Monolithic Power Systems, Inc.
Jul 28, 2010
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Monolithic Power Systems Announces Consecutive Record Revenue Results for the Quarter and Half Year ended June 30, 2010

SAN JOSE, Calif., July 28, 2010 /PRNewswire via COMTEX/ -- 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 half year ended June 30, 2010.

 

The results for the quarter ended June 30, 2010 are as follows:

 

 

The results for the half year ended June 30, 2010 are as follows:

 

 

"Our outstanding revenue performance is driven by our new product releases of the last two years", said Michael Hsing, CEO of MPS. "We are now seeing the dramatic top line and bottom line growth from these successful products."

Business Outlook

The following are MPS' financial targets for the third quarter ending September 30, 2010:

 

 

(1) Non-GAAP net income, non-GAAP net profit, 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 six months ended June 30, 2010 and 2009 excludes the effect of stock-based compensation expense and their related tax effects. Non-GAAP operating expenses for the quarter and six months ended June 30, 2010 and 2009 exclude the effect of stock-based compensation expense. Projected non-GAAP research and development and selling, general and administrative expenses exclude the effect of stock-based compensation expense. This information is not in accordance with, or an alternative for, information prepared using GAAP. A schedule reconciling these amounts is included at the end of this press 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 an investor teleconference covering its quarter ended June 30, 2010 results at 2:00 p.m. PT / 5:00 p.m. ET today, July 28, 2010. 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 617-801-6888, code number 68963211. 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, as that term is defined in the Private Securities Litigation Reform Act of 1995, regarding, among other things, (i) targeted revenues, revenue growth rates, net 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 September 30, 2010, (ii) our outlook for the long term prospects of the company, (iii) our ability to accelerate our revenue and net income growth rates; (iv) our ability to penetrate new markets and expand our market share, (v) our expected pricing practices in 2010, (vi) the seasonality of our business, (vii) our ability to reduce our manufacturing costs, (viii) our ability to obtain adequate supplies of our products from our third-party manufacturer, and (ix) statements of the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), (v), (vi), (vii) or (viii). 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 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, 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, in particular the new products launched within the past 18 months, being lower than expected; competition generally and the increasingly competitive nature of our industry; the effect of catastrophic events; adequate supply of our products from our third-party manufacturer; 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 April 29, 2010.

The forward-looking statements in this press release represent MPS' targets 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 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)



June 30, 2010

December 31, 2009

ASSETS



Current assets:



Cash and cash equivalents

$                   48,962

$                         46,717

Short-term investments

140,829

118,914

Accounts receivable, net of allowances of $0 in both 2010 and 2009

30,322

15,521

Inventories

14,458

19,616

Deferred income tax assets, net - current

5

5

Prepaid expenses and other current assets

2,820

2,726

Total current assets

237,396

203,499

Property and equipment, net

27,253

17,968

Long-term investments

19,495

19,445

Deferred income tax assets, net - long-term

175

175

Other assets

731

734

Total assets

$                 285,050

$                       241,821




LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:



Accounts payable

$                   11,001

$                           7,787

Accrued compensation and related benefits

9,388

8,454

Accrued liabilities

9,116

7,681

Total current liabilities

29,505

23,922




Non-current income tax liability

4,915

4,915

Other long-term liabilities

662

27

     Total liabilities

35,082

28,864

Stockholders' equity:



Common stock, $0.001 par value, $37 and $35 in
     2010 and 2009, respectively; shares authorized:
     150,000,000; shares issued and outstanding:
     36,545,581 and 35,165,316 in 2010 and 2009,
     respectively

199,330

175,518

Retained earnings

49,848

37,085

Accumulated other comprehensive income

790

354

Total stockholders' equity

249,968

212,957

Total liabilities and stockholders' equity

$                 285,050

$                       241,821



                       Consolidated Income Statements
            (Unaudited, in thousands, except per share amounts)


                              Three months ended June       Six months ended
                                        30,                   June 30,
                           ------------------------      -----------------
                                     2010        2009        2010      2009
                                     ----        ----        ----      ----


