SAN JOSE, Calif., April 22, 2015 /PRNewswire/ -- Monolithic
Power Systems (MPS) (Nasdaq: MPWR), a leading company in high
performance power solutions, today announced financial results for
the quarter ended March 31, 2015.
The results for the quarter ended March
31, 2015 are as follows:
- Net revenue was $73.5 million, a
2.9% decrease from $75.7 million in
the fourth quarter of 2014 and a 22.4% increase from $60.1 million in the first quarter of 2014.
- GAAP gross margin was 54.0%, which included the impact of
$0.2 million for stock-based
compensation expense and $0.4 million
for the amortization of acquisition-related intangible assets,
compared with 53.4% in the first quarter of 2014, which included
the impact of $0.2 million for
stock-based compensation expense.
- Non-GAAP gross margin(1) was 54.8%, which excluded the impact
of $0.2 million for stock-based
compensation expense and $0.4 million
for the amortization of acquisition-related intangible assets,
compared with 53.8% in the first quarter of 2014, which excluded
the impact of $0.2 million for
stock-based compensation expense.
- GAAP operating expenses were $33.8
million, including $33.5
million for research and development (R&D) and selling,
general and administrative (SG&A) expenses, which included
$9.0 million for stock-based
compensation expense and $0.1 million
of deferred compensation plan expense, and $0.3 million for litigation expenses.
Comparatively, for the quarter ended March
31, 2014, GAAP operating expenses were $23.0 million, including $31.7 million for R&D and SG&A expense,
which included $7.4 million for
stock-based compensation expense, and a $(8.7) million net litigation benefit. For
the quarter ended March 31, 2014, MPS
recognized a one-time $9.5 million
litigation benefit from the settlement of the O2 Micro
lawsuit.
- Non-GAAP(1) operating expenses were $24.7 million, excluding $9.0 million for stock-based compensation expense
and $0.1 million of deferred
compensation plan expense, compared with $15.6 million, excluding $7.4 million for stock-based compensation
expense, for the quarter ended March 31,
2014.
- GAAP net income was $6.0 million
and GAAP earnings per share were $0.15 per diluted share. Comparatively, GAAP net
income was $9.0 million and GAAP
earnings per share were $0.23 per
diluted share for the quarter ended March
31, 2014.
- Non-GAAP(1) net income was $14.9
million and non-GAAP earnings per share were $0.37 per diluted share, excluding stock-based
compensation expense, amortization of acquisition-related
intangible assets, net deferred compensation plan expense and
related tax effects, compared with non-GAAP net income of
$15.6 million and non-GAAP earnings
per share of $0.39 per diluted share,
excluding stock-based compensation expense, net deferred
compensation plan income and related tax effects, for the quarter
ended March 31, 2014.
The following is a summary of revenue by end market for the
periods indicated, estimated based on the Company's assessment of
available end market data (in millions):
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
End
Market
|
|
2015
|
|
2014
|
Communication
|
|
$
17.3
|
|
$
13.6
|
Storage and
Computing
|
|
11.4
|
|
10.6
|
Consumer
|
|
31.5
|
|
26.1
|
Industrial
|
|
13.3
|
|
9.8
|
Total
|
|
$
73.5
|
|
$
60.1
|
|
|
|
|
|
The following is a summary of revenue by product family for the
periods indicated (in millions):
|
|
Three Months Ended
March 31,
|
Product
Family
|
|
2015
|
|
2014
|
DC to
DC
|
|
$
66.3
|
|
$
54.0
|
Lighting
Control
|
|
7.2
|
|
6.1
|
Total
|
|
$
73.5
|
|
$
60.1
|
|
|
|
|
|
"MPS continues to execute against its plan," said Michael Hsing, CEO and founder of MPS. "We
expect to deliver high growth quality revenue."
In April 2015, MPS's Board of
Directors approved an extension of the current stock buyback
program to December 31, 2015.
Resolution with the Internal Revenue Service
MPS also announced today a settlement with the U.S. Internal
Revenue Service that resolves the IRS audit of MPS's taxes for the
years 2005 through 2007. The settlement includes the following
elements:
- During the second quarter of 2015, MPS will make a payment of
$1.2 million for taxes related
primarily to the revaluation of a license to certain intellectual
property rights of the company to one of its foreign
subsidiaries.
- The Buy-In payment is final and no additional payment will be
required with respect to the intellectual property license for the
years under examination or for a previous or subsequent tax
year.
- MPS expects to make a $1.1
million related interest payment in the next few months as
well as a $0.2 million tax payment
for the years 2008 to 2013.
