Company Meets Q3
Revenue, Gross Margin,
EPS Guidance, and
Exceeds Non-GAAP EPS
GuidanceProvides Q4 2016 Guidance Revenue to
Decrease 4.0% to 9.0% Sequentially, Gross Margin to be Slightly
Down, GAAP EPS to be 8.5 to 11.0 Cents and Non-GAAP EPS to be 8.7
to 11.2 Cents
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 third quarter ended September 30, 2016.
SUMMARY
FINANCIALS
|
Third Quarter 2016 Results
Compared to Third Quarter 2015
Results (USD in millions)
(unaudited) |
| |
|
|
|
| |
Q3 2016 |
Q3 2015 |
CHANGE |
| Net Revenue |
$ |
218.1 |
|
|
|
$ |
165.6 |
|
|
|
+31.7 |
% |
| Gross Profit |
$ |
55.7 |
|
|
|
$ |
36.1 |
|
|
|
+54.5 |
% |
| Gross Margin |
|
25.6 |
% |
|
|
|
21.8 |
% |
|
|
+3.8 |
% |
| GAAP Net Income (Loss)
Attributable to Shareholders |
$ |
13.6 |
|
|
|
$ |
(2.3 |
) |
|
|
+683.1 |
% |
| Non-GAAP Net Income
Attributable to Shareholders |
$ |
21.3 |
(1 |
) |
|
|
$ |
1.7 |
(2 |
) |
|
|
+1,167.5 |
% |
| GAAP EPS (Per Diluted ADS,
USD) |
$ |
0.079 |
|
|
|
$ |
(0.014 |
) |
|
|
+681.7 |
% |
| Non-GAAP EPS (Per Diluted
ADS, USD) |
$ |
0.124 |
(1 |
) |
|
|
$ |
0.010 |
(2 |
) |
|
|
+1,164.4 |
% |
(1) Non-GAAP Net income attributable to common
shareholders and EPS excludes $7.6 million share-based compensation
expenses, net of tax and $0.1 million non-cash acquisition related
charge, net of tax.(2) Non-GAAP Net income attributable to common
shareholders and EPS excludes $3.9 million of share-based
compensation expenses, net of tax and $0.1 million non-cash
acquisition related charges, net of tax.
| |
| Third
Quarter 2016 Results Compared to
Second Quarter 2016 Results (USD
in millions) (unaudited) |
| |
|
|
|
| |
Q3 2016 |
Q2 2016 |
CHANGE |
| Net
Revenue |
$ |
218.1 |
|
$ |
201.1 |
|
|
+8.5 |
% |
| Gross
Profit |
$ |
55.7 |
|
$ |
52.5 |
|
|
+6.2 |
% |
| Gross
Margin |
|
25.6 |
% |
|
26.1 |
% |
|
-0.5 |
% |
| GAAP Net
Income Attributable to Shareholders |
$ |
13.6 |
|
$ |
19.8 |
|
|
-31.3 |
% |
| Non-GAAP Net
Income Attributable to Shareholders |
$ |
21.3 |
(1 |
) |
$ |
20.2 |
(2 |
) |
|
+5.7 |
% |
| GAAP EPS (Per
Diluted ADS, USD) |
$ |
0.079 |
|
$ |
0.115 |
|
|
-31.3 |
% |
| Non-GAAP EPS
(Per Diluted ADS, USD) |
$ |
0.124 |
(1 |
) |
$ |
0.117 |
(2 |
) |
|
+5.7 |
% |
(1) Non-GAAP Net income attributable to common
shareholders and EPS excludes $7.6 million of share-based
compensation expenses, net of tax and $0.1 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.
"The momentum we established during the first
half of the year continued into the third quarter of 2016, as
evidenced by our top and bottom line growth during the first three
quarters of the year as our driver and non-driver business segments
both performed strongly,” said Mr. Jordan Wu, President and Chief
Executive Officer of Himax. “We continue to see increased market
share in our core driver IC business, in both large panel driver
ICs as well as small and medium-sized driver ICs, which is a direct
result of our ongoing technology advancements and strong customer
relationships. Our total solution capabilities and our continued
focus on major new technology trends including higher display
resolution, AMOLED and in-cell TDDI will continue to solidify our
dominant position in the market.”
Mr. Wu continued: “We also remain positive on
the long-term growth prospect of our higher-margin non-driver
business; however, we are anticipating near-term headwinds.
Notably, our LCOS and WLO product lines are expected to experience
sales declines starting the fourth quarter 2016 and the next few
quarters of 2017, primarily due to our major AR customer’s shift in
focus to the development of future generation devices. That being
said, we still remain uniquely positioned in this market as the
provider of choice for critical enablers to AR devices. To support
anticipated growth in this segment, we have proceeded with the
expansion plan for our next generation LCOS and WLO production
lines, which will enable higher end product design and offer far
better product quality for mass production and is expected to be
completed by the end of 2017 or early 2018. We remain committed to
our long-term strategy to diversify our product and customer base
with innovative technologies, which ultimately, should increase
shareholder value.”
Third Quarter 2016 Revenue Breakdown by Product Line
(USD in millions) (unaudited)
| |
Q3 2016 |
|
|
% |
|
|
|
Q3 2015 |
|
|
% |
|
%
Change |
| |
Display drivers for
large-sized panels |
|
|
$ |
72.0 |
|
|
33.0 |
% |
|
|
$ |
50.5 |
|
|
30.5 |
% |
|
|
+42.6 |
% |
| |
Display drivers for
small/medium-sized panels |
|
|
$ |
99.3 |
|
|
45.5 |
% |
|
|
$ |
84.3 |
|
|
50.9 |
% |
|
|
+17.8 |
% |
| |
Non-driver products |
|
|
$ |
46.8 |
|
|
21.5 |
% |
|
|
$ |
30.8 |
|
|
18.6 |
% |
|
|
+52.1 |
% |
| |
Total |
|
|
$ |
218.1 |
|
|
100.0 |
% |
|
|
$ |
165.6 |
|
|
100.0 |
% |
|
|
+ 31.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Q3 2016 |
|
|
% |
|
|
|
Q2
2016 |
|
% |
%
Change |
| |
Display drivers for
large-sized panels |
|
|
$ |
72.0 |
|
|
33.0 |
% |
|
|
$ |
67.5 |
|
|
33.6 |
% |
|
|
+6.6 |
% |
| |
Display drivers for
small/medium-sized panels |
|
|
$ |
99.3 |
|
|
45.5 |
% |
|
|
$ |
90.6 |
|
|
45.0 |
% |
|
|
+9.6 |
% |
| |
Non-driver products |
|
|
$ |
46.8 |
|
|
21.5 |
% |
|
|
$ |
43.0 |
|
|
21.4 |
% |
|
|
+9.0 |
% |
| |
Total |
|
|
$ |
218.1 |
|
|
100.0 |
% |
|
|
$ |
201.1 |
|
|
100.0 |
% |
|
|
+8.5 |
% |
The third quarter revenue of $218.1 million
represented an 8.5% sequential increase and a 31.7% increase
year-over-year. Revenue from large panel display drivers was $72.0
million, up 6.6% sequentially, and up 42.6% from a year ago. Large
panel driver ICs accounted for 33.0% of the Company’s total
revenues for the third quarter, compared to 33.6% in the last
quarter and 30.5% a year ago. As opposed to original guidance of
double-digit sequential growth, the Company’s large panel driver
business grew just mid-single-digit due to a certain customer’s
short-noticed shipment adjustment of its monitor products. Without
the last minute change, the Company could have achieved
double-digit sequential growth that it guided. Despite the lower
than expected sales mentioned above, the Company’s large panel
products grew more than 40% year-over-year thanks to strong
demand from Chinese and Taiwanese panel customers during the
quarter. In China, the Company’s driver IC business for large panel
grew more than 70% year-over-year during the quarter. In
comparison, worldwide large-size TFT-LCD panel shipments declined
around 6% in the same period. It is especially worth highlighting
that Himax’s engineering collaboration and design-in activities
with large panel customers across China, Taiwan and Korea all
remain robust and the Company expects these trends to continue into
the next year.
