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OmniVision Technologies Inc. Reports Operating Results (10-Q)

March 11, 2011 | About:
10qk

10qk

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OmniVision Technologies Inc. (OVTI) filed Quarterly Report for the period ended 2011-01-31.

Omnivision Technologies Inc. has a market cap of $1.7 billion; its shares were traded at around $30.61 with a P/E ratio of 18.9 and P/S ratio of 2.9.

Highlight of Business Operations:

For the nine months ended January 31, 2011, net cash provided by operating activities totaled approximately $124.0 million as compared to $65.4 million for the corresponding period in the prior year. The principal components of the current year amount were: net income of approximately $90.5 million for the nine months ended January 31, 2011; adjustments for non-cash charges of $15.1 million in stock-based compensation, $14.6 million in depreciation and amortization, $13.3 million in write-down of inventories, $9.8 million in gains on equity investments, net, $1.8 million in the tax effect from stock-based compensation, $1.0 million in the excess tax benefit from stock-based compensation and $260,000 in losses on interest rate swaps; a $24.3 million decrease in inventory due to the increase in sales activity for the three months ended January 31, 2011; a $15.3 million increase in accounts payable also resulting from the increase in quarterly sales activity; a $8.2 million increase in deferred tax liabilities; a $5.7 million increase in deferred revenues, less cost of revenues and a $3.5 million decrease in prepaid expenses and other current assets. These increases were partially offset by: a $44.9 million increase in accounts receivable, net; a $6.0 million decrease in income taxes payable; a $4.3 million increase in refundable and deferred income taxes and a $2.6 million decrease in accrued expenses and other current liabilities. The $44.9 million increase in accounts receivable, net, reflects the increased level of revenues during the three months ended January 31, 2011, as days of sales outstanding decreased only slightly, to 41 days as of January 31, 2011 from 42 days as of April 30, 2010.

For the nine months ended January 31, 2010, net cash provided by operating activities totaled approximately $65.4 million. The principal components of the current year amount were: a net income of approximately $3.0 million for the nine months ended January 31, 2010; adjustments for non-cash charges of $18.2 million in stock-based compensation, $17.4 million in depreciation and amortization, $13.5 million in write-down of inventories, $5.2 million in gains on equity investments and $0.8 million in gains on interest rate swaps; a $52.8 million increase in accounts payable; a $3.6 million increase in deferred revenues, less cost of revenues; a $1.4 million increase in accrued expenses and other current liabilities; and a $1.2 million decrease in prepaid expenses and other current assets. These increases were partially offset by: a $23.7 million increase in accounts receivable, net; a $14.0 million increase in inventories; a $2.6 million increase in refundable and deferred income taxes and a $122,000 decrease in deferred tax liabilities. The $23.7 million increase in accounts receivable, net, reflects the increased level of revenues during the nine months ended January 31, 2010, partially offset by faster collection, as reflected in days of sales outstanding which declined to 40 days as of January 31, 2010 from 44 days as of April 30, 2009. The $14.0 million increase in inventories resulted from the need to support an increased level of revenues during the nine months ended January 31, 2010. The $3.6 million increase in deferred revenues, less cost of revenues, was due to an increase in sales to distributors during the nine months ended January 31, 2010.

For the nine months ended January 31, 2011, our cash used in investing activities totaled $38.3 million as compared to cash used in investing activities of approximately $61.8 million for the corresponding period in the prior year, primarily due to $128.2 million in net proceeds from sales or maturities of short-term investments, $3.8 million in net proceeds from the sale of SOI, partially offset by $155.3 million in purchases of short-term investment, $5.0 million in purchases of intangible and other assets, $2.8 million due to the deconsolidation of SOI, $7.1 million in purchases of property, plant and equipment and $282,000 in purchases of long-term investments. For the nine months ended January 31, 2010, our cash used in investing activities totaled $61.8 million due to $51.5 million in net purchases of short-term investments and $10.2 million in purchases of property, plant and equipment.

For the nine months ended January 31, 2011, net cash provided by financing activities totaled approximately $55.1 million, as compared to $13.0 million during the corresponding period in the prior year. This increase was due to $57.6 million in proceeds from the exercise of stock options and employee purchases through our employee stock purchase plan and $1.0 million in excess tax benefits from stock-based compensation, partially offset by $3.4 million used to repay long-term borrowings. For the nine months ended January 31, 2010, net cash provided by financing activities totaled approximately $13.0 million due to $9.5 million in borrowings and $6.2 million in proceeds from the exercise of stock options and employee purchases through our employee stock purchase plan, partially offset by $2.7 million used to repay long-term borrowings.

(1) In March 2007, we entered into the Mortgage Loan with a domestic bank in the amount of $27.9 million. In March 2008, we borrowed $6.0 million under the Term Loan for building improvement of the Santa Clara Property. We drew down the remaining $6.0 million under the Term Loan in July 2008. In August 2009, we entered into the Construction Loan with a bank in China to finance costs associated with the construction of a research center for OTC. As of January 31, 2011, we borrowed approximately $17.5 million under the Construction Loan. See Note 7 Borrowing Arrangements to our condensed consolidated financial statements.

(3) During the three months ended October 31, 2008, we formed OST, a wholly-owned subsidiary in Shanghai, China, for the purpose of expanding our testing capabilities. We contributed $1.5 million in January 2009, as required under the terms of our capital commitment. We are required to contribute the remaining $8.5 million of a $10.0 million commitment by October 16, 2011, which represents a one-year extension from the original due date of October 16, 2010. See Note 13 Commitments and Contingencies to our condensed consolidated financial statements.

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10qk
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