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Himax Technologies, Inc. Reports Fourth Quarter And Full Year 2012 Financial Results

Stocks in this article: HIMX

http://www.himax.com.tw

About Non-GAAP Financial Measures

To supplement the unaudited consolidated statement of income and comprehensive income presented in accordance with GAAP, the Company is also providing non-GAAP measures of income before income tax expenses, net income, net income attributable to us and basic and diluted earnings per share for the three and twelve months ended December 31, 2012 and 2011, which are adjusted from results based on GAAP to exclude the non-cash transactions. The non-GAAP financial measures are provided to enhance the Investors' overall understanding of our current performance in on-going core operations as well as the prospects for the future. These measures should be considered in addition to results prepared and presented in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The Company uses both GAAP and non-GAAP information in evaluating our operating business results internally and therefore deems it important to provide all of this information to investors. The non-GAAP adjustments include share based compensations, acquisition related charges, bad debt collections and its tax charges and tax credit provisions.

Forward Looking Statements

Factors that could cause actual events or results to differ materially include, but not limited to, general business and economic conditions and the state of the semiconductor industry; market acceptance and competitiveness of the driver and non-driver products developed by the Company; demand for end-use applications products; reliance on a small group of principal customers; the uncertainty of continued success in technological innovations; our ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; changes in estimated full-year effective tax rate; shortages in supply of key components; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; our ability to collect accounts receivable and manage inventory 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, 2011 filed with the SEC, as may be amended

– FINANCIAL TABLES –

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 December 31, Three Months Ended September 30,
  2012 2011 2012
Revenues      
  Revenues from third parties, net $129,973 $109,841 $125,671
  Revenues from related parties, net 60,666 59,387 64,742
  190,639 169,228 190,413
       
Costs and expenses:      
 Cost of revenues 146,216 131,850 146,113
 Research and development  17,003 18,666 21,494
 General and administrative  4,328 3,923 5,056
 Sales and marketing  3,863 3,611 4,588
Total costs and expenses 171,410 158,050 177,251
       
Operating income  19,229 11,178 13,162
       
Non operating income (loss):      
Interest income  74  160  58
Equity in losses of equity method investees  (14)  (74)  (30)
Foreign exchange losses, net  (233)  (310)  (63)
Interest expense  (79)  (125)  (77)
Other income (loss), net  (192)  9  502
   (444)  (340)  390
Earnings before income taxes   18,785  10,838  13,552
Income tax expense   4,527  5,809  3,388
Net income   14,258  5,029  10,164
Net loss (income) attributable to noncontrolling interests  82  (1,312)  247
Net income attributable to Himax stockholders $14,340 $3,717 $10,411
       
Basic earnings per ordinary share attributable to Himax stockholders  $ 0.042  $ 0.011  $ 0.031
Diluted earnings per ordinary share attributable to Himax stockholders  $ 0.042  $ 0.011  $ 0.031
Basic earnings per ADS attributable to Himax stockholders  $ 0.084  $ 0.021  $ 0.061
Diluted earnings per ADS attributable to Himax stockholders  $ 0.084  $ 0.021  $ 0.061
       
Basic Weighted Average Outstanding ADS 170,057 176,227 169,782
Diluted Weighted Average Outstanding ADS 170,868 176,227 169,929
 
 
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
(Amounts in Thousands of U.S. Dollars, Except Per Share Data)
     
  Twelve Months Ended December 31,
  2012 2011
Revenues    
  Revenues from third parties, net $485,281 $374,788
  Revenues from related parties, net 251,974 258,233
  737,255 633,021
     
Costs and expenses:    
 Cost of revenues 566,700 507,449
 Research and development  70,913 79,042
 General and administrative  17,139 17,095
 Sales and marketing  15,443 12,827
Total costs and expenses 670,195 616,413
     
