Company Meets Q1 Revenue Guidance,
Beats Gross Margin and EPS Guidance
Himax Technologies, Inc. (Nasdaq:HIMX) (“Himax” or “Company”), a
leading supplier and fabless manufacturer of display drivers and
other semiconductor products, announced its financial results for
the first quarter ended March 31, 2016.
SUMMARY
FINANCIALS
First
Quarter 2016 Results Compared to First Quarter 2015 Results (USD in
millions) (unaudited) |
|
|
|
|
|
Q1
2016 |
Q1 2015 |
CHANGE |
Net Revenues |
$180.3 million |
$179.0 million |
|
+0.7 |
% |
Gross Profit |
$47.2 million |
$46.0 million |
|
+2.5 |
% |
Gross Margin |
|
26.2 |
% |
|
25.7 |
% |
|
+0.5 |
% |
GAAP Net Income
Attributable to Shareholders |
$13.1 million |
$12.6 million |
|
+4.2 |
% |
Non-GAAP Net Income
Attributable to Shareholders |
$13.5 million (1) |
$13.1 million (2) |
|
+2.9 |
% |
GAAP EPS (Per Diluted ADS,
USD) |
$ |
0.076 |
|
$ |
0.073 |
|
|
+4.1 |
% |
Non-GAAP EPS (Per Diluted
ADS, USD) |
$0.078 (1) |
$0.076 (2) |
|
+2.8 |
% |
|
(1) Non-GAAP Net income attributable to common
shareholders and EPS excludes $0.2 million of share-based
compensation expenses, net of tax and $0.2 million non-cash
acquisition related charge, net of tax.(2) Non-GAAP Net income
attributable to common shareholders and EPS excludes $0.4 million
of share-based compensation expenses, net of tax and $0.1 million
non-cash acquisition related charge, net of tax.
First
Quarter 2016 Results Compared to Fourth Quarter
2015 Results (USD in millions)
(unaudited) |
|
|
Q1
2016 |
Q4
2015 |
CHANGE |
Net
Revenue |
$180.3 million |
$178.0 million |
|
+1.3 |
% |
Gross
Profit |
$47.2 million |
$40.7 million |
|
+15.8 |
% |
Gross
Margin |
|
26.2 |
% |
|
22.9 |
% |
|
+3.3 |
% |
GAAP Net
Income Attributable to Shareholders |
$13.1 million |
$6.1 million |
|
+113.5 |
% |
Non-GAAP Net
Income Attributable to Shareholders |
$13.5 million (1) |
$6.5 million (2) |
|
+107.2 |
% |
GAAP EPS (Per
Diluted ADS, USD) |
$ |
0.076 |
|
$ |
0.036 |
|
|
+113.4 |
% |
Non-GAAP EPS
(Per Diluted ADS, USD) |
$0.078 (1) |
$0.038 (2) |
|
+107.1 |
% |
|
(1) Non-GAAP Net income attributable to common
shareholders and EPS excludes $0.2 million of share-based
compensation expenses, net of tax and $0.2 million non-cash
acquisition related charge, net of tax.(2) Non-GAAP Net income
attributable to common shareholders and EPS excludes $0.2 million
of share-based compensation expenses, net of tax and $0.2 million
non-cash acquisition related charge, net of tax.
"We are pleased to report that we delivered
sequential revenue growth despite 9 less working days during the
quarter. Our 2016 first quarter revenue was $180.3 million. Gross
margin for the quarter was 26.2%, marking the highest gross margin
since our inception due to favorable product mix. First quarter
GAAP earnings per diluted ADS came in at 7.6 cents. Both our 2016
first quarter gross margin and EPS exceeded our guidance provided
in February while revenues came in within our guided range.
However, the earthquake that hit in Tainan on February 6th did
cause some delayed shipments of large panel driver ICs to one of
our major customers during the quarter. Without the earthquake, we
could have been at the high end of, if not beat, our revenue
guidance. We do not expect further negative impact from the
earthquake as that customer’s facilities have recovered entering
the second quarter,” began Mr. Jordan Wu, President and Chief
Executive Officer of Himax. “The strong result was due mainly to
China’s panel capacity expansion and in-sourcing of local TV set
makers, coupled with our large panel driver IC share gains. We also
benefited from stronger than expected small and medium-sized driver
IC momentum due to more positive end demand in China, the addition
of a new major smartphone customer since the fourth quarter of
2015, and new shipment of AMOLED driver ICs. On top of that,
accelerating AR/VR related business and other non-driver products
lifted the revenues of our non-driver product segment.”
Mr. Wu concluded: “We are very encouraged to
experience growth in both our driver and non-driver business
segments as we have started to benefit from new business
opportunities not enjoyed by many of our competitors. Our growth
momentum stems from the successful implementation of a multi-year
plan to diversify our products and customer base. Looking ahead, we
expect these growth catalysts mentioned above to continue in 2016
and beyond, and we remain committed to our growth strategy.”
First Quarter 2016 Revenue Breakdown by Product Line
(USD in millions) (unaudited)
|
|
Q1
2016 |
|
|
% |
|
Q1
2015 |
|
% |
|
%
Change |
|
|
Display drivers for
large-sized panels |
$ |
65.7 |
|
|
36.4 |
% |
|
$ |
57.6 |
|
32.2 |
% |
|
+14.1 |
% |
|
|
Display drivers for
small/medium-sized panels |
$ |
79.4 |
|
|
44.1 |
% |
|
$ |
87.0 |
|
48.6 |
% |
|
-8.7 |
% |
|
|
Non-driver products |
$ |
35.2 |
|
|
19.5 |
% |
|
$ |
34.4 |
|
19.2 |
% |
|
+2.2 |
% |
|
|
Total |
$ |
180.3 |
|
|
100.0 |
% |
|
$ |
179.0 |
|
100.0 |
% |
|
+0.7 |
% |
|
|
Q1
2016 |
% |
|
Q4 2015 |
|
% |
%
Change |
Display drivers for
large-sized panels |
$ |
65.7 |
|
|
36.4 |
% |
|
$ |
62.1 |
|
|
34.9 |
% |
|
+5.8 |
% |
Display drivers for
small/medium-sized panels |
$ |
79.4 |
|
|
44.1 |
% |
|
$ |
81.9 |
|
|
46.0 |
% |
|
-3.0 |
% |
Non-driver products |
$ |
35.2 |
|
|
19.5 |
% |
|
$ |
34.0 |
|
|
19.1 |
% |
|
+3.4 |
% |
Total |
$ |
180.3 |
|
|
100.0 |
% |
|
$ |
178.0 |
|
|
100.0 |
% |
|
+1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The first quarter revenue of $180.3 million
represented a 1.3% sequential increase and a 0.7% increase from the
same period last year. Revenue from large panel display drivers was
$65.7 million, up 5.8% sequentially, and up 14.1% from a year ago.
