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MIPS Technologies Inc. Reports Operating Results (10-Q)

May 08, 2012 | About:
10qk

10qk

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MIPS Technologies Inc. (MIPS) filed Quarterly Report for the period ended 2012-03-31.

Mips Tech Inc has a market cap of $350.5 million; its shares were traded at around $6.11 with a P/E ratio of 82.5 and P/S ratio of 4.3.

Highlight of Business Operations:

We reported third quarter fiscal 2012 revenue of $15.3 million, representing a 24% decrease compared to third quarter of fiscal 2011. Royalty revenue in the third quarter of fiscal 2012 was $11.1 million, an 18% decrease compared to the third quarter of fiscal 2011. Total royalty units reported in the third quarter of fiscal 2012 were 172 million, a 5% increase from our third quarter of fiscal 2011. As our royalty revenue is reported one quarter in arrears, shipments and revenue reported in our third quarter of fiscal 2012 represented our customer shipments from the quarter ended December 31, 2011. License and contract revenue in the third quarter of fiscal 2012 was $4.3 million, a 36% decrease compared to the third quarter of fiscal 2011. There were 4 new license agreements executed in the third quarter of fiscal 2012 compared to 7 in the third quarter of fiscal 2011. The decrease was driven by variety of factors including weak economic conditions and consolidation in the semiconductor industry.

Royalties. Our royalty revenue in the third quarter of fiscal 2012 decreased by 18% from the comparable period in fiscal 2011. Total royalty units reported by our customers in the third quarter of fiscal 2012 were 172 million, a 5% increase from our third quarter of fiscal 2011. The royalty per unit for the current quarter was 6 cents compared to 7 cents in the year ago period. The decline in the royalty per unit was due to several licensees reaching volume tiers in their licenses that triggered lower royalty rates, coupled with decline in average selling price at certain of our customers whose royalties are calculated as a percentage of their revenue as well as shifts in product mix at several of our licensees.

Our license and contract revenue decreased by 36% in the third quarter of fiscal 2012 from the comparable period in fiscal 2011. There were 4 new license agreements executed in the third quarter of fiscal 2012 compared to 7 in the third quarter of fiscal 2011. The decrease was driven by variety of factors including economic conditions and consolidation in the semiconductor industry. Unlimited use licenses accounted for $3.1 million of our license and contract revenue in our third quarter of fiscal 2012, and had terms ranging from 1 to 4 years with an average term of approximately 2.5 years. Contract revenue from unlimited use license agreements was $2.5 million in the same period of fiscal 2011.

License and contract revenue for the nine months ended March 31, 2012 decreased by 53% from the comparable period in fiscal 2011 which was primarily due to decrease in the number of licenses and the average selling price of licenses as compared to the first nine months of fiscal 2011. Unlimited use licenses accounted for $6.6 million of our license and contract revenue in the nine months ended March 31, 2012. The range of terms of unlimited license agreements we completed in the first nine months of fiscal 2012 was 1 to 10 years with an average term of approximately 4.2 years. Contract revenue from unlimited use license agreements was $13.1 million in the same period of fiscal 2011. Excluding one architecture agreement that had a term of 16 years, the range of terms of unlimited license agreements we completed in the first nine months of fiscal 2011 was 1 to 6 years with an average term of approximately 3 years.

The $1.3 million decrease in sales and marketing expense for the nine months ended March 31, 2012 compared to the same period in fiscal 2011 was due to a mix of increases and decreases in various expenses, including (i) a $1.6 million decrease in commission and incentive compensation, (ii) a $0.4 million decrease in employee related expense due to decreased headcount, (iii) an increase of $0.3 in severance related to a former executive of the Company, (iv) an increase of $0.3 million in consulting and outside services fees related to mobile and Android projects, and (v) an increase of $0.1 million in stock compensation based on the mix and timing of employee stock grants.

Read the The complete Report

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