SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16
of
the Securities Exchange Act of 1934
For
the
month of May, 2007
Commission
File Number: 000-51847
Himax
Technologies, Inc.
(Translation
of registrant’s name into English)
No.26,
Zih
Lian Road, Fonghua Village,
Sinshih Township,
Tainan County
744,
Taiwan,
Republic of China
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports
under
cover of Form 20-F or Form 40-F:
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as
permitted
by Regulation S-T Rule 101(b)(1):
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as
permitted
by Regulation S-T Rule 101(b)(7):
Indicate
by check mark whether by furnishing the information contained in this
Form, the
Registrant is also thereby furnishing the information to the Commission
pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
If
“Yes”
is marked, indicate below the file number assigned to the registrant
in
connection with Rule 12g3-2(b): N/A
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99.1
|
Press
release entitled, “Himax reports first quarter results” dated May 10,
2007.
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99.2
|
Himax
first quarter results conference call transcript dated May 10,
2007.
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Pursuant
to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to
be signed on its behalf by the undersigned, thereunto duly
authorized.
|
HIMAX
TECHNOLOGIES, INC.
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By:
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Name:
Max Chan
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Title:
Chief Financial Officer
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Date:
May
10th, 2007
HIMAX
REPORTS FIRST QUARTER 2007 RESULTS
Tainan,
Taiwan, May 10, 2007 - Himax Technologies, Inc. (“Himax” or ”Company”)
(NASDAQ:
HIMX) today
reported financial results for the first quarter ended March 31,
2007.
Net
revenue for the
first quarter of 2007 was $184.9 million, compared to $174.9 million for
the
first quarter of 2006, and $220.9 million in the fourth quarter of
2006. Net income for the first quarter of 2007 was $18.0 million, or
$0.09 per diluted share, compared to net income of $21.9 million, or $0.12
per
diluted share in the first quarter of 2006, and $31.1 million, or $0.16
per
diluted share in the fourth quarter of 2006. Share-based compensation
was $1.5 million, $1.1 million and $1.5 million in the first quarter of
2007,
the first quarter of 2006 and the fourth quarter of 2006,
respectively.
Gross
margin in the
first quarter of 2007 was 19.5%, as compared to 21.5% in the first quarter
of
2006, and 18.9% in the fourth quarter of 2006. Operating margin was
9.1% in the first quarter of 2007, as compared to 13.5% in the first quarter
of
2006, and 10.1% in the fourth quarter of 2006.
Excluding
share-based compensation, gross margin was 19.5% in the first quarter of
2007,
21.5% in the first quarter of 2006, and 18.9% in the fourth quarter of
2006,
with an operating margin of 10.4%, 14.1%, and 10.8%, respectively.
A
reconciliation of
our gross margin and operating margin excluding share-based compensation
and
acquisition-related charges, a non-GAAP financial measure, to GAAP gross
margin
and GAAP operating margin, our most comparable GAAP figure, is set out
in the
attached reconciliation schedule.
Jordan
Wu, President
and Chief Executive Officer of Himax, commented, “We are pleased that our
revenues, gross margin and EPS were all inline with our previous
guidance. The decline in revenue reflects the traditionally seasonal
lower demand and fewer working days in the holiday month of
February. Revenue from large panel display drivers were lower
sequentially, inline with expectations. Revenue from small- and
medium-sized display drivers was up strongly on a sequential basis, primarily
due to better sales in both mobile phone and consumer electronic product
segments, share gains at certain first tier Japanese customers and the
acquisition of Wisepal.”
Max
Chan, Chief
Financial Officer of Himax, said, “Our gross margin increased to 19.5% from
18.9% a quarter ago, due to our continued efforts to diversify our product
mix
and lower our costs. Small- and medium-sized driver ICs, which
typically enjoy a higher gross margin, accounted for approximately 16%
of our
revenue in the period, up from approximately 11% of our revenue a quarter
ago.
Our income before tax and minority interest declined primarily due to a
lower
revenue base. We expect our effective tax rate for 2007 to be around 0%
based on
which we have recorded net tax benefit or expense of zero in the first
quarter.”
Looking
forward, Mr.
