Tessera Technologies Announces Fourth Quarter & Year-End 2003 Results; EPS of $0.07 and Net Income of $3.1 Million for Fourth Quarter 2003.Business Editors SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Jan. 27, 2004 Tessera tessera: see mosaic. Technologies, Inc. (Nasdaq:TSRA TSRA Torres Strait Regional Authority (Australia) TSRA Texas State Rifle Association TSRA Texas State Reading Association TSRA Tennessee Scenic Rivers Association TSRA Thoracic Surgery Residents Association TSRA The Sea Ranch Association ), a leading technology developer and services provider for semiconductor chip-scale and multi-chip packages, today announced financial results for the fourth quarter and year ended December December: see month. 31, 2003. "2003 was a record year for Tessera," stated Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. McWilliams, Tessera's Chairman, President and Chief Executive Officer. "We excelled in every aspect of our business: financial performance, licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. growth and penetration, introduction of new technologies, strengthening of our IP portfolio and expansion of our services business. In addition to all of these achievements, we successfully completed our initial public offering in November November: see month. . I am proud of what we've we've Contraction of we have. we've have accomplished in 2003, and I believe the future has never looked brighter for Tessera." Fourth Quarter 2003 Highlights -- Total revenue was $10.7 million, up 16 percent sequentially and 32 percent over the fourth quarter of 2002. -- Total intellectual property revenue was $8.4 million, up 15 percent sequentially and 37 percent over the fourth quarter of 2002. -- Service revenue was $2.3 million, up 21 percent sequentially and 15 percent over the fourth quarter of 2002. -- Net income for the fourth quarter was $3.1 million, up 93 percent sequentially and 35 percent over the fourth quarter 2002. -- Tessera completed its initial public offering in November. "Tessera is benefiting from the continued market share growth of chip-scale and multi-chip packages within the semiconductor industry," continued McWilliams. "We also are benefiting from our continued addition of new licensees as well as the current strong performance of the overall semiconductor market. Since we recognize royalty revenues one quarter in arrears Adv. 1. in arrears - in debt; "he fell behind with his mortgage payments"; "a month behind in the rent"; "a company that has been run behindhand for years"; "in arrears with their utility bills" behindhand, behind , our fourth quarter results reflect the strength of the semiconductor industry in the third quarter of last year." Annual Financial Results Total revenue for the year ended December 31, 2003 was $37.3 million, up 32 percent from $28.3 million for the year ended December 31, 2002. Total intellectual property revenue was $28.6 million, up 21 percent from $23.6 million in 2002. Service revenue was $8.8 million for the year, up 89 percent from $4.6 million the prior year. Net income for the year 2003 was $9.4 million, up 43 percent from $6.5 million for the year 2002. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for 2003 were $0.22. Upon completion of Tessera's initial public offering, the number of common shares used to compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. earnings per share increased significantly due to the resulting mandatory conversion of the company's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. into common stock. As a result, Tessera's earnings per share in 2003 are not comparable to prior periods. Please read the footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." to the attached financial statements for a description of earnings per share calculations in 2003 and 2002. Cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments as of December 31, 2003 were $64.4 million compared to $25.2 million at the beginning of the fourth quarter and $20.2 million at the end of 2002. The cash increase is largely attributable to the company's initial public offering. "We are pleased with the success of Tessera's initial public offering," said Doug DOUG Dumb Old Utility Guy Norby, Senior Vice President and Chief Financial Officer. "Tessera's balance sheet, already strong with no funded debt Funded Debt Long-term debt that matures after more than one year. Notes: This is usually issued as a bond or a long-term note. See also: Bond, Debt, Maturity, Note Funded debt Debt maturing after more than one year. , is now further strengthened due to the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. proceeds. The fourth quarter was the ninth consecutive quarter of profitability for Tessera, and our 93 percent sequential quarterly growth in profit after tax on a 16 percent growth in revenue illustrates the leverage in our business model." Business Highlights New licensees for the quarter included Powertech Technology Inc., Cochlear Limited Cochlear Limited (ASX: COH)is an Australian company that designs, manufactures and sells the Nucleus Cochlear implant along with the Baha osseointegrated bone conduction implant. and the recently announced Oki Electric Industry Co., Ltd. As the tenth Japanese semiconductor company to become a Tessera licensee, Oki will utilize Tessera's packaging technology in products manufactured by Oki and their subcontractor One who takes a portion of a contract from the principal contractor or from another subcontractor. When an individual or a company is involved in a large-scale project, a contractor is often hired to see that the work is done. assemblers This is a list of assemblers. Hundreds of assemblers have been written; some notable examples are:
n. A contract that assigns some of the obligations of a prior contract to another party. intr. & tr.v. sub·con·tract·ed, sub·con·tract·ing, sub·con·tracts assembler Software that translates assembly language into machine language. Contrast with compiler, which is used to translate a high-level language, such as COBOL or C, into assembly language first and then into machine language. , will provide Tessera technology to its broad customer base of semiconductor manufacturers. Cochlear Limited, a leader in cochlear implant cochlear implant n. An electronic device that stimulates auditory nerve fibers in the inner ear in individuals with severe or profound bilateral hearing loss, allowing them to recognize some sounds, especially speech sounds. technology, will use Tessera's advanced packaging technology in implantable hearing devices designed to allow individuals with severe to profound hearing loss to perceive sound. Chip-scale and multi-chip packaging, Tessera's core markets, continue to demonstrate rapid growth. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Gartner Dataquest, the market for chip-scale packaging is expected to grow from 4.4 billion units in 2002 to 18.9 billion units in 2006, representing a compound annual growth rate of 44 percent. Wireless handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. shipments in 2003 exceeded 460 million units, a more than 7 percent increase over 2002. Wireless handsets are a major user of chip-scale and multi-chip packages. Tessera continues to develop and deploy new technologies. In the fourth quarter, Tessera signed an agreement with EEMS See EMS. Italia SpA under which EEMS will manufacture Tessera's MicroZ(TM)-Ball Stack packaging technology. EEMS, a leading European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. provider of backend manufacturing services for memory semiconductors, will provide this technology to its international customer base of semiconductor companies. Tessera's engineering services group is supporting this transfer of technology, which EEMS will then customize to address their customers' requirements. "In 2003, Tessera achieved a major broadening of our customer base, with the addition of seven new customers, including Epson, Sanyo and Renesas, the third largest semiconductor company in the world. This led to significant growth in revenue and income," said McWilliams. "In 2004, we expect to continue to add new licensees, develop and introduce new technologies, and expand the scope of the markets we address. We believe Tessera is well positioned to benefit from the growing demand for advanced packaging technology, which is a key enabler of miniaturized, high performance electronic products." 2004 Financial Guidance Tessera expects first quarter 2004 total revenues in the range of $11.0 to $11.5 million. As we had previously estimated, we also anticipate incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. approximately $500,000 per quarter in 2004 in additional expenses associated with the cost of being a public company. Including these new expenses, Tessera expects net income to range from $3.0 to $3.4 million, or approximately $0.07 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Tessera estimates a full dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. share count of 46 million in the first quarter of 2004 as compared to 44.7 million in the fourth quarter of 2003. Tessera expects full year 2004 total revenues in the range of $50.0 to $52.5 million. Net income is expected to range from $16.0 to $18.5 million, or $0.35 to $0.40 per diluted share. Conference Call Information Tessera will host an investor conference call today at 1:30 P.M. Pacific (4:30 P.M. Eastern), January 27, 2004. The call will be accessible live by dialing 877-866-5534. A 48-hour replay will be available by dialing 800-642-1687, pass code 4816321. The call will also be simultaneously webcast and available on Tessera's web site at http://www.tessera.com. Tessera will hold its Annual Meeting on May 20, 2004, at a location to be determined. About Tessera Tessera develops semiconductor packaging technology that meets the demand for miniaturization min·i·a·tur·ize tr.v. min·i·a·tur·ized, min·i·a·tur·iz·ing, min·i·a·tur·iz·es To plan or make on a greatly reduced scale. min and increased performance of electronic products. Tessera licenses its technology to its customers, enabling them to produce semiconductors that are smaller and faster, and incorporate more features. These semiconductors are utilized in a broad range of communications, computing computing - computer and consumer electronic products. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those projected. Factors that might cause or contribute to such differences include, but are not limited to, fluctuations in Tessera's operating results due to the timing of new license agreements and royalties, Tessera's ability to protect its intellectual property and the risk of a decline in demand for semiconductor products. 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 Registration Statement on Form S-1, filed with the Securities and Exchange Commission September 4, 2003, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , include more information about factors that could affect the company's financial results.
