TAINAN, Taiwan, Feb. 12 /PRNewswire-FirstCall/ -- Himax
Technologies, Inc. ("Himax" or "Company") (NASDAQ:HIMX) today
reported financial results for the fourth quarter and full year
ended December 31, 2006. Net revenue for the fourth quarter of 2006
was $220.9 million, compared to $177.3 million for the fourth
quarter of 2005, and $177.1 million in the third quarter of 2006.
Net income for the fourth quarter of 2006 was $29.4 million, or
$0.15 per diluted share, compared to net income of $17.0 million,
or $0.09 per diluted share in the fourth quarter of 2005, and $4.6
million, or $0.02 per diluted share in the third quarter of 2006.
Share-based compensation was $1.5 million, $4.1 million and $11.5
million in the fourth quarter of 2006, the fourth quarter of 2005
and the third quarter of 2006, respectively. Gross margin in the
fourth quarter of 2006 was 18.9%, as compared to 21.2% in the
fourth quarter of 2005, and 17.4% in the third quarter of 2006.
Operating margin was 10.3% in the fourth quarter of 2006, as
compared to 10.8% in the fourth quarter of 2005, and 1.5% in the
third quarter of 2006. Excluding share-based compensation, gross
margin was 18.9% in the fourth quarter of 2006, 21.3% in the fourth
quarter of 2005, and 17.5% in the third quarter of 2006, with an
operating margin of 11.0%, 13.1%, and 8.0%, respectively. A
reconciliation of our gross margin and operating margin excluding
share-based compensation, a non-GAAP financial measure, to GAAP
gross margin and GAAP operating margin, our most comparable GAAP
figure, is set out in the attached reconciliation schedule. Jordan
Wu, President and Chief Executive Officer of Himax, commented, "We
are pleased with our fourth quarter results, as our revenue and net
income were both record highs since our inception. 2006 was also a
remarkable year for Himax. Our revenue of 2006 increased 37.8%
compared to the prior year, despite a challenging environment faced
by the TFT LCD industry. Moreover, we continued to gain market
share. According to iSuppli, our world wide market share for large
application in 2006 was approximately 19.6% in 2006, a significant
improvement from 15.9% in 2005." Max Chan, Chief Financial Officer
of Himax, said, "Our gross margin increased to 18.9% from 17.4% a
quarter ago. We were able to achieve cost reductions which more
than offset the pricing pressure that we faced in the quarter.
Furthermore, small- and medium-sized driver ICs, which typically
enjoy a higher gross margin, accounted for approximately 11% of our
revenue in the period, up from approximately 9% of our revenue a
quarter ago. Total share-based compensation accrued in the fourth
quarter was approximately $1.5 million, or $0.01 per diluted share,
as compared to $11.5 million, or $0.06 in the third quarter."
Looking forward, Mr. Wu added, "For the first quarter of 2007, we
expect overall revenue will decline approximately 16% to 18%
compared to the fourth quarter of 2006. We expect demand for
PC-related and TV panels to decline significantly due to
seasonality and customers' control on capacity utilization.
However, we expect small- and medium-sized demand will continue to
grow as we are adding new customers and products. We expect our
gross margin to remain flat; diluted GAAP EPS is expected to
decline to the range of $0.08 to $0.09." In the first quarter of
2007, Himax announced closing of Wisepal acquisition. Starting the
first quarter the company will be reporting our result on a
consolidated basis, including Wisepal. Mr. Wu commented, "We are
very pleased with the progress of integration of both companies so
far, and we believe this acquisition will greatly strengthen our
position in the small- and medium-sized applications." Separately,
Himax has completed the share buyback program which the company
announced to the market on November 2nd. Since then, a total of
approximately 10 million of the company's American Depository
Shares have been repurchased from the open market. The repurchased
ADSs and their underlying ordinary shares have been cancelled,
thereby reducing approximately 5% of the Company's issued and
outstanding shares. A reconciliation of our diluted EPS excluding
share-based compensation, a non-GAAP financial measure, to diluted
GAAP EPS, our most comparable GAAP figure, is set out in the
attached reconciliation schedule. Investor Conference Call /
Webcast Details The Company's management will review detailed
fourth quarter 2006 results on Monday, February 12, 2007 at 6:00 PM
EST (7:00 AM, February 13, Taiwan time). The conference call-in
number is +1-201-689-8560 (international) and +1-877-407-0784 (U.S.
