TAINAN, Taiwan, Aug. 6, 2007 (PRIME NEWSWIRE) -- Himax Technologies, Inc. ("Himax" or "Company") (Nasdaq:HIMX) today reported financial results for the second quarter ended June 30, 2007.
Net revenue for the second quarter of 2007 was $222.9 million, representing a 29.8% growth year over year and a 20.5% growth sequentially.
Gross margin was 20.4% in the second quarter of 2007, up 120 basis points year over year and 90 basis points sequentially.
Operating margin was 11.2% in the second quarter of 2007. Operating income was $24.9 million, up 31.8% from the same period last year, and up 48.5% sequentially.
Excluding share-based compensation and acquisition-related charges, non-GAAP operating margin was 12.6% in the second quarter of 2007. Non-GAAP operating income was 28.1 million, up 40.7% from the same period last year, and up 46.4% sequentially.
Net income for the second quarter of 2007 was $26.8 million, up 37.5% from the same period last year, and up 49.0% sequentially. This represents earnings per share of $0.14 per basic and diluted share, compared to $0.10 per basic and diluted share in the second quarter of 2006, and $0.09 per basic and diluted share in the first quarter of 2007.
Excluding share-based compensation and acquisition-related charges, non-GAAP net income was $30.0 million, up 45.8% from the same period last year, and up 47.0% sequentially. This represents earnings per share of $0.15 per basic and diluted share, compared to $0.10 per basic and diluted share in the second quarter of 2006, and $0.10 per basic and diluted share in the first quarter of 2007.
Share-based compensation was $1.5 million, compared to $1.1 million in the second quarter of 2006, and $1.5 million in the first quarter of 2007. Acquisition-related charges were $1.6 million, compared to $0 in the second quarter of 2006 and $0.9 million in the first quarter of 2007.
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.
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.
Jordan Wu, President and Chief Executive Officer of Himax, commented, "We are pleased with the quarter results as revenues came in at the top end of our guidance and both gross margin and EPS were able to beat our guidance. Revenues increased as panel makers raised fab utilization and certain of our customers ramped up their newly installed capacity. We are also pleased that we were able to improve our gross margin for the third consecutive quarter. This positive trend showed the results of our continued efforts in diversifying our product offering and supplier base."
Looking forward, Mr. Wu added, "We expect large panel sales momentum to continue into the third quarter. Outlook for our small- and medium-sized products remains healthy as our product offering, technology roadmap, and design-in status with several tier-1 customers look promising. We expect revenue to grow 8 to 10% sequentially in the third quarter and gross margin to remain flat. Our 2007 RSU is expected to be granted at the end of September 2007, of which a portion will be immediately expensed on the grant date. We expect diluted GAAP EPS to be in the range of $0.08 to $0.09."
Investor Conference Call / Webcast Details
The Company's management will review detailed second quarter 2007 results on Monday, August 6, 2007 at 7:00 PM EDT (7:00 AM, Tuesday, August 7, 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 248178.
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 television semiconductor solutions, as well as LCOS products. 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; and Irvine, California, USA.
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 20-F dated June 22, 2007, 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
Three Months Ended
Ended June 30, March 31,
2007 2006 2007
-------- -------- --------
Revenues
Revenues from third parties, net $102,276 $ 84,634 $ 75,836
Revenues from related parties,
net 120,607 87,041 109,055
-------- -------- --------
222,883 171,675 184,891
-------- -------- --------
Costs and expenses:
Cost of revenues 177,452 138,766 148,830
Research and development 15,328 11,603 14,800
General and administrative 3,222 1,334 3,000
Sales and marketing 1,995 1,097 1,501
-------- -------- --------
Total costs and expenses 197,997 152,800 168,131
-------- -------- --------
Operating income 24,886 18,875 16,760
-------- -------- --------
Non operating income (loss):
Interest income 1,514 1,843 1,382
Impairment loss on an
investment -- (1,500) --
Foreign exchange gains
(losses), net 36 1,398 (490)
Interest expense -- (27) --
Other income, net 159 58 42
-------- -------- --------
1,709 1,772 934
-------- -------- --------
Income before income taxes and
minority interest 26,595 20,647 17,694
Income tax expense -- 1,246 --
-------- -------- --------
Income before minority interest 26,595 19,401 17,694
Minority interest, net of tax 247 124 325
-------- -------- --------
Net income $ 26,842 $ 19,525 $ 18,019
======== ======== ========
Basic earnings per ordinary share
and ADS $0.14 $0.10 $0.09
======== ======== ========
Diluted earnings per
ordinary share and ADS $0.14 $0.10 $0.09
======== ======== ========
Basic Weighted Average Outstanding
Shares 197,656 195,535 195,761
Diluted Weighted Average Outstanding
Shares 198,013 198,512 195,968
Himax Technologies, Inc.
