Tessera Technologies, Inc. (NASDAQ: TSRA) (the "Company" or "we") issued the following response to a letter, dated Feb. 19, 2013, that Starboard Value LP (“Starboard”) addressed to the Company’s Board of Directors (the “Board”).
- The Board seeks to avoid the expense and distraction of a lengthy proxy fight. Further, it sees value in adding independent directors who can advocate for stockholders and bring fresh perspectives to the Board’s deliberations. It was for these reasons that the Board added two new independent directors in August 2012.
- The Board has expressed to Starboard its willingness to consider Starboard’s nominees. Indeed, the Board’s Nominating Committee sought to interview four of Starboard’s nominees, but was rebuffed by Starboard. What’s more, the Board is perplexed that Starboard chose to release its letter as Board members are preparing for a meeting with Starboard previously scheduled to occur later this month.
- The Board believes the IP segment's expenses are consistent with a business model that sustains and grows long term running royalty revenues, as exemplified by the recent signing of two eight-year licenses by SK hynix Inc.
- The Board also continues to believe that our DigitalOptics Corporation ("DOC") subsidiary has a unique opportunity to enter a market measured in billions of units with superior, industry-changing technology, and that investment in DOC will enhance long term stockholder value.
Safe Harbor Statement
This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those projected, particularly with respect to the Board’s response to Starboard's letter, long term running royalty revenues, DOC’s market opportunities and technologies, and the Company’s investment in DOC. Material factors that may cause results to differ from the statements made include the plans or operations relating to the Company's businesses; market or industry conditions; changes in patent laws, regulation or enforcement, or other factors that might affect the Company's ability to protect or realize the value of its intellectual property; the expiration of license agreements and the cessation of related royalty income; the failure, inability or refusal of licensees to pay royalties; initiation, delays, setbacks or losses relating to the Company's intellectual property or intellectual property litigations, or invalidation or limitation of key patents; the timing and results, which are not predictable and may vary in any individual proceeding, of any ICC ruling or award, including in the Amkor arbitration; fluctuations in operating results due to the timing of new license agreements and royalties, or due to legal costs; the risk of a decline in demand for semiconductor and camera module products; failure by the industry to use technologies covered by the Company's patents; the expiration of the Company's patents; the Company's ability to successfully complete and integrate acquisitions of businesses, including the integration by DOC of its recently acquired camera module manufacturing facility in Zhuhai, China; the risk of loss of, or decreases in production orders from, customers of acquired businesses; financial and regulatory risks associated with the international nature of the Company's businesses; failure of the Company's products to achieve technological feasibility or profitability; failure to successfully commercialize the Company's products; changes in demand for the products of the Company's customers; limited opportunities to license technologies and sell products due to high concentration in the markets for semiconductors and related products and camera modules; the impact of competing technologies on the demand for the Company's technologies and products; failure by DOC to become a vertically integrated camera module supplier; and the reliance on a limited number of suppliers for the components used in the manufacture of DOC products. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended Dec. 31, 2011, and its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2012, include more information about factors that could affect the Company's financial results. The Company assumes no obligation to update information contained in this press release. Although this release may remain available on the Company's website or elsewhere, its continued availability does not indicate that the Company is reaffirming or confirming any of the information contained herein.