Wu added, “For the second quarter of 2007, we expect overall revenue will
improve approximately 17% to 20% compared to the first quarter of
2007. We expect demand for our large panel drivers will increase as
our customers raise fab utilization to fulfill increasing
demand
for all large
panel products across the board. We also expect sales of our small- and medium-sized
drivers to remain
healthy as several of
our design-in projects have begun mass production. We expect
our gross margin
to remain flat or decline slightly compared to the first quarter 2007,
with
diluted GAAP EPS is expected to be in the range of $0.10 to $0.11.”
A
reconciliation of
our diluted EPS excluding share-based compensation and acquisition-related
charges, a non-GAAP financial measure, to diluted GAAP EPS, our most comparable
GAAP figure, is set out in the attached reconciliation schedule.
Investor
Conference Call / Webcast Details
The
Company’s
management will review detailed first quarter 2007 results on Wednesday,
May 9,
2007 at 7:00 PM EDT (7:00 AM, Thursday May 10, Taiwan time). The
conference call-in number is +1-201-689-8560 (international) and +1-877-407-0784
(U.S. domestic). A live webcast of the conference call will be available
on the
Company’s website at www.himax.com.tw. The playback will be
available beginning two hours after the conclusion of the conference call
and
will be accessible by dialing +1-201-612-7415 (international) and 1-877-660-6853
(U.S. domestic). The account number to access the replay is 3055 and the
confirmation ID number is 238293.
About
Himax
Technologies, Inc.
Himax
Technologies,
Inc. designs, develops and markets semiconductors that are critical components
of flat panel displays. The Company’s principal products are display drivers for
large-sized TFT-LCD panels, which are used in desktop monitors, notebook
computers and televisions, and display drivers for small- and medium-sized
TFT-LCD panels, which are used in mobile handsets and consumer electronics
products such as digital cameras, mobile gaming devices and car navigation
displays. In addition, the Company is expanding its product offering
to include LCD TV chipset solutions and LCOS
microdisplays. Based in Tainan, Taiwan, the Company has regional
offices in Hsinchu and Taipei, Taiwan; Suzhou and Shenzhen, China; Yokohama,
Japan and Anyangsi Kyungkido, South Korea.
Contacts:
Max
Chan
Chief
Financial Officer
Himax
Technologies, Inc.
+886-2-3393-0877
Ext. 22300
|
Jackson
Ko
Investor
Relations
Himax
Technologies, Inc.
+886-2-3393-0877
Ext. 22240
|
In
the
U.S.
David
Pasquale
The
Ruth
Group
646-536-7006
|
Forward-Looking
Statements:
Certain
statements
in this press release, including statements regarding expected future financial
results and industry growth, are forward-looking statements that involve
a
number of risks and uncertainties that could cause actual events or results
to
differ materially from those described in this press release. Factors that
could
cause actual results to differ include general business and economic conditions
and the state of the semiconductor industry; level of competition; demand
for
end-use applications products; reliance on a small group of principal customers;
continued success in technological innovations; development of alternative
flat
panel display technologies; ability to develop and protect our intellectual
property; pricing pressures including declines in average selling prices;
changes in customer order patterns; shortages in supply of key components;
changes in environmental laws and regulations; exchange rate fluctuations;
regulatory approvals for further investments in our subsidiaries; and other
risks described from time to time in the Company’s SEC filings, including its
Form F-1 dated March 13, 2006, as amended. We undertake no obligation
to publicly update or revise any forward-looking statements, whether as
a result
of new information, future events, or otherwise.
–Tables
Attached –
Himax
Technologies, Inc.
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Unaudited
Condensed Consolidated Statements of Income
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|
|
|
(These
interim financials do not fully comply with US GAAP because they
omit all
interim disclosure required by US GAAP.)
