Print
Email
Network Equipment Technologies Inc. (NWK) filed Quarterly Report for the period ended 2011-12-30.
Network Equipment Technologies Inc. has a market cap of $31.1 million; its shares were traded at around $0.992 with and P/S ratio of 0.5.
This is the annual revenues and earnings per share of NWK over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of NWK.
Highlight of Business Operations:
Product margin was down as a result of reduced sales and a changing mix of products. With reduced sales, we are unable to take advantage of economies of scale, and have also had to take reserves for excess or obsolete inventory. In addition, we had achieved a higher gross margin on our legacy products, which make up a declining portion of our revenue mix, compared to the gross margin for our more recently introduced products. In part, this is because the more recently introduced products have not yet benefitted from on-going cost reduction efforts or volume purchasing.Expense levels were generally consistent with prior periods. We continue to manage expenses and cash closely. Operating expense in the first nine months of fiscal 2012 decreased 4.1% from the prior year, due largely to reduced charges for our headquarters facility lease. In the third quarter of fiscal 2011, we executed a five-year extension of our headquarters facility lease at rates favorable to those in the original lease. In January 2012 (subsequent to the second quarter of fiscal 2012), we implemented a workforce reduction as part of an effort to bring the Company s operating expenses more in line with revenues and preserve capital resources.
Product margin was down primarily due to a lower amount of product revenues available to absorb manufacturing overhead. In addition, lower sales of Promina products contributed to lower product margin, as Promina products have higher gross margin than our more recently introduced products, in part because the more recently introduced products have not yet benefitted from on-going cost reduction efforts or volume purchasing. Product margin can also be affected by inventory reserve charges. As part of our arrangement with our principal contract manufacturer, the manufacturer holds significant amounts of raw materials, components and product inventory on our behalf. Under certain circumstances, we may be required to make deposits on the inventory, and if the inventory continues to remain on hand, to purchase the inventory underlying the deposit. We may subsequently need to write down or write off the inventory. Inventory reserve charges for the third quarters of fiscal 2012 and fiscal 2011 were $359,000 and $53,000, respectively. The increase in inventory reserve charges in fiscal 2012 is attributable to charges for our Promina products.
In addition, lower sales of Promina products contributed to lower product margin, as Promina products have higher gross margin than our more recently introduced products. Product margin can also be affected by inventory reserve charges which for the nine months ended December 30, 2011 and December 24, 2010 were $686,000 and $386,000, respectively. The increase in inventory reserve charges in fiscal 2012 is attributable to charges for our Promina products.
Net cash provided by investing activities was $25.2 million in the first nine months of fiscal 2012 compared to $12.6 million in the comparable prior year period. The principal reason for this change was the net effect upon cash of purchases, sales and maturities of short-term investments. These activities provided net cash of $25.6 million and $15.5 million in fiscal 2012 and 2011, respectively.
Subscribe RSS
