CMRO » Topics » Operating Activities

This excerpt taken from the CMRO 10-Q filed Dec 12, 2008.

Operating Activities

Cash used in operating activities of $8.1 million for the nine months ended October 31, 2008 was driven by our net loss from continuing operations of $8.7 million partially offset by non-cash depreciation and amortization of $1.2 million and cash provided by discontinued operations of $3.2 million, including proceeds of $2.7 million from the sale of our call box business in July 2008. Additionally, our cash flow declined due to increases in accounts receivable and inventory balances of $1.3 million and $2.2 million, respectively.

Included in our year to date loss is non-recurring severance costs totaling $1.0 million. Additionally, our receivable balance has grown as a result of increased sales for the third quarter of fiscal 2009 compared to the same period of the prior fiscal year. The increase in inventory is due to filling our ChargeSource® contract manufacturer’s warehouse with a minimum 10-day supply of finished goods inventory.

Cash used in operating activities of $1.1 million for the nine months ended October 31, 2007 was driven by our net loss from continuing operations of $8.4 million, a decrease in deferred revenue of $0.7 million, and a reduction in accrued liabilities of $1.7 million, primarily due to vendor payments for inventory, income taxes and the distribution of incentive compensation. These decreases were offset primarily by cash generated from discontinued operations of $5.1 million and collection of accounts receivable of $4.6 million.

This excerpt taken from the CMRO 10-Q filed Sep 12, 2008.

Operating Activities

Cash used in operating activities of $2.2 million for the six months ended July 31, 2008 was driven by our net loss from continuing operations of $4.2 million offset by non-cash depreciation and amortization of $0.9 million and cash provided by discontinued operations of $3.2 million, including proceeds of $2.7 million from the sale of our call box business in July 2008. Additionally our accounts receivable and inventory balances increased by $2.2 million and $1.2 million, respectively. These uses of cash are offset by an increase in accounts payable and accrued liabilities of $0.9 million and $0.6 million, respectively.

Included in our year to date loss is non-recurring severance costs totaling $1.0 million. Additionally, our receivable balance has grown as a result of increased sales for the second quarter of fiscal 2009 compared to the same period of the prior fiscal year. The increase in accrued liabilities is due primarily to an accrual of $1.7 million in revenue sharing payable to Ascom for the Symphony™ Multi systems sales to AT&T and offset by the payment of fiscal 2008 accrued bonuses of $0.6 million during the first quarter of fiscal 2009 and a payment made to our ChargeSource® contract manufacturer of $0.5 million for excess inventory.

Cash generated by operating activities of $1.9 million for the six months ended July 31, 2007 was driven by collection of accounts receivable of $5.6 million and cash generated from discontinued operations of $4.1 million, offset by our net loss from continuing operations of $5.4 million and a reduction in accrued liabilities of $2.7 million, primarily due to vendor payments for inventory, income tax payments, and revenue sharing paid to SwissQual in the amount of $0.6 million.

This excerpt taken from the CMRO 10-Q filed Jun 13, 2008.

Operating Activities

Cash used in operating activities of $6.4 million for the first quarter of fiscal 2009 was driven by an increase in accounts receivable of $10.9 million and our net loss of $1.7 million, offset by an increase in deferred revenue and accrued liabilities of $2.4 million and $3.9 million, respectively.

Included in our 2009 fiscal first quarter loss is non-recurring severance costs totaling $0.9 million. Additionally, our receivable balance has grown as a result of increased sales for the first quarter of fiscal 2009 from $6.9 million in the fourth quarter of fiscal 2008 to $12.3 million. The increase in accrued liabilities is due primarily to an accrual of $1.9 million in revenue sharing payable to Ascom for the Symphony Multi systems sales to AT&T and an increase in amounts owed to our suppliers of $1.8 million. The increase in deferred revenue of $2.4 million relates primarily to deferred revenue on AT&T systems that are not yet installed as of quarter end.

