Monolithic Power Systems, Inc.
Oct 22, 2009
PDF

Monolithic Power Systems Announces Results for the Quarter and Nine Months Ended September 30, 2009

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:

The results for the nine months ended September 30, 2009 are as follows:

"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:

(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.

Rick Neely,
Chief Financial Officer
of Monolithic Power Systems, Inc.,
+1-408-826-0777,
investors@monolithicpower.com