Second Quarter 2008 Highlights: * Net revenues increased 10.8% year-over-year and increased 6.6%, sequentially * Non-driver products accounted for more than 5% of total revenues for the first time since inception * Recently ranked worldwide number one display driver supplier for large-sized TFT-LCD panel applications by iSuppli
TAINAN, Taiwan, Aug. 4, 2008 (PRIME NEWSWIRE) -- Himax Technologies, Inc. ("Himax" or "Company") (Nasdaq:HIMX) today reported financial results for the second quarter ended June 30, 2008.
For the second quarter 2008, Himax reported net revenues of $246.9 million, representing a 10.8% increase over $222.9 million for the second quarter of 2007 and a 6.6% increase over the $231.6 million for the first quarter of 2008.
Gross margin was 25.5% in the second quarter of 2008, up 510 basis points year-over-year and up 20 basis points, sequentially.
Operating income was $34.8 million, up 39.9% from $24.9 million in the same period last year, and up 9.9% from $31.7 million in the previous quarter.
Net income for the second quarter of 2008 was $37.7 million, up 40.5% from $26.8 million in the same period last year, and up 10.5% from $34.1 million in the previous quarter. This represents earnings per diluted share of $0.20, compared to $0.14 in the second quarter of 2007, and $0.18 in the first quarter of 2008.
Excluding share-based compensation and acquisition-related charges, non-GAAP operating income was $37.8 million, up from $28.1 million in the same period last year, and up from $34.6 million in the previous quarter.
Non-GAAP net income was $39.8 million, up from $30.0 million in the same period last year, and up from $37.0 million in the previous quarter. This represents earnings per diluted share of $0.21, compared to $0.15 in the second quarter of 2007, and $0.19 in the first quarter of 2008.
Reconciliation of gross margin, operating margin, net income and diluted EPS excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to GAAP gross margin, GAAP operating margin, GAAP net income and diluted GAAP EPS, most comparable GAAP figure, is set out in the following reconciliation schedule.
Jordan Wu, President and Chief Executive Officer of Himax, commented, "Our second quarter revenues came in-line with our guidance, while gross margin and EPS were both above our guidance. We are also pleased to report that, according to iSuppli, we've become the worldwide number one display driver supplier for large-sized TFT-LCD panel applications, with a market share of 20.4% in the first quarter of 2008. Furthermore, our non-driver products accounted for 5.4% of our total revenues in the second quarter, the first time in our history to exceed 5%. We are proud that we have built our expertise from within and possess a great level of grasp on our intellectual properties and a top notch R&D team to capitalize potential business opportunities."
Mr. Wu continued, "To be the world's leading semiconductor solution provider for the flat panel display industry has been our long-term goal since day one of our company. We have chosen our TFT-LCD driver IC to be the first entry into that market and we are proud to be where we are today in that segment. The success in the driver business has enabled us to invest aggressively in a number of other areas. We are happy to report that we are experiencing strong momentum in literally all of those areas. We are working hard to make sure these non-driver segments will continue to contribute more to our business in the long term. Needlessly to say, we remain fully committed to expanding our leadership position in the driver IC market, which will always be a core to our business for the foreseeable future."
Looking forward, Mr. Wu added, "We feel that the current uncertainties in the worldwide economy and the reduced consumer spending are having a negative impact to our third quarter results. Since the end of the second quarter, we have seen many of our panel customers announcing measures to control inventory and reduce capacity utilization, which naturally result in downward revisions to their forecast demands on our display drivers. Customers' turning conservative at a supposed high season has added complexity and further lowered our visibility in gauging our short-term business outlook. We expect third quarter revenues to decline by low-teen percent from the second quarter 2008 and expect gross margin to decline by 1% to 2%. We also expect GAAP EPS to be in the range of $0.04 to $0.06 and non-GAAP EPS to be in the range of $0.11 to $0.14."
Investor Conference Call / Webcast Details
The Company's management will review detailed second quarter 2008 results on Monday, August 4, 2008 at 7:00 PM EDT (7:00 AM, Tuesday, August 5, Taiwan time). The conference dial-in numbers are +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 291283.
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, power management ICs and LCOS microdisplays. Based in Tainan, Taiwan, the Company has regional offices in Hsinchu and Taipei, Taiwan; Ninbo, Foshan, Suzhou and Shenzhen, China; Yokohama, Japan; Anyangsi Kyungkido, and Matsusaka, 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, but not limited to, 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 those risks identified in the section entitled "Risk Factors" in its Form 20-F for the year ended December 31, 2007 filed with SEC on June 20, 2008, 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 U.S. GAAP
because they omit all interim disclosure required by U.S. GAAP.)
