01—Abstract
Summary
Summary of the 10-K filed February 16, 2010. Cited figures are marked; the original filing is the authoritative source.
Monolithic Power Systems, Inc. (MPWR) reported its 2009 annual results, showcasing resilience and growth in a challenging economic environment.
The company experienced a modest revenue increase, driven primarily by its DC to DC converter product family, which continues to be the largest contributor to sales. Despite facing industry-wide price pressures and increased R&D investments for future product development, MPWR maintained a strong gross profit margin. The company's operational focus remains on its highly integrated, power-efficient semiconductor solutions for the computing, consumer electronics, and communications markets.
A significant portion of revenue (84%a) is derived from Asia, highlighting the company's strong presence in this key market. MPWR is actively managing its legal proceedings, particularly with O2Micro, which presents ongoing risks and expenses. The company also noted the illiquidity of its auction-rate securities, though it has taken steps to mitigate potential losses.
02—Key points
Key Highlights
- Revenue increased by 2.8% to $165.0 million in 2009, driven by strong performance in DC to DC converter products.
- Gross profit margin remained healthy at 59.2%, though slightly down from 61.9% in 2008, reflecting industry price pressures.
- Research and Development (R&D) expenses increased to 23.2% of revenue, indicating continued investment in new product development.
- 84% of revenue was generated from customers in Asia, demonstrating a significant geographic concentration.
- The company reported $46.7 million in cash and cash equivalents and $118.9 million in short-term investments, indicating a strong liquidity position.
- Ongoing litigation, particularly with O2Micro, continues to incur significant legal expenses.
- The company has $35.6 million invested in government-backed student loan auction-rate securities, which became illiquid in 2008; impairment charges were recorded.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Monolithic Power Systems kept $0.12.
- Revenue$165.0M100.0%
- Cost of revenue−$67.3M40.8%
- Gross profit$97.7M59.2%
- Operating costs−$78.1M47.4%
- Operating income$19.5M11.8%
- Interest, other & tax$144,0000.1%
- Net income$19.7M11.9%
Where FY2009 revenue went
$165.0M- Cost of revenue: $67.3M, 41% of revenue
- R&D: $38.3M, 23% of revenue
- SG&A: $36.8M, 22% of revenue
- Operating income: $19.5M, 12% of revenue
- Other operating costs: $3.1M, 1.9% of revenue
Kept 12% as operating incomeOperating income $19.5M · 12%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 16, 2010Financial Statements
| Revenue | $165.01M |
| Cost of Revenue | $67.33M |
| Gross Profit | $97.68M |
| R&D Expenses | $38.30M |
| SG&A Expenses | $36.75M |
| Operating Expenses | $78.15M |
| Operating Income | $19.53M |
| Net Income | $19.67M |
| EPS (Basic) | $0.57 |
| EPS (Diluted) | $0.54 |
| Shares Outstanding (Basic) | 34.31M |
| Shares Outstanding (Diluted) | 36.63M |
05—Questions
Frequently Asked Questions
What was MPWR's revenue performance in 2009?
In 2009, Monolithic Power Systems, Inc. (MPWR) reported a revenue of $165.0 million, a modest increase of 2.8% compared to $160.5 million in 2008. This growth was primarily fueled by an 7.1% increase in sales of their DC to DC converter products.
What are the main risks facing MPWR, as highlighted in the filing?
Key risks identified include ongoing litigation, particularly with O2Micro, which results in significant legal expenses and potential adverse outcomes. The company also faces risks associated with the cyclical nature of the semiconductor industry, increased competition, dependence on key personnel, and the illiquidity and potential value decline of its auction-rate securities.
How is MPWR managing its investments, particularly the auction-rate securities?
MPWR has $35.6 million invested in government-backed student loan auction-rate securities that became illiquid in 2008. The company has recorded impairment charges and has a UBS put right to sell a portion of these securities. While they intend to hold the remaining securities, the valuation is subject to market conditions and potential future declines in value.
What is MPWR's strategy for future growth?
MPWR plans to achieve revenue growth by continuing to introduce new products within its existing families and expanding into new product categories. The company also aims to grow by entering new market segments, gaining market share, diversifying its customer base, and securing manufacturing capacity.
06—Continue