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(Figures
in Thousands of U.S. Dollars, Except Per Share
Data)
|
|
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|
Three
Months
Ended
March 31,
|
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|
Three
Months
Ended
December 31,
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|
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|
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|
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2007
|
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2006
|
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2006
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Revenues
|
|
|
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|
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Revenues
from third parties, net
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$ |
75,836
|
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|
$ |
65,427
|
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$ |
90,947
|
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Revenues
from related parties, net
|
|
|
109,055
|
|
|
|
109,432
|
|
|
|
129,932
|
|
|
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|
184,891
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|
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|
174,859
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|
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|
220,879
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|
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Costs
and expenses:
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|
|
|
|
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Cost
of revenues
|
|
|
148,830
|
|
|
|
137,298
|
|
|
|
179,214
|
|
Research
and development
|
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|
14,800
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|
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|
10,902
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|
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|
13,883
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General
and administrative
|
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|
3,000
|
|
|
|
2,058
|
|
|
|
3,180
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Sales
and marketing
|
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|
1,501
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|
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|
1,007
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|
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|
2,280
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Total
costs and expenses
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168,131
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151,265
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198,557
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Operating
income
|
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|
16,760
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|
|
|
23,594
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|
|
|
22,322
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|
|
|
|
|
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|
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Non
operating income (loss):
|
|
|
|
|
|
|
|
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|
|
|
|
Interest
income
|
|
|
1,382
|
|
|
|
205
|
|
|
|
1,812
|
|
Foreign
exchange losses, net
|
|
|
(490 |
) |
|
|
(232 |
) |
|
|
(209 |
) |
Interest
expense
|
|
|
---
|
|
|
|
(284 |
) |
|
|
---
|
|
Other
income,
net
|
|
|
42
|
|
|
|
55
|
|
|
|
61
|
|
|
|
|
934
|
|
|
|
(256 |
) |
|
|
1,664
|
|
Income
before income taxes and minority interest
|
|
|
17,694
|
|
|
|
23,338
|
|
|
|
23,986
|
|
Income
tax expense
(benefit)
|
|
|
---
|
|
|
|
1,491
|
|
|
|
(6,937 |
) |
Income
before
minority interest
|
|
|
17,694
|
|
|
|
21,847
|
|
|
|
30,923
|
|
Minority
interest, net of tax
|
|
|
325
|
|
|
|
92
|
|
|
|
178
|
|
Net
income
|
|
$ |
18,019
|
|
|
$ |
21,939
|
|
|
$ |
31,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per ordinary share and ADS
|
|
$ |
0.09
|
|
|
$ |
0.12
|
|
|
$ |
0.16
|
|
Diluted
earnings per ordinary share and ADS
|
|
$ |
0.09
|
|
|
$ |
0.12
|
|
|
$ |
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Weighted Average Outstanding Shares
|
|
|
195,761
|
|
|
|
178,575
|
|
|
|
198,154
|
|
Diluted
Weighted Average Outstanding Shares
|
|
|
195,968
|
|
|
|
182,271
|
|
|
|
199,419
|
|
Himax
Technologies, Inc.
|
Unaudited
Supplemental Financial Information
|
(Figures
in Thousands of U.S.
Dollars)
|
|
|
Three
Months
Ended
March 31,
|
|
|
Three
Months
Ended
December
31,
|
|
The
amount of share-based compensation included in applicable costs
and
expenses categories is summarized as follows:
|
|
2007
|
|
|
2006
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
|
|
|
|
|
|
|
Cost
of revenues
|
|
$ |
25
|
|
|
$ |
24
|
|
|
$ |
25
|
|
Research
and development
|
|
|
1,187
|
|
|
|
864
|
|
|
|
1,161
|
|
General
and administrative
|
|
|
151
|
|
|
|
105
|
|
|
|
151
|
|
Sales
and marketing
|
|
|
156
|
|
|
|
145
|
|
|
|
156
|
|
Total
|
|
$ |
1,519
|
|
|
$ |
1,138
|
|
|
$ |
1,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax
Technologies, Inc.