Operating income 67,060 16,608
     
Non operating income (loss):    
Interest income  317  556
Equity in losses of equity method investees  (128)  (349)
Foreign exchange gains (losses), net  (452)  466
Interest expense  (352)  (455)
Other income (loss), net  502  (18)
   (113)  200
Earnings before income taxes  66,947 16,808
Income tax expense  16,567 7,301
Net income  50,380 9,507
Net loss attributable to noncontrolling interests 789 1,199
Net income attributable to Himax stockholders $51,169 $10,706
     
Basic earnings per ordinary share attributable to Himax stockholders $0.150 $0.030
Diluted earnings per ordinary share attributable to Himax stockholders $0.150 $0.030
Basic earnings per ADS attributable to Himax stockholders $0.300 $0.061
Diluted earnings per ADS attributable to Himax stockholders $0.300 $0.061
     
Basic Weighted Average Outstanding ADS 170,528 176,886
Diluted Weighted Average Outstanding ADS 170,762 176,914
 
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 December 31, Three Months Ended September 30,
  2012 2011 2012
Share-based compensation      
 Cost of revenues $15 $6 $150
 Research and development 316 188 4,570
 General and administrative 58 33 1,009
 Sales and marketing 73 42 1,004
 Income tax benefit  (76)  (52)  (1,118)
Total $386 $217 $5,615
       
The amount of acquisition-related charges included in applicable statements of income categories is summarized as follows:      
       
Acquisition-related charges      
 Research and development $559 $242 $305
 Sales and marketing 289 289 289
 Income tax benefit  (289)  (125)  (125)
Total $559 $406 $469
 
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: Twelve Months Ended December 31,
  2012 2011
Share-based compensation    
 Cost of revenues $176 $124
 Research and development 5,625 5,062
 General and administrative 1,191 872
 Sales and marketing 1,230 1,005
 Income tax benefit  (1,367)  (1,151)
Total $6,855 $5,912
     
The amount of acquisition-related charges included in applicable statements of income categories is summarized as follows:    
     
Acquisition-related charges    
 Research and development $1,345 $1,017
 Sales and marketing 1,157 1,157
 Income tax benefit  (664)  (500)
Total $1,838 $1,674
 
Himax Technologies, Inc.
GAAP Unaudited Condensed Consolidated Balance Sheets
(Amounts in Thousands of U.S. Dollars, Except Per Share Data)
       
  December 31, 2012 September 30, 2012 December 31, 2011
Assets      
Current assets:      
Cash and cash equivalents $138,737 $88,822 $106,164
Restricted cash and cash equivalents 73,000 73,000 84,200
Investments in marketable securities available-for-sale 172 171 165
Accounts receivable, less allowance for doubtful accounts, sales returns and discounts  135,747 136,284 101,280
Accounts receivable from related parties, less allowance for sales returns and discounts  73,258 82,019 79,833
Inventories  116,671 128,339 112,985
Deferred income taxes  15,294 16,760 16,217
Prepaid expenses and other current assets  13,029 15,012 14,865
Total current assets $565,908 $540,407 $515,709
       
Investment securities, including securities measured at fair value $12,688 $12,926 $24,506
Equity method investments 283 295 439
Property, plant and equipment, net 52,609 53,119 57,150
Deferred income taxes  4,303 5,785 13,649
Goodwill 30,786 30,923 26,846
Intangible assets, net 8,025 6,557 4,494
Other assets 2,445 2,427 2,185
  111,139 112,032 129,269
Total assets $677,047 $652,439 $644,978
       
Liabilities and Equity      
Current liabilities:      
Short-term debt  $73,000 $73,000 $84,200
Accounts payable  135,546 129,959 134,353
Income taxes payable  9,766 8,687 3,644
Other accrued expenses and other current liabilities 23,725 22,688 23,163
Total current liabilities  $242,037 $234,334 $245,360
Other liabilities 6,745 3,860 4,560
Total liabilities $248,782 $238,194 $249,920
       
