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Avago Technologies Ltd. Reports Operating Results (10-Q)

March 10, 2011 | About:
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10qk

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Avago Technologies Ltd. (AVGO) filed Quarterly Report for the period ended 2011-01-30.

Avago Technologies Ltd. has a market cap of $7.52 billion; its shares were traded at around $31 with a P/E ratio of 12.9 and P/S ratio of 3.5. The dividend yield of Avago Technologies Ltd. stocks is 0.2%.

Highlight of Business Operations:

Research and development. Research and development expense was $73 million for the quarter ended January 30, 2011, compared to $64 million for the quarter ended January 31, 2010, an increase of $9 million or 14%. As a percentage of net revenue, research and development expenses decreased slightly to 13% for the quarter ended January 30, 2011 from 14% for the quarter ended January 31, 2010. The increase in absolute dollars was primarily attributable to $3 million in additional research and development project support materials and supplies, a $2 million increase in salary expense resulting from our annual salary review and adjustment, a $1 million increase in outside services expense and $1 million increase in share-based compensation expense due to grants of share-based awards at higher fair market values, partially offset by a $1 million reduction of incentive compensation expense related to our final payments of employee bonuses for fiscal year 2010 as compared to the quarter ended January 31, 2010.

Selling, general and administrative. Selling, general and administrative expense was $50 million for the quarter ended January 30, 2011 compared to $46 million for the quarter ended January 31, 2010, an increase of $4 million or 9%. As a percentage of net revenue, selling, general and administrative decreased slightly to 9% for the quarter ended January 30, 2011 compared to 10% for the quarter ended January 31, 2010. The increase in absolute dollars was primarily attributable to a $2 million increase in salary expense resulting from our annual salary review and adjustment and $2 million increase in legal expenses related to offensive litigation matters initiated in fiscal year 2010, partially offset by a $2 million reduction of incentive compensation expense related to our final payments of employee bonuses for fiscal year 2010 as compared to the quarter ended January 31, 2010.

Net cash provided by operating activities during the quarter ended January 30, 2011 was $67 million. The net cash provided by operating activities was principally due to net income of $119 million and non-cash charges of $59 million, partially offset by changes in operating assets and liabilities of $111 million. The non-cash charges of $59 million included $41 million for depreciation and amortization, $7 million of share-based compensation and $5 million of debt issuance costs written off in connection with our debt redemption. Net income was also reduced by $14 million for the premium paid on our debt redemption which is included in the $19 million loss on extinguishment of debt in the unaudited condensed consolidated statement of operations.

Current liabilities decreased to $237 million at the end of the first quarter of fiscal year 2011 from $565 million at the end of fiscal year 2010, mainly due to the redemption of $230 million of long-term debt that was classified as current at October 31, 2010 (as it had been irrevocably called for redemption before the fiscal year end) and decreases in accounts payable, employee compensation and benefits accruals and accrued interest. Accounts payable decreased to $156 million from $198 million at the end of fiscal year 2010 mainly due to timing of disbursements. Employee compensation and benefits decreased to $51 million from $82 million at fiscal year 2010 mainly due to payments made under our employee bonus plan in respect of fiscal year 2010 performance. Accrued interest decreased to less than $1 million from fiscal year 2010 mainly due to the debt redemption and semi-annual interest payments made during the first quarter of fiscal year 2011.

Net cash provided by operating activities during the quarter ended January 31, 2010 was $41 million. The net cash provided by operating activities was principally due to net income of $38 million and non-cash charges of $54 million, offset by changes in operating assets and liabilities of $51 million. The non-cash charges of $54 million included $39 million for depreciation and amortization, $8 million of debt issuance costs written off in connection with our debt redemption in December 2010 and $5 million of share-based compensation. Net income was also reduced by $16 million for the premium paid on our debt redemption which is included in the $24 million loss on extinguishment of debt in the unaudited condensed consolidated statement of operations.

Current liabilities decreased from $633 million at the end of fiscal year 2009 to $248 million at the end of the first quarter of fiscal year 2010 mainly due to the redemption of $364 million of long-term debt that was classified as current at November 1, 2009 (as it had been irrevocably called for redemption before the fiscal year end) and decreases in employee compensation and benefit accruals and accrued interest. Accounts payable increased by $6 million or 4% from fiscal year 2009 mainly due to timing of disbursements. The decrease in employee compensation and benefit accruals from November 1, 2009 is attributable to our payments under employee bonus plans in respect of fiscal year 2009 performance. Accrued interest decreased $20 million or 80% from fiscal year 2009 mainly due to the debt redemption and semi-annual interest payments made during the first quarter of fiscal year 2010.

Read the The complete Report

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