Large panel driver ICs accounted for 36.4% of the Company’s total
revenues for the first quarter, compared to 34.9% in the last
quarter and 32.2% a year ago. Without the earthquake mentioned
earlier, Himax could have achieved double digit sequential growth
it indicated earlier for this product line. Monitor demand
continued to show strength for the past few quarters as UHD
resolution models started to outgrow legacy models. TV remained the
bright spot as in the last few quarters with 4K TV penetration
doubled from the previous quarter. To sum up, if look only at
China, driver IC business for TVs and large panel overall grew
phenomenally both sequentially and year-over-year. In comparison,
worldwide TV panel shipments actually declined over 10% during the
same period compared to the previous quarter, according to market
research firm IHS. The Company’s leading market share in China,
coupled with rapid capacity ramping of Chinese panel customers and
more in-sourcing from their local set maker customers, have led to
this favorable result. It is especially worth highlighting that
Himax’s engineering collaboration and design-in activities with
Chinese panel customers remain robust despite the soft market
sentiment.
Revenue for small and medium-sized drivers came
in slightly better than guided at $79.4 million, down 3.0%
sequentially and down 8.7% from the same period last year. Driver
ICs for small and medium-sized applications accounted for 44.1% of
total sales for the first quarter, as compared to 46.0% in the
previous quarter and 48.6% a year ago. The main reason behind the
year-over-year decline was the slowdown of business from the
Company’s primary Korean end customer as they replaced much of the
use of LCD displays, for which Himax was a major IC vendor, with
AMOLED displays for their smartphone products. Himax only started
the shipment of AMOLED driver IC in March 2016, thereby creating a
gap in the small and medium sized business compared to the same
period last year. Without this, the Company’s small and medium
driver grew mid-teens versus the same period last year while
smartphone driver ICs grew over 20%. Sequentially, first quarter
sales for smartphones grew low single digit despite fewer working
days around Chinese New Year. The positive momentum came from
Himax’s Chinese smartphone customers, including a new first-tier
player that was added at the end of the fourth quarter of 2015,
launching new models and replenishing inventories. But again, the
strength was offset by double digit sequential decline in
tablets.
As in the last few years, the best-performing
category among driver ICs used in small and medium-sized panels
continued to be those used in automotive with Q1 revenue up 4% from
the previous quarter. It grew double digit from the same period
last year.
Revenues from non-driver businesses were $35.2
million, up 3.4% sequentially and up 2.2% from the same period last
year. Non-driver products accounted for 19.5% of total revenues, as
compared to 19.1% in the previous quarter and 19.2% a year ago. The
sequential growth in the non-driver segment was mainly driven by
AR/VR related businesses as LCOS and WLO revenues more than doubled
during the quarter. Himax has been making shipments for multiple
customers, including a major U.S. customer who has recently started
shipping their new AR devices. Additionally, timing controller,
ASIC service and CMOS image sensor product lines also enjoyed
sequential growth due to mass production of new design wins. The
year-over-year growth was also led by AR/VR related businesses and
timing controllers, partially offset by the deceleration in
out-cell touch controllers.
GAAP gross margin for the first quarter was
26.2%, a 330 basis points increase from 22.9% in the previous
quarter and up 50 basis points from 25.7% in the same period last
year, exceeding the original guidance of 25%. The margin
improvement mainly came from better product mix in small and
medium-sized driver ICs and non-driver product segments. Major
contributors included the accelerating higher end FHD driver IC for
smartphones and strong development fees from AR/VR related
businesses, as well as improving gross margins for the CMOS image
sensor and touch controller product lines. Gross margin expansion
was also a testament to Himax cost reduction measures. Gross margin
improvement remains one of the Company’s business
focuses.
First quarter GAAP operating expenses were $32.0
million in the first quarter of 2016, down 0.4% from the previous
quarter and up 5.3% from a year ago. First quarter operating
expenses included a one-time donation of NT$10 million, or US$0.3
million, to the earthquake relief fund initiated by the Tainan
Municipal Government. Operating expenses increased from the first
quarter of 2015 due to higher expenses for additional headcount to
support new AR/VR projects, annual salary increases, and increase
in R&D expenses. Himax continues to streamline core business
R&D activities and implement other expense control
measures.
GAAP operating income for the first quarter of
2016 was $15.2 million or 8.4% of sales, up 76.3% sequentially and
down 3.0% year-over-year.
Reported GAAP net income for the first quarter
was $13.1 million, or 7.6 cents per diluted ADS, compared to GAAP
net income of $6.1 million, or 3.6 cents per diluted ADS, in the
previous quarter and GAAP net income of $12.6 million, or 7.3 cents
per diluted ADS, for the same period last year. GAAP net income
increased 113.5% from the previous quarter and increased 4.2%
year-over-year. GAAP EPS exceeded the Company’s 5.5 to 7.5 cents
guided range.
