Tessera Technologies, Inc. (TSRA)
Q4 2009 Earnings Call Transcript
January 28, 2010 4:30 pm ET
Moriah Shilton – IR
Hank Nothhaft – Chairman, President and CEO
Mike Anthofer – EVP and CFO
Olga Levinzon – Barclays Capital
Raj Seth – Cowen & Co.
Paul Thomas – Bank of America
Mehdi Hosseini – FBR
Previous Statements by TSRA
» Tessera Technologies, Inc. Q2 2009 Earnings Call Transcript
» Tessera Technologies, Inc. Q1 2009 Earnings Call Transcript
» Tessera Technologies Inc. Q4 2008 Earnings Call Transcript
Thank you, Natwinda, and good afternoon everyone. Thank you for joining us for the Tessera Technologies fourth quarter 2009 results conference call. This call is being broadcast live over the Internet. A webcast replay will be available at Tessera.com for 90 days after the call. In addition, a telephone replay of this call will be made available for two business days, beginning approximately two hours after the completion of this call. To listen to the replay in the US, please dial 800-642-1687 and internationally dial 706-645-9291. The access code is 49699757.
I will now read a short Safe Harbor statement. During the course of this conference call, management will make a number of forward-looking statements, which are statements regarding future events, including the future financial performance of the company. These forward-looking statements 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.
You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this call. More information about factors that may cause results to differ from the projections made in these forward-looking statements can be found in Tessera's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2008, especially in the sections of these filings entitled “Risk Factors”. The company disclaims any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur after this call.
On the call today from management are Hank Nothhaft, Tessera's President and Chief Executive Officer; Mike Anthofer, Chief Financial Officer; and Barney Cassidy, General Counsel. During this call today, management will discuss certain non-GAAP financial measures for comparison purposes only, and they will be using non-GAAP numbers in their prepared remarks. The non-GAAP amounts of cost of revenues; research and development; selling, general and administrative expenses; net income; and earnings per share do not include the following: stock-based compensation, acquired intangibles, amortization charges, charges for acquired in-process research and developments, and related tax effects. Management believes the non-GAAP amounts provide a more meaningful comparison, measure of quarter-over-quarter and year-over-year financial performance. Please refer to the company's fourth-quarter 2009 earnings press release and to the company's website for reconciliation of non-GAAP measures to GAAP.
After management's opening remarks, we will open the call to your questions. So that management is able to respond to as many of you as possible, please restrict yourselves to an opening and a follow-on question. Please reenter the queue if you have additional questions. And with that, I will turn the call over to Hank.
Thank you, Moriah. Good afternoon to all of you, and welcome to the Tessera quarterly earnings call. On today's call, we will discuss our fourth-quarter and full-year 2009 results and recent developments. We will then open the call for your questions.
Total revenue for the fourth quarter of 2009 was $56.5 million. $48.5 million was Micro-electronics royalties and license fees, and $8 million was Imaging & Optics revenues. Our full-year 2009 total revenues were $299.4 million. We signed six new strategic licensees in 2009, two in our Micro-electronics business and four in our Imaging & Optics business.
In Micro-electronics we announced licenses with Motorola for our patented Tessera compliant chip packaging technology and (inaudible) for our MicroPILR interconnect platform. In our Imaging & Optics business, we have two types of intellectual property that we license. The first is infrastructure IP, consisting of our wafer-level packaging and wafer-level optics technologies. The second is design-in IP, which includes our optical and embedded image enhancements technologies.
In 2009 we signed a new licensee for each of these categories. We licensed our wafer-level packaging IP and know-how to JCAP, a Chinese semiconductor assembly services provider; our wafer-level optics technology to Qtech; our extended depth of field for EDOF technology to a leading provider of wireless networking and imaging processing solutions, and our FaceTracker technology to a major cell phone supplier.
On the research and development front in 2009, we developed one of the industry's first 3 megapixel wafer-level optics solutions that includes or integrates EDOF, extended our EDOF and ultrafast lens solutions to support resolutions of up to 14 megapixels, and announced our face recognition technology which performs automatic identification of specific human faces in camera-enabled devices. We also expanded our Imaging & Optics portfolio with the acquisition of certain assets of Dblur Technologies Ltd. This acquisition gave us one more entry point into the Chinese market. In addition, through this acquisition, we now have STMicro as one of our optical imaging enhancement licensees.
Regarding our financial status, we ended 2009 with over $400 million in cash, cash equivalents, and investments and zero debt. Our strong balance sheet will provide the foundation for future investments in our business. We are confident we can grow our recurring revenue base in 2010 as compared to 2009. Recurring revenue excludes discrete nonrecurring items such as initial license fees, fees from settlements and fees from our ongoing auditing program. In general, we are comfortable with our covering analysts' total revenue expectations for 2010. We encourage you to evaluate Tessera on an annual basis. Our quarterly revenue will vary due to the timing of non-recurring discrete items and the volume-based pricing incentives we have with two of our larger DRAM customers. The impact of these volume-based pricing incentives is reasonably predictable. All things being equal, they will have a disproportionately positive impact on our second and third quarters.