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Himax Reports Second Quarter 2010 Financial Results

 

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 Per Share Data)
       
  Three Months Ended June 30, Three Months Ended March 31,
   20 10  20 09  20 10
Revenues      
Revenues from third parties, net $ 94,939 $ 63,348 $ 70,940
Revenues from related parties, net  92,768  121,579  104,558
   187,707  184,927  175,498
       
Costs and expenses:      
Cost of revenues  149,388  146,539  140,773
Research and development  18,341  17,576  17,808
General and administrative  4,197  3,885  4,043
Sales and marketing  2,752  2,126  2,749
Total costs and expenses  174,678  170,126  165,373
       
Operating income  13,029  14,801  10,125
       
Non operating income (loss):      
Interest income  169  284  104
Equity in losses of equity method investees  (106) --  (59)
Foreign exchange gains (losses), net  53  1,006  (11)
Other income, net  67  17  88
   183  1,307  122
Earnings before income tax es  13,212  16,108  10,247
Income tax expense  2,174  1,717  2,049
Net income  11,038  14,391  8,198
Net loss attributable to noncontrolling interests  930  1,032  940
Net income attributable to Himax stockholders $ 11,968 $ 15,423 $ 9,138
       
Basic earnings per ordinary share attributable to Himax stockholders $ 0.03 $ 0.04 $ 0.03
Diluted earnings per ordinary share attributable to Himax stockholders $ 0.03 $ 0.04 $ 0.03
Basic earnings per ADS attributable to Himax stockholders $ 0.07 $ 0.08 $ 0.05
Diluted earnings per ADS attributable to Himax stockholders $ 0.07 $ 0.08 $ 0.05
       
Basic Weighted Average Outstanding O rdinary Shares  355,426 371,984  357,557
Diluted Weighted Average Outstanding O rdinary Shares  358,011 373,602  359,102
 
Himax Technologies, Inc. Unaudited Condensed Consolidated Statements of Income (Amounts in Thousands of U.S. Dollars, Except Per Share Data)
     
  Six Months Ended
  June 3 0 ,
  20 10 200 9
Revenues    
Revenues from third parties, net $ 165,879 $ 107,721
Revenues from related parties, net 197,326 202,862
  363,205 310,583
     
Costs and expenses:    
Cost of revenues 290,161 245,980
Research and development 36,149 32,825
General and administrative 8,240 7,479
Sales and marketing 5,501 4,675
Total costs and expenses 340,051 290,959
     
Operating income 23,154 19,624
     
Non operating income (loss):    
Interest income 273 566
Equity in losses of equity method investees (165) --
Foreign exchange gains (losses), net 42 (409)
Other income (loss), net 155 (121)
  305 36
Earnings before income taxes 23,459 19,660
Income tax expense 4,223 1,966
Net income 19,236 17,694
Net loss attributable to the noncontrolling interests 1,870 2,098
Net income attributable to Himax stockholders $ 21,106 $ 19,792
     
Basic earnings per ordinary share attributable to Himax stockholders $0. 06 $0. 05
Diluted earnings per ordinary share attributable to Himax stockholders $0. 06 $0. 05
Basic earnings per ADS attributable to Himax stockholders $0. 12 $0. 11
Diluted earnings per ADS attributable to Himax stockholders $0. 12 $0. 11
     
Basic Weighted Average Outstanding Shares 356,486 374,859
Diluted Weighted Average Outstanding Shares 358,517 375,139
 
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 June 30, Three Months Ended March 31,
  20 10 20 09 20 10
Share-based compensation      
Cost of revenues $ 21 $ 13 $ 22
Research and development  1,375  1,807  1,374
General and administrative  228  271  229
Sales and marketing  218  260  218
Income tax benefit  (131)  (295)  (187)
Total $ 1,711 $ 2,056 $ 1,656
       
The amount of acquisition-related charges included in applicable statements of income categories is summarized as follows:      
       
Acquisition-related charges      
Research and development $ 258 $ 258 $ 259
Sales and marketing  290  290  289
Income tax benefit  (200)  (162)  (139)
Total $ 348 $ 386 $ 409
 
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: Six Months Ended   June 3 0 ,
  20 10 200 9
Share-based compensation    
Cost of revenues $ 43 $ 26
Research and development  2,749  3,590
General and administrative  457  543
Sales and marketing  436  534
Income tax benefit  (318)  (396)
Total $ 3,367 $ 4,297
     
The amount of acquisition-related charges included in applicable statements of income categories is summarized as follows:    
     
Research and development $ 517 $ 516
Sales and marketing  579  580
Income tax benefit  (339)  (324)
Total $ 757 $ 772
 
Himax Technologies, Inc. Unaudited Condensed Consolidated Balance Sheets (Amounts in Thousands of U.S. Dollars, Except Per Share Data)
       
