HIMAX Reports Second Quarter 2007 Results

Tainan City, TAIWAN, PROVINCE OF CHINA


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


        

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