Himax Technologies, Inc. (Nasdaq: HIMX) (“Himax” or “Company”), a
leading supplier and fabless manufacturer of display drivers and
other semiconductor products, announced its financial results for
the second quarter ended June 30, 2019.
|
SUMMARY
FINANCIALS |
|
Second Quarter
2019 Results
Compared to Second Quarter 2018
Results (USD in millions)
(unaudited) |
|
Q2 2019 |
Q2 2018 |
CHANGE |
Net Revenue |
$169.3 |
$181.4 |
-6.6% |
Gross Profit |
$32.9 |
$41.8 |
-21.2% |
Gross Margin |
19.5% |
23.0% |
-3.5% |
IFRS Profit (Loss)
Attributable to Shareholders |
($5.2) |
$2.0 |
-351.8% |
Non-IFRS Profit (Loss)
Attributable to Shareholders |
($4.8)(1) |
$2.3(2) |
-308.1% |
IFRS EPS (Per Diluted ADS,
USD) |
($0.030) |
$0.012 |
-351.7% |
Non-IFRS EPS (Per Diluted ADS,
USD) |
($0.028)(1) |
$0.013(2) |
-308.1% |
|
(1) Non-IFRS Loss
attributable to common shareholders and EPS excludes $0.4 million
of share-based compensation expenses, net of tax and $0.02 million
non-cash acquisition related charge, net of tax. |
(2) Non-IFRS
Profit attributable to common shareholders and EPS excludes $0.2
million of share-based compensation expenses, net of tax and $0.1
million non-cash acquisition related charges, net of tax. |
Second
Quarter 2019 Results
Compared to First Quarter
2019 Results (USD in millions)
(unaudited) |
|
Q2 2019 |
Q1 2019 |
CHANGE |
Net Revenue |
$169.3 |
$163.3 |
+3.7% |
Gross Profit |
$32.9 |
$36.9 |
-10.6% |
Gross Margin |
19.5% |
22.6% |
-3.1% |
IFRS Profit (Loss)
Attributable to Shareholders |
($5.2) |
($2.3) |
-122.1% |
Non-IFRS Profit
(Loss) Attributable to Shareholders |
($4.8)(1) |
($2.0)(2) |
-144.8% |
IFRS EPS (Per
Diluted ADS, USD) |
($0.030) |
($0.013) |
-122.1% |
Non-IFRS EPS (Per
Diluted ADS, USD) |
($0.028)(1) |
($0.011)(2) |
-144.8% |
|
(1) Non-IFRS Loss
attributable to common shareholders and EPS excludes $0.4 million
of share-based compensation expenses, net of tax and $0.02 million
non-cash acquisition related charge, net of tax. |
(2) Non-IFRS Loss
attributable to common shareholders and EPS excludes $0.3 million
of share-based compensation expenses, net of tax and $0.02 million
non-cash acquisition related charge, net of tax. |
|
“Our second quarter 2019 revenues, gross margin
and EPS all met our guidance issued on May 9. Our revenue came in
at the midrange of our guidance. As expected, our smartphone
segment recorded a significant sequential growth while automotive
business declined amidst worldwide sluggish car sales. Our large
panel driver ICs also experienced lower shipment and pricing
erosion as a result of our panel customers facing industry-wide
overcapacity and uncertain economic outlook. IFRS gross margin for
the second quarter declined sequentially due to less favorable
product mix,” said Mr. Jordan Wu, President and Chief Executive
Officer of Himax.
“Market conditions have been challenging and we
do not see them improving in the near term. Uncertainty in the
global economy continues to overshadow the marketplace, where we
are seeing softness in all industries that consume display. This
combined with prevailing industry-wide capacity oversupply, has led
to severe pricing and cost pressure for panels, which has directly
affected our sales and margin.”
