Hittite Microwave Corporation Reports Financial Results for the Second Quarter of 200628 July 2006
Hittite Microwave Corporation (Nasdaq: HITT) today reported revenue for the second quarter ended June 30, 2006 of $32.4 million, representing an increase of 71.2% compared with $18.9 million for the second quarter of 2005 and a sequential increase of 16.2% compared with $27.9 million for the first quarter of 2006. Net income for the quarter was $10.2 million, or $0.33 per diluted share, an increase of 142.1% compared with $4.2 million, or $0.16 per diluted share, for the second quarter of 2005, and an increase of 15.8% compared with $8.8 million, or $0.29 per diluted share, for the first quarter of 2006.
"We are pleased with our second quarter results," said Stephen Daly, Chairman and CEO. "Increased international sales and a favorable product mix allowed us to deliver strong quarterly results. We launched three new product lines increasing our total to 13 product lines. Our new Log Detector and Controller, Track and Hold, and Commercial Synthesizer Subsystem products add more breadth to our already broad portfolio, and deliver best in class performance. In total, we introduced 29 new products during the quarter across our product lines, in line with our plan for the year."
For the second quarter 2006, revenue from customers in the United States was $14.0 million, or 43% of the company's total revenue, and revenue from customers outside the United States was $18.4 million, or 57% of total revenue. Gross margin was 73.5% for the second quarter compared with 66.4% for the prior year's quarter and compared sequentially to 73.7% for the first quarter of 2006. Operating income for the second quarter was $15.1 million, or 46.6% of revenue. Net income for the second quarter of 2006 reflects equity-based compensation expense of $701,000, or $450,000 after tax, primarily due to the implementation of Statement of Financial Accounting Standards No.123(R). The company's results of operations in 2005 did not include equity-based compensation expense, as FAS 123(R) was not effective for the company until January 1, 2006. Total cash and investments at the end of the second quarter 2006 was $90.0 million, an increase for the quarter of $11.2 million, including $2.1 million from the exercise of employee stock options.
The company also noted that on June 30, 2006, the Russell Investment Group included the company's common stock in the Russell 3000 index.
Business Outlook
The company currently expects revenue for the third quarter ending September 30, 2006 to be in the range of $33.5 million to $34.5 million and net income to be in the range of $10.2 million to $10.6 million, or $0.33 to $0.34 per diluted share, including equity-based compensation expense.
Webcast and Taped Replay
The company will host a conference call to discuss its financial results at 5:00 p.m. ET today. A live webcast of the call will be available online on the Hittite Microwave website. To listen to the live webcast, go to the Investor Relations page of the Hittite Microwave web site at http://www.hittite.com and click on the webcast icon located under the Events Calendar. A telephonic replay of the call also will be available for one week after the live call by dialing (719) 457-0820, access code 7445897. Following the call, a webcast replay will also be available by visiting the Investor Relations page at http://www.hittite.com.
About Hittite Microwave Corporation
Hittite Microwave is an innovative designer and developer of high performance integrated circuits, or ICs, modules and subsystems for technically demanding radio frequency, or RF, microwave and millimeterwave applications. Products include amplifiers, attenuators, data converters, frequency dividers and detectors, frequency multipliers, mixers and converters, modulators, oscillators, phase shifters, power detectors, sensors, switches and synthesizers. Hittite's products are used in a variety of applications and end markets including automotive, broadband, cellular infrastructure, fiber optic, microwave and millimeterwave communications, military, space, and test and measurement. The company utilizes radio frequency integrated circuits (RFIC), monolithic microwave integrated circuits (MMIC), multi-chip modules (MCM) and microwave integrated circuit (MIC) technologies. The company is headquartered in Chelmsford, MA.
"Safe Harbor Statement" under the Private Securities Litigation Reform Act of 1995
Statements in this press release regarding Hittite Microwave Corporation that do not relate to historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include, but are not limited to, any statements regarding our expectations as to future levels of revenue, net income and earnings per share. Readers are cautioned that these forward-looking statements are subject to risks and uncertainties and are only predictions, and actual future events and results may differ materially from these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: market acceptance of our new products; our ability to assess market requirements accurately; our success in maintaining the business of our significant customers; our ability to keep pace with new semiconductor processes; regulatory, operational, financial and political risks inherent in operating internationally; competition within the semiconductor industry; product returns and warranty claims; our ability to manage our growth and costs effectively; protection of our intellectual property; the growth and fiscal strength of our end markets; and other risks and uncertainties that are discussed under "Risk Factors" in our Annual Report on Form 10-K for 2005 and in our Quarterly Report on Form 10-Q for the three months ended March 31, 2006, as filed with the Securities and Exchange Commission .
Hittite Microwave Corporation
Condensed Consolidated Balance Sheets
(unaudited)
(In thousands) June 30, Dec. 31,
2006 2005
Assets
Current assets:
Cash and cash equivalents $81,238 $40,559
Available-for-sale investments 8,776 22,082
Accounts receivable, net 15,738 9,789
Inventories 8,334 4,876
Deferred costs 347 284
Income taxes receivable 3,214 --
Prepaid expenses and other current assets 601 612
Deferred taxes 2,784 2,238
Total current assets 121,032 80,440
Property and equipment, net 13,985 13,417
Other assets 482 540
Total assets $135,499 $94,397
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,976 $1,290
Accrued expenses 5,683 3,766
Income taxes payable -- 1,241
Deferred revenue and customer advances 3,994 3,015
Current portion of long-term debt -- 366
Total current liabilities 11,653 9,678
Long-term debt -- 213
Deferred taxes 1,176 1,176
Total liabilities 12,829 11,067
Total stockholders' equity 122,670 83,330
Total liabilities and stockholders' equity $135,499 $94,397
Hittite Microwave Corporation
Condensed Consolidated Statements of Operations
(unaudited)
(In thousands except per-share data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenue $32,370 $18,909 $60,234 $36,763
Cost of revenue 8,583 6,363 15,901 12,386
Gross profit 23,787 12,546 44,333 24,377
73.5% 66.3% 73.6% 66.3%
Operating expenses:
Research and development 4,209 2,634 7,751 4,922
Selling and marketing 2,768 2,169 5,291 4,447
General and administrative 1,714 684 3,276 1,486
Total operating expenses 8,691 5,487 16,318 10,855
Income from operations 15,096 7,059 28,015 13,522
46.6% 37.3% 46.5% 36.8%
Interest and other income, net 808 179 1,302 304
Income before income taxes 15,904 7,238 29,317 13,826
Provision for income taxes 5,689 2,607 10,284 4,979
Net income 10,215 4,631 19,033 8,847
Accretion on redeemable
convertible preferred stock -- 412 -- 824
Net income attributable to
common stockholders $10,215 $4,219 $19,033 $8,023
Basic earnings per share
attributable to common
stockholders $0.34 $0.17 $0.65 $0.32
Shares used in calculation of
basic earnings per share 29,878 22,425 29,443 22,393
Diluted earnings per share
attributable to common
stockholders $0.33 $0.16 $0.62 $0.30
Shares used in calculation of
diluted earnings per share 30,863 24,138 30,690 24,122
Source: prnewswire
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