Monolithic Power Systems, Inc.
Apr 28, 2009
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Monolithic Power Systems Announces First Quarter 2009 Results

SAN JOSE, Calif., April 28, 2009 /PRNewswire-FirstCall 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 ended March 31, 2009.

The results for the quarter ended March 31, 2009 are as follows:

"In the second half of the quarter, we saw increased turns activities. As a result, our Q1 revenue was better than we expected," said Michael Hsing, chief executive officer and founder of MPS. "We are still cautiously optimistic about the next quarter. However, MPS is always ready for fast changing environments either in up or down markets. The last two quarters proved that. Despite a significant reduction in product demand, MPS will continue to focus on generating cash and delivering profits."

Business Outlook

The following are MPS' financial targets for the second quarter ending June 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 ended March 31, 2009 and 2008 excludes the effect of stock-based compensation expense and their related tax effects. Non-GAAP operating expenses for the quarter ended March 31, 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 March 31, 2009 results at 2:00 p.m. PT / 5:00 p.m. ET today, April 28, 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 30727222. 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 June 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-K filed on February 27, 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)

                                                March 31,   December 31,
                                                   2009          2008
                                                ----------  -------------
    ASSETS
    Current assets:
      Cash and cash equivalents                    $68,094        $83,266
      Short-term investments                        38,002         21,922
      Accounts receivable, net of allowances
       of $8 and $0 in 2009 and 2008,
       respectively                                 13,367          9,115
      Inventories                                   18,559         18,887
      Deferred income tax assets, net - current         74             75
      Prepaid expenses and other current assets      2,791          2,622
      Restricted cash                                7,350          7,360
                                                     -----          -----
        Total current assets                       148,237        143,247
                                                   -------        -------
    Property and equipment, net                     13,967         14,163
    Long-term investments                           37,340         37,425
    Deferred income tax assets, net - long-term         19             19
    Other assets                                       427            438
    Restricted assets                                    7              7
                                                       ---            ---
        Total assets                              $199,997       $195,299
                                                  ========       ========

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                              $8,363         $4,674
      Accrued compensation and related benefits      3,789          7,848
      Accrued liabilities                           14,392         13,360
                                                    ------         ------
        Total current liabilities                   26,544         25,882
                                                    ------         ------

    Non-current income tax liability                 4,773          4,762
    Other long-term liabilities                          9             10
                                                       ---            ---
          Total liabilities                         31,326         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: 33,863,182 and
       33,646,821 in 2009 and 2008,
       respectively                                152,236        147,298
      Retained earnings                             16,683         17,411
      Accumulated other comprehensive income
       (loss)                                         (248)           (64)
        Total stockholders' equity                 168,671        164,645
                                                   -------        -------
        Total liabilities and stockholders'
         equity                                   $199,997       $195,299
                                                  ========       ========



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

                                         Three months
                                        ended March 31,
                                       ----------------
                                         2009     2008
                                         ----     ----



      Revenue                          $29,322  $35,409
      Cost of revenue*                  12,431   13,044
                                        ------   ------

            Gross profit                16,891   22,365
                                        ------   ------
      Operating expenses:
        Research and development*        8,117    7,572
        Selling, general and
         administrative*                 7,808    8,728
        Provision for litigation
         expense                         2,046      736

                                        ------   ------
            Total operating expenses    17,971   17,036
                                        ------   ------

      Income (loss) from operations     (1,080)   5,329
      Other income (expense):
        Interest and other income          385    1,434
        Interest and other expense         (94)      (6)

                                           ---    -----
            Total other income, net        291    1,428
                                           ---    -----

      Income (loss) before income
       taxes                              (789)   6,757
      Income tax provision (benefit)       (61)     822

                                         -----   ------
      Net income (loss)                  $(728)  $5,935
                                         =====   ======
      Basic net income (loss) per
       share                            $(0.02)   $0.18
                                        ======    =====
      Diluted net income (loss) per
       share                            $(0.02)   $0.17
                                        ======    =====

      Weighted average common shares
       outstanding                      33,696   33,340
      Stock options and restricted
       stock                                 -    2,551
                                           ---    -----
      Diluted weighted-average common
       equivalent shares outstanding    33,696   35,891
                                        ======   ======

    * Stock-based compensation has been
      included in the following line items:
        Cost of revenue                    $81      $45
        Research and development         1,560    1,207
        Selling, general and
         administrative                  1,772    1,535
                                         -----    -----
            Total                       $3,413   $2,787
                                        ======   ======



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

                                        -----  ------
    Net income (loss)                   $(728) $5,935
                                        =====  ======

    Adjustments to reconcile net
     income to non-GAAP net income
        Stock-based compensation       $3,413  $2,787
        Tax effect                       (389) (1,087)
                                         ----  ------
        Non-GAAP net income            $2,296  $7,635
                                       ------  ------

    Non-GAAP earnings per share,
     excluding stock- based compensation
     and related tax effects:
        Basic                           $0.07   $0.23
        Diluted                         $0.06   $0.21

    Shares used in the calculation of
     non-GAAP earnings per share:
        Basic                          33,696  33,340
        Diluted                        35,420  35,891



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

                                       -------  -------
    Total operating expenses           $17,971  $17,036
                                       =======  =======

    Adjustments to reconcile total
     operating expenses to non-GAAP
     total operating expenses
        Stock-based compensation       $(3,332) $(2,742)
        Non-GAAP total operating
         expenses                      $14,639  $14,294
                                       -------  -------



                     2009 Second 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 June 30,
                                                    2009
                                                Low      High
                                                ---      ----
    R&D and SG&A                              $17,500  $19,800
                                              =======  =======

    Adjustments to reconcile R&D and SG&A to
     non-GAAP R&D and SG&A
        Stock-based compensation               (3,500)  (3,800)
                                               ------   ------
        Non-GAAP R&D and SG&A                 $14,000  $16,000
                                              -------  -------


SOURCE Monolithic Power Systems, Inc.

http://www.monolithicpower.com