domestic). A live webcast of the conference call will be available
on the Company's website at http://www.himax.com.tw/. The playback
will be available beginning two hours after the conclusion of the
conference call and will be accessible by dialing +1-201-612-7415
(international) and 1-877-660-6853 (U.S. domestic). The account
number to access the replay is 3055 and the confirmation ID number
is 228265. About Himax Technologies, Inc. Himax Technologies, Inc.
designs, develops and markets semiconductors that are critical
components of flat panel displays. The Company's principal products
are display drivers for large-sized TFT-LCD panels, which are used
in desktop monitors, notebook computers and televisions, and
display drivers for small- and medium-sized TFT-LCD panels, which
are used in mobile handsets and consumer electronics products such
as digital cameras, mobile gaming devices and car navigation
displays. In addition, the Company is expanding its product
offering to include LCD TV chipset solutions and LCOS
microdisplays. Based in Tainan, Taiwan, the Company has regional
offices in Hsinchu and Taipei, Taiwan; Suzhou and Shenzhen, China;
Yokohama, Japan and Anyangsi Kyungkido, South Korea. Contacts: Max
Chan Jackson Ko Chief Financial Officer Investor Relations Himax
Technologies, Inc. Himax Technologies, Inc. +886-2-3393-0877 Ext.
22300 +886-2-3393-0877 Ext. 22240 In the U.S. David Pasquale The
Ruth Group 646-536-7006 Forward-Looking Statements: Certain
statements in this press release, 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 press release. Factors that
could cause actual results to differ include general business and
economic conditions and the state of the semiconductor industry;
level of competition; demand for end-use applications products;
reliance on a small group of principal customers; continued success
in technological innovations; development of alternative flat panel
display technologies; ability to develop and protect our
intellectual property; pricing pressures including declines in
average selling prices; changes in customer order patterns;
shortages in supply of key components; changes in environmental
laws and regulations; exchange rate fluctuations; regulatory
approvals for further investments in our subsidiaries; and other
risks described from time to time in the Company's SEC filings,
including its Form F-1 dated March 13, 2006, as amended. We
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. 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.) (Figures in Thousands of
U.S. Dollars, Except Per Share Data) Three Months Ended Three
Months September Ended December 31, 30, 2006 2005 2006 Revenues
Revenues from third parties, net $91,920 $78,696 $89,044 Revenues
from related parties, net 128,959 98,638 88,061 220,879 177,334
177,105 Costs and expenses: Cost of revenues 179,214 139,664
146,287 Research and development 13,642 13,957 22,685 General and
administrative 3,108 2,556 3,027 Sales and marketing 2,150 2,018
2,364 Total costs and expenses 198,114 158,195 174,363 Operating
income 22,765 19,139 2,742 Non operating income (loss): Interest
income 1,812 323 2,000 Impairment loss on an investment --- (129)
--- Foreign exchange gains (losses), net 356 135 (1,298) Interest
expense --- (114) --- Other income (loss), net 61 (92) 59 2,229 123
761 Income before income taxes and minority interest 24,994 19,262
3,503 Income tax (benefit) expense (4,211) 2,313 (1,246) Income
before minority interest 29,205 16,949 4,749 Minority interest, net
of tax 183 31 (157) Net income $29,388 $16,980 $4,592 Basic
earnings per ordinary share and ADS $0.15 $0.10 $0.02 Diluted
earnings per ordinary share and ADS $0.15 $0.09 $0.02 Basic
