 20 licenses
 signed.  Development systems, a leading indicator of design wins, continued
 their upward trend, almost trebling their revenues compared to the
 corresponding period for last year, and rising 39% compared to the previous
 quarter.  The announcements we are making this week at the Embedded Systems
 Conference in San Francisco demonstrate the momentum that is building in our
 business."
 
     Jonathan Brooks, Chief Financial Officer, added:
     "Given the high increase in our headcount during last year and the
 difficulties reported by other technology companies, we decided early in the
 quarter that it would be prudent to moderate our headcount growth plans for
 the year until market conditions improve.  This has resulted in slightly lower
 costs for the quarter allowing operating margins to rise to 32% compared to
 30% in the fourth quarter of 2000.  With continuing strong demand for our
 products and services, we remain confident about the outlook for the next two
 quarters."
 
     Financial Review
     Review of First Quarter ended March 31, 2001
 Total revenues for the first quarter ended March 31, 2001 amounted to
 32.5 million pounds, representing a 9% increase from 29.8 million pounds in
 the fourth quarter of 2000, and a 52% increase over first quarter 2000
 revenues of 21.4 million pounds.
     License revenues amounted to 13.9 million pounds representing 43% of
 revenues with 20 licenses signed in the period, six from new licensees and
 14 from existing partners.  Of the six new licensees, one took a license to
 the ARM7TDMI(R) core; one took a license to the ARM946E-S(TM) solution and
 four 'per use' licenses were signed, two for the ARM7TDMI core and two for the
 ARM922T(TM) core.  Two existing partners, Philips and ST Microelectronics,
 signed 'broad' agreements giving them access to a wide range of cores over the
 next few years.  Three further existing partners upgraded to cores from the
 ARM9(TM) family, one took a license to the ARM7TDMI core having previously
 taken a core in the ARM9 family and eight took licenses to products within the
 same microprocessor core families that they had previously licensed. Toppan, a
 company based in Japan, joined our ATAP(TM) technology access program which
 enables design houses to undertake ARM core-based designs for third parties.
 This brings the total number of ATAP design houses to eleven.
     Royalty revenues were 8.3 million pounds accounting for 26% of revenues
 compared to 8.1 million pounds or 27% of revenues for the fourth quarter of
 2000 and 4.7 million pounds or 22% of revenues in the first quarter of 2000.
 Sales of development systems, a leading indicator of design activity, amounted
 to 6.1 million pounds, representing 19% of total revenues compared to
 4.4 million pounds or 15% of revenues in the fourth quarter of 2000 and
 2.1 million pounds or 10% of revenues in the first quarter of 2000. Service
 revenues, which comprise revenues from consulting fees and support,
 maintenance and training amounted to 4.2 million pounds compared to
 3.0 million pounds in the first quarter of 2000. This figure was slightly down
 from the 4.4 million pounds of service revenues in the fourth quarter of 2000,
 reflecting the conscious shift away from consulting services to higher margin
 IP generation.
     Gross margins for the first quarter of 2001 remained at 88%, the same
 level as in the fourth quarter of 2000, and slightly up on the 87% for the
 first quarter of 2000.
     Research and development expenses were 8.8 million pounds in the first
 quarter of 2001 representing 27% of revenues.  This increased from
 7.7 million pounds or 26% of revenues in the fourth quarter of 2000 as we
 continued our investment in developing next generation products. Sales and
 marketing costs for the first quarter of 2001 were 4.5 million pounds compared
 to 5.9 million pounds in the fourth quarter of 2000, which had been unusually
 high due to expenditure on major trade shows and advertising. General and
 administration expenses increased from 3.2 million pounds in the fourth
 quarter of 2000 to 4.3 million pounds in the first quarter of 2001.  The
 largest components of this increase included foreign exchange losses of
 0.1 million pounds in the quarter compared to a gain of 0.2 million pounds in
 the fourth quarter and higher legal costs in the quarter of 0.2 million
 pounds.  Headcount rose from 619 at the end of 2000 to 659 at the end of the
 first quarter.
     Operating margin for the first quarter of 2001 was 32% compared with 30%
 in the fourth quarter of 2000 and 33% in the first quarter of 2000.
     Income before income tax for the first quarter of 2001 was
 11.4 million pounds or 35% of revenues compared to 10.1 million pounds or 34%
 of revenues in the fourth quarter of 2000 and 8.2 million pounds or 38% of
 revenues in the first quarter of 2000.  Income before income tax in the first
 quarter of 2000 included a profit of 0.5 million pounds on the disposal of
 part of the Company's shareholding in Palmchip Corporation.
     First quarter fully diluted earnings per share prepared under US GAAP were
 0.8 pence (3.2 cents per ADS*) compared to 0.6 pence (2.8 cents) for the
 corresponding period in 2000.  Tax savings arising on a contribution to the
 QUEST in March 2000 resulted in an increase in earnings per fully diluted
 share of 0.1 pence (0.4 cents per ADS*) in the first quarter of 2000.
 
