MDB Capital (7/25/08)
Record Q2:FY2008 revenue reported yesterday of $15.5 mm vs. $12.3mm +9% sequentially / +26% yoy, led by robust integrated product sales of $4.3 mm +173% yoy and strong contribution from new products +52% sequentially. Favorable mix shift continues as integrated products now stand at 28% of revenue vs. 16% yoy and new product contribution at 23%. On the call, management expects this trend to continue in H2:08.
For Q2, 53% gross margins, 14% S&M were in-line with our model,
higher R&D, lower G&A combined to deliver better-than-expected 11% net margins in meeting our GAAP EPS estimate of $0.03 vs. $0.01 +300% yoy. Ex-stock-based compensation, non-GAAP cash EPS of $0.06 vs. $0.03 +100% yoy met our estimate and ahead of consensus by $0.01. Q2 EBITDA was $2.5 mm for 16% EBITDA margins. EBITDA growth continues to outpace revenue growth +67% vs +26% yoy.
In Q2, units shipped were 21.3 mm vs. 16.5 mm in Q1, ASPs $0.71 from $0.84 reflecting strong ramp in printer consumables. New product development remains ahead of plan. 2 / 4 MB products beginning to contribute meaningfully to revenue, doubling sequentially from Q1.
The company has executed solidly against its stated operating targets with 6 quarters of sequential revenue growth. Based on continued momentum in integrated product sales, customer design activity and revenue visibility into the second half of the year, management raised FY2008 revenue guidance to 26% to 29% growth over FY2007 revenue of $51.1 mm, up from previous guidance of 24% to 28% growth targets.
No changes were made to prior operating model guidance of 53%-54% gross margins, 20%-22% R&D, 13%-14% S&M, 10% G&A and net
margins of 10%-12%. As these targets are consistent with our model, there are no changes to our H2:08 revenue and GAAP/non-GAAP estimates at this time.
Ramtron continues to be one of the best managed micro-cap companies in our universe and one of a very small handful of specialty memory companies with >25% revenue growth, >50% gross margins, >50% EPS growth and >20% ROIC. Trading at only 12.1x FY08 EPS est. of $0.29 and 8.3x FY09 EPS est. of $0.42, we reiterate our Buy Rating and $8.00 Price Target derived by 1x growth rate or 24x our FY2009 non-GAAP EPS estimate of $0.42 and applying a 20% discount rate. |
