Monolithic Power Systems, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 129,430 | $ | 103,618 | $ | 470,929 | $ | 388,665 | |||||||
Cost of revenue | 58,269 | 47,107 | 212,646 | 177,792 | |||||||||||
Gross profit | 71,161 | 56,511 | 258,283 | 210,873 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 21,730 | 17,974 | 82,359 | 73,643 | |||||||||||
Selling, general and administrative | 24,038 | 21,316 | 97,257 | 83,012 | |||||||||||
Litigation expense (benefit), net | 340 | (321 | ) | 1,243 | (229 | ) | |||||||||
Total operating expenses | 46,108 | 38,969 | 180,859 | 156,426 | |||||||||||
Income from operations | 25,053 | 17,542 | 77,424 | 54,447 | |||||||||||
Interest and other income, net | 1,647 | 897 | 5,520 | 2,817 | |||||||||||
Income before income taxes | 26,700 | 18,439 | 82,944 | 57,264 | |||||||||||
Income tax provision | 14,629 | 1,866 | 17,741 | 4,544 | |||||||||||
Net income | $ | 12,071 | $ | 16,573 | $ | 65,203 | $ | 52,720 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.29 | $ | 0.41 | $ | 1.58 | $ | 1.30 | |||||||
Diluted | $ | 0.27 | $ | 0.39 | $ | 1.50 | $ | 1.26 | |||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 41,574 | 40,739 | 41,350 | 40,436 | |||||||||||
Diluted | 44,160 | 42,404 | 43,578 | 41,915 | |||||||||||
Cash dividends declared per common share | $ | 0.20 | $ | 0.20 | $ | 0.80 | $ | 0.80 | |||||||
SUPPLEMENTAL FINANCIAL INFORMATION | |||||||||||||||
STOCK-BASED COMPENSATION EXPENSE | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of revenue | $ | 391 | $ | 358 | $ | 1,654 | $ | 1,575 | |||||||
Research and development | 3,519 | 3,039 | 14,816 | 14,041 | |||||||||||
Selling, general and administrative | 7,948 | 7,350 | 36,147 | 29,373 | |||||||||||
Total stock-based compensation expense | $ | 11,858 | $ | 10,747 | $ | 52,617 | $ | 44,989 | |||||||
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME | |||||||||||||||
(Unaudited, in thousands, except per share amounts) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 12,071 | $ | 16,573 | $ | 65,203 | $ | 52,720 | |||||||
Net income as a percentage of revenue | 9.3 | % | 16.0 | % | 13.8 | % | 13.6 | % | |||||||
Adjustments to reconcile net income to non-GAAP net income: | |||||||||||||||
Stock-based compensation expense | 11,858 | 10,747 | 52,617 | 44,989 | |||||||||||
Amortization of acquisition-related intangible assets | 513 | 512 | 2,051 | 2,051 | |||||||||||
Deferred compensation plan expense (income) | 148 | 29 | 238 | (188 | ) | ||||||||||
Tax effect (1) | 11,688 | (364 | ) | 7,402 | (3,265 | ) | |||||||||
Non-GAAP net income | $ | 36,278 | $ | 27,497 | $ | 127,511 | $ | 96,307 | |||||||
Non-GAAP net income as a percentage of revenue | 28.0 | % | 26.5 | % | 27.1 | % | 24.8 | % | |||||||
Non-GAAP net income per share: | |||||||||||||||
Basic | $ | 0.87 | $ | 0.67 | $ | 3.08 | $ | 2.38 | |||||||
Diluted | $ | 0.82 | $ | 0.65 | $ | 2.93 | $ | 2.30 | |||||||
Shares used in the calculation of non-GAAP net income per share: | |||||||||||||||
Basic | 41,574 | 40,739 | 41,350 | 40,436 | |||||||||||
Diluted | 44,160 | 42,404 | 43,578 | 41,915 | |||||||||||
(1) Tax effect for the quarter and year ended December 31, 2017 includes a one-time charge of $13.5 million associated with the enactment of the 2017 Tax Act due to its unique non-recurring nature. | |||||||||||||||
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Gross profit | $ | 71,161 | $ | 56,511 | $ | 258,283 | $ | 210,873 | |||||||
Gross margin | 55.0 | % | 54.5 | % | 54.8 | % | 54.3 | % | |||||||
Adjustments to reconcile gross profit to non-GAAP gross profit: | |||||||||||||||
Stock-based compensation expense | 391 | 358 | 1,654 | 1,575 | |||||||||||
Amortization of acquisition-related intangible assets | 513 | 512 | 2,051 | 2,051 | |||||||||||
Non-GAAP gross profit | $ | 72,065 | $ | 57,381 | $ | 261,988 | $ | 214,499 | |||||||
Non-GAAP gross margin | 55.7 | % | 55.4 | % | 55.6 | % | 55.2 | % | |||||||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total operating expenses | $ | 46,108 | $ | 38,969 | $ | 180,859 | $ | 156,426 | |||||||
Adjustments to reconcile total operating expenses to non-GAAP total operating expenses: | |||||||||||||||
Stock-based compensation expense | (11,467 | ) | (10,389 | ) | (50,963 | ) | (43,414 | ) | |||||||
Deferred compensation plan expense | (776 | ) | (189 | ) | (2,769 | ) | (1,069 | ) | |||||||
Non-GAAP operating expenses | $ | 33,865 | $ | 28,391 | $ | 127,127 | $ | 111,943 | |||||||
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total operating income | $ | 25,053 | $ | 17,542 | $ | 77,424 | $ | 54,447 | |||||||
Operating income as a percentage of revenue | 19.4 | % | 16.9 | % | 16.4 | % | 14.0 | % | |||||||
Adjustments to reconcile total operating income to non-GAAP total operating income: | |||||||||||||||
Stock-based compensation expense | 11,858 | 10,747 | 52,617 | 44,989 | |||||||||||
Amortization of acquisition-related intangible assets | 513 | 512 | 2,051 | 2,051 | |||||||||||
Deferred compensation plan expense | 776 | 189 | 2,769 | 1,069 | |||||||||||
Non-GAAP operating income | $ | 38,200 | $ | 28,990 | $ | 134,861 | $ | 102,556 | |||||||
Non-GAAP operating income as a percentage of revenue | 29.5 | % | 28.0 | % | 28.6 | % | 26.4 | % | |||||||
RECONCILIATION OF INTEREST AND OTHER INCOME, NET, TO NON-GAAP INTEREST AND OTHER INCOME, NET | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total interest and other income, net | $ | 1,647 | $ | 897 | $ | 5,520 | $ | 2,817 | |||||||
Adjustments to reconcile interest and other income to non-GAAP interest and other income: | |||||||||||||||
Deferred compensation plan income | (628 | ) | (160 | ) | (2,531 | ) | (1,257 | ) | |||||||
Non-GAAP interest and other income, net | $ | 1,019 | $ | 737 | $ | 2,989 | $ | 1,560 | |||||||
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total income before income taxes | $ | 26,700 | $ | 18,439 | $ | 82,944 | $ | 57,264 | |||||||
Adjustments to reconcile income before income taxes to non-GAAP income before income taxes: | |||||||||||||||
Stock-based compensation expense | 11,858 | 10,747 | 52,617 | 44,989 | |||||||||||
Amortization of acquisition-related intangible assets | 513 | 512 | 2,051 | 2,051 | |||||||||||
Deferred compensation plan expense (income) | 148 | 29 | 238 | (188 | ) | ||||||||||
Non-GAAP income before income taxes | $ | 39,219 | $ | 29,727 | $ | 137,850 | $ | 104,116 | |||||||