Revenue for small and medium-sized drivers came
in at $99.3 million, up 9.6% sequentially and up 17.8% from the
same period last year. Driver ICs for small and medium-sized
applications accounted for 45.5% of total sales for the third
quarter, as compared to 45.0% in the previous quarter and 50.9% a
year ago. Sales into smartphones came in better than guided to
achieve low-single-digit growth sequentially and up more than 20%
year-over-year, as the Company fulfilled some of the surging rush
orders of late from Chinese end customers through securing
additional capacity from its supply partners. The strong rebound of
the Company’s smartphone driver IC business this year came from its
long-standing leading market share in China where the Company’s end
brand customers are performing strongly. Automotive and tablet
applications were also contributors to the segment and continued
solid momentum, growing double digit during the third quarter both
sequentially and year-over-year.
Revenues from non-driver businesses were $46.8
million, up 9.0% sequentially and up 52.1% from the same period
last year. Non-driver products accounted for 21.5% of total
revenues, as compared to 21.4% in the previous quarter and 18.6% a
year ago. The sequential growth was led by the LCOS and WLO
shipments for AR applications. Other product lines such as timing
controller, touch panel controller and ASIC also grew sequentially.
The performance of LCOS and WLO increased several folds
year-over-year thanks to shipments to the Company’s major AR
customer. The year-over-year growth was partially offset by the
decline of programmable gamma OP, power management IC, and CMOS
image sensors. Himax expects, however, the LCOS and WLO shipments
to slow down starting fourth quarter 2016. The Company remains
positive on the long-term prospect of these two product lines,
judging by the numerous customers the Company has engaged, many of
which the world’s biggest tech names, and the busy engineering
activities going on with such customers.
GAAP gross margin for the third quarter was
25.6%, down 50 basis points from 26.1% in the previous quarter and
up 380 basis points from the same period last year. The Company has
been able to maintain a relatively strong margin this year mainly
thanks to a more favorable product mix in small and medium-sized
driver ICs, increased LCOS and WLO shipments for AR applications
and certain engineering fees from AR/VR new project engagements.
Gross margin improvement remains one of the Company’s business
focuses.
GAAP operating expenses were $40.4 million in
the third quarter of 2016, up 32.2% from the preceding quarter and
up 4.9% from a year ago. The significant sequential increase was
caused by the $9.2 million 2016 RSU grant the Company has
traditionally expensed in the third quarter, which was considered
in its guidance. As an annual practice, the Company rewards
employees with an annual bonus at the end of September each year
which always leads to a substantial increase in the third quarter
GAAP operating expenses compared to the other quarters of the year.
This year, the annual bonus compensation including Restricted Share
Units, or RSUs, and cash payouts totaled $12.0 million, out of
which $9.2 million was vested immediately and expensed in the third
quarter. The remainder will be vested equally at the first, second
and third anniversaries of the grant date. Excluding the RSU
charge, the Company’s third quarter operating expenses were $31.2
million, up 2.0% from the previous quarter and down 8.2% from the
same quarter 2015.
GAAP operating margin for the third quarter of
2016 was 7.0%, up from -1.5% for the same period last year and down
from 10.9% a quarter ago. The GAAP operating income decreased 30.2%
sequentially, but increased 721.5% year-over-year. The sequential
decline was mainly a result of the higher RSU expense to compensate
Himax’s team for the much improved profitability of the year.
Third quarter non-GAAP operating income, which
excludes share-based compensation and acquisition-related charges,
was $25.1 million, or 11.5% of sales, up from 1.6% for the same
period last year and up from 11.1% a quarter ago. The non-GAAP
operating income increased 12.1% sequentially and 835.7% from the
same quarter 2015.
GAAP net income for the third quarter was $13.6
million, or 7.9 cents per diluted ADS, compared to $19.8 million,
or 11.5 cents per diluted ADS, in the previous quarter and GAAP net
loss of $2.3 million, or 1.4 cents per diluted ADS, a year ago.
GAAP net income increased 683.1% year-over-year due to higher
revenue and much improved gross margin, but declined 31.3% from the
previous quarter mainly due to the $9.2 million 2016 RSU charge in
the third quarter. Non-GAAP net income actually increased 5.7%
sequentially.
Third quarter non-GAAP net income was $21.3
million, or 12.4 cents per diluted ADS, compared to $20.2 million
last quarter and $1.7 million the same period last year. Non-GAAP
EPS exceeded the Company’s 10.0 to 12.0 cents guided range.
Balance Sheet and Cash Flow
Himax had $153.4 million of cash, cash
equivalents and marketable securities as of the end of September
2016, compared to $126.0 million at the same time last year and
$179.3 million a quarter ago. The Company made a cash RSU payment
of $9.2 million and a dividend of $22.3 million during the quarter.
On top of the above cash position, restricted cash was $138.0
million at the end of the quarter, same as the preceding 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 September 30, 2016 were $169.4
million, down from $177.7 million a year ago and down from $186.7
million a quarter ago. The lower inventory was a result of
increased shipments in the quarter. Accounts receivable at the end
of September 2016 were $208.4 million as compared to $168.0 million
a year ago and $187.9 million last quarter. DSO was 95 days at the
end of September 2016, as compared to 89 days a year ago and 90
days at end of the last quarter.
Net cash inflow from operating activities for
the third quarter was $2.9 million as compared to an inflow of
$14.1 million for the same period last year and an inflow of $13.1
million last quarter. The year-over-year decrease was a result of
higher receivables although net profit actually increased. The
sequential decrease in cash flow was mainly due to increased
receivables from higher sales and a decrease in accounts payable as
more payments made at the end of the quarter. The Company expects a
significant operating cash inflow in the fourth quarter and for the
full year.
Capital expenditures were $1.9 million in the
third quarter of 2016 versus $2.6 million a year ago and $1.7
million last quarter. The capital expenditure in the third quarter
consisted mainly of purchases of R&D related equipment.
Share Buyback Update
As of September 30, 2016, Himax had 172.0
million ADS outstanding, little changed 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 and Ms. Penny Lin,
internal IR Manager, and Mr. Greg Falesnik, Himax’s US-based IR,
will maintain corporate access for shareholders and attend future
investor conferences. 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 delivered solid results to achieve
both top and bottom line growth during the first three quarters of
the year as its driver and non-driver business segments both
performed strongly.
