Monolithic Power Systems Announces Results for the Quarter and Nine Months Ended September 30, 2009
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SAN JOSE, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Monolithic Power Systems (MPS) (Nasdaq: MPWR), a leading fabless manufacturer of high-performance analog and mixed-signal semiconductors, today announced financial results for the quarter and nine months ended September 30, 2009.
The results for the quarter ended September 30, 2009 are as follows:
-- Net revenues of $48.0 million, up 16.5% sequentially from $41.2 million
in the second quarter of 2009 and down 1.9% from $48.9 million in the
third quarter of 2008
-- Gross margin of 60.7%, compared to 59.1% in the second quarter of 2009
and 62.8% in the third quarter of 2008
-- GAAP operating expenses of $16.0 million, including $19.5 million for
research and development and selling, general and administrative
expenses, which includes $3.1 million for stock-based compensation, $2.8
million for litigation expenses and a credit of $6.4 million for the
net effect of a litigation provision reversal.
-- Non-GAAP(1) operating expenses of $19.2 million, excluding $3.1 million
for stock-based compensation and a credit of $6.4 million for the net
effect of a litigation provision reversal, compared to $16.8 million
for the three months ended September 30, 2008.
-- GAAP net income of $12.6 million, with GAAP earnings per share of $0.34
per diluted share
-- Non-GAAP(1) net income of $8.8 million, or $0.24 per diluted share,
excluding stock-based compensation and related tax effects and a credit
of $6.4 million for the net effect of a litigation provision reversal.
The results for the nine months ended September 30, 2009 are as follows:
-- Net revenues of $118.5 million, compared to $125.8 million for the nine
months ended September 30, 2008, a decrease of 5.8%
-- Gross margin of 59.4%, compared to 62.9% for the nine months ended
September 30, 2008
-- GAAP operating expenses of $55.2 million, including $54.5 million for
research and development and selling, general and administrative
expenses, which includes $10.2 million for stock-based compensation,
$7.1 million for litigation expenses and a credit of $6.4 million for
the net effect of a litigation provision reversal.
-- Non-GAAP(1) operating expenses of $51.4 million, excluding $10.2 million
for stock-based compensation and a credit of $6.4 million for the net
effect of a litigation provision reversal, compared to $49.7 million for
the nine months ended September 30, 2008, an increase of 3.4%
-- GAAP net income of $15.0 million, with GAAP EPS of $0.41 per diluted
share
-- Non-GAAP(1) net income of $17.2 million, or $0.47 per diluted share,
excluding stock-based compensation and related tax effects and a credit
of $6.4 million for the net effect of a litigation provision reversal.
"MPS had an outstanding third quarter, as we almost matched our all time high in quarterly revenue" said Michael Hsing, chief executive officer and founder of MPS. "We are executing very well, as we released a record number of new products this quarter. The future for MPS continues to look great."
Business Outlook
The following are MPS' financial targets for the fourth quarter ending December 31, 2009:
-- Revenues in the range of $43.0 million to $46.0 million.
-- Gross margin at similar levels to the third quarter of 2009.
-- Research and development and selling, general and administrative
expenses between $19.3 million and $20.7 million. Non-GAAP(1) research
and development and selling, general and administrative expenses between
$16.2 million and $17.2 million. This excludes an estimate of
stock-based compensation expense in the range of $3.1 million to $3.5
million.
-- Litigation expense in the range of $2.6 million to $3.0 million.
(1) Non-GAAP net income, non-GAAP operating expenses and non-GAAP research and development and selling, general and administrative expense differ from net income, operating expenses, and research and development and selling, general and administrative expense determined in accordance with GAAP (Generally Accepted Accounting Principles in the United States). Non-GAAP net income for the quarter and nine months ended September 30, 2009 and 2008 excludes the effect of stock-based compensation expense, a credit for the net effect of a litigation provision reversal and their related tax effects. Non-GAAP operating expenses for the quarter and nine months ended September 30, 2009 and 2008 exclude the effect of stock-based compensation expense and a credit for the net effect of a litigation provision reversal. Projected non-GAAP research and development and selling, general and administrative expenses exclude the effect of stock-based compensation expense. A schedule reconciling these amounts is included in this news release. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors' understanding of MPS' core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financials measures used by MPS.
