Company
Meets Q3
2017 Revenue,
GAAP EPS Guidance,
and Exceeds Gross Margin,
Non-GAAP 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 third quarter ended September 30, 2017. The Company’s 2017
third quarter revenues and GAAP earnings per diluted ADS came in at
high end of its guidance while gross margin and non-GAAP earnings
per diluted ADS both exceeded the guidance.
“Despite the decline in the first half in our
business, we delivered solid results in the third quarter,
achieving both top and bottom line growth across all three major
product categories. One of the highlights of our third quarter
business is the joint announcement with Qualcomm to unveil our 3D
sensing total solution. The announcement detailed the two
companies’ collaboration in the development and commercialization
of high resolution, low power active 3D depth sensing solutions for
the Android smartphone ecosystem. The Qualcomm/Himax SLiM™
(Structured Light Imaging Module) solution is state-of-the-art and
the only true 3D sensing total solution available for the Android
market right now,” said Mr. Jordan Wu, President and Chief
Executive Officer of Himax. “The Company’s SLiM™ total solution
brings together Qualcomm’s industry leading 3D algorithm with
Himax’s advanced diffraction optical element (DOE) design and
mass-production-proven wafer level optics for the projector and
cutting-edge NIR sensors with superior quantum efficiency for the
receiver. To complete the Company’s turn-key solution for the
Android market, Himax has put together an A team by partnering with
a few top players in their respective industry, covering laser, NIR
camera lens, IR filter, semiconductor foundry and module assembly.
This strong alliance will ensure that the Company’s SLiM™ 3D
sensing total solution will be an accountable and competitive total
solution for customers’ volume ramping. The SLiM™ total solution
represents a very high barrier of entry for any potential
competition and a much higher ASP and profit margin for us. We are
targeting to have the SLiM™ 3D sensing total solution and
production capacity ready for mass production and shipment by the
end of the first quarter of 2018 with an initial capacity of 2
million units per month. The initial capacity is part of our Phase
I investment of $80 million. We will ramp as needed to meet our
customers’ launch timetable,” Mr. Wu further said.
Himax believes 3D sensing is among the most
significant new features for the next generation smartphone. It is
a game-changing opportunity for the Company and will be the Himax’s
biggest growth engine for the next few years. “We are excited that
Apple has pioneered the 3D sensing technology on iPhone X and is
paving the way for smartphone to become a major AR platform. In the
Android market, we are seeing leading players also aggressively
looking to adopt 3D sensing. We are in close collaboration with
multiple top tier Android smartphone OEMs, aggressively aiming to
launch flagship smartphone models with 3D sensing total solution
during the first half of 2018. By the time we started shipping our
3D total solutions, they will be major contributor to both our
revenues and profit, consequently creating a more favorable product
mix for us,” said Mr. Wu.
Other notable milestones during the third
quarter include the ramp of WLO production capacity and revenue,
and construction of a new building. Mr. Wu said, “We reported in
the last earnings call that this year’s capex has included the
urgent addition of new WLO capacity to meet the rush demand of a
leading customer. This new WLO capacity has started mass production
and we already began shipment to the customer during the third
quarter. We expect shipment to the same customer to accelerate
significantly into the fourth quarter and beyond. In parallel, we
are working on several new development projects with the same
customer for their future generation products. We are very excited
about this partnership and the significant growth opportunities
these projects represent.” Mr. Wu further said, “The construction
of a new building is another major capex project of this year. It
will be completed and ready for move-in at around the new-year
period of 2018. Its timely completion is particularly critical as
it will house the additional WLO capacity and new active alignment
equipment for SLiM™ total solution to fulfill strong demands of
Android Smartphone OEMs.”
Due to the strong 3D sensing demands from the
existing leading WLO customer and new Android smartphone OEMs,
Himax is getting customers’ inputs to finalize the Phase II capex
for additional capacity in 2018. “The scale of Phase II investment
would likely substantially exceed the Phase I capex of $80M. Unlike
the Phase I investment where majority of the capex is going to land
and building, the Phase II investment will be exclusively for the
enlargement of our WLO and active alignment capacity. The Phase II
capacity will still be located in the new building. We are
confident that our investment will deliver high return. We are
positive on our overall business in 2018 and beyond,” said Mr.
Wu.
Third Quarter 2017 Revenue Breakdowns by
Product Line
The third quarter revenues of $197.1 million
represented an increase of 29.9% sequentially and a decrease of
9.6% year-over-year.
Revenue from large panel display drivers was
$54.9 million, up 5.4% sequentially and down 23.7% year-over-year.
Large panel driver ICs accounted for 27.9% of the Company’s total
revenues for the third quarter, compared to 34.4% in the second
quarter of 2017 and 33.0% a year ago. As opposed to the original
guidance of 10% sequential growth, the Company’s large panel driver
business grew just mid-single-digit as one of its Chinese customers
deferred some shipment to Q4. The sector’s rebound from the first
half was driven primarily by stronger sales in TV market. The
year-over-year decline was caused by phase-out of certain
customers’ old models. The Company is pleased with its current
engineering collaboration and design-in activities with large panel
customers across China, Taiwan and Korea. Such activities will lead
to further rebound in future sales momentum.
Revenue for small and medium-sized drivers came
in at $87.2 million, up 24.5% sequentially but down 12.2%
year-over-year. The product segment accounted for 44.2% of total
sales for the third quarter, as compared to 46.1% in the second
quarter of 2017 and 45.5% a year ago. Sales into smartphones
rebounded strongly, up more than 30% sequentially, but still
declining 36.0% year-over-year. The strong smartphone driver IC
sales were driven by customers’ replenishment of inventories after
a lackluster first half. Shipment of 18:9 displays driver ICs to
panel makers for tier-1 end customers also contributed to the
strong rebound. The year-over year decline in the third quarter was
mainly the result of a shrinking addressable market for pure
TFT-LCD driver ICs for smartphones, a significant portion of which
is being replaced by TDDI and AMOLED technologies as the Company
highlighted in previous earnings calls. The good news is that its
TDDI solutions have started some shipment in the third quarter and
are expected to start ramping in Q4.
Sales into automotive application went up single
digit sequentially and more than 20% year-over-year. The quarterly
revenue now reached more than $20 million, a historical high, and
accounting for over 15% of the total driver IC revenue. Driver IC
sales for tablets were also up strongly, increasing over 25%
sequentially but declining 6.8% year-over-year due to weak overall
market demand in the product segment.
Revenues from the non-driver businesses were
$55.0 million, up 85.9% sequentially and up 17.5% versus last year.
Non-driver products accounted for 27.9% of total revenues, also a
record high, as compared to 19.5% in the second quarter of 2017 and
21.5% a year ago. The sequential and year-over-year increase was
due primarily to WLO product shipment to a leading customer as well
as certain one-off customer reimbursements related to Himax’s AR
goggles business. The revenue increase was offset by the
discontinuation of LCOS and WLO shipments to one of Himax’s major
AR device customers who decided to end the product’s production as
it reported before. Excluding the above-mentioned one-off customer
reimbursements, which totaled $13.3 million, the sequential
increase would have been lower but still at a high level of
40.9%.