(Figures in Thousands of U.S. Dollars, Except Per Share Data)
Three
Months
Three Months Ended
Ended June 30, March 31,
2008 2007 2008
--------- --------- ---------
Revenues
Revenues from third parties, net $92,430 $102,276 $77,461
Revenues from related parties, net 154,437 120,607 154,127
--------- --------- ---------
246,867 222,883 231,588
--------- --------- ---------
Costs and expenses:
Cost of revenues 183,797 177,452 172,949
Research and development 20,532 15,328 20,546
General and administrative 5,105 3,222 3,870
Sales and marketing 2,622 1,995 2,558
--------- --------- ---------
Total costs and expenses 212,056 197,997 199,923
--------- --------- ---------
Operating income 34,811 24,886 31,665
--------- --------- ---------
Non operating income (loss):
Interest income 924 1,514 777
Foreign exchange gains (losses),
net (522) 36 1,370
Other income, net 762 159 92
--------- --------- ---------
1,164 1,709 2,239
--------- --------- ---------
Earnings before income taxes and
minority interest 35,975 26,595 33,904
Income tax expense (benefit) (702) -- 702
--------- --------- ---------
Income before minority interest 36,677 26,595 33,202
Minority interest, net of tax 1,037 247 935
--------- --------- ---------
Net income $37,714 $26,842 $34,137
========= ========= =========
Basic earnings per ordinary share
and ADS $0.20 $0.14 $0.18
========= ========= =========
Diluted earnings per ordinary share
and ADS $0.20 $0.14 $0.18
========= ========= =========
Basic Weighted Average Outstanding
Shares 191,301 197,656 191,542
Diluted Weighted Average
Outstanding Shares 192,552 198,013 192,429
Himax Technologies, Inc.
Unaudited Supplemental Financial Information
(Figures in Thousands of U.S. Dollars)
The amount of share-based compensation Three
included in applicable costs and Months
expenses categories is summarized as Three Months Ended
follows: Ended June 30, March 31,
2008 2007 2008
------- ------- -------
Share-based compensation
Cost of revenues $28 $25 $28
Research and development 1,935 1,201 1,872
General and administrative 232 151 233
Sales and marketing 244 156 241
------- ------- -------
Total $2,439 $1,533 $2,374
======= ======= =======
The amount of acquisition-related
charges included in applicable
expenses categories is summarized as
follows:
Research and development $239 $1,234 $240
Sales and marketing 289 408 289
Income tax benefit (920) -- --
------- ------- -------
Total $(392) $1,642 $529
======= ======= =======
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,
2008 2007
--------- ---------
Revenues
Revenues from third parties, net $169,891 $178,112
Revenues from related parties, net 308,564 229,662
--------- ---------
478,455 407,774
--------- ---------
Costs and expenses:
Cost of revenues 356,746 326,282
Research and development 41,078 30,128
General and administrative 8,975 6,222
Sales and marketing 5,180 3,496
--------- ---------
Total costs and expenses 411,979 366,128
--------- ---------
Operating income 66,476 41,646
--------- ---------
Non operating income (loss):
Interest income 1,701 2,896
Foreign exchange gains (losses), net 848 (454)
Other income, net 854 201
--------- ---------
3,403 2,643
--------- ---------
Earnings before income taxes and minority
interest 69,879 44,289
Income tax expense -- --
--------- ---------
Income before minority interest 69,879 44,289
Minority interest, net of tax 1,972 572
--------- ---------
Net income $71,851 $44,861
========= =========
Basic earnings per ordinary share and ADS $0.38 $0.23
========= =========
Diluted earnings per ordinary share and ADS $0.37 $0.23
========= =========
Basic Weighted Average Outstanding Shares 191,422 196,714
Diluted Weighted Average Outstanding Shares 192,518 197,134
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 expenses Six Months Ended
categories is summarized as follows: June 30,
2008 2007
------- -------
Share-based compensation
Cost of revenues $56 $50
Research and development 3,807 2,388
General and administrative 465 302
Sales and marketing 485 312
------- -------
Total $4,813 $3,052
======= =======
The amount of acquisition-related charges
included in applicable expenses
categories is summarized as follows:
Research and development $479 $2,022
Sales and marketing 578 506
Income tax benefit (920) --
------- -------
Total $137 $2,528
======= =======
Himax Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Figures in Thousands of U.S. Dollars, Except Per Share Data)
June 30, March 31, Dec. 31,
2008 2008 2007
--------- --------- ---------
Assets
Current assets:
Cash and cash equivalents $90,404 $125,835 $94,780
Marketable securities available-
for-sale 10,638 15,216 15,208
Restricted marketable securities 2,066 2,049 97
Accounts receivable, less
allowance for doubtful
accounts, sales returns and
discounts 105,690 85,795 88,682
Accounts receivable from related
parties, less allowance for
doubtful accounts, sales returns
and discounts 173,539 179,801 194,902
