Case 4.2 (a) Begins on next page.
Oct 27, 2013 Oct 28, 2012 Oct 30, 2011
Cash flows from operating activities:
Income (loss) from continuing operations 256$ 109$ 1,926$
Other non-cash items, net (30)
Changes in assets and liabilities:
(Increase) decrease in receivables (404) 493 292
(Increase) decrease in inventories (141) 679 (163)
Purchases of marketable securities and short-term investments (607) (1,327) (1,137)
Sales of marketable securities and short-term investments 1,013 1,019 1,923
Acquisitions, net of cash acquired (1) (4,190)
Other investing activities, net
Net cash provided by (used in) investing activities 215 (4,660) 707
Effect of exchange rate changes on cash, net (5) 6
Net increase (decrease) in cash and equivalents for period 319 (4,568) 4,102
Cash and equivalents, beginning of period 1,392 5,960 1,858
Cash and equivalents, end of period 1,711$ 1,392$ 5,960$
Supplemental disclosures of cash flow information:
Results for the Years Ending
Applied Materials (AMAT / NASDAQ)
Annual Consolidated Statement of Cash Flows
Amou nts R ou n ded to : M i llion s
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Restructuring and impairment charges 341 589
(b) Applied Materials (AMAT) generated positive cash flow from operating
activities (CFO) all three years, but the dollar amount of CFO has decreased each
year. CFO is greater than net income every year and there are no significant
concerns related to the operating accounts. Accounts receivable declined two years
and then increased in 2013, resulting in increased cash flows in 2011 and 2012
when the firm collected on receivables. Inventories increased in 2012, but
decreased the other two years which also increased CFO. Accounts payable and
accrued expenses decreased in 2011 and 2012 resulting in lower CFO, and only
increased slightly in 2013. The increases in these accounts are explained in the
Oct 27, 2013 % Oct 28, 2012 % Oct 30, 2011 %
Inflows $ $ $
Proceeds from operating activities 623 34.1 1,851 62.4 2,429 38.5
Sales of property, plant, and equipment 7 0.4 – 130 2.0
Sales of marketable securities and short-term investments 1,013 55.5 1,019 34.3 1,923 30.5
Divestiture of acquisitions, net of cash acquired – – –
Proceeds from other investing activities, net – – –
Proceeds from short-term borrowings, net – – –
Proceeds from sales of common stock 182 10.0 97 3.3 95 1.5
Proceeds from other financing activities, net – – –
Proceeds from discontinued operations – – –
Gains from effect of exchange rate changes on cash, net – – 6 0.1
Purchases of marketable securities and short-term investments 607 40.3 1,327 17.6 1,137 51.4
Acquisitions, net of cash acquired 1 – 4,190 55.6 –
Losses from other investing activities, net – – –
Payment of short-term borrowings, net – – –
Payment of long-term borrowings – 1 – –
Repurchase of common stock / treasury stock 245 16.3 1,416 18.8 468 21.2
Results for the Years Ending
Payment of dividends to shareholders 456 30.3 434 5.8 397 18.0
Losses from discontinued operations – – –
Losses from effect of exchange rate changes on cash, net – 5 0.1 –
A key use of cash each year is to purchase investments with excess cash. In 2012,
AMAT acquired Varian, a semiconductor processing equipment manufacturer and
the leading supplier of ion implantation equipment used by chipmakers globally.
This acquisition was made to complement AMAT’s current products and allow for
future growth. (In 2013, AMAT entered into an agreement to merge with Tokyo
AMAT has a solid cash position.
Case 4.3
(a)
Avnet, Inc.
Statement of Cash Flows Summary Analysis
For the Years Ended June 29, 2013, June 30, 2012, and July 2, 2011
(dollars in thousands)
2013
%
2012
%
2011
%
Inflows:
Cash from operations
696,197
66
528,718
47
278,079
52
Borrowings under A/R
Effect of exchange rate
3,419
0
0
0
51,916
10
Total Inflows
1,060,297
100.0
1,132,177
100.0
532,536
100.0
Outflows:
Repayments under A/R
program
310,000
29
0
0
0
0
Repayment of notes
0
0
0
0
109,600
12
180,941
17
Repurchases of common
stock
207,192
20
0
0
Acquisitions
262,306
25
690,997
72
Effect of exchange rate
0
0
5
0
0
Total Outflows
1,057,818
100.0
100.0
949,304
100.0
Change in cash
2,479
0
0
160,000
Issuance of notes
349,258
33
0
0
0
0
Proceeds from bank and
0
0
7
2
Other financing, net
4,792
1
1
1
3,018
0
0
10,621
2
Proceeds from
divestitures
3,613
0
0
19,108
3
(b) Avnet has generated positive cash from operating activities (CFO) all three
years and the dollar amount has been on an upward trend despite the downward
trend of net income. While CFO was lower than net income in 2011 and 2012 it
With the exception of 2012, CFO was the main source of cash inflows. Short and
long-term borrowings are the other significant source of cash in all three years. In
2011, the effect of exchange rate changes contributed 10% of cash inflows.