The Company has increased market share in its
core driver IC business this year and continues to solidify its
leading position through technology advancement and customer
engagement. With the most comprehensive product portfolio in the
industry, the Company will further capitalize on its strong
position in display drivers to lead the market in major new
technology trends, including higher display resolution, AMOLED and
in-cell TDDI. Equally important, Himax has many unique technologies
and solutions for AR, VR and IoT applications with exciting
long-term growth potential. For the Company’s LCOS micro display
and WLO products, which are integral parts of the eco-system for
the booming AR sector, the Company continues to increase new
project engagements with many heavyweight customers worldwide. The
Company remains committed to its long-term strategy to diversify
its product and customer base with innovative technologies.
The Company’s large panel driver IC business has
grown from Chinese panel customers’ rapid capacity ramping and
rising 4K TV penetration this year. For the fourth quarter, the
Company anticipates its large panel driver IC revenue to increase
high single digit year-over-year, but to decline mid single digit
sequentially due to one single customer’s inventory adjustment.
Despite the temporary demand slowdown, Himax’s leading position in
this segment remains intact. The Company’s large panel customers
are increasingly demanding a total solution from IC vendors in
addition to their constant request for better IC solutions to
support their high-end and high-resolution products. On top of its
unique offerings of technology solutions for advanced features
required of high end TVs, the Company’s capability to provide a
total solution covering driver ICs, timing controllers and PMICs
especially positions it very well in the 4K and 8K display markets.
For example, to handle the massive amount of video data, 8K TVs
require higher speed interface, advanced driving and video
processing technologies, as well as highly integrated timing
controllers with sophisticated functions. The Company believes its
technology strength and total solution capability are significant
differentiators against its competitors and will further solidify
its leading position as the industry migrates to 8K TVs. Himax is
one of the pioneers in product development of 8K TVs with its
Chinese and Korean panel customers and is already shipping small
volume to a leading Korean panel maker.
The other segment within its driver business is
ICs used in small and medium-sized panels for applications
including smartphones, tablets and automotives. While the market
demands remain strong, fourth quarter sales for smartphones are
likely to decline mid single digit sequentially due to the foundry
capacity constraints. However, the sales of smartphone DDICs will
still grow close to 30% year-over-year, driven by Chinese end brand
customers’ strong shipment growth this year. On the AMOLED front,
the Company is collaborating closely with leading panel makers
across China for AMOLED product development. This positions the
Company well for the coming growth of new AMOLED panel shipment
expected from these customers starting late 2017. The Company has
seen wider adoption of AMOLED panels, now almost exclusively
supplied by Samsung, for smartphone brand customers’ flagship
models. This trend has prompted all leading Chinese panel makers to
ramp up their investments in AMOLED manufacturing and accelerate
their timetable for the mass production of AMOLED panels. The
Company believes AMLOED driver ICs will be one of the critical
growth engines for the Company’s small panel driver IC business
starting the end of 2017.
Among driver ICs used in small and medium-sized
panels, the most noteworthy category in recent years is automotive
applications. The Company expects continued solid momentum in Q4
with revenues expected to grow double digit sequentially and close
to 50% year-over-year. With numerous tier 1 automobile brands as
its indirect end customers, the Company has successfully engaged
all key panel manufacturers and module houses worldwide for
long-term partnerships and commands a leading market share in this
segment. To address the growing demand of larger automotive
displays with higher resolution and built-in on-cell or in-cell
touch screen feature, the Company continues to develop advanced
solutions to enable new automotive display applications and provide
its customers with the most comprehensive solutions in the
industry. As such, the Company anticipates the strong growth will
likely continue into the next few years. Driver ICs used in tablets
will continue to grow double digit in the fourth quarter, following
the third quarter’s strong momentum, thanks to shipments for
several leading brand customers in the US and Korea and the holiday
season impact. Overall, Himax expects the small and medium-sized
driver IC segment to increase sequentially by low single digit in
the fourth quarter.
For the past few years, the non-driver business
segment has been Himax’s most exciting growth area and a
differentiator for Himax. New product developments continue to
evolve and gain traction. While the Company is more positive than
ever on the long-term growth prospect of its non-driver businesses,
the Company anticipates near-term headwinds with about 20%
sequential decline in its non-driver revenues for the fourth
quarter. Sales of timing controllers and CMOS image sensors will
deliver strong growth in the fourth quarter, but those of WLO and
LCOS micro displays and, to a lesser extent, touch panel
controllers and ASIC chips will decline sequentially.
The Company has seen significant traction in
customer adoption and design wins of its on-cell solutions.
Notably, a leading Chinese smartphone maker is featuring Himax’s
solution in its newly-launched flagship tablet. More importantly,
Himax is one of the pioneers in offering TDDI solutions and is in
partnerships with essentially all of the display makers of
state-of-the-art pure in-cell touch panels for joint technological
development. The Company is seeing the use of in-cell display with
TDDI rapidly becoming the preferred choice for smartphone brand
customers’ next generation mid-to-high end models. Also, the
increasing adoption of AMOLED panels has pushed TFT-LCD panel
makers to turn to pure in-cell TDDI panel development for thinner
display designs. On top of the busy design-in activities for
TDDI solutions with Korean, Chinese and Taiwanese panel customers,
the Company is also aggressively developing new products and
strengthening its team to expand its product portfolio and get
itself ready for the anticipated strong growth in this segment.
TDDI will be a major growth engine for the Company’s small panel
business starting early 2017, which will also boost its corporate
gross margin over time.
Himax’s LCOS and WLO businesses have grown
strongly through the first nine months of 2016 mainly due to
shipments to one of its leading AR device customers. The Company
was recently informed by the AR customer to reduce future shipment
of the current generation device to a minimum, and instead, to
focus on the joint-development of future generation devices. The
Company therefore expects its LCOS and WLO sales to decline in the
fourth quarter, as well as over the next few quarters in 2017.
Himax is not particularly worried about the short-term headwind as
the said major customer is more committed than ever in the
long-term development of the AR product concept, which is viewed as
a new computing platform and that the Company remains a critical
partner to the customer in its AR efforts. Equally important, while
the revenues from LCOS and WLO may subside over the next few
quarters, they will come from a much more diversified customer
base. Quite a few of the Company’s other customers are expected to
bring their AR products to the market starting next year, although
the Company still doesn’t expect large volumes from the early
generation products of these customers. Not only will the Company
see more diversified revenue stream from multiple customers, its
list of customers continues to expand and it now covers some of the
world’s biggest tech names. Such customers usually come to Himax
for tailored solutions and pay for such developments. This is clear
evidence for Himax’s undisputed leadership position in the
industry. Having invested in related technologies for over 15
years, the Company is uniquely positioned as the provider of choice
for micro display and related optics, both of which are critical
enablers to AR devices. With little competition, the Company is
currently working with over 30 customers on various current and
future generation AR devices using LCOS micro display and/or WLO.
The Company’s increasing design engagements cover not only leading
companies mentioned above, but also niche AR players which bring in
innovative product ideas.