In the Company’s last earnings call, it has
assumed a 20% income tax rate, calculated based on exchange rate of
NTD 33.45 against the USD, the exchange rate at the beginning of
February 2016. As it turned out, the NTD has appreciated against
the USD since February. Himax has thus adjusted its income tax rate
to 15%.
The sequential and year-over-year profit
increase was a combination of higher revenue, much improved gross
margin, together with lower income tax.
First quarter non-GAAP net income, which
excludes the share-based compensation and acquisition-related
charges, was $13.5 million, or 7.8 cents per diluted ADS, compared
to $6.5 million last quarter and $13.1 million the same period last
year. This represents an increase of 107.2% sequentially and
increase of 2.9% year-over-year.
Balance Sheet and Cash Flow
Himax had $168.0 million of cash, cash
equivalents and marketable securities at the end of March 2016,
compared to $178.8 million at the same time last year and $148.3
million a quarter ago. On top of the above cash position,
restricted cash was $180.5 million at the end of the quarter. The
restricted cash is mainly used to guarantee the company’s short
term loan for the same amount. Himax continues to maintain a very
strong balance sheet and remains a debt-free company.
Inventories as of March 31, 2016 were $182.8
million, down from $186.1 million a year ago and up from $171.4
million a quarter ago. Himax was able to lower the inventory
year-over-year because of demand rebound. The sequentially higher
inventory shows the Company’s confidence in strong quarters to
come. Accounts receivable at the end of March 2016 were $173.0
million as compared to $192.7 million a year ago and $177.2 million
last quarter. DSO was 87 days at the end of March 2016, as compared
to 97 days a year ago and 93 days at end of the last quarter. The
decrease of DSO was due to more efficient cash collection from
credit sales.
Net cash inflow from operating activities for
the first quarter was $21.5 million as compared to an outflow of
$3.7 million for the first quarter of 2015 and an inflow of $25.9
million for the fourth quarter of 2015. The year-over-year increase
is mainly due to lower working capital. The sequential decrease in
cash flow was a result of higher net profit offset by higher
working capital.
Capital expenditures were $2.2 million in the
first quarter of 2016 versus $1.8 million a year ago and $3.6
million last quarter. The capital expenditure in the first quarter
consisted mainly of facility updates and capacity expansion for
LCOS and WLO product lines.
Share Buyback Update
As of March 31, 2016, Himax had 171.9 million
ADS outstanding, unchanged from last quarter. On a fully diluted
basis, the total ADS outstanding are 172.4 million.
2016 Investor Outreach and
Conferences
Ms. Jackie Chang, CFO, Ms. Nadiya Chen and Ms.
Penny Lin, internal IR Managers, and Mr. John Mattio, Himax’s
US-based IR, will maintain corporate access for shareholders and
attend future investor conferences in the U.S. and Hong Kong. If
you are interested in speaking with the management, please contact
Himax’s US or Taiwan-based investor relations contact at the
numbers below.
Business Updates
The Company provided an overview of the trends
developing in the industry in its last earnings call, and
illustrated how Himax could stand out as a unique beneficiary from
them and keep its business resilient to the current macro
headwinds. The Company is glad that it had a good start this year
and that should be the beginning of a long term growth. The
impressive momentum of the Company’s large panel driver ICs for TV
application will continue to come from accelerating 4K TV
penetration. Himax is a unique beneficiary of its Chinese
customers’ continued panel capacity expansion at a time when
Chinese TV makers are sourcing more panels locally and starting to
make more export. Equally important, the Company finally saw
smartphone driver IC order rebounds in China coming from end
customers’ restocking and new model launches in the first quarter
of 2016, backed by more 4G smartphone proliferation. Small revenue
contribution from TDDI will start in the second quarter but Himax
believes it will accelerate thereafter. Sales for automotive
applications, where the Company has a leading market share, will
continue to show strong growth as more and larger panels are going
into vehicles. For non-driver products, 2016 will be the year for
Himax to see a bigger revenue percentage generated by LCOS and WLO
product lines as shipments to its major customers started to take
off. The Company is also on track regarding tapping into new
territories such as IoT and machine vision with its latest CIS and
WLO product offerings as stated in the recent technology press
releases. Other non-driver products such as timing controllers and
ASIC services will also continue the growth momentum as they are
adopted by panel manufacturers for many new product areas. Overall,
Himax is seeing strong momentum across all major product lines and
feel excited about the growth prospect of 2016, despite the
uncertain economic environment.
Following a strong first quarter, though
somewhat dented by the earthquake, large panel driver ICs should
grow again by high single digit sequentially and more than 25%
year-over-year, with China and 4K TV still the major growth
engines. Himax expects its 4K TV to remain at high teens percentage
of the Company’s total TV driver sales in the second quarter, with
such strength mainly from Chinese panel makers focusing on high end
models. For reasons detailed earlier, the Company expects sales
from its Chinese panel customers to almost double
year-over-year.
The other segment in driver business is ICs used
in small and medium-sized panels for applications including
smartphones, tablets and automotive. Second quarter smartphones
sales look set to continue its growth by more than 20% sequentially
as the outlook for end-market demand is more optimistic and China’s
local mobile operators have started to offer subsidies on
smartphone purchases. Himax’s end customers are aggressively
launching new models, replenishing inventories in an effort to
gaining market share. Since Himax is the early mover in the AMOLED
driver IC technology, the Company has been collaborating with
multiple panel customers across Korea, China and Japan for AMOLED
product development and the Company is seeing more design-ins at
these panel makers, reaffirming its technology leadership. Himax
believes that AMOLED driver ICs will be one of the critical future
growth engines of its small panel driver IC business, especially
with quite a few new AMOLED fabs being built in China where the
Company has the most comprehensive coverage.
Among driver ICs used in small and medium-sized
panels, the best-performing category has been automotive in recent
years. Himax anticipates Q2 revenue to grow more than 30%
year-over-year. In this product segment, after two strong years,
the Company still expects to see robust and sustainable growth
throughout 2016 and beyond. Himax’s confidence comes from the fact
that higher resolution and larger panels are gradually becoming
mainstream for automotive applications. With numerous top
automobile brands having been Himax’s indirect end customers, it is
well positioned to take advantage of this fast growing market.