Inventories 131,377 122,437 116,550
Deferred income taxes 13,546 13,520 12,684
Prepaid expenses and other
current assets 9,828 9,420 15,369
--------- --------- ---------
Total current assets $537,088 $554,073 $538,272
--------- --------- ---------
Property, plant and equipment, net 47,368 46,523 46,180
Deferred income taxes 22,153 22,109 20,714
Goodwill 26,878 26,878 26,878
Intangible assets, net 11,650 12,185 12,721
Investments in non-marketable
securities 11,619 11,619 7,138
Refundable deposits and prepaid
pension costs 938 874 859
--------- --------- ---------
120,606 120,188 114,490
--------- --------- ---------
Total assets $657,694 $674,261 $652,762
========= ========= =========
Liabilities, Minority Interest and
Stockholders' Equity
Current liabilities:
Accounts payable $152,754 $135,163 $147,221
Income tax payable 14,945 21,106 19,147
Other accrued expenses and other
current liabilities 19,799 19,106 19,231
--------- --------- ---------
Total current liabilities $187,498 $175,375 $185,599
Accrued pension liabilities $234 $233 $218
Deferred income taxes $3,627 $4,547 $4,547
--------- --------- ---------
Total liabilities $191,359 $180,155 $190,364
--------- --------- ---------
Minority interest $7,185 $8,296 $11,089
Stockholders' equity:
Ordinary shares, US$0.0001 par
value, 500,000,000 shares
authorized; 190,910,649,
190,905,649, and 191,979,691
shares issued and outstanding
at June 30, 2008, March 31,
2008, and December 31, 2007,
respectively 19 19 19
Additional paid-in capital 237,788 235,402 235,894
Accumulated other comprehensive
income(loss) 906 849 (7)
Unappropriated retained earnings 220,437 249,540 215,403
--------- --------- ---------
Total stockholders' equity $459,150 $485,810 $451,309
--------- --------- ---------
Total liabilities, minority
interest and stockholders' equity $657,694 $674,261 $652,762
========= ========= =========
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,
2008 2007 2008
-------- -------- --------
Cash flows from operating activities:
Net income $37,714 $26,842 $34,137
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 3,067 2,587 2,939
Write-off of in-process research and
development -- 900 --
Share-based compensation expenses 2,439 1,533 2,374
Minority interest, net of tax (1,037) (247) (935)
Loss (gain) on disposal of property,
plant and equipment 78 204 (6)
Gain on disposal of long-lived
assets held for sale -- -- (113)
Gain on sale of subsidiary shares,
net (91) (125) (6)
Gain on sale of marketable
securities, net (648) (23) (64)
Deferred income taxes (989) (727) (2,167)
Inventories write downs 5,944 4,786 5,099
Changes in operating assets and
liabilities:
Accounts receivable (19,879) (8,661) 2,919
Accounts receivable from related
parties 6,327 (31,856) 15,105
Inventories (14,783) (10,551) (10,923)
Prepaid expenses and other current
assets (455) 486 5,830
Accounts payable 17,481 49,753 (12,083)
Income tax payable (6,162) (4,333) 1,960
Other accrued expenses and other
current liabilities 314 4,071 (109)
-------- -------- --------
Net cash provided by operating
activities 29,320 34,639 43,957
-------- -------- --------
Cash flows from investing activities:
Purchase of property, plant and
equipment (3,038) (6,877) (2,263)
Proceeds from sale of property,
plant and equipment and long-lived
assets held for sale -- 3 264
Purchase of available-for-sale
marketable securities (6,275) (11,723) (22,550)
Sales and maturities of available-
for-sale marketable securities 11,508 11,258 22,957
Proceeds from sale of subsidiary
shares by Himax Technologies
Limited 182 131 9
Purchase of investments in non-
marketable securities -- (1,040) (4,481)
Purchase of subsidiary shares from
minority interest (205) (46) (29)
Decrease (increase) in refundable
deposits (81) 76 (26)
Pledge of restricted marketable
securities (17) (91) (1,952)
-------- -------- --------
Net cash provided by (used in)
investing activities 2,074 (8,309) (8,071)
-------- -------- --------
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,
2008 2007 2008
--------- --------- ---------
Cash flows from financing
activities:
Distribution of cash dividends $(66,817) $ -- $ --
Proceeds from issuance of new
shares by subsidiaries -- -- 89
Payments to acquire of ordinary
shares for retirement (7) (625) (5,364)
--------- --------- ---------
Net cash used in financing
activities (66,824) (625) (5,275)
--------- --------- ---------
Effect of exchange rate changes
on cash and cash equivalents (1) (35) 444
--------- --------- ---------
Net increase (decrease) in cash
and cash equivalents (35,431) 25,670 31,055
Cash and cash equivalents at
beginning of period 125,835 111,838 94,780
--------- --------- ---------
Cash and cash equivalents at end
of period $90,404 $137,508 $125,835
========= ========= =========
Supplemental disclosures of cash
flow information:
Cash paid during the period for
income taxes $6,531 $4,706 $31
========= ========= =========
Himax Technologies, Inc.
