TQNT » Topics » Gross Profit

This excerpt taken from the TQNT 10-Q filed May 5, 2009.

Gross Profit

Our gross profit as a percentage of revenues decreased to 19.6% for the first quarter of 2009, compared to 34.6% for the first quarter of 2008. The decrease in gross profit was a result of a reduction of channel inventory levels which caused lower factory utilization.

These excerpts taken from the TQNT 10-K filed Mar 2, 2009.

Gross Profit

Our gross profit margin as a percentage of revenues increased to 32.4% in 2008, compared to 31.8% in 2007. The gross profit margin in 2007 included an excess inventory charge of $4.1 million for a single customer. Gross profit margin in 2008 increased by a small percentage due to higher efficiency and utilization rates offset by the unfavorable effect of elevated precious metals prices.

Gross Profit

Gross profit is defined as revenue less cost of goods sold. Cost of goods sold includes direct material, labor, stock-based compensation, and overhead expenses and certain production costs related to non-recurring engineering revenues. In general, we derive a higher gross profit margin on lower volume products for the networks and military markets, such as point-to-point radios and satellite systems, whereas our handsets products are typically higher volume, more price sensitive and generally have lower margins. In 2007, our gross profit margin as a percentage of revenues was 31.8% as compared to 30.8% in 2006. The increase in gross margin in 2007 was primarily the result of improved capacity utilization and shorter lead times, which produced a higher absorption of fixed overhead costs.

Gross Profit

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Our gross profit margin as a percentage of revenues increased to 32.4% in 2008, compared to 31.8% in 2007. The gross profit margin in 2007 included an
excess inventory charge of $4.1 million for a single customer. Gross profit margin in 2008 increased by a small percentage due to higher efficiency and utilization rates offset by the unfavorable effect of elevated precious metals prices.

Gross Profit

FACE="Times New Roman" SIZE="2">Gross profit is defined as revenue less cost of goods sold. Cost of goods sold includes direct material, labor, stock-based compensation, and overhead expenses and certain production costs related to non-recurring
engineering revenues. In general, we derive a higher gross profit margin on lower volume products for the networks and military markets, such as point-to-point radios and satellite systems, whereas our handsets products are typically higher volume,
more price sensitive and generally have lower margins. In 2007, our gross profit margin as a percentage of revenues was 31.8% as compared to 30.8% in 2006. The increase in gross margin in 2007 was primarily the result of improved capacity
utilization and shorter lead times, which produced a higher absorption of fixed overhead costs.

This excerpt taken from the TQNT 10-Q filed Nov 6, 2008.

Gross Profit

Our gross profit margin as a percentage of revenues increased to 33.2% for the nine months ended September 30, 2008, compared to 30.0% for the nine months ended September 30, 2007. The gross profit margin for the nine months ended September 30, 2007 included an excess inventory charge of $4.1 million. Gross profit margin for the nine months ended September 30, 2008 increased by a small percentage due to higher efficiency and utilization rates offset by an unfavorable impact of purchasing precious metals targets at high prices and selling the reclaimed target at lower prices.

This excerpt taken from the TQNT 10-Q filed Aug 6, 2008.

Gross Profit

Our gross profit margin as a percentage of revenues increased to 34.6% in the six months ended June 30, 2008, compared to 28.8% in the six months ended June 30, 2007. The increase in gross profit margin was primarily due to continued yield improvements across the portfolio. In addition, the gross margin for the second quarter of 2007 included an excess inventory charge of $4.1 million.

This excerpt taken from the TQNT 10-Q filed May 6, 2008.

Gross Profit

Our gross profit as a percentage of revenues increased to 34.6% in the first quarter of 2008, compared to 31.1% in the first quarter of 2007. We were able to improve our gross margin in the first quarter of 2008 compared to the first quarter of 2007 primarily as a result of improved capacity utilization and a favorable product mix.

 

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These excerpts taken from the TQNT 10-K filed Mar 11, 2008.

Gross Profit

In 2006, our gross profit margin as a percentage of revenues was 30.8% as compared to 28.6% in 2005. The increase in gross margin in 2006 was primarily the result of improved capacity utilization and shorter lead times, which produced a higher absorption of fixed overhead costs but was offset in part by the implementation of SFAS No. 123(R) which requires us to expense equity compensation. The gross margin in 2006 was negatively impacted by planned changes in our product flow to enable future demand, qualification of alternative suppliers, the production of new products and other factors. These factors negatively affected our manufacturing yields in 2006, resulting in reduced margins.

Gross Profit

FACE="Times New Roman" SIZE="2">Gross profit is defined as revenue less cost of goods sold. Cost of goods sold includes direct material, labor, stock-based compensation, and overhead expenses and certain production costs related to non-recurring
engineering revenues. In general, we derive a higher gross profit margin on lower volume products for the networks and military markets, such as point-to-point radios and satellite systems, whereas our handsets products are typically higher volume,
more price sensitive and generally have lower margins. In 2007, our gross profit margin as a percentage of revenues was 31.8% as compared to 30.8% in 2006. The increase in gross margin in 2007 was primarily the result of improved capacity
utilization and shorter lead times, which produced a higher absorption of fixed overhead costs.