Weighted Average Outstanding Shares 198,147 176,854 197,110 Diluted
Weighted Average Outstanding Shares 199,518 180,707 199,729 Himax
Technologies, Inc. Unaudited Supplemental Financial Information
(Figures in Thousands of U.S. Dollars) Three Months Three Months
Ended September Ended December 31, 30, The amount of share-based
compensation included in applicable costs and expenses categories
is summarized as follows: 2006 2005 2006 Share-based compensation
Cost of revenues $25 $89 $208 Research and development 1,161 3,033
8,963 General and administrative 151 380 1,090 Sales and marketing
156 628 1,195 Total $1,493 $4,130 $11,456 Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income (Figures in
Thousands of U.S. Dollars, Except Per Share Data) Twelve Months
Ended December 31, 2006 2005 Revenues Revenues from third parties,
net $331,025 $217,420 Revenues from related parties, net 413,493
322,784 744,518 540,204 Costs and expenses: Cost of revenues
601,565 419,380 Research and development 58,832 41,278 General and
administrative 9,527 6,784 Sales and marketing 6,618 4,762 Total
costs and expenses 676,542 472,204 Operating income 67,976 68,000
Non operating income (loss): Interest income 5,860 580 Impairment
loss on an investment (1,500) (129) Foreign exchange gains, net 224
1,808 Interest expense (311) (125) Other income, net 233 124 4,506
2,258 Income before income taxes and minority interest 72,482
70,258 Income tax (benefit) expense (2,720) 8,923 Income before
minority interest 75,202 61,335 Minority interest, net of tax 242
223 Net income $75,444 $61,558 Basic earnings per ordinary share
and ADS $0.39 $0.35 Diluted earnings per ordinary share and ADS
$0.39 $0.34 Himax Technologies, Inc. Unaudited Condensed
Consolidated Balance Sheets (Figures in Thousands of U.S. Dollars)
Dec 31, Sep 30, Dec 31, 2006 2006 2005 Assets Current assets: Cash
and cash equivalents $109,753 $155,594 $7,086 Marketable securities
available-for-sale 8,828 4,072 3,989 Restricted cash equivalents
and marketable securities 108 31 14,053 Accounts receivable, less
allowance for sales returns and discounts 113,521 101,660 80,158
Accounts receivable from related parties 116,096 71,530 69,688
Inventories 101,341 106,977 105,004 Deferred income taxes 6,721
11,202 8,965 Prepaid expenses and other current assets 10,404
20,622 11,113 Total current assets $466,772 $471,688 $300,056
Property and equipment, net 41,918 34,946 24,426 Deferred income
taxes 11,454 134 151 Intangible assets, net 393 61 81 Investments
in non-marketable securities 817 1,723 1,813 Refundable deposits
550 603 712 55,132 37,467 27,183 Total assets $521,904 $509,155
$327,239 Liabilities, minority interest and stockholders' equity
Current liabilities: Short-term debt $--- $--- $27,274 Current
portion of long-term debt --- --- 89 Accounts payable 120,407
106,829 105,801 Income tax payable 14,385 11,783 13,625 Other
accrued expenses and other current liabilities 21,274 16,029 13,995
Total current liabilities $156,066 $134,641 $160,784 Other
liabilities 191 --- --- Total liabilities $156,257 $134,641
$160,784 Minority interest $1,397 $1,054 $624 Stockholders' equity:
Ordinary share, US$0.0001 par value, 500,000,000 shares authorized
19 19 18 Additional paid-in capital 221,666 260,031 98,450
Accumulated other comprehensive income (207) 27 36 Unappropriated
earnings 142,772 113,383 67,327 Total stockholders' equity $364,250
$373,460 $165,831 Total liabilities, minority interest and
stockholders' equity $521,904 $509,155 $327,239 Himax Technologies,
Inc. Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars) Three Months Ended Three
Months September Ended December 31, 30, 2006 2005 2006 Cash flows
