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