GAAP gross margin for the third quarter was
25.5%, up 170 bps from 23.8% in the second quarter of 2017 and down
10 bps from 25.6% for the same period last year. The sequential
margin improvement was a result of a more favorable product mix,
which was due mainly to the WLO shipments starting July, 2017 and
the one-off customer reimbursements.
GAAP operating expenses were $47.0 million in
the third quarter, up 26.6% from the preceding quarter and up 16.2%
from a year ago. The significant sequential expense increase, on
top of rising R&D expenses, was caused by $6.1 million of RSU
expense. The RSU expense was assumed to be $3.0 million in the
Company’s guidance. The $3.1 million higher RSU represents lower
EPS of 1.5 cents. As an annual practice, the Company rewards
employees with an annual bonus at the end of September 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
RSUs grant $6.5 million, out of which $6.1 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, Himax’s third quarter
operating expenses were $40.9 million, up 10.2% from the previous
quarter and up 31.1% from the same quarter 2016. The significant
year-over-year increase was primarily the result of rising R&D
expenses in the areas of 3D sensing, WLO, TDDI, and high-end TV as
well as the annual merit increases. In addition, NT dollar
appreciation against the US caused the Company’s salary expense to
increase around $0.9 million as it pays the bulk of its employee
salaries in NT dollars.
GAAP operating margin for the third quarter was
1.7%, down from 7.0% for the same period last year and up from
-0.6% in the previous quarter. The sequential improvement was due
to gross profit increase which was mainly driven by WLO shipments
and the one-off customer reimbursements. The year-over-year decline
was a result of higher operating expenses and lower sales.
Third quarter non-GAAP operating income was
$10.2 million, or 5.2% of sales, down from 11.5% for the same
period last year and up from -0.3% a quarter ago.
GAAP net income for the third quarter was $3.7
million, or 2.1 cents per diluted ADS, compared to GAAP net loss of
$0.6 million, or 0.4 cents per diluted ADS, in the previous quarter
and GAAP net income of $13.6 million, or 7.9 cents per diluted ADS,
a year ago.
Third quarter non-GAAP net income was $9.0
million, or 5.2 cents per diluted ADS, compared to non-GAAP net
loss of $0.3 million, or 0.2 cent per diluted ADS, in the previous
quarter and non-GAAP net income of $21.3 million, or 12.4 cents per
diluted ADS, a year ago.
Balance Sheet and Cash Flow
Himax had $151.6 million of cash, cash
equivalents and marketable securities as of the end of September
2017, compared to $153.4 million at the same time last year and
$185.9 million a quarter ago. The Company paid out a dividend of
$41.3 million during the quarter. In addition to the cash position,
restricted cash was $147.2 million at the end of the quarter, up
from $107.2 million in the preceding quarter and up from $138
million a year ago. 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 remain a debt-free
company.
Himax’s inventories as of September 30, 2017
were $130.1 million, down from $147.7 million a quarter ago and
decreased from $169.4 million at the same time last year. The lower
inventory was a result of increased shipments in the quarter.
Accounts receivable at the end of September 2017 were $181.7
million as compared to $208.4 million a year ago and $163.2 million
last quarter. DSO was 98 days, as compared to 95 days a year ago
and 96 days at end of the last quarter.
Net cash inflow from operating activities for
the third quarter was $16.9 million as compared to an inflow of
$2.9 million for the same period last year and an outflow of $1.2
million last quarter. The sequential increase was mainly due to
higher profit, and better working capital situation.
Capital expenditures were on track with the plan
at $10.2 million in the third quarter of 2017, versus $1.9 million
a year ago and $11.9 million last quarter. The third quarter capex
consisted mainly of capacity expansion for WLO production line and
ongoing payments for the new building’s construction. As reported
in the last few earnings calls, the Company is increasing capex
right now to enlarge its WLO capacity located at the current
headquarters to meet certain anchor customer's strong and urgent
demand. The Company is also constructing a new building to house
further WLO capacity, active alignment equipment, next generation
LCOS production line, and additional office spaces. As part of
Himax’s 3D sensing total solution, extremely high precision active
alignment is required to assemble optics on top of laser. Himax
mentioned in earlier earnings calls that it has partnered with a
world leading equipment vendor to develop a dedicated active
alignment solution of its own.
As Himax reported in the previous earnings
calls, the Company’s capex budget will be funded through its
internal resources and banking facilities if needed.
Share Buyback Update
As of September 30, 2017, Himax had 172.1
million ADS outstanding, little changed from last quarter. On a
fully diluted basis, the total ADS outstanding are 172.4
million.
2017 Investor Outreach and
Conferences
Ms. Jackie Chang, CFO, Ms. Ophelia Lin, internal
IR Deputy Director, Mr. Ken Liu, internal IR, 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
Despite the decline in the first half in Himax’s
business, Himax delivered solid results in the third quarter,
achieving both top and bottom line growth across all three major
product categories. One of the highlights of the Company’s third
quarter business is the joint announcement with Qualcomm to unveil
its 3D sensing total solution. The announcement detailed the two
companies’ collaboration in the development and commercialization
of high resolution, low power active 3D depth sensing solutions for
the Android smartphone ecosystem. 3D sensing is a game-changing
opportunity for Himax. It will be Himax’s biggest growth engine for
the next few years.
Display
Driver IC
MarketLarge display driver IC
business rebounded in the third quarter from the trough of the
first half and Himax expects the momentum to carry forward into the
fourth quarter and next year as China continues to ramp new
advanced generation LCD fabs and 4K TV penetration is still on the
rise globally. Being a market leader in both areas, Himax will
benefit from the resulting market expansion. At the moment, due to
tight foundry capacity, Himax is not able to fulfill some rush
orders. This would affect the Company’s growth in the fourth
quarter. Himax expects a moderate sequential revenue increase for
large display driver ICs in the fourth quarter. Looking into the
future, Himax is working with major panel makers on the development
of next generation 8K TVs. 8K TV will likely take off as early as
2020 with Tokyo Olympics, which has promised to broadcast 8K
programs.
In its last earnings calls, the Company
discussed how full-screen 18:9 displays are becoming a trend and
how Himax expects higher TDDI penetration in smartphones going
forward. Both of these trends held true and continued to accelerate
in the third quarter. The Company’s 18:9 display driver ICs are
expected to contribute to 25% of its smartphone display driver IC
revenue in the fourth quarter, of which FHD+ 18:9 shipments will
double.
In terms of its progress in TDDI, Himax has
started some small volume shipment of its new generation TDDI ICs
in the third quarter. The Company now boasts a comprehensive
product portfolio supporting both full screen 18:9 and traditional
16:9 aspect ratios. Himax expects its design-wins of HD+ TDDI for
smartphone to make meaningful contribution to revenue in the fourth
quarter. Himax’s FHD+ TDDI solutions adopt industry leading
interlaced output design which requires less space for the
customer’s panel routing and therefore enables super-slim bezel for
the customer’s panel design. The Company has on-going design-in
activities with many of the Chinese tier-1 smartphone brands and
most of the panel makers in China, Japan and Korea. Himax expects
some of them to start mass production in the first quarter of 2018.