Cash generated by operating activities of $2.7 million for the first quarter of fiscal 2008 was driven by collections of accounts receivable of $6.9 million offset by our net loss of $1.6 million and a reduction in accrued liabilities of $2.8 million, primarily due to vendor payments for inventory as well as income tax payments.

These excerpts taken from the CMRO 10-K filed Apr 30, 2008.

Operating Activities

The cash used in operating activities during fiscal 2008 of $3.4 million relates to our net loss before the gain on sale of SwissQual of $12.0 million, offset by non-cash depreciation and amortization of $2.1 million and a goodwill impairment charge of $0.5 million, as well as collection of accounts receivable in the current year of $6.2 million. The remaining change in operating activities nets to a cash usage of $0.2 million.

Cash provided by operating activities of $3.0 million in fiscal 2007 related to net income of $0.1 million before the gain on sale of SwissQual of $1.7 million as well as non-cash charges for depreciation and amortization, FAS No. 123R compensation expense, and inventory reserves of $3.1 million, $0.6 million, and $0.6 million, respectively, and a decrease in inventory of $2.6 million, a decrease in accrued liabilities of $3.1 million, and an increase in accounts receivable of $1.2 million. The decrease in accrued liabilities relates primarily to the payout of fiscal 2006 accrued bonuses of $1.2 million and a reduction in accrued uninvoiced receipts for inventory purchases.

 

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Cash provided by operating activities of $7.3 million in fiscal 2006 was driven by net income of $6.3 million, non-cash charges totaling $3.8 million and $1.7 million for depreciation and amortization and provisions for obsolete inventory, respectively, offset by gains totaling $6.4 million related to the sales of our investment in SwissQual and software rights. Also, a net change in operating assets and liabilities resulted in a $2.0 million increase in cash. Within the net change in operating assets and liabilities, increased sales resulted in an increase in accounts receivable and inventory, decreasing cash by $5.2 million, which was offset by a $1.7 million increase in deferred revenue and a $4.3 million increase in accrued liabilities.

Previously, we included cash flows from discontinued operations as a single amount in our consolidated statement of cash flows. In fiscal 2006, we separately disclosed the components of cash flows of discontinued operations, reconciled operating cash flows from net income rather than income from continuing operations, and restated our statements of cash flows for fiscal 2005 to conform to the current presentation.

Operating Activities

FACE="Times New Roman" SIZE="2">The cash used in operating activities during fiscal 2008 of $3.4 million relates to our net loss before the gain on sale of SwissQual of $12.0 million, offset by non-cash depreciation and amortization of
$2.1 million and a goodwill impairment charge of $0.5 million, as well as collection of accounts receivable in the current year of $6.2 million. The remaining change in operating activities nets to a cash usage of $0.2 million.

Cash provided by operating activities of $3.0 million in fiscal 2007 related to net income of $0.1 million before the gain on
sale of SwissQual of $1.7 million as well as non-cash charges for depreciation and amortization, FAS No. 123R compensation expense, and inventory reserves of $3.1 million, $0.6 million, and $0.6 million, respectively, and a
decrease in inventory of $2.6 million, a decrease in accrued liabilities of $3.1 million, and an increase in accounts receivable of $1.2 million. The decrease in accrued liabilities relates primarily to the payout of fiscal 2006
accrued bonuses of $1.2 million and a reduction in accrued uninvoiced receipts for inventory purchases.

 


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Cash provided by operating activities of $7.3 million in fiscal 2006 was driven by net income of
$6.3 million, non-cash charges totaling $3.8 million and $1.7 million for depreciation and amortization and provisions for obsolete inventory, respectively, offset by gains totaling $6.4 million related to the sales of our
investment in SwissQual and software rights. Also, a net change in operating assets and liabilities resulted in a $2.0 million increase in cash. Within the net change in operating assets and liabilities, increased sales resulted in an increase
in accounts receivable and inventory, decreasing cash by $5.2 million, which was offset by a $1.7 million increase in deferred revenue and a $4.3 million increase in accrued liabilities.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Previously, we included cash flows from discontinued operations as a single amount in our consolidated statement of cash flows. In fiscal 2006, we
separately disclosed the components of cash flows of discontinued operations, reconciled operating cash flows from net income rather than income from continuing operations, and restated our statements of cash flows for fiscal 2005 to conform to the
current presentation.

