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ARC International plc Trading Update

SAN JOSE, Calif., and ST. ALBANS, England, January 8, 2009 – ARC International plc (LSE: ARK), a leading provider of consumer IP to OEM and semiconductor companies globally, today issued the following trading update for the period from its last Interim Management Statement on November 10, 2008 to December 31, 2008.

Current Trading
While the company saw continued strong growth in royalty revenues in 2008, the increases were offset by lower than expected licensing revenues in the closing weeks of the year, resulting from the rescheduling by two customers of licensing decisions in response to continued deterioration of industry confidence.  As a result, revenues from the full-year 2008 are expected to be in the range of £15.7 to £16.2 million ($29 to $30 million).  ARC’s cash position remains strong at £12.6 million.  

Update on Reorganization Plan
The reorganization plan announced on September 22, 2008 was an early recognition of the challenging macro economic environment, and was designed to increase the company’s operational efficiencies and lower costs.  In order to address the dramatic decline in the Pound Sterling exchange rate, management is taking actions to further reduce costs.  As a result, full-year 2009 savings are expected to be at least £2.5 million, greater than the previously disclosed amount of £2.0 million.  The restructuring plan is still expected to necessitate a total charge of £3.0 million, comprising a cash cost of £1.5 million and provisions for future costs, principally relating to surplus property lease obligations of a further £1.5 million.  The additional actions mentioned above will necessitate £500,000 of the restructuring charge being taken in the first quarter of 2009.  

Outlook
For 2009, management continues to remain cautious due to continuing uncertainty in the economic environment and fundamental industry changes.  The company will report interim and full-year results on February 25, 2009.

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-Based™ chips annually in products such as Mobile TVs, Portable Media Players, WiFi-/WiMAX-enabled computers, 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, Calif., 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).

ARC and ARC-Based are trademarks or registered trademarks of ARC International with the U.S. Patent and Trademark Office and other international trademark organizations. All other brands or product names contained herein are the property of their respective owners. This press release may contain certain "forward-looking statements" that involve risks and uncertainties, including the development, implementation, and release of features described herein. These are at the sole discretion of ARC International. Licenses from 3rd parties for certain software and essential patents may be required depending on licensee's use/implementation. For other factors that could cause actual results to differ, visit the company’s Website as well as the listing particulars filed with the United Kingdom Listing Authority and the Registrar of Companies in England and Wales.