EXHIBIT 99.1
Third Quarter 2008 Highlights: * Small- and medium-sized display drivers achieved record highs in both revenue and percentage of total revenues * Became Taiwan's largest display driver vendor for small-and medium-sized TFT-LCD applications * Non-driver business achieved record highs in revenue and percentage of total revenues
TAINAN, Taiwan, Nov. 3, 2008 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. ("Himax" or "Company") (Nasdaq:HIMX) today reported financial results for the third quarter ended September 30, 2008.
For the third quarter 2008, Himax reported net revenues of $230.1 million, representing a 5.5% decrease over $243.3 million for the third quarter of 2007 and a 6.8% decrease over the $246.9 million for the second quarter of 2008.
Gross margin was 24.5% in the third quarter of 2008, up 2 percentage points year-over-year and down 1 percentage point sequentially.
Operating income was $15.0 million, down 24.7% from $19.9 million in the same period last year, and down 57.0% from $34.8 million in the previous quarter.
Net income for the third quarter of 2008 was $17.7 million or $0.09 per diluted share, down from $21.8 million or $0.11 per diluted share in the third quarter of 2007, and down from $37.7 million or $0.20 per diluted share in the second quarter of 2008.
Excluding share-based compensation and acquisition-related charges, non-GAAP operating income was $30.6 million, down from $36.2 million in the same period last year, and down from $37.8 million in the previous quarter.
Non-GAAP net income was $32.5 million or $0.17 per diluted share, down from $37.4 million or $0.19 per diluted share in the third quarter of 2007, and down from $39.8 million from $0.21 per diluted share in the second quarter of 2008.
Reconciliation of gross margin, operating margin, net income and diluted EPS excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to GAAP gross margin, GAAP operating margin, GAAP net income and diluted GAAP EPS, most comparable GAAP figure, is set out in the attached reconciliation schedule.
Jordan Wu, President and Chief Executive Officer of Himax, commented, "The third quarter of 2008 was a remarkable quarter for our small- and medium-sized display drivers and non-driver businesses. Both achieved record highs in revenues and percentage of total revenues. Our small- and medium-sized drivers accounted for 21.0% of total revenues this quarter, compared to 12.4% last quarter. During the third quarter there was strong demand for our handset display drivers from both the Chinese market and the worldwide brands. Many of the recently launched, well-known, high-end cell phones have Himax display drivers inside. On top of that, during the third quarter we became Taiwan's largest display driver vendor for small- and medium-sized TFT-LCD applications."
Mr. Wu continued, "We've also made great progress in non-driver products. Our non-driver products accounted for 6.6% of total revenues this quarter, compared with 5.4% last quarter. Backed by our strong balance sheet, we remain fully committed to our long-term goal of being the world's leading semiconductor solution provider in the flat panel display industry. We became a world leader in display driver market which is a major step toward achieving our goal. TV and monitor chipsets and LCOS pico projector product lines will continue to be essential areas for us to broaden our product portfolio. Following years of R&D, we have not only commenced commercial production in both areas, we believe our product offerings are competitive and we are well-positioned in those markets. We anticipate that both product lines will bring increasingly positive contributions to our top and bottom lines next year."
Looking forward, Mr. Wu added, "We anticipate another challenging quarter resulting from the tightening credit and consumer weakness in the global economy. All of our customers have announced plans to further reduce capacity utilization in the fourth quarter which has negatively impacted our near-term revenue and profit outlook. We expect fourth quarter revenues to decline by 23-28% sequentially, gross margin to decline by 2-3 percentage points and GAAP EPS to be in the range of $0.06-0.08. Given the limited visibility we are facing, our actual fourth quarter results could depart from what we state today, with both upside and downside risks."
Investor Conference Call / Webcast Details
The Company's management will review detailed third quarter 2008 results on Monday, November 3, 2008 at 6:00 PM EST (7:00 AM, Tuesday, November 4, Taiwan time). The conference dial-in numbers are +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 299513.
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 solution, power management ICs and LCOS microdisplays. Based in Tainan, Taiwan, the Company has regional offices in Hsinchu and Taipei, Taiwan; Ninbo, Foshan, Suzhou and Shenzhen, China; Yokohama, Japan; Anyangsi Kyungkido, and Matsusaka, South Korea; and Irvine California, USA.
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, but not limited to, 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 those risks identified in the section entitled "Risk Factors" in its Form 20-F for the year ended December 31, 2007 filed with SEC on June 20, 2008, 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.