However, driver ICs used in tablets, as previously indicated,
remain weak in Q2, although the decline will likely slow down.
Overall, the Company expects small and medium-sized driver IC
segment in the second quarter to be up double digit
sequentially.
For the past few years, non-driver business
segment has been the Company’s most exciting growth segment and a
differentiator for Himax. New product developments continue to
evolve and gain traction, and the Company remains positive on the
long-term growth prospect of its non-driver businesses.
The Company expects around 20% growth in its
non-driver products for the second quarter, with non-driver
representing the highest percentage of total revenues since the
Company’s inception. Looking ahead, many of the Company’s
non-driver products, including CMOS image sensor, timing
controller, touch panel controller, power management IC, ASIC
service, wafer level optics and LCOS microdisplay, are set to grow
significantly in 2016 and the years ahead.
First onto the touch panel controller product
line. Himax expects on-cell to emerge as the new mainstream touch
technology in 2016. The Company’s on-cell sales started to
accelerate in late first quarter with shipments to Chinese and
Japanese smartphone makers and it expects the momentum to be
carried into the second quarter. Himax has also launched force
touch products, a new feature to the touch panel, and already
secured design-wins from leading smartphone makers for their 2016
models. Furthermore, Himax is one of the pioneers in offering TDDI
solutions for the state-of-art in-cell panels, and is in
partnerships with essentially all of the panel manufacturers in
pure in-cell touch for joint technological development. As
announced on April 19th, the Company started mass production and
volume shipment for a leading Chinese smartphone customer. Himax is
seeing the use of in-cell display with TDDI rapidly becoming the
preferred choice for end product customers’ new high end smartphone
designs. The volume shipment record validates Himax’s leading
pioneer position and confirms the industry’s trend towards pure
in-cell panels. The Company anticipates several TDDI design-wins to
enter mass production at additional Chinese and Korean smartphone
customers and panel makers this year and expects meaningful
contribution from TDDI in 2016 and beyond.
Moving on to Himax’s most exciting AR/VR related
businesses. Over the last quarter, the level of excitement in the
industry as well as capital markets reached a new high as numerous
new AR/VR devices were launched with some of them even started
making shipment. New applications and markets are advancing.
Himax’s design engagements with current and new customers now cover
leading companies in gaming, search, mobile, social media,
military, automotive and consumer electronics industries; many of
them have committed huge amounts of R&D and capital to capture
the rapidly expanding future of this game changing product
category. Having invested in related technologies for over 15
years, Himax is uniquely positioned as the provider of choice for
microdisplay and related optics to enable AR, which is projected by
many market research firms to be grabbing a lion’s share in the
addressable market of AR/VR in the long term.
As some of the Company’s major customers have
already started shipment, Himax saw phenomenal growth from LCOS and
WLO product lines in the first quarter. And in the second quarter,
revenues from LCOS and WLO are expected to triple again
sequentially. Though the Company doesn’t expect big volume from the
early generation products of its customers this year, it already
sees positive top line and bottom line contribution from these two
product areas this year. Himax is confident that LCOS and WLO will
account for a significant portion of the Company’s business longer
term. Over the past couple of months, Himax has been seeing
constant additions of new or existing customers concurrently
working on multiple future generation AR designs/devices using
Himax’s LCOS and/or WLO for a variety of new applications. These
applications range from various glass type AR devices to toys,
industrial helmets and head-up displays for automotive. The Company
currently has more than 30 customers using its LCOS and/or WLO for
their AR devices and optical engine designs, with the vast majority
of them in the U.S. When adopted, Himax’s LCOS and WLO typically
represent two of the parts with the highest value in an AR
product’s bill-of-materials. The models Himax is joint-developing
with some of these largest, most recognized companies in the world
for consumer market launches will advance the entire sector. Himax
believes this is just the beginning of a long term growth
story.
As for VR applications, the continuous efforts
of Himax’s customers in introducing new products aiming for
consumer market are encouraging. Analysts and market research
firms are also excited about the technology. The Company has been
developing customized chips with high refresh rate to perfect the
performance of VR displays in the next generation OLED panels with
two top-notch VR players. Himax has also engaged potential new
customers on their VR initiatives and started to see certain VR
customers showing interests in Himax’s AR related product
offerings. This reaffirms the Company’s leading position in OLED
driver IC technologies and also leverages the long-standing
excellence of its timing controllers, power management ICs, and
ASIC services. Himax expects mass production to start in late 2016
to early 2017.
It is also worth highlighting that the Company’s
CMOS image sensor product line stabilized in the first quarter,
rebounding from its trough in 2015. Looking into the second
quarter, there will be mass production of several design wins for
notebooks and increased shipments for multimedia applications.
Himax briefly introduced its new smart sensor product lines to be
used in new applications across smartphones, tablets, AR/VR
devices, IoT and artificial intelligence in press releases and last
earnings call. This includes the ultra-low-power QVGA CMOS image
sensor and the Diffractive Optical Element (“DOE”) integrated WLO
laser diode collimator to be paired with a Near Infrared (NIR)
sensor. The Company believes the former is by far the lowest power
CIS in the industry with similar resolution. It can therefore be
applied in a constant state of operation, enabling “always on”,
contextually aware, computer vision capabilities. Regarding DOE
integrated WLO laser diode collimator with NIR sensor, Himax
believes this is the most effective total solution for 3D sensing
and detection in the smallest form factor. This breakthrough allows
the solution to be easily integrated into next-generation consumer
electronics. Currently, Himax is making good progress and has seen
encouraging and increasing customer responses. Himax will report
the developments in this new territory in due course.