Unaudited Supplemental Financial Information
(Figures in Thousands of U.S. Dollars)
The amount of share-based
compensation included in Three
applicable costs and Months
expenses categories is Ended
summarized as follows: Three Months March
Ended June 30, 31,
2007 2006 2007
------- ------- -------
Share-based compensation
Cost of revenues $25 $18 $25
Research and development 1,201 818 1,187
General and administrative 151 98 151
Sales and marketing 156 129 156
------- ------- -------
Total $ 1,533 $ 1,063 $ 1,519
======= ======= =======
The amount of acquisition-related
charges included in applicable
expenses categories is
summarized as follows:
Research and development $ 1,234 $ -- $ 789
Sales and marketing 408 -- 98
------- ------- -------
Total $ 1,642 $ -- $ 887
======= ======= =======
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
(Figures in Thousands of U.S. Dollars, Except Per Share Data)
Six Months Ended
June 30,
2007 2006
-------- --------
Revenues
Revenues from third parties, net $178,112 $150,061
Revenues from related parties, net 229,662 196,473
-------- --------
407,774 346,534
-------- --------
Costs and expenses:
Cost of revenues 326,282 276,064
Research and development 30,128 22,505
General and administrative 6,222 3,392
Sales and marketing 3,496 2,104
-------- --------
Total costs and expenses 366,128 304,065
-------- --------
Operating income 41,646 42,469
-------- --------
Non operating income (loss):
Interest income 2,896 2,048
Impairment loss on an investment -- (1,500)
Foreign exchange gains (losses), net (454) 1,166
Interest expense -- (311)
Other income, net 201 113
-------- --------
2,643 1,516
-------- --------
Income before income taxes and minority
interest 44,289 43,985
Income tax expense -- 2,737
-------- --------
Income before minority interest 44,289 41,248
Minority interest, net of tax 572 216
-------- --------
Net income $ 44,861 $ 41,464
======== ========
Basic earnings per ordinary share
and ADS $0.23 $0.22
======== ========
Diluted earnings per ordinary share
and ADS $0.23 $0.22
======== ========
Basic Weighted Average Outstanding
Shares 196,714 187,102
Diluted Weighted Average Outstanding
Shares 197,134 190,510
Himax Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Figures in Thousands of U.S. Dollars)
June 30, Mar 31, Dec 31,
2007 2007 2006
-------- -------- --------
Assets
Current assets:
Cash and cash equivalents $137,508 $111,838 $109,753
Marketable securities
available-for-sale 13,327 12,783 8,828
Restricted cash equivalents
and marketable securities 171 106 108
Accounts receivable, less
allowance for doubtful
accounts, sales returns
and discounts 116,812 108,147 112,767
Accounts receivable from
related parties, less
allowance for doubtful
accounts, sales returns
and discounts 137,602 105,740 116,850
Inventories 125,146 119,379 101,341
Deferred income taxes 6,829 7,401 6,744
Prepaid expenses and other
current assets 10,113 10,276 10,324
-------- -------- --------
Total current assets $547,508 $475,670 $466,715
-------- -------- --------
Property, plant and equipment, net 45,801 45,767 38,895
Deferred income taxes 12,842 11,964 11,405
Intangible assets, net 34,273 35,865 393
Investments in non-marketable
securities 1,857 817 817
Refundable deposits and
prepaid pension costs 593 618 569
-------- -------- --------
95,366 95,031 52,079
-------- -------- --------
Total assets $642,874 $570,701 $518,794
======== ======== ========
Liabilities, minority
interest and stockholders'
equity
Current liabilities:
Accounts payable $171,218 $121,459 $120,407
Income tax payable 7,333 12,150 11,666
Other accrued expenses and
other current liabilities 16,023 16,987 21,206
-------- -------- --------
Total current liabilities $194,574 $150,596 $153,279
Accrued pension liability $196 $196 $192
-------- -------- --------
Total liabilities $194,770 $150,792 $153,471
-------- -------- --------
Minority interest $1,715 $1,980 $1,396
-------- -------- --------
Stockholders' equity:
Ordinary share, US$0.0001
par value, 500,000,000
shares authorized 20 20 19
Additional paid-in capital 259,189 257,678 221,666
Accumulated other
comprehensive loss (198) (305) (275)
Unappropriated earnings 187,378 160,536 142,517
-------- -------- --------
Total stockholders' equity $446,389 $417,929 $363,927
-------- -------- --------
Total liabilities, minority
interest and stockholders'
equity $642,874 $570,701 $518,794
======== ======== ========
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
Three
Months
Three Months Ended
Ended June 30, March 31,
2007 2006 2007
------- ------- -------
Cash flows from operating
activities:
Net income $26,842 $19,525 $18,019
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 2,587 1,204 2,026
Write-off of in-process
research and development 900 -- 700
Share-based compensation
expenses 1,533 1,063 1,519
Minority interest, net of tax (247) (124) (325)
Loss on disposal of property,
