Monolithic Power Systems Announces Results for the First Quarter

Monolithic Power Systems Announces Results for the First Quarter Ended March 31, 2018


Monolithic Power Systems, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)

	Three Months Ended March 31,
		2018			2017
Revenue	$	129,150		$	100,362
Cost of revenue		57,655			45,520
Gross profit		71,495			54,842
Operating expenses:
Research and development		21,609			18,894
Selling, general and administrative		27,318			22,092
Litigation expense		531			286
Total operating expenses		49,458			41,272
Income from operations		22,037			13,570
Interest and other income, net		440			1,381
Income before income taxes		22,477			14,951
Income tax provision		621			474
Net income	$	21,856		$	14,477

Net income per share:
Basic	$	0.52		$	0.35
Diluted	$	0.49		$	0.33
Weighted-average shares outstanding:
Basic		41,922			41,047
Diluted		44,282			43,268

Cash dividends declared per common share	$	0.30		$	0.20



SUPPLEMENTAL FINANCIAL INFORMATION
STOCK-BASED COMPENSATION EXPENSE
(Unaudited, in thousands)
	Three Months Ended March 31,
		2018			2017
Cost of revenue	$	433		$	358
Research and development		3,995			3,498
Selling, general and administrative		10,602			7,806
Total stock-based compensation expense	$	15,030		$	11,662


RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(Unaudited, in thousands, except per share amounts)
	Three Months Ended March 31,
		2018			2017
Net income	$	21,856		$	14,477
Net income as a percentage of revenue		16.9	%		14.4	%

Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation expense		15,030			11,662
Amortization of acquisition-related intangible assets		250			513
Deferred compensation plan expense		49			71
Tax effect		(2,214	)		(1,566	)
Non-GAAP net income	$	34,971		$	25,157
Non-GAAP net income as a percentage of revenue		27.1	%		25.1	%

Non-GAAP net income per share:
Basic	$	0.83		$	0.61
Diluted	$	0.79		$	0.58

Shares used in the calculation of non-GAAP net income per share:
Basic		41,922			41,047
Diluted		44,282			43,268

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited, in thousands)
	Three Months Ended March 31,
		2018			2017
Gross profit	$	71,495		$	54,842
Gross margin		55.4	%		54.6	%

Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation expense		433			358
Amortization of acquisition-related intangible assets		250			513
Non-GAAP gross profit	$	72,178		$	55,713
Non-GAAP gross margin		55.9	%		55.5	%

RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in thousands)
	Three Months Ended March 31,
		2018			2017
Total operating expenses	$	49,458		$	41,272

Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation expense		(14,597	)		(11,304	)
Deferred compensation plan income (expense)		137			(804	)
Non-GAAP operating expenses	$	34,998		$	29,164


RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
(Unaudited, in thousands)
	Three Months Ended March 31,
		2018			2017
Total operating income	$	22,037		$	13,570
Operating income as a percentage of revenue		17.1	%		13.5	%

Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation expense		15,030			11,662
Amortization of acquisition-related intangible assets		250			513
Deferred compensation plan (income) expense		(137	)		804
Non-GAAP operating income	$	37,180		$	26,549
Non-GAAP operating income as a percentage of revenue		28.8	%		26.5	%


RECONCILIATION OF INTEREST AND OTHER INCOME, NET, TO NON-GAAP INTEREST AND OTHER INCOME, NET
(Unaudited, in thousands)
	Three Months Ended March 31,
		2018			2017
Total interest and other income, net	$	440		$	1,381

Adjustments to reconcile interest and other income to non-GAAP interest and other income:
Deferred compensation plan (income) expense		186			(733	)
Non-GAAP interest and other income, net	$	626		$	648


RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES
(Unaudited, in thousands)
	Three Months Ended March 31,
		2018			2017
Total income before income taxes	$	22,477		$	14,951

Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation expense		15,030			11,662
Amortization of acquisition-related intangible assets		250			513
Deferred compensation plan expense		49			71
Non-GAAP income before income taxes	$	37,806		$	27,197

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