Equity      
Himax stockholders' equity:      
Ordinary shares, US$0.3 par value, 1,000,000,000 shares authorized; 356,699,482 shares issued and 339,149,508, 339,834,778 and 349,279,556 outstanding at December 31, 2012, September 30, 2012, and December 31, 2011, respectively $107,010 $107,010 $107,010
Additional paid-in capital  104,776 104,700 103,051
Treasury shares, at cost (17,549,974 ordinary shares, 16,864,704 ordinary shares and 7,419,926 ordinary shares at December 31, 2012, September 30, 2012, and December 31, 2011, respectively)  (12,469)  (11,805)  (4,502)
Accumulated other comprehensive income   (137)  (488)  166
Unappropriated retained earnings 228,201 213,861 187,712
Himax stockholders' equity $427,381 $413,278 $393,437
Noncontrolling interests 884 967 1,621
Total equity $428,265 $414,245 $395,058
Total liabilities and equity $677,047 $652,439 $644,978
 
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows 
(Amounts in Thousands of U.S. Dollars)
       
  Three Months Ended December 31, Three Months Ended September 30,
  2012 2011 2012
       
Cash flows from operating activities:      
Net income  $14,258 $5,029 $10,164
Adjustments to reconcile net income to net cash provided by (used in) operating activities:      
Depreciation and amortization  3,669  3,182  3,152
Share-based compensation expenses  458  269  451
Loss on disposal of property, plant and equipment  6  7  30
Loss (gain) on disposal of marketable securities, net  (17)  1  (635)
Unrealized loss on conversion option  ---   32  62
Interest income from amortization of discount on investment in corporate bonds  ---   (40)  (18)
Impairment loss on investment in non-marketable securities   238  ---   --- 
Equity in losses of equity method investees  14  74  30
Deferred income tax expense  2,732  5,213  7,587
Inventories write downs  2,445  2,757  3,241
Changes in operating assets and liabilities:      
Accounts receivable  537  (6,997)  (7,239)
Accounts receivable from related parties  8,782  594  1,811
Inventories  9,222  (11,078)  7,579
Prepaid expenses and other current assets  1,987  (514)  (320)
Accounts payable  5,586  20,807  (29,448)
Income taxes payable  1,669  675  (4,067)
Other accrued expenses and other current liabilities  857  (2,717)  1,568
Other liabilities  1  ---   (1,039)
Net cash provided by (used in) operating activities   52,444  17,294  (7,091)
       
Cash flows from investing activities:      
Purchase of property and equipment  (2,199)  (1,206)  (1,746)
Proceeds from disposal of property and equipment  1  ---   --- 
Purchase of available-for-sale marketable securities  (4,485)  (3,443)  (3,351)
Disposal of available-for-sale marketable securities  4,502  3,442  7,984
Cash acquired in acquisition  ----   ---   546
Pledge of restricted cash equivalents and marketable securities  (2)  (1,101)  (3)
Decrease in other assets  253  ---   585
Net cash provided by (used in) investing activities  (1,930)  (2,308)  4,015
 
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows 
(Amounts in Thousands of U.S. Dollars)
       
  Three Months Ended December 31, Three Months Ended September 30,
  2012 2011 2012
Cash flows from financing activities:      
Distribution of cash dividends  ---   ---   (10,680)
Proceeds from issuance of new shares by subsidiaries  ---   12  33
Payments to repurchase ordinary shares   (664)  (2,498)  (511)
Proceeds from disposal of subsidiary shares to noncontrolling interests by Himax Technologies, Limited.  ----   17  --- 
Proceeds from disposal of subsidiary shares to noncontrolling interests by Himax Imaging, Inc.  25  2,504  78
Purchase of subsidiary shares from noncontrolling  (1)  (47)  (9)
interests      
Release (pledge) of restricted cash equivalents and marketable securities (for borrowing of short-term debt)  ---   500  (10,000)
Proceeds from borrowing of short-term debt  ---   250,000  73,000
Repayment of short-term debt  ---   (250,000)  (63,000)
Net cash provided by (used in) financing activities  (640)  488  (11,089)
Effect of foreign currency exchange rate changes on cash and cash equivalents  41  36  (5)
Net increase (decrease) in cash and cash equivalents  49,915  15,510  (14,170)
Cash and cash equivalents at beginning of period  88,822  90,654  102,992
Cash and cash equivalents at end of period $138,737 $106,164 $88,822
       