plant and equipment 204 5 35
Gain on sale of subsidiary
shares and investments in
non-marketable securities,
net (125) (33) (21)
Gain on sale of marketable
securities, net (23) (22) (30)
Impairment loss on an
investment -- 1,500 --
Deferred income taxes (727) (1,677) --
Inventories write downs 5,103 1,888 3,118
Changes in operating assets
and liabilities:
Accounts receivable (8,661) (13,672) 6,084
Accounts receivable from
related parties (31,856) 5,076 11,514
Inventories (10,868) (5,897) (20,803)
Prepaid expenses and other
current assets 486 (2,838) (85)
Accounts payable 49,753 12,525 416
Income tax payable (4,333) (3,056) --
Other accrued expenses and
other current liabilities 4,071 (195) (6,290)
------- ------- -------
Net cash provided by
operating activities 34,639 15,272 15,877
------- ------- -------
Cash flows from investing
activities:
Purchase of property, plant
and equipment (6,877) (4,065) (6,483)
Proceeds from sale of
property, plant and
equipment 3 -- --
Purchase of
available-for-sales
marketable securities (11,723) (8,625) (17,581)
Sales and maturities of
available-for-sale
marketable securities 11,258 9,830 13,639
Cash acquired in acquisition -- -- 6,197
Proceeds from sale of
subsidiary shares and
investments in
non-marketable securities
by Himax Technologies
Limited 131 55 34
Purchase of investments in
non-marketable securities (1,040) -- --
Purchase of subsidiary
shares from minority
interest (46) (84) (17)
Refund from (increase in)
refundable deposits 76 (23) (16)
Release (pledge) of
restricted cash equivalents (91) 14,101 2
------- ------- -------
Net cash provided by
(used in) investing
activities (8,309) 11,189 (4,225)
------- ------- -------
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
Three
Months
Three Months Ended
Ended June 30, March 31,
2007 2006 2007
-------- -------- --------
Cash flows from financing
activities:
Proceeds from initial
public offering, net of
issuance costs $ -- $147,813 $ --
Proceeds from issuance of
new shares by
subsidiaries -- -- 1,217
Acquisition of ordinary
shares for retirement (625) -- (10,841)
Repayment of short-term
debt -- (38,577) --
-------- -------- --------
Net cash provided by
(used in) financing
activities (625) 109,236 (9,624)
-------- -------- --------
Effect of exchange rate
changes on cash and cash
equivalents (35) (60) 57
-------- -------- --------
Net increase in cash and
cash equivalents 25,670 135,637 2,085
Cash and cash equivalents
at beginning of period 111,838 31,247 109,753
-------- -------- --------
Cash and cash equivalents
at end of period $137,508 $166,884 $111,838
======== ======== ========
Supplemental disclosures of
cash flow information:
Cash paid during the period for:
Interest $ -- $ 28 $ --
======== ======== ========
Income taxes $ 4,706 $ 5,549 $ 17
======== ======== ========
Supplemental disclosures of
non-cash investing and
financing activities:
Payable for purchase of
equipment and
construction in progress $ (4,473) $ (18) $ 1,384
======== ======== ========
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
Three Months Ended
Ended June 30, March 31,
2007 2006 2007
-------- -------- --------
Revenues $222,883 $171,675 $184,891
Gross profit 45,431 32,909 36,061
Add: Share-based
compensation - Cost of
revenues 25 18 25
Gross profit excluding
share-based compensation 45,456 32,927 36,086
Gross margin excluding
share-based compensation 20.4% 19.2% 19.5%
Operating income 24,886 18,875 16,760
Add: Share-based compensation 1,533 1,063 1,519
Operating income excluding
share-based compensation 26,419 19,938 18,279
Add: Acquisition-related
charges - In-process R&D
write off 900 -- 700
- Intangible assets
amortization 742 -- 187
Operating income excluding
share-based compensation
and acquisition-related
charges 28,061 19,938 19,166
Operating margin excluding
share-based compensation
and acquisition-related
charges 12.6% 11.6% 10.4%
Net income excluding
share-based compensation
and acquisition-related
charges 30,017 20,588 20,425
Net margin excluding
share-based compensation
and acquisition-related
charges 13.5% 12.0% 11.0%
* 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
* Net margin excluding share-based compensation and acquisition-related
charges equals net income excluding share-based compensation and
acquisition-related charges divided by revenues
Himax Technologies, Inc.
Unaudited Supplemental Data - Reconciliation Schedule
(Figures in Thousands of U.S. Dollars, Except Per Share Data)
Diluted Earnings Per Share Excluding Share-based Compensation and
Acquisition-Related Charges:
Three Months
Ended June 30,
2007
--------------
Diluted GAAP EPS $0.14
Add: Estimated share-based compensation
per diluted share $0.01
Add: Estimated acquisition-related charges
per diluted share $0.01
Diluted non-GAAP EPS excluding share-based
compensation and acquisition-related charges $0.15
Numbers do not add up due to rounding