TAINAN, Taiwan, May 9, 2007 (PRIME NEWSWIRE) -- Himax Technologies, Inc. ("Himax" or "Company") (Nasdaq:HIMX) today reported financial results for the first quarter ended March 31, 2007.
Net revenue for the first quarter of 2007 was $184.9 million, compared to $174.9 million for the first quarter of 2006, and $220.9 million in the fourth quarter of 2006. Net income for the first quarter of 2007 was $18.0 million, or $0.09 per diluted share, compared to net income of $21.9 million, or $0.12 per diluted share in the first quarter of 2006, and $31.1 million, or $0.16 per diluted share in the fourth quarter of 2006. Share-based compensation was $1.5 million, $1.1 million and $1.5 million in the first quarter of 2007, the first quarter of 2006 and the fourth quarter of 2006, respectively.
Gross margin in the first quarter of 2007 was 19.5%, as compared to 21.5% in the first quarter of 2006, and 18.9% in the fourth quarter of 2006. Operating margin was 9.1% in the first quarter of 2007, as compared to 13.5% in the first quarter of 2006, and 10.1% in the fourth quarter of 2006.
Excluding share-based compensation, gross margin was 19.5% in the first quarter of 2007, 21.5% in the first quarter of 2006, and 18.9% in the fourth quarter of 2006, with an operating margin of 10.4%, 14.1%, and 10.8%, respectively.
A reconciliation of our gross margin and operating margin excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to GAAP gross margin and GAAP operating margin, our most comparable GAAP figure, is set out in the attached reconciliation schedule.
Jordan Wu, President and Chief Executive Officer of Himax, commented, "We are pleased that our revenues, gross margin and EPS were all inline with our previous guidance. The decline in revenue reflects the traditionally seasonal lower demand and fewer working days in the holiday month of February. Revenue from large panel display drivers were lower sequentially, inline with expectations. Revenue from small- and medium-sized display drivers was up strongly on a sequential basis, primarily due to better sales in both mobile phone and consumer electronic product segments, share gains at certain first tier Japanese customers and the acquisition of Wisepal."
Max Chan, Chief Financial Officer of Himax, said, "Our gross margin increased to 19.5% from 18.9% a quarter ago, due to our continued efforts to diversify our product mix and lower our costs. Small- and medium-sized driver ICs, which typically enjoy a higher gross margin, accounted for approximately 16% of our revenue in the period, up from approximately 11% of our revenue a quarter ago. Our income before tax and minority interest declined primarily due to a lower revenue base. We expect our effective tax rate for 2007 to be around 0% based on which we have recorded net tax benefit or expense of zero in the first quarter."
Looking forward, Mr. Wu added, "For the second quarter of 2007, we expect overall revenue will improve approximately 17% to 20% compared to the first quarter of 2007. We expect demand for our large panel drivers will increase as our customers raise fab utilization to fulfill increasing demand for all large panel products across the board. We also expect sales of our small- and medium-sized drivers to remain healthy as several of our design-in projects have begun mass production. We expect our gross margin to remain flat or decline slightly compared to the first quarter 2007, with diluted GAAP EPS is expected to be in the range of $0.10 to $0.11."
A reconciliation of our diluted EPS excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to diluted GAAP EPS, our most comparable GAAP figure, is set out in the attached reconciliation schedule.
Investor Conference Call / Webcast Details
The Company's management will review detailed first quarter 2007 results on Wednesday, May 9, 2007 at 7:00 PM EDT (7:00 AM, Thursday May 10, Taiwan time). The conference call-in number is +1-201-689-8560 (international) and +1-877-407-0784 (U.S. domestic). A live webcast of the conference call will be available on the Company's website at www.himax.com.tw. The playback will be available beginning two hours after the conclusion of the conference call and will be accessible by dialing +1-201-612-7415 (international) and 1-877-660-6853 (U.S. domestic). The account number to access the replay is 3055 and the confirmation ID number is 238293.
About Himax Technologies, Inc.
Himax Technologies, Inc. designs, develops and markets semiconductors that are critical components of flat panel displays. The Company's principal products are display drivers for large-sized TFT-LCD panels, which are used in desktop monitors, notebook computers and televisions, and display drivers for small- and medium-sized TFT-LCD panels, which are used in mobile handsets and consumer electronics products such as digital cameras, mobile gaming devices and car navigation displays. In addition, the Company is expanding its product offering to include LCD TV chipset solutions and LCOS microdisplays. Based in Tainan, Taiwan, the Company has regional offices in Hsinchu and Taipei, Taiwan; Suzhou and Shenzhen, China; Yokohama, Japan and Anyangsi Kyungkido, South Korea.
