TheStreet: Do you see the demand now for the gadgets -- the extensive desire to get as much as you can out of these gadgets. Is that what is driving so much of this?
What's happening is that this new generation of platforms such as smartphones, iPads and the like is creating tremendous demand for all kinds of content over broadband networks; be it wireless or wireline including of course social networking-type environments like Facebook and others. We're absolutely seeing a significant surge in demand for communications infrastructure chips such as the ones that we develop.
The Street: Your revenue has been growing quarter-over-quarter. What do you see foresee for yourself for the rest of the year?
We expect that we'll continue to grow and drive significant improvement, operating leverage over high gross margins. Our company's characterized by one of the industry's highest gross margins, 64% plus. That coupled with significant operating expenditure discipline has allowed us not only to turn profitable, but also to deliver significant operating leverage and significant increase in earnings per share, including a record fiscal second quarter that we just reported two weeks ago of 15 cents eps [earnings per share].
The Street: How are the troubles in Greece going to affect your company? We're seeing the Euro come down -- a lot of concern about Europe and weakness.
Europe for us represents roughly 9% of our revenues. So Europe in total is not a very large component of our business. Greece is so small it is almost immeasurable. However, to your point there is concern with contagion -- the weakness that we're seeing in Greece could spread to other economies in Europe and obviously affect demand in that part of the world. Again, Europe is roughly 9% of our revenues. Hopefully, there will not be contagion in Europe, but at this point even if it happens it will not be significant for our company.
The Street: We're hearing China is trying to slow things down are you hearing anything along that line?
Clearly in China the government put in place significant economic stimulus over the course of late 2008 and early 2009 to help expedite the process of economic recovery in China and to your point, the government now is tapping the brakes a little bit to kind of take that stimulus out of the economy.
Where Mindspeed has focused is really on communications technologies that are critical to the IT and communications infrastructure of china. These are not particularly speculative technologies these are critical underpinnings of economic growth of china. We're actually seeing significant continued expenditure in those areas that directly benefit Mindspeed and our products.
Edited for length and clarity.
Written by Debra Borchardt in New York.