Second Quarter 2016
Guidance
The Company is providing the following financial
guidance for the second quarter of 2016:
Net Revenue: To be up 7.5 to 12.5%
sequentially, representing a 14.6 to 19.9% year-over-year
growth
Gross Margin: To be around 26%, representing an
increase of 220 basis points year-over-year
GAAP EPS: 8.5 to 10.5 cents per
diluted ADS, representing a 66.7 to 105.9% year-over-year
growth
In providing the above earnings guidance, the
Company has assumed a 15% income tax rate, calculated based on
exchange rate of NTD 32.4 against the USD, which is also the
exchange rate as of beginning of May 2016.
HIMAX TECHNOLOGIES FIRST QUARTER 2016
EARNINGS CONFERENCE CALL
DATE: |
Thursday, May 12th,
2016 |
|
TIME: |
U.S.
8:00 a.m. EDT |
|
DIAL
IN: |
Taiwan
8:00 p.m. |
|
|
U.S. +1 (866) 444-9147 |
|
CONFERENCE ID:
|
INTERNATIONAL +1 (678) 509-7569 |
|
WEBCAST: |
88294326 |
|
|
http://edge.media-server.com/m/p/rxzafbyj |
|
|
A replay of the call will be available beginning two hours after
the call through 11:59 p.m. US EDT on May 19th, 2016 (12:59 p.m.
Taiwan time, May 20th, 2016) on www.himax.com.tw and by
telephone at +1 (855) 859-2056 (US Domestic) or +1 (404) 537-3406
(International). The conference ID number is 88294326. This call is
being webcast by Nasdaq and can be accessed by clicking on this
link or Himax’s website, where the webcast can be accessed through
May 11th, 2017.
About Himax Technologies,
Inc.Himax Technologies, Inc. (NASDAQ:HIMX) is a fabless
semiconductor solution provider dedicated to display imaging
processing technologies. Himax is a worldwide market leader in
display driver ICs and timing controllers used in TVs, laptops,
monitors, mobile phones, tablets, digital cameras, car navigation,
virtual reality (VR) devices and many other consumer electronics
devices. Additionally, Himax designs and provides controllers for
touch sensor displays, in-cell Touch and Display Driver Integration
(TDDI) single-chip solutions, LED driver ICs, power management ICs,
scaler products for monitors and projectors, tailor-made video
processing IC solutions, silicon IPs and LCOS micro-displays for
augmented reality (AR) devices and head-up displays (HUD) for
automotive. The Company also offers digital camera solutions,
including CMOS image sensors and wafer level optics which are used
in a wide variety of applications such as mobile phone, tablet,
laptop, TV, PC camera, automobile, security, medical devices and
Internet of Things. Founded in 2001 and headquartered in Tainan,
Taiwan, Himax currently employs around 1,900 people from three
Taiwan-based offices in Tainan, Hsinchu and Taipei and country
offices in China, Korea, Japan and the US. Himax has 2,819 patents
granted and 511 patents pending approval worldwide as of March 31,
2016. Himax has retained its position as the leading display
imaging processing semiconductor solution provider to consumer
electronics brands worldwide.
http://www.himax.com.tw
Forward Looking Statements
Factors that could cause actual events or
results to differ materially include, but not limited to, General
business and economic conditions and the state of the semiconductor
industry; market acceptance and competitiveness of the driver and
non-driver products developed by the Company; demand for end-use
applications products; reliance on a small group of principal
customers; the uncertainty of continued success in technological
innovations; our ability to develop and protect our intellectual
property; pricing pressures including declines in average selling
prices; changes in customer order patterns; changes in estimated
full-year effective tax rate; shortages in supply of key
components; changes in environmental laws and regulations; exchange
rate fluctuations; regulatory approvals for further investments in
our subsidiaries; our ability to collect accounts receivable and
manage inventory 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, 2015 filed with the SEC, as may be amended.
Company Contacts:
Jackie Chang, CFOHimax Technologies, Inc.Tel:
+886-2-2370-3999 Ext.22300 OrUS Tel: +1-949-585-9838 Ext.252Fax:
+886-2-2314-0877Email:
jackie_chang@himax.com.twwww.himax.com.tw
Nadiya Chen, Investor Relations Himax Technologies, Inc. Tel:
+886-2-2370-3999 Ext. 22513 Fax: +886-2-2314-0877Email:
nadiya_chen@himax.com.twwww.himax.com.tw
Penny Lin, Investor RelationsHimax Technologies, Inc.Tel:
+886-2-2370-3999 Ext.22320Fax: +886-2-2314-0877 Email:
penny_lin@himax.com.twwww.himax.com.tw
Investor Relations - US Representative
John Mattio, FounderLamnia International, LLC.Tel: +1 (203) 885
-1099Direct: +1 (203) 885 -1058 Email: jmattio@lamniaintl.com
www.lamniaintl.com
– FINANCIAL TABLES –
|
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) |
(Amounts in Thousands of U.S. Dollars, Except
Share and Per Share Data) |
|
|
Three Months
Ended March 31, |
|
Three Months
Ended December 31, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
|
|
|
|
Revenues |
$ |
180,319 |
|
|
$ |
179,045 |
|
|
$ |
177,977 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of revenues |
|
133,144 |
|
|
|
133,013 |
|
|
|
137,243 |
|
Research and development |
|
23,402 |
|
|
|
21,300 |
|
|
|
22,575 |
|
General and administrative |
|
4,581 |
|
|
|
4,493 |
|
|
|
4,544 |
|
Sales and marketing |
|
4,013 |
|
|
|
4,591 |
|
|
|
5,004 |
|
Total costs and
expenses |
|
165,140 |
|
|
|
163,397 |
|
|
|
169,366 |
|
|
|
|
|
|
|
Operating income |
|
15,179 |
|
|
|
15,648 |
|
|
|
8,611 |
|
|
|
|
|
|
|
Non operating income
(loss): |
|
|
|
|
|
Interest income |
|
229 |
|
|
|
202 |
|
|
|
188 |
|
Gains (losses) on sale of
securities, net |
|
(41 |
) |
|
|
90 |
|
|
|
159 |
|
Equity in income (losses) of equity
method investees |
|
(161 |
) |
|
|
(50 |
) |
|
|
262 |
|
Foreign currency exchange losses,
net |
|
(215 |
) |
|
|
(313 |
) |
|
|
(28 |
) |
Interest expense |
|
(179 |
) |
|
|
(114 |
) |
|
|
(141 |
) |
Other income (losses), net |
|
(10 |
) |
|
|
14 |
|
|
|
(77 |
) |
|
|
(377 |
) |
|
|
(171 |
) |
|
|
363 |
|
Earnings before income
taxes |
|
14,802 |
|
|
|
15,477 |
|
|
|
8,974 |
|
Income tax expense |
|
2,220 |
|
|
|
3,916 |
|
|
|
3,759 |
|
Net income |
|
12,582 |
|
|
|
11,561 |
|
|
|
5,215 |
|
Net loss
attributable to noncontrolling interests |
|
506 |
|
|
|
1,004 |
|
|
|
915 |
|
Net income
attributable to Himax Technologies, Inc. stockholders |
$ |
13,088 |
|
|
$ |
12,565 |
|
|
$ |
6,130 |
|
|
|
|
|
|
|
Basic earnings per ADS attributable to
Himax Technologies, Inc. stockholders |
$ |
0.076 |
|
|
$ |
0.073 |
|
|
$ |
0.036 |
|
Diluted
earnings per ADS attributable to Himax Technologies, Inc.
