EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

 

Company Contact:       Investor Relations Contact:
Charlie Webster       Moriah Shilton
Chief Financial Officer       Director, Investor Relations
408-894-0700       ir@tessera.com

TESSERA TECHNOLOGIES ANNOUNCES FIRST QUARTER 2008 RESULTS

- First Quarter 2008 Royalty and License Fees Grew 34 Percent versus Prior Year Quarter -

San Jose, Calif., May 1, 2008 – Tessera Technologies, Inc. (Nasdaq: TSRA), a leading provider of miniaturization technologies for the electronics industry, announced its results for the first quarter ended March 30, 2008.

Revenue Highlights: First Quarter 2008

 

   

Total revenue was $59.4 million.

 

   

Royalty and license fees were $50.2 million.

 

   

Product and service revenue was $9.1 million.

Generally accepted accounting principles (GAAP) net income for the first quarter of 2008 was $2.2 million, or $0.05 per diluted share, and included non-cash charges of $4.5 million for stock-based compensation, $2.5 million for acquired in-process research and development and $2.3 million for amortization of acquired intangibles.

Non-GAAP net income for the first quarter of 2008 was $16.1 million, or $0.33 per diluted share. Non-GAAP net income and operating expenses are defined as income and operating expenses adjusted for non-cash tax expense, acquired intangibles amortization charges, charges for acquired in-process research and development, and stock-based compensation. Non-GAAP net income per share equals non-GAAP net income divided by the non-GAAP weighted diluted share count as of that period end.

“Our first quarter total revenue was driven by robust DRAM and wireless unit growth and included a favorable adjustment by one of our licensees,” said Bruce McWilliams, chairman, president and CEO for Tessera. “Demand for increased memory and functionality in both computing and consumer devices is driving broader usage of chip scale packaging in a wide range of applications. From a strategic perspective, as the features of digital still cameras and cell phones converge, we believe our platform of consumer imaging technologies is well positioned to help drive next-generation wireless devices. We believe this will generate longer term company growth.”

 


Second Quarter 2008 Financial Guidance

“First quarter recurring royalty revenue from current licensees fully met expectations,” stated Charlie Webster, CFO for Tessera. “We expect second quarter total revenue to be within the range of $54 million to $56 million, which includes projected royalty and license fees of between $47 million and $49 million. These ranges are one million dollars above our previous guidance originally given on January 31, 2008, as we anticipate strong performance in our core business.”

Non-GAAP operating expenses for the second quarter of 2008 are projected to be approximately $27.5 million to $28.5 million, excluding litigation expenses. Starting with the second quarter of 2008, Tessera will not provide guidance on litigation expense as it is highly variable and difficult to predict. The company will, however, continue to provide actual litigation spending.

As per company policy, quarterly guidance does not include settlements from the company’s current enforcement actions.

Conference Call Information

Tessera Technologies will hold its first quarter 2008 earnings conference call at 1:30 P.M. Pacific (4:30 P.M. Eastern) on Thursday, May 1, 2008. To access the call in the U.S., please dial 866-531-1286, and for international callers dial 706-643-3789 approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days at www.tessera.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the telephone replay in the U.S., please dial 800-642-1687 and for international callers, dial 706-645-9291. Enter access code 43493004.

About Tessera Technologies, Inc.

Tessera is a leading provider of miniaturization technologies for the electronics industry. Tessera provides a broad range of advanced packaging, interconnect, and consumer optics solutions which are widely adopted in high-growth markets including consumer, computing, communications, medical and defense electronics. Tessera’s customers include the world’s top semiconductor companies such as Intel, Samsung, Texas Instruments, Toshiba, Micron and Infineon. The company’s stock is traded on the Nasdaq National Market under the symbol TSRA. Tessera is headquartered in San Jose, California. www.tessera.com.

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 that are adjusted for non-cash tax expense, and stock compensation and the requirements of SFAS No. 123(R), “Share-based Payment” (“123R”). The non-GAAP financial measures used by management and disclosed by the company exclude the income statement effects of non-cash tax expense, either one-time


or ongoing non-cash acquired intangibles amortization charges, acquired in-process research and development, and all forms of stock-based compensation and the effects of 123R upon the number of diluted shares used in calculating non-GAAP earnings per share. Management believes that the non-GAAP measures used in this report 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 the non-GAAP net income to our reported GAAP net income.