- Under GAAP, the income tax impact is recorded in the period of
resolution. Therefore, the results for the Company's second quarter
will include a one-time net charge of $2.3
million reflecting the taxes and interest to be paid,
partially offset by the reversal of previously accrued tax
liabilities and valuation allowances. Of the $2.3 million charge, approximately $1.6 million relates to taxes and $0.7 million to interest.
- There were no penalties assessed on MPS.
- The agreement permits MPS to repatriate approximately
$17.4 million of cash from its
foreign subsidiary without any U.S. federal tax consequences other
than those summarized above.
Business Outlook
The following are MPS' financial targets for the second quarter
ending June 30, 2015:
- Revenue in the range of $79 million to
$83 million.
- GAAP gross margin between 53.7% and 54.7%. Non-GAAP(1)
gross margin between 54.5% and 55.5%. This excludes an
estimated impact of stock-based compensation expenses of 0.3% and
amortization of acquisition-related intangible assets of 0.5%.
- GAAP R&D and SG&A expenses between $32.6 million and $34.6 million. Non-GAAP(1)
R&D and SG&A expenses between $24.3
million and $25.3 million. This excludes an estimate of
stock-based compensation expenses in the range of $8.3 million to $9.3 million.
- Total stock-based compensation expense of $8.6 million to $9.6 million.
- Litigation expenses of $200,000 to
$400,000.
- Other income of $200,000 to
$300,000 before foreign exchange gains or losses.
- Fully diluted shares outstanding between 40.7 million and 41.1
million before shares buyback.
(1) Non-GAAP net income, non-GAAP earnings per share,
non-GAAP gross margin, non-GAAP operating expenses and non-GAAP
R&D and SG&A expenses differ from net income, earnings per
share, gross margin, operating expenses, and R&D and SG&A
expenses determined in accordance with GAAP (Generally Accepted
Accounting Principles in the United
States). Non-GAAP net income and non-GAAP earnings per share
for the quarters ended March 31, 2015
and 2014 exclude the effect of stock-based compensation expense,
amortization of acquisition-related intangible assets, deferred
compensation plan income/expense and related tax effects. Non-GAAP
gross margin for the quarters ended March
31, 2015 and 2014 exclude the effect of stock-based
compensation expense and amortization of acquisition-related
intangible assets. Non-GAAP operating expenses for the quarters
ended March 31, 2015 and 2014 exclude
the effect of stock-based compensation expense and deferred
compensation plan income/expense. Projected non-GAAP gross margin
excludes the effect of stock-based compensation expense and
amortization of acquisition-related intangible assets. Projected
non-GAAP R&D and SG&A expenses exclude the effect of
stock-based compensation expense. These non-GAAP financial measures
are not prepared in accordance with GAAP and should not be
considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. A schedule
reconciling non-GAAP financial measures is included at the end of
this press release. 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 financial measures used by MPS.
Conference Call
MPS plans to conduct an investor
teleconference covering its quarter ended March 31, 2015 results at 2:00 p.m. PT / 5:00 p.m.
ET, April 22, 2015. 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 (404) 537-3406,
code number 23954504. 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,
and statements that will be made during the accompanying
teleconference will contain, forward-looking statements, as that
term is defined in the Private Securities Litigation Reform Act of
1995, including, among other things, (i) projected revenues, GAAP
and non-GAAP gross margin, GAAP and non-GAAP R&D and SG&A
expenses, stock-based compensation expenses, amortization of
acquisition-related intangible assets, litigation expenses and
diluted shares outstanding for the quarter ending June 30, 2015, (ii) our outlook for the long-term
prospects of the company, including our performance against our
business plan, expected revenue growth and the prospects of our new
product families, (iii) our ability to penetrate new markets and
expand our market share, (iv) the seasonality of our business, (v)
our ability to reduce our expenses, (vi) the income tax impact from
the resolution of audits with the Internal Revenue Service, and
(vii) statements of the assumptions underlying or relating to any
statement described in (i), (ii), (iii), (iv), (v) or (vi). 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
significant 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, our ability to attract new customers and retain existing
customers; acceptance of, or demand for, MPS' products, in
particular the new products launched within the past 18 months,
being different than expected; competition generally and the
increasingly competitive nature of our industry; any market
disruptions or interruptions in MPS' schedule of new product
release development; adverse changes in production and testing
efficiency of our products; our ability to realize the anticipated
benefits of companies and products that we acquire, and our ability
to effectively and efficiently integrate these acquired companies
and products into our operations; adverse changes in government
regulations in foreign countries where MPS has offices or
operations; the effect of catastrophic events; adequate supply of
our products from our third-party manufacturer; the risks,
uncertainties and costs of litigation in which we are involved; the
outcome of any upcoming trials, hearings, motions and appeals; the
adverse impact on MPS' financial performance if its tax and
litigation provisions are inadequate; adverse changes or
developments in the semiconductor industry generally; difficulty in
predicting or budgeting for future customer demand and channel
inventories, expenses and financial contingencies; and other
important risk factors identified in MPS' Securities and Exchange
Commission (SEC) filings, including, but not limited to, its annual
report on Form 10-K filed with the SEC on March 2, 2015.