Avnet consistently pays back debt each year which is a good sign that they are able
to generate the cash flow needed. Although the dollar amount is decreasing each
year, Avnet has made significant acquisitions all three years. Avnet continues to
purchase property, plant and equipment, however the dollar amount has decreased
each year, which may be a result of lower need due to the acquisitions.
(c) Avnet is successful in generating positive CFO and has so far been able to
make payments on debt. Their creditworthiness is good.
Case 4.4
Company Name:
Stock Ticker Symbol: HYGS
U.S. Stock Exchange: NASDAQ Variable
/3 / 000
Statement Year-end Dates: 12/31/2013 12/31/2012
Financial Reports Rounded to : Thousands
Check Figures:
Balance Sheet Current Assets: 31,649$ 34,607$
Total Assets: 40,070$ 41,877$
Current Liabilities: 22,528$ 26,054$
Total Stockholders‘ Equity: 6,161$ 4,307$
Hydrogenics Corporation
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Dec 31, 2013 Dec 31, 2012 Jan 0, 1900
Cash flows from operating activities:
Income (loss) from continuing operations (8,908)$ (12,797)$ –$
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization 712 870
Stock-based compensation 631 577
(Increase) decrease in other current assets (47) (181)
Increase (decrease) in accounts payable,
accrued liabilities, and income taxes payable
(1,614) 984
Increase (decrease) in deferred liabilities (6,629) 15,138
Other assets and liabilities, net
Net cash provided by (used in ) operating activities (9,197) (1,163) –
Cash flows from investing activities:
Purchases of property, plant, and equipment (939) (424)
Cash flows from financing activities:
Short-term borrowings, net
Proceeds from long-term borrowings 1,782 1,621
Payment of long-term borrowings (393) (308)
Proceeds from sales of common stock 7,280 5,178
Repurchase of common stock / treasury stock
Dividends to shareholders
Other financing activities, net
Results for the Years Ending
Hydrogenics Corporation (HYGS / NASDAQ)
Annual Consolidated Statement of Cash Flows
Amou n ts Rou nded to : T h ou san ds
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Dec 31, 2013 Dec 31, 2012 Jan 0, 1900
Income (loss) from continuing operations (8,908)$ (12,797)$ –$
Depreciation and amortization 712 870
Stock-based compensation 631 577
Increase (decrease) in deferred liabilities (6,629) 15,138
Other assets and liabilities, net
Purchases of property, plant, and equipment (939) (424)
Sales of property, plant, and equipment 26
Purchases of marketable securities and short-term investments
Sales of marketable securities and short-term investments
Acquisitions, net of cash acquired
Other investing activities, net (32) (2)
Short-term borrowings, net
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(b) Hydrogenics is not generating cash from operations (CFO) due to ongoing
losses in the firm. The CFO was a smaller negative amount than the net loss in
2012; however, the CFO was a greater negative amount than the net loss in 2013.
The main reason for the smaller CFO in 2012 is due to the large increase in
Hydrogenics must rely on issuance of common stock and long-term borrowing to
obtain cash. The majority of funding has come from sales of stock to investors
which is a positive sign that investors are supportive of the company.
Dec 31, 2013 % Dec 31, 2012 % Jan 0, 1900 0
Inflows $ $ $
Proceeds from operating activities – – –
Sales of property, plant, and equipment – 26 0.4 –
Sales of marketable securities and short-term investments – – –
Proceeds from short-term borrowings, net – – –
Proceeds from sales of common stock 7,280 77.8 5,178 72.6 –
Proceeds from other financing activities, net – – –
Proceeds from discontinued operations – – –
Gains from effect of exchange rate changes on cash, net 302 3.2 307 4.3 –
Divestiture of acquisitions, net of cash acquired – – –
Total Inflows 9,364$ 100.0 7,132$ 100.0 –$ 0.0
Outflows $ $ $
Losses from operating activities 9,197 87.1 1,163 61.3 –
Purchases of property, plant, and equipment 939 8.9 424 22.4 –
Purchases of marketable securities and short-term investments – – –
Acquisitions, net of cash acquired – – –
Losses from other investing activities, net 32 0.3 2 0.1 –
Payment of short-term borrowings, net – – –
Hydrogenics Corporation (HYGS / NASDAQ)
Annual Summary Analysis Statement of Cash Flows
S u mm ary pe r cen tag es in ita lic s do n ot f oot d u e to r ou nd in g d if f eren ces
Results for the Years Ending
Payment of long-term borrowings 393 3.7 308 16.2 –
Repurchase of common stock / treasury stock – – –
Payment of dividends to shareholders – – –
Losses from discontinued operations – – –
Losses from effect of exchange rate changes on cash, net – – –