Upgrade to SI Premium - Free Trial

Monolithic Power Systems Announces Results for the Fourth Quarter and Year Ended December 31, 2018, and an Increase in Quarterly Cash Dividend

February 12, 2019 4:01 PM

KIRKLAND, Wash., Feb. 12, 2019 (GLOBE NEWSWIRE) -- Monolithic Power Systems, Inc. (MPS) (Nasdaq: MPWR), a leading company in high performance analog solutions, today announced financial results for the quarter and year ended December 31, 2018. The Company also announced that its Board of Directors has approved an increase in the quarterly cash dividend from $0.30 per share to $0.40 per share. The first quarter dividend of $0.40 per share will be paid on April 15, 2019 to all stockholders of record as of the close of business on March 29, 2019.

The results for the quarter ended December 31, 2018 are as follows:

The results for the year ended December 31, 2018 are as follows:

The following is a summary of revenue by end market for the periods indicated (in thousands):

Three Months Ended December 31, Year Ended December 31,
End Market 2018 2017 2018 2017
Computing and storage $ 43,537 $ 26,679 $ 159,121 $ 100,782
Automotive 22,221 15,846 80,078 53,888
Industrial 26,928 16,160 88,472 62,896
Communications 20,147 15,857 70,589 63,606
Consumer 40,664 54,888 184,122 189,757
Total $ 153,497 $ 129,430 $ 582,382 $ 470,929

The following is a summary of revenue by product family for the periods indicated (in thousands):

Three Months Ended December 31, Year Ended December 31,
Product Family 2018 2017 2018 2017
DC to DC $ 143,021 $ 119,161 $ 537,512 $ 431,861
Lighting Control 10,476 10,269 44,870 39,068
Total $ 153,497 $ 129,430 $ 582,382 $ 470,929

“Despite uncertainty in the macro economy, we expect to continue winning market share in cloud computing, automotive and telecommunication markets. We believe our future is bright," said Michael Hsing, CEO and founder of MPS.

Business Outlook

The following are MPS’ financial targets for the first quarter ending March 31, 2019:

(1) Non-GAAP net income, non-GAAP earnings per share, non-GAAP gross margin, non-GAAP R&D and SG&A expenses, non-GAAP operating expenses, non-GAAP interest and other income, net, non-GAAP operating income and non-GAAP income before taxes differ from net income, earnings per share, gross margin, R&D and SG&A expenses, operating expenses, interest and other income, net, operating income and income before taxes determined in accordance with Generally Accepted Accounting Principles in the United States (GAAP). Non-GAAP net income and non-GAAP earnings per share exclude the effect of stock-based compensation expense, amortization of acquisition-related intangible assets, deferred compensation plan income/expense and related tax effects. Non-GAAP gross margin excludes the effect of stock-based compensation expense and amortization of acquisition-related intangible assets. Non-GAAP operating expenses exclude the effect of stock-based compensation expense and deferred compensation plan income/expense. Non-GAAP interest and other income, net excludes the effect of deferred compensation plan income/expense. Non-GAAP operating income excludes the effect of stock-based compensation expense, amortization of acquisition-related intangible assets and deferred compensation plan income/expense. Non-GAAP income before taxes excludes the effect of stock-based compensation expense, amortization of acquisition-related intangible assets and deferred compensation plan income/expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation expense. Projected non-GAAP R&D and SG&A expenses exclude the effect of stock-based compensation expense. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. 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 financial measures used by MPS.

Conference CallMPS plans to conduct an investor teleconference covering its financial results at 2:00 p.m. PT / 5:00 p.m. ET, February 12, 2019. To access the conference call and the following replay of the conference call, go to http://ir.monolithicpower.com and click on 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 (404) 537-3406, code number 8037138. This press release and any other information related to the call will also be posted on the website.