from operating activities: Net income $29,388 $16,980 $4,592
Adjustments to reconcile net income to net cash provided (used in)
by operating activities: Depreciation and amortization 1,869 942
1,119 Share-based compensation expenses 1,493 4,130 11,456 Minority
interest, net of tax (183) (31) 157 Gain on sale of marketable
securities, net (61) 89 (23) Impairment loss on an investment ---
129 --- Deferred income taxes (6,842) (2,110) 132 Inventories write
down 2,691 708 469 Changes in operating assets and liabilities:
Accounts receivable (11,840) (24,561) (14,772) Accounts receivable
from related parties (44,346) (6,663) (5,096) Inventories 6,885
(27,581) (7,838) Prepaid expenses and other current assets 6,285
(5,768) (4,497) Accounts payable 13,563 (1,731) 8,815 Income tax
payable 2,601 4,485 (1,075) Other accrued expenses and other
current liabilities 1,327 3,690 3,477 Net cash provided by (used
in) operating activities 2,830 (37,292) (3,084) Cash flows from
investing activities: Purchase of land, property and equipment
(5,628) (1,746) (5,691) Purchase of available-for-sales marketable
securities (12,678) --- (10,608) Sales and maturities of
available-for-sale marketable securities 7,940 1,442 8,480 Proceeds
from sale of subsidiary shares by Himax Technologies Limited 937 51
27 Purchase of investments in non-marketable securities --- ---
(1,410) Purchase of subsidiary shares from minority interest (37)
(457) (64) Return of (increase in) refundable deposits 62 (364)
(92) Release (pledge) of restricted cash equivalents and marketable
securities (74) (13,614) 424 Net cash used in investing activities
(9,478) (14,688) (8,934) Himax Technologies, Inc. Unaudited
Condensed Consolidated Statements of Cash Flows (Figures in
Thousands of U.S. Dollars) Three Months Ended Three Months
September Ended December 31, 30, 2006 2005 2006 Cash flows from
financing activities: Proceeds from issuance of ordinary shares
(393) (14,487) --- Proceeds from issuance of new shares by
subsidiaries --- 866 655 Shares buyback for canceling (38,835) ---
--- Proceeds from short-term debt --- 27,274 --- Repayment of
long-term debt --- (42) --- Net cash provided (used in) by
financing activities (39,228) 13,611 655 Effect of exchange rate
changes on cash and cash equivalents 15 4 73 Net decrease in cash
and cash equivalents (45,861) (38,365) (11,290) Cash and cash
equivalents at beginning of period 155,594 45,451 166,884 Cash
received from the acquisition of subsidiary 20 --- --- Cash and
cash equivalents at end of period $109,753 $7,086 $155,594
Supplemental disclosures of cash flow information: Cash paid during
the period for: Interest $--- $114 $--- Income taxes $18 $13 $21
Supplemental disclosures of non-cash investing and financing
activities: Increase (Decrease) in payable for purchase of
equipment and construction in progress $4,481 $(768) $(1,750) Himax
Technologies, Inc. Unaudited Condensed Consolidated Statements of
Cash Flows (Figures in Thousands of U.S. Dollars) Twelve Months
Ended December 31, 2006 2005 Cash flows from operating activities:
Net income $75,444 $61,558 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 5,410 3,613 Share-based compensation expenses 15,150
8,613 Minority interest, net of tax (242) (223) Loss (gain) on
disposal of property and equipment 36 (19) Gain on sale of
marketable securities, net (197) (105) Impairment loss on an
investment 1,500 129 Deferred income taxes (9,066) (3,371)
Inventories write down 9,417 927 Changes in operating assets and
liabilities: Accounts receivable (33,286) (53,297) Accounts
receivable from related parties (46,245) (30,403) Inventories
(5,755) (51,839) Prepaid expenses and other current assets 751
(6,413) Accounts payable 14,591 67,152 Income tax payable 803