|
Unaudited
Condensed Consolidated
Balance
Sheets
|
(Figures
in
Thousands
of U.S.Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar
31,
|
|
|
Dec
31,
|
|
|
Mar
31,
|
|
|
|
2007
|
|
|
2006
|
|
|
2006
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash
and cash
equivalents
|
|
$ |
111,838
|
|
|
$ |
109,753
|
|
|
$ |
31,247
|
|
Marketable
securities available-for-sale
|
|
|
12,783
|
|
|
|
8,828
|
|
|
|
3,150
|
|
Restricted
cash equivalents and marketable securities
|
|
|
106
|
|
|
|
108
|
|
|
|
14,558
|
|
Accounts
receivable, less allowance for doubtful
accounts,
sales returns and discounts
|
|
|
108,147
|
|
|
|
112,363
|
|
|
|
73,178
|
|
Accounts
receivable from related parties, less allowance for doubtful
accounts, sales returns and discounts
|
|
|
105,740
|
|
|
|
117,254
|
|
|
|
71,540
|
|
Inventories
|
|
|
119,379
|
|
|
|
101,341
|
|
|
|
99,539
|
|
Deferred
income taxes
|
|
|
7,401
|
|
|
|
7,362
|
|
|
|
9,645
|
|
Prepaid
expenses and other current assets
|
|
|
10,276
|
|
|
|
10,343
|
|
|
|
10,328
|
|
Total
current assets
|
|
$ |
475,670
|
|
|
$ |
467,352
|
|
|
$ |
313,185
|
|
Property
and
equipment, net
|
|
|
45,767
|
|
|
|
38,895
|
|
|
$ |
25,943
|
|
Deferred
income taxes
|
|
|
11,964
|
|
|
|
11,405
|
|
|
|
145
|
|
Intangible
assets, net
|
|
|
35,865
|
|
|
|
393
|
|
|
|
74
|
|
Investments
in
non-marketable securities
|
|
|
817
|
|
|
|
817
|
|
|
|
1,813
|
|
Refundable
deposits
|
|
|
618
|
|
|
|
550
|
|
|
|
488
|
|
|
|
|
95,031
|
|
|
|
52,060
|
|
|
|
28,463
|
|
Total
assets
|
|
$ |
570,701
|
|
|
$ |
519,412
|
|
|
$ |
341,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities,
minority
interest and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$ |
---
|
|
|
$ |
---
|
|
|
$ |
38,577
|
|
Accounts
payable
|
|
|
121,459
|
|
|
|
120,407
|
|
|
|
85,489
|
|
Income
tax
payable
|
|
|
12,150
|
|
|
|
12,284
|
|
|
|
15,915
|
|
Other
accrued
expenses and other current liabilities
|
|
|
17,183
|
|
|
|
21,398
|
|
|
|
12,167
|
|
Total
current liabilities
|
|
$ |
150,792
|
|
|
$ |
154,089
|
|
|
$ |
152,148
|
|
Minority
interest
|
|
$ |
1,980
|
|
|
$ |
1,396
|
|
|
$ |
609
|
|
Stockholders’
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary
share, US$0.0001 par value, 500,000,000 shares authorized
|
|
|
20
|
|
|
|
19
|
|
|
|
18
|
|
Additional
paid-in capital
|
|
|
257,678
|
|
|
|
221,666
|
|
|
|
99,570
|
|
Accumulated
other comprehensive income
(loss)
|
|
|
(305 |
) |
|
|
(275 |
) |
|
|
37
|
|
Unappropriated
earnings
|
|
|
160,536
|
|
|
|
142,517
|
|
|
|
89,266
|
|
Total
stockholders’ equity
|
|
$ |
417,929
|
|
|
$ |
363,927
|
|
|
$ |
188,891
|
|
Total
liabilities,
minority interest and stockholders’ equity
|
|
$ |
570,701
|
|
|
$ |
519,412
|
|
|
$ |
341,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax
Technologies, Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(Figures
in Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended
March 31,
|
|
|
Three
Months
Ended December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ |
18,019
|
|
|
$ |
21,939
|
|
|
$ |
31,101
|
|
Adjustments
to
reconcile net income to net cash provided
by
operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
2,026
|
|
|
|
1,218
|
|
|
|
1,680
|
|
Write-off
of
in-process research and development
|
|
|
700
|
|
|
|
---
|
|
|
|
---
|
|
Share-based
compensation expenses
|
|
|
1,519
|
|
|
|
1,138
|
|
|
|
1,493
|
|
Minority
interest, net of tax
|
|
|
(325 |
) |
|
|
(92 |
) |
|
|
(178 |
) |
Loss
on disposal of property and equipment
|
|
|
35
|
|
|
|
31
|
|
|
|
---
|
|
Gain
on
sale of subsidiary shares and investments in non-marketable securities,
net
|
|
|
(21 |
) |
|
|
(43 |
) |
|
|
(49 |
) |
Gain
on
sale of marketable securities, net
|
|
|
(30 |
) |
|
|
(15 |
) |
|
|
(12 |
) |
Deferred