Safe Harbor StatementThis press release contains, and statements that will be made during the accompanying teleconference will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including, among other things, (i) projected revenues, GAAP and non-GAAP gross margin, GAAP and non-GAAP R&D and SG&A expenses, stock-based compensation expenses, interest and other income, and diluted shares outstanding, (ii) our outlook for the long-term prospects of the company, including our performance against our business plan, revenue growth in certain of our market segments, our continued investment into R&D, expected revenue growth, customers' acceptance of our new product offerings, the prospects of our new product development, and our expectations regarding market and industry segment trends and prospects, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements of the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking 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 significant 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, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, our ability to attract new customers and retain existing customers; acceptance of, or demand for, MPS' products, in particular the new products launched recently, being different than expected; our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to increase market share in our targeted markets; competition generally and the increasingly competitive nature of our industry; any market disruptions or interruptions in MPS' schedule of new product development releases; adverse changes in production and testing efficiency of our products; our ability to realize the anticipated benefits of companies and products that we acquire, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; our ability to manage our inventory levels; adverse changes in laws and government regulations, such as tariffs on imports of foreign goods, including in foreign countries where MPS has offices or operations; adverse events arising from orders of governmental entities, including such orders that impact our customers, and adopting of new or amended accounting standards; the effect of catastrophic events; adequate supply of our products from our third-party manufacturing partners; the risks, uncertainties and costs of litigation in which we are involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on MPS' financial performance if its tax and litigation provisions are inadequate; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies; the ongoing consolidation of companies in the semiconductor industry; and other important risk factors identified in MPS' Securities and Exchange Commission (SEC) filings, including, but not limited to, our annual report on Form 10-K filed with the SEC on March 1, 2018 and our quarterly report on Form 10-Q filed with the SEC on November 2, 2018. The forward-looking statements in this press release and statements made during the accompanying teleconference represent MPS' projections and current expectations, as of the date hereof, 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 SystemsMonolithic Power Systems, Inc. (MPS) provides small, highly energy efficient, easy-to-use power solutions for systems found in industrial applications, telecom infrastructures, cloud computing, automotive, and consumer applications. MPS' mission is to reduce total energy consumption in its customers' systems with green, practical, compact solutions. The company was founded by Michael Hsing in 1997 and is based in the United States. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

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.

Contact:Bernie BlegenChief Financial OfficerMonolithic Power Systems, Inc.408-826-0777[email protected]

Monolithic Power Systems, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value)
December 31,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents$ 172,704 $ 82,759
Short-term investments 204,577 216,331
Accounts receivable, net 55,214 38,037
Inventories 136,384 99,281
Other current assets 11,931 12,762
Total current assets 580,810 449,170
Property and equipment, net 150,001 144,636
Long-term investments 3,241 5,256
Goodwill 6,571 6,571
Acquisition-related intangible assets, net 111 951
Deferred tax assets, net 16,830 15,917
Other long-term assets 35,868 30,068
Total assets$ 793,432 $ 652,569
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$ 22,678 $ 22,813
Accrued compensation and related benefits 18,799 15,597
Accrued liabilities 38,962 27,507
Total current liabilities 80,439 65,917
Income tax liabilities 34,375 31,621
Other long-term liabilities 38,525 33,024
Total liabilities 153,339 130,562
Stockholders' equity:
Common stock and additional paid-in capital, $0.001 par value; shares authorized:
150,000; shares issued and outstanding: 42,505 and 41,614, respectively 450,908 376,586
Retained earnings 194,728 143,608
Accumulated other comprehensive income (loss) (5,543) 1,813
Total stockholders’ equity 640,093 522,007
Total liabilities and stockholders’ equity$ 793,432 $ 652,569