stockholders |
$ |
0.076 |
|
|
$ |
0.073 |
|
|
$ |
0.036 |
|
|
|
|
|
|
|
Basic Weighted Average Outstanding ADS |
|
172,303 |
|
|
|
171,608 |
|
|
|
172,303 |
|
Diluted Weighted Average Outstanding ADS |
|
172,352 |
|
|
|
172,185 |
|
|
|
172,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies,
Inc.Unaudited Supplemental Financial
Information(Amounts in Thousands of U.S. Dollars) |
|
|
|
|
|
|
|
|
The amount of
share-based compensation included in applicable
statements of income categories is
summarized as follows: |
Three Months Ended March
31, |
|
ThreeMonthsEndedDecember |
|
|
2016 |
|
|
|
2015 |
|
|
|
31, 2015 |
|
Share-based
compensation |
|
|
|
|
|
Cost of revenues |
$ |
26 |
|
|
$ |
7 |
|
|
$ |
27 |
|
Research and development |
|
161 |
|
|
|
312 |
|
|
|
160 |
|
General and administrative |
|
70 |
|
|
|
132 |
|
|
|
70 |
|
Sales and marketing |
|
20 |
|
|
|
84 |
|
|
|
20 |
|
Income tax benefit |
|
(48 |
) |
|
|
(127 |
) |
|
|
(47 |
) |
Total |
$ |
229 |
|
|
$ |
408 |
|
|
$ |
230 |
|
|
|
|
|
|
|
The amount
of acquisition-related charges
included in applicable statements of
income categories is summarized as
follows: |
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges |
|
|
|
|
|
Research and development |
$ |
246 |
|
|
$ |
194 |
|
|
$ |
237 |
|
Income tax benefit |
|
(99 |
) |
|
|
|
|
(83 |
) |
|
|
(98 |
) |
Total |
$ |
147 |
|
|
$ |
111 |
|
|
$ |
139 |
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
GAAP Unaudited Condensed
Consolidated Balance Sheets |
(Amounts in Thousands of U.S. Dollars,
Except Share and Per Share
Data) |
|
|
March
31, 2016 |
|
December 31, 2015 |
|
March
31,
2015 |
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
150,521 |
|
|
$ |
129,829 |
|
|
$ |
176,362 |
|
Investments in marketable
securities available-for-sale |
|
|
17,441 |
|
|
|
18,511 |
|
|
|
2,407 |
|
Accounts receivable, less allowance
for doubtful accounts, sales returns and discounts |
|
|
173,025 |
|
|
|
177,198 |
|
|
|
192,715 |
|
Inventories |
|
|
182,814 |
|
|
|
171,374 |
|
|
|
186,143 |
|
Deferred income taxes |
|
|
3,372 |
|
|
|
3,306 |
|
|
|
6,724 |
|
Restricted cash, cash equivalents
and marketable securities |
|
|
180,451 |
|
|
|
180,442 |
|
|
|
130,180 |
|
Prepaid expenses and other current
assets |
|
|
19,343 |
|
|
|
17,175 |
|
|
|
19,106 |
|
Total current
assets |
|
|
726,967 |
|
|
|
697,835 |
|
|
|
713,637 |
|
Investment in non-marketable
equity securities |
|
|
11,211 |
|
|
|
11,211 |
|
|
|
11,211 |
|
Equity method
investments |
|
|
3,490 |
|
|
|
3,648 |
|
|
|
3,666 |
|
Property, plant and
equipment, net |
|
|
52,654 |
|
|
|
54,461 |
|
|
|
54,879 |
|
Deferred income
taxes |
|
|
982 |
|
|
|
871 |
|
|
|
566 |
|
Goodwill |
|
|
28,138 |
|
|
|
28,138 |
|
|
|
28,138 |
|
Other
intangible assets, net |
|
|
3,913 |
|
|
|
4,161 |
|
|
|
4,085 |
|
Other
assets |
|
|
2,036 |
|
|
|
2,012 |
|
|
|
1,948 |
|
|
|
|
102,424 |
|
|
|
104,502 |
|
|
|
104,493 |
|
Total assets |
|
$ |
829,391 |
|
|
$ |
802,337 |
|
|
$ |
818,130 |
|
Liabilities, Redeemable
noncontrolling interest and
Equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Short-term debt |
|
$ |
180,000 |
|
|
$ |
180,000 |
|
|
$ |
130,000 |
|
Accounts payable |
|
|
138,662 |
|
|
|
124,423 |
|
|
|
148,657 |
|
Income taxes payable |
|
|
14,775 |
|
|
|
12,139 |
|
|
|
22,187 |
|
Deferred income taxes |
|
|
141 |
|
|
|
138 |
|
|
|
35 |
|
Other accrued expenses and other
current liabilities |
|
|
32,939 |
|
|
|
36,030 |
|
|
|
27,642 |
|
Total current
liabilities |
|
|
366,517 |
|
|
|
352,730 |
|
|
|
328,521 |
|
Other
liabilities |
|
|
4,647 |
|
|
|
4,610 |
|
|
|
5,546 |
|
Total
liabilities |
|
|
371,164 |
|
|
|
357,340 |
|
|
|
334,067 |
|
Redeemable
noncontrolling interest |
|
|
3,656 |
|
|
|
3,656 |
|
|
|
3,656 |
|
Equity |
|
|
|
|
|
|
Himax
Technologies, Inc.