In summary, Himax is looking to ship a few millions units of TDDI
ICs during the fourth quarter and seeing strong growth starting
2018. TDDI has higher ASP and better margin than traditional driver
IC with less competition. Hence, the Company expects the shipment
of TDDI ICs will lead to margin improvement of its small and medium
panel driver ICs starting 2018.
For AMOLED, it’s set to become mainstream in the
global smartphone market in the future with penetration potentially
reaching as high as 50% by 2020. Himax has joint development
projects with many major Chinese OLED panel makers and has
delivered 18:9 product samples to some of them starting the second
quarter. With Chinese smartphone brands’ AMOLED adoption forecast
to reach 18% in 2017, Chinese panel makers have committed
tremendous capital to build nine brand new OLED fabs by 2019, and
are in full speed to pull forward the mass production schedule.
Once Chinese panel makers start mass production, Himax believes
OLED driver IC will be one of the long-term growth engines for its
small panel driver IC business.
Himax expects driver IC sales for automotive
application to grow around 20% sequentially and close to 35% year
over year, far surpassing market average, as some of the major
design-wins from prior years started going into mass production.
Still more panels are going into vehicles, with the number of units
expected to increase from 135 million in 2016 to 200 million in
2022. Himax has engaged all of the major automotive panel
manufacturers worldwide for long-term partnerships and secured many
of their key projects pipelined for the next few years.
Going into the fourth quarter, due to
seasonality and smartphone OEM customers’ inventory adjustment to
accelerate the product transition from 16:9 to the new full screen
18:9 design, Himax expects revenue for small and medium-sized panel
segments to be flat sequentially.
Non-Driver Product
CategoriesThe non-driver IC business segment has been the
Company’s most exciting growth area and a differentiator for the
Company in the past few years.
3D Sensing Total Solution Himax
believes 3D sensing is among the most significant new features for
the next generation smartphone. The Company is excited that Apple
has pioneered the 3D sensing technology on iPhone X and is paving
the way for smartphone to become a major AR platform. In the
Android market, the Company is seeing leading players also
aggressively looking to adopt 3D sensing. Judging by their current
development activities, Himax expects some of China’s leading
smartphone names to launch flagship models with 3D sensing during
the first half of 2018.
While 3D sensing can have a wide range of
applications across smartphone, IoT, automotive, AR/VR, robitcs,
etc., the Company’s current target market is primarily the
smartphone. SLiM™ (Structured Light Imaging Module), the Company’s
turn-key total solution, has already achieved the performance,
size, power consumption, and costs suitable for smartphones. The
Company emphasized the importance of a total solution approach in
3D sensing as it reduces the customer’s integration complexity to a
minimum and is essential for most of the Android OEMs. The
Qualcomm/Himax solution, with Himax being the product owner of the
total SLiM™ module, is state-of-the-art in its technological
sophistication and the only true 3D sensing total solution
available for the Android market right now. 3D algorithm, projector
and receiver are the three fundamental building blocks of 3D
sensing. The Company’s SLiM™ total solution brings together
Qualcomm’s industry leading 3D algorithm with Himax’s advanced
diffraction optical element (DOE) design and mass-production-proven
wafer level optics for the projector and cutting-edge NIR sensors
with superior quantum efficiency for the receiver. To complete the
Company’s turn-key solution for the Android market, Himax has put
together an A team by partnering with a few top players in their
respective industry, covering laser, NIR camera lens, IR filter,
semiconductor foundry and module assembly. This strong alliance
will ensure that the Company’s SLiM™ 3D sensing total solution will
be an accountable and competitive total solution for customers’
volume ramping.
The majority of the key technologies inside the
SLiM™ total solution is developed and supplied by Himax. These
critical technologies include, on the projector end, DOE and
collimator utilizing the Himax’s world leading WLO technology, a
tailor-made laser driver IC, and high precision active alignment
for the projector assembly; and on the receiver end, a high
efficiency near-infrared CMOS image sensor. Last but not least,
Himax also developed an ASIC by incorporating Qualcomm’s algorithm
for 3D depth map generation. The fact that all of these critical
components are developed in-house puts Himax in a unique leading
position. It represents a very high barrier of entry for any
potential competition and a much higher ASP and profit margin for
Himax. While the Company prefers to offer a total solution, it can
also provide the aforementioned individual technologies separately
to a small number of select customers who possess in-house 3D
sensing integration capabilities so as to best accommodate their
specific needs.
Himax is seeing very strong demand for the SLiM™
total solution amid the Android smartphone market. Himax is tightly
focusing on just a few top tier smartphone makers, with whom the
Company is in close collaboration right now. Himax, together with
its target customers, are aiming to launch 3D sensing smartphones
during the first half of 2018.
Himax’s own SLiM™ solution and production
capability will be ready for mass production and shipment by the
end of the first quarter of 2018 with an initial capacity of 2
million units per month. The initial capacity is part of the
Company’s Phase I capex investment of $80 million. It will ramp as
needed to meet its customers’ launch timetable. Given that the
Company is offering highly integrated solutions with ASPs much
higher than those of individual components, by the time it starts
shipping its total solutions, they will be a major contributor to
both its revenues and profit, consequently creating a more
favorable product mix for Himax.
WLOHimax reported that this
year’s capex will be significantly higher than usual. Himax also
reported the urgent addition of new WLO capacity to meet the rush
demand of a leading customer. This new capacity is located in its
existing headquarters in which it retrofitted space to make room
for the new equipment. Himax reported that the project is going
smoothly as planned. Himax has started mass production and shipment
to the above mentioned customer during the third quarter. The
Company expects shipment to accelerate to the same customer into
the fourth quarter and beyond. In parallel, Himax is working on
several new development projects with the same customer for their
future generation products. Himax is very excited about the
partnership and the significant growth opportunities these projects
represent.
On other WLO business updates, WLO is one of the
key technologies enabling 3D sensing, AR goggle devices, and many
other applications. At present, 3D sensing is the top priority of
Himax’s WLO business. Levering on its exceptional design know-how
and mass production experience in WLO technology, Himax is able to
produce the world’s most compact optics required of 3D sensing
while achieving superior performance. In addition to 3D sensing,
Himax also has ongoing collaborations with customers in developing
wave-guide for AR glasses and micro displays using its WLO
technology.
New BuildingOn to the other
major capex project of this year, construction of a new building.
The progress has been good to date and everything is proceeding on
schedule. The new building, located near the Company’s current
headquarters, will house additional 8” glass WLO capacity and new
active alignment equipment that was just mentioned. It will also
provide the extra office space it desperately needed. The new
building will be completed and ready for personnel and equipment
move-in at around the new-year period of 2018.
