Monolithic Power Systems Announces Results for the Second Quarter Ended June 30, 2013

SAN JOSE, Calif., Aug. 6, 2013 /PRNewswire/ -- 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 June 30, 2013.

The results for the quarter ended June 30, 2013 are as follows:

• Net revenue was $57.7 million, a 12.1% increase from $51.5 million in the first quarter of 2013 and a 1.5% decrease from $58.6 million in the second quarter of 2012.
• Gross margin was 53.6%, compared with 53.2% in the first quarter of 2013 and 53.2% in the second quarter of 2012.
• GAAP operating expenses were $26.0 million, including $26.3 million for research and development (R&D) and selling, general and administrative (SG&A) expenses, which included $5.0 million for stock-based compensation, and $(0.3) million for litigation benefit. Comparatively, for the quarter ended June 30, 2012, GAAP operating expenses were $24.4 million, including $24.6 million for R&D and SG&A expenses, which included $3.7 million for stock-based compensation, and $(0.2) million for litigation benefit.
• Non-GAAP(1) operating expenses were $21.0 million, excluding $5.0 million for stock-based compensation, compared with $20.7 million, excluding $3.7 million for stock-based compensation, for the quarter ended June 30, 2012.
• GAAP net income was $5.5 million and GAAP earnings per share were $0.14 per diluted share. Comparatively, GAAP net income was $6.6 million and GAAP earnings per share were $0.18 per diluted share for the quarter ended June 30, 2012.
• Non-GAAP(1) net income was $9.3 million and non-GAAP earnings per share were $0.24 per diluted share, excluding stock-based compensation and a one-time cash award and related tax effects, compared with non-GAAP net income of $10.1 million and non-GAAP earnings per share of $0.28 per diluted share, excluding stock-based compensation and related tax effects, for the quarter ended June 30, 2012.

The results for the six months ended June 30, 2013 are as follows:

• Net revenue was $109.2 million, a 0.1% increase from $109.1 million for the six months ended June 30, 2012.
• Gross margin was 53.4%, compared with 52.8% for the six months ended June 30, 2012.
• GAAP operating expenses were $51.1 million, including $51.7 million for R&D and SG&A expenses, which included $9.5 million for stock-based compensation, and $(0.6) million for litigation benefit. Comparatively, for the six months ended June 30, 2012, GAAP operating expenses were $47.6 million, including $47.7 million for R&D and SG&A expenses, which included $6.9 million for stock-based compensation, and $(0.1) million for litigation benefit.
• Non-GAAP(1) operating expenses were $41.5 million, excluding $9.5 million for stock-based compensation, compared with $40.7 million, excluding $6.9 million for stock-based compensation, for the six months ended June 30, 2012.
• GAAP net income was $8.0 million and GAAP earnings per share were $0.21 per diluted share. Comparatively, GAAP net income was $9.6 million and GAAP earnings per share were $0.27 per diluted share for the six months ended June 30, 2012.
• Non-GAAP(1) net income was $15.7 million and non-GAAP earnings per share were $0.41 per diluted share, excluding stock-based compensation and a one-time cash award and related tax effects, compared with non-GAAP net income of $16.3 million and non-GAAP earnings per share of $0.46 per diluted share, excluding stock-based compensation and related tax effects, for the six months ended June 30, 2012.

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):

  The following is a summary of revenue by product family for the periods indicated (in millions):

"We are pleased to announce sequential quarterly revenue growth of 12% well above industry average," said Michael Hsing, CEO and founder of MPS. "With our industry leading products continuing to gain acceptance in cloud computing, industrial and automotive markets, we are now in the new era of growth and diversification."

Business Outlook

The following are MPS' financial targets for the third quarter ending September 30, 2013:                                                                                                                         

• Revenue in the range of $63 million to $67 million.
• Gross margin between 53.5% and 54.5%.
• GAAP research and development and selling, general and administrative expenses between $25.3 million and $26.8 million. Non-GAAP(1) research and development and selling, general and administrative expenses between $21.0 million and $22.0 million. This excludes an estimate of stock-based compensation expense in the range of $4.3 million to $4.8 million.
• Litigation expenses between $300,000 and $400,000.
• Fully diluted shares outstanding between 38.8 million and 39.2 million before shares buyback.

(1) Non-GAAP net income, non-GAAP earnings per share, non-GAAP operating expenses and non-GAAP research and development and selling, general and administrative expenses differ from net income, earnings per share, operating expenses, and research and development and selling, general and administrative 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 three and six months ended June 30, 2013 and 2012 exclude the effect of stock-based compensation expense and a one-time cash award and their related tax effects. Non-GAAP operating expenses for the three and six months ended June 30, 2013 and 2012 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. 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 June 30, 2013 results at 2:00 p.m. PT / 5:00 p.m. ET, August 6, 2013. 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 17264667. 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, including, among other things, (i) projected 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, 2013, (ii) our outlook for the long-term prospects of the company, including the prospects of our new product families, (iii) our ability to penetrate new markets and expand our market share, (iv) our expected pricing practices in 2013, (v) the seasonality of our business, (vi) our ability to reduce our manufacturing costs, 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; 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 quarterly report on Form 10-Q filed with the SEC on May 2, 2013.

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 a fabless semiconductor company specializing in high-performance analog ICs. Founded in 1997, MPS's core technology is its innovative and proprietary manufacturing process combined with superior analog circuit design capabilities across system-level and end customer applications. These combined advantages enable MPS to deliver highly integrated monolithic products that offer energy efficient and cost-effective solutions. MPS product families include DC/DC converters, LED drivers and controllers, Class-D audio amplifiers, battery chargers and protections, USB and current-limit switches and AC/DC offline products. MPS has over 900 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.

SOURCE Monolithic Power Systems, Inc.