This excerpt taken from the CMRO 10-Q filed Dec 13, 2007.

Operating Activities

Cash used in operating activities of $1.0 million for the nine months ended October 31, 2007 was driven by our net loss of $6.4 million, a decrease in deferred revenue of $0.9 million, and a reduction in accrued liabilities of $2.2 million, primarily due to vendor payments for inventory, income tax payments, and the distribution of incentive compensation. These decreases were offset by collection of accounts receivable of $7.1 million and non-cash depreciation and amortization of $1.7 million.

 

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Cash provided by operating activities of $0.7 million for the nine months ended October 31, 2006 was generated by our net loss offset by non-cash depreciation and amortization, provisions for obsolete inventory, and stock based compensation totaling approximately $2.4 million, as well as a reduction in inventory, as we continued the call box upgrade projects, in the amount of $1.9 million. This cash generated was offset by a reduction in accrued liabilities of approximately $3.7 million, primarily due to vendor payments for inventory as well as the distribution of incentive compensation.

This excerpt taken from the CMRO 10-Q filed Sep 13, 2007.

Operating Activities

Cash generated by operating activities of $1.9 million for the six months ended July 31, 2007 was driven by collection of accounts receivable of $7.8 million and a reduction in inventory of $1.3 million, offset by our net loss of $3.8 million and a reduction in accrued liabilities of $3.2 million, primarily due to vendor payments for inventory, income tax payments, and revenue sharing paid to SwissQual in the amount of $632,000.

Cash used in operating activities of $0.4 million for the six months ended July 31, 2006 was driven by a net loss of $0.3 million and a reduction in accrued liabilities of approximately $2.6 million, primarily due to vendor

 

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payments for inventory as well as the distribution of incentive compensation, partially offset by non-cash charges totaling $1.5 million and $0.5 million for depreciation and amortization and provisions for obsolete inventory, respectively. Also, a net change in other operating assets and liabilities resulted in a $0.4 million increase in cash flow. Within the net change in other operating assets and liabilities, inventory decreased by $1.0 million, increasing cash flow, which was offset by a $0.9 million increase in other assets, which relates to amounts due from our new landlord for tenant improvement reimbursements.

This excerpt taken from the CMRO 10-Q filed Jun 14, 2007.

Operating Activities

Cash generated by operating activities of $2.7 million for the first quarter of fiscal 2008 was driven by collections of accounts receivable of $6.9 million offset by our net loss of $1.6 million and a reduction in accrued liabilities of $2.8 million, primarily due to vendor payments for inventory as well as income tax payments.

As of April 30, 2007 we have accrued $610,000 payable to SwissQual for revenue sharing related to our Wireless Test Solutions sales for calendar year 2007. We expect to pay this liability in full during the current fiscal year.

Cash used in operating activities of $2.6 million for the first quarter of fiscal 2007 was driven by net loss of $0.6 million and a reduction in accrued liabilities of approximately $3.9 million, primarily due to vendor payments for inventory as well as the distribution of incentive compensation, partially offset by non-cash charges totaling $0.8 million and $0.3 million for depreciation and amortization and provisions for obsolete inventory, respectively. Also, a net change in other operating assets and liabilities resulted in a $0.9 million increase in cash flow. Within the net change in other operating assets and liabilities, increased sales resulted in an increase in inventory, decreasing cash flow by $0.1 million, which was offset by a $0.2 million increase in deferred revenue and a $0.7 million increase in accounts payable.

This excerpt taken from the CMRO 10-K filed Apr 30, 2007.