      Revenue                     $55,690     $41,173    $105,940   $70,495
      Cost of
       revenue*                    23,256      16,823      44,210    29,254
                                   ------      ------      ------    ------

           Gross
            profit                 32,434      24,350      61,730    41,241
                                   ------      ------      ------    ------
      Operating expenses:
        Research
         and
         development*              11,785       9,732      22,825    17,849
        Selling,
         general
         and
         administrative*           11,615       9,321      22,008    17,129
        Litigation
         expense                    2,228       2,233       3,795     4,279

           Total
            operating
            expenses               25,628      21,286      48,628    39,257
                                   ------      ------      ------    ------

      Income
       from
       operations                   6,806       3,064      13,102     1,984
      Other income (expense):
        Interest
         and other
         income                       338         281         685       666
        Interest
         and other
         expense                       (4)       (185)         (4)     (279)

           Total
            other
            income,
            net                       334          96         681       387
                                      ---         ---         ---       ---

      Income
       before
       income
       taxes                        7,140       3,160      13,783     2,371
      Income tax
       provision
       (benefit)                      733         (26)      1,020       (87)


      Net income                   $6,407      $3,186     $12,763    $2,458
                                   ======      ======     =======    ======
      Basic net
       income
       per share                    $0.18       $0.09       $0.36     $0.07
                                    =====       =====       =====     =====
      Diluted
       net
       income
       per share                    $0.17       $0.09       $0.33     $0.07
                                    =====       =====       =====     =====

      Weighted
       average
       common
       shares
       outstanding                 36,291      34,070      35,858    33,842
      Stock
       options                      2,064       2,319       2,293     2,036
                                    -----       -----       -----     -----
      Diluted
       weighted-
       average
       common
       equivalent
       shares
       outstanding                 38,355      36,389      38,151    35,878
                                   ======      ======      ======    ======

    * Stock-based
     compensation has been
     included in the
     following line items:
        Cost of
         revenue                     $116         $67        $195      $148
        Research
         and
         development                1,995       1,687       3,730     3,247
        Selling,
         general
         and
         administrative             3,428       2,098       5,638     3,870
            Total                  $5,539      $3,852      $9,563    $7,265
                                   ======      ======      ======    ======

            RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
                  (in thousands, except per share amounts)

    Net income                     $6,407      $3,186     $12,763    $2,458
                                   ======      ======     =======    ======

    Adjustments to reconcile net income to non-GAAP net
     income
        Stock-
         based
         compensation              $5,539      $3,852      $9,563    $7,265
        Tax effect                   (218)       (903)       (731)   (1,292)
        Non-GAAP
         net
         income                   $11,728      $6,135     $21,595    $8,431
                                  -------      ------     -------    ------

    Non-GAAP earnings per share, excluding stock-based
     compensation and related tax effects:
        Basic                       $0.32       $0.18       $0.60     $0.25
        Diluted                     $0.31       $0.17       $0.57     $0.24

    Shares used in the calculation of non-GAAP earnings
     per share:
        Basic                      36,291      34,070      35,858    33,842
        Diluted                    38,355      36,389      38,151    35,878


              RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP
                             OPERATING EXPENSES
                  (in thousands, except per share amounts)

    Total
     operating
     expenses                     $25,628     $21,286     $48,628   $39,257
                                  =======     =======     =======   =======

    Adjustments to reconcile total operating expenses to
     non-GAAP total operating expenses
        Stock-
         based
         compensation             $(5,423)    $(3,785)    $(9,368)  $(7,117)
        Non-GAAP
         total
         operating
         expenses                 $20,205     $17,501     $39,260   $32,140
                                  -------     -------     -------   -------


2010 Third 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 ended
                                                         September 30, 2010
                                                          Low        High
    R&D and SG&A                                         $23,200    $24,700
                                                         =======    =======

    Adjustments to reconcile R&D and SG&A to non-
     GAAP R&D and SG&A
        Stock-based compensation                          (4,700)    (5,200)
        Non-GAAP R&D and SG&A                            $18,500    $19,500
                                                         -------    -------


SOURCE Monolithic Power Systems, Inc.