Monolithic Power Systems, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Revenue $ 153,497 $ 129,430 $ 582,382 $ 470,929
Cost of revenue 68,904 58,269 259,714 212,646
Gross profit 84,593 71,161 322,668 258,283
Operating expenses:
Research and development 22,735 21,730 93,455 82,359
Selling, general and administrative 28,372 24,038 113,803 97,257
Litigation expense, net 409 340 1,922 1,243
Total operating expenses 51,516 46,108 209,180 180,859
Income from operations 33,077 25,053 113,488 77,424
Interest and other income (expense), net (393) 1,647 4,994 5,520
Income before income taxes 32,684 26,700 118,482 82,944
Income tax provision 5,046 14,629 13,214 17,741
Net income $ 27,638 $ 12,071 $ 105,268 $ 65,203
Net income per share:
Basic$ 0.65 $ 0.29 $ 2.49 $ 1.58
Diluted$ 0.61 $ 0.27 $ 2.36 $ 1.50
Weighted-average shares outstanding:
Basic 42,467 41,574 42,247 41,350
Diluted 45,058 44,160 44,602 43,578
SUPPLEMENTAL FINANCIAL INFORMATION
STOCK-BASED COMPENSATION EXPENSE
(Unaudited, in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Cost of revenue$ 504 $ 391 $ 1,888 $ 1,654
Research and development 3,822 3,519 15,990 14,816
Selling, general and administrative 10,516 7,948 42,729 36,147
Total stock-based compensation expense$ 14,842 $ 11,858 $ 60,607 $ 52,617
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(Unaudited, in thousands, except per share amounts)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Net income $ 27,638 $ 12,071 $ 105,268 $ 65,203
Net income as a percentage of revenue 18.0% 9.3% 18.1% 13.8%
Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation expense 14,842 11,858 60,607 52,617
Amortization of acquisition-related intangible assets 197 513 841 2,051
Deferred compensation plan expense 458 148 431 238
Tax effect 1,432 11,688 (313) 7,402
Non-GAAP net income$ 44,567 $ 36,278 $ 166,834 $ 127,511
Non-GAAP net income as a percentage of revenue 29.0% 28.0% 28.6% 27.1%
Non-GAAP net income per share:
Basic$ 1.05 $ 0.87 $ 3.95 $ 3.08
Diluted$ 0.99 $ 0.82 $ 3.74 $ 2.93
Shares used in the calculation of non-GAAP net income per share:
Basic 42,467 41,574 42,247 41,350
Diluted 45,058 44,160 44,602 43,578
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited, in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Gross profit$ 84,593 $ 71,161 $ 322,668 $ 258,283
Gross margin 55.1% 55.0% 55.4% 54.8%
Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation expense 504 391 1,888 1,654
Amortization of acquisition-related intangible assets 197 513 841 2,051
Non-GAAP gross profit$ 85,294 $ 72,065 $ 325,397 $ 261,988
Non-GAAP gross margin 55.6% 55.7% 55.9% 55.6%
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Total operating expenses$ 51,516 $ 46,108 $ 209,180 $ 180,859
Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation expense (14,338) (11,467) (58,719) (50,963)
Deferred compensation plan income (expense) 1,513 (776) 591 (2,769)
Non-GAAP operating expenses$ 38,691 $ 33,865 $ 151,052 $ 127,127
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
(Unaudited, in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Total operating income$ 33,077 $ 25,053 $ 113,488 $ 77,424
Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation expense 14,842 11,858 60,607 52,617
Amortization of acquisition-related intangible assets 197 513 841 2,051
Deferred compensation plan (income) expense (1,513) 776 (591) 2,769
Non-GAAP operating income$ 46,603 $ 38,200 $ 174,345 $ 134,861
RECONCILIATION OF INTEREST AND OTHER INCOME (EXPENSE), NET, TO NON-GAAP INTEREST AND OTHER INCOME, NET
(Unaudited, in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Total interest and other income (expense), net$ (393) $ 1,647 $ 4,994 $ 5,520
Adjustments to reconcile interest and other income (expense), net, to non-GAAP interest and other income, net:
Deferred compensation plan (income) expense 1,971 (628) 1,022 (2,531)
Non-GAAP interest and other income, net$ 1,578 $ 1,019 $ 6,016 $ 2,989
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES
(Unaudited, in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Total income before income taxes$ 32,684 $ 26,700 $ 118,482 $ 82,944
Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation expense 14,842 11,858 60,607 52,617
Amortization of acquisition-related intangible assets 197 513 841 2,051
Deferred compensation plan expense 458 148 431 238
Non-GAAP income before income taxes$ 48,181 $ 39,219 $ 180,361 $ 137,850

2019 FIRST QUARTER OUTLOOK
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited)
Three Months Ending
March 31, 2019
Low High
Gross margin 54.8% 55.4%
Adjustments to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation expense 0.5% 0.5%
Non-GAAP gross margin 55.3% 55.9%
RECONCILIATION OF R&D AND SG&A EXPENSES TO NON-GAAP R&D AND SG&A EXPENSES
(Unaudited, in thousands)
Three Months Ending
March 31, 2019
Low High
R&D and SG&A expense$ 55,000 $ 59,000
Adjustments to reconcile R&D and SG&A expense to non-GAAP R&D and SG&A expense:
Stock-based compensation expense (17,000) (19,000)
Non-GAAP R&D and SG&A expense$ 38,000 $ 40,000

mps1.jpg

Source: Monolithic Power Systems, Inc.

Categories

Press Releases

Next Articles