income taxes
|
|
|
---
|
|
|
|
(679 |
) |
|
|
(7,332 |
) |
Inventories
write downs
|
|
|
3,118
|
|
|
|
756
|
|
|
|
2,050
|
|
Changes
in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
6,084
|
|
|
|
6,998
|
|
|
|
(10,488 |
) |
Accounts
receivable from related parties
|
|
|
11,514
|
|
|
|
(1,879 |
) |
|
|
(45,667 |
) |
Inventories
|
|
|
(20,803 |
) |
|
|
4,708
|
|
|
|
7,527
|
|
Prepaid
expenses and other current assets
|
|
|
(85 |
) |
|
|
1,801
|
|
|
|
4,125
|
|
Accounts
payable
|
|
|
416
|
|
|
|
(20,312 |
) |
|
|
13,578
|
|
Income
tax payable
|
|
|
---
|
|
|
|
2,333
|
|
|
|
457
|
|
Other
accrued expenses and other current liabilities
|
|
|
(6,290 |
) |
|
|
(1,746 |
) |
|
|
3,067
|
|
Net
cash provided by operating activities
|
|
|
15,877
|
|
|
|
16,156
|
|
|
|
1,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of
property and equipment
|
|
|
(6,483 |
) |
|
|
(3,886 |
) |
|
|
(4,187 |
) |
Purchase
of
available-for-sales marketable securities
|
|
|
(17,581 |
) |
|
|
---
|
|
|
|
(12,678 |
) |
Sales
and
maturities of available-for-sale marketable securities
|
|
|
13,639
|
|
|
|
878
|
|
|
|
7,940
|
|
Cash
acquired
in acquisition
|
|
|
6,197
|
|
|
|
---
|
|
|
|
17
|
|
Proceeds
from
sale of subsidiary shares and investments in non-marketable securities
by
Himax Technologies Limited
|
|
|
34
|
|
|
|
124
|
|
|
|
1,537
|
|
Purchase
of
subsidiary shares from minority interest
|
|
|
(17 |
) |
|
|
(23 |
) |
|
|
(602 |
) |
Refund
from
(increase in) refundable deposits
|
|
|
(16 |
) |
|
|
223
|
|
|
|
63
|
|
Release
(pledge) of restricted cash equivalents and marketable
securities
|
|
|
2
|
|
|
|
(505 |
) |
|
|
(75 |
) |
Net
cash used in investing activities
|
|
|
(4,225 |
) |
|
|
(3,189 |
) |
|
|
(7,985 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax
Technologies, Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(Figures
in Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended
March 31,
|
|
|
Three
Months
Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2006
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds
from
initial public offering, net of issuance costs
|
|
$ |
---
|
|
|
$ |
---
|
|
|
$ |
(392 |
) |
Proceeds
from
issuance of new shares by subsidiaries
|
|
|
1,217
|
|
|
|
---
|
|
|
|
---
|
|
Acquisition
of
ordinary shares for retirement
|
|
|
(10,841 |
) |
|
|
---
|
|
|
|
(38,835 |
) |
Proceeds
from
borrowing of short-term debt
|
|
|
---
|
|
|
|
11,303
|
|
|
|
---
|
|
Repayment
of
long-term debt
|
|
|
---
|
|
|
|
(89 |
) |
|
|
---
|
|
Net
cash provided by (used in) financing activities
|
|
|
(9,624 |
) |
|
|
11,214
|
|
|
|
(39,227 |
) |
Effect
of
exchange rate changes on cash and cash equivalents
|
|
|
57
|
|
|
|
(20 |
) |
|
|
19
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
2,085
|
|
|
|
24,161
|
|
|
|
(45,841 |
) |
Cash
and cash equivalents at beginning of period
|
|
|
109,753
|
|
|
|
7,086
|
|
|
|
155,594
|
|
Cash
and cash equivalents at end of period
|
|
$ |
111,838
|
|
|
$ |
31,247
|
|
|
$ |
109,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during the period for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$ |
---
|
|
|
$ |
283
|
|
|
$ |
---
|
|
Income
taxes
|
|
$ |
17
|
|
|
$ |
15
|
|
|
$ |
110
|
|
Supplemental
disclosures of non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
for purchase of equipment and construction in progress
|
|
$ |
1,384
|
|
|
$ |
893
|
|
|
$ |
2,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value of
common stocks issued by Himax Display, Inc. in the acquisition
of
Integrated Microdisplays Limited
|
|
$ |
---
|
|
|
$ |
---
|
|
|
$ |
538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value of
ordinary shares issued by Himax Technologies, Inc. in the acquisition
of
Wisepal Technologies, Inc.