Supplemental disclosures of cash flow information:      
 Cash paid during the period for:      
Interest expense $79 $126 $77
Income taxes $88 $46 $174
 
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows 
(Amounts in Thousands of U.S. Dollars)
     
     
  Twelve Months Ended December 31,
  2012 2011
     
Cash flows from operating activities:    
Net income  $50,380 $9,507
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 13,299 12,795
Share-based compensation expenses 1,936 4,190
Loss on disposal of property, plant and equipment  36  121
Gain on disposal of equity method investment  ---   (313)
Gain on disposal of marketable securities, net  (648)  (350)
Unrealized loss (gain) on conversion option  (28)  934
Interest income from amortization of discount on investment in corporate bonds  (101)  (170)
Impairment loss on investment in non-marketable securities   238  --- 
Equity in losses of equity method investees  128  349
Deferred income tax expense   9,670  6,492
Inventories write downs  12,418  9,138
Changes in operating assets and liabilities:    
Accounts receivable  (34,467)  (21,068)
Accounts receivable from related parties  6,591  16,181
Inventories  (16,104)  (4,135)
Prepaid expenses and other current assets  1,421  951
Accounts payable  1,192  18,431
Income taxes payable  6,711  (5,616)
Other accrued expenses and other current liabilities  (172)  (2,092)
Other liabilities  (333)  (1,897)
Net cash provided by operating activities   52,167  43,448
     
Cash flows from investing activities:    
Purchase of property and equipment  (6,560)  (18,859)
Proceeds from disposal of property and equipment  1  7
Purchase of available-for-sale marketable securities  (19,609)  (17,490)
Disposal of available-for-sale marketable securities  24,255  25,834
Proceeds from disposal of equity method investment  ---   371
Purchase of investment securities  (3)  --- 
Cash acquired in acquisition  546  --- 
Pledge of restricted cash equivalents and marketable securities  (7)  (94)
Decrease in other assets  682  34
Net cash used in investing activities  (695)  (10,197)
 
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows 
(Amounts in Thousands of U.S. Dollars)
     
     
  Twelve Months Ended December 31,
  2012 2011
Cash flows from financing activities:    
Distribution of cash dividends  $ (10,680)  $ (21,224)
Proceeds from issuance of new shares by subsidiaries  116  53
Payments to repurchase ordinary shares   (8,886)  (4,627)
Proceeds from disposal of subsidiary shares to noncontrolling interests by Himax Technologies Limited  97  17
Proceeds from disposal of subsidiary shares to noncontrolling interests by Himax Imaging, Inc.  436  3,224
Purchase of subsidiary shares from noncontrolling  (14)  (1,958)
interests    
Release (pledge) of restricted cash equivalents and marketable securities (for borrowing of short-term debt)  11,200  (26,700)
Proceeds from borrowing of short-term debt  304,000  277,200
Repayment of short-term debt  (315,200)  (250,000)
Net cash used in financing activities  (18,931)  (24,015)
Effect of foreign currency exchange rate changes on cash and cash equivalents  32  86
Net decrease in cash and cash equivalents  32,573  9,322
Cash and cash equivalents at beginning of period  106,164  96,842
Cash and cash equivalents at end of period $138,737 $106,164
     
Supplemental disclosures of cash flow information:    
 Cash paid during the period for:    
Interest expense $352 $490
Income taxes $448 $6,326
Supplemental disclosures of non-cash investing activities:    
Fair value of ordinary shares issued by Himax Display, Inc. in the acquisition of Spatial Photonics, Inc. $135 $ ---
 
