- Quarterly Dividend Declared -

SAN JOSE, Calif.--(BUSINESS WIRE)-- Tessera Technologies, Inc. (NASDAQ:TSRA) (the "Company" or "we") announced its results for the second quarter ended June 30, 2012.

"We generated $92 million in Intellectual Property revenue in the first half of 2012," stated Robert A. Young, chief executive officer and president, Tessera Technologies, Inc. "We are pleased with the progress we have made to date in our licensing discussions with current and potential customers of our patent portfolios. In addition, Invensas Corporation introduced two new semiconductor packaging technologies in the first half. We are taking key steps toward the commercial adoption of these next-generation technologies.

"Turning to our DigitalOptics segment, in the first half of this year we achieved significant operational milestones toward our goal of becoming a vertically integrated Original Design Manufacturer (ODM), including most recently our acquisition of the Vista Point Technologies camera module manufacturing assets from Flextronics. We are engaged in discussions with multiple Tier One and other mobile phone manufacturers for initial commercial adoption of our MEMS autofocus technology. As discussed previously, we believe growth in our DigitalOptics segment will come from the sale of integrated camera modules using our MEMS autofocus technology to the $9 billion market for mobile phone cameras."

Second Quarter 2012

• Total revenues were $61.4 million.
• Intellectual Property segment revenues were $53.0 million.
• DigitalOptics segment revenues were $8.4 million.

Total revenue for the second quarter of 2012 was $61.4 million, compared to $70.7 million of total revenue in the second quarter of the prior year. Intellectual Property revenue for the second quarter of 2012 was $53.0 million, compared to $60.5 million in the second quarter of the prior year, which included a nonrecurring $1.0 million license fee. The year-over-year decline was primarily due to the timing of the renewed contract with a major DRAM customer which resulted comparatively in lower revenues of $6.1 million and lower unit volumes reported by customers totaling $9.8 million, offset by audit payments in the second quarter of 2012 of approximately $9.4 million.

DigitalOptics revenue for the second quarter of 2012 was $8.4 million, compared to $10.2 million in the second quarter of the prior year. The decrease was due primarily to an Extended Depth of Field (EDoF) customer whose reported units were lower than the prior year and weaker demand for the Company's Micro-Optics products.

Generally accepted accounting principles (GAAP) net loss for the second quarter of 2012 was $409,000, or $0.01 per diluted share, which included non-cash charges of $6.3 million for amortization of acquired intangibles and $5.2 million for stock-based compensation.

Non-GAAP net income for the second quarter of 2012 was $8.3 million or $0.16 per basic share. Non-GAAP net income is defined as income and operating expenses adjusted for acquired intangibles amortization, charges for acquired in-process research and development, stock-based compensation expense, impairment charges on long-lived assets and goodwill, and related tax effects.

Six-month Period Ended June 30, 2012

• Total revenue was $108.1 million.
• Intellectual Property segment revenue was $92.0 million.
• DigitalOptics segment revenue was $16.1 million.

GAAP net loss for the six-month period was $8.5 million, or $0.16 per diluted share. Non-GAAP net income for the six-month period was $8.0 million, or $0.15 per diluted share.

Balance Sheet

Cash, cash equivalents and investments were $474.8 million at June 30, 2012, a decrease of $15.6 million from March 31, 2012. In the second quarter of 2012, net cash provided by operations was $23.3 million. The Company purchased $1.1 million of intellectual property and $4.6 million of property and equipment in the second quarter of 2012. On June 28, 2012, the Company paid $27.2 million in connection with the Vista Point Technologies acquisition, approximately $7 million of which was deposited with an escrow agent for the second closing of assets. On June 14, 2012, $5.2 million was paid to stockholders of record as of May 24, 2012, for the quarterly $0.10 per common share cash dividend.

Quarterly Cash Dividend

On July 25, 2012, the board of directors declared a cash dividend of $0.10 per share of common stock for the third quarter, payable on Sept.13, 2012, for stockholders of record at the close of business on Aug. 23, 2012.

Prepared Remarks and Conference Call Information

Concurrently with the publication of its earnings press release, the Company will post to its website management's prepared remarks regarding the Company's quarterly performance. These prepared remarks are being made available in order to provide the investment community with additional time to analyze the Company's results prior to the conference call. The second quarter 2012 earnings conference call will include brief remarks from management, followed by a Q&A session.