     * Each ADS represents three shares
 
     Balance Sheet and Cash Flow
     Total assets rose to 146.6 million pounds compared to 127.3 million pounds
 at 31 December 2000.  Deferred revenues, which represent revenues invoiced but
 not yet recognized, grew to their highest level ever of 23.9 million pounds at
 the end of the quarter compared to 12.7 million pounds at 31 December, 2000,
 reflecting the strong increase in licensing activity.  Accounts receivable
 increased by 72% to 32.5 million pounds compared to 18.9 million pounds at
 31 December 2000.  This reflected very high invoicing levels towards the end
 of the quarter, the majority of which is included within deferred revenues.
 Debtor days rose slightly to 55 days compared to 51 days in the fourth quarter
 and 64 days for the corresponding period in 2000.
     Net cash flow from operating activities was 7.0 million pounds in the
 quarter, with an additional 1.0 million pounds of cash generated from interest
 received.  Capital expenditure for the quarter amounted to 4.1 million pounds
 and 1.4 million pounds was spent on the purchase of part of the business of
 Noral Micrologics Limited.  Cash balances increased from 75.3 million pounds
 at 31 December 2000 to 78.4 million pounds.
 
     About ARM
     ARM is the industry's leading provider of 16/32-bit embedded RISC
 microprocessor solutions.  ARM licenses its high-performance, low-cost,
 power-efficient RISC processors, peripherals, and system-on-chip designs to
 leading electronics companies.  The company also provides comprehensive
 support required in developing a complete system.  ARM's microprocessor cores
 are rapidly becoming the volume RISC standard in applications such as consumer
 entertainment, encryption, imaging, industrial, mass storage, networking and
 wireless.
     ARM and ARM7TDMI are registered trademarks of ARM Limited. ARM9, ARM922T,
 ARM946E-S, ARM10, SecurCore, and ATAP are all trademarks of ARM Limited, All
 other brands or product names are the property of their respective holders.
 "ARM" refers to ARM Holdings plc (Nasdaq: ARMHY) (LSE:   ARM) together with its
 subsidiaries including ARM Limited; ARM, INC.; ARM KK; ARM Korea Ltd, ARM
 France SAS and ARM Taiwan Limited.
 
     This announcement contains "forward-looking statements" including
 statements concerning plans, future events or performance and underlying
 assumptions and other statements which are other than statements of historical
 fact.  The Company's actual results for future periods may differ materially
 from those expressed in any forward-looking statements made by or on behalf of
 the Company.  The factors that could cause actual results to differ materially
 include, without limitation, potential for significant fluctuation in and
 unpredictability of results, the ability of semiconductor partners to
 manufacture and market microprocessors based on the ARM(R) architecture; the
 acceptance of ARM technology by systems companies; the availability of
 development tools, systems software and operating systems; the rapid change in
 technology in the industry and ARM' s ability to develop new products in a
 timely manner; management of growth; competition from other architectures;
 general business and economic conditions; the growth in the semiconductor
 industry; the Company's ability to protect its intellectual property; and
 ARM's ability to attract and retain employees.
 
