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

December 09, 2011 | About:
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10qk

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OmniVision Technologies Inc. (OVTI) filed Quarterly Report for the period ended 2011-10-31.

Omnivision Technologies Inc. has a market cap of $749.4 million; its shares were traded at around $12.57 with a P/E ratio of 5.4 and P/S ratio of 0.8.

Highlight of Business Operations:

Selling, general and administrative expenses consist primarily of compensation and personnel-related expenses, commissions paid to distributors and manufacturers representatives, and insurance and legal expenses. Selling, general and administrative expenses for the three months ended October 31, 2011 increased to approximately $15.8 million from $14.7 million for the three months ended October 31, 2010. As a percentage of revenues, selling, general and administrative expenses for the three months ended October 31, 2011 and 2010 represented 7.2% and 6.2%, respectively. The increase in selling, general and administrative expenses of approximately $1.1 million, or 7.5%, for the three months ended October 31, 2011 from the similar period in the prior year resulted primarily from: a $0.7 million increase in stock-based compensation expenses; a $358,000 increase in legal expenses related to patent defense; and a $219,000 increase in salary and payroll-related expenses resulting from a headcount increase. These increases were partially offset by a $319,000 decrease in commission expenses paid primarily to distributors and sales representatives. We anticipate that our selling, general and administrative expenses will decrease during the third quarter of fiscal 2012 due to lower commission payments and slightly lower payroll-related expenses.

Our working capital increased to $634.1 million as of October 31, 2011, as compared to $582.1 million as of April 30, 2011. Our working capital increased as a result of: a $143.7 million increase in inventories primarily caused by a cutback in orders by end-user customers in the second quarter of fiscal 2012; a $4.1 million decrease in deferred revenues, less cost of revenues; and a $1.8 million increase in prepaid and deferred income taxes. These increases in working capital were partially offset by: a $52.6 million increase in accounts payable resulting from an increase in production activities; a $25.3 million increase in accrued expenses and other current liabilities resulting from the acquisition of the CamerCube production operations from VisEra; a $15.9 million decrease in accounts receivable; a $2.3 million decrease in prepaid expenses and other current assets; and a $2.1 million decrease in cash, cash equivalents and short-term investments.

For the six months ended October 31, 2011, net cash provided by (used in) operating activities totaled approximately $(5.8) million as compared to $44.0 million for the corresponding period in the prior year. The principal components of the current year amount were: net income of approximately $63.1 million for the six months ended October 31, 2011; adjustments for non-cash charges of $14.2 million in depreciation and amortization, $12.0 million in stock-based compensation, $8.6 million in benefit from acquisition of production operations, $7.8 million in write-down of inventories, $5.6 million in gains on equity investments, net, and $1.0 million in losses on interest rate swaps; $52.7 million increase in accounts payable; a $15.9 million decrease in accounts receivable, net; a $4.3 million decrease in prepaid and deferred income taxes; and a $2.3 million decrease in prepaid expenses and other current assets. These increases were partially offset by: a $155.2 million increase in inventories; a $4.1 million decrease in deferred revenues, less cost of revenues; a $3.4 million decrease in accrued expenses and other current liabilities; and a $2.0 million decrease in income taxes payable. The $155.2 million increase in inventories was primarily caused by a cutback in orders by end-user customers in the second quarter of fiscal 2012. The $52.7 million increase in accounts payable resulted from an increase in production activities. The $15.9 million decrease in accounts receivable, net, reflects the decreased level of revenues during the three months ended October 31, 2011 as compared to the three months ended April 30, 2011.

For the six months ended October 31, 2010, net cash provided by operating activities totaled approximately $44.0 million. The principal components of the current year amount were: net income of approximately $45.8 million for the six months ended October 31, 2010; adjustments for non-cash charges of $10.4 million in write-down of inventories, $10.3 million in stock-based compensation, $9.3 million in depreciation and amortization, $6.1 million in gains on equity investments, net, $1.8 million in the tax effect from stock-based compensation, $1.5 million in losses on interest rate swaps and $1.2 million in the excess tax benefit from stock-based compensation; a $6.2 million increase in accounts payable; a $2.7 million increase in deferred revenues, less cost of revenues; a $2.3 million increase in income taxes payable; a $1.5 million increase in deferred tax liabilities and a $1.5 million decrease in prepaid expenses and other current assets. These increases were partially offset by: a $38.9 million increase in accounts receivable, net, and a $3.2 million increase in refundable and deferred income taxes. The $38.9 million increase in accounts receivable, net, reflects the increased level of revenues during the three months ended October 31, 2010, as days of sales outstanding increased only slightly, to 43 days as of October 31, 2010 from 42 days as of April 30, 2010. The $2.7 million decrease in deferred revenues, less cost of revenues, was due to a decrease in inventories at our distributors as of October 31, 2010.

For the six months ended October 31, 2011, our cash provided by investing activities totaled $36.8 million as compared to cash provided by investing activities of approximately $29.5 million for the corresponding period in the prior year, primarily due to $96.0 million in net proceeds from sales or maturities of short-term investments, partially offset by $46.3 million in purchases of short-term investments, $11.4 million in purchases of property, plant and equipment, net of sales and $1.0 million in purchases of intangible and other asset . For the six months ended October 31, 2010, our cash provided by investing activities totaled $29.5 million due to $40.9 million in net proceeds from sales or maturities of short-term investments, partially offset by $5.0 million in purchases of intangible and other assets, $2.8 million due to the deconsolidation of SOI, $3.4 million in purchases of property, plant and equipment and $282,000 in purchases of long-term investments.

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