"We had a strong third quarter with growth in both revenue and earnings, compared with a year ago," said Stephen Daly, President and CEO. "During the quarter we added 26 new products across six of our 10 product lines, increasing our portfolio to 376 standard products. In July, we achieved a strategic milestone in successfully completing our initial public offering. On August 30, we acquired Q-Dot, an analog and mixed-signal research and development company with high speed data acquisition integrated circuit and system design expertise, which we will integrate into our long term product strategy."
Revenue from customers in the United States was $12.0 million, or 57% of the company's total revenue, and revenue from customers outside the United States was $9.2 million, or 43% of total revenue, compared with 49% and 51%, respectively, for the third quarter of 2004. Gross margin for the third quarter of 2005 was 69.5%, compared with 64.4% for the third quarter of 2004 and 66.4% for the second quarter of 2005. The year-over-year gross margin improvement was primarily the result of lower manufacturing costs. Operating expenses for the third quarter of 2005 were $7.0 million, including a charge of $1.8 million, or $0.04 per diluted share, for in-process research and development related to the acquisition of Q-Dot. Cash and cash equivalents at the end of the third quarter were $52.9 million, an increase of $21.6 million from the second quarter of 2005, after giving effect to the cash dividend paid during the third quarter to shareholders of record on June 24, 2005 and receipt of the net proceeds from the company's initial public offering in July 2005.
The company currently expects revenue for the fourth quarter ending December 31, 2005 to be in the range of $21.5 million to $22.5 million and net income to be in the range of $5.4 million to $5.7 million, or $0.18 to $0.19 per diluted share.
Webcast and Taped Replay
The company will host a conference call to discuss its financial results at 5:00 p.m. EDT on Thursday, October 27, 2005. A live webcast of the call will be available online on the Hittite Microwave website. To listen to the live webcast, go to the Investor Relations page of the Hittite Microwave web site at www.hittite.com and click on the webcast icon located under the Events Calendar. A telephonic replay of the call also will be available for one week after the live call by dialing 719-457-0820, access code 4461022. Following the call, a webcast replay will also be available by visiting the Investor Relations page at www.hittite.com.
About Hittite Microwave Corporation
Hittite Microwave is an innovative designer and developer of high performance integrated circuits, or ICs, modules and subsystems for technically demanding radio frequency, or RF, microwave and millimeterwave applications. Products include amplifiers, attenuators, frequency dividers and detectors, frequency multipliers, mixers and converters, modulators, oscillators, sensors and switches. Hittite's products are used in a variety of applications and end markets including automotive, broadband, cellular infrastructure, fiber optic, microwave and millimeterwave communications, military, space, and test and measurement. The company utilizes radio frequency integrated circuits (RFIC), monolithic microwave integrated circuits (MMIC), multi-chip modules (MCM) and microwave integrated circuit (MIC) technologies. The company is headquartered in Chelmsford, MA.
"Safe Harbor Statement" under the Private Securities Litigation Reform Act of 1995
Statements in this press release regarding Hittite Microwave Corporation that do not relate to historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include, but are not limited to, any statements regarding our expectations as to future levels of revenue and earnings per share. Readers are cautioned that these forward-looking statements are subject to risks and uncertainties and are only predictions and actual future events and results may differ materially from these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: market acceptance of our new products; our ability to assess market requirements accurately; our success in maintaining the business of our significant customers; our ability to keep pace with new semiconductor processes; regulatory, operational, financial and political risks inherent in operating internationally; competition within the semiconductor industry; product returns and warranty claims; our ability to manage our growth and costs effectively; protection of our intellectual property; the growth and fiscal strength of our end markets; and other risks and uncertainties that are iscussed under "Risk Factors" in our Registration Statement on Form S-1, File Number 333-124664, and in our Quarterly Report on Form 10-Q, each as filed with the Securities and Exchange Commission.
Hittite Microwave Corporation Consolidated Balance Sheet (In thousands) Sept. 30, 2005 Dec. 31, 2004 (unaudited) (audited) Assets Current assets: Cash and cash equivalents $52,860 $24,548 Accounts receivable, net 13,077 10,119 Inventory, net 4,592 5,437 Deferred costs 348 276 Prepaid expenses and other current assets 646 291 Deferred taxes 1,188 1,188 Total current assets 72,711 41,859 Property and equipment, net 13,122 13,225 Other assets 565 147 Total assets $86,398 $55,231 Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity Current Liabilities: Current portion of long-term debt $366 $366 Accounts payable 1,543 2,244 Accrued expenses 3,249 2,689 Taxes payable 120 630 Deferred revenue and customer advances 3,123 2,939 Total current liabilities 8,401 8,868 Long-term debt 305 579 Deferred taxes 1,470 1,470 Total liabilities 10,176 10,917 Redeemable convertible preferred stock -- 20,591 Stockholders' equity: Common stock 286 223 Additional paid-in capital 74,201 23 Accumulated other comprehensive income (loss) (5) 57 Deferred compensation (416) - Retained earnings 2,251 23,420 Treasury stock (95) - Total stockholders' equity 76,222 23,723 Total liabilities, redeemable convertible preferred stock and stockholders' equity $86,398 $55,231 Hittite Microwave Corporation Consolidated Statement of Operations (In thousands except per-share data) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 (unaudited)(unaudited)(unaudited)(unaudited) Revenue $21,186 $15,986 $57,949 $44,726 Cost of revenue 6,466 5,694 18,852 16,575 Gross profit 14,720 10,292 39,097 28,151 69.5% 64.4% 67.5% 62.9% Operating expenses: Research and development 2,727 1,807 7,649 5,392 Selling and marketing 1,855 1,825 6,302 5,625 General and administrative 695 959 2,181 2,245 In-process research and development 1,778 -- 1,778 -- Total operating expenses 7,055 4,591 17,910 13,262 Income from operations 7,665 5,701 21,187 14,889 36.2% 35.7% 36.6% 33.3% Interest and other income, net 332 33 636 87 Income before income taxes 7,997 5,734 21,823 14,976 Provision for income taxes 2,879 2,063 7,858 5,390 Net income 5,118 3,671 13,965 9,586 Accretion on redeemable convertible preferred stock 120 381 944 1,144 Net income attributable to common stockholders $4,998 $3,290 $13,021 $8,442 Basic earnings per share attributable to common stockholders $0.18 $0.13 $0.51 $0.34 Shares used in calculation of basic earnings per share (Note 1) 26,908 22,246 23,914 22,239 Diluted earnings per share attributable to common stockholders $0.17 $0.12 $0.47 $0.32 Shares used in calculation of diluted earnings per share (Note 1) 28,506 23,894 25,599 23,578 Note 1: All share and per share data give effect to a 1.874-for-one stock split effected on June 29, 2005.