Operating Activities

Cash provided by operating activities of $3.0 million in fiscal 2007 related to net income of $1.8 million as well as non-cash charges for depreciation and amortization, FAS No. 123R compensation expense, and inventory

 

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reserves of $3.1 million, $0.6 million, and $0.6 million, respectively, and a decrease in inventory of $2.6 million offset by the current year gain on sale of SwissQual of $1.7 million, a decrease in accrued liabilities of $3.1 million, and an increase in accounts receivable of $1.2 million. The decrease in accrued liabilities relates primarily to the payout of fiscal 2006 accrued bonuses of $1.2 million and a reduction in accrued uninvoiced receipts for inventory purchases.

Previously, we included cash flows from discontinued operations as a single amount in our consolidated statement of cash flows. In fiscal 2006, we separately disclosed the components of cash flows of discontinued operations, reconciled operating cash flows from net income rather than income from continuing operations, and restated our statements of cash flows for fiscal 2005 to conform to the current presentation.

This excerpt taken from the CMRO 10-Q filed Dec 20, 2006.

Operating Activities

Cash provided by operating activities of $0.7 million for the nine months ended October 31, 2006 decreased $2.0 million compared to the nine months ended October 31, 2005. Cash was generated in fiscal 2007 by our net loss offset by non-cash depreciation and amortization, provisions for obsolete inventory, and stock based compensation totaling approximately $2.4 million as well as a reduction in inventory, as we continued the call box upgrade projects, in the amount of $1.9 million. This cash generated was offset by a reduction in accrued liabilities of approximately $3.7 million, primarily due to vendor payments for inventory as well as the distribution of incentive compensation.

For the nine months ended October 31, 2005, cash was generated by our net loss offset by non-cash depreciation and amortization and provisions for obsolete inventory totaling approximately $3.3 million as well as an increase in deferred revenue, accounts payable, and accrued liabilities of $3.9 million. Accounts receivable and amounts due from affiliates increased by $4.2 million, primarily driven by increased sales across our three businesses. Based on revenue for the three months ended October 31, 2005, days sales outstanding decreased to 71 days from 92 days for the corresponding period of the prior fiscal year. Sales of our WTS products into our international markets typically require us to extend credit terms of between 90 days and 120 days. For the third quarter of fiscal 2006, a significant portion of our WTS sales were to customers based in North America, where we typically extend credit terms of between 30 and 45 days. We have continued to experience low losses from bad debts, and good collections history with isolated exceptions. Cash used for inventory was $0.8 million for the nine months ended October 31, 2005.

 

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This excerpt taken from the CMRO 10-Q filed Sep 14, 2006.

Operating Activities

Cash used in operating activities of $0.4 million for the six months ended July 31, 2006 decreased $2.5 million compared to the six months ended July 31, 2005. Cash used in operating activities for the first half of fiscal 2007 was driven by net loss of $0.3 million and a reduction in accrued liabilities of approximately $2.6 million, primarily due to vendor payments for inventory as well as the distribution of incentive compensation, partially offset by non-cash charges totaling $1.5 million and $0.5 million for depreciation and amortization and provisions for obsolete inventory, respectively. Also, a net change in other operating assets and liabilities resulted in a $0.4 million increase in cash flow. Within the net change in other operating assets and liabilities, inventory decreased by $1.0 million, increasing cash flow, which was offset by a $0.9 million increase in other assets, which relates to amounts due from our new landlord for tenant improvement reimbursements.

Cash used in operating activities in the six months ended July 31, 2005 was $2.8 million driven by net loss of $1.2 million, partially offset by non-cash charges totaling $2.0 million and $0.7 million for depreciation and amortization and provisions for obsolete inventory, respectively. For the six months ended July 31, 2005, accounts receivable and amounts due from affiliates increased by $5.9 million, primarily due to increased sales in the latter part of the second quarter. Days sales outstanding decreased to 102 days as of July 31, 2005. Sales of our WTS products into our international markets typically require us to extend credit terms of between 90 days and 120 days. We have continued to experience low losses from bad debts, and good collections history with isolated exceptions. Accounts payable and accrued liabilities generated cash of $1.6 million for the six months ended July 31, 2005, and cash used for inventory was $0.4 million.