“Against the backdrop of an unfriendly market
environment, we have faced multiple challenges that have had an
adverse effect on our overall financial performance over the past
twelve months. First, the large display driver IC and small/medium
driver IC markets experienced chip-on-film (COF) and wafer capacity
shortages, respectively. The severe shortages significantly
affected our ability to fulfill customer orders in the back half of
2018, which not only impacted our 2018 sales but also jeopardized
our ability to win new projects with customers at the time. While
these constraints were resolved towards the end of 2018, we are
still suffering from the repercussions of the loss of new projects
as we did not get to take part in the mass production of those
projects, many of which started in the second or third quarter this
year. Second, beginning earlier this year, there has been a major
pullback in demand for our DDICs as panel makers, facing an
industry-wide overcapacity and uncertain economic outlook, cut back
their production and, in the meantime, attempt to lower the DDIC
inventory which they built earlier to address the IC shortage
concern. The combination of these two factors has negatively
impacted our performance in the second half of 2018 as well as
full-year 2019. Separately in the smartphone segment, new model
opportunities, which we count on to boost our new generation TDDI
product shipment, have been limited so far in 2019 due to a slow
smartphone market. In summary, while we expect strong TDDI growth
in 2019, its contribution to our overall sales will be offset by
decreases in large panel and automotive DDICs, which have been
negatively impacted by the unfavorable market environment.”
“Notwithstanding the current business headwinds,
we are committed to the long-term strategy of achieving a balanced
portfolio of DDIC and non-DDIC products. Looking forward, we
believe that as a market and technology leader in DDIC, we are
positioned well to regain market share in both large and
small/medium display segments where we have seen major new project
opportunities emerging with our customers. At the same time, we are
working towards capitalizing on the unique non-driver technologies
where we have invested heavily in the last few years, particularly
3D sensing and ultra-low power smart sensing.”
“In the past, our structured light-based 3D
sensing total solution was designed to target the Android
smartphone’s front-facing facial recognition and payment
certification. The project was unsuccessful and we have since
adjusted our structured light-based 3D sensing technology
development to focus on applications for non-smartphone segments
which are typically less sensitive to cost and always require a
total solution. For the smartphone market where many customers are
exploring time-of-flight (ToF) solutions for world-facing 3D
sensing, we are an active participant by being a key optical
component provider. Another key area of our non-driver R&D
efforts has been the AI-based smart sensing. Our WiseEye
solution contains Himax’s industry leading CMOS image sensor and
ASIC designs with Emza’s AI-based algorithm, all built with
ultra-low power design. WiseEye will enable next generation
AI-based computer vision technology with ultra-low power for
notebook and many other markets,” said Mr. Jordan Wu.
“Last but not least, while we are making good
progress in the development of strategic technologies, we have kept
R&D expenses approximately flat compared to last year. These
include next generation display driver technology for 8K TV and
AMOLED, 3D sensing for both mobile phone and non-mobile phone
applications and the ultra-low power smart sensing solutions. We
are committed to our overall strategy and continue to invest in
technology to drive our long-term growth,” concluded Mr. Jordan
Wu.
|
Second Quarter 2019 Revenue Breakdown by Product Line (USD
in millions) (unaudited) |
|
Q2 2019 |
|
% |
|
Q2 2018 |
|
% |
|
% Change |
Display drivers for
large-sized panels |
$59.3 |
|
35.0% |
|
$60.6 |
|
33.4% |
|
-2.2% |
Display drivers for
small/medium-sized panels |
$81.7 |
|
48.3% |
|
$89.3 |
|
49.2% |
|
-8.5% |
Non-driver products |
$28.3 |
|
16.7% |
|
$31.5 |
|
17.4% |
|
-10.1% |
Total |
$169.3 |
|
100.0% |
|
$181.4 |
|
100.0% |
|
-6.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2019 |
|
% |
|
Q1 2019 |
|
% |
|
% Change |
Display drivers for
large-sized panels |
$59.3 |
|
35.0% |
|
$70.0 |
|
42.9% |
|
-15.3% |
Display drivers for
small/medium-sized panels |
$81.7 |
|
48.3% |
|
$67.6 |
|
41.4% |
|
+20.9% |
Non-driver products |
$28.3 |
|
16.7% |
|
$25.7 |
|
15.7% |
|
+9.8% |
Total |
$169.3 |
|
100.0% |
|
$163.3 |
|
100.0% |
|
+3.7% |
|
|
|
|
|
|
|
|
|
|
The Company recorded net revenues of $169.3
million, an increase of 3.7% sequentially and a decrease of 6.6%
year-over-year. As expected, its smartphone segment recorded a
significant sequential growth while automotive business declined
amidst worldwide sluggish car sales. The TV sales were also hit by
the falling panel prices caused by the display industry’s
oversupply situation. Gross margin was 19.5%, down 310 basis points
sequentially due to less favorable product mix. IFRS loss per
diluted ADS were 3.0 cents, in line with the guidance range of 2.0
to 3.5 cents. Non-IFRS loss per diluted ADS were 2.8 cents, in line
with the guidance range of 1.8 to 3.3 cents.
