SAN JOSE, Calif.--(BUSINESS WIRE)--
Tessera Technologies, Inc. (Nasdaq: TSRA) (the "Company") announced it
has received a letter from Starboard Value and Opportunity Master Fund
Ltd and its affiliates and director nominees (together "Starboard").
In the letter Starboard stated it holds less than 1.3% of the shares
outstanding and intends to nominate candidates to fill half of the
positions on the Company's Board of Directors. According to the letter,
Starboard holds 622,916 shares of the Company, 621,916 of which it
purchased in December 2011, and intends to nominate Messrs. Maury
Austin, Peter A. Feld and Jeffery S. McCreary for election at the 2012
Annual Meeting of the Stockholders of Tessera Technologies, Inc.
According to public filings, Starboard owns approximately 9.9% of MIPS
Technologies, Inc., where Mr. Austin is the former CFO and Mr. McCreary
is a board member.
The Company issued the following statement:
"The Board of Directors of the Company is single-mindedly focused on
enhancing value for all stockholders. Since installing Bob Young as CEO
a little more than six months ago, the Board has taken decisive steps to
chart a new path for the Company that will capitalize on the significant
growth opportunities that the Company uniquely enjoys. Our
Micro-electronics business continues to generate strong cash flow that
we are prudently re-investing in new packaging solutions and in patented
technology in adjacent and other vertical markets. Our Digital Optics
business is now pursuing a large, transformational market opportunity
that will produce measurable results in the next twelve months,
exploiting technology that is proven and disruptive, with a clear path
to commercialization. The Company has the right Board and management
team in place to execute on these opportunities and to deliver value for
the Company's stockholders.
We welcome an open and active dialogue with our stockholders. We regret
that Starboard did not see fit to engage in dialogue with us prior to
delivering its letter, but we look forward to the opportunity to engage
in discussions with Starboard and all of our stockholders in the coming
weeks. We know our stockholders need to understand the strategic plan
and the concrete steps the Company is taking to execute on it. We are
confident that as our stockholders understand the plan and the pace on
which we are moving to realize it, our stockholders will be as excited
about the Company's prospects as we are."
In addition, the Company is filing with the Securities and Exchange
Commission the following letter to stockholders from Robert A. Young,
President and Chief Executive Officer of the Company:
As we close the books on 2011, we are preparing to take our next
steps in 2012 toward the very large growth opportunities we see ahead.
Our strong momentum today stands in contrast to our position just a
year ago. Last May, when it asked me to step in as CEO of Tessera
Technologies, Inc. (the "Company"), our Board of Directors saw a
pressing need to re-set the course for our two business units so each
could more aggressively pursue a multi-billion dollar market opportunity.
Over the past year, the Board of Directors and I have:
Replaced more than half the senior management team, hiring new
executives with the proven skills we need to drive our two businesses
to the next level.
Added two new Directors, significantly broadening our highly
qualified Board's experience, expertise and contacts.
Retained a financial advisor to help refocus the Company and to
finalize our strategies to address our emerging market opportunities.
Our operations performed strongly in 2011, generating cash from
operating activities of $63.4 million in the first three quarters of the
year. At the end of the third quarter, we had no debt and cash of $535.6
million — an increase of $60.6 million from December 2010. We
have elected to prudently reinvest our cash in each of our business
segments in order to address the large market opportunities at hand, out
of the conviction that doing so will deliver superior returns to our
Cash-Flow Generation: Micro-electronics
The driver of our cash flows — our Micro-electronics business — has
been generating a non-GAAP operating profit margin of about 70% over the
past three years, even after our investments in R&D programs and patent
litigation. We passed important milestones in 2011 as we implemented our
strategies to continue our growth over the horizon:
Our new executive team successfully renewed two large
revenue-generating licenses held by Samsung and Hynix.
Our revitalized R&D team continued to create new generations of
semiconductor packaging that will further improve the performance of
integrated circuits. Much like our first packaging breakthrough, our
latest technology enables high-speed chip performance in an even
smaller form factor.
We laid the foundation for expanding our technology licensing
expertise into new and adjacent markets, including vertical markets
beyond our traditional semiconductor packaging focus.
Growth Opportunity: Digital
It may surprise those who have tracked the success of our
Micro-electronics business to learn that our largest growth opportunity
today is in our Digital Optics business (formerly known as Imaging &
This business is positioned to disrupt the multi-billion dollar
market for mobile camera modules — a fragmented market in which
low-margin assemblers compete with similar designs and commoditized
components. Our technologies will enable a new generation of
feature-rich camera modules within several well established markets
including mobile phones, our first target market.
The most bulky component in today's mobile phones is the camera
module. Some of today's Android phones even feature a "bump" made
necessary by the nearly obsolete technology now found in all mobile
phone camera modules, built around magnetic coil technology that is over
100 years old and has reached its effective limits of miniaturization.
We will introduce camera modules based on silicon rather than
magnetic coils to move the lenses for focusing and zoom. This
breakthrough MEMS technology is disruptive because it obsoletes the
magnetic coils in use today by enabling cameras that are thinner, much
faster, have more accurate lens positioning, and use far less battery
power. When combined with the other software and technologies
that we have already have developed and marketed, it means better
quality images and video from miniature mobile phone cameras. Our
technologies will enable mobile phone cameras to perform as well as
standalone digital still cameras and to compete with video cameras on
quality. We are discussing our offerings with Tier One OEM manufacturers
of wireless handsets, and expect to ship our game-changing products in
In short, we have positioned our Digital Optics business with the
right technologies and people to exploit a large and growing market that
has yet to see the kind of transformative innovation that's been common
in other consumer electronics businesses.