Himax Technologies, Inc.
Non-GAAP 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 December 31, Three Months Ended September 30,
  2012 2011 2012
Revenues $190,639 $169,228 $190,413
       
Gross profit 44,423 37,378 44,300
Add: Share-based compensation – Cost of revenues 15 6 150
Gross profit excluding share-based compensation 44,438 37,384 44,450
Gross margin excluding share-based compensation 23.3% 22.1% 23.3%
       
Operating income 19,229 11,178 13,162
Add: Share-based compensation 462 269 6,733
Operating income excluding share-based compensation 19,691 11,447 19,895
Add: Acquisition-related charges –Intangible assets amortization 848 531 594
Operating income excluding share-based compensation and acquisition-related charges 20,539 11,978 20,489
Operating margin excluding share-based compensation and acquisition-related charges 10.8% 7.1% 10.8%
Net income attributable to Himax stockholders 14,340 3,717 10,411
Add: Share-based compensation, net of tax 386 217 5,615
Add: Acquisition-related charges, net of tax 559 406 469
Net income attributable to Himax stockholders excluding share-based compensation and acquisition-related charges 15,285 4,340 16,495
Net margin attributable to Himax stockholders excluding share-based compensation and acquisition-related charges 8.0% 2.6% 8.7%
       
*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.
Non-GAAP 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:
     
  Twelve Months Ended December 31,
  2012 2011
Revenues $737,255 $633,021
     
Gross profit 170,555 125,572
Add: Share-based compensation – Cost of revenues 176 124
Gross profit excluding share-based compensation 170,731 125,696
Gross margin excluding share-based compensation 23.2% 19.9%
     
Operating income  67,060 16,608
Add: Share-based compensation 8,222 7,063
Operating income excluding share-based compensation 75,282 23,671
Add: Acquisition-related charges –Intangible assets amortization 2,502 2,174
Operating income excluding share-based compensation and acquisition-related charges 77,784 25,845
Operating margin excluding share-based compensation and acquisition-related charges 10.6% 4.1%
Net income attributable to Himax stockholders 51,169 10,706
Add: Share-based compensation, net of tax 6,855 5,912
Add: Acquisition-related charges, net of tax 1,838 1,674
Net income attributable to Himax stockholders excluding share-based compensation and acquisition-related charges 59,862 18,292
Net margin attributable to Himax stockholders excluding share-based compensation and acquisition-related charges 8.1% 2.9%
     
*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 ADS Attributable to Himax stockholders Excluding Share-based Compensation and Acquisition-Related Charges:
 
  Three Months Ended December 31, 2012   Twelve Months Ended December 31, 2012
     
Diluted GAAP earning per ADS attributable to Himax stockholders  $ 0.084  $ 0.300
Add: Share-based compensation per ADS  $ 0.002  $ 0.040
Add: Acquisition-related charges per ADS  $ 0.003  $ 0.011
     
Diluted non-GAAP earning per ADS attributable to Himax stockholders excluding share-based compensation and acquisition-related charges  $ 0.089  $ 0.351
     
Numbers do not add up due to rounding
CONTACT: For the Company
         Jackie Chang, CFO
         Himax Technologies, Inc.
         Taiwan Tel: +886-2-2370-3999 Ext.22300, or
         US Tel: +1-949-585-9838 Ext. 252
         Email: jackie_chang@himax.com.tw
         www.himax.com.tw
         
         Penny Lin, Investor Relations
         Himax Technologies, Inc.
         Tel: +886-2-2370-3999 Ext.22320
         Fax: +886-2-2314-0877
         Email: penny_lin@himax.com.tw
         www.himax.com.tw
         
         Investor Relations - US Representative
         MZ North America
         John Mattio, SVP
         Tel: +1-212-301-7130
         Email: john.mattio@mzgroup.us
         www.mzgroup.us

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