  June 3 0 , 2 010 March 3 1 , 2 010 December 3 1 , 200 9
Assets      
Current assets:      
Cash and cash equivalents $ 153,967 $ 155,932 $ 110,924
Investments in marketable securities available-for-sale  3,900  5,198  10,730
Accounts receivable, less allowance for doubtful accounts, sales returns and discounts 97,499  71,354 64,496
Accounts receivable from related parties, less allowance for sales returns and discounts  118,746  129,519  138,172
Inventories  79,261  65,401  67,768
Deferred income taxes  15,873  17,590  17,491
Prepaid expenses and other current assets  12,657  13,753  14,216
Total current assets $ 481,903 $ 458,747 $ 423,797
       
Investments in non-marketable equity securities  12,643  11,619  11,619
Equity method investments  1,318  1,430  586
Property , plant and equipment, net  50,544  50,783  51,586
Deferred income taxes  23,426  24,695  24,548
Goodwill  26,846  26,846  26,846
Intangible assets, net  7,773  8,322  8,872
Other assets  2,440  2,541  2,594
   124,990  126,236  126,651
Total assets $ 606,893 $ 584,983 $ 550,448
       
Liabilities and E quity      
Current liabilities:      
Accounts payable $ 134,266 $ 115,916 $ 88,079
Income taxes payable  7,661  16,495  14,147
Dividend payable  44,188 -- --
Other accrued expenses and other current liabilities 19,413 16,017 18,425
  Total current liabilities $ 205,528 $ 148,428 $ 120,651
Other liabilities  4,642  5,605  5,725
  Total liabilities 210,170 154,033 126,376
       
Equity      
Himax s tockholders' equity:      
Ordinary shares, US$0.3 par value, 1,000,000,000 shares authorized; 353,502,962 shares, 355,531,454 shares, and 358,012,184 shares issued and outstanding at June 30, 2010, March 31, 2010, and December 31, 2009, respectively $ 106,051 $ 106,659 $ 107,404
Additional paid-in capital  101,623  102,123  102,924
Accumulated other comprehensive income (loss)  (32)  35  4
Unappropriated retained earnings 186,039 218,259 209,121
Himax stockholders' equity $ 393,681 $ 427,076 $ 419,453
Noncontrolling interests  3,042  3,874  4,619
Total equity $ 396,723 $ 430,950 $ 424,072
Total liabilities and equity $ 606,893 $ 584,983 $ 550,448
 
Himax Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows ( Amounts in T housands of U . S . D ollars)
       
  Three Months Ended June 30, Three Months Ended March 31,
  20 10 20 09 20 10
       
Cash flows from operating activities:      
Net income $ 11,038 $ 14,391 $ 8,198
Adjustments to reconcile net income to net cash provided by (used in) operating activities:      
Depreciation and amortization  3,463  3,530  3,522
Reversal for allowance for doubtful accounts --  (129) --
Share-based compensation expenses  1,842  2,351  1,843
Equity in losses of equity method investees  106 --  59
Gain on disposal of property and equipment --  (12) --
Gain on disposal of marketable securities, net  (19) --  (59)
Deferred income tax expense (benefit)  2,639  (1,604)  (375)
Inventories write downs  1,371  3,223  2,864
Changes in operating assets and liabilities:      
Accounts receivable  (25,211)  (12,439)  (6,858)
Accounts receivable from related parties  9,827  (54,097)  8,656
Inventories (15,230)  (22,770) (498)
Prepaid expenses and other current assets  1,098  (3,571)  462
Accounts payable  18,352  73,419  27,837
Income taxes payable  (8,844)  (5,166)  2,354
Other accrued expenses and other current liabilities  2,464  2,263  (2,199)
Other liabilities  (602) -- --
Net cash provided by (used in) operating activities  2,294  (611)  45,806
       
Cash flows from investing activities:      
Purchase of property and equipment  (1,720)  (2,870)  (2,388)
Proceeds from disposal of property and equipment --  1 --
Purchase of available-for-sale marketable securities  (4,257)  (5,147)  (5,577)
Disposal of available-for-sale marketable securities  5,514  6,693  11,190
Proceeds from disposal of subsidiary shares to noncontrolling interests by Himax Technologies Limited 94 333 418
Purchase of non-marketable equity securities (1,024) -- --
Purchase of equity method investments -- (351) (897)
Purchase of subsidiary shares from noncontrolling interests  (109)  (33)  (38)
Decrease (increase) in other assets  72  (38)  69
Net cash provided by ( used in ) investing activities  (1,430)  (1,412)  2,777
 
Himax Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows ( Amounts in T housands of U . S . D ollars)
       