 


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This excerpt taken from the TQNT 10-Q filed Nov 6, 2007.

Gross Profit

Our gross profit margin as a percentage of revenues decreased to 30.0% for the nine months ended September 30, 2007, compared to 31.4% for the nine months ended September 30, 2006. The gross profit in the nine months ended September 30, 2007 and 2006 included relatively flat stock-based compensation charges in the amounts of $2.1 million and $2.3 million, respectively. Therefore, the decrease in our gross profit was primarily due to excess inventory charges of $4.1 million in the second quarter of 2007, primarily due to reduced demand for a single device from a specific customer.

This excerpt taken from the TQNT 10-Q filed Aug 7, 2007.

Gross Profit

Our gross profit margin as a percentage of revenues decreased to 28.8% in the six months ended June 30, 2007, compared to 31.2% in the six months ended June 30, 2006. The gross profit in the six months ended June 30, 2007 and 2006 included stock-based compensation charges in the amount of $1.3 million and $1.6 million, respectively. The decrease in gross profit margin was primarily due to $4.1 million in excess inventory charges in the six months ended June 30, 2007 primarily due to reduced demand for a single device from a specific customer.

This excerpt taken from the TQNT 10-Q filed May 9, 2007.

Gross Profit

Our gross profit margin as a percentage of revenues increased to 31.1% in the first quarter of 2007, compared to 30.3% in the first quarter of 2006. The profit margin in the first quarter of 2007 included stock-based compensation charges in the amount of $0.6 million, as compared to $0.8 million in the first quarter of 2006. We were able to improve our gross margin in the first quarter of 2007 as compared to the first quarter of 2006, primarily from improved capacity utilization and handset module yields.

This excerpt taken from the TQNT 10-K filed Mar 15, 2007.

Gross Profit

Our gross profit margin as a percentage of revenues decreased to 28.6% in 2005, compared to 31.8% in 2004. The decrease was primarily due to lower overall sales in 2005, resulting in less absorption of fixed overhead costs, combined with lower average selling prices on products such as SAW filters and duplexers and lower yields from some of our new products. The effect was most evident in the in the fourth quarter of 2005 as we reported a gross profit margin of 28.7% during the quarter, compared to 31.4% in the third quarter of 2005 and 29.8% in the fourth quarter of 2004.

This excerpt taken from the TQNT 10-Q filed Nov 9, 2006.

Gross Profit

 

Our gross profit margin as a percentage of revenues increased to 31.4% for the nine months ended September 30, 2006, compared to 28.6% for the nine months ended September 30, 2005. The profit margin for nine months ended September 30, 2006 included the effect of stock-based compensation charges resulting from the adoption of SFAS No. 123(R) on January 1, 2006, which had a negative impact on our gross margin of approximately 80 basis points. Despite the negative impact of stock-based compensation charges, we were still able to improve our gross margin in the nine months ended September 30, 2006 as compared to the nine months ended September 30, 2005, primarily from improved capacity utilization, resulting in higher absorption of fixed overhead costs, combined with yield improvements and the favorable impact of higher volumes of new products with higher margins.

 

This excerpt taken from the TQNT 10-Q filed Aug 8, 2006.

Gross Profit

 

Our gross profit margin as a percentage of revenues increased to 31.2% in the six months ended June 30, 2006, compared to 27.0% in the six months ended June 30, 2005. The profit margin in the six months ended June 30, 2006 included the effect of stock-based compensation charges resulting from the adoption of SFAS No. 123(R) on January 1, 2006, which had a negative impact on our gross margin of approximately 90 basis points. Despite the negative impact of stock-based compensation charges, we were still able to improve our gross margin in 2006 as compared to 2005, primarily from improved capacity utilization, resulting in higher absorption of fixed overhead costs, combined with continuous yield improvements and the favorable impact of new products.

 

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This excerpt taken from the TQNT 10-Q filed May 10, 2006.

Gross Profit

Our gross profit margin as a percentage of revenues increased to 30.3% in the first quarter of 2006, compared to 25.9% in the first quarter of 2005. The profit margin for the first quarter of 2006 included the effect of stock-based compensation charges of $0.8 million resulting from the adoption of SFAS No. 123(R) which had a negative impact on our gross margin of approximately 80 basis points. The increase from the first quarter of 2005 was primarily due to improved capacity utilization, resulting in higher absorption of fixed overhead costs.

This excerpt taken from the TQNT 10-K filed Mar 16, 2006.