|
|
$ |
45,031
|
|
|
$ |
---
|
|
|
$ |
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax
Technologies, Inc.
|
|
Unaudited
Supplemental Data – Reconciliation Schedule
|
|
(Figures
in Thousands of U.S. Dollars, Except Per Share
Data)
|
|
|
|
Gross
Margin and Operating Margin Excluding Share-based Compensation
and
Acquisition-Related Charges:
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended
March 31,
|
|
|
Three
Months
Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2006
|
|
Revenues
|
|
$ |
184,891
|
|
|
$ |
174,859
|
|
|
$ |
220,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
36,061
|
|
|
|
37,561
|
|
|
|
41,665
|
|
Add:
Share-based compensation – Cost of revenues
|
|
|
25
|
|
|
|
24
|
|
|
|
25
|
|
Gross
profit
excluding share-based compensation
|
|
|
36,086
|
|
|
|
37,585
|
|
|
|
41,690
|
|
Gross
margin
excluding share-based compensation
|
|
|
19.5 |
% |
|
|
21.5 |
% |
|
|
18.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
16,760
|
|
|
|
23,594
|
|
|
|
22,322
|
|
Add:
Share-based compensation
|
|
|
1,519
|
|
|
|
1,138
|
|
|
|
1,493
|
|
Operating
income excluding share-based compensation
|
|
|
18,279
|
|
|
|
24,732
|
|
|
|
23,815
|
|
Add:
Acquisition-related charges – In-process R&D write off
|
|
|
700
|
|
|
|
---
|
|
|
|
---
|
|
Add:
Acquisition-related charges –Intangible assets
amortization
|
|
|
187
|
|
|
|
---
|
|
|
|
---
|
|
Operating
income excluding share-based compensation
and
acquisition-related charges
|
|
|
19,166
|
|
|
|
24,732
|
|
|
|
23,815
|
|
Operating
margin excluding share-based compensation
and
acquisition-related charges
|
|
|
10.4 |
% |
|
|
14.1 |
% |
|
|
10.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Gross
margin
excluding share-based compensation equals gross profit excluding
share-based compensation divided by
revenues
|
*
|
Operating
margin excluding share-based compensation and acquisition-related
charges equals operating income excluding share-based
compensation and acquisition-related charges divided by
revenues
|
Diluted
Earnings Per Share Excluding Share-based Compensation and
Acquisition-Related Charges:
|
|
|
|
|
|
|
Three
Months
Ended
March 31,
|
|
|
|
2007
|
|
Diluted
GAAP
EPS
|
|
$ |
0.09
|
|
Add:
Estimated
share-based compensation per diluted share
|
|
$ |
0.01
|
|
Add:
Estimated
acquisition-related charges per diluted share
|
|
$ |
---
|
|
|
|
|
|
|
Diluted
non
GAAP EPS excluding share-based compensation and acquisition-related
charges
|
|
$ |
0.10
|
|
|
|
|
|
|
Numbers
do not
add up due to rounding
|
|
LIVE
CALL
INFORMATION
|
REPLAY
INFORMATION
|
Thursday,
May 10, 2007 7AM Taiwan
Wednesday,
May
9, 2007 7PM NYC
Listener
Call Number: 1-201-689-8560
|
Accessible
2
hours after the call through
noon
on
Thursday, May 17, 2007 Taiwan
Replay
Number:
1-201-612-7415
Account
number: 3055
Conference
ID
number: 238293
|
Operator
Intro: Welcome to Himax Technologies first quarter 2007 results
Conference Call. At this time, all participants are in a listen-only
mode. Later we will conduct a question and answer
session. At that time, if you have a question, you will need to press
the star 1 on your push button phone. The call is scheduled for one
hour.