TESSERA TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Year Ended
----------------------------- -----------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2003 2003 2002 2003 2002
---------- --------- -------- -------- --------
Revenue:
Intellectual
property $7,356 $5,987 $5,821 $25,393 $17,925
Other intellectual
property 1,000 1,293 260 3,169 5,715
Services 2,321 1,924 2,013 8,759 4,630
---------- --------- -------- -------- --------
Total net
revenues 10,677 9,204 8,094 37,321 28,270
Cost of revenues 1,843 1,849 1,169 6,734 4,264
Research &
development 1,960 1,997 1,766 7,661 6,700
Selling, general
and administrative 3,305 2,839 2,048 11,030 7,552
Stock-based
compensation 102 612 300 1,110 1,942
---------- --------- -------- -------- --------
Total costs
and expenses 7,210 7,297 5,283 26,535 20,458
---------- --------- -------- -------- --------
Operating Income 3,467 1,907 2,811 10,786 7,812
Other income
(expense) (7) 69 (176) 195 45
---------- --------- -------- -------- --------
Income before taxes 3,460 1,976 2,635 10,981 7,857
(Benefit) provision
for income taxes 365 370 341 1,626 1,318
---------- --------- -------- -------- --------
Net income 3,095 1,606 2,294 9,355 6,539
Cumulative preferred
stock dividends in
arrears -- -- 3,235 6,187 12,941
---------- --------- -------- -------- --------
Net income attributable
to common stockholders 3,095 1,606 (941) 3,168 (6,402)
========== ========= ======== ======== ========
Shares basic 23,539 6,870 6,890 11,141 6,784
Shares diluted 44,711 40,869 6,890 41,653 6,784
Net income per
share basic $0.13 $0.23 (0.14) 0.28 (0.94)
========== ========= ======== ======== ========
Net income per
share diluted $0.07 $0.04 (0.14) 0.22 (0.94)
========== ========= ======== ======== ========
Note: Generally accepted accounting principles (GAAP) require that
cumulative dividends related to our preferred stock be deducted from
net income in the computation of earnings per share if this results in
dilution. As a result, 2002 earnings per share (EPS), both basic and
diluted, was a loss of $0.94. Without the impact of preferred
dividends, basic and diluted EPS in 2002 would have been $0.20 and
$0.19 respectively, while basic and diluted EPS for the fourth quarter
of 2002 would have been $0.07 and $0.07, respectively. All of our
preferred stock converted to common stock upon completion of our
initial public offering in November of 2003.
TESSERA TECHNOLOGIES INC.
CONSOLIDATED SUMMARY BALANCE SHEET INFORMATION
(In thousands)
Dec. 31, Sept. 30, Dec. 31,
2003 2003 2002
----------------------------------------- -------- --------- ---------
Assets
----------------------------------------- -------- --------- ---------
Current Assets:
----------------------------------------- -------- --------- ---------
Cash and cash equivalents $64,379 $132 $1,341
----------------------------------------- -------- --------- ---------
Short term investments 0 25,059 18,829
----------------------------------------- -------- --------- ---------
Accounts receivable 2,540 3,052 1,883
----------------------------------------- -------- --------- ---------
Other current assets 1,335 1,521 763
----------------------------------------- -------- --------- ---------
----------------------------------------- -------- --------- ---------
Total current assets 68,254 29,764 22,816
----------------------------------------- -------- --------- ---------
Property and equipment, net 1,725 1,743 1,220
----------------------------------------- -------- --------- ---------
Other assets 102 105 134
----------------------------------------- -------- --------- ---------
Total assets 70,081 31,612 24,170
----------------------------------------- -------- --------- ---------
----------------------------------------- -------- --------- ---------
Liabilities and Stockholders Equity
----------------------------------------- -------- --------- ---------
Current Liabilities:
----------------------------------------- -------- --------- ---------
Accounts payable 876 693 650
----------------------------------------- -------- --------- ---------
Accrued liabilities 3,014 3,223 2,012
----------------------------------------- -------- --------- ---------
Deferred revenue 202 463 0
----------------------------------------- -------- --------- ---------
Total current liabilities 4,092 4,379 2,662
----------------------------------------- -------- --------- ---------
----------------------------------------- -------- --------- ---------
Preferred stock 0 121,257 96,000
----------------------------------------- -------- --------- ---------
Stockholders (deficit) equity
----------------------------------------- -------- --------- ---------
Common stock 38 7 7
----------------------------------------- -------- --------- ---------
Additional paid in capital 157,178 359 26,561
----------------------------------------- -------- --------- ---------
Deferred stock based compensation (153) (174) (620)
----------------------------------------- -------- --------- ---------
Accumulated deficit (91,074) (94,169) (100,429)
----------------------------------------- -------- --------- ---------
Accumulated other comprehensive loss 0 (47) (11)
----------------------------------------- -------- --------- ---------
Total stockholders (deficit)
equity 65,989 (94,024) (74,492)
----------------------------------------- -------- --------- ---------
----------------------------------------- -------- --------- ---------
Total liabilities and stockholders equity 70,081 31,612 24,170
----------------------------------------- -------- --------- ---------
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