Gross Profit

Our gross profit margin as a percentage of revenues remained flat in 2004 at 31.8% as compared to 2003. Our margins were partially improved by increased sales of products for the base station market which had higher gross profit margins than our consumer driven products such as wireless phones. This increase was offset by higher fixed costs in 2004 as compared to 2003, including the amortization of intangible assets acquired in the Infineon acquisition.

 

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This excerpt taken from the TQNT 10-Q filed Nov 8, 2005.

Gross Profit

 

Our gross profit margin as a percentage of revenues decreased to 28.6% in the first nine months of 2005, compared to 32.4% in the comparable period of 2004. The decrease was primarily due to lower overall sales, resulting in less absorption of fixed overhead costs and lower average selling prices. In addition, the results from the first half of 2004 included certain adjustments for warranty and other reserves that were a benefit to gross margin and the 2005 results include our TFR operation and DARPA contract revenue, which has low margins. Offsetting this in part was a $1.9 million benefit to gross margin from the settlement of an outstanding credit memo, which had expired and was closed during the first half of 2005, prohibiting additional claims.

 

This excerpt taken from the TQNT 10-Q filed Aug 8, 2005.

Gross Profit

Our gross profit margin as a percentage of revenues decreased to 29.1% in the first six months of 2005, compared to 34.8% in the comparable period of 2004. The decrease was primarily due to lower overall sales, resulting in less absorption of fixed overhead costs and lower average selling prices on SAW filters. In addition, the results from the first half of 2004 included certain adjustments for warranty and other reserves that were a benefit to gross margin. Offsetting this in part was a $1.9 million benefit to gross margin from the settlement of an outstanding credit memo, which had expired and was closed during the first half of 2005, prohibiting additional claims.

This excerpt taken from the TQNT 10-Q filed May 11, 2005.

Gross Profit

Gross profit is defined as revenue less cost of goods sold. Cost of goods sold includes direct material, labor and overhead expenses and certain production costs related to non-recurring engineering revenue. In general, we derive a higher gross profit margin on lower volume products for base stations, point-to-point radios, and satellite systems, whereas products for wireless phones and WLAN markets are higher volume, price sensitive and generally lower margin products. Our gross profit margin as a percentage of revenue decreased to 27.5% in the first quarter of 2005, compared to 35.4% in the first quarter of 2004. The decrease was primarily due to lower overall sales resulting in less absorption of fixed overhead costs, lower average selling prices on SAW filters, and the fact that the results for the first quarter of 2004 included a $1.3 million benefit from the reclaim of platinum embedded in equipment that did not recur in the first quarter of 2005. In addition, the results in the first quarter of 2004 included certain adjustments for warranty and other reserves that were a benefit to gross margin whereas in the first quarter of 2005, we wrote off $0.8 million of excess and obsolete inventory. All of these factors are detrimental to the first quarter 2005 gross margin compared to the first quarter of 2004. Offsetting this in part is a $1.9 million benefit to gross margin from the settlement of an outstanding credit memo which had expired and was closed during the quarter, prohibiting additional claims.

This excerpt taken from the TQNT 10-K filed Mar 15, 2005.

Gross Profit

Gross profit decreased 8.5% to $87.0 million in 2003 from $95.1 million in 2002. Our gross profit also decreased as measured as a percentage of revenues, from 35.6% in 2002 to 27.9% in 2003. This decline in our gross profitability was attributable primarily to the following factors: excessive cost structure and an extremely competitive pricing environment in the optoelectronics business we acquired from Agere in early January 2003, continued underutilization of our Oregon and Texas wafer fabrication plants, and lower prices for our products for wireless phones and base stations.

As of the end of 2003, our Oregon GaAs fabrication facility was operating at only 35% utilization, our Texas fabrication facility was operating at less than 30% utilization, and our optoelectronics manufacturing facility in Pennsylvania was operating at less than 10% of its capacity. Our SAW filter factories were operating at over 80% utilization as of the end of 2003. During 2003, we implemented several measures to reduce our cost and capacity levels to more closely match demand. We reduced ongoing operating expenses by approximately $1.2 million by disposing of non-strategic elements of the optoelectronics business acquired from Agere, saved approximately $0.9 million by transferring the manufacturing associated with the products we acquired from Infineon to our fabrication facility in Oregon, saved approximately $2.0 million by reducing work schedules, and reduced operating expenses by approximately $0.8 million by moving the majority of the assembly and test operations associated with our optoelectronics products in Pennsylvania to our plant in Matamoros, Mexico. Other efforts aimed at improving utilization of our manufacturing facilities included shipping a record number of 150mm GaAs wafers from our Oregon fabrication facility and record yields in our Pennsylvania and Texas fabrication facilities.

Most of the markets in which we operate are highly competitive and characterized by intense price pressure. The average selling prices of many of our products decreased during 2003. Our strategy for maintaining profitability under these conditions is to maintain tight control of our spending, implementing measures to maintain the proper level of capacity such as those described above, and continuing to aggressively develop new products.

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