The forward-looking statements in this press release represent
MPS' projections 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 (MPS) is the leading company in high performance power
solutions. Founded in 1997, MPS pioneered integrated power
semiconductor solutions and power delivery architectures.
MPS' mission is to provide innovative power solutions in Cloud
Computing, Telecom, Industrial and Automotive, and Consumer market
segments. MPS has over 1,000 employees worldwide, located
in the United
States, China, Taiwan, Korea, Japan and
across Europe.
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.
Condensed
Consolidated Balance Sheets (Unaudited, in thousands, except
par value)
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
95,966
|
|
$
126,266
|
Short-term
investments
|
137,791
|
|
112,452
|
Accounts receivable,
net
|
25,343
|
|
25,630
|
Inventories
|
53,396
|
|
40,918
|
Prepaid expenses and
other current assets
|
2,727
|
|
2,880
|
Total current
assets
|
315,223
|
|
308,146
|
Property and
equipment, net
|
64,256
|
|
62,942
|
Long-term
investments
|
5,394
|
|
5,389
|
Goodwill
|
6,571
|
|
6,571
|
Acquisition-related
intangible assets, net
|
6,445
|
|
6,812
|
Deferred tax assets,
net
|
1,052
|
|
1,049
|
Other long-term
assets
|
10,689
|
|
8,457
|
Total
assets
|
$
409,630
|
|
$
399,366
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
19,900
|
|
$
13,138
|
Accrued compensation
and related benefits
|
7,366
|
|
9,020
|
Accrued
liabilities
|
18,626
|
|
14,703
|
Total current
liabilities
|
45,892
|
|
36,861
|
Deferred tax and
other tax liabilities
|
6,016
|
|
5,876
|
Other long-term
liabilities
|
12,270
|
|
10,204
|
Total
liabilities
|
64,178
|
|
52,941
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.001
par value; shares authorized:
150,000; shares issued and outstanding: 39,253
and 38,832
as of March 31, 2015 and December 31, 2014,
respectively
|
241,737
|
|
240,500
|
Retained
earnings
|
97,619
|
|
100,114
|
Accumulated other
comprehensive income
|
6,096
|
|
5,811
|
Total stockholders'
equity
|
345,452
|
|
346,425
|
Total liabilities and
stockholders' equity
|
$
409,630
|
|
$
399,366
|
Condensed
Consolidated Statement of Operations (Unaudited, in
thousands, except per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Revenue
|
$
73,538
|
|
$
60,061
|
Cost of
revenue
|
33,855
|
|
27,964
|
Gross
profit
|
39,683
|
|
32,097
|
Operating
expenses:
|
|
|
|
Research and
development
|
16,038
|
|
15,603
|
Selling,
general and administrative
|
17,518
|
|
16,109
|
Litigation
expense (benefit), net
|
270
|
|
(8,700)
|
Total operating
expenses
|
33,826
|
|
23,012
|
Income from
operations
|
5,857
|
|
9,085
|
Interest and other
income, net
|
642
|
|
190
|
Income before income
taxes
|
6,499
|
|
9,275
|
Income tax
provision
|
536
|
|
257
|
Net
income
|
$
5,963
|
|
$
9,018
|
|
|
|
|
Net income per share:
|
|
|
|
Basic
|
$
0.15
|
|
$
0.23
|
Diluted
|
$
0.15
|
|
$
0.23
|
Weighted-average
shares outstanding:
|
|
|
|
Basic
|
39,105
|
|
38,470
|
Diluted
|
40,596
|
|
39,517
|
|
|
|
|
Cash dividends
declared per common share
|
$
0.20
|
|
$
-
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
FINANCIAL INFORMATION
|
STOCK-BASED
COMPENSATION EXPENSE
|
(Unaudited, in
thousands)
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Cost of
revenue
|
$
242
|
|
$
205
|
Research and
development
|
2,620
|
|
2,005
|
Selling, general and
administrative
|
6,357
|
|
5,388
|
Total stock-based
compensation expense
|
$
9,219
|
|
$
7,598
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
NET INCOME TO NON-GAAP NET INCOME
|
(Unaudited, in
thousands, except per share amounts)
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Net
income
|
$
5,963
|
|
$
9,018
|
Net
income as a percentage of revenue
|
8.1%
|
|
15.0%
|
|
|
|
|
Adjustments to
