Monolithic Power Systems Announces Results for the First Quarter

Monolithic Power Systems Announces Results for the First Quarter Ended March 31, 2017

Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)

	Three Months Ended March 31,
		2017			2016
Revenue	$	100,362		$	84,512
Cost of revenue		45,520			39,002
Gross profit		54,842			45,510
Operating expenses:
Research and development		18,894			17,321
Selling, general and administrative		22,092			17,768
Litigation expense		286			45
Total operating expenses		41,272			35,134
Income from operations		13,570			10,376
Interest and other income, net		1,381			543
Income before income taxes		14,951			10,919
Income tax provision		474			344
Net income	$	14,477		$	10,575

Net income per share:
Basic	$	0.35		$	0.26
Diluted	$	0.33		$	0.25
Weighted-average shares outstanding:
Basic		41,047			40,028
Diluted		43,268			41,646

Cash dividends declared per common share	$	0.20		$	0.20

SUPPLEMENTAL FINANCIAL INFORMATION
STOCK-BASED COMPENSATION EXPENSE
(Unaudited, in thousands)
	Three Months Ended March 31,
		2017			2016
Cost of revenue	$	358		$	434
Research and development		3,498			3,698
Selling, general and administrative		7,806			4,847
Total stock-based compensation expense	$	11,662		$	8,979

RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(Unaudited, in thousands, except per share amounts)
	Three Months Ended March 31,
		2017			2016
Net income	$	14,477		$	10,575
Net income as a percentage of revenue		14.4	%		12.5	%

Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation expense		11,662			8,979
Amortization of acquisition-related intangible assets		513			513
Deferred compensation plan expense (income)		71			(145	)
Tax effect		(1,566	)		(1,176	)
Non-GAAP net income	$	25,157		$	18,746
Non-GAAP net income as a percentage of revenue		25.1	%		22.2	%

Non-GAAP net income per share:
Basic	$	0.61		$	0.47
Diluted	$	0.58		$	0.45

Shares used in the calculation of non-GAAP net income per share:
Basic		41,047			40,028
Diluted		43,268			41,646

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited, in thousands)
	Three Months Ended March 31,
		2017			2016
Gross profit	$	54,842		$	45,510
Gross margin		54.6	%		53.9	%

Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation expense		358			434
Amortization of acquisition-related intangible assets		513			513
Non-GAAP gross profit	$	55,713		$	46,457
Non-GAAP gross margin		55.5	%		55.0	%

RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in thousands)
	Three Months Ended March 31,
		2017			2016
Total operating expenses	$	41,272		$	35,134

Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation expense		(11,304	)		(8,545	)
Deferred compensation plan expense		(804	)		(157	)
Non-GAAP operating expenses	$	29,164		$	26,432


RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
(Unaudited, in thousands)
	Three Months Ended March 31,
		2017			2016
Total operating income	$	13,570		$	10,376
Operating income as a percentage of revenue		13.5	%		12.3	%

Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation expense		11,662			8,979
Amortization of acquisition-related intangible assets		513			513
Deferred compensation plan expense		804			157
Non-GAAP operating income	$	26,549		$	20,025
Non-GAAP operating income as a percentage of revenue		26.5	%		23.7	%


RECONCILIATION OF OTHER INCOME TO NON-GAAP OTHER INCOME
(Unaudited, in thousands)
	Three Months Ended March 31,
		2017			2016
Total interest and other income, net	$	1,381		$	543

Adjustments to reconcile interest and other income to non-GAAP interest and other income:
Deferred compensation plan income		(733	)		(302	)
Non-GAAP interest and other income, net	$	648		$	241

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