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
(These interim financials do not fully comply with U.S. GAAP because
they omit all interim disclosure required by U.S. GAAP)
(Amounts in Thousands of U.S. Dollars, Except Per Share Data)
Three
Three Months Months
Ended Ended
September 30, June 30,
2008 2007 2008
------- ------- -------
Revenues
Revenues from third parties, net $95,468 $91,960 $92,430
Revenues from related parties, net 134,598 151,377 154,437
------- ------- -------
230,066 243,337 246,867
------- ------- -------
Costs and expenses:
Cost of revenues 173,761 188,626 183,797
Research and development 30,551 26,171 20,532
General and administrative 6,427 4,891 5,105
Sales and marketing 4,341 3,758 2,622
------- ------- -------
Total costs and expenses 215,080 223,446 212,056
------- ------- -------
Operating income 14,986 19,891 34,811
------- ------- -------
Non operating income (loss):
Interest income 714 1,429 924
Foreign exchange losses, net (1,089) (29) (522)
Other income, net 342 166 762
------- ------- -------
(33) 1,566 1,164
------- ------- -------
Earnings before income taxes
and minority interest 14,953 21,457 35,975
Income tax benefit (1,697) -- (702)
------- ------- -------
Income before minority interest 16,650 21,457 36,677
Minority interest, net of tax 1,036 316 1,037
------- ------- -------
Net income $17,686 $21,773 $37,714
======= ======= =======
Basic earnings per ordinary share and ADS $0.09 $0.11 $0.20
======= ======= =======
Diluted earnings per ordinary share and ADS $0.09 $0.11 $0.20
======= ======= =======
Basic Weighted Average Outstanding Shares 191,306 197,690 191,301
Diluted Weighted Average Outstanding Shares 191,629 197,733 192,552
Himax Technologies, Inc.
Unaudited Supplemental Financial Information
(Amounts in Thousands of U.S. Dollars)
Three
The amount of share-based compensation Three Months Months
included in applicable statements of Ended Ended
income categories is summarized September 30, June 30,
as follows: 2008 2007 2008
------- ------- -------
Share-based compensation
Cost of revenues $365 $355 $28
Research and development 10,558 11,795 1,935
General and administrative 2,141 1,718 232
Sales and marketing 1,998 1,842 244
Income tax benefit (634) (622) --
------- ------- -------
Total $14,428 $15,088 $2,439
======= ======= =======
The amount of acquisition-related charges
included in applicable statements of
income categories is summarized
as follows:
Research and development $239 $250 $239
Sales and marketing 290 304 289
Income tax benefit (162) -- (920)
------- ------- -------
Total $367 $554 $(392)
======= ======= =======
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
(Amounts in Thousands of U.S. Dollars, Except Per Share Data)
Nine Months Ended
September 30,
2008 2007
-------- --------
Revenues
Revenues from third parties, net $265,359 $270,072
Revenues from related parties, net 443,162 381,039
-------- --------
708,521 651,111
-------- --------
Costs and expenses:
Cost of revenues 530,507 514,908
Research and development 71,629 56,299
General and administrative 15,402 11,113
Sales and marketing 9,521 7,254
-------- --------
Total costs and expenses 627,059 589,574
-------- --------
Operating income 81,462 61,537
-------- --------
Non operating income (loss):
Interest income 2,415 4,325
Foreign exchange losses, net (241) (483)
Other income, net 1,196 367
-------- --------
3,370 4,209
-------- --------
Earnings before income taxes and minority interest 84,832 65,746
Income tax benefit (1,697) --
-------- --------
Income before minority interest 86,529 65,746
Minority interest, net of tax 3,008 888
-------- --------
Net income $89,537 $66,634
======== ========
Basic earnings per ordinary share and ADS $0.47 $0.34
======== ========
Diluted earnings per ordinary share and ADS $0.47 $0.34
======== ========
Basic Weighted Average Outstanding Shares 191,383 197,671
Diluted Weighted Average Outstanding Shares 191,869 197,834
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 Nine Months Ended
is summarized as follows: September 30,
2008 2007
-------- --------
Share-based compensation
Cost of revenues $421 $405
Research and development 14,365 14,183
General and administrative 2,606 2,020
Sales and marketing 2,483 2,154
Income tax benefit (634) (622)
-------- --------
Total $19,241 $18,140
======== ========
The amount of acquisition-related charges included
in applicable statements of income categories
is summarized as follows:
Research and development $718 $2,273
Sales and marketing 868 810
Income tax benefit (1,082) --
-------- --------
Total $504 $3,083
======== ========
Himax Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Amounts in Thousands of U.S. Dollars, Except Per Share Data)
Sept 30, June 30, Dec 31,
2008 2008 2007
-------- -------- --------
Assets
Current assets:
Cash and cash equivalents $123,139 $90,404 $94,780
Marketable securities
available-for-sale 8,973 10,638 15,208
Restricted marketable securities 2,113 2,066 97
Accounts receivable, less allowance
for doubtful accounts, sales returns
and discounts 105,403 105,690 88,682
Accounts receivable from related
