Skyworks Solutions Inc. (SWKS, Financial) filed Quarterly Report for the period ended 2010-01-01.
Skyworks Solutions Inc. has a market cap of $2.36 billion; its shares were traded at around $13.51 with a P/E ratio of 18.8 and P/S ratio of 2.9. SWKS is in the portfolios of Paul Tudor Jones of The Tudor Group, Chuck Royce of ROYCE & ASSOCIATES, Jeremy Grantham of GMO LLC.
Cash and cash equivalent balances increased $32.1 million to $396.3 million at January 1, 2010 from $364.2 million at October 2, 2009. This increase was due to $53.0 million in cash that we generated from operations during the three-month period ended January 1, 2010, which was offset by the retirement of $5.0 million of aggregate principal amount of the 2007 Convertible Notes, reacquisition of equity instruments of $2.6 million (relating to the aforementioned adoption of ASC 470-20), capital expenditures of $14.7 million and $3.5 million in repurchases of common stock (relating to the vesting of restricted stock). The number of days sales outstanding for the three-month period ended January 1, 2010 decreased to 44 from 47 for the corresponding period in fiscal 2009.
During the three-month period ended January 1, 2010, we generated net income of $28.0 million. We experienced a decrease in other assets of $2.1 million, and an increase in accounts payable and other accrued liabilities of $7.8 million and $0.5 million, respectively. We also incurred multiple non-cash charges (e.g., depreciation, amortization, contribution of common shares to savings and retirement plans, deferred income taxes, and share-based compensation expense) totaling $30.7 million. This was offset by an increase in accounts receivable and inventories of $4.3 million and $12.0 million, respectively.
Cash used in investing activities for the three-month period ended January 1, 2010 consisted of investments in capital equipment of $14.7 million primarily to expand fabrication and assembly and test capacity. We also paid an additional $1.0 million for an earn out provision related to our acquisition of Axiom Microdevices. We believe a focused program of capital expenditures will be required to sustain our current manufacturing capabilities. We expect that future capital expenditures will be funded by the generation of positive cash flows from operations. We may also consider future acquisition opportunities to extend our technology portfolio and design expertise and to expand our product offerings.
Cash used in financing activities for the three-month period ended January 1, 2010 consisted of the retirement of $5.0 million of aggregate principal amount of our 2007 Convertible Notes, the $2.6 million reacquisition of the equity component on our 2007 Convertible Notes as a result of such early retirements (pursuant to the adoption of ASC 470-20) and the repurchase of common stock of $3.5 million (related to tax withholding on vesting of restricted stock), offset by cash provided by stock option exercises of $6.1 million.
Our invested cash balances primarily consist of money market funds and repurchase agreements where the underlying securities primarily consist of United States treasury obligations, United States agency obligations, overnight repurchase agreements backed by United States treasuries and/or United States agency obligations and highly rated commercial paper. Our invested cash balances also include time deposits/certificates of deposit. At January 1, 2010, we also held a $3.2 million aggregate principal amount auction rate security which historically has provided liquidity through a Dutch auction process. Disruptions in the credit markets have substantially eliminated the liquidity of this process resulting in failed auctions. During the fiscal year ended October 3, 2008, we performed a comprehensive valuation and discounted cash flow analysis on the auction rate security. We concluded the value of the auction rate security was $2.3 million, and the carrying value of these securities was reduced by $0.9 million, reflecting this change in fair value. Accordingly, in the fiscal year ended October 3, 2008, we recorded unrealized losses on this auction rate security of approximately $0.9 million. We assessed these declines in fair market value to be temporary and consider the security to be illiquid until there is a successful auction or the security matures. Accordingly, the remaining auction rate security balance has been reclassified to non-current other assets and the loss has been recorded in Other Comprehensive Income. We will continue to monitor the liquidity and accounting classification of this security in future periods. If, in a future period, we determine that the impairment is other than temporary, we will impair the security to its fair value and charge the loss to earnings.