Phase II ExpansionAmong all of
the components in the Company’s 3D sensing total solution, the only
two items requiring the Company’s own capital expenditure are the
WLO production line and the active alignment equipment. The two
items are not outsourced because they require highly
differentiating manufacturing know-how and are critical factors of
its competitiveness.
Judging from the strong 3D sensing demands from
the existing leading WLO customer and new Android OEMs, the Company
is getting customers’ input to finalize Phase II capex for
additional equipment in 2018. While the plan is yet to be
finalized, the scale of the investment would likely substantially
exceed the Phase I capex of $80M. Unlike the Phase I investment
where majority of the capex is going to land and building, the
Phase II investment will be exclusively for the enlargement of the
Company’s WLO and active alignment capacity. The Phase II capacity
will still be located in the same new building. The new
building has sufficient room to house capacity much in excess of
the Phase II expansion. Himax will formally announce the Phase II
expansion once the Company finalizes the plan.
Himax said the capex budget for Phase I and
Phase II expansion will be funded through its internal resources
and banking facilities, if so needed.
CMOS Image SensorHimax
continues to make great progress with its two machine vision sensor
product lines, namely, near infrared (“NIR”) sensor and
Always-on-Sensor (“AoS™”). The Company’s NIR sensor is a critical
part in the SLiM™ total solution. Himax’s NIR sensors’ overall
performance is far ahead of those of its peers in 3D sensing
application. Himax currently offers low noise HD, or 1 megapixel,
and 5.5 megapixel NIR sensors and is planning to add more to
further enrich its product portfolio. Himax’s NIR sensors deliver
superior quantum efficiency in the NIR range, especially over 940nm
band which is critical for outdoor applications.
On the AoS product line, armed with Emza’s
machine-vision algorithms, Himax is working with major consumer
electronics and home appliances OEMs to add “people sensing”
capabilities into their products where its WiseEye™ system
detects human presence reliably with extremely low power
consumption to enhance user experience. Following one major global
brand’s adoption in their high end TV models in the first quarter
of 2017, Himax expects several new projects will enter mass
production in 2018, especially in the TV market.
For the traditional human vision segments, Himax
sees strong demands in notebooks and increasing shipments for
multimedia applications such as car recorders, surveillance,
drones, home appliances, and consumer electronics, among
others.
LCOSHimax’s main focus areas
are on AR goggle devices and head-up-displays (HUD) for
automotives. The Company’s list of AR goggle device customers
covers many of the world’s biggest tech names. Himax continues to
see heavyweight companies allocating major R&D resources and
budgets to bring the new products into the market. The Company is
committed to provide the best technology to support them in the
effort. In addition to AR applications, Himax reported great
progress in developing high-end HUD for automotives. Himax’s
technology leadership in this space has little competition. LCOS
represents a significant long term growth opportunity for
Himax.
For non-driver IC business in the fourth
quarter, Himax reported third quarter one-off customer
reimbursements of $13.3 million which will not repeat in the fourth
quarter, thus causing a sequential decline of 20% for its
non-driver revenue, yet an increase of close to 20% for the same
period last year. Excluding the reimbursements, the non-driver
revenue would grow around 10% sequentially, where WLO would grow
around 20%.
Fourth Quarter
2017 Guidance
The Company
is providing the following financial guidance for the fourth
quarter of 2017: |
Net Revenue: |
To decrease 4% to 10%
sequentially |
Gross
Margin: |
To decline around 1%
sequentially |
GAAP EPS: |
13.0 to 15.0 cents per
diluted ADS, as compared to 2.1 cents reported in 3Q 2017 |
Non GAAP EPS (1): |
13.2 to 15.2 cents per
diluted ADS, as compared to 5.2 cents reported in 3Q 2017 |
(1)Non-GAAP EPS excludes share-based compensation and
acquisition-related charges |
In the third quarter result, Himax reported a
one-off customer reimbursement of $13.3 million in the third
quarter which will not repeat in the fourth quarter, thus causing a
sequential revenue decline. Without it, Himax expects the fourth
quarter revenue to be down around 3.5% to up 3.0% sequentially.
The above earnings guidance includes the
disposal of an investment netting 12.0 cents in earnings per
diluted ADS. As many of you have already seen in Himax’s PR
issued on September 26th, Himax reached an agreement with a buyer
to dispose of a direct investment which was made over 2007 to 2008.
The investment involves a China-based operation providing display
driver IC backend processing covering wafer bumping, chip testing
and packaging. Himax’s initial investment amount of $8.96 million
represented a minority stake of 14.46% in the investee company.
Total proceeds from disposal are $32.00 million with a pre-tax gain
of $23.04 million. Gain after tax is estimated to be $20.74
million, representing a contribution of 12.0 cents GAAP net income
per diluted ADS. The transaction is subject to relevant government
approvals with closing expected to be no later than the end of the
fourth quarter, 2017.
HIMAX TECHNOLOGIES THIRD QUARTER
2017 EARNINGS CONFERENCE
CALL
DATE: |
|
Thursday, November 9th,
2017 |
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 |
|
96411246 |
WEBCAST: |
|
https://edge.media-server.com/m6/p/tkka9upt |
A replay of the call will be available beginning
two hours after the call through 10:59 a.m. US EST on November
16th, 2017 (11:59 p.m. Taiwan time, November 16th, 2017) 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 96411246. 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 9th, 2018.
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 for AR devices,
3D sensing and machine vision, 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 2,150 people from three Taiwan-based
offices in Tainan, Hsinchu and Taipei and country offices in China,
Korea, Japan and the US. Himax has 3,011 patents granted and 441
patents pending approval worldwide as of September 30th, 2017.
