Xperi Corporation Announces First Quarter 2018 Results
"We are very pleased to report strong first quarter results," said
Financial Highlights |
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($ in millions, except per share data) |
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Q1 2018 |
Q1 2017 |
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Billings |
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GAAP Operating Expenses |
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Non-GAAP Operating Expenses |
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Interest Expense |
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Cash Tax Payments |
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GAAP Diluted Shares Outstanding | 49.7 | 50.4 | ||||||
Non-GAAP Diluted Shares Outstanding | 52.1 | 51.6 | ||||||
Other Relevant Metrics |
Q1 2018 |
Q1 2017 |
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Operating Cash Flow1 |
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Cash, Cash Equivalents & S-T Investments |
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1 Q1 2018 operating cash flow was negatively impacted by the
payment of approximately
Stock Repurchase Program
During the first quarter of 2018, the Company repurchased approximately
645,000 shares of common stock for an aggregate amount of
Dividends
On
Additionally, on
Financial Guidance
Consequent with the introduction of the new revenue accounting standard,
ASC 606, the Company announced it would begin using billings as a key
measure of business progress. As a result, the Company's outlook is now
based on billings rather than GAAP revenue. For additional information
regarding the Company's approach to guidance, please review the "ASC 606
Business Metrics and Guidance Approach" presentation given by the
Company on
Q2 2018 |
GAAP Outlook |
Non-GAAP Outlook |
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Billings |
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N/A |
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Operating Expense |
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The Company reiterates its 2018 financial guidance as follows:
FY 2018 |
GAAP Outlook |
Non-GAAP Outlook |
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Billings |
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N/A | ||||||
Operating Expense |
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Cash Tax Payments |
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Fully Diluted Shares | 50.5 million | 52.5 million | ||||||
Operating Cash Flow |
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N/A | ||||||
Conference Call Information
The Company will hold its first quarter 2018 earnings conference call at
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 Company's financial results and guidance and our long-term business prospects. Material factors that may cause results to differ from the statements made include the plans or operations relating to the businesses of the Company; 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; 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 semiconductors and products utilizing our audio and imaging technologies; 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; 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 due to high concentration in applicable markets for such technologies; the impact of competing technologies on the demand for the Company's technologies; pricing trends, including the Company's ability to achieve economies of scale; and other developments in the markets in which the Company operates, as well as management's response to any of the aforementioned factors. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release.
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements that are included herein and elsewhere, including the Risk
Factors included in the Company's recent reports on Form 10-K and Form
10-Q and other documents of the Company on file with the
About
Billings
Billings reflect amounts in an accounting period invoiced to customers,
less any credits issued to or paid to customers, plus amounts due under
certain licensing-related contractual arrangements that may not be
subject to an invoice. Management evaluates the Company's financial
performance in part based on billings due to the close alignment between
billings and cash receipts from licensing activity, and believes
billings is an important metric to provide to readers of our financial
results. Billings may vary materially from revenue recorded under
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance
with
Set forth below are reconciliations of the Company's reported GAAP to non-GAAP financial metrics.
XPER-E
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
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2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (33,017 | ) | $ | (11,029 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
Depreciation of property and equipment | 1,775 | 1,834 | ||||||
Amortization of intangible assets | 27,166 | 28,554 | ||||||
Stock-based compensation expense | 7,408 | 7,081 | ||||||
Deferred income tax | (6,743 | ) | (37,950 | ) | ||||
Amortization of premium or discount on investments and other | 1,012 | 87 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (7,059 | ) | (7,132 | ) | ||||
Unbilled contracts receivable, net | 31,123 | 30,620 | ||||||
Other assets | (770 | ) | 6,575 | |||||
Accounts payable | (609 | ) | (3,292 | ) | ||||
Accrued legal fees | (787 | ) | 1,499 | |||||
Accrued and other liabilities | (17,543 | ) | 183 | |||||
Deferred revenue | 2,694 | 1,932 | ||||||
Net cash from operating activities | 4,650 | 18,962 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (768 | ) | (565 | ) | ||||
Purchases of short-term investments | - | (11,493 | ) | |||||
Proceeds from sales of short-term investments | 8,540 | 1,035 | ||||||
Proceeds from maturities of short-term investments | 7,800 | 4,650 | ||||||
Net cash from investing activities | 15,572 | (6,373 | ) | |||||
Cash flows from financing activities: | ||||||||
Dividend paid | (9,886 | ) | (9,843 | ) | ||||