Revenue from large display drivers was $59.3
million, down 15.3% sequentially, and down 2.2% year-over-year.
Clouded by weak demand and oversupply, Himax’s panel customers have
been over-stocked since last year. Its large panel driver ICs
experienced lower shipments and pricing erosion in the second
quarter as a result. Large panel driver ICs accounted for 35.0% of
the Company’s total revenues for the second quarter, compared to
42.9% in the first quarter of 2019 and 33.4% a year ago.
Revenue for small and medium-sized display
drivers came in at $81.7 million, up 20.9% sequentially but down
8.5% year-over-year. The segment accounted for 48.3% of total sales
for the second quarter, as compared to 41.4% in the first quarter
of 2019 and 49.2% a year ago. The sequential revenue increase was
mainly from smartphone and tablet sales. Both segments saw stronger
shipments to a more diversified customer base in Q2. On
year-over-year basis, sales for all small and medium-sized business
segments declined except for smartphone TDDI.
Sales into smartphones were up 60.9%
sequentially and flat year-over-year. The strong sequential
increase came from high TDDI shipment off a low base and strong
shipment of traditional discrete driver IC to a major Chinese
smartphone maker. On a year-over-year basis, Himax’s TDDI shipment
doubled as its shipment was capped last year by capacity
constraint. However, sales of the traditional DDICs declined by
close to 40% from last year. It expects sales for traditional
discrete driver ICs in smartphone segment to decline significantly
in the second half of 2019 as its addressable market is being
quickly replaced by TDDI and AMOLED. Display drivers for tablet and
other consumer products were up 23.7% sequentially through shipment
to a leading end customer and white box market on the backdrop of a
shrinking global tablet market. Year-over-year sales of this
segment declined 17.9%.
Driver IC revenue for automotive application was
down 10% both sequentially and year-over-year as car sales remained
weak across all major markets worldwide. The $25.6 million sales
for the second quarter accounted for 18.2% of the Company’s total
driver IC revenue. It expects this downward trend to continue in
2H19.
Revenues from non-driver businesses were $28.3
million, up 9.8% sequentially but down 10.1% from last year.
Non-driver products accounted for 16.7% of total revenues, as
compared to 15.7% in the first quarter of 2019 and 17.4% a year
ago. The sequential increase was mainly due to higher timing
controller and CMOS image sensor sales offset by lower WLO
shipment. On a year-over-year basis, CMOS image sensor enjoyed some
growth, while other major products, including WLO and timing
controller, experienced decline.
The gross margin for the second quarter was
19.5%, down 310 basis points sequentially and down 350 basis points
from the same period last year, both a result of product mix. The
Company anticipated the sequential decline and highlighted three
reasons in the last earnings call. Firstly, its large panel driver
IC business experienced pricing pressure caused by industry wide TV
panel oversupply and high material cost. Secondly, the gross margin
of the WLO business fell because of reduced shipment per an anchor
customer’s demand which led to lower capacity utilization. Finally,
the significant sequential increase of TDDI for low-end market and
certain traditional discrete driver IC for smartphones also led to
lower overall gross margin.
IFRS operating expenses were $38.9 million in
the second quarter, down 3.4% from the preceding quarter and down
5.8% from a year ago.
IFRS operating margin for the second quarter was
-3.5%, down from 0.3% in the same period last year and down from
-2.1% in the prior quarter. The sequential decrease was primarily a
result of lower gross margin. The year-over-year decline was a
result of lower sales and gross margin.
Second quarter non-IFRS operating loss was $5.5
million, or -3.2% of sales, versus non-IFRS operating income of
$0.8 million, or 0.5% of sales, for the same period last year and
down from -1.8% a quarter ago.
IFRS loss for the second quarter was $5.2
million, or 3.0 cents per diluted ADS, compared to loss of $2.3
million, or 1.3 cents per diluted ADS, in the previous quarter and
IFRS profit of $2.0 million, or 1.2 cents per diluted ADS, a year
ago.