reconcile net income to non-GAAP net income:
|
|
|
|
Stock-based compensation expense
|
9,219
|
|
7,598
|
Amortization of acquisition-related intangible assets
|
367
|
|
-
|
Deferred compensation expense (income), net
|
40
|
|
(24)
|
Tax effect
|
(673)
|
|
(1,007)
|
Non-GAAP net income
|
$
14,916
|
|
$
15,585
|
Non-GAAP
net income as a percentage of revenue
|
20.3%
|
|
25.9%
|
|
|
|
|
Non-GAAP net income
per share:
|
|
|
|
Basic
|
$
0.38
|
|
$
0.41
|
Diluted
|
$
0.37
|
|
$
0.39
|
|
|
|
|
Shares used in the
calculation of non-GAAP net income per share:
|
|
|
|
Basic
|
39,105
|
|
38,470
|
Diluted
|
40,596
|
|
39,517
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GROSS MARGIN TO NON-GAAP GROSS MARGIN
|
(Unaudited, in
thousands)
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Gross
profit
|
$
39,683
|
|
$
32,097
|
Gross
margin
|
54.0%
|
|
53.4%
|
|
|
|
|
Adjustments to
reconcile gross profit to non-GAAP gross profit:
|
|
|
|
Stock-based compensation expense
|
242
|
|
205
|
Amortization of acquisition-related intangible assets
|
367
|
|
-
|
Non-GAAP gross
profit
|
$
40,292
|
|
$
32,302
|
Non-GAAP gross
margin
|
54.8%
|
|
53.8%
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
|
(Unaudited, in
thousands)
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Total operating
expenses
|
$
33,826
|
|
$
23,012
|
|
|
|
|
Adjustments to
reconcile total operating expenses to non-GAAP total operating
expenses:
|
|
|
|
Stock-based compensation expense
|
(8,977)
|
|
(7,392)
|
Deferred compensation plan expense
|
(166)
|
|
(13)
|
Non-GAAP operating
expenses
|
$
24,683
|
|
$
15,607
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
OPERATING INCOME TO NON-GAAP OPERATING INCOME
|
(Unaudited, in
thousands)
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Total operating
income
|
$
5,857
|
|
$
9,085
|
Operating income as a percentage of revenue
|
8.0%
|
|
15.1%
|
|
|
|
|
Adjustments to
reconcile total operating income to non-GAAP total operating
income:
|
|
|
|
Stock-based compensation expense
|
9,219
|
|
7,598
|
Amortization of acquisition-related intangible assets
|
367
|
|
-
|
Deferred compensation plan expense
|
166
|
|
13
|
Non-GAAP operating income
|
$
15,609
|
|
$
16,696
|
Non-GAAP operating
income as a percentage of revenue
|
21.2%
|
|
27.8%
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
OTHER INCOME TO NON-GAAP OTHER INCOME
|
(Unaudited, in
thousands)
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Total interest and
other income, net
|
$
642
|
|
$
190
|
Adjustments to
reconcile other income to non-GAAP other income:
|
|
|
|
Deferred compensation plan income
|
(126)
|
|
(36)
|
Non-GAAP interest and other income, net
|
$
516
|
|
$
154
|
|
|
|
|
2015 SECOND
QUARTER OUTLOOK
|
RECONCILIATION OF
GROSS MARGIN TO NON-GAAP GROSS MARGIN
|
(Unaudited)
|
|
Three
Months Ending
|
|
June 30,
2015
|
|
Low
|
|
High
|
Gross
margin
|
53.7%
|
|
54.7%
|
Adjustments to
reconcile gross margin to non-GAAP gross margin:
|
|
|
|
Stock-based compensation expense
|
0.3%
|
|
0.3%
|
Amortization of acquisition-related intangible assets
|
0.5%
|
|
0.5%
|
Non-GAAP gross
margin
|
54.5%
|
|
55.5%
|
|
|
|
|
RECONCILIATION OF
R&D AND SG&A EXPENSES TO NON-GAAP R&D AND SG&A
EXPENSES
|
(Unaudited, in
thousands)
|
|
|
|
|
|
Three Months
Ending
|
|
June 30,
2015
|
|
Low
|
|
High
|
R&D and SG&A
expenses
|
$ 32,600
|
|
$
34,600
|
Adjustments to
reconcile R&D and SG&A expenses to non-GAAP R&D and
SG&A expenses:
|
|
|
|
Stock-based compensation expense
|
(8,300)
|
|
(9,300)
|
Non-GAAP R&D and
SG&A expenses
|
$ 24,300
|
|
$
25,300
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/monolithic-power-systems-announces-results-for-the-first-quarter-ended-march-31-2015-and-resolution-with-the-us-internal-revenue-service-300070481.html
SOURCE Monolithic Power Systems