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. Material factors that may cause results to differ from the statements made include delays, setbacks or losses relating to our intellectual property or intellectual property litigations, or any invalidation or limitation of our key patents; fluctuations in our operating results due to the timing of new license agreements and royalties, or due to legal costs; changes in patent laws, regulation or enforcement, or other factors that might affect our ability to protect our intellectual property; the risk of a decline in demand for semiconductor products; failure by the industry to adopt our technologies; competing technologies; the future expiration of our patents; the future expiration of our license agreements and the cessation of related royalty income; the failure or refusal of licensees to pay royalties; failure to achieve the growth prospects and synergies expected from acquisition transactions; and delays and challenges associated with integrating acquired companies with our existing businesses. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. Tessera’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2007 include more information about factors that could affect the company’s financial results.


TESSERA TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended
March 31,
     2008    2007 (1)

Revenues:

     

Royalty and license fees

   $ 50,240    $ 37,456

Past production payments

     —        —  

Product and service revenues

     9,111      9,363
             

Total revenues

     59,351      46,819
             

Operating expenses:

     

Cost of revenues

     4,332      4,702

Research, development and other related costs

     14,153      8,353

Selling, general and administrative costs

     35,517      16,154
             

Total operating expenses

     54,002      29,209
             

Operating income

     5,349      17,610

Other income, net

     2,834      2,758
             

Income before taxes

     8,183      20,368

Income tax provision

     5,957      9,274
             

Net income

   $ 2,226    $ 11,094
             

Basic and diluted net income per share:

     

Net income per common share - basic

   $ 0.05    $ 0.24
             

Net income per common share - diluted

   $ 0.05    $ 0.23
             

Weighted average number of shares used in per share
calculations - basic

     48,157      47,001
             

Weighted average number of shares used in per share
calculations - diluted

     48,693      48,749
             

 

(1) Certain prior year amounts have been reclassified to conform to current year presentation in the Consolidated Statements of Operations.


TESSERA TECHNOLOGIES, INC.

SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA

(in thousands)

(unaudited)

 

     Three Months Ended
March 31,
     2008    2007

Non-cash income tax expense

   $ 4,540    $ 8,470

Stock compensation - cost of revenues

   $ 105    $ 550

Stock compensation - research, development and other related costs

   $ 1,411    $ 508

Stock compensation - selling, general and administrative

   $ 2,977    $ 2,623

Amortization of acquired intangibles - cost of revenues

   $ 594    $ 422

Amortization of acquired intangibles - research, development and other related costs

   $ 1,423    $ 677

Amortization of acquired intangibles - selling, general and administration

   $ 330    $ 202

Acquired in-process research & development charge

   $ 2,500    $ —  

Weighted average number of shares used in per share
calculations excluding the effects of 123R - diluted

     49,363      48,335


TESSERA TECHNOLOGIES, INC.

CONSOLIDATED SUMMARY BALANCE SHEET INFORMATION

(in thousands)

 

     March 31,
2008
    December 31,
2007*
 
     (unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 126,827     $ 207,158  

Short-term investments

     92,692       82,566  

Accounts receivable, net

     23,554       13,464  

Inventories

     1,797       1,817  

Deferred tax assets

     5,681       5,291  

Other current assets

     4,196       3,544  
                

Total current assets

     254,747       313,840  

Property and equipment, net

     29,693       29,443  

Intangible assets, net

     74,539       51,336  

Goodwill

     42,980       35,489  

Deferred tax assets

     14,844       12,937  

Long-term investments

     36,674       —    

Other assets

     1,221       1,391  
                

Total assets

   $ 454,698     $ 444,436  
                

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 2,877     $ 2,301  

Accrued legal fees

     7,344       4,789  

Accrued liabilities

     7,655       9,532  

Deferred revenue

     502       469  

Income tax payable

     7,378       1,274  
                

Total current liabilities

     25,756       18,365  
                

Deferred tax liabilities

     10,934       7,747  

Other long-term liabilities

     1,178       —    

Stockholders’ equity:

