* Fourth quarter 2007 revenues increased to $267.1 million -- record high since inception * Fourth quarter 2007 gross margin increased to 24.7% -- marks fifth consecutive quarter of improvement
TAINAN, Taiwan, Feb. 13, 2008 (PRIME NEWSWIRE) -- Himax Technologies, Inc. ("Himax" or "Company") (Nasdaq: HIMX) today reported financial results for the fourth quarter ended December 31, 2007.
Net revenues for the fourth quarter of 2007 was $267.1 million, representing 20.9% growth year-over-year and 9.8% growth sequentially.
Gross margin was 24.7% in the fourth quarter of 2007, up 580 basis points year-over-year and 220 basis points sequentially.
Operating margin was 15.9% in the fourth quarter of 2007. Operating income was $42.4 million, up from $22.3 million in the same period last year, and up from $19.9 million in the previous quarter.
Net income for the fourth quarter of 2007 was $46.1 million, up from $31.1 million in the same period last year, and up from $21.8 million in the previous quarter. This represents earnings per diluted share of $0.23, compared to $0.16 in the fourth quarter of 2006, and $0.11 in the third quarter of 2007.
Excluding share-based compensation and acquisition-related charges, non-GAAP operating margin was 16.6% in the fourth quarter of 2007. Non-GAAP operating income was $44.4 million, up from $23.8 million in the same period last year, and up from $36.2 million in the previous quarter.
Non-GAAP net income was $48.1 million, up from $32.6 million in the same period last year, and up from $38.0 million in the previous quarter. This represents earnings per diluted share of $0.24, compared to $0.16 in the fourth quarter of 2006, and $0.19 in the third quarter of 2007.
Share-based compensation was $1.6 million, compared to $1.5 million in the fourth quarter of 2006, and $15.7 million in the third quarter of 2007. Acquisition-related charges were $0.5 million, compared to $18 thousand in the fourth quarter of 2006 and $0.6 million in the third quarter of 2007.
Reconciliation of gross margin, operating margin and diluted EPS excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to GAAP gross margin, GAAP operating margin and diluted GAAP EPS, most comparable GAAP figure, is set out in the attached reconciliation schedule.
Jordan Wu, President and Chief Executive Officer of Himax, commented, "We have concluded another remarkable quarter with revenue, net income, and EPS all achieving record-high levels. Also, our fourth quarter revenue, gross margin, and EPS all came in higher than our previous guidance. As always, we introduced innovative and leading-edge display driver solutions in the past quarter which again illustrates Himax's capability in setting new industry standards and providing value to our customers' development of new products."
Mr. Wu continued, "During the past few months, we also made a couple of strategic moves in our non-driver IC areas where we formed business alliances with leading players in the industry. We believe these moves will provide significant values to our shareholders in the long term. In the beginning of 2008, Chi Mei Optoelectronics, one of the world's leading LCD panel manufacturers, and TPV Technologies Limited, the world's largest LCD monitor manufacturer and the world's largest LCD TV ODM, each took a minority ownership stake in Himax Media Solutions, a subsidiary of Himax. Additionally, we announced a strategic alliance with 3M, one of the world's leading companies in optics technologies, to commercialize LCOS mobile projectors by combining the two companies' proprietary technologies to deliver a complete mobile projector solution to consumer electronics manufacturers. These strategic alignments will provide Himax added competitive strength and further validate our strategy in the non-driver space."
Looking forward, Mr. Wu added, "In 2008, display driver IC will continue to be our main business, for which our primary goal is still to gain further market share across all LCD panel applications. In addition, we remain fully committed to making Himax a world-leading semiconductor solution provider for displays with a more diversified product portfolio beyond driver IC. Overall, we expect revenues to decline sequentially in the first quarter of 2008, primarily due to seasonality. We expect revenues to decline by around 15% and gross margin to remain flat or decline slightly. We expect diluted GAAP EPS to be in the range of $0.13-$0.15."
Investor Conference Call / Webcast Details
The Company's management will review detailed fourth quarter 2007 results on Wednesday, February 13, 2008 at 6:00 PM EDT (7:00 AM, Thursday, February 14, 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 270446.
