8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):    September 14, 2020

MONOLITHIC POWER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

Delaware	000-51026	77-0466789
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading symbol(s)	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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

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.  ☐

Item 7.01. Regulation FD Disclosure

On September 14, 2020, Monolithic Power Systems, Inc. issued a press release updating its financial guidance for the quarter ending September 30, 2020. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information under Item 7.01 of this Current Report on Form 8-K and the exhibit attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the 1934 Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit	Description
99.1	Press release dated September 14, 2020.
104	Cover Page Interactive Data File (embedded within Inline XBRL Document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: September 14, 2020	By:	/s/ T. Bernie Blegen
		T. Bernie Blegen
		Chief Financial Officer

EX-99.1

Exhibit 99.1

PRESS RELEASE

For Immediate Release

Monolithic Power Systems Updates Third Quarter 2020 Financial Guidance

KIRKLAND, WASHINGTON, September 14, 2020 -- Monolithic Power Systems, Inc. (MPS) (Nasdaq: MPWR), a leading company in high performance analog solutions, today announced updates to its financial guidance for the three months ended September 30, 2020.

MPS’s quarterly guidance previously issued on July 28, 2020 reflected the best information available at the time. Subsequently, our overall business during the third quarter of 2020 increased beyond our expectations for two key reasons. First, a majority of the increase was because we were able to fulfill our customers’ demand that had been delinquent due to past capacity constraints. Second, several China-based customers requested previously scheduled shipment dates be pulled into the third quarter of 2020, which we believe is related to recent trade policy changes. These two extraordinary events affecting our third quarter 2020 revenue outlook are believed to be non-recurring in nature. We do not believe these events are indicators of higher or lower overall future demand for our products.

In addition, MPS has begun to take steps to secure resources and accelerate previously announced plans to expand fab capacity outside of China.

The following table presents the updated financial guidance for the three months ending September 30, 2020:

	Previously Announced on			Updated as of
	July 28, 2020			September 14, 2020
Revenue	$200 million	to	$210 million	$257 million	to	$259 million
GAAP gross margin	55.2%	to	55.8%	55.1%	to	55.3%
Non-GAAP (1) gross margin	55.5%	to	56.1%	55.4%	to	55.6%
GAAP research and development (“R&D”) and selling, general and administrative (“SG&A”) expenses	$70.7 million	to	$74.7 million	$75.0 million	to	$80.5 million
Non-GAAP (1) R&D and SG&A expenses	$50.2 million	to	$52.2 million	$57.0 million	to	$58.0 million
Interest and other income	$1.5 million	to	$1.7 million	$0.8 million	to	$1.2 million

MPS plans to host a Zoom webinar covering this announcement at 3:00 p.m. PT / 6:00 p.m. ET, September 14, 2020. You can access the webinar, free of charge, at: https://mpsic.zoom.us/j/91757232335. In addition, MPS will provide more information on the third quarter financial results and fourth quarter guidance in our earnings release and webinar at the end of October 2020.

(1) Projected non-GAAP gross margin and R&D and SG&A expenses differ from projected gross margin and R&D and SG&A expenses determined in accordance with Generally Accepted Accounting Principles in the United States (GAAP). Projected non-GAAP gross margin excludes the effect of stock-based compensation expense. Projected non-GAAP R&D and SG&A expenses exclude the effect of stock-based compensation expense. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors' understanding of MPS' core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS.

Safe Harbor Statement

This press release contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including, among other things, (i) projected revenues, GAAP and non-GAAP gross margin, GAAP and non-GAAP R&D and SG&A expenses, and interest and other income, (ii) our outlook for the long-term prospects of the company, including our performance against our business plan, revenue growth in certain of our market segments, our continued investment into R&D, expected revenue growth, customers' acceptance of our new product offerings, the prospects of our new product development, and our expectations regarding market and industry segment trends and prospects, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements of the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this press release and listeners to the accompanying webinar are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, our ability to attract new customers and retain existing customers; acceptance of, or demand for, MPS' products, in particular the new products launched recently, being different than expected; our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to increase market share in our targeted markets; competition generally and the increasingly competitive nature of our industry; any market disruptions or interruptions in MPS' schedule of new product development releases; adverse changes in production and testing efficiency of our products; our ability to manage our inventory levels; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, including in foreign countries where MPS has offices or operations; adverse events arising from orders of governmental entities, including such orders that impact our customers, and adopting of new or amended accounting standards; the effect of epidemics and pandemics, such as the COVID-19 outbreak first identified in December 2019, on the global economy and on our business; adequate supply of our products from our third-party manufacturing partners; the risks, uncertainties and costs of litigation in which we are involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on MPS' financial performance if its tax and litigation provisions are inadequate; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of the COVID-19 pandemic); our ability to realize the anticipated benefits of companies and products that we acquire, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the ongoing consolidation of companies in the semiconductor industry; and other important risk factors identified in MPS’s Securities and Exchange Commission (SEC) filings, including, but not limited to, our annual report on Form 10-K filed with the SEC on February 28, 2020 and our quarterly report on Form 10-Q filed with the SEC on August 3, 2020. The forward-looking statements in this press release and statements made during the accompanying teleconference represent MPS’s projections and current expectations, as of the date hereof, not predictions of actual performance. MPS assumes no obligation to update the information in this press release or in accompanying webinar.

About Monolithic Power Systems

Monolithic Power Systems, Inc. (MPS) provides small, highly energy efficient, easy-to-use power solutions for systems found in industrial applications, telecom infrastructures, cloud computing, automotive, and consumer applications. MPS' mission is to reduce total energy consumption in its customers' systems with green, practical, compact solutions. The company was founded by Michael Hsing in 1997 and is based in the United States. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Contact:

Bernie Blegen

Chief Financial Officer

Monolithic Power Systems, Inc.

408-826-0777

investors@monolithicpower.com

UPDATED 2020 THIRD QUARTER OUTLOOK

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN

(Unaudited)

	Three Months Ending September 30, 2020
	Previously Announced on July 28, 2020						Updated as of September 14, 2020
	Low			High			Low			High
Gross margin		55.2	%		55.8	%		55.1	%		55.3	%
Adjustments to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation expense		0.3	%		0.3	%		0.3	%		0.3	%
Non-GAAP gross margin		55.5	%		56.1	%		55.4	%		55.6	%

RECONCILIATION OF R&D AND SG&A EXPENSES TO NON-GAAP R&D AND SG&A EXPENSES

(Unaudited, in thousands)

	Three Months Ending September 30, 2020
	Previously Announced on July 28, 2020						Updated as of September 14, 2020
	Low			High			Low			High
R&D and SG&A expense	$	70,700		$	74,700		$	75,000		$	80,500
Adjustments to reconcile R&D and SG&A expense to non-GAAP R&D and SG&A expense:
Stock-based compensation expense		(20,500	)		(22,500	)		(18,000	)		(22,500	)
Non-GAAP R&D and SG&A expense	$	50,200		$	52,200		$	57,000		$	58,000

XML

Document And Entity Information	Sep. 14, 2020
Document Information [Line Items]
Entity, Registrant Name	MONOLITHIC POWER SYSTEMS, INC.
Document, Type	8-K
Document, Period End Date	Sep. 14, 2020
Entity, Incorporation, State or Country Code	DE
Entity, File Number	000-51026
Entity, Tax Identification Number	77-0466789
Entity, Address, Address Line One	5808 Lake Washington Blvd. NE
Entity, Address, City or Town	Kirkland
Entity, Address, State or Province	WA
Entity, Address, Postal Zip Code	98033
City Area Code	425
Local Phone Number	296-9956
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	MPWR
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001280452