The Company will hold its second quarter 2012 earnings conference call at 2:00 P.M. Pacific (5:00 P.M. Eastern) today. To access the call in the U.S., please dial 888-723-9308, and for international callers dial 706-643-3789 approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days at www.tessera.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the telephone replay in the U.S., please dial 855-859-2056. International callers please dial 404-537-3406. Enter access code 99631902.

Safe Harbor Statement

This document 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 for the second quarter of 2012; the adoption of the Company's technologies, including its new semiconductor packaging technologies and its MEMS autofocus technology; and the transformation of the DigitalOptics business into a vertically integrated ODM, including for devices using MEMS autofocus technology. Material factors that may cause results to differ from the statements made include the plans or operations relating to the Company's businesses; market or industry conditions; 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; the timing and results, which are not predictable and may vary in any individual proceeding, of any ICC ruling or award, including in the Amkor arbitration; fluctuations in operating results due to the timing of new license agreements and royalties, or due to legal costs; 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 risk of a decline in demand for semiconductor and camera module products; 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, including the integration by DigitalOptics Corporation ("DOC") of Flextronics's camera module business in Zhuhai, China; 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 and sell products due to high concentration in the markets for semiconductors and related products and camera modules; the impact of competing technologies on the demand for the Company's technologies and products; failure by DOC to become a vertically integrated camera module supplier; and the reliance on a limited number of suppliers for the components used in the manufacture of DOC products. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended Dec. 31, 2011, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, include more information about factors that could affect the Company's financial results. The Company assumes no obligation to update information contained in this press release. Although this release may remain available on the Company's website or elsewhere, its continued availability does not indicate that the Company is reaffirming or confirming any of the information contained herein.

About Tessera Technologies, Inc.

Tessera Technologies, Inc. is a holding company with operating subsidiaries in two segments: Intellectual Property and DigitalOptics. Our Intellectual Property business generates revenue from patented innovations through license agreements with semiconductor companies and outsourced semiconductor assembly and test companies. Tessera, Inc. pioneered chip-scale packaging solutions for the semiconductor industry. Our DigitalOptics business delivers innovation in imaging and optics with products and capabilities that enable expanded functionality in increasingly smaller devices. Our miniaturized camera module solutions provide cost-effective, high-quality camera features, including Micro Electro Mechanical Systems ("MEMS")-based autofocus, extended depth of field ("EDoF"), zoom, image enhancement and optical image stabilization. We also offer customized micro-optic lenses from diffractive and refractive optical elements to integrated micro-optical subassemblies. For more information call 1.408.321.6000 or visit www.tessera.com.

Tessera, Tessera, Inc., the Tessera logo, DigitalOptics Corporation, and Invensas Corporation are trademarks or registered trademarks of affiliated companies of Tessera Technologies, Inc. in the United States and other countries. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.

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 either one-time or ongoing non-cash acquired intangibles amortization charges, acquired in-process research and development, all forms of stock-based compensation, impairment charges on long-lived assets and goodwill, and related tax effects. The non-GAAP financial measures also exclude the effects of FASB Accounting Standards Codification 718, "Stock Compensation" upon the number of diluted shares used in calculating non-GAAP earnings per share. 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.

Set forth below are reconciliations of non-GAAP net income to the Company's reported GAAP net income.

TESSERA TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
		Three Months Ended							Six Months Ended
		June 30, 2012				June 30, 2011			June 30, 2012				June 30, 2011
Revenues:
Royalty and license fees		$	58,185			$	65,402		$	101,449			$	127,660
Product and service revenues			3,239				5,328			6,648				10,843
Total revenues			61,424				70,730			108,097				138,503
Operating expenses:
Cost of revenues			5,597				5,361			11,357				10,873
Research, development and other related costs			24,870				18,785			48,315				37,398
Selling, general and administrative			24,437				22,775			49,048				42,239
Litigation expense			6,724				7,208			10,216				13,204
Restructuring charges			-				-			-				2,059
Total operating expenses			61,628				54,129			118,936				105,773
Operating income (loss)			(204	)			16,601			(10,839	)			32,730
Other income and expense, net			987				726			1,655				1,334
Income (loss) before taxes			783				17,327			(9,184	)			34,064
Provision for (benefit from) income taxes			1,192				5,741			(687	)			11,266
Net income (loss)		$	(409	)		$	11,586		$	(8,497	)		$	22,798
Basic and diluted net income (loss) per share:
Net income (loss) per share-basic		$	(0.01	)		$	0.23		$	(0.16	)		$	0.45
Net income (loss) per share-diluted		$	(0.01	)		$	0.23		$	(0.16	)		$	0.44
Cash dividends declared per share		$	-			$	-		$	0.10			$	-
Weighted average number of shares used in per share calculations-basic			51,881				51,106			51,765				50,965
Weighted average number of shares used in per share calculations-diluted			51,881				51,442			51,765				51,386