As
a reminder, this
conference is being recorded today. A replay will be available 2
hours after the call today, through noon on Thursday, May 17, 2007 in
Taiwan. The replay dial-in number is 1-201-612-7415 with account
number 3055 and conference ID number 238293. The replay will also be
accessible at www.himax.com.tw.
Thank
you operator.
Welcome everyone to Himax’s first quarter 2007 earnings call. Joining
us from the company are Mr. Jordan
Wu, President and Chief Executive Officer, and Mr. Max Chan, Chief
Financial Officer. After the company’s prepared comments we will have
time for any questions.
If
you have not yet
received a copy of today’s results release, please call The Ruth Group at
646-536-7003. Or you can get a copy off of Himax’s
website.
Before
we begin the
formal remarks, the Company’s attorneys advise that certain statements in this
conference call, including statements regarding expected future financial
results and industry growth, are forward-looking statements that involve
a
number of risks and uncertainties that could cause actual events or results
to
differ materially from those described in this conference call.
Factors
that could
cause actual results to differ include general business and economic conditions
and the state of the semiconductor industry; level of competition; demand
for
end-use applications products; reliance on a small group of principal customers;
continued success in technological innovations; ability to develop and protect
our intellectual property; pricing pressures including declines in average
selling prices; changes in customer order patterns; shortages in supply of
key
components; changes in environmental laws and regulations; exchange rate
fluctuations; regulatory approvals for further investments in our subsidiaries;
and other risks described from time to time in the Company’s SEC filings,
including its Form F-1 dated March 13, 2006, as amended.
The
Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
At
this time, I would now like to turn
the call over to Mr. Jordan
Wu. Please go ahead, sir.
Thank
you David and thank you everyone for joining us on today’s
call.
I
will start with a
brief review of Himax’s performance during the first quarter of 2007 and discuss
the outlook for the second quarter of 2007. Max, our CFO, will then
provide further details on our financial performance.
We
closed the
Wisepal acquisition on Feb 1st, 2007 and
therefore
we are reporting the first quarter results on a consolidated basis
today.
Our
first quarter
revenues, gross margin and EPS were all in line with our previous
guidance.
Our
first quarter
net revenue was 184.9 million, representing a 6% growth year over year, and
a
16% decline quarter over quarter. The decline in revenue reflects the
traditionally seasonal lower demand and fewer working days in the holiday
month
of February. Moreover, demand for large panel driver IC decreased as a result
of
large panel maker’s decision to lower fab utilization for better inventory
control.
In
terms of customer
mix, revenues from related parties were $109.1 million, about 59% of total
revenue in the first quarter. Revenues from unrelated parties were
$75.8 million, or 41% of total revenue.
Revenues
from large
panel display drivers were down 22% sequentially and accounted for approximately
82% of our total revenues in the first quarter. Demand for both IT and TV
related drivers declined with TV demand showing more significant
seasonality.
Revenues
from small-
and medium-sized display drivers grew 25% sequentially. This is primarily
due to
better sales in both mobile phone and consumer electronic products, share
gains
at certain first tier Japanese customers, and acquisition of Wisepal. Small-
and
medium-sized revenue accounted for about 16% of our total
revenues. This is up from about 11% in the fourth quarter of last
year.
Our
gross margin was
19.5% in the first quarter of 2007, up 60 basis points from the previous
quarter. Despite the tough pricing environment, we are pleased that we were
able
to improve our gross margin as we continued to diversify product mix and
lower
our cost.
Our
GAAP operating
margin declined sequentially from 10.1% to 9.1% primarily due to lower revenue
base in the first quarter. Also, the expense of acquisition-related charges
negatively impacted our operating margin. Excluding share-based compensation
and
acquisition-related charges, our non-GAAP operating margin decreased
sequentially from 10.8% to 10.4%. Max will provide more information on the
Wisepal acquisition-related charges.
Our
first quarter
GAAP income before tax and minority interest came in at $17.7 million as
compared to $24.0 million in the previous quarter. The decline is due primarily
to lower revenue. Excluding share-based compensation and acquisition-related
charges, our non-GAAP income before tax and minority interest was $20.1 million,
as compared to $25.5 million in the previous quarter.