Second quarter non-IFRS loss was $4.8 million,
or 2.8 cents per diluted ADS, compared to non-IFRS loss of $2.0
million, or 1.1 cents per diluted ADS last quarter and non-IFRS
profit of $2.3 million, or 1.3 cents per diluted ADS the same
period last year.
Balance Sheet and Cash Flow
Himax had $122.4 million of cash, cash
equivalents and other financial assets as of the end of June 2019,
compared to $126.7 million at the same time last year and $108.2
million a quarter ago. The cash position increased $14.1 million
from last quarter due primarily to increased unsecured borrowings
of $37 million, offset by capex of $5.7 million and cash outflow of
$17.7 million from operations. On top of the cash position,
restricted cash was $164.3 million at the end of the quarter, the
same as the preceding quarter and up from $147.0 million a year
ago. The restricted cash is mainly used to guarantee the secured
short-term borrowing for the same amount. The Company had $77
million unsecured short-term loan at the end of Q2 versus $40
million a quarter ago. As reported in the last earnings call,
further loan was made to finance the land payment.
Himax’s inventories as of June 30, 2019 were
$188.5 million, slightly down from $189.3 million a quarter ago and
up from $142.1 million a year ago. Accounts receivable at the end
of June 2019 were $176.2 million, little changed from last quarter
and a year ago. DSO was 96 days at the end of June 2019, as
compared to 93 days a year ago and 97 days at end of the last
quarter. As highlighted in the last earnings calls, in response to
capacity shortage of foundry and certain packaging material, the
Company had to keep the inventory level higher than usual last
year. Given the prevailing uncertain market conditions and ease of
foundry capacity, the Company has started to control its inventory
level from the first quarter 2019. More sizeable reduction in
inventory will be seen starting the third quarter.
Net cash outflow from operating activities for
the second quarter was $17.7 million as compared to an outflow of
$2.8 million for the same period last year and an outflow of $22.1
million last quarter. The increased outflow year-over-year was
mainly due to additional inventory buildup and lower profit.
Second quarter capital expenditures amounted to
$5.7 million, versus $17.7 million a year ago and $6.3 million last
quarter. The investment in design tools and R&D related
equipment for its traditional IC design business amounted to $1.7
million in the quarter. The remaining $4.0 million was for the
ongoing payments for the new building’s construction and WLO
capacity expansion. Third quarter capex is budgeted to be around
$33 million including the payment of $27.7 million for the land
purchase which was deferred from the second quarter. By the end of
Q3 Himax will have concluded substantially all the capex payments
for the new land, building and 3D sensing project with just $1
million left to be made in the fourth quarter.
Dividend
Himax typically makes annual cash dividend
payment at approximately the middle of the year based on the prior
year’s profitability. The Company’s Board of Directors has decided
that Himax will not pay cash dividend in 2019. The decision was
made with full consideration of Himax’s 2018 financial results as
well as 2019 operations and capital requirement.
Share Buyback Update
As of June 30, 2019, Himax had 172.1 million ADS
outstanding, unchanged from last quarter. On a fully diluted basis,
the total ADS outstanding are 172.6 million.
Q3 2019
Outlook
As the Company mentioned last quarter, market
conditions have been challenging and it does not see them improving
in the near term. Uncertainty in the global economy continues to
overshadow the marketplace, where Himax is seeing softness in all
industries that consume display. This combined with prevailing
industry-wide capacity oversupply, has led to severe pricing and
cost pressure for panels, which has directly affected its sales and
margin.
Against the backdrop of an unfriendly market
environment, the Company has faced multiple challenges that have
had an adverse effect on its overall financial performance over the
past twelve months. First, the large display driver IC and
small/medium driver IC markets experienced chip-on-film (COF) and
wafer capacity shortages, respectively. The severe shortages
significantly affected its ability to fulfill customer orders in
the back half of 2018, which not only impacted its 2018 sales but
also jeopardized its ability to win new projects with customers at
the time. While these constraints were resolved towards the end of
2018, the Company is still suffering from the repercussions of the
loss of new projects as it did not get to take part in the mass
production of those projects, many of which started in the second
or third quarter this year.
