Power-one Inc has a market cap of $568.5 million; its shares were traded at around $4.33 with a P/E ratio of 6 and P/S ratio of 0.6.
Highlight of Business Operations:Solar and wind energy generation systems require inverters to condition the electrical energy generated by PV modules or wind turbine generators and deliver it to the grid. In 2011, we estimate that the market for solar inverters was over $6.7 billion (as compared to $6.8 billion in 2010 and $2.8 billion in 2009), and the market for wind inverters was over $3.6 billion, of which $2.2 billion was attributable to sales in the merchant markets (as compared to $2.3 billion in 2010 and $1.9 billion in 2009). Inverters represent approximately 5-7% of the installation cost of a solar system and approximately 3-5% of the installation cost of a wind system. They are sold through multiple channels, including direct sales to end users, and through distributors, systems integrators, original equipment manufacturers ("OEM"s) and Engineering, Procurement and Construction firms ("EPC"s). The primary geographic market for PV installations has traditionally been in Europe, although Asia and North America are beginning to see significant PV investment. Wind turbine installations also initially gained strength primarily in Europe, but have seen rapid adoption in North America, Asia and other regions in recent years.
Historically, a few customers accounted for a material portion of our net sales each year. For 2011, 2010 and 2009, our consolidated top five customers accounted for approximately 22%, 20% and 24% of our consolidated net sales, respectively. For 2011, 2010 and 2009, our top five Renewable Energy Solutions customers accounted for approximately 27%, 27% and 36% of our Renewable Energy net sales, respectively. For 2011, 2010 and 2009, our top five Power Solutions customers accounted for approximately 44%, 40% and 34% of our Power Solutions net sales, respectively. If we lose any of these key customers, if any of them reduces or cancels a significant order, if any of them experiences significant financial or other failure, or if the purchased product mix changes significantly in favor of products that have lower gross margins, our net sales and operating results could decrease significantly.
Gross profit for fiscal 2011 decreased by $90.4 million to $312.7 million from a gross profit of $403.1 million for fiscal 2010. As a percentage of net sales, gross margin decreased to 30.8% for fiscal 2011 from a gross margin of 38.5% for fiscal 2010. Gross margin for the fiscal year ended January 1, 2012 was negatively impacted by macroeconomic and industry specific pressures in the European market. These included an aggressive pricing environment for PV inverters as compared to 2010. Gross margin was also negatively impacted by increased factory overhead including start-up costs associated with our new Renewable Energy factories in North America and China, increased costs related to the establishment of our Renewable Energy service organization, offset partially by reductions in material costs.
During fiscal 2011, revenue decreased $12.3 million, or 4%, compared to fiscal 2010 primarily due to reduced demand in connection with the weakened global economic environment. Operating margins increased to 7% during fiscal 2011 as compared to 1% operating margins in fiscal 2010. The increased operating margins were a result of a reduction in factory expenses, reduced excess and obsolete inventory charges, and a reduction in our operating expenses from lower legal expenses and elimination and consolidation of administrative functions at certain sites.
Net cash provided by operating activities included decreases in tax payable, accounts receivable and accounts payable of $103.8 million, $26.0 million, and $35.6 million, respectively and increases in inventory and other liabilities of $8.7 million and $13.6 million, respectively. Income taxes paid of $164.1 million includes approximately $100 million for Italian tax payments related to the for 2010 tax year. Decreases in accounts receivable and accounts payable are a result of decreases in revenues levels and related purchase levels at the end of fiscal 2011 as compared with the levels of fiscal 2010.
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