SAN JOSE, Calif.--(BUSINESS WIRE)--
Xperi Corporation (Nasdaq:XPER) (the "Company" or "we") today announced
financial results for the first quarter ended March 31, 2018.
"We are very pleased to report strong first quarter results," said Jon
Kirchner, chief executive officer of Xperi. "Billings exceeded the high
end of our guidance range, mainly driven by increasing penetration of
our solutions in the home and automotive markets. We remain confident
about our long-term business prospects and bought back 645,000 shares
during the quarter."
|
Financial Highlights
|
|
($ in millions, except per share data)
|
|
|
|
|
|
Q1 2018
|
|
|
|
Q1 2017
|
|
|
|
|
|
|
|
|
|
|
|
Billings
|
|
|
|
$104.3 |
|
|
|
$99.7 |
|
GAAP Operating Expenses
|
|
|
|
$98.0 |
|
|
|
$107.2 |
|
Non-GAAP Operating Expenses
|
|
|
|
$62.0 |
|
|
|
$65.5 |
|
Interest Expense
|
|
|
|
$6.3 |
|
|
|
$6.5 |
|
Cash Tax Payments
|
|
|
|
$4.0 |
|
|
|
$3.0 |
|
GAAP Diluted Shares Outstanding
|
|
|
|
49.7
|
|
|
|
50.4
|
|
Non-GAAP Diluted Shares Outstanding
|
|
|
|
52.1
|
|
|
|
51.6
|
|
|
|
|
|
|
|
|
|
|
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Other Relevant Metrics
|
|
|
|
Q1 2018
|
|
|
|
Q1 2017
|
|
Operating Cash Flow1 |
|
|
|
$4.7 |
|
|
|
$19.0 |
|
Cash, Cash Equivalents & S-T Investments
|
|
|
|
$80.8 |
|
|
|
$122.2 |
1 Q1 2018 operating cash flow was negatively impacted by the
payment of approximately $9 million to certain DTS employees for
transaction-related retention bonuses. Q1 2017 operating cash flow was
positively impacted by the early payment of $6 million in DTS
performance bonuses in conjunction with the closing of the DTS
acquisition in Q4 2016.
Stock Repurchase Program
During the first quarter of 2018, the Company repurchased approximately
645,000 shares of common stock for an aggregate amount of $15.0 million.
These purchases were executed under the Company's stock repurchase
program. As of March 31, 2018, the Company had approximately $127.9
million remaining under its current repurchase program.
Dividends
On March 22, 2018, the Company paid $9.9 million to stockholders of
record on March 1, 2018, for the quarterly cash dividend of $0.20 per
share of common stock.
Additionally, on April 26, 2018, the Board of Directors approved a
regular quarterly dividend of $0.20 per share of common stock, payable
on June 14, 2018, to stockholders of record on May 24, 2018.
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 January 25, 2018 at http://investor.xperi.com/events.cfm.
|
|
|
Q2 2018
|
|
|
|
GAAP Outlook
|
|
|
|
Non-GAAP Outlook
|
|
Billings
|
|
|
|
$99 to 103M
|
|
|
|
N/A
|
|
Operating Expense
|
|
|
|
$99 to 102M
|
|
|
|
$62 to 65M
|
|
|
The Company reiterates its 2018 financial guidance as follows:
|
|
|
FY 2018
|
|
|
|
GAAP Outlook
|
|
|
|
Non-GAAP Outlook
|
|
Billings
|
|
|
|
$415M to 445M
|
|
|
|
N/A
|
|
Operating Expense
|
|
|
|
$394M to 412M
|
|
|
|
$245M to 263M
|
|
Cash Tax Payments
|
|
|
|
$16M to 20M
|
|
|
|
$16M to 20M
|
|
Fully Diluted Shares
|
|
|
|
50.5 million
|
|
|
|
52.5 million
|
|
Operating Cash Flow
|
|
|
|
$120 to 145M
|
|
|
|
N/A
|
|
|
Conference Call Information
The Company will hold its first quarter 2018 earnings conference call at
2:00 PM Pacific Time (5:00 PM Eastern Time) on Thursday, May 3, 2018. To
access the call in the U.S., please dial +1 877-260-1479, and for
international callers dial +1 334-323-0522, approximately 15 minutes
prior to the start of the conference call. The conference ID is 3321885.