  Three Months Ended June 3 0 , Three Months Ended  March 3 1 ,
  2010 2009 2010
Cash flows from financing activities:      
Distribution of cash dividends $ -- $ (55,496) $ ---
Proceeds from issuance of new shares by subsidiaries  76  55  65
Payments to acquire ordinary shares for retirement  (2,903)  (6,458)  (3,642)
Proceeds from borrowing of short-term debt  160,000 -- --
Repayment of short-term debt  (160,000) -- --
Net cash used in financing activities  (2,827)  (61,899)  (3,577)
Effect of foreign currency exchange rate change s on cash and cash equivalents  (2)   4  2 
Net increase (decrease) in cash and cash equivalents  (1,965) (63,918)  45,008
Cash and cash equivalents at beginning of period  155,932 200,678  110,924
Cash and cash equivalents at end of period $ 153,967 $ 136,760 $ 155,932
       
Supplemental disclosures of cash flow information:      
Cash paid during the period for:      
Interest expense $ 5 $ -- $ --
Income taxes $ 8,196 $ 7,608 $ 47
Supplemental disclosures of non-cash financing activities:      
Dividend Payable $ 44,188 $ -- $ --
 
Himax Technologies, Inc. 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 June 30, Three Months Ended March 31,
   20 10  20 09  20 10
Revenues $ 187,707 $ 184,927 $ 175,498
       
Gross profit  38,319  38,388  34,725
Add: Share-based compensation – Cost of revenues  21  13  22
Gross profit excluding share-based compensation  38,340  38,401  34,747
Gross margin excluding share-based compensation  20.4%  20.8%  19.8%
       
Operating income  13,029  14,801  10,125
Add: Share-based compensation  1,842  2,351  1,843
Operating income excluding share-based compensation  14,871  17,152  11,968
Add: Acquisition-related charges –Intangible assets amortization  548  548  548
Operating income excluding share-based compensation and acquisition-related charges  15,419  17,700  12,516
Operating margin excluding share-based compensation and acquisition-related charges  8.2%  9.6%  7.1%
Net income attributable to Himax stockholders  11,968  15,423  9,138
Add: Share-based compensation, net of tax  1,711  2,056  1,656
Add: Acquisition-related charges, net of tax  348  386  409
Net income attributable to Himax stockholders excluding share-based compensation and acquisition-related charges  14,027  17,865  11,203
Net margin attributable to Himax stockholders excluding share-based compensation and acquisition-related charges  7.5%  9.7%  6.4%
       
*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 stockholders excluding share-based compensation and acquisition-related charges equals net income attributable to Himax stockholders 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, Operating Margin and Net Margin Excluding Share-based Compensation and Acquisition-Related Charges:
     
  Six Months Ended June 30,
   20 10  200 9
Revenues $363,205 $310,583
     
Gross profit 73,044 64,603
Add: Share-based compensation – Cost of revenues 43 26
Gross profit excluding share-based compensation 73,087 64,629
Gross margin excluding share-based compensation 20.1% 20.8%
         
Operating income 23,154 19,624
Add: Share-based compensation 3,685 4,693
Operating income excluding share-based compensation 26,839 24,317
Add: Acquisition-related charges –Intangible assets amortization 1,096 1,096
Operating income excluding share-based compensation and acquisition-related charges 27,935 25,413
Operating margin excluding share-based compensation and acquisition-related charges 7.7% 8.2%
Net income attributable to Himax stockholders 21,106 19,792
Add: Share-based compensation, net of tax 3,367 4,297
Add: Acquisition-related charges, net of tax 757 772
Net income attributable to Himax stockholders excluding share-based compensation and acquisition-related charges 25,230 24,861
Net margin attributable to Himax stockholders excluding share-based compensation and acquisition-related charges 6.9% 8.0%
     
*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 stockholders excluding share-based compensation and acquisition-related charges equals net income attributable to Himax stockholders excluding share-based compensation and acquisition-related charges divided by revenues
 
Diluted Earnings Per O rdinary Share Attributable to Himax stockholders Excluding Share-based Compensation and Acquisition-Related Charges:  
  Three Months Ended June 30, 20 10 Six Months Ended June 30, 20 10
Diluted GAAP EPS attributable to Himax stockholders $0.03 $0.06
Add: Share-based compensation per diluted share $-- $0.01
Add: Acquisition-related charges per diluted share $-- $--
     
Diluted non GAAP EPS attributable to Himax stockholders excluding share-based compensation and acquisition-related charges $0.04 $0.07
     
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
          Jessica Huang
            +886-2-2370-3999 Ext. 22513
            jessica_huang@himax.com.tw

          The Ruth Group
          In the U.S.
          Joseph Villalta
          +1-646-536-7003
          jvillalta@theruthgroup.com

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