Microsemi Corp. Reports Operating Results (10-Q)
Microsemi Corp. has a market cap of $1.84 billion; its shares were traded at around $22.81 with a P/E ratio of 22.5 and P/S ratio of 3.6. Microsemi Corp. had an annual average earning growth of 12.6% over the past 10 years.Hedge Fund Gurus that owns MSCC: Louis Moore Bacon of Moore Capital Management, LP, Bruce Kovner of Caxton Associates. Mutual Fund and Other Gurus that owns MSCC: David Dreman of Dreman Value Management, Columbia Wanger of Columbia Wanger Asset Management, Robert Olstein of Olstein Financial Alert Fund, Chuck Royce of Royce& Associates, Pioneer Investments, Mario Gabelli of GAMCO Investors.
Highlight of Business Operations: Net sales increased $71.5 million or 63.4% between the quarters ended January 2, 2011 (Q1 2011) and December 27, 2009 (Q1 2010) to $184.4 million for Q1 2011 from $112.8 million for Q1 2010. Net sales grew in all of our end markets, with overall net sales growth primarily related to our acquisitions of Actel Corporation and White Electronic Designs Corporation, both of which occurred after Q1 2010.
Operating income decreased $4.2 million to $6.3 million for Q1 2011 from $10.5 million from Q1 2010. In Q1 2011, we incurred $6.1 million in acquisition related costs. In addition, amortization expense increased $8.2 million to $12.1 million in Q1 2011 from $3.9 million in Q1 2010.
Net sales in the Defense & Security end market increased $25.9 million to $69.8 million in Q1 2011 from $44.0 million in Q1 2010. Sales in this end market were favorably impacted by the contributions from products we added from recent acquisitions, as well as contributions from the ramping of millimeter wave scan subsystems used in whole-body scanners and radar applications. We believe the Department of Defense and Homeland Security budgets for electronic content, an area of Microsemi focus, will continue to expand and contribute to growth in this end market. We also believe that international defense sales will increase, enabled in part by our security product offerings, and that Microsemis dollar content in defense programs will increase as our products move up the value chain. As such, we believe that this end market will grow in the upcoming quarter.
Net sales in the Aerospace end market increased $19.7 million to $45.1 million in Q1 2011 from $25.4 million in Q1 2010. The increase in net sales between Q1 2011 and Q1 2010 was driven primarily by demand and order rates for commercial aircraft at aircraft manufacturers and tier one suppliers, growing electronic content in current aircraft, refurbishment programs for older aircraft and demand for the high-reliability radar and avionics solutions we provide. Sales into satellite applications have grown as generally these applications are in a less economically sensitive market and are expected to grow further as we develop power management ICs and DC/DC converter solutions. Including contributions from products we added from Microsemi SoC, our dollar content opportunity now approaches $3 million per satellite on some high end satellite products. We believe that sales in this end market will grow in the upcoming quarter.
Selling, general and administrative expense was $46.3 million for Q1 2011 compared to $25.8 million for Q1 2010. While selling, general and administrative expenses in 2011 were favorably impacted by restructuring and cost control measures, these expenses increased overall primarily due to the incremental costs incurred from acquisition we added in the last year. Expenses in Q1 2011 also included $6.1 million in acquisition-related costs. We expect selling, general and administrative expenses to increase by $3.5 million to $4.5 million next quarter due to additional costs attributable to Microsemi SoC, along with additional cost to support our continued growth prospects in the coming year.
Research and development expense was $24.0 million for Q1 2011 compared to $11.8 million in Q1 2010. The increase was in support of additional product development to support our organic growth and attributable to additional research and development activities from acquisitions we added in the last year. We expect research and development expense to increase by $3.5 million to $4.5 million next quarter primarily due to additional costs incurred attributable to Microsemi SoC, along with some additional cost in our product development efforts as we intend to continue to make product investments that deliver continued organic growth.
Read the The complete Report