SAN JOSE, Calif., April 24, 2014 — (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 March 31, 2014.

The results for the quarter ended March 31, 2014 are as follows:

• Net revenue was $60.1 million, a 5.5% decrease from $63.6 million in the fourth quarter of 2013 and a 16.7% increase from $51.5 million in the first quarter of 2013.
• GAAP gross margin was 53.4%, compared with 53.2% in the first quarter of 2013, which included $0.2 million for stock-based compensation expenses for both periods.
• Non-GAAP gross margin(1) was 53.8%, compared with 53.5% in the first quarter of 2013, which excluded $0.2 million for stock-based compensation expenses for both periods.
• GAAP operating expenses were $23.0 million, including $31.7 million for research and development (R&D) and selling, general and administrative (SG&A) expenses, which included $7.4 million for stock-based compensation and deferred compensation plan expenses, and $(8.7) million for litigation benefit. Comparatively, for the quarter ended March 31, 2013, GAAP operating expenses were $25.1 million, including $25.4 million for R&D and SG&A expenses, which included $4.5 million for stock-based compensation expenses, and $(0.3) million for litigation benefit.
• For the quarter ended March 31, 2014, MPS recognized a $9.0 million net litigation benefit from the settlement of the O2 Micro lawsuit. In conjunction with the recognition of this benefit, MPS recorded a one-time special non-executive employee bonus accrual of $3.1 million, of which $0.3 million was recorded in cost of revenue and $2.8 million was recorded in operating expenses.
• Non-GAAP(1) operating expenses were $15.6 million, excluding $7.4 million for stock-based compensation and deferred compensation plan expenses, compared with $20.6 million, excluding $4.5 million for stock-based compensation expenses, for the quarter ended March 31, 2013.
• GAAP net income was $9.0 million and GAAP earnings per share were $0.23 per diluted share. Comparatively, GAAP net income was $2.5 million and GAAP earnings per share were $0.07 per diluted share for the quarter ended March 31, 2013.
• Non-GAAP(1) net income was $15.6 million and non-GAAP earnings per share were $0.39 per diluted share, excluding stock-based compensation expenses, net deferred compensation plan income and related tax effects, compared with non-GAAP net income of $6.4 million and non-GAAP earnings per share of $0.17 per diluted share, excluding stock-based compensation expenses and related tax effects, for the quarter ended March 31, 2013.

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):

"MPS had an outstanding quarter, hitting record first-quarter revenues while continuing to deliver solutions that exceed industry standards," said Michael Hsing, CEO and founder of MPS. "We are delivering on our promise to broaden our product portfolio and grow revenues above the industry average, with sustainable long-term growth."

Business Outlook

The following are MPS's financial targets for the second quarter ending June 30, 2014:

• Revenue in the range of $65 million to $69 million.
• GAAP gross margin between 53.7% and 54.7%. Non-GAAP(1) gross margin between 54.0% and 55.0%. This excludes an estimated impact of stock-based compensation expenses of 0.3%.
• GAAP R&D and SG&A expenses between $27.8 million and $30.4 million. Non-GAAP(1) R&D and SG&A expenses between $20.5 million and $22.5 million. This excludes an estimate of stock-based compensation expenses in the range of $7.3 million to $7.9 million.
• Litigation expenses of $200,000 to $400,000.
• Fully diluted shares outstanding between 39.5 million and 39.9 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, 2014 and 2013 exclude the effect of stock-based compensation expenses, net deferred compensation plan income and their related tax effects. Non-GAAP gross margin for the quarters ended March 31, 2014 and 2013 exclude the effect of stock-based compensation expenses. Non-GAAP operating expenses for the quarters ended March 31, 2014 and 2013 exclude the effect of stock-based compensation and deferred compensation plan expenses. Projected non-GAAP gross margin exclude the effect of stock-based compensation expenses. Projected non-GAAP R&D and SG&A expenses exclude the effect of stock-based compensation expenses. 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, 2014 results at 2:00 p.m. PT / 5:00 p.m. ET, April 24, 2014. 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 25697963. 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, litigation expenses and diluted shares outstanding for the quarter ending June 30, 2014, (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) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements of the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv) or (v). 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 10, 2014.

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 1,000 employees worldwide, located in the United States, China, Taiwan, Korea, Japan, Singapore 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.

Contact:

Monolithic Power Systems, Inc. Meera Rao, Chief Financial Officer, Monolithic Power Systems, Inc., 408-826-0777 Email Contact Web: http://www.monolithicpower.com