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Tessera Technologies Announces First Quarter 2012 Results

Stocks in this article: TSRA

About Tessera Technologies, Inc.

Tessera Technologies, Inc. is a holding company with operating subsidiaries in two segments: Intellectual Property and DigitalOptics. Our Intellectual Property business generates revenue from patented innovations through license agreements with semiconductor companies and outsourced semiconductor assembly and test companies. Tessera, Inc. pioneered chip-scale packaging solutions for the semiconductor industry. Our DigitalOptics business delivers innovation in imaging and optics with products and capabilities that enable expanded functionality in increasingly smaller devices. Our miniaturized camera module solutions provide cost-effective, high-quality camera features, including Micro Electro Mechanical Systems (“MEMS”)-based autofocus, extended depth of field (“EDoF”), zoom, image enhancement and optical image stabilization. We also offer customized micro-optic lenses from diffractive and refractive optical elements to integrated micro-optical subassemblies. For information call 1-408-321-6000 or go to www.tessera.com.

Tessera, Tessera, Inc., the Tessera logo, DigitalOptics Corporation, and Invensas Corporation are trademarks or registered trademarks of affiliated companies of Tessera Technologies, Inc. in the United States and other countries. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company’s earnings release contains non-GAAP financial measures adjusted for either one-time or ongoing non-cash acquired intangibles amortization charges, acquired in-process research and development, all forms of stock-based compensation, impairment charges on long-lived assets and goodwill, and related tax effects. The non-GAAP financial measures also exclude the effects of FASB Accounting Standards Codification 718, “ Stock Compensation” upon the number of diluted shares used in calculating non-GAAP earnings per share. Management believes that the non-GAAP measures used in this release provide investors with important perspectives into the Company’s ongoing business performance. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Set forth below are reconciliations of non-GAAP net income to the Company’s reported GAAP net income.

TESSERA TECHNOLOGIES, INC.

     
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended
March 31,
  2012     2011
Revenues:
Royalty and license fees $ 43,264 $ 62,258
Product and service revenues   3,409     5,515
Total revenues   46,673     67,773
Operating expenses:
Cost of revenues 5,760 5,512
Research, development and other related costs 23,445 18,613
Selling, general and administrative 24,611 19,464
Litigation expense 3,492 5,996
Restructuring and other charges   -     2,059
Total operating expenses   57,308     51,644
Operating income (loss) (10,635 ) 16,129
Other income and expense, net   668     608
Income (loss) before taxes (9,967 ) 16,737
Provision for income taxes   (1,879 )   5,525
Net income (loss) $ (8,088 ) $ 11,212
Basic and diluted net income (loss) per share:
 
Net income (loss) per share - basic $ (0.16 ) $ 0.22
Net income (loss) per share - diluted $ (0.16 ) $ 0.22
Cash dividends declared per share $ 0.10   $ -
Weighted average number of shares used in per share
calculations - basic   51,738     50,823
Weighted average number of shares used in per share
calculations - diluted   51,738     51,267
TESSERA TECHNOLOGIES, INC.
       
CONSOLIDATED BALANCE SHEETS
(in thousands)
 
March 31, December 31,
  2012   2011*
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 78,913 $ 55,758
Short-term investments 411,519 436,687
Accounts receivable, net 7,920 8,599
Inventories 1,635 1,574
Short-term deferred tax assets 1,891 1,892
Other current assets   15,823     13,664  
Total current assets   517,701     518,174  
 
Property and equipment, net 35,544 36,319
Intangible assets, net 135,115 141,326
Long-term deferred tax assets 18,223 18,223
Other assets   2,345     2,484  
Total assets $ 708,928   $ 716,526  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,408 $ 7,203
Accrued legal fees 5,897 6,110
Accrued liabilities 12,894 20,824

Dividend payable

5,192 -
Deferred revenue   5,145     2,610  
Total current liabilities   34,536     36,747  
 
Long-term deferred tax liabilities 4,083 4,083
Other long-term liabilities 5,017 5,017
 
Stockholders' equity:
Common stock 52 52
Additional paid-in capital 470,331 462,697
Treasury stock (10,505 ) (10,505 )
Accumulated other comprehensive income 283 24
Retained earnings   205,131     218,411  
Total stockholders' equity   665,292     670,679  
 
Total liabilities and stockholders' equity $ 708,928   $ 716,526  
 
* Derived from audited financial statements
TESSERA TECHNOLOGIES, INC.
     
RECONCILIATION TO NON-GAAP INCOME FROM GAAP NET INCOME (LOSS)
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended
March 31,
  2012     2011  
 
GAAP net income (loss) $ (8,088 ) $ 11,212
 
 
Adjustments to GAAP net income (loss):
Stock-based compensation - cost of revenues 150 143
Stock-based compensation - research, development and other related costs 1,712 2,446
Stock-based compensation - selling, general and administrative 2,194 3,475
Amortization of acquired intangibles - cost of revenues 2,016 1,707
Amortization of acquired intangibles - research, development and other related costs 1,353 753
Amortization of acquired intangibles - selling, general and administrative 3,004 1,632
Tax adjustments for non-GAAP items (2,559 ) (2,360 )
   
Non-GAAP net income (loss) $ (218 ) $ 19,008  
 
Non-GAAP net income (loss) per common share - diluted $ (0.00 ) $ 0.36  
Weighted average number of shares used in per share
calculations excluding the effects of FAS 123R - diluted   53,093     52,548  
TESSERA TECHNOLOGIES, INC.
         
CONSOLIDATED REVENUE DETAILS
(in thousands)
(unaudited)
 
Three Months Ended
March 31,
  2012   2011
Revenues:
Intellectual Property Segment
Royalty and license fees $ 39,028 $ 53,615
Product and service revenues   -   -
Total Intellectual Property revenues 39,028 53,615
 
DigitalOptics Segment
Royalty and license fees 4,236 8,643
Product and service revenues   3,409   5,515
Total DigitalOptics revenues 7,645 14,158
   
Total revenues $ 46,673 $ 67,773

TSRA - E

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