Oct. 22, 2009 (PR Newswire) -- SAN JOSE, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Monolithic Power Systems (MPS) (Nasdaq: MPWR), a leading fabless manufacturer of high-performance analog and mixed-signal semiconductors, today announced financial results for the quarter and nine months ended September 30, 2009.

The results for the quarter ended September 30, 2009 are as follows:

--  Net revenues of $48.0 million, up 16.5% sequentially from $41.2 million
in the second quarter of 2009 and down 1.9% from $48.9 million in the
third quarter of 2008
--  Gross margin of 60.7%, compared to 59.1% in the second quarter of 2009
and 62.8% in the third quarter of 2008
--  GAAP operating expenses of $16.0 million, including $19.5 million for
research and development and selling, general and administrative
expenses, which includes $3.1 million for stock-based compensation, $2.8
million for  litigation expenses and a credit of $6.4 million for the
net effect of a litigation provision reversal.
--  Non-GAAP(1) operating expenses of $19.2 million, excluding $3.1 million
for stock-based compensation and a credit of $6.4 million for the net
effect of  a litigation provision reversal, compared to $16.8 million
for the three months ended September 30, 2008.
--  GAAP net income of $12.6 million, with GAAP earnings per share of $0.34
per diluted share

--  Non-GAAP(1) net income of $8.8 million, or $0.24 per diluted share,
excluding stock-based compensation and related tax effects and a credit
of $6.4 million for the net effect of a litigation provision reversal.

The results for the nine months ended September 30, 2009 are as follows:

--  Net revenues of $118.5 million, compared to $125.8 million for the nine
months ended September 30, 2008, a decrease of 5.8%
--  Gross margin of 59.4%, compared to 62.9% for the nine months ended
September 30, 2008
--  GAAP operating expenses of $55.2 million, including $54.5 million for
research and development and selling, general and administrative
expenses, which includes $10.2 million for stock-based compensation,
$7.1 million for   litigation expenses and a credit of $6.4 million for
the net effect of a litigation provision reversal.
--  Non-GAAP(1) operating expenses of $51.4 million, excluding $10.2 million
for stock-based compensation and a credit of $6.4 million for the net
effect of a litigation provision reversal, compared to $49.7 million for
the nine months ended September 30, 2008, an increase of 3.4%
--  GAAP net income of $15.0 million, with GAAP EPS of $0.41 per diluted
share

--  Non-GAAP(1) net income of $17.2 million, or $0.47 per diluted share,
excluding stock-based compensation and related tax effects and a credit
of $6.4 million for the net effect of a litigation provision reversal.

"MPS had an outstanding third quarter, as we almost matched our all time high in quarterly revenue" said Michael Hsing, chief executive officer and founder of MPS. "We are executing very well, as we released a record number of new products this quarter. The future for MPS continues to look great."

Business Outlook

The following are MPS' financial targets for the fourth quarter ending December 31, 2009:

--  Revenues in the range of $43.0 million to $46.0 million.
--  Gross margin at similar levels to the third quarter of 2009.
--  Research and development and selling, general and administrative
expenses between $19.3 million and $20.7 million. Non-GAAP(1) research
and development and selling, general and administrative expenses between
$16.2 million and $17.2 million. This excludes an estimate of
stock-based compensation expense in the range of $3.1 million to $3.5
million.

--  Litigation expense in the range of $2.6 million to $3.0 million.

(1) Non-GAAP net income, non-GAAP operating expenses and non-GAAP research and development and selling, general and administrative expense differ from net income, operating expenses, and research and development and selling, general and administrative expense determined in accordance with GAAP (Generally Accepted Accounting Principles in the United States). Non-GAAP net income for the quarter and nine months ended September 30, 2009 and 2008 excludes the effect of stock-based compensation expense, a credit for the net effect of a litigation provision reversal and their related tax effects. Non-GAAP operating expenses for the quarter and nine months ended September 30, 2009 and 2008 exclude the effect of stock-based compensation expense and a credit for the net effect of a litigation provision reversal. Projected non-GAAP research and development and selling, general and administrative expenses exclude the effect of stock-based compensation expense. A schedule reconciling these amounts is included in this news release. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. 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.