Parade Technologies Reports First Quarter 2023 Financial Results

Financial Highlights:

  • Q123 consolidated revenue US$99.99 million, compared with US$210.72 million in the year-ago quarter
  • Q123 consolidated net income US$11.62 million; Basic and Fully diluted after-tax EPS US$0.15 (NT$4.51) and US$0.15 (NT$4.46), respectively

Parade Technologies, Ltd. (Taipei Exchange: 4966.TWO), a leading high-speed interface IC supplier, today announced financial results for the first quarter fiscal year 2023 ended March 31, 2023, and provided guidance for the second quarter of fiscal year 2023.

Consolidated revenue was US$99.99 million and consolidated net income was US$11.62 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.15 (NT$4.51) and US$0.15 (NT$4.46), respectively. These results compared to consolidated revenue US$210.72 million and consolidated net income of US$59.19 million, or US$0.75 (NT$20.91) and US$0.73 (NT$20.55) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the first quarter of 2023 consolidated revenue decreased 1.44% sequentially and was down 52.55% year-over-year.

The gross profit in the first quarter of 2023 was US$44.04 million, representing a decrease of 1.42% from the previous quarter and a decrease of 56.30% compared to the same quarter of last year.

On February 22, 2023, Parade announced a new offering in its high-speed connectivity product category. The PS5510 which is an updated version of the FL5500 USB hub controller featuring ultra-low power operation and hardware-accelerated secure firmware updates. PS5510 is compliant with the USB 3.2 specification and offers 5 SuperSpeed+ ports (1 up/4 down), each capable of providing 10Gbps data connectivity. The upstream port and 2 downstream ports support the features required for USB-C connections while all of the ports may be used for legacy USB Type-A connections. One additional USB 2.0-only port is provided for an additional hard-wired device, often needed in the target applications. With its ultra-low power operation and on-chip RSA/SHA-256 hardware to support secure in-field firmware upgrades, PS5510 is ideal for port expansion on USB4 and Thunderbolt™ docking solutions as well as monitors and mini-docks/dongles.

On March 22, 2023, Parade announced a new offering in its eDP Timing Controller with Embedded Driver (TED) product category. The TC3230 features support for higher resolutions as well as the most advanced Embedded DisplayPort features for power savings. TC3230 is compliant with the eDP 1.5 standard and supports Multi-SST Operation (MSO), Panel Self-Refresh, DSC 1.2a, ALPM, and more. The TC3220 is configurable to support all panel resolutions up to 2560×1600 using an 18 or 24-bit color format. Adding a second TC3230, in MSO+DSC mode, enables panel resolutions up to 3840×2160. With support for the standard based embedded video interface protocols offered by major CPU, GPU and SoC vendors, system implementation is straight-forward. The integrated source drivers support up to 2562 output channels with support for dual-gate and MUX2/MUX3 sub-pixel driving structures. The TC3230 is designed for Chip on Glass (COG) application on LTPS (Low Temperature Polycrystalline Silicon), a-Si (Amorphous Silicon) or Oxide type TFT panels. It requires no external crystal or timing reference, includes a programmable gamma buffer, as well as Parade’s exclusive Smart-Backlight™ feature for additional color and power optimization. The fully programmable row and column driver timing enables the TC3230 to serve a broad range of panels types, and it provides synchronization signals that support a wide range of touch controllers.

On March 29, 2023, Parade announced the availability of the PS8838 USB 3.2 / DP 2.1 MUX and PS8839 USB 3.2 / DP 2.1 DeMUX for commercial and consumer PCs, host systems and peripherals. PS8838 features a DisplayPort 2.1 and USB 3.2 Gen 2×1 MUX with retiming, targeting USB-C host systems and docks. PS8839 is a DeMUX/Retimer device optimized for sink applications including docks and peripherals. The PS8838 and PS8839 are fully compliant with USB-IF USB 3.2 specification supporting up to Gen 2×1 or 10Gbps and VESA DP 2.1 standard up to UHBR20. The devices support low power consumption for standby and low power states, greatly extending the battery life of mobile devices and enabling system EnergyStar compliance.

Based on current business outlook, Parade is providing the following guidance for the second quarter of fiscal 2023:

  • Revenue: US$98 ~110 Million
  • Gross Margin: 43% ~47%
  • Operating Expense: US$29.5 ~32.5 Million

The financial figures detailed above for the first quarter of 2023 have been reviewed by independent accountants.

About Parade Technologies, Ltd.

Parade Technologies, Ltd. is a leading supplier of mixed-signal ICs for a variety of popular display and high-speed interface standards used in computers, consumer electronics and display panels. The fabless semiconductor company was founded in 2005 and publicly listed on Taipei Exchange (“TPEx”) in 2011 (stock code: 4966). Parade’s portfolio of IC products serves the growing demand for HDMI™, DisplayPort™, SATA, and USB ICs for display, storage and interface applications.

In addition to being a technology innovator, Parade is an active participant and leader in industry standards-setting organizations. Parade Technologies, Inc., a wholly owned US-based subsidiary of Parade Technologies, Ltd., is a member of VESA (Video Electronics Standard Association). Parade Technologies, Inc. has made key contributions to the development of VESA’s DisplayPort™ digital video interface standard.