 

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This excerpt taken from the CMRO 10-Q filed Jun 14, 2006.

Operating Activities

Cash used in operating activities of $2.6 million in the first quarter of fiscal 2007 increased $1.1 million compared to the first quarter of fiscal 2006. Cash used in operating activities for the first quarter of fiscal 2007 was driven by net loss of $0.6 million and a reduction in accrued liabilities of approximately $3.9 million, primarily due to vendor payments for inventory as well as the distribution of incentive compensation, partially offset by non-cash charges totaling $0.8 million and $0.3 million for depreciation and amortization and provisions for obsolete inventory, respectively. Also, a net change in other operating assets and liabilities resulted in a $0.9 million increase in cash flow. Within the net change in other operating assets and liabilities, increased sales resulted in an increase in inventory, decreasing cash flow by $0.1 million, which was offset by a $0.2 million increase in deferred revenue and a $0.7 million increase in accounts payable.

Cash used in operating activities for the first quarter of fiscal 2006 was $1.5 million driven by net loss of $1.5 million, partially offset by non-cash charges totaling $1.0 million and $0.1 million for depreciation and amortization and provisions for doubtful accounts receivable, respectively. Also, a net change in operating assets and liabilities resulted in a $1.1 million decrease in cash flow. Within the net change in operating assets and liabilities, deferred revenue decreased by approximately $0.9 million primarily as a result of the change in accounting treatment of sales to SwissQual.

This excerpt taken from the CMRO 10-K filed May 1, 2006.

Operating Activities

Cash provided by operating activities of $7.3 million in fiscal 2006 increased $9.1 million compared to fiscal 2005. This increase was driven by net income of $6.3 million, non-cash charges totaling $3.8 million and

 

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$1.7 million for depreciation and amortization and provisions for obsolete inventory, respectively, offset by gains totaling $6.4 million related to the sales of our investment in SwissQual and software rights. Also, a net change in operating assets and liabilities resulted in a $2.0 million increase in cash flow. Within the net change in operating assets and liabilities, increased sales resulted in an increase in accounts receivable and inventory, decreasing cash flow by $5.2 million, which was offset by a $1.7 million increase in deferred revenue and a $4.3 million increase in accrued liabilities.

Cash used in operating activities of $1.8 million in fiscal 2005 decreased $4.6 million compared to fiscal 2004. This decrease was driven by a net loss of $10.1 million, offset by non-cash charges totaling $4.5 million, $2.9 million, $1.0 million, and $0.3 million for depreciation and amortization, charges to fully reserve our deferred tax asset, provisions for obsolete inventory, and provisions for doubtful accounts, respectively, and a net change in operating assets and liabilities that resulted in a $0.5 million decrease in cash flow. Within the net change in operating assets and liabilities, decreased sales resulted in a decrease in accounts receivable and due from affiliate, increasing cash flow by $5.0 million, which was offset by a $3.3 million increase in inventory and a $1.7 million increase in deferred revenue.

Previously, we included cash flows from discontinued operations as a single amount in our consolidated statement of cash flows. In fiscal 2006, we separately disclosed the components of cash flows of discontinued operations, reconciled operating cash flows from net income rather than income from continuing operations, and restated our statements of cash flows for fiscal 2005 and 2004 to conform to the current presentation.

We increased our inventory balance in fiscal 2005 by approximately $3.3 million in support of expected demand. As discussed above, we transitioned the manufacturing of our ChargeSource products from in-house to a contract manufacturer located in China. In support of this effort, we have procured long-lead and other electrical components in accordance with our planned production plan. It is our current strategy to have our contract manufacturer build ChargeSource products under a turnkey model, whereby the contract manufacture procures all necessary components directly from our existing supply base and we simply procure the finished good from the contract manufacturer. During the first quarter of fiscal 2006, we received the first purchase orders for our component inventory, totaling approximately $0.6 million, from our contract manufacturer.