Our
GAAP net income
came in at $18.0 million as compared to $31.1 million in the previous quarter.
EPS was $0.09, as compared to $0.16 in the previous quarter. On top of lower
revenue, the sequential decline was primarily due to tax benefits of $6.9
million recorded in the fourth quarter of 2006. We estimated our 2007 effective
tax rate to be around 0%, and therefore we recorded net tax benefit or expense
of zero in the first quarter.
Excluding
share-based compensation and acquisition-related charges, our non-GAAP net
income was $20.4 million, as compared to $32.6 million in the fourth
quarter. Non-GAAP EPS was $0.10 as compared to $0.16 in the previous
quarter.
Now
let me talk about our guidance for the second quarter of 2007.
We
expect sales to improve in the second quarter. Demand for our large panel
drivers is expected to increase as our customers are raising fab utilization
to
fulfill increasing demand for all large panel products across the board.
Also,
we expect sales of our small- and medium-sized
drivers
to remain
healthy as several
of our design-in
projects
have
begun
mass production.
Overall,
we
expect
revenue to grow 17-20% sequentially in the second quarter. Gross
margin is expected
to remain flat
or decline
slightly. Diluted
GAAP EPS is expected
to improve
to $0.10
to $0.11 as
a result of higher
revenue, while non-GAAP
EPS would
be $0.11
to $0.12
excluding share-based
compensation and amortization on acquisition-related
intangibles.
Now
let
me turn over to Max Chan, our CFO, for some financial
details.
Before
getting into the first quarter
financials, I want to note that when discussing
comparisons
between the fourth
quarter 06 and the
first quarter 07, there were a few
updates
to the fourth quarter financials. Changes
are primarily due to higher
estimated tax exemption and reclassifications in certain accounts. These
were filed as a 6K with SEC today US
time. Revenues remain
$220.9
million for the fourth quarter 2006.
Net income
is updated to $0.16
per share
for the fourth quarter 2006 as compared to $0.15
per share
presented previously on February 13th,
2007.
Now
let me move on to the detailed Q1
review.
Net
revenues
in the first
quarter were $184.9
million, representing a year-on-year
growth of 6%
and a sequential decline
of 16%.
The
gross margin had increased
to 19.5%
from 18.9%
a quarter ago. Our
gross margin improved
sequentially primarily
because
our small-
and medium-sized driver ICs,
which typically enjoyed higher gross margins,
accounted for a higher percentage of
our sales. Small- and
medium-sized panel drivers accounted for approximately
16%
of
our revenue in the period, up
from approximately 11%
a quarter ago.
Our
GAAP operating expense was
$19.3
million in the first quarter,
flat as
compared to the
previous
quarter.
We
had identified 3 intangible assets
from the Wisepal
acquisition –
Core/developed Technology, In-process
R&D and
Customer Relations. In-Process R&D was valued at approximately
$0.7
million and was written off as a
one-time charge. Core/developed Technology and Customer Relations will be
amortized over useful life of 7 years. Amortization on these two intangible
assets will be approximately
$1
million per annum.
Our
non-GAAP operating expense,
excluding share-based compensation and
acquisition-related charges was approximately $16.9 million
in
the first quarter, down from
approximately
$17.9
million in
previous
quarter. Share-based
compensation was
approximately $1.5
million, and acquisition-related
charges
were
approximately $0.9 million. We
have provided detailed breakdown
for these charges
at
the end of the press
release.
Capital
expenditure
for the first quarter was approximately $6.5 million, mainly for the purchase
of
software, equipments and property relating to our headquarters.
The
acquisition of Wisepal has increased
our headcount by approximately
50
on Feb. 1. Our total headcount
became approximately
950 at
the end of the first
quarter.
Jordan
provided our
2Q07 outlook earlier. We are basing that guidance on approximately 198.0
million
diluted weighted average outstanding shares. For 2Q07, share-based
compensation is
expected
to be approximately
$1.5 million
and
acquisition-related charges are expected to be approximately $0.3
million.
Operator,
that concludes our prepared remarks. We can now take any
questions.