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, 2016 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
Ophelia Lin, Investor
RelationsHimax Technologies, Inc.Tel: +886-2-2370-3999
Ext.22202Fax: +886-2-2314-0877 Email:
ophelia_lin@himax.com.tw www.himax.com.tw
Ken Liu, Investor RelationsHimax Technologies,
Inc.Tel: +886-2-2370-3999 Ext.22513Fax: +886-2-2314-0877 Email:
ken_liu@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
-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, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
|
|
|
|
Revenues |
$ |
197,146 |
|
|
$ |
218,081 |
|
|
$ |
151,730 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of revenues |
|
146,778 |
|
|
|
162,348 |
|
|
|
115,556 |
|
Research and development |
|
34,989 |
|
|
|
28,789 |
|
|
|
27,921 |
|
General and administrative |
|
6,016 |
|
|
|
5,774 |
|
|
|
4,552 |
|
Sales and marketing |
|
5,967 |
|
|
|
5,874 |
|
|
|
4,641 |
|
Total costs and expenses |
|
193,750 |
|
|
|
202,785 |
|
|
|
152,670 |
|
|
|
|
|
|
|
Operating income (loss) |
|
3,396 |
|
|
|
15,296 |
|
|
|
(940 |
) |
|
|
|
|
|
|
Non operating income
(loss): |
|
|
|
|
|
Interest income |
|
509 |
|
|
|
264 |
|
|
|
619 |
|
Gains on sale of securities, net |
|
55 |
|
|
|
95 |
|
|
|
37 |
|
Equity in incomes (losses) of equity method investees |
|
114 |
|
|
|
(206 |
) |
|
|
(697 |
) |
Foreign currency exchange losses, net |
|
(180 |
) |
|
|
(486 |
) |
|
|
(27 |
) |
Interest expense |
|
(145 |
) |
|
|
(133 |
) |
|
|
(113 |
) |
Other income (losses), net |
|
2 |
|
|
|
2 |
|
|
|
(41 |
) |
|
|
355 |
|
|
|
(464 |
) |
|
|
(222 |
) |
Earnings (loss) before
income taxes |
|
3,751 |
|
|
|
14,832 |
|
|
|
(1,162 |
) |
Income tax expense (benefit) |
|
621 |
|
|
|
1,441 |
|
|
|
(179 |
) |
Net income (loss) |
|
3,130 |
|
|
|
13,391 |
|
|
|
(983 |
) |
Net loss
attributable to noncontrolling interests |
|
554 |
|
|
|
207 |
|
|
|
354 |
|
Net
income (loss) attributable to
Himax Technologies, Inc. stockholders |
$ |
3,684 |
|
|
$ |
13,598 |
|
|
$ |
(629 |
) |
|
|
|
|
|
|
Basic
earnings (loss) per ADS
attributable to Himax Technologies, Inc. stockholders |
$ |
0.021 |
|
|
$ |
0.079 |
|
|
$ |
(0.004 |
) |
Diluted
earnings (loss) per ADS
attributable to Himax Technologies, Inc. stockholders |
$ |
0.021 |
|
|
$ |
0.079 |
|
|
$ |
(0.004 |
) |
|
|
|
|
|
|
Basic Weighted Average Outstanding ADS |
|
172,401 |
|
|
|
172,304 |
|
|
|
172,399 |
|
Diluted Weighted Average Outstanding ADS |
|
172,448 |
|
|
|
172,356 |
|
|
|
172,462 |
|
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, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
Revenues |
|
|
$ |
504,086 |
|
|
$ |
599,474 |
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
Cost of revenues |
|
|
|
381,643 |
|
|
|
444,088 |
|
Research and development |
|
|
|
88,241 |
|
|
|
73,994 |
|
General and administrative |
|
|
|
15,201 |
|
|
|
15,169 |
|
Sales and marketing |
|
|
|
14,972 |
|
|
|
13,849 |
|
Total costs and expenses |
|
|
|
500,057 |
|
|
|
547,100 |
|
|
|
|
|
|
|
Operating
income |
|
|
|
4,029 |
|
|
|
52,374 |
|
|
|
|
|
|
|
Non
operating income
(loss): |
|
|
|
|
|
Interest income |
|
|
|
1,671 |
|
|
|
822 |
|
Dividend income |
|
|
|
- |
|
|
|
700 |
|
Gains on sale of securities, net |
|
|
|
162 |
|
|
|
5 |
|
Equity in losses of equity method investees |
|
|
|
(717 |
) |
|
|
(565 |
) |
Foreign currency exchange losses, net |
|
|
|
(1,240 |
) |
|
|
(519 |
) |
Interest expense |
|
|
|
(395 |
) |
|
|
(502 |
) |
Other income (losses), net |
|
|
|
9 |
|
|
|
(7 |
) |
|
|
|
|
(510 |
) |
|
|
(66 |
) |
Earnings before income
taxes |
|
|
|
3,519 |
|
|
|
52,308 |
|
Income tax expense |
|
|
|
563 |
|
|
|
7,062 |
|
Net
income |
|
|
|
2,956 |
|
|
|
45,246 |
|
Net loss
attributable to noncontrolling interests |
|
|
|
1,462 |
|
|
|
1,227 |
|
Net
income attributable to Himax
Technologies, Inc.
stockholders |
|
|
$ |
4,418 |
|
|
$ |
46,473 |
|
|
|
|
|
|
|
Basic earnings
per ADS attributable to Himax Technologies,
Inc. stockholders |
|
|
$ |
0.026 |
|
|
$ |
0.270 |
|
Diluted
earnings per ADS attributable to Himax
Technologies, Inc.
stockholders |
|
|
$ |
0.026 |
|
|
$ |
0.270 |
|
|
|
|
|
|
|
Basic Weighted Average Outstanding ADS |
|
|
|
172,399 |
|
|
|
172,303 |
|
Diluted Weighted Average Outstanding
ADS |
|
|
|
172,414 |
|
|
|
172,334 |
|
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 September 30, |
|
Three Months Ended
June 30, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
Share-based
compensation |
|
|
|
|
|
Cost of
revenues |
$ |
130 |
|
|
$ |
146 |
|
|
$ |
25 |
|
Research
and development |
|
4,873 |
|
|
|
7,128 |
|
|
|
137 |
|
General
and administrative |
|
713 |
|
|
|
1,002 |
|
|
|
69 |
|
Sales and
marketing |
|
877 |
|
|
|
1,325 |
|
|
|
24 |
|
Income
tax benefit |
|
(1,439 |
) |
|
|
(2,027 |
) |
|
|
(43 |
) |
Total |
$ |
5,154 |
|
|
$ |
7,574 |
|
|
$ |
212 |
|
|
|
|
|
|
|
The amount
of acquisition-related charges
included in applicable statements of
income categories is summarized as
follows: |
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges |
|
|
|
|
|
Research
and development |
$ |
246 |
|
|
$ |
246 |
|
|
$ |
246 |
|
Income
tax benefit |
|
(99 |
) |
|
|
(99 |
) |
|
|
(98 |
) |
Total |
$ |
147 |
|
|
$ |
147 |
|
|
$ |
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, |
|
|
2017 |
|
|
|
2016 |
|
Share-based
compensation |
|
|
|
Cost of
revenues |
$ |
180 |
|
|
$ |
199 |
|
Research
and development |
|
5,147 |
|
|
|
7,449 |
|
General
and administrative |
|
851 |
|
|
|
1,142 |
|
Sales and
marketing |
|
924 |
|
|
|
1,365 |
|
Income
