Himax Technologies' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Himax Technologies, Inc. (HIMX)

Q2 2012 Earnings Call

August 9, 2012 8:00 a.m. ET

Executives

John Mattio - Investor Relations, MZ North America

Jordan Wu - President and Chief Executive Officer

Jackie Chang - Chief Financial Officer

Analysts

Jay Srivatsa - Chardan Capital

Peter Liao - Nomura

George Chang - Yuanta Research

Kyna Wong - Merrill Lynch

Presentation

Operator

Greetings. Welcome to Himax Technologies Incorporated Second Quarter 2012 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded today. It is now my pleasure to introduce your host John Mattio, Senior Vice President of MZ North America. Thank you. Mr. Mattio, you may begin.

John Mattio

Thank you very much, operator. Welcome everyone to Himax’s second quarter 2012 earnings conference call. Joining us from the company are Mr. Jordan Wu, President and Chief Executive Officer, and Ms. Jackie Chang, Chief Financial Officer. After the company’s prepared comments, we have allocated time for questions in a Q&A session following the company’s prepared remarks. If you have not yet received a copy of today’s results release, please call MZ Group at 212-301-7130, or the press release can be accessed on financial portals like Bloomberg, Yahoo, or Google, or you can download a copy from Himax’s website at www.himax.com.tw.

Before we begin the formal remarks, I’d like to remind everyone that some of the statements in this conference call, including statements regarding expected future financial results and industry growth are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this conference call. Factors that could cause actual results include, but are 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; and other operational and market challenges including company’s Taiwan depository listing, TDR; the capability to maintain the full two-way fungibles between the company’s ordinary shares and ADSs; 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 SEC as amended.

Except for the company’s full year of 2011 financials which were provided on the company’s 20-F filed with the SEC, the financial information in this conference call is unaudited and consolidated, and prepared in accordance with US GAAP. Such financial information is generated internally and has not yet been subjected to the same review and scrutiny, including internal auditing procedures and audit by independent auditors, to which the company subjects its annual consolidated financial statements, and may vary materially from the audited consolidated financial information for the same period. Any evaluation of the financial information included in this conference call should also take into account the published audited consolidated financial statements and the notes to those statements. In addition, the financial information included in this conference call is not necessarily indicative of results for any future period. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

At this time, I would now like to turn the call over to Mr. Jordan Wu, Chairman and CEO. Jordan?

Jordan Wu

Thank you, John, and thank you everyone for being with us for today’s call. In this earnings call, in addition to reporting our performance for the second quarter, I will also summarize key growth drivers and highlight milestones we have achieved so far in the first half of 2012. I will then provide our outlook for the third quarter 2012 and outline our strategic focus areas for the rest of the year. Our CFO, Jackie Chang, will provide further details on our financial performance.

We issued our second quarter earnings press release yesterday. Q2 revenues came in at $189.5 million while gross margin was 23.1% and GAAP earnings per ADS were 8.9 cents, mapped with what we stated in the preliminary results issued on July 9. These strong results reflect further progress we have made across our organization. Starting with our sales performance, second quarter revenues of $189.5 million represented 18% growth year-over-year and 13.7% increase sequentially. Strong sales in our small and medium-sized drivers and non-driver ICs remained the top contributors to our revenue growth.

Our sales to non-related parties increased an impressive 36.5% year- over-year and grew 21.9% sequentially. Revenues from large panel display drivers were $79.7 million, up 4.3% from a year ago and also increased 11.7% sequentially. Large panel drivers accounted for 42.1% of our total revenues for the second quarter compared to 47.6% a year ago and 42.8% in the previous quarter. The sales increase was mainly due to the growing sales to the panel customers in China. Thanks to the new capacity ramp currently underway in China, we anticipate this positive trend to continue in the second half of the year.

Sales of small and medium sized applications came in at $83.8 million, up 34.7% from the same period last year and up 15.8% sequentially. The growth was mainly a result of strong sales in a number of fast-growing product segments including smartphones, automotive and tablets. Sales for smartphone driver ICs, particularly those to the China market, were particularly robust. Our small and medium sized driver sales totaled $83.8 million for the second quarter, a record high in our history. Revenues from our non-driver businesses were $26 million, an increase of 18.4% from the same period last year and up 13.2% sequentially.

Read the rest of this transcript for free on seekingalpha.com

More from Stocks

Market Can't Handle the Wild Ride: Cramer's 'Mad Money' Recap (Thursday 5/24/18)

Market Can't Handle the Wild Ride: Cramer's 'Mad Money' Recap (Thursday 5/24/18)

Replay: Jim Cramer on North Korea, Oil Prices, Apple and Carnival Corporation

Replay: Jim Cramer on North Korea, Oil Prices, Apple and Carnival Corporation

Canopy Growth: First Cannabis Firm on the NYSE Fails to Generate Buzz

Canopy Growth: First Cannabis Firm on the NYSE Fails to Generate Buzz

Video: This Startup Connects Buyers and Sellers of Legal Marijuana

Video: This Startup Connects Buyers and Sellers of Legal Marijuana

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit