Attached files
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| 8-K - FORM 8-K - MONOLITHIC POWER SYSTEMS INC | mps_8k-earnings.htm |
Exhibit 99.1
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PRESS RELEASE
For Immediate Release
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Monolithic Power Systems, Inc.
79 Great Oaks Boulevard
San Jose, CA 95119 USA
T: 408-826-0600, F: 408-826-0601
www.monolithicpower.com
Monolithic Power Systems Announces Results for the Third Quarter and Nine Months Ended September 30, 2012
SAN JOSE, Calif. November 1, 2012--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 and nine months ended September 30, 2012.
The results for the quarter ended September 30, 2012 are as follows:
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Net revenue was $56.5 million, a 3.6% decrease from $58.6 million in the second quarter of 2012 and a 6.7% increase from $53.0 million in the third quarter of 2011.
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Gross margin was 53.1% compared with 53.2% in the second quarter of 2012 and 52.5% in the third quarter of 2011.
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GAAP operating expenses were $23.7 million, including $23.9 million for research and development (R&D) and selling, general and administrative (SG&A) expenses, which include $4.1 million for stock-based compensation, and ($0.2) million for litigation benefit. Comparatively, for the three months ended September 30, 2011, GAAP operating expenses were $22.8 million, including $22.1 million for research and development and selling, general and administrative expenses, which included $3.3 million for stock-based compensation and $0.7 million for litigation expenses.
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Non-GAAP(1) operating expenses were $19.6 million, excluding $4.1 million for stock-based compensation, compared with $19.5 million, excluding $3.3 million for stock-based compensation, for the quarter ended September 30, 2011.
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GAAP net income was $5.9 million and GAAP earnings per share were $0.16 per diluted share. Comparatively, GAAP net income was $5.5 million and GAAP earnings per share were $0.16 per diluted share for the quarter ended September 30, 2011.
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Non-GAAP(1) net income was $9.9 million and non-GAAP earnings per share were $0.27 per diluted share, excluding stock-based compensation and related tax effects, compared to non-GAAP net income of $7.8 million and non-GAAP earnings per share of $0.23 per diluted share, excluding stock-based compensation and related tax effects, for the quarter ended September 30, 2011.
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The results for the nine months ended September 30, 2012 are as follows:
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Net revenue was $165.6 million compared with $149.1 million for the nine months ended September 30, 2011, an increase of 11.1%.
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Gross margin was 52.9% compared with 51.4% for the nine months ended September 30, 2011.
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GAAP operating expenses were $71.3 million, including $71.6 million for research and development and selling, general and administrative expenses, which include $11.0 million for stock-based compensation, and ($0.3) million for litigation benefit. Comparatively, GAAP operating expenses were $65.7 million, including $63.2 million for research and development and selling, general and administrative expenses, which included $9.8 million for stock-based compensation and $2.5 million for litigation expenses for the nine months ended September 30, 2011.
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Non-GAAP(1) operating expenses were $60.3 million, excluding $11.0 million for stock-based compensation, compared with $55.9 million, excluding $9.8 million for stock-based compensation for the nine months ended September 30, 2011.
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GAAP net income was $15.5 million, with GAAP earnings per share of $0.43 per diluted share, compared with GAAP net income was $10.8 million, and GAAP earnings per share of $0.31 per diluted share for the nine months ended September 30, 2011.
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Non-GAAP(1) net income was $26.1 million, with non-GAAP earnings per share of $0.73 per diluted share, excluding stock-based compensation and related tax effects, compared to non-GAAP net income of $19.7 million, with non-GAAP earnings per share of $0.56 per diluted share, excluding stock-based compensation and related tax effects, for the nine months ended September 30, 2011.
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The following is a summary of revenue by end market for the periods indicated, estimated based on the Company’s assessment of available end market data. Certain amounts reported in previous periods have been updated and reclassified (in millions):
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End Market
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Q3-2012 | Q2-2012 | Q1-2012 | Q4-2011 | Q3-2011 | Q2-2011 | Q1-2011 | |||||||||||||||||||||
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Communication
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$ | 12.8 | $ | 14.1 | $ | 11.8 | $ | 10.8 | $ | 12.0 | $ | 12.1 | $ | 9.9 | ||||||||||||||
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Computing
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10.8 | 10.4 | 10.0 | 8.6 | 9.0 | 7.2 | 5.7 | |||||||||||||||||||||
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Consumer
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26.0 | 26.2 | 23.9 | 24.6 | 27.8 | 29.2 | 26.4 | |||||||||||||||||||||
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Industrial
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6.9 | 7.9 | 4.8 | 3.4 | 4.2 | 3.1 | 2.5 | |||||||||||||||||||||
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Total
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$ | 56.5 | $ | 58.6 | $ | 50.5 | $ | 47.4 | $ | 53.0 | $ | 51.6 | $ | 44.5 |
The following is a summary of revenue by product family for the periods indicated (in millions):
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Three months ended September 30,
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Nine months ended September 30,
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Product Family
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2012
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2011* | 2012 | 2011* | ||||||||||||
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DC to DC Converters
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$ | 49.7 | $ | 44.9 | $ | 145.2 | $ | 128.3 | ||||||||
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Lighting Control Products
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6.8 | 8.1 | 20.4 | 20.8 | ||||||||||||
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Total
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$ | 56.5 | $ | 53.0 | $ | 165.6 | $ | 149.1 | ||||||||
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2011 Revenue associated with Audio Amplifiers has been included with DC to DC Converters to conform with current year presentation.