Conference Call
MPS plans to conduct a management teleconference covering its quarter and nine months ended September 30, 2009 results at 2:00 p.m. PT / 5:00 p.m. ET today, October 22, 2009. To access the conference call and following replay, go to http://ir.monolithicpower.com and click the webcast link. From this site, you can listen to the teleconference, assuming that your computer system is configured properly. In addition to the webcast replay, which will be archived for all investors for one year on the MPS website, a phone replay will be available for seven days after the live call at 617-801-6888, code number 75482076. This press release and any other information related to the call will also be posted on the website.
Safe Harbor Statement
This press release contains forward-looking statements regarding targeted revenues, gross margin, GAAP and non-GAAP research and development and selling, general and administrative expenses, stock-based compensation expense and litigation expense for the quarter ending December 31, 2009, and our outlook for the long term prospects of the company. These statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this press release and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, the risks, uncertainties and costs of litigation in which the company is involved; the outcome of any upcoming trials, hearings, motions, and appeals; any market disruptions or interruptions in MPS' schedule of new product release development; adverse changes in production and testing efficiency; adverse changes in government regulations in foreign countries where MPS has offices; acceptance of, or demand for, MPS' products being lower than expected; the adverse impact on MPS' financial performance if its tax and litigation provisions are inadequate; difficulty in predicting or budgeting for future expenses and financial contingencies; and other important risk factors identified in MPS' SEC filings, including, but not limited to, its Form 10-Q filed on July 30, 2009.
The forward-looking statements in this press release represent MPS' targets, not predictions of actual performance. MPS assumes no obligation to update the information in this press release or in the accompanying conference call.
About Monolithic Power Systems, Inc.
Monolithic Power Systems, Inc. (MPS) develops and markets proprietary, advanced analog and mixed-signal semiconductors. The company combines advanced process technology with its highly experienced analog designers to produce high-performance power management integrated circuits (ICs) for DC to DC converters, LED drivers, Cold Cathode Fluorescent Lamp (CCFL) backlight controllers, Class D audio amplifiers, and Linear ICs. MPS products are used extensively in computing and network communications products, LCD monitors and TVs, and a wide variety of consumer and portable electronics products. MPS partners with world-class manufacturing organizations to deliver top quality, ultra-compact, high-performance solutions through the most productive, cost-efficient channels. Founded in 1997 and headquartered in San Jose, California, the company has expanded its global presence with sales offices in Taiwan, China, Korea, Japan, and Europe, which operate under MPS International, Ltd.
Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.
Consolidated Balance Sheets
(Unaudited, in thousands, except par value)
September December
30, 2009 31, 2008
---------- ---------
ASSETS
Current assets:
Cash and cash equivalents $51,993 $83,266
Short-term investments 97,763 21,922
Accounts receivable, net of allowances
of $7 and $0 in 2009 and 2008,
respectively 19,493 9,115
Inventories 20,358 18,887
Deferred income tax assets, net - current 76 75
Prepaid expenses and other current assets 2,790 2,622
Restricted cash - 7,360
-- -----
Total current assets 192,473 143,247
------- -------
Property and equipment, net 17,012 14,163
Long-term investments 19,465 37,425
Deferred income tax assets, net - long-term 19 19
Other assets 431 438
Restricted assets 7 7
-- --
Total assets $229,407 $195,299
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $8,867 $4,674
Accrued compensation and related benefits 6,351 7,848
Accrued liabilities 8,041 13,360
----- ------
Total current liabilities 23,259 25,882
------ ------