TESSERA TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
		March 31, 2012				December 31, 2011*
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	115,438			$	55,758
Short-term investments			359,357				436,687
Accounts receivable, net			5,456				8,599
Inventories			2,765				1,574
Short-term deferred tax assets			1,891				1,892
Other current assets			18,417				13,664
Total current assets			503,324				518,174
Property and equipment, net			49,462				36,319
Intangible assets, net			131,683				141,326
Goodwill			3,566				-
Long-term deferred tax assets			19,336				18,223
Other assets			11,616				2,484
Total assets		$	718,987			$	716,526
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	9,280			$	7,203
Accrued legal fees			8,225				6,110
Accrued liabilities			18,820				20,824
Deferred revenue			3,165				2,610
Total current liabilities			39,490				36,747
Long-term deferred tax liabilities			4,083				4,083
Other long-term liabilities			5,258				5,017
Stockholders' equity:
Common stock			52				52
Additional paid-in capital			475,740				462,697
Treasury stock			(10,528	)			(10,505	)
Accumulated other comprehensive income			170				24
Retained earnings			204,722				218,411
Total stockholders' equity			670,156				670,679
Total liabilities and stockholders' equity		$	718,987			$	716,526
* Derived from audited financial statements

TESSERA TECHNOLOGIES, INC.
RECONCILIATION TO NON-GAAP INCOME FROM GAAP NET INCOME (LOSS)
(in thousands, except per share amounts)
(unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2012				2011				2012				2011
GAAP net income (loss)		$	(409	)		$	11,586			$	(8,497	)		$	22,798
Adjustments to GAAP net income (loss):
Stock-based compensation - cost of revenues			248				129				398				272
Stock-based compensation - research, development and other related costs			1,952				2,408				3,664				4,854
Stock-based compensation - selling, general and administrative			3,013				6,290				5,207				9,765
Amortization of acquired intangibles - cost of revenues			2,015				1,707				4,031				3,414
Amortization of acquired intangibles - research, development and other related costs			1,353				740				2,706				1,493
Amortization of acquired intangibles - selling, general and administration			2,976				1,698				5,980				3,330
Tax adjustments for non-GAAP items			(2,925	)			(3,196	)			(5,484	)			(5,556	)
Non-GAAP net income (loss)		$	8,223			$	21,362			$	8,005			$	40,370
Non-GAAP net income (loss) per common share - diluted		$	0.16			$	0.41			$	0.15			$	0.77
Weighted average number of shares used in per share calculations excluding the effects of 123R - diluted			52,897				52,525				52,919				52,535

TESSERA TECHNOLOGIES, INC.
CONSOLIDATED REVENUE DETAILS
(in thousands)
(unaudited)
		Three Months Ended June 30,						Six Months Ended June 30,
		2012			2011			2012			2011
Revenues:
Intellectual Property Segment
Royalty and license fees		$	52,974		$	60,487		$	92,002		$	114,102
Product and service revenues			-			-			-			-
Total Intellectual Property revenues			52,974			60,487			92,002			114,102
DigitalOptics Segment
Royalty and license fees			5,211			4,915			9,447			13,558
Product and service revenues			3,239			5,328			6,648			10,843
Total DigitalOptics revenues			8,450			10,243			16,095			24,401
Total revenues		$	61,424		$	70,730		$	108,097		$	138,503

TSRA-E

Tessera Technologies, Inc.
Michael Anthofer, 408-321-6756
Chief Financial Officer
Moriah Shilton, 408-321-6713 (Investor Relations)
Sr. Director, Communications & Investor Relations

Source: Tessera Technologies, Inc.

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