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"MPS has delivered 11% growth year to date, well above the market. The current slowdown in our revenue growth is transitory," said Michael Hsing, CEO and founder of MPS. "With the breadth of our newly released products and our strong pipeline, MPS expects to accelerate its growth in 2013."
Business Outlook
The following are MPS’ financial targets for the fourth quarter ending December 31, 2012:
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Revenue in the range of $46.0 million to $50.0 million.
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Gross margin between 52.5% and 53.5%.
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2
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GAAP research and development and selling, general and administrative expenses between $23.5 million and $25.5 million. Non-GAAP(1) research and development and selling, general and administrative expenses between $19.5 million and $21.0 million. This excludes an estimate of stock-based compensation expense in the range of $4.0 million to $4.5 million.
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We expect to record a $2.5 million legal judgment as a benefit to fourth quarter litigation expense. |
(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 quarter and nine months ended September 30, 2012 and 2011 exclude the effect of stock-based compensation expense and its related tax effect. Non-GAAP operating expenses for the quarter and nine months ended September 30, 2012 and 2011 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 and nine months ended September 30, 2012 results at 2:00 p.m. PT / 5:00 p.m. ET today, November 1, 2012. 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 41664359. 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 December 31, 2012, (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 2012, (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 annual report on Form 10-K filed with the SEC on March 12, 2012 and its current report on Form 10-Q filed with the SEC on July 30, 2012.
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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, 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, Singapore, Japan, and Europe, which operate under MPS International, Ltd.
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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.
Contact:
Meera Rao
Chief Financial Officer
Monolithic Power Systems, Inc.
408-826-0777
investors@monolithicpower.com
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Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value and share amounts)
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September 30,
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December 31,
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2012
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2011
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 78,247 | $ | 96,371 | ||||
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Short-term investments
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107,279 | 77,827 | ||||||
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Accounts receivable, net of allowances of $5 in 2012 and 2011
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21,561 | 15,097 | ||||||
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Inventories
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32,623 | 20,104 | ||||||
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Deferred income tax assets, net - current
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644 | 421 | ||||||
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Prepaid expenses and other current assets
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2,214 | 1,685 | ||||||
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Total current assets
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242,568 | 211,505 | ||||||
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Property and equipment, net
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59,883 | 47,794 | ||||||
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Long-term investments
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11,756 | 13,675 | ||||||
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Deferred income tax assets, net - long-term
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19 | 239 | ||||||
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Other assets
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1,043 | 654 | ||||||
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Total assets
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$ | 315,269 | $ | 273,867 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$ | 11,405 | $ | 8,904 | ||||
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Accrued compensation and related benefits
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5,959 | 9,321 | ||||||
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Accrued liabilities
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7,500 | 7,845 | ||||||
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Total current liabilities
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24,864 | 26,070 | ||||||
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Non-current income tax liabilities
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5,341 | 4,920 | ||||||
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Total liabilities
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30,205 | 30,990 | ||||||
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Commitments and contingencies
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Stockholders' equity:
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Common stock, $0.001 par value; shares authorized: 150,000,000; shares issued and outstanding: 35,431,808 and 33,826,032 in 2012 and 2011, respectively
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185,583 | 159,336 | ||||||
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Retained earnings
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95,456 | 79,948 | ||||||
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Accumulated other comprehensive income
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4,025 | 3,593 | ||||||
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Total stockholders’ equity
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285,064 | 242,877 | ||||||
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Total liabilities and stockholders’ equity
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$ | 315,269 | $ | 273,867 | ||||
5
Condensed Consolidated Statement of Operations
(Unaudited, in thousands, except per share amounts)
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Three months ended September 30,
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Nine months ended September 30,
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2012
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2011
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2012
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2011
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Revenue
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$ | 56,508 | $ | 52,962 | $ | 165,599 | $ | 149,058 | ||||||||
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Cost of revenue (1)
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26,495 | 25,148 | 78,004 | 72,381 | ||||||||||||
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Gross profit
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30,013 | 27,814 | 87,595 | 76,677 | ||||||||||||
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Operating expenses:
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Research and development (2)
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11,967 | 11,792 | 35,553 | 33,115 | ||||||||||||
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Selling, general and administrative (3)
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11,955 | 10,249 | 36,088 | 30,082 | ||||||||||||
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Litigation expense (benefit), net
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(229 | ) | 722 | (345 | ) | 2,474 | ||||||||||
