Welcome to a Laptop Battery specialist of the Fujitsu Laptop Battery
Thank you Bruno. As noted earlier, revenue for the second quarter was 77.1 million, up 10% from the prior quarter and up 64% from the year ago period. Gross margin for Q2 improved further to 61.2%. This was above our guidance and higher than the gross margin posted in prior and year ago period.
We continue to see the benefits of favorable volume and mix combined with continued with strict cost controls. Similar to Q1 we benefited from good overhead absorption as our revenue in production ramped up over the last quarter. Our strength in mature products with battery such as Fujitsu LifeBook P250 Battery , Fujitsu Lifebook P5010 Battery , Fujitsu Lifebook P5010D Battery , Fujitsu Lifebook P5020 Battery , Fujitsu LifeBook P8010 Battery , Fujitsu LifeBook P8020 Battery , Fujitsu Lifebook S2000 Battery , Fujitsu LifeBook S2010 Battery , Fujitsu Lifebook S2020 Battery , Fujitsu LifeBook S2110 Battery , Fujitsu LIFEBOOK S8205 Battery , Fujitsu LIFEBOOK S8305 Battery contributed to a more favorable margin mix. Gross margin in Q2 also benefited from the strength in revenue from the industrial and other end markets. We will continue to work to control the cost side in an effort to maintain the higher margin levels we achieved in the first half of this year.
As noted in our press release, in Q2 we enjoyed a one time benefit of some sales of order fully reserved products. Total operating expenses for the second quarter came in at 31.4 million compared to 30.2 million in the first quarter. Reflected in the total OpEx number is approximately $600,000 of one time non-executive level incentive compensation.
Although we have added some additional R&D and marketing head count, we continue to closely monitor our spending. Q2 net income was 16.7 million of $0.14 per share as compared to 11.1 million or $0.10 per share in the first quarter, and compared to a net loss of 2.7 or $0.02 per share in the year ago period. All per share amount (inaudible) fully diluted basis.
At the current share price, we expect diluted share count to be approximately 120 to 121 million shares. Moving on, our balance sheet was further strengthened in the quarter, we generated additional 28.1 million of cash from our operations, late in the quarter with the cash, cash equivalent in short term marketable security balance of $212 million. As expected our remaining balance of advanced credits which was due was used up in the second quarter
Not included in the liquidity discussion I just went through is the remaining balance of our auction rate securities is with a fair value of $12.7 million. For the second quarter in a row, we actually experienced a small gain on redemptions.
However, due to the illiquid market for these types of investments, auction rate securities continue to be classified as long term marketable securities.
Cash receivable at July 3 was 47.3 million compared to 48.3 million at the end of last quarter and days’ sales outstanding were 55 days compared to 52 days last quarter and 51 days in Q2 2009. As relative to the entire cost although our actual cost [inaudible] have not maturely change, the DSO metric has been and will continue to be impacted by a transition to higher sell to transactions which causes higher growth [billing].
Inventory at July 3, 2010, was 26.8 million, up from 24.7 million last quarter and down from 28.1 million in the year ago period. Monthly of inventory now stands at 2.7 months compared to 2.5 months at the end of the end of Q1 2010 and 3.8 months in Q2 2009. The increase is planned and is mainly due initial stocking of our broader ECP3 family. Inventory and our distributions channels slightly increased during the quarter, which made approximate of 2.6 million on capital expenditures during the second quarter, an increase from 2 million in Q1 with the quarterly depreciation in amortization expense at 3.5 million as it was in Q1.
This concludes to financial review portion of the call. I will now turn things back over to Bruno for the second quarter detailed look; please go ahead Bruno.
Bruno Guilmart
Thank you Michael, in summary we continue to fell very positive about our business moving forward. We believe we had the right combination of product families to be customers’ needs as reflected in our design win momentum. We’re confident we can sustain our profitability in the in the second half of 2010 as we continue to drive revenue growth while keeping strict control over all operating expenses.
While maintaining a lean infrastructure and adding our count very selectively where at the same time continuing to watch and adjust as needed to global economic changes. On the R&D side we are excited about the progress we have made executing our new product road map. We believe that these products will further improve our current offering and provide different shaded and defendable market positions.
Let me turn now to our expectations. In terms of specific guidance, we expect revenue to be flat to up 5% compared to Q2. Q3 gross margin are expected to be in the range of 59 to 61%. Operating expenses are expected to be approximately 31million as we continue to tightly control cost.