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Skyworks Solutions Inc. has a market cap of $2.36 billion; its shares were traded at around $13.51 with a P/E ratio of 18.8 and P/S ratio of 2.9. SWKS is in the portfolios of Paul Tudor Jones of The Tudor Group, Chuck Royce of ROYCE & ASSOCIATES, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
We adopted ASC 740- Income Taxes (formerly referenced as FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109), as of the beginning of fiscal year 2008. During the quarter ended January 1, 2010, there was a change in our gross unrecognized tax benefits of $0.4 million. Of the total unrecognized tax benefits at January 1, 2010, $6.6 million would impact the effective tax rate, if recognized. There are no positions which we anticipate could change within the next twelve months. Total year to date accrued interest related to our unrecognized tax benefits is $0.0 million. Our policy is to recognize accrued interest and penalties, if incurred, on any unrecognized tax benefits as a component of income tax expense.Cash and cash equivalent balances increased $32.1 million to $396.3 million at January 1, 2010 from $364.2 million at October 2, 2009. This increase was due to $53.0 million in cash that we generated from operations during the three-month period ended January 1, 2010, which was offset by the retirement of $5.0 million of aggregate principal amount of the 2007 Convertible Notes, reacquisition of equity instruments of $2.6 million (relating to the aforementioned adoption of ASC 470-20), capital expenditures of $14.7 million and $3.5 million in repurchases of common stock (relating to the vesting of restricted stock). The number of days sales outstanding for the three-month period ended January 1, 2010 decreased to 44 from 47 for the corresponding period in fiscal 2009.
During the three-month period ended January 1, 2010, we generated net income of $28.0 million. We experienced a decrease in other assets of $2.1 million, and an increase in accounts payable and other accrued liabilities of $7.8 million and $0.5 million, respectively. We also incurred multiple non-cash charges (e.g., depreciation, amortization, contribution of common shares to savings and retirement plans, deferred income taxes, and share-based compensation expense) totaling $30.7 million. This was offset by an increase in accounts receivable and inventories of $4.3 million and $12.0 million, respectively.
Cash used in investing activities for the three-month period ended January 1, 2010 consisted of investments in capital equipment of $14.7 million primarily to expand fabrication and assembly and test capacity. We also paid an additional $1.0 million for an earn out provision related to our acquisition of Axiom Microdevices. We believe a focused program of capital expenditures will be required to sustain our current manufacturing capabilities. We expect that future capital expenditures will be funded by the generation of positive cash flows from operations. We may also consider future acquisition opportunities to extend our technology portfolio and design expertise and to expand our product offerings.
Cash used in financing activities for the three-month period ended January 1, 2010 consisted of the retirement of $5.0 million of aggregate principal amount of our 2007 Convertible Notes, the $2.6 million reacquisition of the equity component on our 2007 Convertible Notes as a result of such early retirements (pursuant to the adoption of ASC 470-20) and the repurchase of common stock of $3.5 million (related to tax withholding on vesting of restricted stock), offset by cash provided by stock option exercises of $6.1 million.
Our invested cash balances primarily consist of money market funds and repurchase agreements where the underlying securities primarily consist of United States treasury obligations, United States agency obligations, overnight repurchase agreements backed by United States treasuries and/or United States agency obligations and highly rated commercial paper. Our invested cash balances also include time deposits/certificates of deposit. At January 1, 2010, we also held a $3.2 million aggregate principal amount auction rate security which historically has provided liquidity through a Dutch auction process. Disruptions in the credit markets have substantially eliminated the liquidity of this process resulting in failed auctions. During the fiscal year ended October 3, 2008, we performed a comprehensive valuation and discounted cash flow analysis on the auction rate security. We concluded the value of the auction rate security was $2.3 million, and the carrying value of these securities was reduced by $0.9 million, reflecting this change in fair value. Accordingly, in the fiscal year ended October 3, 2008, we recorded unrealized losses on this auction rate security of approximately $0.9 million. We assessed these declines in fair market value to be temporary and consider the security to be illiquid until there is a successful auction or the security matures. Accordingly, the remaining auction rate security balance has been reclassified to non-current other assets and the loss has been recorded in Other Comprehensive Income. We will continue to monitor the liquidity and accounting classification of this security in future periods. If, in a future period, we determine that the impairment is other than temporary, we will impair the security to its fair value and charge the loss to earnings.
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