Non-GAAP operating expenses were $11 million for Q2 compared with $11.3 million last quarter. We have been controlling our discretionary spending to reflect current business levels and for the current quarter of Q3, our OpEx will decline a few hundred thousand dollars or so due to reducing our worldwide headcount by 5% to 7%. Going forward, our non-GAAP operating expenses should remain within this range aside from fluctuations for variable selling cost.
The non-GAAP effective tax rate was 9% for Q2 compared with 36% last quarter. The Q2 tax rate was unusually low due to the GAAP net loss for the quarter which resulted in some year-to-date true-ups. The tax rate was also affected by the mixture of income between foreign and domestic locations.
Non-GAAP net income was $1 million, or $0.04 per diluted share for Q2, compared with $1.8 million, or $0.07 per share, last quarter. Most of the net income decline was a result of the lower revenue volume. Although our net earnings decreased sequentially, we remained profitable and this has been the case the last five plus years.
Exiting Q2, our balance sheet remained in excellent shape and the cash generation of our business remains strong. Cash including both short and long-term investments and marketable securities was $124 million which equated to $5.13 per share. During the quarter, we repurchased $302,000 shares for $2.3 million at an average price of $7.63 per share. Since starting the buyback program in 2007, we have repurchased over 4.8 million shares for $48 million.Net inventory was $18.3 million at the end of Q2 which is flat from last quarter and equated to 87 days of supply. Compared with the peak five quarters ago, we have reduced in-house inventory by 41% and we are well positioned when an uptick returned. Distributor inventory decreased 9% sequentially and we had 7.3 weeks of supply at the end of Q2, which was within the normal range of six to eight weeks. Capital equipment additions were $1.1 million for Q2 and depreciation expense was $2 million.Read the rest of this transcript for free on seekingalpha.com
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