The conference call will also be broadcast live over the Internet at http://investor.xperi.com.
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 Securities and
Exchange Commission (the "SEC"). The Company's SEC filings are available
publicly on the SEC's website at www.sec.gov.
Any forward-looking statements made or incorporated by reference herein
are qualified in their entirety by these cautionary statements, and
there can be no assurance that the actual results or developments
anticipated by the Company will be realized or, even if substantially
realized, that they will have the expected consequences to, or effects
on, the Company or its business or operations. Except to the extent
required by applicable law, the Company undertakes no obligation to
update publicly or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.
About Xperi Corporation
Xperi Corporation (Nasdaq:XPER) and its brands, DTS, FotoNation, HD
Radio, Invensas and Tessera, are dedicated to creating innovative
technology solutions that enable extraordinary experiences for people
around the world. Xperi's solutions are licensed by hundreds of leading
global partners and have shipped in billions of products in areas
including premium audio, broadcast, automotive, computational imaging,
computer vision, mobile computing and communications, memory, data
storage, and 3D semiconductor interconnect and packaging. For more
information, please call 408-321-6000 or visit www.xperi.com.
Xperi, DTS, Invensas, FotoNation, HD Radio, Tessera and their respective
logos are trademarks or registered trademarks of affiliated companies of
Xperi Corporation in the United States and other countries. All other
company, brand and product names may be trademarks or registered
trademarks of their respective companies.
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 U.S.
GAAP.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance
with U.S. Generally Accepted Accounting Principles (GAAP), the Company's
earnings release contains non-GAAP financial measures adjusted for
discontinued operations, either one-time or ongoing non-cash acquired
intangibles amortization charges, acquired in-process research and
development, all forms of stock-based compensation, restructuring and
other related exit costs. Management believes that the non-GAAP measures
used in this release provide investors with important perspectives into
the Company's ongoing business performance. The non-GAAP financial
measures disclosed by the Company should not be considered a substitute
for, or superior to, financial measures calculated in accordance with
GAAP, and the financial results calculated in accordance with GAAP and
reconciliations to those financial statements should be carefully
evaluated. The non-GAAP financial measures used by the Company may be
calculated differently from, and therefore may not be comparable to,
similarly titled measures used by other companies. All financial data is
presented on a GAAP basis except where the Company indicates its
presentation is on a non-GAAP basis.
Set forth below are reconciliations of the Company's reported GAAP to
non-GAAP financial metrics.
XPER-E
|
XPERI CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
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
|
|
|
|
|
XPERI CORPORATION
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(in thousands)
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
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
|
|
|
Goodwill |
|
|
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
|
|
|
Treasury stock
|
|
|
(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
|
|
|
|
XPERI CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
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
|
|
|
|
|
XPERI CORPORATION
|
|
SUPPLEMENTAL FINANCIAL INFORMATION SCHEDULE
|
|
OTHER INCOME AND EXPENSE, NET
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
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
|
|
|
|
|
XPERI CORPORATION
|
|
RECONCILIATION FROM GAAP TO NON-GAAP OPERATING EXPENSES
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
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
|
|
|
|
|
XPERI CORPORATION
|
|
RECONCILIATION FOR GUIDANCE ON
|
|
GAAP TO NON-GAAP OPERATING EXPENSE
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
June 30, 2018
|
|
December 31, 2018
|
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
|
|
GAAP expense
|
|
$
|
99
|
|
|
$
|
102
|
|
|
$
|
394
|
|
|
$
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
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, 818-436-1082
jordan.miller@xperi.com
or
Xperi
Investor Relations:
Geri Weinfeld, 818-436-1231
geri.weinfeld@xperi.com
Source: Xperi Corporation
News Provided by Acquire Media