ARC International plc - Trading Statement and Management Changes

Elstree, UK - 13 September 2001: ARC International plc (LSE:ARK.L), a leading designer and developer of customisable, high-performance microprocessors and related intellectual property solutions, today provided an update on trading and announced changes in directors' responsibilities.

Key Points
· Difficult market conditions continuing in third quarter 2001
· Market interest in ARC's technology remains high
· Previously announced cost reduction programme fully implemented
· Bob Terwilliger relinquishes role of CEO
· John Stockton, previously non-executive Chairman, becomes interim CEO
· Jan Tufvesson, a non-executive director, appointed non-executive Chairman
 

Trading Statement
The difficult market conditions affecting our customers' businesses that resulted in a marked slowdown in concluding licence agreements during the second quarter of 2001, have continued during the third quarter. Market interest in ARC's technology remains high, as reflected in the quantity and quality of our active customer prospects. However, turnover in the third quarter is now expected to be no higher than £2 million.

The cost reduction programme to reduce staff numbers, announced on 1st August, has been implemented and progress is being made on cutting occupancy costs. Although visibility in our market continues to be limited, we remain confident about the longer-term prospects for our innovative technology.

Results for the third quarter ending 30 September 2001 will be reported on 1 November 2001.

Changes in Directors' Responsibilities
The Board has agreed with Bob Terwilliger that, with immediate effect, he will stand down as Chief Executive Officer and as a Director. The Board wishes to thank Bob for his substantial contribution to the development of ARC over recent years.

John Stockton, who was previously non-executive Chairman of the Company, has assumed the role of interim Chief Executive Officer and the Company has commenced a search for a new CEO. John has extensive experience in senior operational management positions in a number of semiconductor companies.

Jan Tufvesson, who is currently a non-executive director, has been appointed non-executive Chairman.

For further information, please contact:
Simon Poulton CFO, ARC International plc 020 8236 2800
Peter Aubusson Investor Relations Manager,
ARC International plc 020 8236 2800
Sue Pemberton Citigate Dewe Rogerson 020 7638 9571

ARC's management will be available on 020 7638 9571 on 13 September.

ARC will host a conference call for analysts and investors at 9.00 a.m. BST today, 13 September. The dial in number for participants will be: +44 (0) 20 8240 8244; Password: ARC International.

A replay of the call will be available for five days on the following number: +44 (0) 20 8288 4459; Access code 668972

A recording of the call will also be audio streamed on the Investor Relations section of the website: www.arccores.com from approximately 2.00 p.m. on 13 September.

Notes to Editors:
John Stockton became a non-executive director of ARC in December 1999 and Chairman of the Company in March 2000. John has extensive senior operational management experience within the semiconductor industry. From 1992 to 1996, he was Chairman, President and Chief Executive Officer of Tamarack Storage Devices, Inc. Subsequently he was involved in the formation of Simages (now TeraLogic) and was a cofounder and part-time Chief Technology Officer of sVISION, Inc. He has also held the positions of Chief Executive Officer of CRISC (now Stream Machine) and Chief Executive Officer of Synergy Semiconductor Inc. He has provided consulting services to MCC, the Mayfield Fund and VLSI Technology, Inc.
 

Jan Olof Ingemar Tufvesson became a non-executive director of ARC International in December 1999. Since 1998, he has been a management consultant and is also non-executive Chairman of Dialog Semiconductor plc. Prior to that he worked for Ericsson for eighteen years.

About ARC International
ARC International plc, is a leading developer of user-customisable, high-performance microprocessor cores, including ARCtangentTM, and related intellectual property technology enabling designers to reduce time to market for their system-on-a-chip products. Over 56 licensees use ARC's technology including: Austria Mikro Systeme, BrightCom, Conexant Systems, Cypress Semiconductor, Fujitsu Microelectronics, IBM, Infineon Technologies, Qlogic, RF Micro Devices, SanDisk, Texas Instruments and Vtech Communications. ARC's target markets are telecommunications, voice and data networking, and consumer electronics embedded systems. Products available based on ARC's technology include digital still cameras, set-top boxes and network processors.
 

With headquarters in Elstree, England, ARC International plc and its group companies employ about 230 people in research and development, sales, and marketing offices across North America and Europe. MetaWare Inc., Precise Software Technologies Inc. and VAutomation Inc. are wholly owned subsidiaries of ARC International, providing software development tools, hardware and software intellectual property and real time operating systems for an integrated approach to system-on-a-chip development.

ARC International plc is listed on the London Stock Exchange (LSE:ARK). The company's website is located at www.arccores.com

Statements made in this press release that are not historical facts include forward-looking statements that involve risks and uncertainties. Important factors that could cause actual results to differ from those indicated by such forward-looking statements include, among others, market acceptance of the ARC technology; fluctuations in and unpredictability of the Company's quarterly results; general economic and business conditions; regulatory policies adopted by governmental authorities; assumptions regarding the Company's future business strategy; changes in technology; competition; ability to attract and retain qualified personnel; risks associated with the Company's international operations; and other uncertainties that are discussed in the "Investment Considerations" section of the Company's listing particulars dated 28 September 2000 filed with the United Kingdom Listing Authority and the Registrar of Companies in England and Wales.
 

ARC International (UK) Ltd. and ARC Cores Inc., both of which are wholly owned subsidiaries of ARC International plc, trade under the name of ARC Cores.
ARC Cores is a trademark of ARC International (UK) Limited.
All other brands or product names are the property of their respective holders.