Alliance Fiber Optic Products Inc. (AFOP, Financial) filed Quarterly Report for the period ended 2009-03-31.
Alliance Fiber Optic Products Inc. designs manufactures and markets a broad range of high performance fiber optic components and integrated modules. AFOP's products are used by leading and emerging communications equipment manufacturers to deliver optical networking systems to the long-haul enterprise metropolitan and last mile access segments of the communications network. AFOP offers a broad product line of passive optical components including interconnect systems couplers and splitters thin film CWDM & DWDM components and modules optical attenuators and micro-optics devices. AFOP is headquartered in Sunnyvale California with manufacturing and product development capabilities in the United States Taiwan and China. Alliance Fiber Optic Products Inc. has a market cap of $38.2 million; its shares were traded at around $0.91 with a P/E ratio of 11.4 and P/S ratio of 1.
At March 31, 2009, we had cash and cash equivalents of $6.5 million and short-term investments of $16.9 million. We also hold $16.3 million in ARS and associated Rights which are not saleable by us at the date hereof. Accordingly, we do not consider the ARS or the Rights as sources of liquidity at this time.
Net cash used in operating activities was $0.2 million for the three months ended March 31, 2009. The decrease in net cash used in operating activities was primarily due to a $0.5 million increase in accounts receivable and $0.7 million decrease in accounts payable, which was partially offset by net income of $0.3 million, a $0.7 million decrease in inventory, and total depreciation and amortization expenses of $0.3 million. Net cash used in operating activities was $0.4 million for the three months ended March 31, 2008. Net cash used in operating activities was primarily due to $0.9 million increase in account receivable and $0.7 million decrease in accrued expenses, which was offset by net income of $0.8 million and total depreciation and amortization expense of $0.3 million.
Cash used in investing activities was $5.4 million for the three months ended March 31, 2009. In the three months ended March 31, 2009, we spent a net of $5.8 million for the purchase of short-term securities, and we used $0.1 million to acquire property and equipment. Net cash provided by investing activities was $5.5 million for the three months ended March 31, 2008. This resulted from $5.6 million in net proceeds from sales of short-term investment offset by $0.1 million spending on equipment purchases.
Cash used in financing activities was $39,000 and $18,000 for the three months ended March 31, 2009 and 2008, respectively. Cash used in financing activities was for the repayment of bank borrowings.
We had net income of approximately $0.3 million and $0.8 million in the first quarter of fiscal 2009 and 2008, respectively. Although we generated a profit in the first quarter of fiscal 2009 and 2008, we may not be able to sustain profitability in the future and our cash flows may be negative again in the future. As of March 31, 2009, we had an accumulated deficit of approximately $64.1 million. We continue to experience fluctuating demand for our products. If demand for our products increases in the future, we expect to incur significant and increasing expenses for expansion of our manufacturing operations, research and development, sales and marketing, and administration, and in expanding direct sales and distribution channels. Given the rate at which competition in our industry intensifies and the fluctuations in demand for our products, we may not be able to adequately control our costs and expenses or achieve or maintain adequate operating margins. As a result, to maintain profitability, we will need to generate and sustain substantially higher revenues while maintaining reasonable cost and expense levels. We may not be able to sustain profitability on a quarterly or an annual basis.
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Alliance Fiber Optic Products Inc. designs manufactures and markets a broad range of high performance fiber optic components and integrated modules. AFOP's products are used by leading and emerging communications equipment manufacturers to deliver optical networking systems to the long-haul enterprise metropolitan and last mile access segments of the communications network. AFOP offers a broad product line of passive optical components including interconnect systems couplers and splitters thin film CWDM & DWDM components and modules optical attenuators and micro-optics devices. AFOP is headquartered in Sunnyvale California with manufacturing and product development capabilities in the United States Taiwan and China. Alliance Fiber Optic Products Inc. has a market cap of $38.2 million; its shares were traded at around $0.91 with a P/E ratio of 11.4 and P/S ratio of 1.
Highlight of Business Operations:
Income tax expense. Income tax expense was $0.01 million and $0.06 million for the three months ended March 31, 2009 and 2008, respectively. During the three months ended March 31, 2008, we paid $0.05 million income tax for the year ended December 31, 2007.At March 31, 2009, we had cash and cash equivalents of $6.5 million and short-term investments of $16.9 million. We also hold $16.3 million in ARS and associated Rights which are not saleable by us at the date hereof. Accordingly, we do not consider the ARS or the Rights as sources of liquidity at this time.
Net cash used in operating activities was $0.2 million for the three months ended March 31, 2009. The decrease in net cash used in operating activities was primarily due to a $0.5 million increase in accounts receivable and $0.7 million decrease in accounts payable, which was partially offset by net income of $0.3 million, a $0.7 million decrease in inventory, and total depreciation and amortization expenses of $0.3 million. Net cash used in operating activities was $0.4 million for the three months ended March 31, 2008. Net cash used in operating activities was primarily due to $0.9 million increase in account receivable and $0.7 million decrease in accrued expenses, which was offset by net income of $0.8 million and total depreciation and amortization expense of $0.3 million.
Cash used in investing activities was $5.4 million for the three months ended March 31, 2009. In the three months ended March 31, 2009, we spent a net of $5.8 million for the purchase of short-term securities, and we used $0.1 million to acquire property and equipment. Net cash provided by investing activities was $5.5 million for the three months ended March 31, 2008. This resulted from $5.6 million in net proceeds from sales of short-term investment offset by $0.1 million spending on equipment purchases.
Cash used in financing activities was $39,000 and $18,000 for the three months ended March 31, 2009 and 2008, respectively. Cash used in financing activities was for the repayment of bank borrowings.
We had net income of approximately $0.3 million and $0.8 million in the first quarter of fiscal 2009 and 2008, respectively. Although we generated a profit in the first quarter of fiscal 2009 and 2008, we may not be able to sustain profitability in the future and our cash flows may be negative again in the future. As of March 31, 2009, we had an accumulated deficit of approximately $64.1 million. We continue to experience fluctuating demand for our products. If demand for our products increases in the future, we expect to incur significant and increasing expenses for expansion of our manufacturing operations, research and development, sales and marketing, and administration, and in expanding direct sales and distribution channels. Given the rate at which competition in our industry intensifies and the fluctuations in demand for our products, we may not be able to adequately control our costs and expenses or achieve or maintain adequate operating margins. As a result, to maintain profitability, we will need to generate and sustain substantially higher revenues while maintaining reasonable cost and expense levels. We may not be able to sustain profitability on a quarterly or an annual basis.
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