10,852 Other accrued expenses and other current liabilities 2,863
5,290 Net cash provided by operating activities 31,174 12,464 Cash
flows from investing activities: Purchase of land, property and
equipment (19,270) (14,733) Purchase of available-for-sales
marketable securities (31,911) (38,048) Sales and maturities of
available-for-sale marketable securities 27,128 42,028 Proceeds
from sale of subsidiary shares by Himax Technologies Limited 1,143
51 Purchase of investments in non-marketable securities (1,410) ---
Purchase of subsidiary shares from minority interest (208) (523)
Return of (increase in) refundable deposits 170 (414) Release
(pledge) of restricted cash equivalents and marketable securities
13,946 (13,724) Net cash used in investing activities (10,412)
(25,363) Himax Technologies, Inc. Unaudited Condensed Consolidated
Statements of Cash Flows (Figures in Thousands of U.S. Dollars)
Twelve Months Ended December 31, 2006 2005 Cash flows from
financing activities: Distribution of special cash dividends ---
(13,558) Proceeds from issuance of ordinary shares 147,407 ---
Proceeds from issuance of new shares by subsidiaries 668 866 Shares
buyback for canceling (38,835) --- Proceeds from borrowing of
short-term debt 11,303 27,274 Repayment of short-term debt (38,577)
--- Repayment of long-term debt (89) (178) Net cash provided by
financing activities 81,877 14,404 Effect of exchange rate changes
on cash and cash equivalents 8 4 Net increase in cash and cash
equivalents 102,647 1,509 Cash and cash equivalents at beginning of
period 7,086 5,577 Cash received from the acquisition of subsidiary
20 --- Cash and cash equivalents at end of period $109,753 $7,086
Supplemental disclosures of cash flow information: Cash paid during
the period for: Interest $311 $125 Income taxes $5,603 $1,130
Supplemental disclosures of non-cash investing and financing
activities: Increase (Decrease) in payable for purchase of
equipment and construction in progress $3,606 $(2,285) Himax
Technologies, Inc. Unaudited Supplemental Data - Reconciliation
Schedule (Figures in Thousands of U.S. Dollars, Except Per Share
Data) Gross Margin and Operating Margin Excluding Share-based
Compensation: Three Months Ended Three Months September Ended
December 31, 30, 2006 2005 2006 Revenues $220,879 $177,334 $177,105
Gross profit 41,665 37,670 30,818 Add: Share-based compensation -
Cost of revenues 25 89 208 Gross profit excluding share-based
compensation 41,690 37,759 31,026 Gross margin excluding
share-based compensation 18.9 % 21.3 % 17.5 % Operating income
22,765 19,139 2,742 Add: Share-based compensation 1,493 4,130
11,456 Operating income excluding share-based compensation 24,258
23,269 14,198 Operating margin excluding share-based compensation
11.0 % 13.1 % 8.0 % *Gross margin excluding share-based
compensation equals gross profit excluding share-based compensation
divided by revenues *Operating margin excluding share-based
compensation equals operating income excluding share-based
compensation divided by revenues Diluted Earnings Per Share
Excluding Share-based Compensation: Three Months Ended December 31,
2006 Diluted GAAP EPS $0.15 Add: Estimated share-based compensation
per diluted share $0.01 Diluted non GAAP EPS excluding share-based
compensation $0.16 Numbers do not add up due to rounding
DATASOURCE: Himax Technologies, Inc. CONTACT: Max Chan, Chief
Financial Officer, +886-2-3393-0877 Ext. 22300, , or Jackson Ko,
Investor Relations, +886-2-3393-0877 Ext. 22240, , both of Himax
Technologies, Inc.; or In the U.S.: David Pasquale of The Ruth
Group, +1-646-536-7006, Web site: http://www.himax.com.tw/
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