MIPS Technologies Reports Fourth Quarter and Fiscal 2008 Financial Results and Corporate Restructuring

These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding the items listed below provides meaningful supplemental information to investors, as well as management that is indicative of the Company's ongoing operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.

    (a) This adjustment reflects the non-cash equity-based compensation
        expense related to the Company's adoption of SFAS No. 123 revised
        (SFAS 123R) beginning July 1, 2005. For the fourth fiscal quarter
        ending June 30, 2008, $1.6 million of equity-based compensation was
        allocated as follows: $478,000 to research and development, $592,000
        to sales and marketing and $547,000 to general and administrative. For
        the third fiscal quarter ending March 31, 2008, $1.8 million of
        equity-based compensation was allocated as follows: $604,000 to
        research and development, $577,000 to sales and marketing and $618,000
        to general and administrative. For the fourth quarter of fiscal 2007
        ending June 30, 2007, $1.6 million equity-based compensation expense
        was allocated as follows:  $539,000 to research and development,
        $508,000 to sales and marketing and $572,000 to general and
        administrative.

    (b) This adjustment reflects the non-cash expense related to the
        amortization of intangibles acquired in connection with the
        acquisition of Chipidea included in operating expenses. For the fourth
        fiscal quarter ending June 30, 2008, $2.5 million of amortization
        expense related to these intangible assets was allocated as follows:
        $2.4 million to cost of sales, $9,000 to research and development and
        $131,000 to sales and marketing. For the third fiscal quarter ending
        March 31, 2008, $2.4 million of amortization expense related to these
        intangible assets was allocated as follows:  $2.3 million to cost of
        sales, $8,000 to research and development and $126,000 to sales and
        marketing.

    (c) This adjustment reflects the amortization expense related to the
        amount held in escrow and payable to the founders of Chipidea in
        connection with the acquisition of Chipidea.  This adjustment also
        reflects legal fees incurred in association with certain financing
        activities and the amortization of loan origination fees.  For the
        fourth fiscal quarter ending June 30, 2008, $1.8 million was expensed
        related to the escrow amount payable to the founders of Chipidea and
        was allocated as follows: $694,000 to general and administrative and
        $1.1 million to research and development.  $280,000 was expensed
        related to the amortization of loan origination fees and was allocated
        to Other Income/Expense.  For the third fiscal quarter ending March
        31, 2008, $1.7 million was expensed related to the escrow amount
        payable to the founders of Chipidea and was allocated as follows:
        $567,000 to general and administrative and $1.1 million to research
        and development.  $686,000 was expensed related to the amortization of
        loan origination fees and was allocated to Other Income/Expense.

    (d) This adjustment reflects integration expense related to the
        acquisition of Chipidea recorded in accounting and legal expense under
        general and administrative.

    (e) This adjustment reflects the impairment charge of goodwill and
        acquired intangible assets associated with Chipidea and certain other
        transactions.

    (f) This adjustment reflects restructuring expense related to reduction in
        workforce and facilities exit costs.

    (g) This adjustment reflects certain equity write down under Other
        Income/Expense related to investment associated with an equity
        position in a private company.

    (h) This adjustment reflects the non-GAAP tax adjustment due to the
        adjustments described above.  The Company believes that in the short
        to intermediate term a 35% tax rate is a reasonable estimate of an
        ongoing tax rate that can be used by investors to estimate post tax
        non-GAAP income.



                           MIPS TECHNOLOGIES, INC.
    RECONCILIATION OF GAAP TO NON-GAAP NET INCOME and NET INCOME PER SHARE
                    (In thousands, except per share data)
                                 (unaudited)

                                               Twelve Months     Twelve Months
                                                   Ended             Ended
                                               June 30, 2008     June 30, 2007
        GAAP net income (loss)                   $(131,835)           $8,483
        Net income (loss) per basic share           $(3.00)            $0.19
        Net income (loss) per diluted share         $(3.00)            $0.18
    (i) Equity-based compensation expense
         under SFAS 123R                            $7,889            $7,701
    (j) Amortization of intangibles                  8,181                            -
        (k)  Acquisition  related  cost                                          7,889                                  -
        (l)  Integration  cost                                                          2,239                                  -
        (m)  Acquired  in-process  research
                  and  development                                                          6,350                                  -
        (n)  Impairment  of  goodwill  and
                  acquired  intangible  assets                                103,107                                  -
        (o)  Restructuring                                                                1,560                                  -
        (p)  Equity  Write-Down                                                        2,276                                  -
        (q)  Tax  adjustment                                                            (2,864)                                -
                Non-GAAP  net  income                                                  $4,792                      $16,184
                Non-GAAP  net  income  per  basic  share                    $0.11                          $0.37
                Non-GAAP  net  income  per  diluted  share                $0.11                          $0.35
                Common  shares  outstanding  -  basic                      43,964                        43,516
                Common  shares  outstanding  -  diluted                  45,477                        45,891

 





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