Parade leverages its close relationships with market leading Tier-1 OEMs to develop ICs that provide unique system capabilities. Many of the company’s devices integrate proprietary technologies that offer superior system signal integrity, advanced system integration and enhanced power efficiency. As a result of the company’s “standards-plus” design philosophy, Parade ICs have been designed into products offered by nearly every leading computer and display vendor worldwide.

Parade Technologies, Ltd. and Subsidiaries.

The reader is advised that these consolidated financial statements have been prepared originally in NT$ and conformed with the adoption of IFRSs. In the event of any differences between NT$ and US$ version, the NT$ version shall prevail.

UNAUDITED CONSOLIDATED INCOME STATEMENTS

USD in Thousands NTD in Thousands
Sequential Quarter Three Months ended Sequential Quarter Three Months ended
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31, Dec 31, Mar 31, Mar 31,

2023

2022

2023

2022

2023

2022

2023

2022

 
Revenue

 

99,990

 

 

101,450

 

99,990

 

 

210,723

 

 

3,039,712

 

 

3,181,446

 

3,039,712

 

 

5,898,143

 

Cost of goods sold

 

55,947

 

 

56,774

 

55,947

 

 

109,948

 

 

1,700,797

 

 

1,780,425

 

1,700,797

 

 

3,077,451

 

Gross profit

 

44,043

 

 

44,676

 

44,043

 

 

100,775

 

 

1,338,915

 

 

1,401,021

 

1,338,915

 

 

2,820,692

 

Research & development expenses

 

19,892

 

 

20,074

 

19,892

 

 

21,226

 

 

604,717

 

 

629,511

 

604,717

 

 

594,124

 

Sales & marketing expenses

 

7,198

 

 

6,469

 

7,198

 

 

8,214

 

 

218,822

 

 

202,857

 

218,822

 

 

229,911

 

General & administrative expenses

 

4,993

 

 

4,114

 

4,993

 

 

6,449

 

 

151,797

 

 

129,023

 

151,797

 

 

180,508

 

Expected credit loss

 

(84

)

 

-

 

(84

)

 

-

 

 

(2,549

)

 

-

 

(2,549

)

 

-

 

Total operating expenses

 

32,167

 

 

30,657

 

32,167

 

 

35,889

 

 

977,885

 

 

961,391

 

977,885

 

 

1,004,543

 

Operating income

 

11,876

 

 

14,019

 

11,876

 

 

64,886

 

 

361,030

 

 

439,630

 

361,030

 

 

1,816,149

 

Non-operating income and (expenses)

 

1,268

 

 

1,800

 

1,268

 

 

(30

)

 

38,560

 

 

56,441

 

38,560

 

 

(825

)

Income before income taxes

 

13,144

 

 

15,819

 

13,144

 

 

64,856

 

 

399,590

 

 

496,071

 

399,590

 

 

1,815,324

 

Income tax expense

 

1,523

 

 

1,335

 

1,523

 

 

5,669

 

 

46,299

 

 

41,861

 

46,299

 

 

158,689

 

Net income

 

11,621

 

 

14,484

 

11,621

 

 

59,187

 

 

353,291

 

 

454,210

 

353,291

 

 

1,656,635

 

EPS - Basic (In Dollar)

$

0.15

 

$

0.18

$

0.15

 

$

0.75

 

$

4.51

 

$

5.67

$

4.51

 

$

20.91

 

Shares used in computing EPS-Basic (In thousands)

 

78,373

 

 

80,160

 

78,373

 

 

79,212

 

 

78,373

 

 

80,160

 

78,373

 

 

79,212

 

EPS - Diluted (In Dollar)

$

0.15

 

$

0.18

$

0.15

 

$

0.73

 

$

4.46

 

$

5.60

$

4.46

 

$

20.55

 

Shares used in computing EPS-Diluted (In thousands)

 

79,207

 

 

81,067

 

79,207

 

 

80,602

 

 

79,207

 

 

81,067

 

79,207

 

 

80,602

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

As of March 31, 2023 and 2022
USD in Thousands NTD in Thousands
Mar 31, Mar 31, Mar 31, Mar 31,

2023

 

2022

 

2023

 

2022

 

Current assets
Cash & cash equivalents

185,110

 

340,632

 

5,636,592

 

9,752,306

 

Accounts receivable, net

47,877

 

56,022

 

1,457,865

 

1,603,903

 

Inventories, net

131,991

 

93,867

 

4,019,123

 

2,687,412

 

Other current assets

23,515

 

16,992

 

716,041

 

486,468

 

Total current assets

388,493

 

507,513

 

11,829,621

 

14,530,089

 

Non-current assets
Property, plant and equipment, net

16,074

 

17,800

 

489,440

 

509,608

 

Right-of-use assets

6,018

 

8,138

 

183,259

 

232,999

 

Intangible assets

103,274

 

108,218

 

3,144,691

 

3,098,289

 

Deferred income tax assets

11,664

 

9,653

 

355,164

 

276,374

 