tax benefit |
|
(1,524 |
) |
|
|
(2,122 |
) |
Total |
$ |
5,578 |
|
|
$ |
8,033 |
|
|
|
|
|
The amount
of acquisition-related charges
included in applicable statements of
income categories is summarized as
follows: |
|
|
|
|
|
|
|
Acquisition-related
charges |
|
|
|
Research
and development |
$ |
738 |
|
|
$ |
738 |
|
Income
tax benefit |
|
(296 |
) |
|
|
(296 |
) |
Total |
$ |
442 |
|
|
$ |
442 |
|
|
|
|
|
Himax Technologies, Inc. |
GAAP Unaudited Condensed
Consolidated Balance Sheets |
(Amounts in Thousands of U.S. Dollars,
Except Share and Per Share
Data) |
|
|
|
September
30,
2017 |
|
June
30,
2017 |
|
September 30,
2016 |
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
141,482 |
|
|
$ |
177,206 |
|
|
$ |
140,805 |
|
Investments in marketable securities available-for-sale |
|
|
10,124 |
|
|
|
8,663 |
|
|
|
12,559 |
|
Accounts
receivable, less allowance for doubtful accounts, sales returns and
discounts |
|
|
181,731 |
|
|
|
163,243 |
|
|
|
208,372 |
|
Inventories |
|
|
130,112 |
|
|
|
147,680 |
|
|
|
169,382 |
|
Deferred
income taxes |
|
|
- |
|
|
|
- |
|
|
|
3,459 |
|
Restricted cash, cash equivalents and marketable securities |
|
|
147,202 |
|
|
|
107,201 |
|
|
|
138,000 |
|
Other
receivables from related party |
|
|
4,150 |
|
|
|
4,150 |
|
|
|
4,000 |
|
Prepaid
expenses and other current assets |
|
|
18,487 |
|
|
|
12,329 |
|
|
|
24,435 |
|
Total current assets |
|
|
633,288 |
|
|
|
620,472 |
|
|
|
701,012 |
|
Investment in non-marketable
equity securities |
|
|
12,110 |
|
|
|
12,242 |
|
|
|
12,379 |
|
Equity method
investments |
|
|
4,231 |
|
|
|
4,055 |
|
|
|
3,104 |
|
Property, plant and
equipment, net |
|
|
69,518 |
|
|
|
57,813 |
|
|
|
49,849 |
|
Deferred income
taxes |
|
|
6,841 |
|
|
|
6,671 |
|
|
|
1,194 |
|
Goodwill |
|
|
28,138 |
|
|
|
28,138 |
|
|
|
28,138 |
|
Other
intangible assets, net |
|
|
2,427 |
|
|
|
2,675 |
|
|
|
3,418 |
|
Restricted
marketable securities |
|
|
463 |
|
|
|
460 |
|
|
|
127 |
|
Other
assets |
|
|
1,492 |
|
|
|
1,478 |
|
|
|
1,547 |
|
|
|
|
125,220 |
|
|
|
113,532 |
|
|
|
99,756 |
|
Total assets |
|
$ |
758,508 |
|
|
$ |
734,004 |
|
|
$ |
800,768 |
|
Liabilities, redeemable
noncontrolling interest and
Equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Short-term debt |
|
$ |
147,000 |
|
|
$ |
107,000 |
|
|
$ |
138,000 |
|
Accounts
payable |
|
|
125,553 |
|
|
|
113,670 |
|
|
|
141,810 |
|
Income
taxes payable |
|
|
8,633 |
|
|
|
7,778 |
|
|
|
13,708 |
|
Deferred
income taxes |
|
|
- |
|
|
|
- |
|
|
|
144 |
|
Other
payable to related party |
|
|
1,350 |
|
|
|
- |
|
|
|
- |
|
Other
accrued expenses and other current liabilities |
|
|
37,675 |
|
|
|
71,062 |
|
|
|
34,549 |
|
Total current liabilities |
|
|
320,211 |
|
|
|
299,510 |
|
|
|
328,211 |
|
Other
liabilities |
|
|
3,145 |
|
|
|
3,191 |
|
|
|
3,851 |
|
Total liabilities |
|
|
323,356 |
|
|
|
302,701 |
|
|
|
332,062 |
|
|
|
|
|
|
|
|
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 344,207,492 shares, 344,007,418
shares and 344,007,418 shares outstanding at September 30, 2017,
Jun 30, 2017 and September 30, 2016, respectively |
|
|
107,010 |
|
|
|
107,010 |
|
|
|
|
107,010 |
|
Additional paid-in capital |
|
|
107,140 |
|
|
|
|
106,837 |
|
|
|
|
106,109 |
|
Treasury
shares, at cost, 12,491,990 shares, 12,692,064 shares and
12,692,064 shares at September 30, 2017, Jun 30, 2017 and September
30, 2016, respectively |
|
|
(8,878 |
) |
|
|
|
(9,020 |
) |
|
|
|
(9,020 |
) |
Accumulated other comprehensive loss |
|
|
(1,748 |
) |
|
|
|
(2,041 |
) |
|
|
|
(1,794 |
) |
Unappropriated retained earnings |
|
|
228,997 |
|
|
|
|
225,312 |
|
|
|
|
261,283 |
|
Himax Technologies, Inc. stockholders’
equity |
|
|
432,521 |
|
|
|
|
428,098 |
|
|
|
|
463,588 |
|
Noncontrolling
interests |
|
|
(1,025 |
) |
|
|
|
(451 |
) |
|
|
|
1,462 |
|
Total equity |
|
|
431,496 |
|
|
|
|
427,647 |
|
|
|
|
465,050 |
|
Total liabilities,
redeemable noncontrolling
interest and equity |
|
$ |
758,508 |
|
|
$ |
734,004 |
|
|
$ |
800,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,130 |
|
|
$ |
13,391 |
|
|
$ |
(983 |
) |
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
4,672 |
|
|
|
3,393 |
|
|
|
3,471 |
|
Share-based compensation expenses |
|
|
446 |
|
|
|
378 |
|
|
|
255 |
|
Loss
(gain) on disposals of property and equipment |
|
|
3 |
|
|
|
(2 |
) |
|
|
--- |
|
Gain on
disposals of marketable securities, net |
|
|
(55 |
) |
|
|
(95 |
) |
|
|
(37 |
) |
Equity in
losses (income) of equity method investees |
|
|
(114 |
) |
|
|
206 |
|
|
|
697 |
|
Deferred
income tax benefit |
|
|
(223 |
) |
|
|
(219 |
) |
|
|
(50 |
) |
Inventories write downs |
|
|
3,346 |
|
|
|
2,653 |
|
|
|
2,487 |
|
Changes in: |
|
|
|
|
|
|
Accounts
receivable |
|
|
(23,691 |
) |
|
|
(20,441 |
) |
|
|
4,482 |
|
Inventories |
|
|
14,222 |
|
|
|
14,620 |
|
|
|
(1,907 |
) |
Prepaid
expenses and other current assets |
|
|
(6,154 |
) |
|
|
(5,054 |
) |
|
|
1,898 |
|
Accounts
payable |
|
|
11,883 |
|
|
|
(10,033 |
) |
|
|
(2,271 |
) |
Accounts
payable to related party |
|
|
--- |
|
|
|
--- |
|
|
|
(1,098 |
) |
Income
taxes payable |
|
|
855 |
|
|
|
2,035 |
|
|
|
(7,854 |
) |
Other
payable to related party |
|
|
1,350 |
|
|
|
--- |
|
|
|
--- |
|
Other
accrued expenses and other current liabilities |
|
|
7,206 |
|
|
|
2,034 |
|
|
|
182 |
|
Other
liabilities |
|
|
(4 |
) |
|
|
(6 |
) |
|
|
(507 |
) |
Net cash provided by
(used in) operating
activities |
|
|
16,872 |
|
|
|
2,860 |
|
|
|
(1,235 |
) |
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
|
(10,178 |
) |
|
|
(1,861 |
) |
|
|
(11,919 |
) |
