Microvision Inc. (MVIS, Financial) filed Quarterly Report for the period ended 2012-06-30.
Microvision, Inc. has a market cap of $30.7 million; its shares were traded at around $2.03 with and P/S ratio of 5.5.
Cost of product revenue includes the direct and allocated indirect cost of manufacturing products sold to customers. Direct costs include labor, materials and other costs incurred directly in the manufacture of these products. Indirect costs include labor and other costs associated with operating our manufacturing capabilities and capacity. Our overhead, which includes the costs of procuring, inspecting and storing material, and facility and depreciation costs, is allocated to cost of product revenue based on the proportion of direct material purchased to support production. Cost of product revenue also includes any manufacturing overhead associated with excess capacity and adjustments to reflect our inventory at lower of cost or market. During the three and six months ended June 30, 2012 we expensed approximately $167,000 and $411,000 of manufacturing overhead associated with production capacity in excess of production requirements, compared to $358,000 and $698,000 during the three and six months ended June 30, 2011. Cost of product revenue for the three and six months ended June 30, 2011, included inventory write downs of $483,000 and $944,000, respectively.
During the three months ended June 30, 2012, we negotiated a lower price for certain components in inventory that had previously been written down to net realizable value. As a result of this renegotiation, the aggregate purchase price was reduced and we recorded a credit of $1.4 million to cost of product revenue during the three months ended June 30, 2012. Except for the reduction in cost of product revenue associated with the renegotiation with our component supplier, our negative margins on product sales were lower for the three and six months ended June 30, 2012 compared to the same periods in 2011 primarily because of lower material costs as we transition from sales of SHOWWXâ„¢ products to sales of key components under our "Image by PicoP" ingredient brand business model and the sale of inventory that had previously been written down to the lower of cost or market.
Cost of contract revenue for the three and six months ended June 30, 2011 included a provision for estimated losses on uncompleted contracts of $213,000 and $298,000, respectively. The losses resulted from excess material cost associated with minimum order quantities for materials required to complete the statement of work.
The decrease in sales, marketing, general and administrative expense during the three and six months ended June 30, 2012, compared to the same period in 2011, is primarily due to decreased payroll costs associated with reductions in staffing levels compared to the prior year and lower non-cash compensation expense resulting from the forfeiture of stock option grants.
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Microvision, Inc. has a market cap of $30.7 million; its shares were traded at around $2.03 with and P/S ratio of 5.5.
Highlight of Business Operations:
Product revenue was lower during the three months ended June 30, 2012 than the same period in 2011, due to decreased sales of our SHOWWX products compared to the prior period. Product revenue was higher during the six months ended June 30, 2012 than the same period in 2011, due to sales of key components under our "Image by PicoP" ingredient brand business model and increased sales of our PicoP display engines compared to the prior period. The backlog of product orders at June 30, 2012 was approximately $4.4 million, compared to $533,000 at June 30, 2011. The product backlog is scheduled for delivery within one year.Cost of product revenue includes the direct and allocated indirect cost of manufacturing products sold to customers. Direct costs include labor, materials and other costs incurred directly in the manufacture of these products. Indirect costs include labor and other costs associated with operating our manufacturing capabilities and capacity. Our overhead, which includes the costs of procuring, inspecting and storing material, and facility and depreciation costs, is allocated to cost of product revenue based on the proportion of direct material purchased to support production. Cost of product revenue also includes any manufacturing overhead associated with excess capacity and adjustments to reflect our inventory at lower of cost or market. During the three and six months ended June 30, 2012 we expensed approximately $167,000 and $411,000 of manufacturing overhead associated with production capacity in excess of production requirements, compared to $358,000 and $698,000 during the three and six months ended June 30, 2011. Cost of product revenue for the three and six months ended June 30, 2011, included inventory write downs of $483,000 and $944,000, respectively.
During the three months ended June 30, 2012, we negotiated a lower price for certain components in inventory that had previously been written down to net realizable value. As a result of this renegotiation, the aggregate purchase price was reduced and we recorded a credit of $1.4 million to cost of product revenue during the three months ended June 30, 2012. Except for the reduction in cost of product revenue associated with the renegotiation with our component supplier, our negative margins on product sales were lower for the three and six months ended June 30, 2012 compared to the same periods in 2011 primarily because of lower material costs as we transition from sales of SHOWWXâ„¢ products to sales of key components under our "Image by PicoP" ingredient brand business model and the sale of inventory that had previously been written down to the lower of cost or market.
Cost of contract revenue for the three and six months ended June 30, 2011 included a provision for estimated losses on uncompleted contracts of $213,000 and $298,000, respectively. The losses resulted from excess material cost associated with minimum order quantities for materials required to complete the statement of work.
The decrease in sales, marketing, general and administrative expense during the three and six months ended June 30, 2012, compared to the same period in 2011, is primarily due to decreased payroll costs associated with reductions in staffing levels compared to the prior year and lower non-cash compensation expense resulting from the forfeiture of stock option grants.
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