Himax Technologies, Inc. Pre-announces Preliminary Unaudited Fourth Quarter 2016 Financial Results
January 26 2017 - 6:10AM
4Q16 Gross Margin and EPS Miss Company
Guidance Due to an Additional Inventory Write-down
Himax Technologies, Inc. (Nasdaq:HIMX) (“Himax” or “Company”), a
leading supplier and fabless manufacturer of display drivers and
other semiconductor products, today pre-announced preliminary
unaudited financial results for the three months ended December 31,
2016. Revenues in the fourth quarter were in-line with the
Company’s previous guidance issued on November 10, 2016, while
gross margin and EPS were below the guidance.
Revenues were $203.4 million, a sequential
decline of 6.7% from $218.1 million in the third quarter of 2016
and in-line with the Company’s guidance of a 4.0% to 9.0%
sequential decline.
Gross margin was 19.1% versus guidance of
“slightly down” from 25.6% reported in the third quarter of 2016.
The lower gross margin is the result of an additional one-time,
non-cash inventory write-down totaling $12.0 million. Excluding
this additional inventory write-down, gross margin would have been
25.0% and met the guidance. The $12.0 million inventory write-down
is on top of the $2.7 million original inventory write-off
estimate for the fourth quarter. In comparison, the inventory
write-off amounts were $2.5 million, $3.0 million and $2.5 million
for the first, second and third quarter of 2016, respectively. The
vast majority of the additional write-down was related to certain
aged inventories of traditional human vision CMOS image sensors
(“CIS”) with smaller amounts also covering driver IC and other
products. Earlier in 2016, we decided to switch our strategy of the
CIS business to focus on smart sensor, machine vision segments, as
opposed to the traditional human vision segments. As part of this
new strategic direction, we made a decision recently to expedite
the sales of some aged inventories of human vision sensors. We
believe it is appropriate that we write-down the inventory at this
time, as we anticipate the need to offer discounted prices to
accelerate the sales of some products and, for some other products
where the potential revenues do not justify the efforts, stop the
sales all together. Our new CIS strategy is backed by new products
such as the Always-on-Sensor (AoS) and the structured light 3D
scanning total solution which offer unique and market leading
features. The new strategy is also backed by close collaboration
and intensive development activities with certain heavyweight
partners and customers.
Following this one-time write-down, we believe
our inventory position to be healthy across CIS, driver IC and all
other product areas.
The impact to Earnings per Diluted ADS of the
aforementioned inventory write-down is 6.0 cents. After the
write-down, GAAP Earnings per Diluted ADS became 2.6 cents, below
the Company’s guided range of 8.5 to 11.0 cents. Non-GAAP Earnings
per Diluted ADS became 2.8 cents, below the guided range of 8.7 to
11.2 cents. Excluding the additional inventory write-down, GAAP and
Non-GAAP EPS would have been 8.6 cents and 8.8 cents, respectively
and met our original guidance.
In addition to the CIS product line, we are also
seeing exciting developments in other key non-driver areas such as
wafer level optics (WLO) and LCOS microdisplay. As early as the
second half of the year, we may see significant business progress
to contribute to both top and bottom lines out of these non-driver
areas. We will host a conference call with investors and analysts
in February when we will provide full financial reports and further
elaborate on our business prospects.
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 heads-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 over 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 2,948 patents
granted and 437 patents pending approval worldwide as of December
31th, 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:
+1-212-301-7130Email: greg.falesnik@mzgroup.us www.mzgroup.us
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