stockholders’ equity: |
|
|
|
|
|
|
Ordinary shares, US$0.3 par value,
1,000,000,000 shares authorized; 356,699,482 shares issued; and
343,815,424 shares, 343,815,424 shares and 342,425,144 shares
outstanding at March 31, 2016, December 31, 2015 and March 31,
2015, respectively |
|
|
107,010 |
|
|
|
107,010 |
|
|
|
107,010 |
|
Additional paid-in capital |
|
|
105,618 |
|
|
|
|
|
105,355 |
|
|
|
108,357 |
|
Treasury shares, at cost,
12,884,058 shares, 12,884,058 shares and 14,274,338 shares at March
31, 2016, December 31, 2015 and March 31, 2015, respectively |
|
|
(9,157 |
) |
|
|
|
|
(9,157 |
) |
|
|
(10,144 |
) |
Accumulated other comprehensive
loss |
|
|
(1,553 |
) |
|
|
|
|
(1,879 |
) |
|
|
(311 |
) |
Unappropriated retained
earnings |
|
|
250,462 |
|
|
|
237,375 |
|
|
|
280,831 |
|
Himax Technologies, Inc.
stockholders’ equity |
|
|
452,380 |
|
|
|
438,704 |
|
|
|
485,743 |
|
Noncontrolling
interests |
|
|
2,191 |
|
|
|
2,637 |
|
|
|
(5,336 |
) |
Total
equity |
|
|
454,571 |
|
|
|
441,341 |
|
|
|
480,407 |
|
Total
liabilities, redeemable
noncontrolling interest and
equity |
|
$ |
829,391 |
|
|
$ |
802,337 |
|
|
$ |
818,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts in
Thousands of
U.S.
Dollars) |
|
|
Three Months Ended March
31, |
|
Three Months Ended
December
31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
12,582 |
|
|
$ |
11,561 |
|
|
$ |
5,215 |
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,450 |
|
|
|
3,966 |
|
|
|
3,407 |
|
Bad debt expense |
|
|
--- |
|
|
|
--- |
|
|
|
310 |
|
Share-based compensation
expenses |
|
|
277 |
|
|
|
535 |
|
|
|
277 |
|
Gain on disposals of equity method
investment |
|
|
--- |
|
|
|
(88 |
) |
|
|
--- |
|
Loss (gain) on disposals of
marketable securities, net |
|
|
41 |
|
|
|
(2 |
) |
|
|
(159 |
) |
Equity in losses (income) of equity
method investees |
|
|
161 |
|
|
|
50 |
|
|
|
(262 |
) |
Deferred income tax expense
(benefit) |
|
|
(179 |
) |
|
|
908 |
|
|
|
1,665 |
|
Inventories write downs |
|
|
2,710 |
|
|
|
1,993 |
|
|
|
2,445 |
|
Changes in: |
|
|
|
|
|
|
Accounts receivable |
|
|
4,199 |
|
|
|
26,636 |
|
|
|
(9,583 |
) |
Inventories |
|
|
(14,150 |
) |
|
|
(22,031 |
) |
|
|
3,875 |
|
Prepaid expenses and other current
assets |
|
|
(628 |
) |
|
|
590 |
|
|
|
8,977 |
|
Accounts payable |
|
|
14,240 |
|
|
|
(30,671 |
) |
|
|
12,427 |
|
Income taxes payable |
|
|
2,651 |
|
|
|
3,141 |
|
|
|
(749 |
) |
Other accrued expenses and other
current liabilities |
|
|
(3,839 |
) |
|
|
(219 |
) |
|
|
(1,594 |
) |
Other liabilities |
|
|
(10 |
) |
|
|
(80 |
) |
|
|
(385 |
) |
Net cash
provided by (used in)
operating activities |
|
|
21,505 |
|
|
|
(3,711 |
) |
|
|
25,866 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Purchases of property, plant and
equipment |
|
|
(2,202 |
) |
|
|
(1,842 |
) |
|
|
(3,567 |
) |
Purchases of available-for-sale
marketable securities |
|
|
(6,596 |
) |
|
|
(4,426 |
) |
|
|
(16,498 |
) |
Proceeds from disposals of
available-for-sale marketable securities |
|
|
7,968 |
|
|
|
4,428 |
|
|
|
17,520 |
|
Purchase of equity method
investment |
|
|
--- |
|
|
|
(3,690 |
) |
|
|
--- |
|
Proceeds from disposals of equity
method investment |
|
|
--- |
|
|
|
179 |
|
|
|
--- |
|
Proceeds from (repayments of)
refundable deposits, net |
|
|
6 |
|
|
|
|
|
(26 |
) |
|
|
13 |
|
Pledges of restricted cash, cash
equivalents and marketable securities |
|
|
(12 |
) |
|
|
(3 |
) |
|
|
--- |
|
Cash received from the acquisition
of Liqxtal, net of cash paid of $1,780 |
|
|
--- |
|
|
|
--- |
|
|
|
341 |
|
Net cash
used in investing activities |
|
|
(836 |
) |
|
|
|
|
(5,380 |
) |
|
|
(2,191 |
) |
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts in
Thousands of
U.S.