Non-current income tax liability 4,798 4,762
Other long-term liabilities 8 10
-- --
Total liabilities 28,065 30,654
------ ------
Stockholders' equity:
Common stock, $0.001 par value, $35 and
$34 in 2009 and 2008, respectively;
shares authorized: 150,000,000; shares
issued and outstanding: 34,841,371 and
33,646,821 in 2009 and 2008,
respectively 168,472 147,298
Retained earnings 32,431 17,411
Accumulated other comprehensive income
(loss) 439 (64)
--- ---
Total stockholders' equity 201,342 164,645
------- -------
Total liabilities and stockholders'
equity $229,407 $195,299
======== ========
Consolidated Income Statements
(Unaudited, in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
---------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $47,966 $48,891 $118,461 $125,802
Cost of revenue* 18,868 18,201 48,122 46,620
------ ------ ------ ------
Gross profit 29,098 30,690 70,339 79,182
------ ------ ------ ------
Operating expenses:
Research and development* 10,080 9,420 27,929 25,594
Selling, general and
administrative* 9,438 9,560 26,567 27,200
Litigation expense 2,811 1,090 7,090 6,120
Litigation provision reversal,
net (6,356) - (6,356) -
------ ------ ------ ------
Total operating expenses 15,973 20,070 55,230 58,914
------ ------ ------ ------
Income from operations 13,125 10,620 15,109 20,268
Other income (expense):
Interest and other income 161 684 827 2,928
Interest and other expense (76) (389) (355) (507)
-- --- --- -----
Total other income, net 85 295 472 2,421
-- --- --- -----
Income before income taxes 13,210 10,915 15,581 22,689
Income tax provision 648 458 561 1,697
------- ------- ------- -------
Net income $12,562 $10,457 $15,020 $20,992
======= ======= ======= =======
Basic net income per share $0.36 $0.31 $0.44 $0.63
===== ===== ===== =====
Diluted net income per share $0.34 $0.29 $0.41 $0.58
===== ===== ===== =====
Weighted average common shares
outstanding 34,552 33,869 34,082 33,482
Stock options and restricted
stock 2,695 2,733 2,273 2,850
----- ----- ----- -----
Diluted weighted-average common
equivalent shares outstanding 37,247 36,602 36,355 36,332
====== ====== ====== ======
* Stock-based compensation has been included in the following line
items:
Cost of revenue $69 $76 $217 $249
Research and development 1,409 1,471 4,656 4,074
Selling, general and
administrative 1,688 1,787 5,558 5,141
----- ----- ----- -----
Total $3,166 $3,334 $10,431 $9,464
====== ====== ======= ======
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(in thousands, except per share amounts)
------- ------- ------- -------
Net income $12,562 $10,457 $15,020 $20,992
======= ======= ======= =======
Adjustments to reconcile net income to
non-GAAP net income
Stock-based compensation $3,166 $3,334 $10,431 $9,464
Litigation provision reversal,
net (6,356) - (6,356) -
Tax effect (605) (1,679) (1,896) (3,603)
---- ------ ------ ------
Non-GAAP net income $8,767 $12,112 $17,199 $26,853
------ ------- ------- -------
Non-GAAP earnings per share, excluding
stock-based compensation and
related tax effects:
Basic $0.25 $0.36 $0.50 $0.80
Diluted $0.24 $0.33 $0.47 $0.74
Shares used in the calculation of
non-GAAP earnings per share:
Basic 34,552 33,869 34,082 33,482
Diluted 37,247 36,602 36,355 36,332
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP
OPERATING EXPENSES
(in thousands, except per share amounts)
------- ------- ------- -------
Total operating expenses $15,973 $20,070 $55,230 $58,914
======= ======= ======= =======
Adjustments to reconcile total operating expenses to non-GAAP total
operating expenses
Stock-based compensation $(3,097) $(3,258) $(10,214) $(9,215)
Litigation provision reversal,
net 6,356 - 6,356 -
----- -- ----- --
Non-GAAP total operating
expenses $19,232 $16,812 $51,372 $49,699
------- ------- ------- -------
2009 Fourth Quarter Outlook
RECONCILIATION OF R&D AND SG&A EXPENSES TO NON-GAAP R&D AND SG&A EXPENSES
(in thousands, except per share amounts)
Three months
ending
December 31,
2009
Low High
--- ----
R&D and SG&A $16,200 $17,200
======= =======
Adjustments to reconcile R&D and SG&A to non-GAAP R&D and SG&A
Stock-based compensation 3,100 3,500
----- -----
Non-GAAP R&D and SG&A $19,300 $20,700
------- -------
SOURCE Monolithic Power Systems, Inc.
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