In addition to many AR devices under
development, Himax’s WLO technology is also being adopted to enable
new things such as 3D scanning, which can in turn be used in a wide
variety of industries such as consumer, industrial, IoT, AI,
medical, automotive and military. Some customers even come to the
Company with novel bio-medical product ideas. The Company’s
customer base for this business is extremely diversified, covering
literally all of the most well-known tech names throughout the
world, some of them leading end brand players or semiconductor
platform solution providers. Himax is one of the very few players
in the market with WLO technology and the one possessing the most
proven mass production track record with expertise ranging from
design and high yield production to cost and quality controls. The
Company is very happy with its current development progress in this
area.
With respect to the expansion plan for its next
generation LCOS and WLO production lines, the Company has proceeded
in line with its schedule. The Company plans to complete it around
the end of 2017 or early 2018. The new production lines will enable
higher end product design and offer far better product quality for
mass production of its next generation LCOS and WLO product lines
that the Company expects will lead the industry in the future
generation of related products. This investment will be financed
through the Company’s internal resources and existing bank
facilities, if needed.
Himax continues to make great progress with its
new smart sensor areas by collaborating with certain heavyweight
partners, including a major e-commerce customer, leading consumer
electronics brands and a heavyweight international smartphone
chipset maker. By pairing a DOE integrated WLO laser diode
collimator with a near infrared CIS, the Company is offering the
most effective total solution for 3D sensing and detection in the
smallest form factor, which enables easy integration into next
generation smartphones, AR/VR devices and consumer electronics.
Similarly, the ultra-low-power QVGA CMOS image sensor can also be
bundled with the Company’s WLO lens to support super low power
computer vision to enable new applications across mobile devices,
consumer electronics, surveillance, drones, IoT and artificial
intelligence. The Company will report business developments in
these new territories in due course. Regarding other CIS products,
the Company maintains a leading position in laptop applications and
will increase shipments for multimedia applications such as
surveillance, drones, home appliances, consumer electronics,
etc.
Fourth Quarter 2016
Guidance
The Company is providing the following financial
guidance for the fourth quarter of 2016:
| Net Revenue: |
|
|
|
To be down 4.0% to 9.0% sequentially,
representing an 11.5% to 17.6% year-over-year growth |
| Gross Margin: |
|
|
|
To be slightly down sequentially, as compared to
22.9% reported in the fourth quarter of 2015 |
| GAAP EPS: |
|
|
|
8.5 to 11.0 cents per diluted ADS, as compared to
3.6 cents reported in the fourth quarter of 2015 |
| Non-GAAP EPS(1): |
|
|
|
8.7 to 11.2 cents per diluted ADS, as compared to
3.8 cents reported in the fourth quarter of 2015 |
| |
|
|
|
|
| (1) Non-GAAP EPS excludes
share-based compensation and acquisition-related charges |
In providing the above earnings guidance, the
Company has assumed a 14.0% income tax rate for 2016, calculated
based on exchange rate of NTD 31.5 against the USD, which is also
the exchange rate as of beginning of November 2016.
HIMAX TECHNOLOGIES THIRD QUARTER 2016
EARNINGS CONFERENCE CALL
| DATE: |
|
|
|
Thursday, November 10th, 2016 |
| TIME: |
|
|
|
U.S.
8:00 a.m. EST |
| |
|
|
|
Taiwan 9:00 p.m. |
| DIAL IN: |
|
|
|
U.S. +1 (866) 444-9147 |
| |
|
|
|
INTERNATIONAL +1 (678)
509-7569 |
| CONFERENCE ID |
|
|
|
99322894 |
| WEBCAST: |
|
|
|
http://edge.media-server.com/m/p/evh25q5c |
| |
|
|
|
|
A replay of the call will be available beginning
two hours after the call through 11:59 p.m. US EST on November
17th, 2016 (12:59 p.m. Taiwan time, November 18th, 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 99322894. 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 November 10th, 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 2,100 people from three
Taiwan-based offices in Tainan, Hsinchu and Taipei and country
offices in China, Korea, Japan and the US. Himax has 2,911 patents
granted and 458 patents pending approval worldwide as of September
30th, 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
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 RepresentativeGreg
Falesnik, Managing DirectorMZ North AmericaTel:
+1-949-385-6449Email: greg.falesnik@mzgroup.us www.mzgroup.us
| -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 September
30, |
|
Three Months Ended
June 30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
218,081 |
|
|
$ |
165,582 |
|
|
$ |
201,074 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of revenues |
|
|
162,348 |
|
|
|
129,510 |
|
|
|
148,596 |
|
|
Research and development |
|
|
28,789 |
|
|
|
27,907 |
|
|
|
21,803 |
|
|
General and administrative |
|
|
5,774 |
|
|
|
5,158 |
|
|
|
4,814 |
|
|
Sales and marketing |
|
|
5,874 |
|
|
|
5,468 |
|
|
|
3,962 |
|
|
Total costs and expenses |
|
|
202,785 |
|
|
|
168,043 |
|
|
|
179,175 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
15,296 |
|
|
|
(2,461 |
) |
|
|
21,899 |
|
|
|
|
|
|
|
|
|
|
Non operating income
(loss): |
|
|
|
|
|
|
|
Interest income |
|
|
264 |
|
|
|
116 |
|
|
|
329 |
|
|
Dividend income |
|
|
- |
|
|
|
- |
|
|
|
700 |
|
|
Gains (losses) on sale of securities, net |
|
|
95 |
|
|
|
32 |
|
|
|
(49 |
) |
