Monolithic Power Systems Announces Results for the First Quarter Ended March 31, 2017

SAN JOSE, Calif., April 26, 2017 (GLOBE NEWSWIRE) -- Monolithic Power Systems, Inc. (MPS) (Nasdaq:MPWR), a leading company in high performance analog solutions, today announced financial results for the quarter ended March 31, 2017.

  • Revenue was $100.4 million, a 3.1% decrease from $103.6 million in the fourth quarter of 2016 and an 18.8% increase from $84.5 million in the first quarter of 2016.
  • GAAP gross margin was 54.6%, compared with 53.9% in the first quarter of 2016.
  • Non-GAAP gross margin(1) was 55.5%, excluding the impact of $0.4 million for stock-based compensation expense and $0.5 million for the amortization of acquisition-related intangible assets, compared with 55.0% in the first quarter of 2016, excluding the impact of $0.4 million for stock-based compensation expense and $0.5 million for the amortization of acquisition-related intangible assets.
  • GAAP operating expenses were $41.3 million, compared with $35.1 million for the quarter ended March 31, 2016.
  • Non-GAAP(1) operating expenses were $29.2 million, excluding $11.3 million for stock-based compensation expense and $0.8 million for deferred compensation plan expense, compared with $26.4 million, excluding $8.5 million for stock-based compensation expense and $0.2 million for deferred compensation plan expense, for the quarter ended March 31, 2016.
  • GAAP operating income was $13.6 million, compared with $10.4 million for the quarter ended March 31, 2016.
  • Non-GAAP(1) operating income was $26.5 million, excluding $11.7 million for stock-based compensation expense, $0.5 million for the amortization of acquisition-related intangible assets and $0.8 million for deferred compensation plan expense, compared with $20.0 million, excluding $9.0 million for stock-based compensation expense, $0.5 million for the amortization of acquisition-related intangible assets and $0.2 million for deferred compensation plan expense, for the quarter ended March 31, 2016.
  • GAAP interest and other income, net was $1.4 million, compared with $0.5 million for the quarter ended March 31, 2016.
  • Non-GAAP(1) interest and other income, net was $0.6 million, excluding $0.7 million for deferred compensation plan income, compared with $0.2 million, excluding $0.3 million for deferred compensation plan income, for the quarter ended March 31, 2016.
  • GAAP net income was $14.5 million and GAAP earnings per share were $0.33 per diluted share. Comparatively, GAAP net income was $10.6 million and GAAP earnings per share were $0.25 per diluted share for the quarter ended March 31, 2016.
  • Non-GAAP(1) net income was $25.2 million and non-GAAP earnings per share were $0.58 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 $18.7 million and non-GAAP earnings per share of $0.45 per diluted share, excluding stock-based compensation expense, amortization of acquisition-related intangible assets, net deferred compensation plan income and related tax effects, for the quarter ended March 31, 2016.

The following is a summary of revenue by market segment for the periods indicated, estimated based on MPS’s assessment of available end market data (in thousands):

   Three Months Ended March 31,
Market Segment   2017   2016
Consumer $  35,611 $  33,807
Industrial    27,685    18,437
Computing and storage    20,617    15,393
Communications    16,449    16,875
Total $  100,362 $  84,512

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

   Three Months Ended March 31,
Product Family   2017   2016
DC to DC $  91,424 $  77,118
Lighting Control    8,938    7,394
Total $  100,362 $  84,512

“We continue to grow and continue to enhance shareholder value,” said Michael Hsing, CEO and founder of MPS.

Business Outlook

The following are MPS’ financial targets for the second quarter ending June 30, 2017:

  • Revenue in the range of $109 million to $113 million.
     
  • GAAP gross margin between 54.1% and 55.1%.  Non-GAAP(1) gross margin between 55.0% and 56.0%, which excludes an estimated impact of stock-based compensation expenses of 0.4% and amortization of acquisition-related intangible assets of 0.5%.
     
  • GAAP R&D and SG&A expenses between $42.0 million and $46.0 million. Non-GAAP(1) R&D and SG&A expenses between $29.9 million and $31.9 million, which excludes an estimate of stock-based compensation expenses in the range of $12.1 million to $14.1 million.
     
  • Total stock-based compensation expense of $12.5 million to $14.5 million.
     
  • Litigation expenses of $200,000 to $300,000.
     
  • Interest and other income, net, of $400,000 to $500,000 before foreign exchange gains or losses.
     
  • Fully diluted shares outstanding between ­­­42.9 million and 43.9 million before shares buybacks.

(1) Non-GAAP net income, non-GAAP earnings per share, non-GAAP gross margin, non-GAAP R&D and SG&A expenses, non-GAAP operating expenses, non-GAAP interest and other income, net and non-GAAP operating income differ from net income, earnings per share, gross margin, R&D and SG&A expenses, operating expenses, interest and other income, net and operating income determined in accordance with GAAP (Generally Accepted Accounting Principles in the United States). Non-GAAP net income and non-GAAP earnings per share 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 excludes the effect of stock-based compensation expense and amortization of acquisition-related intangible assets. Non-GAAP operating expenses exclude the effect of stock-based compensation expense and deferred compensation plan income/expense.  Non-GAAP interest and other income, net excludes the effect of deferred compensation plan income/expense. Non-GAAP operating income excludes the effect of stock-based compensation expense, amortization of acquisition-related intangible assets 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.

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