SAN JOSE, Calif. — (BUSINESS WIRE) — April 28, 2011 — Tessera Technologies, Inc. (Nasdaq: TSRA) announced its results for the first quarter ended March 31, 2011.
“We had a solid first quarter of 2011. Total revenue of $67.8 million included Imaging & Optics revenue of $14.2 million, of which $3.8 million was license fees,” said Henry R. Nothhaft, Tessera’s chairman and chief executive officer. “Cash, cash equivalents, and investments at March 31, 2011 were $499.5 million, an increase of $24.5 million in the quarter.”
Revenue Highlights: First Quarter 2011
- Total revenues were $67.8 million.
- Micro-electronics revenues were $53.6 million.
- Imaging & Optics revenues were $14.2 million.
First quarter 2011 total revenues of $67.8 million were up $3.5 million, or 5% compared to the first quarter of 2010. First quarter 2011 Micro-electronics revenues of $53.6 million were down $2.2 million, or 4% compared to first quarter 2010 revenues of $55.8 million, which included a royalty payment of $3.0 million from United Test and Assembly Center Ltd. as a result of the companies’ 2010 settlement.
First quarter 2011 Imaging & Optics revenues of $14.2 million included $8.7 million in royalties and license fees. Imaging & Optics royalties were $4.9 million and included a one-time catch up payment of $620,000. Imaging & Optics products and services revenue was $5.5 million.
Generally accepted accounting principles (GAAP) net income for the first quarter of 2011 was $11.2 million, or $0.22 per diluted share, which included a reduction-in-workforce restructuring charge of $2.1 million. Also included were non-cash charges of $6.1 million for stock-based compensation and $4.1 million for amortization of acquired intangibles.
Non-GAAP net income for the first quarter of 2011 was $19.0 million or $0.36 per diluted share. Non-GAAP net income is defined as income and operating expenses adjusted for acquired intangibles amortization, charges for acquired in-process research and development, stock-based compensation expense, impairment charges on long-lived assets, and related tax effects.
“Operationally, we took several steps in the first quarter to accelerate and maximize the long-term growth potential of both our business segments,” continued Nothhaft. “In our Micro-electronics segment, we formed a new group, operating through a subsidiary named Invensas Corporation, which is focused on the expansion of our intellectual property (IP) development and licensing activities beyond semiconductor packaging.
“In addition, we announced the appointment of Bob Roohparvar as the new president of our Imaging & Optics segment. We believe Bob’s extensive technical, leadership and execution skills will accelerate the growth of our Imaging & Optics business. Early in the second quarter, we reorganized all of the Imaging & Optics business units under a single subsidiary named DigitalOptics Corporation to focus and leverage our unique collection of IP, R&D expertise and customer relationships to maximize the opportunities in the Imaging & Optics space we see ahead of us. We also retained GCA Savvian Advisors, LLC as our financial advisor to assist in the evaluation of multiple alternatives, including, among others, a spin-off transaction for this segment of our business.”
Second Quarter 2011 Financial Guidance
Second quarter 2011 total revenues are expected to range between $75.5 million and $78.5 million, compared to second quarter 2010 total revenues of $74.6 million. Second quarter 2011 Micro-electronics revenues are expected to range between $65 million and $67 million.
The company’s second quarter 2011 guidance reflects, similar to the first quarter of 2011, no revenue from the five licensees or former licensees that are either in breach or have not yet renewed their license agreements with Tessera. The company continues to pursue legal redress based on its long standing practice of ensuring fair payment for use of its IP and protecting its licensees in good standing. The timing of resolution of these litigation and arbitration matters is difficult to predict.
Two major DRAM manufacturers have volume pricing adjustments in their licenses that may cause, only for these two DRAM manufacturers when unit shipment volumes are high, our aggregate annual DRAM royalty revenue to grow less rapidly than annual growth in overall unit shipments in the DRAM market. Tessera anticipates its second quarter 2011 revenue will benefit by between $10 million and $12 million due to the annual reset of the volume pricing adjustments with these two DRAM manufacturers, along with other factors.
Second quarter 2011 Imaging & Optics revenues, in total, are expected to
be approximately $10.5 million to $11.5 million. Second quarter 2011
Imaging & Optics royalty and license fees revenues are expected to be
approximately $5.0 million to $5.5 million. Imaging & Optics products
and services revenues are expected to be approximately $5.5 million to
$6.0 million. This compares to Imaging & Optics royalties and license
fees revenues of $3.3 million and products and services revenues of $6.2
million in the second quarter of 2010, which totaled $9.5 million for