Alliance Fiber Optic Products Inc. (AFOP, Financial) filed Quarterly Report for the period ended 2010-11-10.
Alliance Fiber Optic Products Inc. has a market cap of $100.7 million; its shares were traded at around $11.75 with a P/E ratio of 22.1 and P/S ratio of 3.3. AFOP is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Gross Profit. Gross profit increased to $4.7 million, or 35.5% of revenues, for the three months ended September 30, 2010 from $2.3 million, or 32.6% of revenues, for the same period in 2009. Gross profit increased to $11.5 million, or 33.9% of revenues, for the nine months ended September 30, 2010 from $7.0 million, or 31.2% of revenues, for the same period in 2009. For the three and nine months ended September 30, 2010, the higher gross profit was due to the higher utilization of our factories as a result of increased volume shipments to our customers. We expect our gross profit as a percentage of revenues to continue to improve with higher production volumes, which we anticipate will result in improved absorption of overhead expenses. However, decreasing average selling prices will negatively impact our gross profit and may offset any benefits from improved absorption.
General and Administrative Expenses. General and administrative expenses increased to $1.0 million for the three months ended September 30, 2010 from $0.9 million for the same period in 2009. General and administrative expenses increased to $2.9 million for the nine months ended September 30, 2010 from $2.5 million for the same period in 2009.
Income Tax Expense. Income tax expense was approximately $0.25 million and $0.02 million for the three months ended September 30, 2010 and 2009, respectively. Income tax expense was approximately $0.32 million and $0.06 million for the nine months ended September 30, 2010 and 2009, respectively. Income tax expenses increased due to higher net profit for the three months ended September 30, 2010.
Net cash provided by operating activities was $3.3 million for the nine months ended September 30, 2010. Net cash provided by operating activities was primarily due to net income of $4.3 million, an increase in accounts payable and other liabilities of $3.5 million, and contribution from adjustment for non-cash charges, including depreciation and stock based compensation of $1.0 million. These were offset by a $3.1 million increase in accounts receivable and a $2.2 million increase in inventory. Net cash provided by operating activities was $2.2 million for the nine months ended September 30, 2009. The increase in net cash provided by operating activities was primarily due to net income of $1.0 million, a decrease in net inventory of $0.9 million and decrease in accounts receivable of $0.4 million, and contribution from adjustment for non-cash charges, including depreciation and stock based compensation of $1.0 million. These were offset by a $0.9 million decrease in accounts payable and other liabilities.
Cash provided by investing activities was $0.9 million for the nine months ended September 30, 2010. This resulted from $3.9 million in net proceeds from short-term investments and $3.0 million spending on equipment purchases. Cash used in investing activities was $4.3 million for the nine months ended September 30, 2009. This resulted from $3.7 million in net purchases of short-term investments and $0.6 million spending on equipment purchases.
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Alliance Fiber Optic Products Inc. has a market cap of $100.7 million; its shares were traded at around $11.75 with a P/E ratio of 22.1 and P/S ratio of 3.3. AFOP is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Cost of Revenues. Cost of revenues was $8.6 million and $4.7 million for the three months ended September 30, 2010 and 2009, respectively. Cost of revenues as a percentage of revenues decreased to 64.5% for the three months ended September 30, 2010 from 67.4% for the three months ended September 30, 2009. Cost of revenues was $22.3 million and $15.4 million for the nine months ended September 30, 2010 and 2009, respectively. Cost of revenues as a percentage of revenues decreased to 66.0% for the nine months ended September 30, 2010 from 68.8% for the nine months ended September 30, 2009. The lower percentage cost of revenues for the three and nine months ended September 30, 2010 resulted from increased factory utilization due to higher revenues.Gross Profit. Gross profit increased to $4.7 million, or 35.5% of revenues, for the three months ended September 30, 2010 from $2.3 million, or 32.6% of revenues, for the same period in 2009. Gross profit increased to $11.5 million, or 33.9% of revenues, for the nine months ended September 30, 2010 from $7.0 million, or 31.2% of revenues, for the same period in 2009. For the three and nine months ended September 30, 2010, the higher gross profit was due to the higher utilization of our factories as a result of increased volume shipments to our customers. We expect our gross profit as a percentage of revenues to continue to improve with higher production volumes, which we anticipate will result in improved absorption of overhead expenses. However, decreasing average selling prices will negatively impact our gross profit and may offset any benefits from improved absorption.
General and Administrative Expenses. General and administrative expenses increased to $1.0 million for the three months ended September 30, 2010 from $0.9 million for the same period in 2009. General and administrative expenses increased to $2.9 million for the nine months ended September 30, 2010 from $2.5 million for the same period in 2009.
Income Tax Expense. Income tax expense was approximately $0.25 million and $0.02 million for the three months ended September 30, 2010 and 2009, respectively. Income tax expense was approximately $0.32 million and $0.06 million for the nine months ended September 30, 2010 and 2009, respectively. Income tax expenses increased due to higher net profit for the three months ended September 30, 2010.
Net cash provided by operating activities was $3.3 million for the nine months ended September 30, 2010. Net cash provided by operating activities was primarily due to net income of $4.3 million, an increase in accounts payable and other liabilities of $3.5 million, and contribution from adjustment for non-cash charges, including depreciation and stock based compensation of $1.0 million. These were offset by a $3.1 million increase in accounts receivable and a $2.2 million increase in inventory. Net cash provided by operating activities was $2.2 million for the nine months ended September 30, 2009. The increase in net cash provided by operating activities was primarily due to net income of $1.0 million, a decrease in net inventory of $0.9 million and decrease in accounts receivable of $0.4 million, and contribution from adjustment for non-cash charges, including depreciation and stock based compensation of $1.0 million. These were offset by a $0.9 million decrease in accounts payable and other liabilities.
Cash provided by investing activities was $0.9 million for the nine months ended September 30, 2010. This resulted from $3.9 million in net proceeds from short-term investments and $3.0 million spending on equipment purchases. Cash used in investing activities was $4.3 million for the nine months ended September 30, 2009. This resulted from $3.7 million in net purchases of short-term investments and $0.6 million spending on equipment purchases.
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