Forward-Looking Statements:
Certain statements in this press release, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this press release. Factors that could cause actual results to differ include general business and economic conditions and the state of the semiconductor industry; level of competition; demand for end-use applications products; reliance on a small group of principal customers; continued success in technological innovations; development of alternative flat panel display technologies; ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; shortages in supply of key components; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; and other risks described from time to time in the Company's SEC filings, including its Form F-1 dated March 13, 2006, as amended. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Himax Technologies, Inc. Unaudited Condensed Consolidated Statements of Income (These interim financials do not fully comply with US GAAP because they omit all interim disclosure required by US GAAP.) (Figures in Thousands of U.S. Dollars, Except Per Share Data) Three Months Ended ----------------------------------- March 31, Dec. 31, ---------------------- --------- 2007 2006 2006 --------- --------- --------- Revenues Revenues from third parties, net $ 75,836 $ 65,427 $ 90,947 Revenues from related parties, net 109,055 109,432 129,932 --------- --------- --------- 184,891 174,859 220,879 --------- --------- --------- Costs and expenses: Cost of revenues 148,830 137,298 179,214 Research and development 14,800 10,902 13,883 General and administrative 3,000 2,058 3,180 Sales and marketing 1,501 1,007 2,280 --------- --------- --------- Total costs and expenses 168,131 151,265 198,557 --------- --------- --------- Operating income 16,760 23,594 22,322 --------- --------- --------- Non operating income (loss): Interest income 1,382 205 1,812 Foreign exchange losses, net (490) (232) (209) Interest expense --- (284) --- Other income, net 42 55 61 --------- --------- --------- 934 (256) 1,664 --------- --------- --------- Income before income taxes and minority interest 17,694 23,338 23,986 Income tax expense (benefit) --- 1,491 (6,937) --------- --------- --------- Income before minority interest 17,694 21,847 30,923 Minority interest, net of tax 325 92 178 --------- --------- --------- Net income $ 18,019 $ 21,939 $ 31,101 ========= ========= ========= Basic earnings per ordinary share and ADS $ 0.09 $ 0.12 $ 0.16 ========= ========= ========= Diluted earnings per ordinary share and ADS $ 0.09 $ 0.12 $ 0.16 ========= ========= ========= Basic Weighted Average Outstanding Shares 195,761 178,575 198,154 Diluted Weighted Average Outstanding Shares 195,968 182,271 199,419
Himax Technologies, Inc. Unaudited Supplemental Financial Information (Figures in Thousands of U.S. Dollars) The amount of share-based compensation included in applicable costs and Three Months Ended expenses categories is summarized as March 31, December 31, follows: 2007 2006 2006 ---------------------------------------- ------ ------ Share-based compensation Cost of revenues $ 25 $ 24 $ 25 Research and development 1,187 864 1,161 General and administrative 151 105 151 Sales and marketing 156 145 156 ------ ------ ------ Total $1,519 $1,138 $1,493 ====== ====== ======
Himax Technologies, Inc. Unaudited Condensed Consolidated Balance Sheets (Figures in Thousands of U.S. Dollars) Mar 31, Dec 31, Mar 31, 2007 2006 2006 -------- -------- -------- Assets Current assets: Cash and cash equivalents $111,838 $109,753 $ 31,247 Marketable securities available- for-sale 12,783 8,828 3,150 Restricted cash equivalents and marketable securities 106 108 14,558 Accounts receivable, less allowance for doubtful accounts, sales returns and discounts 108,147 112,363 73,178 Accounts receivable from related parties, less allowance for doubtful accounts, sales returns and discounts 105,740 117,254 71,540 Inventories 119,379 101,341 99,539 Deferred income taxes 7,401 7,362 9,645 Prepaid expenses and other current assets 10,276 10,343 10,328 -------- -------- -------- Total current assets $475,670 $467,352 $313,185 -------- -------- -------- Property and equipment, net 45,767 38,895 $ 25,943 Deferred income taxes 11,964 11,405 145 Intangible assets, net 35,865 393 74 Investments in non-marketable securities 817 817 1,813 Refundable deposits 618 550 488 -------- -------- -------- 95,031 52,060 28,463 -------- -------- -------- Total assets $570,701 $519,412 $341,648 ======== ======== ======== Liabilities, minority interest and stockholders' equity Current liabilities: Short-term debt $ -- $ -- $ 38,577 Accounts payable 121,459 120,407 85,489 Income tax payable 12,150 12,284 15,915 Other accrued expenses and other current liabilities 17,183 21,398 12,167 -------- -------- -------- Total current liabilities $150,792 $154,089 $152,148 -------- -------- -------- Minority interest $ 1,980 $ 1,396 $ 609 -------- -------- -------- Stockholders' equity: Ordinary share, US$0.0001 par value, 500,000,000 shares authorized 20 19 18 Additional paid-in capital 257,678 221,666 99,570 Accumulated other comprehensive income (loss) (305) (275) 37 Unappropriated earnings 160,536 142,517 89,266 -------- -------- -------- Total stockholders' equity $417,929 $363,927 $188,891 -------- -------- -------- Total liabilities, minority interest and stockholders' equity $570,701 $519,412 $341,648 ======== ======== ========