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 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 September
December 31, 30,
2007 2006 2007
-------- ------- -------
Revenues
Revenues from third parties, net $101,683 $90,947 $91,960
Revenues from related parties, net 165,417 129,932 151,377
-------- ------- -------
267,100 220,879 243,337
-------- ------- -------
Costs and expenses:
Cost of revenues 201,255 179,214 188,626
Research and development 17,549 13,883 26,171
General and administrative 3,790 3,180 4,891
Sales and marketing 2,080 2,280 3,758
-------- ------- -------
Total costs and expenses 224,674 198,557 223,446
-------- ------- -------
Operating income 42,426 22,322 19,891
-------- ------- -------
Non operating income (loss):
Interest income 1,108 1,812 1,429
Foreign exchange gains (losses), net 11 (209) (29)
Other income, net 209 61 166
-------- ------- -------
1,328 1,664 1,566
-------- ------- -------
Income before income tax benefit and
minority interest 43,754 23,986 21,457
Income tax benefit (1,978) (6,937) --
-------- ------- -------
Income before minority interest 45,732 30,923 21,457
Minority interest, net of tax 321 178 316
-------- ------- -------
Net income $46,053 $31,101 $21,773
======== ======= =======
Basic earnings per ordinary share and ADS $0.23 $0.16 $0.11
======== ======= =======
Diluted earnings per ordinary share and ADS $0.23 $0.16 $0.11
======== ======= =======
Basic Weighted Average Outstanding
Shares 196,327 198,154 197,690
Diluted Weighted Average Outstanding
Shares 197,264 199,419 197,733
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 expenses Months
categories is summarized as follows: Three Months Ended
Ended September
December 31, 30,
2007 2006 2007
-------- ------- -------
Share-based compensation
Cost of revenues $17 $25 $355
Research and development 1,210 1,161 11,795
General and administrative 162 151 1,718
Sales and marketing 170 156 1,842
-------- ------- -------
Total $1,559 $1,493 $15,710
======= ======= =======
The amount of acquisition-related charges
included in applicable expenses categories
is summarized as follows:
Research and development $210 $18 $250
Sales and marketing 251 -- 304
-------- ------- -------
Total $461 $18 $554
======= ======= =======
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
(Figures in Thousands of U.S. Dollars, Except Per Share Data)
Twelve Months Ended
December 31,
2007 2006
-------- --------
Revenues
Revenues from third parties, net $371,755 $329,886
Revenues from related parties, net 546,456 414,632
-------- --------
918,211 744,518
-------- --------
Costs and expenses:
Cost of revenues 716,163 601,565
Research and development 73,848 60,655
General and administrative 14,903 9,762
Sales and marketing 9,334 6,970
-------- --------
Total costs and expenses 814,248 678,952
-------- --------
Operating income 103,963 65,566
-------- --------
Non operating income (loss):
Interest income 5,433 5,860
Impairment loss on an investment -- (1,500)
Foreign exchange losses, net (472) (341)
Interest expense -- (311)
Other income, net 576 233
-------- --------
5,537 3,941
-------- --------
Income before income tax benefit and minority
interest 109,500 69,507
Income tax benefit (1,978) (5,446)
-------- --------
Income before minority interest 111,478 74,953
Minority interest, net of tax 1,209 237
-------- --------
Net income $112,687 $75,190
======== ========
Basic earnings per ordinary share and ADS $0.57 $0.39
======== ========
Diluted earnings per ordinary share and ADS $0.57 $0.39
======== ========
Basic Weighted Average Outstanding Shares 196,862 192,475
Diluted Weighted Average Outstanding Shares 197,522 195,090
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 categories is
summarized as follows: Twelve Months Ended
December 31,
2007 2006
-------- --------
Share-based compensation
Cost of revenues $422 $275
Research and development 15,393 11,806
General and administrative 2,182 1,444
Sales and marketing 2,324 1,625
-------- --------
Total $20,321 $15,150
======== ========
The amount of acquisition-related charges included
in applicable expenses categories is summarized
as follows:
Research and development $2,483 $18
Sales and marketing 1,061 --
-------- --------
Total $3,544 $18
======== ========
Himax Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Figures in Thousands of U.S. Dollars, Except Per Share Data)
December September December
31, 30, 31,
2007 2007 2006
-------- --------- --------
Assets
Current assets:
Cash and cash equivalents $94,780 $119,246 $109,753
Marketable securities available-for-sale 15,208 16,109 8,828
Restricted cash equivalents 97 171 108
Accounts receivable, less allowance for
doubtful accounts, sales returns and
discounts 88,683 101,467 112,767
Accounts receivable from related
parties, less allowance for doubtful
accounts, sales returns and discounts 194,902 178,099 116,850
Inventories 116,550 125,983 101,341
Deferred income taxes 12,884 6,829 6,744
Prepaid expenses and other current
assets 15,834 12,903 10,324
-------- --------- --------
Total current assets $538,938 $560,807 $466,715
-------- --------- --------
Property, plant and equipment, net 46,161 46,070 38,895
Deferred income taxes 20,833 12,842 11,405
Intangible assets, net 35,088 33,711 393
Investments in non-marketable
securities 7,138 2,584 817
Refundable deposits and prepaid pension
costs 604 612 569
-------- --------- --------
109,824 95,819 52,079
-------- --------- --------
Total assets $648,762 $656,626 $518,794
======== ========= ========
Liabilities, minority interest and
stockholders' equity
Current liabilities:
Accounts payable $147,221 $160,269 $120,407
Income tax payable 19,497 7,333 11,666
Dividends payable -- 39,710 --
Other accrued expenses and other
current liabilities 19,395 15,738 21,206
-------- --------- --------
Total current liabilities $186,113 $223,050 $153,279
Accrued pension liability $272 $196 $192
-------- --------- --------
Total liabilities $186,385 $223,246 $153,471
-------- --------- --------
Minority interest $10,211 $3,084 $1,396
-------- --------- --------
Stockholders' equity:
Ordinary share, US$0.0001 par value,
191,979,691, 198,548,799, and
193,600,302 shares issued and
outstanding at December 31, 2007,
September 30, 2007 and December 31,
2006, respectively 20 20 19
Additional paid-in capital 236,703 260,980 221,666
Accumulated other comprehensive loss (52) (146) (275)
Unappropriated earnings 215,495 169,442 142,517
-------- --------- --------
Total stockholders' equity $452,166 $430,296 $363,927
-------- --------- --------
Total liabilities, minority interest
and stockholders' equity $648,762 $656,626 $518,794
======== ========= ========
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
Three
Months
Ended
Three Months September
Ended December 31, 30,
2007 2006 2007
--------- --------- ---------
Cash flows from operating
activities:
Net income $46,053 $31,101 $21,773
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Depreciation and amortization 2,892 1,680 2,755
Share-based compensation
expenses 1,559 1,493 1,284
Minority interest, net of tax (321) (178) (316)
Gain on disposal of property,
plant and equipment -- -- (16)
Gain on sale of subsidiary
shares and investments in
non-marketable securities, net (160) (49) (112)
Gain on sale of marketable
securities, net (28) (12) (31)
Deferred income taxes (14,189) (6,714) --
Inventories write downs 4,231 2,050 3,784
Changes in operating assets and
liabilities:
Accounts receivable 12,697 (10,791) 15,850
Accounts receivable from
related parties (16,708) (45,364) (40,994)
Inventories 5,210 7,527 (4,552)
Prepaid expenses and other
current assets (2,276) 4,316 (2,966)
Accounts payable (13,051) 13,578 (10,949)
Income tax payable 12,164 (161) --
Other accrued expenses and other
current liabilities 3,180 2,876 (114)
--------- --------- ---------
Net cash provided by (used in)
operating activities 41,253 1,352 (14,604)
--------- --------- ---------
Cash flows from investing
activities:
Purchase of property, plant and
equipment (3,138) (4,187) (2,500)
Proceeds from sale of property,
plant and equipment 3 -- 3
Purchase of available-for-sales
marketable securities (11,028) (12,678) (12,144)
Cash acquired (paid) in
acquisition (36) 17 --
Sales and maturities of
available-for-sale marketable
securities 12,002 7,940 9,404