|
Equity in losses of equity method investees |
|
|
(206 |
) |
|
|
(119 |
) |
|
|
(198 |
) |
|
Foreign currency exchange gains (losses), net |
|
|
(486 |
) |
|
|
680 |
|
|
|
182 |
|
|
Interest expense |
|
|
(133 |
) |
|
|
(152 |
) |
|
|
(190 |
) |
|
Other income, net |
|
|
2 |
|
|
|
125 |
|
|
|
1 |
|
|
|
|
|
(464 |
) |
|
|
682 |
|
|
|
775 |
|
|
Earnings (loss) before
income taxes |
|
|
14,832 |
|
|
|
(1,779 |
) |
|
|
22,674 |
|
|
Income tax expense |
|
|
1,441 |
|
|
|
1,151 |
|
|
|
3,401 |
|
|
Net income (loss) |
|
|
13,391 |
|
|
|
(2,930 |
) |
|
|
19,273 |
|
| Net loss
attributable to noncontrolling interests |
|
|
207 |
|
|
|
598 |
|
|
|
514 |
|
| Net
income (loss) attributable to
Himax Technologies, Inc. stockholders |
|
$ |
13,598 |
|
|
$ |
(2,332 |
) |
|
$ |
19,787 |
|
|
|
|
|
|
|
|
|
| Basic earnings
(loss) per ADS attributable to Himax
Technologies, Inc. stockholders |
|
$ |
0.079 |
|
|
$ |
(0.014 |
) |
|
$ |
0.115 |
|
| Diluted
earnings (loss) per ADS
attributable to Himax Technologies, Inc. stockholders |
|
$ |
0.079 |
|
|
$ |
(0.014 |
) |
|
$ |
0.115 |
|
|
|
|
|
|
|
|
|
|
Basic Weighted Average Outstanding ADS |
|
|
172,304 |
|
|
|
171,615 |
|
|
|
172,303 |
|
|
Diluted Weighted Average Outstanding ADS |
|
|
172,356 |
|
|
|
171,936 |
|
|
|
172,385 |
|
| |
| Himax Technologies, Inc. |
| Unaudited Condensed Consolidated Statements of
Income |
| (Amounts in Thousands of U.S. Dollars, Except
Share and Per Share Data) |
| |
|
|
|
Nine
Months Ended September
30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
$ |
599,474 |
|
|
$ |
513,812 |
|
|
|
|
|
|
|
|
| Costs and
expenses: |
|
|
|
|
|
|
Cost of revenues |
|
|
|
444,088 |
|
|
|
391,408 |
|
|
Research and development |
|
|
|
73,994 |
|
|
|
71,847 |
|
|
General and administrative |
|
|
|
15,169 |
|
|
|
13,926 |
|
|
Sales and marketing |
|
|
|
13,849 |
|
|
|
14,570 |
|
|
Total costs and expenses |
|
|
|
547,100 |
|
|
|
491,751 |
|
|
|
|
|
|
|
|
| Operating
income |
|
|
|
52,374 |
|
|
|
22,061 |
|
|
|
|
|
|
|
|
| Non
operating income
(loss): |
|
|
|
|
|
|
Interest income |
|
|
|
822 |
|
|
|
522 |
|
|
Dividend income |
|
|
|
700 |
|
|
|
- |
|
|
Gains on sale of securities, net |
|
|
|
5 |
|
|
|
1,834 |
|
|
Equity in losses of equity method investees |
|
|
|
(565 |
) |
|
|
(339 |
) |
|
Foreign currency exchange losses, net |
|
|
|
(519 |
) |
|
|
(15 |
) |
|
Interest expense |
|
|
|
(502 |
) |
|
|
(373 |
) |
|
Other income (losses), net |
|
|
|
(7 |
) |
|
|
203 |
|
| |
|
|
|
(66 |
) |
|
|
1,832 |
|
| Earnings
before income taxes |
|
|
|
52,308 |
|
|
|
23,893 |
|
|
Income tax expense |
|
|
|
7,062 |
|
|
|
7,646 |
|
| Net
income |
|
|
|
45,246 |
|
|
|
16,247 |
|
| Net loss
attributable to noncontrolling interests |
|
|
|
1,227 |
|
|
|
2,818 |
|
| Net
income attributable to Himax
Technologies, Inc.
stockholders |
|
|
$ |
46,473 |
|
|
$ |
19,065 |
|
|
|
|
|
|
|
|
| Basic earnings per
ADS attributable to Himax Technologies,
Inc. stockholders |
|
|
$ |
0.270 |
|
|
$ |
0.111 |
|
| Diluted earnings
per ADS attributable to Himax Technologies,
Inc. stockholders |
|
|
$ |
0.270 |
|
|
$ |
0.111 |
|
|
|
|
|
|
|
|
|
Basic Weighted Average Outstanding ADS |
|
|
|
172,303 |
|
|
|
171,610 |
|
|
Diluted Weighted Average Outstanding
ADS |
|
|
|
172,334 |
|
|
|
171,891 |
|
| |
|
|
|
|
| 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 MonthsEnded September
30, |
|
ThreeMonthsEnded
June30, |
| |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
| Share-based
compensation |
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
146 |
|
|
$ |
70 |
|
|
$ |
27 |
|
|
Research and development |
|
|
7,128 |
|
|
|
3,505 |
|
|
|
160 |
|
|
General and administrative |
|
|
1,002 |
|
|
|
530 |
|
|
|
70 |
|
|
Sales and marketing |
|
|
1,325 |
|
|
|
823 |
|
|
|
20 |
|
|
Income tax benefit |
|
|
(2,027 |
) |
|
|
(1,040 |
) |
|
|
(47 |
) |
| Total |
|
$ |
7,574 |
|
|
$ |
3,888 |
|
|
$ |
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 |
|
|
$ |
220 |
|
|
$ |
246 |
|
|
Income tax benefit |
|
|
(99 |
) |
|
|
(94 |
) |
|
|
(98 |
) |
| Total |
|
$ |
147 |
|
|
$ |
126 |
|
|
$ |
148 |
|
| |
|
|
|
| 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: |
|
|
Nine Months Ended
September 30, |
| |
|
|
|
2016 |
|
|
|
2015 |
|
| Share-based
compensation |
|
|
|
|
|
|
Cost of revenues |
|
|
$ |
199 |
|
|
$ |
83 |
|
|
Research and development |
|
|
|
7,449 |
|
|
|
4,129 |
|
|
General and administrative |
|
|
|
1,142 |
|
|
|
795 |
|
|
Sales and marketing |
|
|
|
1,365 |
|
|
|
990 |
|
|
Income tax benefit |
|
|
|
(2,122 |
) |
|
|
(1,295 |
) |
| Total |
|
|
$ |
8,033 |
|
|
$ |
4,702 |
|
| |
|
|
|
|
|
| The amount
of acquisition-related charges
included in applicable statements of
income categories is summarized as
follows: |
|
|
|
|
|
| |
|
|
|
|
|
| Acquisition-related
charges |
|
|
|
|
|
|
Research and development |
|
|
$ |
738 |
|
|
$ |
608 |
|
|
Income tax benefit |
|
|
|
(296 |
) |
|
|
|
|
(260 |
) |
| Total |
|
|
$ |
442 |
|
|
$ |
348 |
|
| |
| Himax Technologies, Inc. |
| GAAP Unaudited Condensed
Consolidated Balance Sheets |
| (Amounts in Thousands of U.S. Dollars,
Except Share and Per Share
Data) |
| |
|
September
30, 2016 |
|
June
30, 2016 |
|
September
30, 2015 |
|
Assets |
|
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
140,805 |
|
|
$ |
164,423 |
|
|
$ |
106,387 |
|
|
Investments in marketable securities available-for-sale |
|
|
12,559 |
|
|
|
14,917 |
|
|
|
19,625 |
|
|
Accounts receivable, less allowance for doubtful accounts, sales
returns and discounts |
|
|
208,372 |
|
|
|
187,925 |
|
|
|
167,975 |
|
|
Inventories |
|
|
169,382 |
|
|
|
186,655 |
|
|
|
177,694 |
|
|
Deferred income taxes |
|
|
3,459 |
|
|
|
3,361 |
|
|
|
4,216 |
|
|
