Hittite Microwave Corp. (HITT, Financial) filed Quarterly Report for the period ended 2010-03-31.
Hittite Microwave Corp. has a market cap of $1.5 billion; its shares were traded at around $49.69 with a P/E ratio of 28.6 and P/S ratio of 9.2. Hittite Microwave Corp. had an annual average earning growth of 18.7% over the past 5 years.HITT is in the portfolios of Jim Simons of Renaissance Technologies LLC, RS Investment Management.
Sales and marketing expense. In the three months ended March 31, 2010, our sales and marketing expense increased $1.2 million, or 36.0%, to $4.6 million, and represented 8.5% of our revenue, compared with $3.4 million, or 8.9% of our revenue, in the corresponding period of 2009. The increase in our sales and marketing expense was primarily attributable to a $0.4 million increase in third party commissions, due to our increase in revenue, a $0.4 million increase in personnel costs, due to the growth of our worldwide direct sales and marketing organization and the discontinuation in 2010 of cost savings initiatives undertaken in 2009, and $0.4 million net increase in other costs. We expect sales and marketing expense will increase as we hire additional personnel, continue to expand our worldwide sales and marketing activities and, to the extent that our revenue increases, pay additional commissions.
General and administrative expense. In the three months ended March 31, 2010, our general and administrative expense increased $0.9 million, or 41.1%, to $3.1 million, and represented 5.7% of our revenue, compared with $2.2 million, or 5.8% of our revenue, in the corresponding period of 2009. The increase in our general and administrative expense was primarily attributable to a $0.6 million increase in professional fees, primarily related to intellectual property litigation, and a $0.3 million increase in personnel costs.
Interest income. In the three months ended March 31, 2010, our interest income decreased $0.1 million to $29,000 compared with $0.1 million in the corresponding period of 2009, as a result of lower effective yields, due to prevailing market conditions, partially offset by the impact of higher cash and investment balances.
As of March 31, 2010, we held $238.2 million of cash and cash equivalents. In the three months ended March 31, 2010, cash provided by our operations was $22.2 million, of which the principal components were our net income of $16.1 million and non-cash charges of $4.6 million, as well as a net decrease in operating assets and liabilities of $2.4 million, partially offset by a net increase in deferred taxes of $0.9 million. The net decrease in operating assets and liabilities includes an increase in income taxes payable of $6.1 million, due to the timing of tax payments, a $5.4 million increase in accounts payable and accrued expenses, due to the growth of our business and the timing of disbursements, partially offset by a $7.6 million increase in accounts receivable, due to our increase in revenue, and an increase in other net operating assets and liabilities of $1.5 million.
In the three months ended March 31, 2010, we invested $4.7 million in the purchase of property and capital equipment, primarily for the purchase of an additional building to support the growth of our business. We received $2.4 million from the exercise of stock options and $1.5 million from the tax benefit related to our stock-based compensation plans.
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Hittite Microwave Corp. has a market cap of $1.5 billion; its shares were traded at around $49.69 with a P/E ratio of 28.6 and P/S ratio of 9.2. Hittite Microwave Corp. had an annual average earning growth of 18.7% over the past 5 years.HITT is in the portfolios of Jim Simons of Renaissance Technologies LLC, RS Investment Management.
Highlight of Business Operations:
Research and development expense. In the three months ended March 31, 2010, our research and development expense increased $0.9 million, or 15.2%, to $7.0 million, and represented 12.8% of our revenue, compared with $6.0 million, or 15.8% of our revenue, in the corresponding period of 2009. The increase in our research and development expense was attributable to a $1.1 million increase in personnel costs, partially offset by a $0.2 million decrease in engineering material costs. The increase in personnel costs in 2010 related primarily to the discontinuation in 2010 of cost savings initiatives undertaken in 2009 and the growth of our engineering organization. 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 increase as we add personnel and other costs to invest in the development of new products.Sales and marketing expense. In the three months ended March 31, 2010, our sales and marketing expense increased $1.2 million, or 36.0%, to $4.6 million, and represented 8.5% of our revenue, compared with $3.4 million, or 8.9% of our revenue, in the corresponding period of 2009. The increase in our sales and marketing expense was primarily attributable to a $0.4 million increase in third party commissions, due to our increase in revenue, a $0.4 million increase in personnel costs, due to the growth of our worldwide direct sales and marketing organization and the discontinuation in 2010 of cost savings initiatives undertaken in 2009, and $0.4 million net increase in other costs. We expect sales and marketing expense will increase as we hire additional personnel, continue to expand our worldwide sales and marketing activities and, to the extent that our revenue increases, pay additional commissions.
General and administrative expense. In the three months ended March 31, 2010, our general and administrative expense increased $0.9 million, or 41.1%, to $3.1 million, and represented 5.7% of our revenue, compared with $2.2 million, or 5.8% of our revenue, in the corresponding period of 2009. The increase in our general and administrative expense was primarily attributable to a $0.6 million increase in professional fees, primarily related to intellectual property litigation, and a $0.3 million increase in personnel costs.
Interest income. In the three months ended March 31, 2010, our interest income decreased $0.1 million to $29,000 compared with $0.1 million in the corresponding period of 2009, as a result of lower effective yields, due to prevailing market conditions, partially offset by the impact of higher cash and investment balances.
As of March 31, 2010, we held $238.2 million of cash and cash equivalents. In the three months ended March 31, 2010, cash provided by our operations was $22.2 million, of which the principal components were our net income of $16.1 million and non-cash charges of $4.6 million, as well as a net decrease in operating assets and liabilities of $2.4 million, partially offset by a net increase in deferred taxes of $0.9 million. The net decrease in operating assets and liabilities includes an increase in income taxes payable of $6.1 million, due to the timing of tax payments, a $5.4 million increase in accounts payable and accrued expenses, due to the growth of our business and the timing of disbursements, partially offset by a $7.6 million increase in accounts receivable, due to our increase in revenue, and an increase in other net operating assets and liabilities of $1.5 million.
In the three months ended March 31, 2010, we invested $4.7 million in the purchase of property and capital equipment, primarily for the purchase of an additional building to support the growth of our business. We received $2.4 million from the exercise of stock options and $1.5 million from the tax benefit related to our stock-based compensation plans.
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