Other non-current assets

147,484

 

76,667

 

4,490,886

 

2,194,962

 

Total non-current assets

284,514

 

220,476

 

8,663,440

 

6,312,232

 

Total Assets

673,007

 

727,989

 

20,493,061

 

20,842,321

 

 
Current Liabilities
Accounts payable

19,793

 

43,215

 

602,705

 

1,237,258

 

Other payables

30,540

 

40,844

 

929,938

 

1,169,376

 

Current income tax liabilities

9,281

 

24,445

 

282,606

 

699,860

 

Lease liabilities - current

3,292

 

3,487

 

100,249

 

99,818

 

Other current liabilities

6,792

 

10,716

 

206,792

 

306,815

 

Total current liabilities

69,698

 

122,707

 

2,122,290

 

3,513,127

 

Non-current Liabilities
Lease liabilities - non-current

2,726

 

4,652

 

83,010

 

133,181

 

Total non-current liabilities

2,726

 

4,652

 

83,010

 

133,181

 

Equity
Ordinary shares

26,738

 

26,742

 

811,832

 

811,956

 

Capital reserves

136,752

 

146,220

 

4,220,434

 

4,387,899

 

Retained earnings

508,057

 

492,747

 

15,025,235

 

14,627,390

 

Other equity

(11,301

)

(20,527

)

73,644

 

(1,393,138

)

Treasury shares

(59,663

)

(44,552

)

(1,843,384

)

(1,238,094

)

Total equity

600,583

 

600,630

 

18,287,761

 

17,196,013

 

Total liabilities and equity

673,007

 

727,989

 

20,493,061

 

20,842,321

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For three months ended March 31, 2023 and 2022
USD in Thousands NTD in Thousands
Mar 31, Mar 31, Mar 31, Mar 31,

2023

 

2022

 

2023

 

2022

 

Cash flows from operating activities
Income before income tax for the period

13,144

 

64,856

 

399,590

 

1,815,324

 

Depreciation and amortization (including the right-of-use assets)

5,319

 

5,356

 

161,703

 

149,898

 

Expetced credit loss

84

 

-

 

2,549

 

-

 

Loss on disposal of equipment

-

 

1

 

-

 

33

 

Loss on disposal of intangible assets

47

 

-

 

1,422

 

-

 

Share-based compensation cost

9,653

 

9,097

 

291,744

 

254,632

 

Interest income

(1,525

)

(25

)

(46,376

)

(692

)

Income and expenses having no effect on cash flows

13,578

 

14,429

 

411,042

 

403,871

 

Accounts receivable

(13,254

)

(5,639

)

(403,575

)

(161,444

)

Inventories

13,502

 

(18,088

)

411,136

 

(517,868

)

Other current assets

(11,653

)

(10,577

)

(285,910

)

(298,996

)

Net changes in assets relating to operating activities

(11,405

)

(34,304

)

(278,349

)

(978,308

)

Accounts payable

6,791

 

2,369

 

206,778

 

67,838

 

Other payables

(10,023

)

(8,695

)

(305,192

)

(248,956

)

Other current liabilities

(6,683

)

673

 

(203,487

)

19,264

 

Net changes in liabilities relating to operating activities

(9,915

)

(5,653

)

(301,901

)

(161,854

)

Cash inflow generated from operations

5,402

 

39,328

 

230,382

 

1,079,033

 

Interest received

1,526

 

25

 

46,376

 

692

 

Income taxes paid

(5,021

)

(333

)

(152,638

)

(9,311

)

Net cash provided by operating activities

1,907

 

39,020

 

124,120

 

1,070,414

 

Cash flows from investing activities
Acquisition of equipment

(1,766

)

(1,840

)

(53,688

)

(51,490

)

Acquisition of intangible assets

(134

)

(7

)

(4,068

)

(194

)

Decrease in refundable deposits

6,784

 

24

 

206,557

 

693

 

Increase in other prepayments

(2,070

)

(2,238

)

(62,929

)

(62,653

)

Net cash flows provided by (used in) investing activities

2,814

 

(4,061

)

85,872

 

(113,644

)

Cash flows from financing activities
Proceeds from exercise of employee stock options

-

 

2,372

 

-

 

66,397

 

Repayment of the principal portion of lease liabilities

(771

)

(791

)

(23,431

)

(22,149

)

Treasury shares reissued to employees

10,422

 

11,789

 

310,226

 

327,175

 

Distribution of cash dividends

(60,062

)

(40,752

)

(1,724,498

)

(1,147,980

)

Cash dividend regain from canceled share-based compensation

19

 

16

 

555

 

479

 

Net cash flows used in financing activities

(50,392

)

(27,366

)

(1,437,148

)

(776,078

)

Effect of exchange rate changes

3,644

 

606

 

(111,636

)

369,871

 

Net (decrease) increase in cash and cash equivalents

(42,027

)

8,199

 

(1,338,792

)

550,563

 

Cash and cash equivalents at beginning of period

227,137

 

332,433

 

6,975,384

 

9,201,743

 

Cash and cash equivalents at end of period

185,110

 

340,632

 

5,636,592

 

9,752,306

 

 

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