Himax Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (Figures in Thousands of U.S. Dollars) Three Months Ended ------------------------------ March 31, Dec. 31, ------------------ -------- 2007 2006 2006 -------- -------- -------- Cash flows from operating activities: Net income $ 18,019 $ 21,939 $ 31,101 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,026 1,218 1,680 Write-off of in-process research and development 700 -- -- Share-based compensation expenses 1,519 1,138 1,493 Minority interest, net of tax (325) (92) (178) Loss on disposal of property and equipment 35 31 -- Gain on sale of subsidiary shares and investments in non-marketable securities, net (21) (43) (49) Gain on sale of marketable securities, net (30) (15) (12) Deferred income taxes -- (679) (7,332) Inventories write downs 3,118 756 2,050 Changes in operating assets and liabilities: Accounts receivable 6,084 6,998 (10,488) Accounts receivable from related parties 11,514 (1,879) (45,667) Inventories (20,803) 4,708 7,527 Prepaid expenses and other current assets (85) 1,801 4,125 Accounts payable 416 (20,312) 13,578 Income tax payable -- 2,333 457 Other accrued expenses and other current liabilities (6,290) (1,746) 3,067 -------- -------- -------- Net cash provided by operating activities 15,877 16,156 1,352 -------- -------- -------- Cash flows from investing activities: Purchase of property and equipment (6,483) (3,886) (4,187) Purchase of available-for-sales marketable securities (17,581) -- (12,678) Sales and maturities of available- for-sale marketable securities 13,639 878 7,940 Cash acquired in acquisition 6,197 -- 17 Proceeds from sale of subsidiary shares and investments in non-marketable securities by Himax Technologies Limited 34 124 1,537 Purchase of subsidiary shares from minority interest (17) (23) (602) Refund from (increase in) refundable deposits (16) 223 63 Release (pledge) of restricted cash equivalents and marketable securities 2 (505) (75) -------- -------- -------- Net cash used in investing activities (4,225) (3,189) (7,985) -------- -------- --------
Himax Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (Figures in Thousands of U.S. Dollars) Three Months Ended ------------------------------ March 31, Dec. 31, ------------------- -------- 2007 2006 2006 -------- -------- -------- Cash flows from financing activities: Proceeds from initial public offering, net of issuance costs $ -- $ -- $ (392) Proceeds from issuance of new shares by subsidiaries 1,217 -- -- Acquisition of ordinary shares for retirement (10,841) -- (38,835) Proceeds from borrowing of short-term debt -- 11,303 -- Repayment of long-term debt -- (89) -- -------- -------- -------- Net cash provided by (used in) financing activities (9,624) 11,214 (39,227) -------- -------- -------- Effect of exchange rate changes on cash and cash equivalents 57 (20) 19 -------- -------- -------- Net increase (decrease) in cash and cash equivalents 2,085 24,161 (45,841) Cash and cash equivalents at beginning of period 109,753 7,086 155,594 -------- -------- -------- Cash and cash equivalents at end of period $111,838 $ 31,247 $109,753 ======== ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ -- $ 283 $ -- ======== ======== ======== Income taxes $ 17 $ 15 $ 110 ======== ======== ======== Supplemental disclosures of non-cash investing and financing activities: Payable for purchase of equipment and construction in progress $ 1,384 $ 893 $ 2,721 ======== ======== ======== Fair value of common stocks issued by Himax Display, Inc. in the acquisition of Integrated Microdisplays Limited $ -- $ -- $ 538 ======== ======== ======== Fair value of ordinary shares issued by Himax Technologies, Inc. in the acquisition of Wisepal Technologies, Inc $ 45,031 $ -- $ -- ======== ======== ========
Himax Technologies, Inc. Unaudited Supplemental Data - Reconciliation Schedule (Figures in Thousands of U.S. Dollars, Except Per Share Data) Gross Margin and Operating Margin Excluding Share-based Compensation and Acquisition-Related Charges: Three Months Ended ----------------------------- March 31, Dec. 31, ------------------- -------- 2007 2006 2006 -------- -------- -------- Revenues $184,891 $174,859 $220,879 Gross profit 36,061 37,561 41,665 Add: Share-based compensation - Cost of revenues 25 24 25 Gross profit excluding share- based compensation 36,086 37,585 41,690 Gross margin excluding share- based compensation 19.5% 21.5% 18.9% Operating income 16,760 23,594 22,322 Add: Share-based compensation 1,519 1,138 1,493 Operating income excluding share-based compensation 18,279 24,732 23,815 Add: Acquisition-related charges - In-process R&D write off 700 -- -- - Intangible assets amortization 187 -- -- Operating income excluding share-based compensation and acquisition-related charges 19,166 24,732 23,815 Operating margin excluding share-based compensation and acquisition-related charges 10.4% 14.1% 10.8% * Gross margin excluding share-based compensation equals gross profit excluding share-based compensation divided by revenues * Operating margin excluding share-based compensation and acquisition-related charges equals operating income excluding share-based compensation and acquisition-related charges divided by revenues Diluted Earnings Per Share Excluding Share-based Compensation and Acquisition-Related Charges: Three Months Ended March 31, 2007 ----------------- Diluted GAAP EPS $0.09 Add: Estimated share-based compensation per diluted share $0.01 Add: Estimated acquisition-related charges per diluted share $ -- Diluted non GAAP EPS excluding share-based compensation and acquisition-related charges $0.10 Numbers do not add up due to rounding