OmniVision Technologies, Inc. (
Q3 2012 Earnings Call
February 23, 2012 17:00 AM ET
Mary McGowan - IR
Shaw Hong - Chairman, President & CEO
Ray Cisneros, VP of Worldwide Sales
Hasan Gadjali - VP of Worldwide Marketing & Business Development
Anson Hoi Fung Chan - CFO & VP
Patrick McCartney - Lazard Capital Markets
Paul Coster - JPMorgan
Harsh Kumar - Morgan Keegan
Raji Gill - Needham & Co. LLC
Hans Mosesmann - Raymond James
Betsy Van Hees - Wedbush Securities
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Ladies and gentlemen, thank you for standing by and welcome to the OmniVision Technologies Conference Call for the Third Quarter of Fiscal 2012. (Operator Instructions). I would now like to turn the conference call over to Mary McGowan of Blackburn Communications. Please proceed.
Thank you very much. Good afternoon, everyone, and welcome to our fiscal 2012 third quarter earnings conference call. On today’s call will be Shaw Hong, President and CEO; Ray Cisneros, VP of Worldwide Sales; Hasan Gadjali, VP of Worldwide Marketing and Business Development; and Anson Chan, Chief Financial Officer.
During this conference call, we may make forward-looking statements regarding our business including statements relating to revenues, earnings charges and our product plans. This is based on information as of today, February 23, 2012, and actual results may differ materially than those set forth in such statements.
These and other forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially. There are discussions with risk factors you should review, forward-looking disclosures and the earnings release we issued today, as well as the risk factors and other disclosures in OmniVisions SEC filings and reports including the most recent annual report on Form 10-K and the recent quarterly report on Form 10-Q. During today’s call, we will also discuss certain GAAP and non-GAAP financial measures, the latter of which excludes stock based compensation expenses and related tax effects. A reconciliation between the two is available in our earnings release posted on our website.
With that, I’ll now turn the call over to Mr. Shaw Hong. Shaw?
Thank you, Mary, and welcome to all of you joining us on the call and webcast.
Earlier this afternoon, we received a press release describing our results for the third fiscal quarter of 2012. For those who have not read the release, I will provide you with a recap of our financial results.
In Q3, we recorded revenues of $185 million and we shipped $143 million in essentials. On a non-GAAP basis, gross margin was 24.7% and net income was $7.4 million or $0.14 per diluted share. Before I turn the call over to our management team to provide details on our Q3 financial results and our outlook I’d like to make a few comments on key events during the quarter.
First, I’d like to point out that revenues for our third fiscal quarter exceeded the high end of our guidance. This achievement allows our outlook for Q4 a test to our determination to attend the necessary pipeline stability for the near-term. We will continue working to re-bid our business momentum.
Last quarter, I spoke of our commitment to deploy considerable resources to support the long term growth opportunities available to the company. As part of that strategy, we introduced a second next generation piece of architecture called OmniBSI+. This newest architecture is an enhancement of our original OmniBSI technology. OmniBSI+ is the most improved performance over OmniBSI and the cost competitive solution to our customers. OmniBSI+ exemplifies our strive for continuous improvement in our commitment to distinguish our products from a technology standpoint.
In addition to driving product performance, this new architecture gives us the opportunity to maximize the utilization of our 8-inch wafer capacity. Since OmniBSI+ is based on the original OmniBSI architecture, it too uses 8-inch wafers. At the same time, we’ll release even more products based on our more advanced OmniBSI-2 pixel technology, which we did 12-inch wafers. The utilization of our 8-inch and 12-inch manufacturing capacity allows us to produce a wider array of devices to satisfy an even broader range of market needs.
I would also like to provide an update on the CameraCubes production of places, which we acquired from VisEra last quarter. OmniVision is making progress in promoting the CameraCubes to OEM for smaller and smaller consumer devices. Since its first introduction we have continued to drive our engineering process to deliver a margin that is increasingly cost effective and that shortens the time to market to our customers. And instead last quarter we continued to expand and increase in CameraCubes demand going into second half of calendar 2012.
And finally as you may recall, OmniVision’s Board of Directors authorized a stock buyback program to repurchase up to $100 million of the Company’s outstanding common stock. This action was taken as a result of the Board’s steadfast belief in the long-term strength of the company. It has margin and its ability to innovate and to compete. With that said, during the quarter we retained $100 million to our stockholders and repurchased approximately 8.1 million shares of OmniVision’s common stock on the open market.
With that I will turn the call over to Ray, who will provide an update on the quarter’s sales activities.
Thank you, Shaw. We are pleased to have exceeded the high end of our guidance. Some of our key customers experienced a strong holiday season. Going forward we are working diligently to regain our momentum.
In our third fiscal quarter we shipped 143 million units as compared to 153 million units in our prior quarter. The average selling price in our fiscal third quarter was $1.29 as compared to $1.42 in the prior quarter. The step-down is due to a reduction in higher resolution sensor product mix.