Unaudited Supplemental Data - Reconciliation Schedule
(Figures in Thousands of U.S. Dollars)
Gross Margin and Operating Margin Excluding Share-based
Compensation and Acquisition-Related Charges:
Three
Months
Three Months Ended
Ended June 30, March 31,
2008 2007 2008
-------- -------- --------
Revenues $246,867 $222,883 $231,588
Gross profit 63,070 45,431 58,639
Add: Share-based compensation - Cost
of revenues 28 25 28
Gross profit excluding share-based
compensation 63,098 45,456 58,667
Gross margin excluding share-based
compensation 25.6% 20.4% 25.3%
Operating income 34,811 24,886 31,665
Add: Share-based compensation 2,439 1,533 2,374
Operating income excluding share-
based compensation 37,250 26,419 34,039
Add: Acquisition-related charges
-Intangible assets amortization 528 742 529
-In-process R&D write off -- 900 --
Operating income excluding share-
based compensation
and acquisition-related charges 37,778 28,061 34,568
Operating margin excluding share-
based compensation and acquisition-
related charges 15.3% 12.6% 14.9%
Net income 37,714 26,842 34,137
Add: Share-based compensation 2,439 1,533 2,374
Add: Acquisition-related charges, net
of tax (392) 1,642 529
Net income excluding share-based
compensation and acquisition-related
charges 39,761 30,017 37,040
Net margin excluding share-based
compensation and acquisition-related
charges 16.1% 13.5% 16.0%
*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)
Gross Margin and Operating Margin Excluding Share-based
Compensation and Acquisition-Related Charges:
Six Months
Ended June 30,
2008 2007
-------- --------
Revenues $478,455 $407,774
Gross profit 121,709 81,492
Add: Share-based compensation - Cost of
revenues 56 50
Gross profit excluding share-based
compensation 121,765 81,542
Gross margin excluding share-based
compensation 25.4% 20.0%
Operating income 66,476 41,646
Add: Share-based compensation 4,813 3,052
Operating income excluding share-based
compensation 71,289 44,698
Add: Acquisition-related
charges -Intangible assets
amortization 1,057 928
-In-process R&D
write off -- 1,600
Operating income excluding share-based
compensation and acquisition-related
charges 72,346 47,226
Operating margin excluding share-based
compensation and acquisition-related
charges 15.1% 11.6%
Net income 71,851 44,861
Add: Share-based compensation 4,813 3,052
Add: Acquisition-related charges, net of
tax 137 2,528
Net income excluding share-based
compensation and acquisition-related
charges 76,801 50,441
Net margin excluding share-based
compensation and acquisition-related
charges 16.1% 12.4%
*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
Diluted Earnings Per Share Excluding Share-based Compensation
and Acquisition-Related Charges:
Three Months Six Months
Ended June 30, Ended June 30,
2008 2008
-------------- --------------
Diluted GAAP EPS $0.20 $0.37
Add: Estimated share-based
compensation per diluted share $0.01 $0.03
Add: Estimated acquisition-related
charges per diluted share $-- $0.01
Diluted non GAAP EPS excluding
share-based compensation and
acquisition-related charges $0.21 $0.40
Numbers do not add up due to rounding