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Tessera Technologies Announces First Quarter 2016 Results

SAN JOSE, Calif., May 02, 2016 (BUSINESS WIRE) -- Tessera Technologies, Inc. TSRA, +3.20% (the “Company” or “we”) today announced financial results for the first quarter ending March 31, 2016. Total revenue for the first quarter of 2016 was $60.0 million, above the Company’s guidance range of $55 million to $59 million. GAAP net income for the first quarter of 2016 was $18.1 million, or $0.36 per diluted share, and non-GAAP net income was $24.6 million, or $0.48 per diluted share.

“We had an excellent start to 2016, posting impressive first quarter financial results, maintaining highly efficient business operations, and establishing technology development partnerships with several industry leaders,” said Tom Lacey, Tessera’s Chief Executive Officer. “On the new business front, we recently announced license agreements that reflect the quality and breadth of our technology portfolios. Sandia National Labs signed a license agreement for our ZiBond [®] and Direct Bond Interconnect (DBI [®] ) technologies, which are the most advanced 3D integration technologies available, and today we announced a new Invensas license and development agreement with Advanced Semiconductor Engineering for the commercialization of our Bond Via Array™ (BVA [®] ) technology.

“FotoNation recorded its highest-ever revenue quarter, and has significantly raised the bar for mobile phone image quality through a collaboration with LG on their latest premium smartphone, the LG V10™. More recently, FotoNation expanded its relationship with SocioNext to develop image stabilization solutions for the category now known as ‘on-the-move’ video devices, such as drones, action cameras, and wearables,” added Lacey.

First Quarter 2016 Results

Total revenue was $60.0 million in the first quarter of 2016, compared with total revenue of $79.9 million in the first quarter of 2015. Recurring revenue was $54.6 million in the first quarter of 2016, compared with recurring revenue of $51.9 million in the first quarter of 2015. First quarter 2016 revenue included $5.4 million of episodic revenue, compared with episodic revenue of $28.0 million in the first quarter of 2015.

Operating expenses were $33.8 million in the first quarter of 2016, compared with $27.7 million in the first quarter 2015. First quarter 2016 operating expenses include year-over-year increases of $2.7 million in research and development, $2.0 million in litigation expense, and $1.3 million in amortization expense.

Net income was $18.1 million, or $0.36 per diluted share, compared with net income of $35.6 million, or $0.66 per diluted share, for the first quarter of 2015. Net income for the first quarter of 2015 benefited from the $28.0 million of episodic revenue referenced above.

Non-GAAP net income for the first quarter of 2016 was $24.6 million, or $0.48 per diluted share, compared with non-GAAP net income in the first quarter of 2015 of $40.4 million, or $0.74 per diluted share. Non-GAAP net income is defined as income and operating expenses adjusted for discontinued operations, restructuring and other exit costs, acquired intangible asset amortization, charges for acquired in-process research and development, stock-based compensation expense, impairment charges on long-lived assets and goodwill, and related tax effects.

Balance Sheet

Total current assets were $392.8 million as of March 31, 2016, a decrease of $18.8 million from December 31, 2015. Cash, cash equivalents and short-term investments were $363.4 million as of March 31, 2016, a decrease of $18.3 million from December 31, 2015. The decline in cash for the quarter was primarily due to stock repurchases of $36.5 million pursuant to the Company’s stock repurchase program and $10.0 million used for the Company’s quarterly dividend, largely offset by cash generated from operating activities.

Dividends

On March 16, 2016, the Company paid $10.0 million to stockholders of record as of February 24, 2016 for the quarterly cash dividend of $0.20 per share of common stock.

Additionally, on April 26, 2016, the Board of Directors approved a regular quarterly dividend of $0.20 per share of common stock, payable on June 14, 2016 to stockholders of record on May 24, 2016.

Stock Repurchase Program

During the first quarter of 2016, the Company repurchased approximately 1.3 million shares of common stock for an aggregate amount of $36.5 million, representing approximately 2.5 percent of shares outstanding at the beginning of the year. These purchases were executed under the Company’s stock repurchase program. As of March 31, 2016, the Company had approximately $189.4 million remaining under its current repurchase program.

Financial Guidance

For the second quarter of 2016, the Company’s guidance is as follows:

  • Total revenue is expected to be between $64 million and $66 million;
  • GAAP earnings per share are expected to be between $0.42 and $0.44 per diluted share;
  • Non-GAAP earnings per share are expected to be between $0.54 and $0.56 per diluted share.

For the full-year 2016, the Company is updating its total revenue guidance range to between $255 million and $270 million.

Conference Call Information

The Company will hold its first quarter ended March 31, 2016 earnings conference call at 2:00 PM Pacific (5:00 PM Eastern) on Monday, May 2. To access the call in the U.S., please dial +1 (888) 723-9308, and for international callers dial +1 (615) 489-8916, approximately 10 minutes...


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