Proceeds from sale of
subsidiary
shares and investments in non-
marketable securities by Himax
Technologies Limited 253 1,537 144
Purchase of investments in non-
marketable securities (4,531) -- (750)
Purchase of subsidiary shares
from minority interest (120) (602) (112)
Refund from (increase in)
refundable deposits (23) 63 (15)
Release (pledge) of restricted
cash equivalents 100 (75) --
--------- --------- ---------
Net cash used in investing
activities (6,518) (7,985) (5,970)
--------- --------- ---------
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
Three
Months
Ended
Three Months September
Ended December 31, 30,
2007 2006 2007
---------- ---------- ----------
Cash flows from financing
activities:
Payment of cash dividends $(39,710) $-- $--
Proceeds from issuance of new
shares by subsidiaries 8,307 --- 2,290
Proceeds from initial public
offering, net of issuance
costs -- (392) --
Acquisition of ordinary
shares for retirement (27,879) (38,835) --
---------- ---------- ----------
Net cash provided by (used
in) financing activities (59,282) (39,227) 2,290
---------- ---------- ----------
Effect of exchange rate change 81 19 22
---------- ---------- ----------
Net decrease in cash and cash
equivalents (24,466) (45,841) (18,262)
Cash and cash equivalents at
beginning of period 119,246 155,594 137,508
---------- ---------- ----------
Cash and cash equivalents at
end of period $94,780 $109,753 $119,246
========== ========== ==========
Supplemental disclosures of
cash flow information:
Cash paid during the period
for income taxes $32 $110 $24
========== ========== ==========
Supplemental disclosures of
non-cash investing and
financing activities:
Payable for purchase of
equipment and construction
in progress $(242) $(971) $6
========== ========== ==========
Dividends payable $-- $-- $39,710
========== ========== ==========
Fair value of ordinary shares
issued by Himax Display, Inc.
in the acquisition of
Integrated Microdisplays
Limited $-- $538 $--
========== ========== ==========
Fair value of additional
ordinary shares to be issued
by Himax Technologies, Inc.
pursuant to the contingent
consideration provision in
the acquisition of Wisepal
Technologies, Inc. $1,687 $-- $--
========== ========== ==========
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
Twelve Months
Ended December 31,
2007 2006
--------- ---------
Cash flows from operating activities:
Net income $112,687 $75,190
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 10,260 5,221
Write-off of in-process research and
development 1,600 --
Share-based compensation expenses 5,895 15,150
Minority interest, net of tax (1,209) (237)
Loss on disposal of property and equipment 223 36
Gain on sales of subsidiary shares and
investment in non-marketable
securities, net (418) (137)
Gain on sale of marketable securities, net (112) (60)
Impairment loss on investments in non-
marketable securities -- 1,500
Deferred income taxes (14,915) (8,938)
Inventories write down 16,235 5,165
Changes in operating assets and liabilities:
Accounts receivable 25,970 (32,237)
Accounts receivable from related parties (78,043) (47,263)
Inventories (31,013) (1,502)
Prepaid expenses and other current assets (4,841) 749
Accounts payable 26,169 14,606
Income tax payable 7,831 (1,959)
Other accrued expenses and other current
liabilities 846 4,412
--------- ---------
Net cash provided by operating activities 77,165 29,696
--------- ---------
Cash flows from investing activities:
Purchase of land, property and equipment (18,998) (17,829)
Proceeds from sale of property, plant and
equipment 9 --
Purchase of available-for-sales marketable
securities (52,476) (31,911)
Sales and maturities of available-for-sale
marketable securities 46,303 27,128
Cash acquired in acquisition 6,161 17
Proceeds from sale of subsidiary shares and
investment in non-marketable
securities by Himax Technologies Limited 562 1,142
Purchase of investments in non-marketable
securities (6,321) (817)
Purchase of subsidiary shares from minority
interest (295) (773)
Return of refundable deposits 22 171
Release of restricted cash equivalents and
marketable securities 11 13,945
