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TAINAN, Taiwan, Oct. 6, 2010 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. ("Himax" or "Company") (Nasdaq:HIMX) today updated its previously announced third quarter 2010 guidance.
The Company now expects revenue to decline approximately 26% sequentially, from the $187.7 million posted in the second quarter 2010, gross margin to increase slightly above the top of the previous gross margin guidance, and GAAP earnings per ADS to be in the range of $0-0.01. Excluding share-based compensation and acquisition-related charges, non-GAAP earnings per ADS in the third quarter is expected to be in the range of $0.04-0.05. The revision is primarily to reflect adjustment in customer demand.
Previous guidance provided on August 10, 2010 had forecast third quarter 2010 revenues to decline by 13-18% quarter over quarter, with gross margin to increase by 1-2 percentage points from 20.4% in the second quarter, GAAP earnings per ADS to be in the range of $0-0.02 and non-GAAP earnings per ADS to be in the range of $0.04-0.06.
Jordan Wu, President and Chief Executive Officer of Himax, commented, "As updated in our last earnings conference call, we experienced a sudden order cutback right around the same time when we provided our third quarter guidance in mid-August. These order adjustments continued in September while panel inventory levels remained a concern for panel makers. However, we managed to increase our gross margin primarily due to a more favorable product mix."
Mr. Wu continued, "As an annual practice, we granted our annual restricted share units, or RSUs, at the end of September which resulted in a significant increase in our third quarter operating expenses from immediately vested RSUs. The total value of our 2010 RSUs is approximately $9 million, representing a 25% decline as compared to approximately $12 million in 2009. In our efforts to allow more distributable RSUs to the Himax team, Biing-Seng Wu, our Chairman, Chih-Chung Tsai, Chief Technology Officer, along with myself have voluntarily reduced our RSU amount proposed by the compensation committee to $1. Moreover, several senior managers also agreed to contribute half of their RSUs to the pool which were then reallocated to compensate other employees. Our goal is to provide competitive compensation to our team while limiting RSU expenses to the shareholders in a year when our financial performance is not as strong as those in years past."