Summary
Monolithic Power Systems, Inc. (MPWR) reported revenue of $65.3 million for the third quarter of 2013, an increase of 15.6% compared to the same period in 2012, driven primarily by strong performance in DC to DC converters and lighting control products. For the nine-month period, revenue grew 5.4% year-over-year to $174.5 million. The company demonstrated improved profitability with a gross margin of 54.0% in Q3 2013, up from 53.1% in Q3 2012, and 53.6% for the nine-month period, up from 52.9% in the prior year, attributed to a better product mix and lower inventory reserves. Net income for the quarter was $7.4 million ($0.19 per diluted share), compared to $5.9 million ($0.16 per diluted share) in the prior year. The company also announced a new stock repurchase program in July 2013, authorizing up to $100 million in repurchases through June 2015, and repurchased $8.0 million in the third quarter. Financially, MPWR ended the quarter with a strong liquidity position, holding $110.4 million in cash and cash equivalents and $93.9 million in short-term investments, a significant increase from the prior year, bolstered by robust operating cash flow generation. The company continues to invest in research and development, with R&D expenses increasing by 5.6% for the quarter and 4.8% for the nine-month period, reflecting growth in R&D headcount and new product development initiatives. Investors should note the continued geographic concentration of revenue in Asia (91% in Q3) and reliance on a key distributor (33% of Q3 revenue), which represent ongoing business risks.
Financial Highlights
42 data points| Revenue | $65.35M |
| Cost of Revenue | $30.05M |
| Gross Profit | $35.29M |
| SG&A Expenses | $13.89M |
| Operating Expenses | $26.64M |
| Operating Income | $8.66M |
| Net Income | $7.41M |
| EPS (Basic) | $0.20 |
| EPS (Diluted) | $0.19 |
| Shares Outstanding (Basic) | 37.91M |
| Shares Outstanding (Diluted) | 39.01M |
Key Highlights
- 1Revenue increased by 15.6% to $65.3 million in Q3 2013 compared to Q3 2012, driven by strong sales of DC to DC converters and lighting control products.
- 2Gross margin improved to 54.0% in Q3 2013 from 53.1% in Q3 2012, reflecting a better product mix and lower inventory reserves.
- 3Net income for Q3 2013 was $7.4 million, or $0.19 per diluted share, up from $5.9 million, or $0.16 per diluted share, in the prior year.
- 4The company reported a strong liquidity position with $110.4 million in cash and cash equivalents and $93.9 million in short-term investments as of September 30, 2013.
- 5A new stock repurchase program was authorized in July 2013, allowing for up to $100 million in share repurchases through June 2015, with $8.0 million repurchased in Q3 2013.
- 6Research and Development expenses increased to support new product development, with headcount growing from 388 to 441 employees in the R&D division.
- 7Revenue remains highly concentrated in Asia (91% of Q3 revenue) and relies significantly on a single large distributor (33% of Q3 revenue).