Statement re Results of Strategic Review and Retur

Statement re Results of Strategic Review and Return of Capital to Shareholders GEO Selection description 

    LONDON--(BUSINESS WIRE)--Nov. 22, 2002--

                         ARC International PLC
                           Strategic Update


ARC International plc (LSE: ARK), a world leader in semiconductor and
software technology licensing, today announces the result of its
strategic review and intention to return capital to shareholders.

On November 1st 2002, ARC announced its intention to conduct a review
of the strategic options available to the Company, including an
analysis of the Group's capital structure, business plan and future
liquidity requirements. In addition, the appointment of WestLB Panmure
Limited as joint corporate broker and financial adviser to the Company
was also announced. The Board promised substantive progress in
November and can today deliver the outcome of the review.

Strategy

ARC's strategy remains to grow organically, increasing revenues
through licensing, royalties and maintenance, whilst reducing costs
across the business, forging strategic alliances and diversifying into
new product areas. In addition, the Board believes that the Company
can support significantly higher levels of turnover with its current
infrastructure.

The new management team has made significant improvements to the
business during the course of this year, achieving growth in turnover,
adding 23 ARCtangent processor licenses and successfully introducing
the USB Now product and the A5 version of the ARCtangent processor. In
addition, costs have so far been reduced by approximately £1m per
quarter, the integration of all the acquired companies has been
completed and the management team is now complete. A new board member
has been appointed, Jez San, a founder of ARC International and the
largest individual shareholder. The Board continues to work hard to
develop strong relationships with all shareholders and views Mr San's
appointment as a valuable addition to the Board.

Along with a number of key strategic partnerships announced this year,
the Intel Microelectronics Services business has recently added the
ARCtangent processor to its IP library. Within its product offering,
ARC has several new products that will be introduced in the next few
months, which include a new generation of the ARCtangent processor as
well as additional platform offerings. The Company also announced
yesterday the acceleration of its expansion into the Asian market.

Return of Capital

As a result of the strategic review, and following discussions with
shareholders, the Board believes that ARC has more than sufficient
working capital funding to bring the Group to profitability on the
basis of reasonably prudent assumptions. Consequently, ARC's Board
intends to return £50m of capital to shareholders during the first
half of the next calendar year in order to optimise the Company's
capital structure and hence shareholders potential for future returns.
The return of capital will be subject to shareholder and Court
approval. Following the return of capital, ARC will have a strong
balance sheet with sufficient cash resources to forge long term
relationships with existing and prospective partners, licensees and
suppliers, as well as having the flexibility to make modest
complimentary acquisitions where appropriate.

The Board and its advisers are currently examining the most effective
method to return capital to shareholders. A further announcement will
be made when this analysis is completed.

Current Trading

As announced at the third quarter results in October 2002, ARC
believes that it continues to make meaningful progress towards
achieving EBITDA breakeven and expects its financial performance for
the year to fall within the current range of published analyst
forecasts.


Mike Gulett, CEO of ARC, commented:

"We have made good progress this year in our drive towards
profitability and this remains our focus. We have won many important
new customers and the recent addition of the ARC processor to the
Intel Microelectronics Services library further endorses the strength
of our technology. On the basis of these achievements I am very
optimistic about ARC's future.

Since WestLB Panmure came on board, we have rapidly completed a
comprehensive review of the business. The results show that we have
more than sufficient working capital funding to bring the Group to
profitability and we therefore intend to return £50m of capital to
shareholders during the first half of the next calendar year."


Enquiries:

ARC International plc
Mike Gulett,               Chief Executive Officer                               001 408 437 3404
Monica Johnson,            Chief Financial Officer                               001 408 437 3470

WestLB Panmure                                                               [phone]
Tim Linacre
Andrew Godber

Tulchan Communications                                                       [phone]
Julie Foster

   Short Name: Arc Intl PLC
   Category Code: STR
   Sequence Number: 00001275
   Time of Receipt (offset from UTC): 20021122T073115+0000