Hittite Microwave Corporation (NASDAQ:HITT) today announced that it revised its financial results for the fourth quarter ended December 31, 2013 to correct an error in its accounting for foreign exchange losses related to an intra-company loan. The impact to the company's results of operations from the correction of the error was to increase other expense by $0.9 million and to reduce net income by a corresponding amount. Revenue, gross profit and income from operations for the quarter remain unchanged.
Giving effect to the correction, net income for the quarter was $15.6 million, or $0.50 per diluted share, rather than $16.5 million, or $0.53 per diluted share, as previously reported on February 6, 2014. For the full year 2013, the company's revised net income was $70.0 million, or $2.25 per diluted share, rather than $70.9 million, or $2.28 per diluted share, as previously reported. Revised financial results for the fourth quarter and year ended December 31, 2013 accompany this release.
The error related to a loan by the company to its subsidiary in Norway that is denominated in Norwegian kroner. In its previously reported results, the company had recorded net foreign exchange losses related to this loan as a component of foreign currency translation losses within stockholders' equity. In preparing to file its Annual Report on Form 10-K for 2013, the company concluded that such net foreign exchange losses should instead have been classified within other expense. The loan has been substantially repaid in the first quarter of 2014, and accounting for the loan is not expected to have a material impact on future financial results.
About Hittite Microwave Corporation
Hittite Microwave Corporation is an innovative designer and manufacturer of high performance integrated circuits, or ICs, modules, subsystems and instrumentation for technically demanding digital, RF, microwave and millimeterwave applications covering DC to 110 GHz. The company's standard and custom products apply analog, digital and mixed-signal semiconductor technologies, which are used in a wide variety of wireless & wired communication and sensor applications for the automotive, broadband, cellular infrastructure, fiber optic, microwave & millimeterwave communications, military, space and test & measurement markets. The company is headquartered in Chelmsford, Massachusetts.
"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, net income 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: the impact of macro-economic conditions on demand for our products; our ability to effectively manage our costs and expenses in response to fluctuations in our growth rate; market acceptance of our new products; our ability to assess accurately our end market requirements; our success in maintaining the business of our significant customers; our ability to keep pace with new semiconductor processes; risks related to our dependence on third-party suppliers; regulatory, operational, financial and political risks inherent in operating internationally; competition within the semiconductor industry; product returns and warranty claims; the possibility that intellectual property claims initiated by or against us could be costly or have adverse outcomes; and other risks and uncertainties that are discussed under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission.
Hittite Microwave Corporation | |||||||||||
Condensed Consolidated Balance Sheets (unaudited) | |||||||||||
(In thousands) | |||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 118,600 | $ | 269,157 | |||||||
Marketable securities | 353,947 | 140,069 | |||||||||
Accounts receivable, net | 36,186 | 30,921 | |||||||||
Inventories | 76,020 | 65,926 | |||||||||
Income taxes receivable | 5,991 | 1,566 | |||||||||
Prepaid expenses and other current assets | 2,997 | 2,761 | |||||||||
Deferred taxes | 13,399 | 14,988 | |||||||||
Total current assets | 607,140 | 525,388 | |||||||||
Property and equipment, net | 39,433 | 36,294 | |||||||||
Deferred taxes | 1,725 | 709 | |||||||||
Other assets | 8,190 | 11,172 | |||||||||
Total assets | $ | 656,488 | $ | 573,563 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 4,971 | $ | 3,205 | |||||||
Accrued expenses | 10,386 | 12,889 | |||||||||
Income taxes payable | 193 | 584 | |||||||||
Deferred revenue and customer advances | 6,735 | 4,699 | |||||||||
Total current liabilities | 22,285 | 21,377 | |||||||||
Long-term income taxes payable | 5,839 | 412 | |||||||||
Deferred taxes | 232 | 446 | |||||||||
Other liabilities | 103 | 124 | |||||||||
Total liabilities | 28,459 | 22,359 | |||||||||
Total stockholders' equity | 628,029 | 551,204 | |||||||||
Total liabilities and stockholders' equity | $ | 656,488 | $ | 573,563 |
Hittite Microwave Corporation | ||||||||||||||||||
Condensed Consolidated Statements of Operations (unaudited) | ||||||||||||||||||
(In thousands except per-share data) | ||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
Revenue | $ | 68,775 | $ | 68,515 | $ | 273,815 | $ | 264,395 | ||||||||||
Cost of revenue | 22,502 | 18,296 | 79,040 | 69,415 | ||||||||||||||
Gross profit | 46,273 | 50,219 | 194,775 | 194,980 | ||||||||||||||
67.3 | % | 73.3 | % | 71.1 | % | 73.7 | % | |||||||||||
Operating expenses: | ||||||||||||||||||
Research and development | 11,823 | 12,449 | 49,764 | 49,202 | ||||||||||||||
Sales and marketing | 6,105 | 6,319 | 23,516 | 23,966 | ||||||||||||||
General and administrative | 3,364 | 3,468 | 13,855 | 14,598 | ||||||||||||||
Total operating expenses | 21,292 | 22,236 | 87,135 | 87,766 | ||||||||||||||
Income from operations | 24,981 | 27,983 | 107,640 | 107,214 | ||||||||||||||
36.3 | % | 40.8 | % | 39.3 | % | 40.6 | % | |||||||||||
Interest and other income (expense), net | (1,015 | ) | 68 | (682 | ) | 57 | ||||||||||||
Income before income taxes | 23,966 | 28,051 | 106,958 | 107,271 | ||||||||||||||
Provision for income taxes | 8,360 | 10,337 | 36,965 | 38,702 | ||||||||||||||
Net income | $ | 15,606 | $ | 17,714 | $ | 69,993 | $ | 68,569 | ||||||||||
Earnings per share: | ||||||||||||||||||
Basic | $ | 0.51 | $ | 0.58 | $ | 2.29 | $ | 2.26 | ||||||||||
Diluted | $ | 0.50 | $ | 0.57 | $ | 2.25 | $ | 2.22 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic | 30,672 | 30,401 | 30,609 | 30,359 | ||||||||||||||
Diluted | 31,174 | 31,003 | 31,093 | 30,895 |
Hittite Microwave Corporation
William W. Boecke, 978-250-3343
V.P.
and Chief Financial Officer