Hittite Microwave Corp. (HITT, Financial) filed Quarterly Report for the period ended 2012-03-31.
Hittite Microwv has a market cap of $1.57 billion; its shares were traded at around $51.46 with a P/E ratio of 19.3 and P/S ratio of 5.9. Hittite Microwv had an annual average earning growth of 14.7% over the past 5 years.
Research and development expense. In the three months ended March 31, 2012, our research and development expense increased $2.4 million, or 25.0%, to $11.8 million, and represented 18.6% of our revenue, compared with $9.4 million, or 14.0% of our revenue, in the corresponding period of 2011. The increase in our research and development expense was primarily attributable to a $1.1 million increase in personnel costs, a $0.4 million increase in supplies and materials, a $0.3 million increase in equipment costs, a $0.2 million increase in professional fees, a $0.1 million increase in travel costs and a $0.3 million increase in occupancy and other costs. The increase in personnel costs was primarily due to the growth of our engineering organization, including the opening of our new design centers in Virginia and Egypt in the second half of 2011. We believe that a significant amount of research and development activity will be required for us to remain competitive in the future. As a result, we expect our research and development expense to continue to increase as we invest in the development of new products and, in the near term, to support the translation of certain existing products to other GaAs foundries.
Sales and marketing expense. In the three months ended March 31, 2012, our sales and marketing expense increased $0.2 million, or 3.6%, to $5.6 million, and represented 8.9% of our revenue, compared with $5.4 million, or 8.1% of our revenue, in the corresponding period of 2011. The increase in our sales and marketing expense was primarily attributable to a $0.4 million increase in personnel costs partially offset by a $0.2 million decrease in travel and other costs. The increase in personnel costs primarily related to increased stock-based compensation expense.
General and administrative expense. In the three months ended March 31, 2012, our general and administrative expense increased $0.8 million, or 25.3%, to $3.8 million, and represented 6.0% of our revenue, compared with $3.0 million, or 4.5% of our revenue, in the corresponding period of 2011. The increase in our general and administrative expense was primarily attributable to a $0.4 million increase in professional fees and a $0.4 million increase in personnel and other costs. The increase in professional fees primarily related to our global expansion project.
As of March 31, 2012, we held $373.9 million of cash and cash equivalents. Cash provided by our operations was $22.4 million in the three months ended March 31, 2012, of which the principal components were our net income of $16.0 million, non-cash charges of $6.7 million and a net decrease in operating assets and liabilities of $1.1 million partially offset by a net increase in deferred taxes of $1.5 million. The decrease in net operating assets and liabilities includes a $9.3 million net increase in taxes payable, due to the timing of tax payments and receipts, a $3.1 million decrease in accounts receivable, related to the timing of customer shipments and collections, a $2.1 million increase in accounts payable and accrued expenses, due to the timing of disbursements and a $0.6 million increase in deferred revenue and customer advances, due to product shipments under contracts with advanced billings. These items were partially offset by an increase in inventory of $13.4 million primarily related to the advance purchases of wafers from one of our foundries and an increase in other assets of $0.6 million.
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Hittite Microwv has a market cap of $1.57 billion; its shares were traded at around $51.46 with a P/E ratio of 19.3 and P/S ratio of 5.9. Hittite Microwv had an annual average earning growth of 14.7% over the past 5 years.
Highlight of Business Operations:
Revenue. In the three months ended March 31, 2012, our revenue decreased $3.9 million, or 5.8%, to $63.3 million, compared with $67.2 million in the corresponding period of 2011. Revenue from sales to customers outside the United States accounted for 51.2% of our total revenue in the three months ended March 31, 2012, compared with 55.4% in the corresponding period of 2011. Our revenue decrease was primarily attributable to a $2.3 million decrease in sales to the microwave and millimeterwave communications market, a $2.3 million decrease in sales to the military market and a $2.2 million decrease in sales to the cellular market partially offset by a $2.1 million increase in sales to the test and measurement market. The decrease in sales to the microwave and millimeterwave communications and cellular markets reflects weaker demand for our products used in infrastructure projects by our telecommunications customers. The decrease in sales to the military market reflects our completion of a systems contract in 2011, as well as lower pricing on certain military programs. We believe that the growth in sales to the test and measurement market reflects increased market share due to broader range of our product offerings and the increased market acceptance of products we introduced in prior years.Research and development expense. In the three months ended March 31, 2012, our research and development expense increased $2.4 million, or 25.0%, to $11.8 million, and represented 18.6% of our revenue, compared with $9.4 million, or 14.0% of our revenue, in the corresponding period of 2011. The increase in our research and development expense was primarily attributable to a $1.1 million increase in personnel costs, a $0.4 million increase in supplies and materials, a $0.3 million increase in equipment costs, a $0.2 million increase in professional fees, a $0.1 million increase in travel costs and a $0.3 million increase in occupancy and other costs. The increase in personnel costs was primarily due to the growth of our engineering organization, including the opening of our new design centers in Virginia and Egypt in the second half of 2011. We believe that a significant amount of research and development activity will be required for us to remain competitive in the future. As a result, we expect our research and development expense to continue to increase as we invest in the development of new products and, in the near term, to support the translation of certain existing products to other GaAs foundries.
Sales and marketing expense. In the three months ended March 31, 2012, our sales and marketing expense increased $0.2 million, or 3.6%, to $5.6 million, and represented 8.9% of our revenue, compared with $5.4 million, or 8.1% of our revenue, in the corresponding period of 2011. The increase in our sales and marketing expense was primarily attributable to a $0.4 million increase in personnel costs partially offset by a $0.2 million decrease in travel and other costs. The increase in personnel costs primarily related to increased stock-based compensation expense.
General and administrative expense. In the three months ended March 31, 2012, our general and administrative expense increased $0.8 million, or 25.3%, to $3.8 million, and represented 6.0% of our revenue, compared with $3.0 million, or 4.5% of our revenue, in the corresponding period of 2011. The increase in our general and administrative expense was primarily attributable to a $0.4 million increase in professional fees and a $0.4 million increase in personnel and other costs. The increase in professional fees primarily related to our global expansion project.
As of March 31, 2012, we held $373.9 million of cash and cash equivalents. Cash provided by our operations was $22.4 million in the three months ended March 31, 2012, of which the principal components were our net income of $16.0 million, non-cash charges of $6.7 million and a net decrease in operating assets and liabilities of $1.1 million partially offset by a net increase in deferred taxes of $1.5 million. The decrease in net operating assets and liabilities includes a $9.3 million net increase in taxes payable, due to the timing of tax payments and receipts, a $3.1 million decrease in accounts receivable, related to the timing of customer shipments and collections, a $2.1 million increase in accounts payable and accrued expenses, due to the timing of disbursements and a $0.6 million increase in deferred revenue and customer advances, due to product shipments under contracts with advanced billings. These items were partially offset by an increase in inventory of $13.4 million primarily related to the advance purchases of wafers from one of our foundries and an increase in other assets of $0.6 million.
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