Restricted cash, cash equivalents and marketable securities |
|
|
138,000 |
|
|
|
138,000 |
|
|
|
180,442 |
|
|
Other receivables from related parties |
|
|
4,000 |
|
|
|
1,000 |
|
|
|
- |
|
|
Prepaid expenses and other current assets |
|
|
24,435 |
|
|
|
19,356 |
|
|
|
23,520 |
|
|
Total current assets |
|
|
701,012 |
|
|
|
715,637 |
|
|
|
679,859 |
|
|
Investment in non-marketable
equity securities |
|
|
12,379 |
|
|
|
10,780 |
|
|
|
11,211 |
|
| Equity method
investments |
|
|
3,104 |
|
|
|
3,277 |
|
|
|
3,392 |
|
|
Property, plant and
equipment, net |
|
|
49,849 |
|
|
|
51,056 |
|
|
|
55,700 |
|
| Deferred income
taxes |
|
|
1,194 |
|
|
|
1,074 |
|
|
|
1,492 |
|
|
Goodwill |
|
|
28,138 |
|
|
|
28,138 |
|
|
|
28,138 |
|
| Other
intangible assets, net |
|
|
3,418 |
|
|
|
3,665 |
|
|
|
3,668 |
|
| Restricted
marketable securities |
|
|
127 |
|
|
|
124 |
|
|
|
121 |
|
| Other
assets |
|
|
1,547 |
|
|
|
1,517 |
|
|
|
2,021 |
|
| |
|
|
99,756 |
|
|
|
99,631 |
|
|
|
105,743 |
|
|
Total assets |
|
$ |
800,768 |
|
|
$ |
815,268 |
|
|
$ |
785,602 |
|
|
Liabilities, redeemable
noncontrolling interest and
Equity |
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
|
|
Short-term debt |
|
$ |
138,000 |
|
|
$ |
138,000 |
|
|
$ |
180,000 |
|
|
Accounts payable |
|
|
141,810 |
|
|
|
151,842 |
|
|
|
111,996 |
|
|
Income taxes payable |
|
|
13,708 |
|
|
|
11,695 |
|
|
|
13,517 |
|
|
Deferred income taxes |
|
|
144 |
|
|
|
140 |
|
|
|
34 |
|
|
Other accrued expenses and other current liabilities |
|
|
34,549 |
|
|
|
54,729 |
|
|
|
35,781 |
|
|
Total current liabilities |
|
|
328,211 |
|
|
|
356,406 |
|
|
|
341,328 |
|
| Other
liabilities |
|
|
3,851 |
|
|
|
3,783 |
|
|
|
4,407 |
|
|
Total liabilities |
|
|
332,062 |
|
|
|
360,189 |
|
|
|
345,735 |
|
|
|
|
|
|
|
|
|
| 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 344,007,418 shares, 343,815,424
shares and 343,815,424 shares outstanding at September 30, 2016,
June 30, 2016 and September 30, 2015, respectively |
|
|
107,010 |
|
|
|
107,010 |
|
|
|
107,010 |
|
|
Additional paid-in capital |
|
|
106,109 |
|
|
|
105,881 |
|
|
|
107,238 |
|
|
Treasury shares, at cost, 12,692,064 shares, 12,884,058 shares and
12,884,058 shares at September 30, 2016, June 30, 2016 and
September 30, 2015, respectively |
|
|
(9,020 |
) |
|
|
(9,157 |
) |
|
|
(9,157 |
) |
|
Accumulated other comprehensive loss |
|
|
(1,794 |
) |
|
|
(1,897 |
) |
|
|
(723 |
) |
|
Unappropriated retained earnings |
|
|
261,283 |
|
|
|
247,902 |
|
|
|
233,082 |
|
|
Himax Technologies, Inc. stockholders’
equity |
|
|
463,588 |
|
|
|
449,739 |
|
|
|
437,450 |
|
| Noncontrolling
interests |
|
|
1,462 |
|
|
|
1,684 |
|
|
|
(1,239 |
) |
|
Total equity |
|
|
465,050 |
|
|
|
451,423 |
|
|
|
436,211 |
|
|
Total liabilities,
redeemable noncontrolling
interest and equity |
|
$ |
800,768 |
|
|
$ |
815,268 |
|
|
$ |
785,602 |
|
| |
|
| |
|
| |
|
| Himax Technologies, Inc. |
| Unaudited Condensed
Consolidated Statements of Cash Flows |
| (Amounts in
Thousands of
U.S.
Dollars) |
|
|
|
Three Months Ended September
30, |
|
ThreeMonths EndedJune
30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
| Cash flows from
operating activities: |
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
13,391 |
|
|
$ |
(2,930 |
) |
|
$ |
19,273 |
|
| Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
3,393 |
|
|
3,425 |
|
|
|
3,465 |
|
|
Share-based compensation expenses |
|
378 |
|
|
472 |
|
|
|
277 |
|
| Gain on
disposals of property and equipment |
|
(2 |
) |
|
(2 |
) |
|
|
|
|
--- |
|
| Loss
(gain) on disposals of marketable securities, net |
|
(95 |
) |
|
(32 |
) |
|
|
49 |
|
| Equity in
losses of equity method investees |
|
206 |
|
|
119 |
|
|
|
198 |
|
| Deferred
income tax expense |
|
(219 |
) |
|
(85 |
) |
|
|
(86 |
) |
|
Inventories write downs |
|
2,653 |
|
|
2,078 |
|
|
|
3,186 |
|
| Changes in: |
|
|
|
|
|
|
|
| Accounts
receivable |
|
(20,441 |
) |
|
14,181 |
|
|
|
(14,975 |
) |
|
Inventories |
|
14,620 |
|
|
9,800 |
|
|
|
(7,027 |
) |
| Prepaid
expenses and other current assets |
|
(5,054 |
) |
|
(1,867 |
) |
|
|
296 |
|
| Accounts
payable |
|
(10,033 |
) |
|
(13,775 |
) |
|
|
13,180 |
|
| Income
taxes payable |
|
2,035 |
|
|
(425 |
) |
|
|
(3,082 |
) |
| Other
accrued expenses and other current liabilities |
|
2,034 |
|
|
3,184 |
|
|
|
(1,669 |
) |
| Other
liabilities |
|
(6 |
) |
|
|
--- |
|
|
|
7 |
|
|
Net cash provided by
operating activities |
|
2,860 |
|
|
14,143 |
|
|
|
13,092 |
|
|
|
|
|
|
|
|
|
|
| Cash flows from
investing activities: |
|
|
|
|
|
|
|
| Purchases
of property, plant and equipment |
|
(1,861 |
) |
|
(2,554 |
) |
|
|
(1,680 |
) |
| Proceeds
from disposal of property and equipment |
|
9 |
|
|
2 |
|
|
--- |
|
| Purchases
of available-for-sale marketable securities |
|
(6,123 |
) |
|
(33,328 |
) |
|
|
(10,552 |
) |
| Proceeds
from disposals of available-for-sale marketable securities |
|
8,777 |
|
|
16,757 |
|
|
|
12,831 |
|
| Purchases
of investment securities |
|
(1,600 |
) |
|
|
--- |
|
|
|
|
|
--- |
|
| Proceeds
from capital reduction of investment |
|
|
--- |
|
|
|
--- |
|
|
|
431 |
|
| Purchase
of equity method investment |
|
(37 |
) |
|
|
--- |
|
|
|
|
|
--- |
|
| Proceeds
from (repayments of) refundable deposits, net |
|
5 |
|
|
(204 |
) |
|
|
394 |
|
| Releases
(pledges) of restricted cash, cash equivalents and marketable
securities |
|
(2 |
) |
|
(131 |
) |
|
|
451 |
|
| Other
receivables from related parties |
|
(3,000 |
) |
|
|
--- |
|
|
|
(1,000 |
) |
|
Net cash provided by (used in)
investing activities |
|
(3,832 |
) |
|
(19,458 |
) |
|
|
875 |
|
| |
| Himax Technologies, Inc. |
| Unaudited Condensed
Consolidated Statements of Cash Flows |
| (Amounts in
Thousands of
U.S.
