01—Abstract
Summary
Summary of the 10-K filed March 1, 2017. Cited figures are marked; the original filing is the authoritative source.
Monolithic Power Systems, Inc. (MPWR) reported strong revenue growth for the fiscal year ended December 31, 2016, with a 16.7% increase year-over-year, reaching $388.7 milliona.
This growth was driven by solid performance across its key market segments, particularly computing and storage, and industrial, with the consumer segment also showing positive momentum. The company maintained healthy gross margins, slightly improving to 54.3%b in 2016, reflecting efficient operations and its focus on high-performance, cost-effective power solutions. MPWR demonstrated disciplined expense management, with Research and Development (R&D) and Selling, General, and Administrative (SG&A) expenses as a percentage of revenue declining compared to the previous year.
The company also continued to return value to shareholders through consistent quarterly cash dividends, totaling $33.1 millionc in 2016. With a strong balance sheet including over $268 million in cash, cash equivalents, and short-term investments, MPWR is well-positioned to continue its growth trajectory, invest in innovation, and explore strategic opportunities while managing its operations effectively within the cyclical semiconductor industry.
02—Key points
Key Highlights
- Revenue increased by 16.7% to $388.7 million in 2016, driven by strong performance in computing/storage and industrial segments.
- Gross margin slightly improved to 54.3% in 2016, indicating efficient cost management.
- Research and Development (R&D) expenses as a percentage of revenue decreased to 18.9% in 2016, while Selling, General, and Administrative (SG&A) expenses decreased to 21.4% of revenue.
- The company paid cash dividends totaling $33.1 million in 2016, continuing its commitment to shareholder returns.
- MPWR ended 2016 with a robust liquidity position, holding $268.2 million in cash, cash equivalents, and short-term investments.
- The company's stock repurchase program remained active, with $50 million available for future repurchases as of December 31, 2016.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Monolithic Power Systems kept $0.14.
- Revenue$388.7M100.0%
- Cost of revenue−$177.8M45.7%
- Gross profit$210.9M54.3%
- Operating costs−$156.4M40.2%
- Operating income$54.4M14.0%
- Interest, other & tax−$1.7M0.4%
- Net income$52.7M13.6%
Where FY2016 revenue went
$388.7M- Cost of revenue: $177.8M, 46% of revenue
- SG&A: $83.0M, 21% of revenue
- Other operating costs: $73.4M, 19% of revenue
- Net income: $52.7M, 14% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed March 1, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $388.67M$333.07M | +16.7% |
| Cost of Revenue | $177.79M$152.90M | +16.3% |
| Gross Profit | $210.87M$180.17M | +17.0% |
| SG&A Expenses | $83.01M$72.31M | +14.8% |
| Operating Expenses | $156.43M$139.10M | +12.5% |
| Operating Income | $54.45M$41.07M | +32.6% |
| Net Income | $52.72M$35.17M | +49.9% |
| EPS (Basic) | $1.30$0.89 | +46.1% |
| EPS (Diluted) | $1.26$0.86 | +46.5% |
| Shares Outstanding (Basic) | 40.44M39.47M | +2.4% |
| Shares Outstanding (Diluted) | 41.91M40.87M | +2.6% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Monolithic Power Systems' revenue growth in 2016?
Monolithic Power Systems experienced a 16.7% revenue increase in 2016, primarily driven by strong demand in the computing and storage segment (up 42.4%) and the industrial segment (up 35.1%). The consumer segment also contributed positively with a 6.0% increase. This growth was supported by higher unit shipments and design wins with new customers, despite a slight 2% decrease in average selling prices.
How did MPWR manage its expenses and maintain profitability in 2016?
MPWR demonstrated effective expense management. While Research and Development (R&D) expenses increased in absolute terms to support new product development, they decreased as a percentage of revenue to 18.9%. Similarly, Selling, General, and Administrative (SG&A) expenses as a percentage of revenue fell to 21.4%. This, coupled with a slight improvement in gross margin to 54.3%, contributed to a significant increase in operating income and net income for the year.
What is the company's outlook on dividends and stock repurchases?
Monolithic Power Systems continued to pay quarterly cash dividends, totaling $0.80 per share in 2016, amounting to $33.1 million. The company also had an active stock repurchase program, with $50 million authorized for future repurchases as of the end of 2016. These actions reflect a commitment to returning capital to shareholders.
What is the company's financial health and liquidity position at the end of 2016?
MPWR reported a strong financial position at the end of 2016. It had $112.7 million in cash and cash equivalents and $155.5 million in short-term investments, totaling over $268 million in highly liquid assets. Working capital also increased to $330 million, indicating a healthy ability to meet short-term obligations and fund operations.
06—Continue