TeleNav 2011 Annual Report Download - page 66

Table of Contents
Provision for income taxes . Our provision for income taxes increased 124% from $11.9 million in fiscal 2009 to $26.6 million in fiscal
2010. Our effective tax rate increased from 29% in fiscal 2009 to 39% in fiscal 2010. The increase in the effective tax rate was primarily
attributable to a tax benefit in fiscal 2009 related to the release of a portion of our valuation allowance against U.S. federal and state deferred tax
assets and a reduction in the forecasted federal research credit for fiscal 2010 due to the expiration of the federal research and development tax
credit effective December 31, 2009. The increase was partially offset by a tax benefit recognized in fiscal 2010 for a tax deduction related to
Qualified Domestic Production Activities under Section 199 of the Internal Revenue Code and by the release of the remaining valuation
allowance related to U.S. federal and state deferred tax assets.
We recognize interest and penalties related to unrecognized tax benefits as part of our provision for income taxes. We had $47,000 and $0
accrued for the payment of interest and penalties at June 30, 2010 and 2009, respectively.
Liquidity and capital resources
The following table sets forth the major sources and uses of cash for each of the periods set forth below:
At June 30, 2011, we had cash and cash equivalents and short-term investments of $203.3 million, which primarily consisted of money
market mutual funds, municipal securities, corporate bonds and commercial paper held by well-capitalized financial institutions. From inception
until fiscal 2010, we financed our operations primarily through private sales of equity. On May 18, 2010, we completed our IPO of 6,550,000
shares of common stock. We raised net proceeds from the offering of $44.6 million after deducting the underwriter’s discount and offering
expenses payable by us, based on an IPO price of $8.00 per share, including 1,050,000 shares of common stock purchased by the underwriters in
connection with the exercise of their over-allotment option.
Our accounts receivable are heavily concentrated in a small number of customers. As of June 30, 2011, our accounts receivable balance
was $30.7 million, of which AT&T, Ford and T-
Mobile represented 50%, 17% and 11%, respectively. Our accounts receivable balance due from
Sprint represented less than 10% of total accounts receivable as of June 30, 2011 and will fluctuate based upon the timing of invoicing and
payment under Sprint’s fixed annual fee arrangement.
Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of expenditures to support
development efforts, the expansion of research and development and sales and marketing activities and headcount, the introduction of our new
and enhanced service and product offerings and the growth in our end user base. We believe our cash and cash equivalents and anticipated cash
flows from operations will be sufficient to satisfy our financial obligations through at least the next 12 months. However, we may experience
lower than expected cash generated from operating activities, revenue that is lower than we anticipate, or greater than expected cost of revenue
or operating expenses. Our revenue and operating results could be lower than we anticipate if, among other reasons, our wireless carrier
customers, two of which we are substantially dependent upon for a large portion of our revenue, were to limit or terminate our relationships with
them; we were to fail to successfully compete in our highly competitive market, including against competitors
62
Fiscal Year Ended June 30,
2011 2010 2009
(in thousands)
Net cash provided by operating activities
$
106,680
$
44,450
$
23,040
Net cash used in investing activities
(187,698
)
(9,815
)
(6,994
)
Net cash provided by (used in) financing activities
(7,735
)
45,104
68
Effect of exchange rate changes on cash and cash equivalents
(56
)
(5
)
164
Net increase (decrease) in cash
$
(88,809
)
$
79,734
$
16,278