Monolithic Power Systems, Inc.
Jul 30, 2009
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Monolithic Power Systems Announces Second Quarter and Half Year 2009 Results

SAN JOSE, Calif., July 30 /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 half year ended June 30, 2009.

The results for the quarter ended June 30, 2009 are as follows:

The results for the half year ended June 30, 2009 are as follows:

"MPS saw a rebound in our business in the second quarter as our major end markets performed well after a slow first quarter" said Michael Hsing, chief executive officer and founder of MPS. "We are still cautious in the near term, but optimistic in the long term. With our slate of new products, we are winning business in many new geographic markets as well as new product segments."

Business Outlook

The following are MPS' financial targets for the third quarter ending September 30, 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 half year ended June 30, 2009 and 2008 excludes the effect of stock-based compensation expense and their related tax effects. Non-GAAP operating expenses for the quarter and half year ended June 30, 2009 and 2008 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. 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 ended June 30, 2009 results at 2:00 p.m. PT / 5:00 p.m. ET today, July 30, 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 73043206. 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 September 30, 2009, and our outlook for the next quarter. 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 April 28, 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 Sheet
                    (Unaudited, in thousands, except par value)

                                                June 30,   December 31,
                                                  2009         2008
                                                --------   ------------
    ASSETS
    Current assets:
      Cash and cash equivalents                  $56,816      $83,266
      Short-term investments                      61,968       21,922
      Accounts receivable, net of allowances
       of $7 and $0 in 2009 and 2008,
       respectively                               12,448        9,115
      Inventories                                 20,082       18,887
      Deferred income tax assets, net - current       75           75
      Prepaid expenses and other current assets    3,325        2,622
      Restricted cash                              7,350        7,360
                                                   -----        -----
        Total current assets                     162,064      143,247
                                                 -------      -------
    Property and equipment, net                   16,326       14,163
    Long-term investments                         37,635       37,425
    Deferred income tax assets, net - long-term       19           19
    Other assets                                     430          438
    Restricted assets                                  7            7
                                                     ---          ---
        Total assets                            $216,481     $195,299
                                                ========     ========

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                           $10,280       $4,674
      Accrued compensation and related benefits    7,128        7,848
      Accrued liabilities                         14,262       13,360
                                                  ------       ------
        Total current liabilities                 31,670       25,882
                                                  ------       ------

    Non-current income tax liability               4,785        4,762
    Other long-term liabilities                        9           10
                                                     ---          ---
          Total liabilities                       36,464       30,654
                                                  ------       ------

    Stockholders' equity:
      Common stock, $0.001 par value, $34 and
       $34 in 2009 and 2008, respectively;
       shares authorized: 150,000,000; shares
       issued and outstanding: 34,256,923 and
       33,646,821 in 2009 and 2008,
       respectively                              159,845      147,298
      Retained earnings                           19,869       17,411
      Accumulated other comprehensive income
       (loss)                                        303          (64)
                                                     ---          ---
        Total stockholders' equity               180,017      164,645
                                                 -------      -------
        Total liabilities and stockholders'
         equity                                 $216,481     $195,299
                                                ========     ========

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

                                          Three months       Six months
                                         ended June 30,    ended June 30,
                                        ---------------   ---------------
                                         2009     2008     2009     2008
                                         ----     ----     ----     ----



      Revenue                          $41,173  $41,502  $70,495  $76,911
      Cost of revenue*                  16,823   15,375   29,254   28,419
                                        ------   ------   ------   ------

            Gross profit                24,350   26,127   41,241   48,492
                                        ------   ------   ------   ------
      Operating expenses:
        Research and development*        9,732    8,602   17,849   16,174
        Selling, general and
         administrative*                 9,321    8,912   17,129   17,640
        Provision for litigation
         expense                         2,233    4,294    4,279    5,030

                                        ------   ------   ------   ------
            Total operating expenses    21,286   21,808   39,257   38,844
                                        ------   ------   ------   ------

      Income from operations             3,064    4,319    1,984    9,648
      Other income (expense):
        Interest and other income          281      810      666    2,244
        Interest and other expense        (185)    (112)    (279)    (118)

                                            --      ---      ---    -----
            Total other income, net         96      698      387    2,126
                                            --      ---      ---    -----

      Income before income taxes         3,160    5,017    2,371   11,774
      Income tax provision (benefit)       (26)     417      (87)   1,239

                                        ------   ------   ------  -------
      Net income                        $3,186   $4,600   $2,458  $10,535
                                        ======   ======   ======  =======
      Basic net income per share         $0.09    $0.14    $0.07    $0.32
                                         =====    =====    =====    =====
      Diluted net income per share       $0.09    $0.13    $0.07    $0.29
                                         =====    =====    =====    =====

      Weighted average common shares
       outstanding                      34,070   33,229   33,842   33,287
      Stock options and restricted
       stock                             2,319    3,003    2,036    2,804
                                         -----    -----    -----    -----
      Diluted weighted-average common
       equivalent shares outstanding    36,389   36,232   35,878   36,091
                                        ======   ======   ======   ======

    * Stock-based compensation has
     been included in the following
     line items:
        Cost of revenue                    $67     $128     $148     $173
        Research and development         1,687    1,396    3,247    2,603
        Selling, general and
         administrative                  2,098    1,819    3,870    3,354
                                         -----    -----    -----    -----
            Total                       $3,852   $3,343   $7,265   $6,130
                                        ======   ======   ======   ======

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

                                        ------   ------   ------  -------
    Net income                          $3,186   $4,600   $2,458  $10,535
                                        ======   ======   ======  =======

    Adjustments to reconcile net income to non-GAAP net income
        Stock-based compensation        $3,852   $3,343   $7,265   $6,130
        Tax effect                        (903)    (837)  (1,292)  (1,924)
                                          ----     ----   ------   ------
        Non-GAAP net income             $6,135   $7,106   $8,431  $14,741
                                        ------   ------   ------  -------

    Non-GAAP earnings per share, excluding stock-based compensation and
     related tax effects:
        Basic                            $0.18    $0.21    $0.25    $0.44
        Diluted                          $0.17    $0.20    $0.24    $0.41

    Shares used in the calculation of non-GAAP earnings per share:
        Basic                           34,070   33,229   33,842   33,287
        Diluted                         36,389   36,232   35,878   36,091


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

                                       -------  -------  -------  -------
    Total operating expenses           $21,286  $21,808  $39,257  $38,844
                                       =======  =======  =======  =======

    Adjustments to reconcile total operating expenses to non-GAAP total
     operating expenses
        Stock-based compensation       $(3,785) $(3,215) $(7,117) $(5,957)
                                       -------- -------- -------- --------
        Non-GAAP total operating
         expenses                      $17,501  $18,593  $32,140  $32,887
                                       -------  -------  -------  -------

                            2009 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
                                                                    ending
                                                                 September 30,
                                                                     2009
                                                                 Low     High
                                                                 ---     ----
    R&D and SG&A                                               $15,300 $16,300
                                                               ======= =======

    Adjustments to reconcile R&D and SG&A to non-GAAP R&D
     and SG&A
      Stock-based compensation                                   3,300   3,700
                                                                 -----   -----
      Non-GAAP R&D and SG&A                                    $18,600 $20,000
                                                               ------- -------

SOURCE Monolithic Power Systems, Inc.

CONTACT:
Rick Neely,

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

Web Site: http://www.monolithicpower.com