Repayment of debt | (100,000 | ) | (1,500 | ) | ||||
Proceeds from exercise of stock options | 829 | 4,241 | ||||||
Proceeds from employee stock purchase program | 3,402 | 1,155 | ||||||
Repurchase of common stock | (17,861 | ) | (3,251 | ) | ||||
Net cash from financing activities | (123,516 | ) | (9,198 | ) | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (103,294 | ) | 3,391 | |||||
Cash and cash equivalents at beginning of period | 138,260 | 65,626 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 34,966 | $ | 69,017 | ||||
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CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
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2018 | 2017* | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 34,966 | $ | 138,260 | ||||
Short-term investments | 45,824 | 62,432 | ||||||
Accounts receivable, net | 23,107 | 17,010 | ||||||
Unbilled contracts receivable | 204,765 | 10,866 | ||||||
Other current assets | 17,364 | 16,949 | ||||||
Total current assets | 326,026 | 245,517 | ||||||
Long-term unbilled contracts receivable | 71,331 | 2,930 | ||||||
Property and equipment, net | 33,423 | 34,442 | ||||||
Intangible assets, net | 404,623 | 431,789 | ||||||
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385,574 | 385,574 | ||||||
Other assets | 5,383 | 9,772 | ||||||
Total assets | $ | 1,226,360 | $ | 1,110,024 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,624 | $ | 4,233 | ||||
Accrued legal fees | 6,696 | 7,483 | ||||||
Accrued liabilities | 30,785 | 47,969 | ||||||
Current portion of long-term debt | - | 34,451 | ||||||
Deferred revenue | 4,597 | 2,686 | ||||||
Total current liabilities | 45,702 | 96,822 | ||||||
Long-term deferred tax liabilities | 72,564 | 15,085 | ||||||
Long-term debt, net | 480,330 | 545,211 | ||||||
Other long-term liabilities | 17,403 | 17,330 | ||||||
Stockholders' equity: | ||||||||
Common stock | 61 | 60 | ||||||
Additional paid-in capital | 698,297 | 686,660 | ||||||
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(337,258 | ) | (319,397 | ) | ||||
Accumulated other comprehensive loss | (520 | ) | (303 | ) | ||||
Retained earnings | 249,781 | 68,556 | ||||||
Total stockholders' equity | 610,361 | 435,576 | ||||||
Total liabilities and stockholders' equity | $ | 1,226,360 | $ | 1,110,024 | ||||
* Derived from audited financial statements | ||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(in thousands, except per share amounts) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
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2018 | 2017 | |||||||
Revenue: | ||||||||
Royalty and license fees | $ | 65,532 | $ | 67,255 | ||||
Total revenue | 65,532 | 67,255 | ||||||
Operating expenses: | ||||||||
Cost of revenue | 2,324 | 1,400 | ||||||
Research, development and other related costs | 26,515 | 26,012 | ||||||
Selling, general and administrative | 34,702 | 41,205 | ||||||
Amortization expense | 27,166 | 28,555 | ||||||
Litigation expense | 7,316 | 9,978 | ||||||
Total operating expenses | 98,023 | 107,150 | ||||||
Operating loss | (32,491 | ) | (39,895 | ) | ||||
Interest expense | (6,318 | ) | (6,459 | ) | ||||
Other income and expense, net | 3,154 | 46 | ||||||
Loss before taxes | (35,655 | ) | (46,308 | ) | ||||
Benefit from income taxes | (2,638 | ) | (35,279 | ) | ||||
Net loss | $ | (33,017 | ) | $ | (11,029 | ) | ||
Basic and diluted net loss per share: | ||||||||
Net loss per share - basic | $ | (0.67 | ) | $ | (0.22 | ) | ||
Net loss per share - diluted | $ | (0.67 | ) | $ | (0.22 | ) | ||
Cash dividends declared per share | $ | 0.20 | $ | 0.20 | ||||
Weighted average number of shares used in per share calculations - basic |
49,302 | 49,139 | ||||||
Weighted average number of shares used in per share calculations - diluted |
49,302 | 49,139 | ||||||
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SUPPLEMENTAL FINANCIAL INFORMATION SCHEDULE | ||||||||
OTHER INCOME AND EXPENSE, NET | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
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2018 |
2017 | |||||||
Other income and expense, net: | ||||||||
Interest income from significant financing components under Topic 606 | $ | 2,151 | $ | - | ||||
Interest income from investments | 250 | 213 | ||||||
Other income (losses) | 753 | (167 | ) | |||||
Total | $ | 3,154 | $ | 46 | ||||
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RECONCILIATION FROM GAAP TO NON-GAAP OPERATING EXPENSES | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
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2018 | 2017 | |||||||
GAAP operating expenses | $ | 98,023 | $ | 107,150 | ||||
Adjustments to non-GAAP operating expenses: | ||||||||
Stock-based compensation expense--R&D | (3,094 | ) | (2,697 | ) | ||||
Stock-based compensation expense--SG&A | (4,314 | ) | (4,364 | ) | ||||
Amortization expense | (27,166 | ) | (28,555 | ) | ||||
Acquisition & related expense | (1,480 | ) | (6,024 | ) | ||||
Non-GAAP operating expenses | $ | 61,969 | $ | 65,510 | ||||
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RECONCILIATION FOR GUIDANCE ON | ||||||||||||||||
GAAP TO NON-GAAP OPERATING EXPENSE | ||||||||||||||||
(in millions) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
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Low | High | Low | High | |||||||||||||
GAAP expense |
$ |
99 |
$ |
102 |
$ |
394 |
$ |
412 |
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Stock-based compensation--R&D | (4 | ) | (4 | ) | (15 | ) | (15 | ) | ||||||||
Stock-based compensation--SG&A | (5 | ) | (5 | ) | (22 | ) | (22 | ) | ||||||||
Acquisition & related expense | (1 | ) | (1 | ) | (3 | ) | (3 | ) | ||||||||
Amortization | (27 | ) | (27 | ) | (109 | ) | (109 | ) | ||||||||
Total of non-GAAP adjustments |
(37 |
) |
(37 |
) |
(149 |
) |
(149 |
) |
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Non-GAAP expense |
$ |
62 |
$ |
65 |
$ |
245 |
$ |
263 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180503006476/en/
Xperi PR:
jordan.miller@xperi.com
or
geri.weinfeld@xperi.com
Source:
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