parties, less allowance for doubtful
accounts, sales returns and discounts 145,612 173,539 194,902
Inventories 115,411 131,377 116,550
Deferred income taxes 12,776 13,546 12,684
Prepaid expenses and
other current assets 13,814 9,828 15,369
-------- -------- --------
Total current assets $527,241 $537,088 $538,272
-------- -------- --------
Property, plant and equipment, net 47,808 47,368 46,180
Deferred income taxes 20,893 22,153 20,714
Goodwill 26,878 26,878 26,878
Intangible assets, net 11,114 11,650 12,721
Investments in non-marketable securities 11,619 11,619 7,138
Refundable deposits
and prepaid pension costs 876 938 859
-------- -------- --------
119,188 120,606 114,490
-------- -------- --------
Total assets $646,429 $657,694 $652,762
======== ======== ========
Liabilities, Minority Interest
and Stockholders' Equity
Current liabilities:
Accounts payable $120,846 $152,754 $147,221
Income tax payable 12,511 14,945 19,147
Other accrued expenses
and other current liabilities 25,073 19,799 19,231
-------- -------- --------
Total current liabilities $158,430 $187,498 $185,599
Accrued pension liabilities $220 $234 $218
Deferred income taxes $3,488 $3,627 $4,547
-------- -------- --------
Total liabilities $162,138 $191,359 $190,364
-------- -------- --------
Minority interest $6,287 $7,185 $11,089
-------- -------- --------
Stockholders' equity:
Ordinary shares, US$0.0001 par value,
500,000,000 shares authorized;
192,488,685, 190,910,649, and
191,979,691 shares issued and
outstanding at September 30, 2008,
June 30, 2008, and December 31, 2007,
respectively 19 19 19
Additional paid-in capital 240,006 237,788 235,894
Accumulated other
comprehensive income(loss) (144) 906 (7)
Unappropriated retained earnings 238,123 220,437 215,403
-------- -------- --------
Total stockholders' equity $478,004 $459,150 $451,309
-------- -------- --------
Total liabilities, minority interest
and stockholders' equity $646,429 $657,694 $652,762
======== ======== ========
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Amounts in Thousands of U.S. Dollars)
Three
Months
Three Months Ended
Ended September 30, June 30,
2008 2007 2008
-------- -------- --------
Cash flows from operating activities:
Net income $17,686 $21,773 $37,714
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 3,102 2,755 3,067
Share-based compensation expenses 2,347 1,284 2,439
Minority interest, net of tax (1,036) (316) (1,037)
Loss (gain) on disposal of property,
plant and equipment 12 (16) 78
Gain on sale of subsidiary shares and
investments in non-marketable
securities, net (217) (112) (91)
Gain on sale of marketable
securities, net (82) (31) (648)
Deferred income taxes 1,834 -- (989)
Inventories write downs 3,626 3,565 5,944
Changes in operating assets
and liabilities:
Accounts receivable 240 15,850 (19,879)
Accounts receivable
from related parties 27,221 (40,994) 6,327
Inventories 11,875 (4,333) (14,783)
Prepaid expenses and
other current assets (1,163) (2,966) (455)
Accounts payable (31,236) (10,949) 17,481
Income tax payable (2,434) -- (6,162)
Other accrued expenses and other
current liabilities 2,414 (114) 314
-------- -------- --------
Net cash provided by (used in)
operating activities 34,189 (14,604) 29,320
-------- -------- --------
Cash flows from investing activities:
Purchase of property,
plant and equipment (2,825) (2,500) (3,038)
Proceeds from sale of property,
plant and equipment -- 3 --
Purchase of available-for-sale
marketable securities (18,580) (12,144) (6,275)
Sales and maturities of
available-for-sale marketable
securities 19,944 9,404 11,508
Proceeds from sale of subsidiary
shares by Himax Technologies
Limited 472 144 182
Purchase of investments in
non-marketable securities -- (750) --
Purchase of subsidiary shares
from minority interest (88) (112) (205)
Decrease (increase) in
refundable deposits 24 (15) (81)
Pledge of restricted
marketable securities (47) -- (17)
-------- -------- --------
Net cash provided by (used in)
investing activities (1,100) (5,970) 2,074
-------- -------- --------
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Amounts in Thousands of U.S. Dollars)
Three
Months
Three Months Ended
Ended September 30, June 30,
2008 2007 2008
-------- -------- --------
Cash flows from financing activities:
Distribution of cash dividends $-- $-- $(66,817)
Proceeds from issuance of new
shares by subsidiaries -- 2,290 --
Payments to acquire of ordinary
shares for retirement (90) -- (7)
-------- -------- --------
Net cash provided by (used in)
financing activities (90) 2,290 (66,824)
-------- -------- --------
Effect of exchange rate changes on cash
and cash equivalents (264) 22 (1)
-------- -------- --------
Net increase (decrease) in cash
and cash equivalents 32,735 (18,262) (35,431)
Cash and cash equivalents
at beginning of period 90,404 137,508 125,835
-------- -------- --------
Cash and cash equivalents
at end of period $123,139 $119,246 $90,404
======== ======== ========
Supplemental disclosures
of cash flow information:
Cash paid during the period
for income taxes $96 $24 $6,531
======== ======== ========
Himax Technologies, Inc.
