MIPS Technologies Inc. (MIPS) filed Quarterly Report for the period ended 2009-09-30.
MIPS TechnologiesInc. is a leading designer and developer of RISC-basedhigh-performance 32- and 64-bit microprocessor intellectual property forembedded systems applications. The Company licenses its technology to its seven semiconductor partners: NEC CorporationToshiba CorporationLSI Logic CorporationPhilips Electronics N.V.Integrated Device TechnologyNKK Corporation and Quantum Effect DesignInc. These partners in turn designmarket and sell MIPS-based microprocessors to system OEMs. Mips Technologies Inc. has a market cap of $184.83 million; its shares were traded at around $4.1 with a P/E ratio of 13.67 and P/S ratio of 2.63.
Highlight of Business Operations:
Our cash and cash equivalents as of September 30, 2009 were $43.5 million compared to $44.5 million at June 30, 2009. The decrease in cash and cash equivalents was primarily due to payments to reduce our debt of $2.2 million and certain administrative and severance payments of approximately $1.4 million relating to our discontinued operations. These negative cash outflows were offset by positive cash flow from operations of approximately $3.0 million.
The $0.5 million increase in sales and marketing expense for first quarter of fiscal 2010 over the comparable period in fiscal 2009 was primarily due to $1.6 million increase in expenses reflecting higher salaries and our increased effort in sales and marketing of our products. This increase was partially offset by $0.8 million of employee compensation expenses due to decreased staffing levels and $0.2 million decrease in stock compensation expense.
The $2.1 million decrease in general and administrative expense for the first quarter of fiscal 2010 over the comparable period in fiscal 2009 was primarily due to a $1.0 million decrease in outside service expenses, including legal and audit fees, a $0.4 million decrease in salary, bonus, and benefit expenses due to decreased staffing levels, a $0.2 million decrease in consulting expense, a $0.2 million decrease in stock compensation expense and a $0.2 million decrease in depreciation and facilities expenses.
At September 30, 2009, we had an outstanding debt balance of $10.6 million relating to a $15 million term loan with Silicon Valley Bank (SVB) that we entered into in July 2008. Remaining monthly payments under the term loan of $0.3 million are due through July 2012. In addition to making payments on the term loan in the quarter ended September 30, 2009, we also repaid the full outstanding balance of $1.2 million that we owed to SVB under a revolving line of credit. We renewed the revolving line of credit in the first quarter of 2010, enabling us to borrow up to $10 million through September 20, 2010. Loans under this facility are secured by virtually all of our assets with the exception of IP, and the facility contains affirmative and negative covenants that impose restrictions on the operation of our business.
Net cash provided by operating activities was $1.6 million for the quarter ended September 30, 2009. The cash generated from operating activities included $3.0 million from continuing operations, partially offset by cash used by discontinued operations of $1.4 million. The cash generated from continuing operations was primarily a result of our positive net income net of non-cash expenses and cash provided from changes in our asset and liability balances. Our net income from continuing operations included the effects of non-cash charges of $0.9 million from stock compensation expense and $0.5 million in depreciation and amortization of intangible assets. In addition, cash generated from operating activities of continuing operations increased primarily as a result of (i) a $1.4 million decrease in prepaid expenses and other current and long term assets, primarily reflecting the timing of engineering design software license payments as compared to their amortization and (ii) a $0.9 million increase in accounts payable and accrued liabilities, primarily reflecting a $1.0 million withholding tax accrual in connection with change in our foreign legal structure. Those generators of cash were partially offset by an increase in accounts receivable of $1.2 million, reflecting the timing of license sales and customer payments. The negative cash flow from operating activities of discontinued operations was primarily driven by the payment of $1.4 million of cash for restructuring and administrative expenses.
Net cash provided by operating activities was $3.2 million for the three month period ended September 30, 2008. The cash generated from operating activities included $4.8 million from continuing operations, partially offset by cash used by discontinued operations of $1.6 million. The cash generated from continuing operations was primarily due to our net income from continuing operations. Our net income from continuing operations included the effects of non-cash charges of $1.0 million from stock compensation expense and $0.6 million in depreciation and amortization. Cash used by discontinued operations of $1.6 million was a result of a net loss offset by non-cash activities and changes in asset and liability balances.
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