Just more than a month after Transmeta Corp. announced its restructuring, the company today reported Q1 results with revenue down and a narrowed loss.

The struggling company in March announced plans to revitalize itself, including a new CEO, a refocus on IP and a move away from products, and a 67 employee layoff. The restructuring impacted the closing quarter, but will have more impact as 2005 proceeds, according to the company's CFO.

"Our first quarter results reflect some of the modifications that we made to our product business model, and we would expect to realize the full financial benefits of our previously announced restructuring over the coming quarters," Mark R. Kent said in a statement.

"During the first quarter, we significantly reduced our negative cash flow to $11.7 million, and we are well ahead of reaching the first financial objective of our restructuring plan by reducing our negative cash flow run rate to $5 million per quarter or less by the end of the third quarter," the CFO continued. "Today, I believe that we should achieve this goal ahead of plan and we are now guiding to negative cash flow of less than $5 million by the end of the second quarter."

Revenue for the quarter ended March 31 was $6.9 million compared to $11.2 million in Q4 2004 and $5.2 million in the year-ago quarter. Q1 sales comprised of $6.4 million in product revenue and $0.45 million of licensing revenue. This compares with $4.8 million in product revenue and $6.4 million of licensing revenue in Q4.

The company also reported deferred revenue of $14.5 million reflecting license fees received as of March 31, from Sony Corp. and Fujitsu Ltd. under two licensing agreements for Transmeta's proprietary LongRun2 power management technologies.

"Our business model now enables us to deploy our innovative technology and intellectual property through products, licensing and synergistic engineering services. The relationships we have with Sony and Microsoft are excellent examples of our new strategy in action," said Arthur L. Swift, the company's newly appointed president and CEO, in the statement. "This new approach and modified business model are already starting to show positive results, and I am pleased to report we are ahead of schedule on our operational goals."

Meanwhile, Transmeta's net loss narrowed to $21.1 million or 11 cents per share, compared with a net loss of $28.1 million or a loss of 15 cents per share in Q4 and a net loss of $23.4 million or a loss of 14 cents per share in the Q1 2004.

"With continued careful expense management and anticipated milestone-based payments from our license and service customers, we are currently expecting our cash position to be $35 million or greater at Dec. 31, 2005," added Kent. "This should provide us with sufficient liquidity and the resources to successfully execute on our growth strategies."

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