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Total operating expenses
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23,693 | 22,763 | 71,296 | 65,671 | ||||||||||||
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Income from operations
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6,320 | 5,051 | 16,299 | 11,006 | ||||||||||||
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Interest income and other, net
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156 | 3 | 621 | 210 | ||||||||||||
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Income before income taxes
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6,476 | 5,054 | 16,920 | 11,216 | ||||||||||||
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Income tax provision (benefit)
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555 | (419 | ) | 1,412 | 368 | |||||||||||
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Net income
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$ | 5,921 | $ | 5,473 | $ | 15,508 | $ | 10,848 | ||||||||
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Basic net income per share
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$ | 0.17 | $ | 0.16 | $ | 0.45 | $ | 0.32 | ||||||||
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Diluted net income per share
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$ | 0.16 | $ | 0.16 | $ | 0.43 | $ | 0.31 | ||||||||
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Weighted average common shares outstanding:
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Basic
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35,145 | 33,594 | 34,677 | 34,149 | ||||||||||||
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Diluted
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36,438 | 34,240 | 36,008 | 35,275 | ||||||||||||
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(1) Includes stock-based compensation expense
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$ | 112 | $ | 83 | $ | 325 | $ | 235 | ||||||||
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(2) Includes stock-based compensation expense
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1,465 | 1,576 | 4,255 | 4,553 | ||||||||||||
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(3) Includes stock-based compensation expense
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2,605 | 1,715 | 6,746 | 5,248 | ||||||||||||
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Total stock-based compensation expense
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$ | 4,182 | $ | 3,374 | $ | 11,326 | $ | 10,036 | ||||||||
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Three months ended September 30,
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Nine months ended September 30,
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2012
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2011
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2012
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2011
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RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
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(in thousands, except per share amounts)
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Net income
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$ | 5,921 | $ | 5,473 | $ | 15,508 | $ | 10,848 | ||||||||
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Net income as a percentage of revenue
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10.5 | % | 10.3 | % | 9.4 | % | 7.3 | % | ||||||||
| Adjustments to reconcile net income to non-GAAP net income | ||||||||||||||||
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Stock-based compensation
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$ | 4,182 | $ | 3,374 | $ | 11,326 | $ | 10,036 | ||||||||
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Tax effect
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(244 | ) | (1,051 | ) | (706 | ) | (1,226 | ) | ||||||||
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Non-GAAP net income
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$ | 9,859 | $ | 7,796 | $ | 26,128 | $ | 19,658 | ||||||||
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Non-GAAP net income as a percentage of revenue
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17.4 | % | 14.7 | % | 15.8 | % | 13.2 | % | ||||||||
| Non-GAAP earnings per share, excluding stock-based compensation and related tax effects: | ||||||||||||||||
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Basic
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$ | 0.28 | $ | 0.23 | $ | 0.75 | $ | 0.58 | ||||||||
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Diluted
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$ | 0.27 | $ | 0.23 | $ | 0.73 | $ | 0.56 | ||||||||
| Shares used in the calculation of non-GAAP earnings per share: | ||||||||||||||||
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Basic
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35,145 | 33,594 | 34,677 | 34,149 | ||||||||||||
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Diluted
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36,438 | 34,240 | 36,008 | 35,275 | ||||||||||||
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RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
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(in thousands)
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Total operating expenses
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$ | 23,693 | $ | 22,763 | $ | 71,296 | $ | 65,671 | ||||||||
| Adjustments to reconcile total operating expenses to non-GAAP total operating expenses | ||||||||||||||||
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Stock-based compensation
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$ | (4,070 | ) | $ | (3,291 | ) | $ | (11,001 | ) | $ | (9,801 | ) | ||||
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Non-GAAP operating expenses
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$ | 19,623 | $ | 19,472 | $ | 60,295 | $ | 55,870 | ||||||||
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RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
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(in thousands)
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Total operating income
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$ | 6,320 | $ | 5,051 | $ | 16,299 | $ | 11,006 | ||||||||
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Operating income as a percentage of revenue
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11.2 | % | 9.5 | % | 9.8 | % | 7.4 | % | ||||||||
| Adjustments to reconcile total operating income to non-GAAP total operating income | ||||||||||||||||
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Stock-based compensation
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$ | 4,182 | $ | 3,374 | $ | 11,326 | $ | 10,036 | ||||||||
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Non-GAAP operating income
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$ | 10,502 | $ | 8,425 | $ | 27,625 | $ | 21,042 | ||||||||
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Non-GAAP operating income as a percentage of revenue
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18.6 | % | 15.9 | % | 16.7 | % | 14.1 | % | ||||||||
7
2012 FOURTH QUARTER OUTLOOK
RECONCILIATION OF R&D AND SG&A EXPENSES TO NON-GAAP R&D AND SG&A EXPENSES
(in thousands)
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Three months ending
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December 31, 2012
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Low
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High
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R&D and SG&A
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$ | 23,500 | $ | 25,500 | ||||
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Adjustments to reconcile R&D and SG&A to non-GAAP R&D and SG&A
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Stock-based compensation
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$ | (4,000 | ) | $ | (4,500 | ) | ||
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Non-GAAP R&D and SG&A
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$ | 19,500 | $ | 21,000 | ||||
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