Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported):

February 3, 2005

 


 

MONOLITHIC POWER SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

 


 

Delaware   000-51026   77-0466789

(State or other jurisdiction of

incorporation or organization)

  (Commission File Number)  

(I.R.S. Employer

Identification Number)

 

983 University Avenue, Building A

Los Gatos, California 95032

(Address of principal executive offices) (Zip Code)

 

(408) 357-6600

(Registrant’s telephone number, including area code)

 

 

(former name or former address, if changed since last report)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 



 

Item 2.02 Results of Operations and Financial Condition

 

The information in this report and the exhibit attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

On February 3, 2005, Monolithic Power Systems, Inc., a Delaware corporation, issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2004 and is subsequently holding a webcast conference call regarding those financial results. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits

 

(c) Exhibits.

 

Exhibit

 

Description


99.1   Press Release issued February 3, 2005.

 

2


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

February 3, 2005

 

By:

 

/s/ Tim Christoffersen


        Tim Christoffersen,
        Chief Financial Officer and Secretary
       

(Principal Financial and Accounting Officer and Duly

Authorized Officer)

 

3


 

Index to Exhibits

 

Exhibit

 

Description


99.1   Press Release issued February 3, 2005.
Press Release

Exhibit 99.1

 

Contact:

 

Tim Christoffersen

Chief Financial Officer

Monolithic Power Systems, Inc.

408 357-6777

 

Monolithic Power Systems Reports Fourth-

Quarter and Fiscal Year 2004 Financial Results

 

LOS GATOS, Calif., February 3, 2005 – Monolithic Power Systems, Inc. (MPS) (Nasdaq: MPWR), a fabless manufacturer of high-performance analog and mixed-signal semiconductors, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2004.

 

Financial highlights for the fourth quarter included:

 

    Net revenues of $15.1 million, up 85% from $8.2 million for the same quarter of 2003

 

    Gross margin of 62.6%, up from 60.9% for the year-earlier quarter

 

    R&D and SG&A expenses of $4.2 million, or 28.0% of net revenues, compared with $2.6 million, or 32% of net revenues, for the same quarter a year ago

 

    GAAP net income of $647,000 ($0.02 per diluted share), which includes a one time net tax credit of $1,001,000, compared to GAAP net income of $356,000 ($0.00 per diluted share) from the same quarter a year earlier

 

    Non-GAAP net income(1), excluding stock-based compensation expense, of $3.4 million ( $0.12 per diluted share).

 

“Our net revenues and gross margin exceeded our initial expectations for the fourth quarter,” said MPS Chief Executive Officer Michael Hsing. “Our increase in revenue came across all of our product lines and I am extremely pleased with the design win momentum at our customers.”

 

For full-year 2004, net revenues were $47.9 million, up 98% from $24.2 million for 2003. Net loss was $4.1 million ($0.58 per diluted share), compared with a net loss of $3.0 million ($0.71 per diluted share) for the prior year. Excluding stock-based compensation expense, non-GAAP net income for 2004 was $7.9 million ($0.30 per diluted share), compared with a non-GAAP net income of $85,000 ($0.00 per diluted share) for 2003.

 

Conference Call

 

MPS plans to conduct a management teleconference on fourth-quarter and year-end results at 2:00 p.m. PST / 5:00 p.m. EST today, February 3, 2005. Dial-in number: 719-457-2727, code number 9577454. The call will be webcast live and archived for all investors for one year on the MPS website at http://www.monolithicpower.com/cmp_02_inv_rel.htm. This press release and any other information related to the call will also be posted on the website at that location. In addition, a phone replay of the call will be available for seven days at 719-457-0820, code number 9577454.

 

(1) Non-GAAP net income differs from net income determined according to GAAP (Generally Accepted Accounting Principles in the United States). A schedule reconciling these amounts is included in this

 


news release. Our non-GAAP net income differs from GAAP net loss in that our non-GAAP figure excludes stock-based compensation expense. 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 in assessing 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 provides investors supplemental information and 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 the investor with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP measures utilized by MPS.