Proceeds
from disposals of property and equipment |
|
|
--- |
|
|
|
9 |
|
|
|
--- |
|
Purchases
of available-for-sale marketable securities |
|
|
(20,325 |
) |
|
|
(6,123 |
) |
|
|
(15,979 |
) |
Proceeds
from disposals of available-for-sale marketable securities |
|
|
19,014 |
|
|
|
8,777 |
|
|
|
16,497 |
|
Purchases
of investment securities |
|
|
--- |
|
|
|
(1,600 |
) |
|
|
--- |
|
Proceeds
from capital reduction of investment |
|
|
132 |
|
|
|
--- |
|
|
|
--- |
|
Purchase
of equity method investment |
|
|
--- |
|
|
|
(37 |
) |
|
|
(2,230 |
) |
Proceeds
from (repayments of) refundable deposits, net |
|
|
(12 |
) |
|
|
|
5 |
|
|
|
284 |
|
Pledges
of restricted marketable securities |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(115 |
) |
Cash paid
for loan made to related party |
|
|
(1,500 |
) |
|
|
(3,000 |
) |
|
|
--- |
|
Cash
received for loan made to related party |
|
|
1,500 |
|
|
|
--- |
|
|
|
1,500 |
|
Net cash used in
investing activities |
|
|
(11,373 |
) |
|
|
|
(3,832 |
) |
|
|
(11,962 |
) |
|
|
|
|
|
|
|
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, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Payments
of cash dividends |
|
$ |
(41,281 |
) |
|
$ |
(22,348 |
) |
|
$ |
--- |
|
Proceeds
from disposals of subsidiary shares to noncontrolling interests by
Himax Imaging, Inc. |
|
|
--- |
|
|
|
8 |
|
|
|
--- |
|
Purchases
of subsidiary shares from noncontrolling interests |
|
|
(41 |
) |
|
|
(290 |
) |
|
|
(1 |
) |
Releases
of restricted cash, cash equivalents and marketable securities (for
borrowing of short-term debt) |
|
|
(40,000 |
) |
|
|
--- |
|
|
|
--- |
|
Proceeds
from short-term debt |
|
|
70,000 |
|
|
|
89,000 |
|
|
|
27,000 |
|
Repayments of short-term debt |
|
|
(30,000 |
) |
|
|
(89,000 |
) |
|
|
(27,000 |
) |
Net cash used in
financing activities |
|
|
(41,322 |
) |
|
|
(22,630 |
) |
|
|
(1 |
) |
Effect
of foreign currency exchange rate
changes on cash and cash equivalents |
|
|
99 |
|
|
|
(16 |
) |
|
|
59 |
|
Net
decrease in cash and cash
equivalents |
|
|
(35,724 |
) |
|
|
(23,618 |
) |
|
|
(13,139 |
) |
Cash and cash
equivalents at beginning of period |
|
|
177,206 |
|
|
|
164,423 |
|
|
|
190,345 |
|
Cash and cash
equivalents at end of period |
|
$ |
141,482 |
|
|
$ |
140,805 |
|
|
$ |
177,206 |
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
Cash paid
during the period for: |
|
|
|
|
|
|
Interest |
|
$ |
145 |
|
|
$ |
137 |
|
|
$ |
113 |
|
Income
taxes |
|
$ |
6,371 |
|
|
$ |
4,558 |
|
|
$ |
7,986 |
|
|
|
|
|
|
|
|
Supplemental
disclosures of investing activities affecting both
cash and non-cash items: |
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
$ |
16,118 |
|
|
$ |
1,949 |
|
|
$ |
13,292 |
|
Increase
in payable for purchases of equipment and asset retirement
obligations |
|
|
(5,940 |
) |
|
|
(88 |
) |
|
|
(1,373 |
) |
Cash
paid |
|
$ |
10,178 |
|
|
$ |
1,861 |
|
|
$ |
11,919 |
|
|
|
|
|
|
|
|
Supplemental
disclosures of non-cash investing and
financing activities: |
|
|
|
|
|
|
Dividend
payable |
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
41,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts
in Thousands of
U.S.
Dollars) |
|
|
|
|
Nine Months Ended
September
30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net income |
|
|
|
$ |
2,956 |
|
|
$ |
45,246 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
11,582 |
|
|
|
10,308 |
|
Share-based compensation expenses |
|
|
|
|
955 |
|
|
|
932 |
|
Gain on
disposals of property and equipment |
|
|
|
|
(25 |
) |
|
|
(2 |
) |
Gain on
disposals of marketable securities, net |
|
|
|
|
(162 |
) |
|
|
(5 |
) |
Equity in
losses of equity method investees |
|
|
|
|
717 |
|
|
|
565 |
|
Deferred
income tax benefit |
|
|
|
|
(763 |
) |
|
|
(484 |
) |
Inventories write downs |
|
|
|
|
8,880 |
|
|
|
8,549 |
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
|
|
4,140 |
|
|
|
(31,217 |
) |
Inventories |
|
|
|
|
10,756 |
|
|
|
(6,557 |
) |
Prepaid
expenses and other current assets |
|
|
|
|
(5,636 |
) |
|
|
(5,386 |
) |
Accounts
payable |
|
|
|
|
(16,716 |
) |
|
|
17,387 |
|
Accounts
payable to related party |
|
|
|
|
(576 |
) |
|
|
--- |
|
Income
taxes payable |
|
|
|
|
(5,517 |
) |
|
|
1,604 |
|
Other
payable to related party |
|
|
|
|
1,350 |
|
|
|
--- |
|
Other
accrued expenses and other current liabilities |
|
|
|
|
9,224 |
|
|
|
(3,474 |
) |
Other
liabilities |
|
|
|
|
(68 |
) |
|
|
(9 |
) |
Net cash provided by
operating activities |
|
|
|
|
21,097 |
|
|
|
37,457 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
|
|
|
(24,106 |
) |
|
|
(5,743 |
) |
Proceeds
from disposals of property and equipment |
|
|
|
|
28 |
|
|
|
9 |
|
Purchases
of available-for-sale marketable securities |
|
|
|
|
(41,405 |
) |
|
|
(23,271 |
) |
Proceeds
from disposals of available-for-sale marketable securities |
|
|
|
|
42,031 |
|
|
|
29,576 |
|
Purchases of investment securities |
|
|
|
--- |
|
|
|
(1,600 |
) |
Proceeds from capital reduction of investment |
|
|
|
132 |
|
|
|
431 |
|
Purchase
of equity method investment |
|
|
|
|
(2,230 |
) |
|
|
(37 |
) |
Proceeds from (repayments of) refundable deposits, net |
|
|
|
(38 |
) |
|
|
405 |
|
Releases (pledges) of restricted marketable securities |
|
|
|
(341 |
) |
|
|
437 |
|
Cash paid for loan made to related party |
|
|
|
(1,500 |
) |
|
|
(4,000 |
) |
Cash
received for loan made to related party |
|
|
|
|
4,500 |
|
|
|
--- |
|
Net cash used in
investing activities |
|
|
|
|
(22,929 |
) |
|
|
(3,793 |
) |
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts
in Thousands of
U.S.
