ARC International plc Announces Unaudited Interim Results For the Six Months Ended June 30, 2009

SAN JOSE, Calif., and ST. ALBANS, England, August 5, 2009 – ARC International (LSE: ARK), a leading provider of customisable Solutions-to-Silicon IP for consumer product and semiconductor companies worldwide, today announces its unaudited interim results for the six months ended June 30, 2009.

Financial Highlights

• Revenue for six months ended June 30, 2009 is in line with expectations at £7.3m ($11.0m), a decrease of 22% (H108: £9.3m, $18.3m)
• Restructuring of operations commenced on June 30, expected to deliver cost savings estimated at £6.0m on an annualised basis and recognisable from H2 2009, achieved at a cash cost of £2.8m
• Net loss before restructuring charges stands at £4.3m (H108: £2.0m)
• Period-end cash and short-term investments of £9.1m (December 31, 2008: £12.7m)
• Loss per share of 4.48p (H108: 1.35p)

Operational Highlights

• 24 customer contracts completed in the period, including six new customers
• Dr Geoff Bristow appointed Chief Executive Officer in May, and Charles Rendell appointed Chief Financial Officer in June
• New processor range to be announced in November 2009 aimed at half the power consumption of the ARC 600, which is already 25% lower power than its nearest competitor
• Following the introduction of its “Sound-to-Silicon” solutions, the Company has revealed a strong market position in flash memory controllers, to be launched as “Storage-to-Silicon”.

Commenting on the results Dr Geoff Bristow, ARC International Chief Executive Officer, said:

“ARC has a core competence in lower power embedded technology which has been used to establish a previously unsung leadership position in the control of embedded flash memory. The same power-performance profile which gave us a strength in this application space is now set to help us build a presence in other emerging embedded markets such as security (e.g. secure card and identity verification with fingerprint recognition). We are now planning to capitalise on these competitive strengths with our new “Storage-to-Silicon” and “Security-to-Silicon” vertical solutions.

“At the same time we continue to win new licenses with our “Sound-to-Silicon” offering. This includes the Sonic Focus audio enhancement software, which as we announced yesterday, we are taking into the portable telephone space to improve the clarity of phone calls. This is potentially a large market for us.

“All this is made possible by two centres of development expertise in San Jose, USA and St Petersburg, Russia. In St Petersburg we have 50 skilled software mathematicians, already wellrespected for their codec development but who are being employed as part of our engine for innovation.

“By significantly reducing our cost base elsewhere, without impacting our core competencies we have enhanced the Company’s ability to try and capitalise on these opportunities.”

Financial tables

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About ARC International plc

ARC International is a world-leading provider of consumer IP to OEM and semiconductor companies globally. ARC’s award-winning, vertically integrated audio and video solutions enable high quality multimedia content to be captured, shared, and played on a wide range of electronics devices. ARC’s 150+ customers collectively ship hundreds of millions of ARC-BasedTM chips annually in products such as PCs and laptops, digital and mobile TVs, portable media players, flash storage, digital cameras, network appliances, and medical and government systems.
ARC International maintains a worldwide presence with corporate and research and development offices in San Jose and Lake Tahoe, California, St. Albans, England, St. Petersburg, Russia and Hyderabad, India. For more information visit www.ARC.com. ARC International is listed on the London Stock Exchange as ARC International plc (LSE: ARK).