The major milestones that you can expect this coming year:
First half of 2012: We will sign our first design win for the use
of our transformational MEMS optical imaging technology in a new cell
Second half of 2012: We will announce major steps toward
high-volume manufacturing of devices using this MEMS technology.
We invite you to invest with us in this exciting opportunity — and to
carefully watch our progress during the year ahead. As the Company's
largest individual stockholder, I look forward to executing our plans to
drive a significant increase in the value of the Company. We appreciate
Robert A. Young
President and Chief Executive Officer
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 milestones, the impact of changes to
executive management and the board of directors, growth of the Company's
served markets, market opportunities, industry and technology trends,
use of the Company's technology in additional applications, growth
opportunities, growth drivers, the characteristics, benefits, features,
disruptive qualities and potential of the Company's technologies and
products, including with respect to packaging solutions in the Company's
Micro-electronics segment and new generation camera modules and the
shipping of such in the Company's Digital Optics segment, profit growth
in the Digital Optics segment, the future investment and development
resources including with respect to strategic growth opportunities,
ability to address upcoming needs of key market segments, and the
expansion of the Company's technology licensing expertise. Material
factors that may cause results to differ from the statements made
include changes to the plans or operations relating to the Company's
businesses and groups, market or industry conditions; the future
expiration of license agreements and the cessation of related royalty
income; the failure or refusal of licensees to pay royalties; delays,
setbacks or losses relating to the Company's intellectual property or
intellectual property litigation, or any 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; changes in
patent laws, regulation or enforcement, or other factors that might
affect the Company's ability to protect our intellectual property; the
risk of a decline in demand for semiconductor products; failure by the
industry to adopt technologies covered by the Company's patents; and the
future expiration of the Company's patents. 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, 2010 and Form 10-Q for the period ended
Sept. 30, 2011, 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 that develops, invests
in, licenses and delivers innovative miniaturization technologies and
products for next-generation electronic devices through its
subsidiaries. The Company's Micro-electronics reporting segment realizes
the value of patents generated in over 20 years of semiconductor
packaging research and development. Its current research and development
portfolio includes 3-D packaging and other cost reducing chip scale and
wafer level packaging solutions. The Company's other reporting segment,
Digital Optics (formerly known as Imaging & Optics), offers camera
module solutions that provide cost-effective, high-quality camera
features, including extended depth of field (EDoF), zoom, image
enhancement, optical image stabilization and MEMS-based auto-focus.
These technologies can be applied to mobile and wireless products as
well as vertical markets such as, automotive, medical and security.
Tessera Intellectual Property Corp. manages the operations of the
Company's Micro-electronics reporting segment, including the patent
portfolios of Tessera, Inc. and Invensas Corporation. The Company's
Digital Optics reporting segment is operated through DigitalOptics
Corporation. The Company is headquartered in San Jose, California. For
more information call 1.408.321.6000 or go to 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.
Additional Information and Where to Find It
Tessera Technologies, Inc. (the "Company"), its directors and certain
executive officers and employees may become participants in the
solicitation of proxies from stockholders in connection with the
Company's 2012 Annual Meeting of Stockholders (the "Annual Meeting").
The Company plans to file a proxy statement with the Securities and
Exchange Commission (the "SEC") in connection with the solicitation of
proxies for the Annual Meeting (the "2012 Proxy Statement").
Robert J. Boehlke, John B. Goodrich, David C. Nagel, Kevin G. Rivette,
Anthony J. Tether, and Robert A. Young, all of whom are members of the
Company's Board of Directors, and Michael Anthofer, Executive Vice
President and Chief Financial Officer, Bernard J. Cassidy, Executive
Vice President, General Counsel and Secretary and Moriah Shilton, Senior
Director, Investor Relations, may become participants in the Company's
solicitation. Information regarding the Company's directors' and
executive officers' respective interests in the Company by security
holdings or otherwise is set forth in the Company's proxy statement
relating to the 2011 annual meeting of stockholders. No other
participants own in excess of 1% of the Company's common stock.
Additional information regarding the interests of such participants will
be included in the 2012 Proxy Statement and other relevant documents to
be filed with the SEC in connection with the Annual Meeting.
Promptly after filing its definitive 2012 Proxy Statement with the SEC,
the Company will mail the definitive 2012 Proxy Statement and a proxy
card to each stockholder entitled to vote at the Annual Meeting.
STOCKHOLDERS ARE URGED TO READ THE 2012 PROXY STATEMENT (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT
THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain, free
of charge, copies of the definitive 2012 Proxy Statement and any other
documents filed by the Company with the SEC in connection with the
Annual Meeting at the SEC's website (http://www.sec.gov),
at the Company's website (http://ir.tessera.com/sec/cfm)
or by writing to the Secretary, Tessera Technologies, Inc., 3025 Orchard
Parkway, San Jose, California 95134.
Tessera Technologies, Inc.
Chief Financial Officer
Sr. Director, Investor
Abernathy MacGregor Group
Tom Johnson, 212-371-5999
or Amy Feng, 213-630-6550
Source: Tessera Technologies, Inc.
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