Tessera Technologies Inc. (TSRA)
Q3 2012 Results Earnings Call
November 1, 2012 5:00 PM ET
Moriah Shilton - Senior Director, Investor Relations
Robert Young - President and CEO
Rick Neely - Chief Financial Officer
Barney Cassidy - General Counsel
Krish Sankar - Bank of America-Merrill Lynch
Previous Statements by TSRA
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Thank you. I will now turn the call over to Ms. Moriah Shilton. Madam, you may begin.
Thank you, Domaria, and good afternoon, everyone. Thank you for joining us for the call today. This call is also being broadcast live over the Internet.
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 provision 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, 2011, and its quarterly report Form 10-Q for the quarter ended June 30, 2012, especially in the sections 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 Robert Young, President and Chief Executive Officer; Rick Neely, Chief Financial Officer; and Barney Cassidy, General Counsel.
During this call today, management may discuss certain non-GAAP financial measures for comparison purposes only. 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 expense, acquired intangibles amortization charges, charges for acquired in-process research and development, impairment charges on long-lived assets and goodwill, and related tax effects. After management’s brief opening remarks, we will open the call to your questions.
And I will now turn the call over to Bob.
Good afternoon and thank you for joining us on the call today. I’d like to take few minutes to discuss our corporate and business unit highlights for the quarter, before opening the call for your questions.
In the third quarter, we made several significant executive and board level changes. In August, we appointed Rick Neely as our CFO, who brings our company more than three decades of financial and managerial experience in high technology industries, including extensive experience of offshore operations, particularly in Asia. We believe his expertise and experience will be very valuable to us as our camera module business develops.
Also in the third quarter, we appointed two new Board members, Rick Hill and Tim Stultz, expanding the Board to eight. Rick and Tim are distinguished industry veterans. Rick as a recently retired long time successful CEO of Novellus and Tim as a current highly regarded CEO of Nanometrics.
We look forward to working with Rick and Tim as they help us guide the ongoing strategic initiatives for both of our business segments, but in particularly DigitalOptics efforts and implementing successful manufacturing and initial product ramp of camera modules.
Now to the discussion of our business segments, in our Intellectual Property segment, in the third quarter we received a $19.9 million payment from Amkor Technology, Inc. related to the July 6, 2012 interim award by the International Court of Arbitration of the International Chamber of Commerce. This payment is a partial amount of the total due which is still under dispute. We have taken amount in excess of our $25 million in connection with this interim award.
Also in the third quarter, our Intellectual Property teams continued to demonstrate infringement of Tessera, Inc. and Invensas Corporation patents by many manufacturers. We are confident and our ability to secure fair compensation in exchange for providing long-term freedom of operation under our portfolios of patented ideas, which were both internally developed, as well as acquired.
One of our promising internally developed technologies is xFD, which is a stack package for DRAM’s. In the third quarter, we successfully gained an initial OEM adoption for this packaging solution for use in ultrabooks and tablets, and we look forward to continuing to work with this key partner.
Now in DigitalOptics segment, I met with many mobile phone makers since our last earnings call, and I’m very encouraged by the demand that they express for our MEMS auto-focus technology. And by the progress we made in the third quarter towards our goal of shipping our next-generation MEMS auto-focus technology within the current quarter.
We also made progress in the third quarter with the initial build out of our optical component manufacturing site in Taiwan and began the conversion of our camera module manufacturing facility in Zhuhai, China, which we formally opened in Q3 for the production of our proprietary camera module technologies.