Dollars) |
|
|
|
Three Months Ended September
30, |
|
Three Months Ended June
30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
| Cash flows from
financing activities: |
|
|
|
|
|
|
| Payments
of cash dividends |
|
$ |
(22,348 |
) |
|
$ |
(51,364 |
) |
|
$ |
--- |
|
| Excess
tax benefits from share-based compensation |
|
|
--- |
|
|
|
771 |
|
|
|
--- |
|
| Proceeds
from disposals of subsidiary shares to noncontrolling interests by
Himax Imaging, Inc. |
|
|
8 |
|
|
|
8 |
|
|
|
1 |
|
| Purchases
of subsidiary shares from noncontrolling interests |
|
|
(290 |
) |
|
|
(305 |
) |
|
|
--- |
|
| Releases
(pledges) of restricted cash, cash equivalents and marketable
securities (for borrowing of short-term debt) |
|
|
--- |
|
|
|
(50,000 |
) |
|
|
42,000 |
|
| Proceeds
from issuance of new shares by subsidiaries |
|
|
--- |
|
|
|
1,466 |
|
|
|
--- |
|
| Proceeds
from short-term debt |
|
|
89,000 |
|
|
|
130,000 |
|
|
|
49,000 |
|
|
Repayments of short-term debt |
|
|
(89,000 |
) |
|
|
(80,000 |
) |
|
|
(91,000 |
) |
|
Net cash provided by
(used in)
financing activities |
|
|
(22,630 |
) |
|
|
(49,424 |
) |
|
|
1 |
|
| Effect
of foreign currency exchange rate
changes on cash and cash equivalents |
|
|
(16 |
) |
|
|
(130 |
) |
|
|
(66 |
) |
| Net
increase
(decrease) in
cash and cash equivalents |
|
|
(23,618 |
) |
|
|
(54,869 |
) |
|
|
13,902 |
|
| Cash and cash
equivalents at beginning of period |
|
|
164,423 |
|
|
|
161,256 |
|
|
|
150,521 |
|
| Cash and cash
equivalents at end of period |
|
$ |
140,805 |
|
|
$ |
106,387 |
|
|
$ |
164,423 |
|
|
|
|
|
|
|
|
|
| Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
| Cash paid
during the period for: |
|
|
|
|
|
|
|
Interest |
|
$ |
137 |
|
|
$ |
215 |
|
|
$ |
182 |
|
| Income
taxes |
|
$ |
4,558 |
|
|
$ |
2,479 |
|
|
$ |
6,591 |
|
| |
|
|
|
|
|
|
| Supplemental
disclosures of investing activities affecting both
cash and non-cash items: |
|
|
|
|
|
|
| Purchases
of property, plant and equipment |
|
$ |
1,949 |
|
|
$ |
4,708 |
|
|
$ |
1,638 |
|
| Decrease
(increase) in payable for purchases of equipment and asset
retirement obligations |
|
|
(88 |
) |
|
|
(2,154 |
) |
|
|
42 |
|
| Cash
paid |
|
$ |
1,861 |
|
|
$ |
2,554 |
|
|
$ |
1,680 |
|
| |
|
|
|
|
|
|
| Supplemental
disclosures of non-cash investing and
financing activities: |
|
|
|
|
|
|
| Dividend
payable |
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
22,348 |
|
| |
| Himax Technologies, Inc. |
| Unaudited Condensed
Consolidated Statements of Cash Flows |
| (Amounts in
Thousands of
U.S.
Dollars) |
|
|
|
Nine Months Ended
September
30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
| Cash flows from
operating activities: |
|
|
|
|
| Net income |
|
$ |
45,246 |
|
|
$ |
16,247 |
|
| Adjustments to
reconcile net income to net cash provided by (used in) operating
activities: |
|
|
|
|
|
Depreciation and amortization |
|
|
10,308 |
|
|
|
10,757 |
|
|
Share-based compensation expenses |
|
|
932 |
|
|
|
1,541 |
|
| Gain on
disposals of property and equipment |
|
|
(2 |
) |
|
|
(2 |
) |
| Gain on
disposals of equity method investment |
|
|
--- |
|
|
|
(88 |
) |
| Gain on
disposals of investment securities, net |
|
|
--- |
|
|
|
(1,682 |
) |
| Gain on
disposals of marketable securities, net |
|
|
(5 |
) |
|
|
(64 |
) |
| Equity in
losses of equity method investees |
|
|
565 |
|
|
|
339 |
|
| Deferred
income tax expense (benefit) |
|
|
(484 |
) |
|
|
2,483 |
|
|
Inventories write downs |
|
|
8,549 |
|
|
|
7,340 |
|
| Changes in: |
|
|
|
|
| Accounts
receivable |
|
|
(31,217 |
) |
|
|
51,239 |
|
|
Inventories |
|
|
(6,557 |
) |
|
|
(18,929 |
) |
| Prepaid
expenses and other current assets |
|
|
(5,386 |
) |
|
|
(2,228 |
) |
| Accounts
payable |
|
|
17,387 |
|
|
|
(67,332 |
) |
| Income
taxes payable |
|
|
1,604 |
|
|
|
(5,726 |
) |
| Other
accrued expenses and other current liabilities |
|
|
(3,474 |
) |
|
|
2,899 |
|
| Other
liabilities |
|
|
(9 |
) |
|
|
(131 |
) |
|
Net cash provided by
(used in) operating
activities |
|
|
37,457 |
|
|
|
(3,337 |
) |
|
|
|
|
|
|
| Cash flows from
investing activities: |
|
|
|
|
| Purchases
of property, plant and equipment |
|
|
(5,743 |
) |
|
|
(6,415 |
) |
| Proceeds
from disposals of property and equipment |
|
|
9 |
|
|
|
8 |
|
| Purchases
of available-for-sale marketable securities |
|
|
(23,271 |
) |
|
|
(46,553 |
) |
| Proceeds
from disposals of available-for-sale marketable securities |
|
|
29,576 |
|
|
|
29,200 |
|
| Purchases
of investment securities |
|
|
(1,600 |
) |
|
|
--- |
|
| Proceeds
from disposals of investment securities |
|
|
--- |
|
|
|
1,682 |
|
| Proceeds
from capital reduction of investment |
|
|
431 |
|
|
|
--- |
|
| Purchase
of equity method investment |
|
|
(37 |
) |
|
|
(3,708 |
) |
| Proceeds
from disposals of equity method investment |
|
|
--- |
|
|
|
179 |
|
| Proceeds
from (repayments of) refundable deposits, net |
|
|
405 |
|
|
|
(317 |
) |
| Releases
(pledges) of restricted cash, cash equivalents and marketable
securities |
|
|
437 |
|
|
|
(227 |
) |
| Other
receivables from related parties |
|
|
(4,000 |
) |
|
|
--- |
|
|
Net cash used in
investing activities |
|
|
(3,793 |
) |
|
|
(26,151 |
) |
|
|
|
|
|
|
| |
| Himax Technologies, Inc. |
| Unaudited Condensed
Consolidated Statements of Cash Flows |
| (Amounts in
Thousands of
U.S.