    

Common Stock

     48       48  

Additional paid-in capital

     320,709       313,387  

Treasury Stock

     (10,505 )     (544 )

Accumulated other comprehensive loss

     (1,575 )     (494 )

Retained earnings

     108,153       105,927  
                

Total stockholders’ equity

     416,830       418,324  
                

Total liabilities and stockholders’ equity

   $ 454,698     $ 444,436  
                

 

* Derived from audited financial statements


TESSERA TECHNOLOGIES, INC.

RECONCILIATION TO NON-GAAP INCOME FROM GAAP NET INCOME

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended March 31, 2008  
     GAAP    Stock-based
Compensation
    Amortization
of Acquired
Intangibles
    Non-cash Tax
Expense
    Acquired
In-process
Research &
Development
Charge
    Non-GAAP, as
adjusted
 

Revenues:

             

Royalty and license fees

   $ 50,240            $ 50,240  

Past production payments

     —                —    

Product and service revenues

     9,111              9,111  
                       

Total revenues

     59,351              59,351  
                       

Operating expenses:

             

Cost of revenues

     4,332      (105 )     (594 )         3,633  

Research, development and other related costs

     14,153      (1,411 )     (1,423 )       (2,500 )     8,819  

Selling, general and administrative costs

     35,517      (2,977 )     (330 )         32,210  
                                               

Total operating expenses

     54,002      (4,493 )     (2,347 )     —         (2,500 )     44,662  
                                               

Operating income

     5,349      4,493       2,347       —         2,500       14,689  

Other income, net

     2,834              2,834  
                                               

Income before taxes

     8,183      4,493       2,347       —         2,500       17,523  

Income tax provision

     5,957          (4,540 )       1,417  
                                               

Net income

   $ 2,226    $ 4,493     $ 2,347     $ 4,540     $ 2,500     $ 16,106  
                                               

Basic and diluted net income per share:

             

Net income per common share - basic

   $ 0.05           
                 

Net income per common share - diluted

   $ 0.05            $ 0.33  
                       

Weighted average number of shares used in per share calculations - basic

     48,157           
                 

Weighted average number of shares used in per share calculations - diluted

     48,693              49,363 *
                       

 

* Excludes the effects of 123(R)

 

     Three Months Ended March 31, 2007  
     GAAP (1)    Stock-based
Compensation
    Amortization
of Acquired
Intangibles
    Non-cash Tax
Expense
    Acquired
In-process
Research &
Development
Charge
   Non-GAAP, as
adjusted
 

Revenues:

              

Royalty and license fees

   $ 37,456             $ 37,456  

Past production payments

     —                 —    

Product and service revenues

     9,363               9,363  
                        

Total revenues

     46,819               46,819  
                        

Operating expenses:

              

Cost of revenues

     4,702      (550 )     (422 )          3,730  

Research, development and other related costs

     8,353      (508 )     (677 )          7,168  

Selling, general and administrative costs

     16,154      (2,623 )     (202 )          13,329  
                                              

Total operating expenses

     29,209      (3,681 )     (1,301 )     —         —        24,227  
                                              

Operating income

     17,610      3,681       1,301       —         —        22,592  

Other income, net

     2,758               2,758  
                                              

Income before taxes

     20,368      3,681       1,301       —         —        25,350  

Income tax provision

     9,274          (8,470 )        804  
                                              

Net income

   $ 11,094    $ 3,681     $ 1,301     $ 8,470     $ —      $ 24,546  
                                              

Basic and diluted net income per share:

              

Net income per common share - basic

   $ 0.24            
                  

Net income per common share - diluted

   $ 0.23             $ 0.51  
                        

Weighted average number of shares used in per share calculations - basic

     47,001            
                  

Weighted average number of shares used in per share calculations - diluted

     48,749               48,335 *
                        

 

* Excludes the effects of 123(R)

 

(1) Certain prior year amounts have been reclassified to conform to current year presentation in the Consolidated Statements of Operations.