OmniVision Technologies Q4 2010 Earnings Call Transcript

OmniVision Technologies Q4 2010 Earnings Call Transcript
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OmniVision Technologies (OVTI)

Q4 2010 Earnings Call

May 27, 2010 5:00 pm ET


Brian Dunn - President and Chief Operating Officer

Anson Chan - Chief Financial Officer, Principal Accounting Officer and Vice President of Finance

Bruce Weyer - Vice President of Worldwide Marketing

Ray Cisneros - Vice President of Worldwide Sales

Shaw Hong - Co-Founder, Chairman, Chief Executive Officer and President


Rajvindra Gill - Needham & Company, LLC

Yair Reiner - Oppenheimer & Co. Inc.

Tristan Gerra - Robert W. Baird & Co. Incorporated

Betsy Van Hees - Wedbush Securities Inc.

Harsh Kumar - Morgan Keegan & Company, Inc.

Paul Coster - JP Morgan Chase & Co



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Good day, ladies and gentlemen, and welcome to the OmniVision Technologies Earnings Conference Call for the Fourth Quarter of Fiscal 2010. My name is Camina, and I will be your coordinator for today's call. [Operator Instructions] I would now like to turn our presentation over to your host, Mr. Brian Dunn. Please proceed, sir.

Brian Dunn

Thank you very much. Good afternoon, everyone, and welcome to our fiscal 2010 fourth quarter earnings conference call. Just after the close of market today, OmniVision issued an earnings release reporting our financial results for our fourth fiscal quarter and fiscal year ended April 30, 2010. You can access this release from the Investor Relations section of our website at Please be advised that this call is being webcast live and is also being recorded for playback purposes. Both the live webcast and replay can also be accessed from the Investor Relations section of our website.

Before we begin, we wish to remind you that certain information discussed in this call, in particular, our revenues, earnings targets and our forward-looking product plans, is based on information as of today, May 27, 2010, and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements.

During the call today, we will present important factors related to our business, which may potentially affect these forward-looking statements. As a result, we caution you against placing undue reliance on these forward-looking statements.

For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings release we issued today as well as OmniVision’s SEC filings including our annual report on Form 10-K for fiscal 2009 and our quarterly reports on Form 10-Q and other reports filed with the SEC from time to time.

And as a reminder, we disclaim any obligation to update information contained in any forward-looking statement.

During this call today, we will discuss certain GAAP and non-GAAP financial measures, the latter of which excludes stock-based compensation expenses and other charges that are driven primarily by discrete events that management does not consider to be directly related to our core operating performance such as goodwill impairment charge in fiscal 2009. A reconciliation between the two is available in our earnings release posted on our website.

With that, I will now turn the call over to OmniVision's President and Chief Executive Officer, Mr. Shaw Hong. Shaw?

Shaw Hong

Thank you, Brian. I will also like to welcome everyone who is participating on our call today. Joining me today are Anson Chan, our CFO; Ray Cisneros, our VP of Sales; and Bruce Weyer, our VP of Marketing.

I will begin the call with an overview of our results for the quarter followed by comments on the progress we made in meeting our strategic goals, which will include a highlight of our successes in the technological developments and our new and innovative product introductions. I will ask Ray to present an overview of our current sales activities and recent accomplishments, followed by Bruce with his comments on our leading strategic posture with our OmniBSI pixel technology and products and the same posture within the emerging video-centric world. Finally, Anson will discuss in detail our financial results for the fourth fiscal quarter. Anson will also provide our outlook for the first quarter of fiscal 2011. We will conclude as usual by answering as many of your questions as time permits.

We reported today our fiscal 2010 fourth quarter revenues of $157 million, which were equal to our third fiscal quarter results. Gross margins improved sequentially to 24.9% for the fourth quarter from 24.6% in the third quarter. This revenue results are consistent with our expectations and the fourth quarter revenue guidance that we provided in our last earnings conference call.

We recorded GAAP net income of approximately $3.5 million or $0.07 per diluted share, while our non-GAAP net income totaled $10 million or $0.18 per diluted share.

Our financial position remains strong, with cash and short-term investments at quarter end totaling $334 million. We are extremely pleased by the progress we made this quarter. This progress refers to our successes in fulfilling our goals of providing and delivering improved image-centric technologies and solutions to our customers and developing and making available a full range of innovative and cross-functional imaging products to all the markets.

This fulfillment is made possible because of our technological strength. And this strength laid a foundation across our entire product portfolio and has position us well to meet our customer needs across all of our target market segments.

In our later session, Bruce will discuss in greater details our leadership role in strengthening transition from a sensing to an imaging company.

As a part of the strategy towards offering you true imaging solutions and providing progress to an imaging video-centric consumer market, we recently completed the acquisition of Aurora Systems, a privately held company. Aurora is a supplier of liquid crystal on silicon devices for use in mobile projection applications and high-definition home theater projection systems. With our cost devices, we will expand our product portfolio with the growing popularity of imaging projection systems in consumer devices and to offer even more comprehensive and innovative imaging solutions to our customers.

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