 

About MPS

 

Monolithic Power Systems, Inc. (MPS) designs, develops and markets proprietary, advanced analog and mixed-signal semiconductors for large and high-growth markets. The company’s integrated circuits (ICs) are used in a variety of electronic products, such as notebook computers, flat panel displays, cellular handsets, digital cameras, wireless local area network (LAN) access points, home entertainment systems and personal digital assistants (PDAs). MPS utilizes a fabless business model, manufacturing its ICs through foundry partners that employ the company’s proprietary process technology. MPS is based in Los Gatos, California, and through MPS International maintains international sales offices in Taiwan, China and Korea.

 

Safe Harbor Statement

 

This press release contains forward-looking statements, including statements regarding, among other things, potential growth of the markets into which we sell our products. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including the potential impact on customers of the effects of litigation in which the company is involved, risks associated with our continued development and expansion of our business, acceptance of, or demand for, our products being lower than expected, and, based on our limited operating history, difficulty in predicting or budgeting for future expenses and financial contingencies.

 

Other risk factors are listed in MPS’ SEC filings, including but not limited to the final prospectus for its initial public offering of common stock filed November 19, 2004.

 

Any statements by persons outside of MPS speculating on the progress of the quarter, or other aspects of the MPS’ business, are not based on internal MPS information and should be assessed accordingly by investors.

 

MPS, Monolithic Power Systems, and the MPS logo are among the trademarks of Monolithic Power Systems, Inc. in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners.

 

Financial Statements Attached

 


 

Monolithic Power Systems, INC.

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

     unaudited
Q4 2003


    unaudited
Q4 2004


    2003

    2004

 

Revenues

   $ 8,163     $ 15,127     $ 24,204     $ 47,923  

Cost of revenues:

                                

Product cost

     3,060       5,481       10,750       18,681  

Stock-based compensation

     129       176       180       810  
    


 


 


 


Total cost of revenues

     3,189       5,657       10,930       19,491  
    


 


 


 


Gross profit

     4,974       9,470       13,274       28,432  

Gross profit %

     60.9 %     62.6 %     54.8 %     59.3 %

Operating expenses:

                                

Research and development (excluding stock based compensation)

     1,361       2,268       5,493       7,689  

Selling, General and administrative (excluding stock based compensation)

     1,259       1,970       3,914       7,018  

Patent litigation

     585       2,989       4,332       7,833  

Stock-based compensation*

     1,458       2,614       2,741       11,047  
    


 


 


 


Total operating expenses

     4,663       9,841       16,480       33,587  
    


 


 


 


Income (Loss) from operations

     311       (371 )     (3,206 )     (5,155 )

Other income (expense):

                                

Interest and other income

     45       62       170       171  

Interest and other expense

     —         (45 )     —         (140 )
    


 


 


 


Total other income, net

     45       17       170       31  
    


 


 


 


Net Income (loss) before income taxes

     356       (354 )     (3,036 )     (5,124 )

Income tax expense (credit)

     —         (1,001 )     —         (1,001 )
    


 


 


 


Net Income <loss>

     356       647       (3,036 )     (4,123 )
    


 


 


 


Accretion of redeemable convertible preferred stock

     335       178       1,340       1,183  
    


 


 


 


Net income (loss) attributable to common stockholders

   $ 21     $ 469     $ (4,376 )   $ (5,306 )
    


 


 


 


Basic net income (loss) per common share

   $ 0.00     $ 0.03     $ (0.71 )   $ (0.58 )

Diluted net income (loss) per common share

   $ 0.00     $ 0.02     $ (0.71 )   $ (0.58 )

Shares used in basic net income (loss) per common share

     6,358       16,186       6,143       9,132  

Shares used in diluted net income (loss) per common share

     20,815       27,922       6,143       9,132  

 


 

Monolithic Power Systems, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     31-Dec-03

    31-Dec-04

 

ASSETS

                

Current assets:

                

