Alliance Fiber Optic Products Inc. (AFOP, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $46.8 million; its shares were traded at around $1.11 with a P/E ratio of 22.2 and P/S ratio of 1.3.
Interest and Other Income, Net. Interest and other income, net, was $0.2 million and $0.3 million for the three months ended September 30, 2009 and 2008, respectively. Interest and other income, net, was $0.6 million and $1.0 million for the nine months ended September 30, 2009 and 2008, respectively. The decrease in interest and other income is due to lower interest rates on our investments.
At September 30, 2009, we had cash and cash equivalents of $10.0 million and short-term investments of $31.8 million, which includes our auction rate securities of $14.4 million. We also held $1.8 million of ARS Rights in other current assets. On June 30, 2009, we reclassified $16.2 million of ARS and the related ARS Right from long-term to current assets. The ARS and associated Rights 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 provided by operating activities was $2.2 million for the nine months ended September 30, 2009. The cash provided by operating activities was primarily due to net income of $1.0 million, a decrease in accounts receivable of $0.4 million, decreases in inventory of $1.0 million, and depreciation and amortization of $0.8 million, offset by cash used for accounts payable of $0.5 million, prepaid expenses of $0.06 million, and accrued liabilities of $0.4 million.
Net cash provided by operating activities was $3.4 million for the nine months ended September 30, 2008. The cash provided was primarily due to net income of $3.2 million, an increase in accounts payable of $0.8 million, and total depreciation and amortization expenses of $0.9 million, which was offset by $0.2 million inventory provision and $1.1 million increase in inventory.
Cash used in investing activities was $4.3 million for the nine months ended September 30, 2009. This resulted from $3.7 million in net purchases of short-term investments. We also used $0.6 million cash on equipment purchases. Cash provided by investing activities was $12.4 million for the nine months ended September 30, 2008. This resulted from $13.2 million in net proceeds from sales of short-term investments offset by $0.8 million spending on equipment purchases.
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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 $46.8 million; its shares were traded at around $1.11 with a P/E ratio of 22.2 and P/S ratio of 1.3.
Highlight of Business Operations:
Cost of Revenues. Cost of revenues was $4.7 million and $7.4 million for the three months ended September 30, 2009 and 2008, respectively. Cost of revenues as a percentage of revenues decreased to 67.4% for the three months ended September 30, 2009 from 68.4% for the three months ended September 30, 2008. Cost of revenues was $15.4 million and $20.9 million for the nine months ended September 30, 2009 and 2008, respectively. Cost of revenues as a percentage of revenues increased slightly to 68.8% for the nine months ended September 30, 2009 from 68.5% for the nine months ended September 30, 2008. The decrease of cost of revenues was mainly due to lower sales. The decrease as a percentage of revenues was due to product mixes for both connectivity and optical passive products. Gross Profit. Gross profit decreased to $2.3 million, or 32.6% of revenues, for the three months ended September 30, 2009 from $3.4 million, or 31.6% of revenues, for the same period in 2008. Gross profit decreased in dollars to $7.0 million, or 31.2% of revenues, for the nine months ended September 30, 2009 from $9.6 million, or 31.5% of revenues, for the same period in 2008. For the period ended September 30, 2009, the utilization of our factories was reduced due to the decreased volume shipments of our products, which contributed to lower gross margin.Interest and Other Income, Net. Interest and other income, net, was $0.2 million and $0.3 million for the three months ended September 30, 2009 and 2008, respectively. Interest and other income, net, was $0.6 million and $1.0 million for the nine months ended September 30, 2009 and 2008, respectively. The decrease in interest and other income is due to lower interest rates on our investments.
At September 30, 2009, we had cash and cash equivalents of $10.0 million and short-term investments of $31.8 million, which includes our auction rate securities of $14.4 million. We also held $1.8 million of ARS Rights in other current assets. On June 30, 2009, we reclassified $16.2 million of ARS and the related ARS Right from long-term to current assets. The ARS and associated Rights 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 provided by operating activities was $2.2 million for the nine months ended September 30, 2009. The cash provided by operating activities was primarily due to net income of $1.0 million, a decrease in accounts receivable of $0.4 million, decreases in inventory of $1.0 million, and depreciation and amortization of $0.8 million, offset by cash used for accounts payable of $0.5 million, prepaid expenses of $0.06 million, and accrued liabilities of $0.4 million.
Net cash provided by operating activities was $3.4 million for the nine months ended September 30, 2008. The cash provided was primarily due to net income of $3.2 million, an increase in accounts payable of $0.8 million, and total depreciation and amortization expenses of $0.9 million, which was offset by $0.2 million inventory provision and $1.1 million increase in inventory.
Cash used in investing activities was $4.3 million for the nine months ended September 30, 2009. This resulted from $3.7 million in net purchases of short-term investments. We also used $0.6 million cash on equipment purchases. Cash provided by investing activities was $12.4 million for the nine months ended September 30, 2008. This resulted from $13.2 million in net proceeds from sales of short-term investments offset by $0.8 million spending on equipment purchases.
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