Dollars) |
|
|
Three Months Ended March
31, |
|
Three Months Ended December
31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2015 |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Proceeds from disposals of
subsidiary shares to noncontrolling interests by Himax Imaging,
Inc. |
|
$ |
--- |
|
|
$ |
3 |
|
|
$ |
4 |
|
Purchases of subsidiary shares from
noncontrolling interests |
|
|
(1 |
) |
|
|
(9 |
) |
|
|
(145 |
) |
Proceeds from short-term debt |
|
|
61,000 |
|
|
|
140,000 |
|
|
|
92,303 |
|
Repayments of short-term debt |
|
|
(61,000 |
) |
|
|
(140,000 |
) |
|
|
|
|
(92,303 |
) |
Net cash
used in financing activities |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
(141 |
) |
Effect
of foreign currency exchange rate
changes on cash and cash equivalents |
|
|
24 |
|
|
|
(7 |
) |
|
|
(92 |
) |
Net
increase
(decrease) in
cash and cash equivalents |
|
|
20,692 |
|
|
|
(9,104 |
) |
|
|
23,442 |
|
Cash and cash
equivalents at beginning of period |
|
|
129,829 |
|
|
|
185,466 |
|
|
|
106,387 |
|
Cash and cash
equivalents at end of period |
|
$ |
150,521 |
|
|
$ |
176,362 |
|
|
$ |
129,829 |
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
Cash paid during the period
for: |
|
|
|
|
|
|
Interest |
|
$ |
187 |
|
|
$ |
74 |
|
|
$ |
79 |
|
Income taxes |
|
$ |
71 |
|
|
$ |
100 |
|
|
$ |
350 |
|
|
|
|
|
|
|
|
Supplemental
disclosures of investing activities affecting both
cash and non-cash items: |
|
|
|
|
|
|
Purchases of property, plant and
equipment |
|
$ |
1,388 |
|
|
$ |
1,382 |
|
|
$ |
1,948 |
|
Decrease in payable for purchases
of equipment and asset retirement obligations |
|
|
814 |
|
|
|
460 |
|
|
|
|
|
1,619 |
|
Cash paid |
|
$ |
2,202 |
|
|
$ |
1,842 |
|
|
$ |
3,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Non-GAAP Unaudited Supplemental Data –
Reconciliation Schedule |
(Amounts in Thousands of U.S.
Dollars) |
|
Gross Margin, Operating Margin and Net Margin Excluding
Share-Based Compensation and
Acquisition-Related Charges: |
|
|
Three Months Ended March
31, |
|
|
|
Three Months Ended December
31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2015 |
|
Revenues |
$ |
180,319 |
|
|
$ |
179,045 |
|
|
$ |
177,977 |
|
|
|
|
|
|
|
Gross profit |
|
47,175 |
|
|
|
46,032 |
|
|
|
40,734 |
|
Add: Share-based
compensation – cost of revenues |
|
26 |
|
|
|
7 |
|
|
|
27 |
|
Gross profit excluding
share-based compensation |
|
47,201 |
|
|
|
46,039 |
|
|
|
40,761 |
|
Gross margin excluding
share-based compensation |
|
26.2 |
% |
|
|
25.7 |
% |
|
|
22.9 |
% |
|
|
|
|
|
|
Operating income |
|
15,179 |
|
|
|
15,648 |
|
|
|
8,611 |
|
Add: Share-based
compensation |
|
277 |
|
|
|
535 |
|
|
|
277 |
|
Operating income
excluding share-based compensation |
|
15,456 |
|
|
|
16,183 |
|
|
|
8,888 |
|
Add:
Acquisition-related charges –intangible assets amortization |
|
246 |
|
|
|
194 |
|
|
|
237 |
|
Operating income
excluding share-based compensation and acquisition-related
charges |
|
15,702 |
|
|
|
16,377 |
|
|
|
9,125 |
|
Operating margin
excluding share-based compensation and acquisition-related
charges |
|
8.7 |
% |
|
|
9.1 |
% |
|
|
5.1 |
% |
Net income attributable
to Himax Technologies, Inc. stockholders |
|
13,088 |
|
|
|
12,565 |
|
|
|
6,130 |
|
Add: Share-based
compensation, net of tax |
|
229 |
|
|
|
408 |
|
|
|
230 |
|
Add:
Acquisition-related charges, net of tax |
|
147 |
|
|
|
111 |
|
|
|
139 |
|
Net income attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
13,464 |
|
|
|
13,084 |
|
|
|
6,499 |
|
Net margin attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
7.5 |
% |
|
|
7.3 |
% |
|
|
3.7 |
% |
|
|
|
|
|
|
*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 attributable to Himax Technologies, Inc. stockholders
excluding share-based compensation and acquisition-related charges
equals net income attributable to Himax Technologies, Inc.
stockholders excluding share-based compensation and
acquisition-related charges divided by revenues |
|
|
Diluted Earnings Per ADS Attributable to Himax
Technologies, Inc. stockholders Excluding Share-Based Compensation
and Acquisition-Related Charges: (Amounts in U.S.
Dollars) |
|
|
|
Three Months EndedMarch
31, 2016 |
|
|
Diluted GAAP earnings per ADS
attributable to Himax Technologies, Inc. stockholders |
|
$ |
0.076 |
|
|
|
Add: Share-based compensation per
ADS |
|
$ |
0.001 |
|
|
|
Add: Acquisition-related charges
per ADS |
|
$ |
0.001 |
|
|
|
|
|
|
|
|
Diluted non-GAAP earnings per ADS
attributable to Himax Technologies, Inc. stockholders excluding
share-based compensation and acquisition-related charges |
|
$ |
0.078 |
|
|
|
|
|
|
|
Numbers do not add up
due to rounding |
|
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