Summary
Monolithic Power Systems Inc. (MPWR) reported a decrease in revenue for the third quarter and the first nine months of 2011 compared to the same periods in 2010. This decline was primarily attributed to reduced sales of their DC to DC converter products, partly due to lost customers in Korea because of production capacity limitations in 2010. Sales of audio amplifiers and lighting control products also saw decreases. Despite the revenue dip, the company's financial position appears stable, with a healthy working capital and a significant increase in cash and cash equivalents year-over-year. However, operating expenses, particularly R&D, increased as a percentage of revenue. The company is also facing potential tax liabilities stemming from an IRS audit, although they believe their positions are defensible.
Financial Highlights
43 data points| Revenue | $52.96M |
| Cost of Revenue | $25.15M |
| Gross Profit | $27.81M |
| R&D Expenses | $11.79M |
| SG&A Expenses | $10.25M |
| Operating Expenses | $22.76M |
| Operating Income | $5.05M |
| Net Income | $5.47M |
| EPS (Basic) | $0.16 |
| EPS (Diluted) | $0.16 |
| Shares Outstanding (Basic) | 34K |
| Shares Outstanding (Diluted) | 34K |
Key Highlights
- 1Revenue decreased by 19.6% for the three months ended September 30, 2011, and 13.2% for the nine months ended September 30, 2011, compared to the prior year periods.
- 2The decrease in revenue was primarily driven by lower sales of DC to DC converters, attributed to lost customers in Korea and reduced demand for lighting control and audio amplifier products.
- 3Cash and cash equivalents significantly increased from $48.0 million at December 31, 2010, to $93.0 million at September 30, 2011.
- 4Research and Development (R&D) expenses increased as a percentage of revenue, rising to 22.3% for Q3 2011 from 17.1% in Q3 2010.
- 5The company repurchased $38.5 million of its common stock in the first nine months of 2011, under an expanded $70.0 million stock repurchase program.
- 6Significant litigation expense related to shareholder derivative actions was incurred in September 2011.
- 7An ongoing IRS audit could potentially result in increased federal and state income tax liabilities of up to $37.0 million, plus interest and penalties, although the company believes its tax returns were filed correctly.