Skyworks Solutions Inc. Reports Operating Results (10-Q)
Skyworks Solutions Inc. has a market cap of $5.84 billion; its shares were traded at around $35.54 with a P/E ratio of 26.8 and P/S ratio of 5.5. Hedge Fund Gurus that owns SWKS: Lee Ainslie of Maverick Capital, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns SWKS: Pioneer Investments, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:The provision for income taxes increased 24.0% to $15.9 million ($15.2 million and $0.7 million for United States and foreign income taxes, respectively) for the quarter ended December 31, 2010 as compared to the corresponding period in fiscal 2010.
Cash provided from operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities. For the quarter ended December 31, 2010 we generated $64.8 million in cash flow from operations, an increase of $11.8 million when compared to the $53.0 million generated in the corresponding period in fiscal 2010. For the quarter ended December 31, 2010, net income increased by $32.9 million to $60.9 million when compared to the corresponding period in fiscal 2010. The increase in net income for the quarter was primarily offset by changes in non-cash items and by our investments in working capital as a result of higher business activity. Specifically, the working capital increase was due to the increases in accounts receivable and inventory of $25.6 million and $17.0 million, respectively, which was partially offset by an increase in accounts payable of $8.6 million during the fiscal quarter.
Cash flow from investing activities consists primarily of capital expenditures and acquisitions. We had net cash outflows of $37.0 million for the quarter ended December 31, 2010, compared to $15.7 million for the corresponding period in fiscal 2010. The increase is primarily due to higher capital expenditures during the quarter.
Cash flows from financing activities consist primarily of cash transactions related to debt and equity. During the quarter ended December 31, 2010, we had net cash outflows of $31.0 million, compared to $5.2 million for the corresponding period in fiscal 2010. Specifically, we had the following significant uses of cash:
Cash and cash equivalent balances decreased to $450.0 million at December 31, 2010 from $453.3 million at October 1, 2010. Our net cash position, after deducting our debt, increased by $41.0 million to $425.6 million at December 31, 2010 from $384.6 million at October 1, 2010. Based on our historical results of operations, we expect our existing sources of liquidity, together with cash expected to be generated from operations, will be sufficient to fund our research and development, capital expenditures, debt obligations, working capital and other cash requirements for at least the next 12 months. However, we cannot be certain that the capital required to fund these expenses will be available in the future. In addition, any strategic investments and acquisitions that we may make may require additional capital resources. If we are unable to obtain sufficient capital to meet our capital needs on a timely basis and on favorable terms, our business and operations could be materially adversely affected.
Our long-term debt at December 31, 2010 consists of $26.7 million aggregate principal amount of 2007 Convertible Notes. These 2007 Convertible Notes contain cash settlement provisions, which permit the application of the treasury stock method in determining potential share dilution of the conversion spread should the share price of the Companys common stock exceed $9.52. It has been the Companys historical practice to cash settle the principal and interest components of convertible debt instruments, and it is our intention to continue to do so in the future, including settlement of the 2007 Convertible Notes due in March 2012.
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