STOCKHOLM (BRAIN) — MIPS reported first-quarter net sales increased 30% year-over-year with its Sports sub-category that includes bike helmets rising 24%.
Net sales for the quarter were SEK 151 million ($16.3 million) compared with SEK 116 million at the same time last year; the Sports sub-category totaled SEK 124 million, compared with SEK 100 million. It was the 10th consecutive quarter of Sports growth.
While the European Sports market was primarily responsible for the first-quarter growth, the U.S. market increased in the past year because of bicycle commuting, according to MIPS. Overall, the North America market first-quarter net sales increased 43% from SEK 63 million to SEK 90 million.
Newly acquired body and head impact protection brand Koroyd contributed 18% growth in the quarter.
"Our scalable business model meant that our underlying profitability improved significantly in the period," said CEO and President Max Strandwitz. "However, the impact of the strong Swedish krona and legal costs continued to impact negatively in the quarter."
Strandwitz said MIPS has chosen to enter a patent dispute involving one of its U.S. customers that the company did not name. In an email from Strandwitz to BRAIN, he said because it concerns a customer relationship and product, all details are confidential. MIPS is not a party to the lawsuit, but because it concerns intellectual property rights, it will collaborate with its customer. Legal costs for the quarter were SEK 7 million.
Net income was SEK 29 million for the quarter, up 53% from SEK 19 million year-over-year. Earnings per share increased from SEK 0.71 to SEK 1.09.
According to Strandwitz, the war in the Middle East has had little impact.
"At this point, it is difficult to assess the potential outcome of the conflict and the impact it may have on consumer demand going forward. We have not yet seen any material impact on the supply chain due to the ongoing conflict, primarily because MIPS Group's customers are responsible for shipping costs associated with delivery. Neither have we yet experienced any actual price increases for the materials we use, but many of our suppliers have indicated that a prolonged conflict will result in higher prices. If cost increases become substantial for MIPS, we intend to pass these costs on to customers."
Wednesday, MIPS announced Karin Rosenthal will step down from her position as CFO. Rosenthal will remain in her role until Oct. 22 to help with the recruitment of her successor.
MIPS' corporate headquarters is in Stockholm, and its stock is traded on the Stockholm Stock Exchange under the MIPS symbol. Stock quote at Marketwatch.com.