Dollars) |
|
|
|
Nine Months Ended
September
30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
| Cash flows from
financing activities: |
|
|
|
|
| Payments
of cash dividends |
|
$ |
(22,348 |
) |
|
$ |
(51,364 |
) |
| Excess
tax benefits from share-based compensation |
|
|
--- |
|
|
|
771 |
|
| Proceeds
from disposals of subsidiary shares to noncontrolling interests by
Himax Imaging, Inc. |
|
|
9 |
|
|
|
18 |
|
| Purchases
of subsidiary shares from noncontrolling interests |
|
|
(291 |
) |
|
|
(358 |
) |
| Releases
(pledges) of restricted cash, cash equivalents and marketable
securities (for borrowing of short-term debt) |
|
|
42,000 |
|
|
|
(50,000 |
) |
| Proceeds
from issuance of new shares by subsidiaries |
|
|
--- |
|
|
|
1,466 |
|
| Proceeds
from short-term debt |
|
|
199,000 |
|
|
|
320,000 |
|
|
Repayments of short-term debt |
|
|
(241,000 |
) |
|
|
(270,000 |
) |
|
Net cash used in
financing activities |
|
|
(22,630 |
) |
|
|
(49,467 |
) |
| Effect
of foreign currency exchange rate
changes on cash and cash equivalents |
|
|
(58 |
) |
|
|
(124 |
) |
| Net
increase (decrease) in
cash and cash equivalents |
|
|
10,976 |
|
|
|
(79,079 |
) |
| Cash and cash
equivalents at beginning of period |
|
|
129,829 |
|
|
|
185,466 |
|
| Cash and cash
equivalents at end of period |
|
$ |
140,805 |
|
|
$ |
106,387 |
|
|
|
|
|
|
|
| Supplemental
disclosures of cash flow information: |
|
|
|
|
| Cash paid
during the period for: |
|
|
|
|
| Interest
expense |
|
$ |
506 |
|
|
$ |
437 |
|
| Income
taxes |
|
$ |
11,220 |
|
|
$ |
12,155 |
|
| |
|
|
|
|
| Supplemental
disclosures of investing activities affecting both
cash and non-cash items: |
|
|
|
|
| Purchases
of property, plant and equipment |
|
$ |
4,975 |
|
|
$ |
8,619 |
|
| Decrease
(increase) in payable for purchases of equipment and asset
retirement obligations |
|
|
768 |
|
|
|
(2,204 |
) |
| Cash
paid |
|
$ |
5,743 |
|
|
$ |
6,415 |
|
| |
| 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 September
30, |
|
Three Months Ended June
30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
| Revenues |
$ |
218,081 |
|
|
$ |
165,582 |
|
|
$ |
201,074 |
|
| Gross profit |
|
55,733 |
|
|
|
36,072 |
|
|
|
52,478 |
|
| Add: Share-based
compensation – cost of revenues |
|
146 |
|
|
|
70 |
|
|
|
27 |
|
| Gross profit excluding
share-based compensation |
|
55,879 |
|
|
|
36,142 |
|
|
|
52,505 |
|
| Gross margin excluding
share-based compensation |
|
25.6 |
% |
|
|
21.8 |
% |
|
|
26.1 |
% |
| Operating income
(loss) |
|
15,296 |
|
|
|
(2,461 |
) |
|
|
21,899 |
|
| Add: Share-based
compensation |
|
9,601 |
|
|
|
4,928 |
|
|
|
277 |
|
| Operating income
excluding share-based compensation |
|
24,897 |
|
|
|
2,467 |
|
|
|
22,176 |
|
| Add:
Acquisition-related charges –intangible assets amortization |
|
246 |
|
|
|
220 |
|
|
|
246 |
|
| Operating income
excluding share-based compensation and acquisition-related
charges |
|
25,143 |
|
|
|
2,687 |
|
|
|
22,422 |
|
| Operating margin
excluding share-based compensation and acquisition-related
charges |
|
11.5 |
% |
|
|
1.6 |
% |
|
|
11.1 |
% |
| Net income (loss)
attributable to Himax Technologies, Inc. stockholders |
|
13,598 |
|
|
|
(2,332 |
) |
|
|
19,787 |
|
| Add: Share-based
compensation, net of tax |
|
7,574 |
|
|
|
3,888 |
|
|
|
230 |
|
| Add:
Acquisition-related charges, net of tax |
|
147 |
|
|
|
126 |
|
|
|
148 |
|
| Net income attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
21,319 |
|
|
|
1,682 |
|
|
|
20,165 |
|
| Net margin attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
9.8 |
% |
|
|
1.0 |
% |
|
|
10.0 |
% |
| |
|
|
|
|
|
| *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 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 |
|
|
|
|
| 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: |
|
|
|
|
|
Nine Months Ended
September 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
| Revenues |
|
|
$ |
599,474 |
|
|
$ |
513,812 |
|
| Gross profit |
|
|
|
155,386 |
|
|
|
122,404 |
|
| Add: Share-based
compensation – Cost of revenues |
|
|
|
199 |
|
|
|
83 |
|
| Gross profit excluding
share-based compensation |
|
|
|
155,585 |
|
|
|
122,487 |
|
| Gross margin excluding
share-based compensation |
|
|
|
26.0 |
% |
|
|
23.8 |
% |
| Operating income |
|
|
|
52,374 |
|
|
|
22,061 |
|
| Add: Share-based
compensation |
|
|
|
10,155 |
|
|
|
5,997 |
|
| Operating income
excluding share-based compensation |
|
|
|
62,529 |
|
|
|
28,058 |
|
| Add:
Acquisition-related charges –Intangible assets amortization |
|
|
|
738 |
|
|
|
608 |
|
| Operating income
excluding share-based compensation and acquisition-related
charges |
|
|
|
63,267 |
|
|
|
28,666 |
|
| Operating margin
excluding share-based compensation and acquisition-related
charges |
|
|
|
10.6 |
% |
|
|
5.6 |
% |
| Net income attributable
to Himax Technologies, Inc. stockholders |
|
|
|
46,473 |
|
|
|
19,065 |
|
| Add: Share-based
compensation, net of tax |
|
|
|
8,033 |
|
|
|
4,702 |
|
| Add:
Acquisition-related charges, net of tax |
|
|
|
442 |
|
|
|
348 |
|
| Net income attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
|
|
54,948 |
|
|
|
24,115 |
|
| Net margin attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
|
|
9.2 |
% |
|
|
4.7 |
% |
| |
|
|
|
|
|
| *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 MonthsEndedSeptember
30, |
|
Nine
MonthsEndedSeptember
30, |
| |
|
2016 |
|
|
|
2016 |
|
| Diluted GAAP earnings per
ADS attributable to Himax Technologies, Inc. stockholders |
$ |
0.079 |
|
|
$ |
0.270 |
|
| Add: Share-based
compensation per ADS |
$ |
0.044 |
|
|
$ |
0.047 |
|
| Add: Acquisition-related
charges per ADS |
$ |
0.001 |
|
|
$ |
0.003 |
|
| |
|
|
|
| Diluted non-GAAP earnings
per ADS attributable to Himax Technologies, Inc. stockholders
excluding share-based compensation and acquisition-related
charges |
$ |
0.124 |
|
|
$ |
0.319 |
|
| |
|
|
|
| Numbers do not add up due to rounding |
|
Himax Technologies (NASDAQ:HIMX)
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