     More information on ARM is available at http://www.arm.com
 
 
                                ARM Holdings plc
                        First Quarter Results - US GAAP
                      (in thousands except per share data)
 
                                     Quarter          Quarter      Quarter
                                      Ended            Ended        Ended
                                      Mar 31           Mar 31       Mar 31
                                       2001             2000         2001 (1)
                                    Unaudited        Unaudited     Unaudited
                                   pounds'000       pounds'000      $'000
     Revenues
     Product revenues                 28,311          18,421        40,250
     Service revenues                  4,193           2,998         5,961
     Total revenues                   32,504          21,419        46,211
 
     Cost of revenues
     Product costs                     2,041           1,174         2,902
     Service costs                     1,992           1,538         2,832
     Total cost of revenues            4,033           2,712         5,734
 
     Gross profit                     28,471          18,707        40,477
 
     Research and development          8,750           5,382        12,440
     Sales and marketing               4,467           3,427         6,351
     General and administration        4,332           2,397         6,159
     Amortization of goodwill            476             516           676
     Total operating expenses         18,025          11,722        25,626
 
     Income from operations           10,446           6,985        14,851
 
     Interest                          1,021             809         1,452
     Loss from equity affiliate           --             (85)           --
     Gain on partial disposal
      of equity affiliate                 --             512            --
     Minority interest                   (80)            (46)         (114)
     Income before income tax         11,387           8,175        16,189
     Provision for income taxes        3,658           1,507         5,201
 
     Net income                        7,729           6,668        10,988
 
     Net income                        7,729           6,668        10,988
     Other comprehensive income:
     Foreign currency adjustments        158              84           225
     Unrealized holding
      loss on available for sale
      securities                      (1,692)             --        (2,406)
                                       6,195           6,752         8,807
     Earnings per share
      (assuming dilution)
     Shares outstanding ('000)     1,025,391       1,028,640
     Earnings per
      share -- pence(2)                  0.8             0.6
     Earnings per ADS
      (assuming dilution)
     ADS's outstanding ('000)        341,797         342,880
     Earnings per ADS - cents (1)        3.2             2.8
 
     (1) Translated solely for the convenience of the reader at March 31, 2001
 closing rate of $1.4217 = 1 pound
     (2) The comparatives have been restated to reflect the five for one stock
 split in April 2000.
 
 
                                ARM Holdings plc
                       Consolidated Balance Sheet-US GAAP
 
                                       Mar 31         Dec 31         Mar 31
                                        2001           2000         2001 (1)
                                     Unaudited       Audited       Unaudited
                                    pounds'000     pounds'000       $'000
     Assets
     Current assets:
     Cash and cash equivalents        78,446          75,266       111,527
     Accounts receivable, net
      of allowance of 105,000 pounds
      in 2001 and 155,000 pounds
      in 2000                         32,542          18,913        46,265
     Inventory                           715             385         1,016
     Prepaid expenses and other
      assets                           6,154           4,652         8,749
     Income taxes receivable              --             439            --
     Total current assets            117,857          99,655       167,557
 
     Deferred income taxes             1,153             740         1,639
     Property and equipment, net      16,825          14,874        23,920
     Intangible assets                 6,081           5,440         8,646
     Investments                       4,696           6,634         6,676
     Total assets                    146,612         127,343       208,438
 
 
     Liabilities and shareholders'
      equity
     Accounts payable                  3,334           2,049         4,740
     Income taxes payable              4,900           1,621         6,966
     Personnel taxes                     704             590         1,001
     Accrued liabilities               5,827           9,128         8,284
     Deferred revenue                 23,858          12,677        33,919
     Total liabilities                38,623          26,065        54,910
 
     Minority interest                   386             306           549
                                      39,009          26,371        55,459
 
     Shareholders' equity
     Ordinary shares                     502             500           714
     Additional paid in capital       78,469          78,035       111,559
     Cumulative translation
      adjustment                         288             130           409
     Retained earnings                63,493          55,764        90,268
     Accumulated other
      comprehensive income               395           2,087           562
     Treasury stock, at cost         (35,544)        (35,544)      (50,533)
     Total shareholders' equity      107,603         100,972       152,979
 
     Total liabilities and
      shareholders' equity           146,612         127,343       208,438
 
     (1)Translated solely for the convenience of the reader at March 2001
     closing rate of $ 1.4217 = 1 pound
 
     The financial information contained in this announcement does not
 constitute statutory accounts within the meaning of Section 240 of the
 Companies Act 1985. Statutory accounts of the Company in respect of the
 financial year ended December 31,2000 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.
 
 SOURCE  ARM Holdings plc