Monolithic Power Systems 10-Q 2021-09-30

Filed 2021-11-08. 2 sections, 228K characters. Original on sec.gov · Markdown · JSON

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-51026

Monolithic Power Systems, Inc.

(Exact name of registrant as specified in its charter)

Delaware	77-0466789
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

5808 Lake Washington Blvd. NE, Kirkland, Washington 98033

(Address of principal executive offices)(Zip Code)

(425) 296-9956

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001 per share		MPWR		The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐
Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 46,093,000 shares of the registrant’s common stock issued and outstanding as of November 1, 2021.

MONOLITHIC POWER SYSTEMS, INC.

TABLE OF CONTENTS		PAGE
PART I. FINANCIAL INFORMATION		4
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	4
	CONDENSED CONSOLIDATED BALANCE SHEETS	4
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	5
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	6
	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	7
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	8
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32
ITEM 4.	CONTROLS AND PROCEDURES	32
PART II. OTHER INFORMATION		32
ITEM 1.	LEGAL PROCEEDINGS	32
ITEM1A.	RISK FACTORS	32
ITEM 6.	EXHIBITS	51

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

MONOLITHIC POWER SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)

	September 30,		December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	226,091	$	334,944
Short-term investments		515,947		260,169
Accounts receivable, net		79,859		66,843
Inventories		208,062		157,062
Other current assets		34,535		22,980
Total current assets		1,064,494		841,998
Property and equipment, net		340,060		281,528
Goodwill		6,571		6,571
Deferred tax assets, net		17,726		18,556
Other long-term assets		67,050		59,838
Total assets	$	1,495,901	$	1,208,491

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	72,092	$	38,169
Accrued compensation and related benefits		75,815		45,840
Other accrued liabilities		79,756		62,960
Total current liabilities		227,663		146,969
Income tax liabilities		41,019		37,062
Other long-term liabilities		64,506		57,873
Total liabilities		333,188		241,904
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital: $0.001 par value; shares authorized: 150,000; shares issued and outstanding: 46,091 and 45,267, respectively		769,858		657,701
Retained earnings		381,193		298,746
Accumulated other comprehensive income		11,662		10,140
Total stockholders’ equity		1,162,713		966,587
Total liabilities and stockholders’ equity	$	1,495,901	$	1,208,491

See accompanying notes to unaudited condensed consolidated financial statements.

MONOLITHIC POWER SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per-share amounts)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	$	323,522	$	259,422	$	871,294	$	611,409
Cost of revenue		137,211		116,382		379,709		274,329
Gross profit		186,311		143,040		491,585		337,080
Operating expenses:
Research and development		49,468		37,717		136,113		95,346
Selling, general and administrative		56,291		43,503		164,982		116,550
Litigation expense		3,421		1,841		6,645		6,264
Total operating expenses		109,180		83,061		307,740		218,160
Income from operations		77,131		59,979		183,845		118,920
Other income, net		793		2,494		6,411		5,980
Income before income taxes		77,924		62,473		190,256		124,900
Income tax expense		9,154		6,907		20,904		3,412
Net income	$	68,770	$	55,566	$	169,352	$	121,488

Net income per share:
Basic	$	1.50	$	1.24	$	3.70	$	2.72
Diluted	$	1.44	$	1.18	$	3.55	$	2.59
Weighted-average shares outstanding:
Basic		45,970		44,970		45,754		44,737
Diluted		47,852		46,955		47,772		46,819

See accompanying notes to unaudited condensed consolidated financial statements.

MONOLITHIC POWER SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Net income	$	68,770		$	55,566		$	169,352		$	121,488
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(371	)		6,936			2,592			5,072
Change in unrealized gain (loss) on available-for-sale securities, net of tax of $32, $30, $177 and $(321), respectively		(268	)		(368	)		(1,070	)		2,888
Other comprehensive income (loss), net of tax		(639	)		6,568			1,522			7,960
Comprehensive income	$	68,131		$	62,134		$	170,874		$	129,448

See accompanying notes to unaudited condensed consolidated financial statements.

MONOLITHIC POWER SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except per-share amounts)

(unaudited)

								Accumulated
	Common Stock and							*Other*			*Total*
	Additional Paid-in Capital				*Retained*			*Comprehensive*			****Stockholders’
Three Months Ended September 30, 2021	*Shares*		*Amount*		*Earnings*			*Income*			*Equity*
Balance as of July 1, 2021		45,917	$	733,672	$	341,382		$	12,301		$	1,087,355
Net income		-		-		68,770			-			68,770
Other comprehensive loss		-		-		-			(639	)		(639	)
Dividends and dividend equivalents declared ($0.60 per share)		-		-		(28,959	)		-			(28,959	)
Common stock issued under the employee equity incentive plan		167		2,227		-			-			2,227
Common stock issued under the employee stock purchase plan		7		2,377		-			-			2,377
Stock-based compensation expense		-		31,582		-			-			31,582
Balance as of September 30, 2021		46,091	$	769,858	$	381,193		$	11,662		$	1,162,713

Showing the first 8K of 224K characters. Open the full section