Unaudited Supplemental Data - Reconciliation Schedule
(Amounts in Thousands of U.S. Dollars)
Gross Margin and Operating Margin Excluding Share-based Compensation
and Acquisition-Related Charges:
Three
Months
Three Months Ended
Ended September 30, June 30,
2008 2007 2008
-------- -------- --------
Revenues $230,066 $243,337 $246,867
Gross profit 56,305 54,711 63,070
Add: Share-based compensation
- Cost of revenues 365 355 28
Gross profit excluding
share-based compensation 56,670 55,066 63,098
Gross margin excluding
share-based compensation 24.6% 22.6% 25.6%
Operating income 14,986 19,891 34,811
Add: Share-based compensation 15,062 15,710 2,439
Operating income excluding
share-based compensation 30,048 35,601 37,250
Add: Acquisition-related charges
- Intangible assets amortization 529 554 528
Operating income excluding
share-based compensation
and acquisition-related charges 30,577 36,155 37,778
Operating margin excluding
share-based compensation
and acquisition-related charges 13.3% 14.9% 15.3%
Net income 17,686 21,773 37,714
Add: Share-based
compensation, net of tax 14,428 15,088 2,439
Add: Acquisition-related
charges, net of tax 367 554 (392)
Net income excluding share-based
compensation and acquisition-related
charges 32,481 37,415 39,761
Net margin excluding share-based
compensation and acquisition-related
charges 14.1% 15.4% 16.1%
* 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 excluding share-based compensation and
acquisition-related charges equals net income excluding share-based
compensation and acquisition-related charges divided by revenues
Himax Technologies, Inc.
Unaudited Supplemental Data - Reconciliation Schedule
(Amounts in Thousands of U.S. Dollars)
Gross Margin and Operating Margin Excluding Share-based Compensation
and Acquisition-Related Charges:
Nine Months
Ended September 30,
2008 2007
-------- --------
Revenues $708,521 $651,111
Gross profit 178,014 136,203
Add: Share-based compensation - Cost of revenues 421 405
Gross profit excluding share-based compensation 178,435 136,608
Gross margin excluding share-based compensation 25.2% 21.0%
Operating income 81,462 61,537
Add: Share-based compensation 19,875 18,762
Operating income excluding share-based
compensation 101,337 80,299
Add: Acquisition-related charges
-Intangible assets amortization 1,586 1,483
-In-process R&D write off -- 1,600
Operating income excluding share-based
compensation and acquisition-related charges 102,923 83,382
Operating margin excluding share-based
compensation and acquisition-related charges 14.5% 12.8%
Net income 89,537 66,634
Add: Share-based compensation, net of tax 19,241 18,140
Add: Acquisition-related charges, net of tax 504 3,083
Net income excluding share-based compensation
and acquisition-related charges 109,282 87,857
Net margin excluding share-based compensation
and acquisition-related charges 15.4% 13.5%
* 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 excluding share-based compensation and
acquisition-related charges equals net 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 Nine
Months Months
Ended Ended
Sept 30, Sept 30,
2008 2008
-------- --------
Diluted GAAP EPS $0.09 $0.47
Add: Share-based compensation per diluted share $0.08 $0.10
Add: Acquisition-related charges per diluted share $-- $--
Diluted non GAAP EPS excluding share-based
compensation and acquisition-related charges $0.17 $0.57
Numbers do not add up due to rounding
CONTACT: Himax Technologies, Inc.
Max Chan, Chief Financial Officer
+886-2-2370-3999 Ext. 22300
max_chan@himax.com.tw
Investor Relations
Jessie Wang
+886-2-2370-3999 Ext. 22618
jessie_wang@himax.com.tw
The Ruth Group
In the U.S.
Joseph Villalta
+1-646-536-7003
jvillalta@theruthgroup.com