Cash and cash equivalents

   $ 12,135     $ 46,419  

Short-term investments

     1,007       2,600  

Accounts receivable, net

     4,566       3,989  

Inventories

     1,599       5,398  

Deferred tax asset - current

             807  

Prepaid and other current assets

     330       1,122  
    


 


Total current assets

     19,637       60,335  

Property and equipment, net

     2,149       4,180  

Other assets

     30       134  

Deferred tax asset - noncurrent

             658  

Restricted assets

     787       6,641  
    


 


Total assets

   $ 22,603     $ 71,948  
    


 


LIABILITIES AND SHAREHOLDERS’ EQUITY

                

Current liabilities:

                

Accounts payable

   $ 1,792     $ 2,744  

Accrued compensation and related benefits

     515       1,518  

Accrued liabilities

     587       3,648  

Deferred tax liabilities

             374  
    


 


Total current liabilities

     2,894       8,284  

Deferred rent

     65       162  

Redeemable convertible preferred stock – no par value;

     18,413          

Shareholders’ equity:

                

Convertible preferred stock – no par value

     11,163          

Common stock, no par value

     13,533       93,199  

Deferred stock compensation

     (8,013 )     (9,180 )

Notes receivable from stockholders

     (398 )     (398 )

Accumulated other comprehensive income

     1       243  

Accumulated deficit

     (15,055 )     (20,362 )
    


 


Total shareholders’ equity

     1,231       63,502  
    


 


Total liabilities and shareholders’ equity

   $ 22,603     $ 71,948  
    


 


 


 

Monolithic Power Systems, INC.

NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

     Q4 2003

    Q4 2004

    2003

    2004

 

Revenues

     8,326       15,127       24,404       48,088  

Cost of revenues:

                                

Product cost

     3,060       5,481       10,750       18,681  

Stock-based compensation

     —         —                 —    
    


 


 


 


Total cost of revenues

     3,060       5,481       10,750       18,681  
    


 


 


 


Gross profit

     5,266       9,646       13,654       29,407  

Gross profit %

     63.2 %     63.8 %     55.9 %     61.2 %

Operating expenses:

                                

Research and development (excluding stock based compenasation)

     1,361       2,268       5,493       7,689  

Selling, General and administrative (excluding stock based compensation)

     1,259       1,970       3,914       7,018  

Patent litigation

     585       2,989       4,332       7,833  

Stock-based compensation*

     —         —                 —    
    


 


 


 


Total operating expenses

     3,205       7,227       13,739       22,540  
    


 


 


 


Income (loss) from operations

     2,061       2,419       (85 )     6,867  

Other income (expense):

                                

Interest and other income

     45       62       170       171  

Interest and other expense

     —         (45 )     —         (140 )
    


 


 


 


Total other income (expense), net

     45       17       170       31  
    


 


 


 


Net Income before income taxes

     2,106       2,436       85       6,898  

Income tax expense (credit)

     —         (1,001 )     —         (1,001 )
    


 


 


 


Net Income

   $ 2,106     $ 3,437     $ 85     $ 7,899  
    


 


 


 


Basic net income per common share

   $ 0.33     $ 0.21     $ 0.01     $ 0.86  

Diluted net income per common share

   $ 0.10     $ 0.12     $ 0.00     $ 0.30  

Shares used in basic net income per common share

     6,358       16,186       6,143       9,132  

Shares used in diluted net income per common share

     20,815       27,922       24,181       26,702  

 


 

Monolithic Power Systems, INC.

NON-GAAP AND GAAP RECONCILATIONS

(unaudited)

(in thousands)

 

     Q4 2003

   Q4 2004

   2003

    2004

 

Net income (loss) - GAAP basis

   $ 356    $ 647    $ (3,036 )   $ (4,123 )
    

  

  


 


Non-GAAP Adjustments for Stock Comp

                              

Contra Revenue

     163      —        200       165  

Cost Of Good Sold

     129      176      180       810  

Operating Expense

     1,458      2,614      2,741       11,047  

Tax effect to items

     —        —        —         —    
    

  

  


 


Net income - Non-GAAP

   $ 2,106    $ 3,437    $ 85     $ 7,899