Dollars) |
|
|
|
|
Nine Months Ended
September
30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Payments
of cash dividends |
|
|
|
$ |
(41,281 |
) |
|
$ |
(22,348 |
) |
Proceeds
from disposals of subsidiary shares to noncontrolling interests by
Himax Imaging, Inc. |
|
|
|
|
4 |
|
|
|
9 |
|
Purchases
of subsidiary shares from noncontrolling interests |
|
|
|
|
(42 |
) |
|
|
(291 |
) |
Releases
of restricted cash, cash equivalents and marketable securities (for
borrowing of short-term debt) |
|
|
|
|
(9,000 |
) |
|
|
42,000 |
|
Proceeds
from short-term debt |
|
|
|
|
124,161 |
|
|
|
199,000 |
|
Repayments of short-term debt |
|
|
|
|
(115,161 |
) |
|
|
(241,000 |
) |
Net cash provided by
financing activities |
|
|
|
|
(41,319 |
) |
|
|
(22,630 |
) |
Effect
of foreign currency exchange rate
changes on cash and cash equivalents |
|
|
|
|
181 |
|
|
|
(58 |
) |
Net
increase (decrease) in
cash and cash equivalents |
|
|
|
|
(42,970 |
) |
|
|
10,976 |
|
Cash and cash
equivalents at beginning of period |
|
|
|
|
184,452 |
|
|
|
129,829 |
|
Cash and cash
equivalents at end of period |
|
|
|
$ |
141,482 |
|
|
$ |
140,805 |
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
Cash paid
during the period for: |
|
|
|
|
|
|
Interest
expense |
|
|
|
$ |
395 |
|
|
$ |
506 |
|
Income
taxes |
|
|
|
$ |
14,410 |
|
|
$ |
11,220 |
|
|
|
|
|
|
|
|
Supplemental
disclosures of investing activities affecting both
cash and non-cash items: |
|
|
|
|
|
|
Purchases
of property, plant and equipment |
|
|
|
$ |
32,143 |
|
|
$ |
4,975 |
|
Decrease
(increase) in payable for purchases of equipment and asset
retirement obligations |
|
|
|
|
(8,037 |
) |
|
|
768 |
|
Cash
paid |
|
|
|
$ |
24,106 |
|
|
$ |
5,743 |
|
|
|
|
|
|
|
|
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, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
Revenues |
$ |
197,146 |
|
|
$ |
218,081 |
|
|
$ |
151,730 |
|
Gross profit |
|
50,368 |
|
|
|
55,733 |
|
|
|
36,174 |
|
Add: Share-based
compensation – cost of revenues |
|
130 |
|
|
|
146 |
|
|
|
25 |
|
Gross profit excluding
share-based compensation |
|
50,498 |
|
|
|
55,879 |
|
|
|
36,199 |
|
Gross margin excluding
share-based compensation |
|
25.6% |
|
|
|
25.6% |
|
|
|
23.9% |
|
Operating income
(loss) |
|
3,396 |
|
|
|
15,296 |
|
|
|
(940 |
) |
Add: Share-based
compensation |
|
6,593 |
|
|
|
9,601 |
|
|
|
255 |
|
Operating income (loss)
excluding share-based compensation |
|
9,989 |
|
|
|
24,897 |
|
|
|
(685 |
) |
Add:
Acquisition-related charges –intangible assets amortization |
|
246 |
|
|
|
246 |
|
|
|
246 |
|
Operating income (loss)
excluding share-based compensation and acquisition-related
charges |
|
10,235 |
|
|
|
25,143 |
|
|
|
(439 |
) |
Operating margin
excluding share-based compensation and acquisition-related
charges |
|
5.2% |
|
|
|
11.5% |
|
|
|
(0.3% |
) |
Net income (loss)
attributable to Himax Technologies, Inc. stockholders |
|
3,684 |
|
|
|
13,598 |
|
|
|
(629 |
) |
Add: Share-based
compensation, net of tax |
|
5,154 |
|
|
|
7,574 |
|
|
|
212 |
|
Add:
Acquisition-related charges, net of tax |
|
147 |
|
|
|
147 |
|
|
|
148 |
|
Net income (loss)
attributable to Himax Technologies, Inc. stockholders excluding
share-based compensation and acquisition-related charges |
|
8,985 |
|
|
|
21,319 |
|
|
|
(269 |
) |
Net margin attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
4.6% |
|
|
|
9.8% |
|
|
|
(0.2% |
) |
|
|
|
|
|
|
* 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, |
|
|
|
|
2017 |
|
|
|
2016 |
|
Revenues |
|
|
$ |
504,086 |
|
|
$ |
599,474 |
|
Gross profit |
|
|
|
122,443 |
|
|
|
155,386 |
|
Add: Share-based
compensation – Cost of revenues |
|
|
|
180 |
|
|
|
199 |
|
Gross profit excluding
share-based compensation |
|
|
|
122,623 |
|
|
|
155,585 |
|
Gross margin excluding
share-based compensation |
|
|
|
24.3 |
% |
|
|
26.0 |
% |
Operating income |
|
|
|
4,029 |
|
|
|
52,374 |
|
Add: Share-based
compensation |
|
|
|
7,102 |
|
|
|
10,155 |
|
Operating income
excluding share-based compensation |
|
|
|
11,131 |
|
|
|
62,529 |
|
Add:
Acquisition-related charges –Intangible assets amortization |
|
|
|
738 |
|
|
|
738 |
|
Operating income
excluding share-based compensation and acquisition-related
charges |
|
|
|
11,869 |
|
|
|
63,267 |
|
Operating margin
excluding share-based compensation and acquisition-related
charges |
|
|
|
2.4 |
% |
|
|
10.6 |
% |
Net income attributable
to Himax Technologies, Inc. stockholders |
|
|
|
4,418 |
|
|
|
46,473 |
|
Add: Share-based
compensation, net of tax |
|
|
|
5,578 |
|
|
|
8,033 |
|
Add:
Acquisition-related charges, net of tax |
|
|
|
442 |
|
|
|
442 |
|
Net income attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
|
|
10,438 |
|
|
|
54,948 |
|
Net margin attributable
to Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
|
|
2.1 |
% |
|
|
9.2 |
% |
|
|
|
|
|
|
*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 Ended September
30, |
|
Nine Months Ended
September 30, |
|
|
|
2017 |
|
|
2017 |
|
Diluted GAAP earnings
per ADS attributable to Himax Technologies, Inc. stockholders |
$0.021 |
|
$0.026 |
|
Add: Share-based
compensation per ADS |
$0.030 |
|
$0.032 |
|
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 |
$0.052 |
|
$0.061 |
|
|
|
|
|
Numbers do
not add up due to rounding |
Himax Technologies (NASDAQ:HIMX)
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