--------- ---------
Net cash used in investing activities (25,022) (8,927)
--------- ---------
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
Twelve Months
Ended December 31,
2007 2006
Cash flows from financing activities:
Payment of cash dividends $(39,710) $--
Proceeds from issuance of ordinary shares -- 147,408
Proceeds from issuance of new shares by
subsidiaries 11,814 676
Acquisition of ordinary shares for
retirement (39,345) (38,835)
Proceeds from borrowing of short-term debt -- 11,303
Repayment of short-term debt -- (38,577)
Repayment of long-term debt -- (89)
--------- ---------
Net cash provided by (used in) financing
activities (67,241) 81,886
--------- ---------
Effect of exchange rate change 125 12
--------- ---------
Net increase (decrease) in cash and cash
equivalents (14,973) 102,667
Cash and cash equivalents at beginning of
year 109,753 7,086
--------- ---------
Cash and cash equivalents at end of year $94,780 $109,753
========= =========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $-- $311
========= =========
Income taxes $4,779 $5,695
========= =========
Supplemental disclosures of non-cash
investing and financing activities:
Payable for purchase of equipment and
construction in progress $(3,325) $(1,846)
========= =========
Fair value of ordinary shares issued by
Himax Display, Inc. in the acquisition of
Integrated Microdisplays Limited $-- $538
========= =========
Fair value of ordinary shares issued and to
be issued by Himax Technologies, Inc. in
the acquisition of Wisepal Technologies,
Inc $46,719 $--
========= =========
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
Ended
Three Months September
Ended December 31, 30,
2007 2006 2007
--------- --------- ---------
Revenues $267,100 $220,879 $243,337
Gross profit 65,845 41,665 54,711
Add: Share-based compensation -
Cost of revenues 17 25 355
Gross profit excluding share-
based compensation 65,862 41,690 55,066
Gross margin excluding share-
based compensation 24.7% 18.9% 22.6%
Operating income 42,426 22,322 19,891
Add: Share-based compensation 1,559 1,493 15,710
Operating income excluding share-
based compensation 43,985 23,815 35,601
Add: Acquisition-related charges
-Intangible assets amortization 461 18 554
Operating income excluding share-
based compensation and
acquisition-related charges 44,446 23,833 36,155
Operating margin excluding share-
based compensation and
acquisition-related charges 16.6% 10.8% 14.9%
Net income excluding share-based
compensation and acquisition-
related charges 48,073 32,612 38,037
Net margin excluding share-based
compensation and acquisition-
related charges 18.0% 14.8% 15.6%
*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:
Twelve Months
Ended December 31,
2007 2006
--------- ---------
Revenues $918,211 $744,518
Gross profit 202,048 142,953
Add: Share-based compensation - Cost of
revenues 422 275
Gross profit excluding share-based
compensation 202,470 143,228
Gross margin excluding share-based
compensation 22.1% 19.2%
Operating income 103,963 65,566
Add: Share-based compensation 20,321 15,150
Operating income excluding share-based
compensation 124,284 80,716
Add: Acquisition-related charges
- In-process R&D write off 1,600 --
- Intangible assets
amortization 1,944 18
Operating income excluding share-based
compensation and acquisition-related
charges 127,828 80,734
Operating margin excluding share-based
compensation and acquisition-related
charges 13.9% 10.8%
Net income excluding share-based
compensation and acquisition-related
charges 136,552 90,358
Net margin excluding share-based
compensation and acquisition-related
charges 14.9% 12.1%
*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
Diluted Earnings Per Share Excluding Share-based Compensation and
Acquisition-Related Charges:
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2007
------------------ -------------------
Diluted GAAP EPS $0.23 $0.57
Add: Estimated share-based
compensation per diluted
share $0.01 $0.10
Add: Estimated acquisition-
related charges $-- $0.02
Diluted non-GAAP EPS
excluding share-based
compensation and
acquisition-related
charges $0.24 $0.69
Numbers do not add up due to rounding