8-KFinancial EventsExhibits & Filings

MONOLITHIC POWER SYSTEMS INC 8-K Report, Financial Restatement (Jan 6, 2006)

Filed January 6, 2006For Securities:MPWR

Summary

Monolithic Power Systems, Inc. (MPWR) filed an 8-K on January 5, 2006, reporting that its financial statements for fiscal year 2004, Q1 2005, and Q2 2005 should no longer be relied upon. This restatement is primarily due to errors discovered during the analysis of a litigation settlement with O2Micro International, Ltd., which resulted in a reduced award and the reversal of a significant litigation provision. Management's review identified several accounting errors that necessitate a revision of previously reported financial results. The audit committee was informed of these errors, and discussions were held with their independent auditor, Deloitte & Touche LLP. The company also announced this information via a press release on January 6, 2006, which is attached as an exhibit to this filing.

Key Highlights

  • 1MPWR is restating its financial statements for FY 2004, Q1 2005, and Q2 2005.
  • 2The decision to restate was based on management's recommendation and approved by the audit committee.
  • 3Errors were discovered during the process of determining accounting and tax effects related to a litigation settlement with O2Micro International, Ltd.
  • 4A $12 million provision for litigation recorded in Q2 2005 will be reversed due to a reduced award in the O2Micro litigation.
  • 5The company's independent auditor, Deloitte & Touche LLP, has been informed of the errors.
  • 6A press release detailing these restatements was issued on January 6, 2006, and is included as an exhibit.

Frequently Asked Questions

The financial statements for fiscal year 2004, and the first two quarters of fiscal year 2005, are being restated because management discovered several accounting errors. These errors came to light during the analysis of a litigation settlement with O2Micro International, Ltd., and its related accounting and tax implications.

The litigation settlement with O2Micro International, Ltd. resulted in a reduced award and led to the reversal of a $12 million provision for litigation that was recorded in the second quarter of fiscal year 2005. This, along with other discovered errors, necessitated the restatement.

The financial statements affected by this restatement include the entire fiscal year 2004, the first fiscal quarter ended March 31, 2005, and the second fiscal quarter ended June 30, 2005.

Yes, the company's management and audit committee have discussed these errors with Deloitte & Touche LLP, the company's independent registered public accounting firm.