This excerpt taken from the CMRO 10-K filed May 11, 2005.

Operating Activities

 

Cash used in operating activities for fiscal 2005 was driven by a net loss from continuing operations of $10.4 million, offset by $4.5 million of non-cash charges for depreciation and amortization, $2.9 million non-cash charge to fully reserve our deferred tax asset, $0.3 million non-cash charge for doubtful accounts, and a net change in operating assets and liabilities that resulted in a $0.5 million increase in cash flow. Within the net change in operating assets and liabilities, decreased sales resulted in a decrease in accounts receivable and due from affiliate, increasing cash flow by $5.0 million, which was offset by a $2.3 million increase in inventory and a $1.7 million increase in deferred revenue.

 

Accounts receivable as of January 31, 2005 includes approximately $1.0 million due from Targus and its affiliates. The entire amount is currently past due. Of the $1.0 million due, $280,000 is reserved, which represents the most severely delinquent balances due from Targus Europe and Targus Australia, which have historically been more difficult for us to collect. Targus was the exclusive distributor of our ChargeSource products through January 2004, at which time they were removed as the exclusive distributor. Throughout fiscal 2005, we continued to honor our obligations under non-cancelable and non-returnable purchase orders placed by Targus and accepted by Comarco through the first quarter of fiscal 2005 in an attempt to affect an orderly wind-down of the relationship. During December 2004, Targus ceased making payments to Comarco for product shipped under an open book account.

 

In an effort to collect amounts owed us, on March 16, 2005, we filed a complaint against Targus seeking recovery of amounts due. While Comarco believes this action is meritorious, this matter is in the very early stages and any loss of the amounts owed to Comarco that may result from the outcome of this matter is not determinable or estimable. Should we not prevail in this matter, our anticipated cash flows from operations in fiscal 2006 will be reduced correspondingly.

 

Additionally, as of January 31, 2005, approximately $2.1 million of accounts receivable was due from TIM Cellular S.A., of which approximately $549,000 is reserved, which represents the most severely delinquent balances. Such amount represents 35 percent of gross accounts receivable on that date and a substantial portion became past due on March 1, 2005. As of April 25, 2005, $1.3 million of this balance has been collected.

 

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We increased our inventory balance in fiscal 2005 by approximately $2.3 million in support of expected demand for all our products. As discussed above, we are transitioning the manufacturing of our ChargeSource products from in-house to a contract manufacturer located in China. In support of this effort, we have procured long-lead and other electrical components in accordance with our planned production plan. It is our current strategy to have our contract manufacturer build ChargeSource products under a turnkey model, whereby the contract manufacture procures all necessary components directly from our existing supply base and we simply procure the finished good from the contract manufacturer. We are currently transitioning to this model and have begun selling our inventory to the contract manufacturer to avoid component lead time delays. During the first quarter of fiscal 2006, we received the first purchase orders for our component inventory, totaling approximately $0.6 million, from our contract manufacturer.

 

Cash used in operating activities for fiscal 2004 was driven by a net loss from continuing operations of $1.8 million, offset by $5.2 million of non-cash charges for depreciation and amortization, $1.0 million non-cash income tax benefit that resulted in a decrease in cash flow, and a net change in operating assets and liabilities that resulted in a $9.3 million decrease in cash flow. Within the net change in operating assets and liabilities, increased sales in the second half of fiscal 2004 resulted in an increase in accounts receivable and due from affiliate, decreasing cash flow by $10.3 million. In fiscal 2004, we increased inventory levels to meet anticipated demand, resulting in a $2.2 million decrease in cash flow. These decreases in cash flow were offset by increases in operating liabilities of $2.7 million.

 

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