Second, beginning earlier this year, there has
been a major pullback in demand for its DDICs as panel makers,
facing an industry-wide overcapacity and uncertain economic
outlook, cut back their production and, in the meantime, attempt to
lower the DDIC inventory which they built earlier to address the IC
shortage concern. The combination of these two factors has
negatively impacted the Company’s performance in the second half of
2018 as well as full-year 2019. Separately in the smartphone
segment, new model opportunities, which Himax counts on to boost
its new generation TDDI product shipment, have been limited so far
in 2019 due to a slow smartphone market.
In summary, while Himax expects strong TDDI
growth in 2019, its contribution to the Company’s overall sales
will be offset by decreases in large panel and automotive DDICs,
which have been negatively impacted by the unfavorable market
environment.
Notwithstanding the current business headwinds,
the Company is committed to the long-term strategy of achieving a
balanced portfolio of DDIC and non-DDIC products. Looking forward,
it believes that as a market and technology leader in DDIC, Himax
is positioned well to regain market share in both large and
small/medium display segments where the Company has seen major new
project opportunities emerging with its customers. At the same
time, we are working towards capitalizing on the unique non-driver
technologies where it has invested heavily in the last few years,
particularly 3D sensing and ultra-low power smart sensing.
While Himax is making good progress in the
development of strategic technologies, the Company has kept R&D
expenses approximately flat compared to last year. These include
next generation display driver technology for 8K TV and AMOLED, 3D
sensing for both mobile phone and non-mobile phone applications and
the ultra-low power smart sensing solutions. The Company is
committed to its overall strategy and continue to invest in
technology to drive its long-term growth.
Display
Driver IC
MarketLDDICDuring
the second quarter, Himax’s business, and the overall market,
remained weak due to panel overcapacity and high inventory on the
backdrop of an uncertain global economy. Panel makers have reduced
production output, resulting in decreased demand and price erosion
for the Company's DDIC products. The Company expects these trends
will continue into Q3 and the remainder of 2019.
Another major factor affecting its large display
driver IC business is the material costs. Although COF demand has
started to show signs of relaxation, the supply remains tight and
prices in Q3 remain high. The overall outlook of its LDDIC business
for the second half of 2019 has reversed since its last report due
to the reasons mentioned above. The Company now expects its third
quarter revenue in the large display driver IC segment to decrease
sequentially by high-teens with lower gross margin. Based on
the information currently available, it is unlikely that
overcapacity and weak demand in the large panel will change in the
near future. As a result, it expects revenue to decline further in
4Q19 for this segment with continued margin pressure. Despite the
short-term weak outlook, Himax is making good progress securing new
design wins from its existing customers. The Company expects to
return to growth starting Q1 2020.
On technology development, 8K TVs will continue
to hold a small share in the TV market because 8K content and
transmission technology are still early in its lifecycle. But 8K
TVs remain a strategic area for Himax and are expected to boost
demand for higher LCD driver ICs and timing controller
contents.
SMDDICThe global smartphone
market is expected to decline in 2019. On the one hand, Himax is
pleased with the strong TDDI growth in the second quarter driven by
a more diversified customer base and enriched product portfolio. On
the other hand, the speed of growth of TDDI has not been to the
Company’s satisfaction and it is concerned that the TDDI market is
maturing while at the same time experiencing rapid ASP erosion
caused by increased competition. Moreover, sluggish smartphone
demand and shorter product cycles have led to its
slower-than-expected inventory reduction. For the third quarter, it
expects TDDI shipment to be down by low single digits and revenue
to decline by high single digits from the previous quarter due to
ASP erosion. The Company has taken more aggressive action to
control inventory levels and adjust for the weak market
environment. It expects a further reduction in inventory level in
the third quarter.
Himax remains the industry leader in developing
next generation TDDIs solutions such as MUX6, dual gate and high
screen refresh rate TDDIs. The Company has already begun new
design-ins with major smartphones names but do not expect these to
make a meaningful contribution to its sales until 2020. Increased
competition in TDDI market combined with accelerating AMOLED
display adoption will limit the Company’s TDDI growth for
smartphone application in the third quarter and the remainder of
2019.
Himax mentioned in the last earnings call that
it could potentially start shipping TDDI chips for the tablet
market in 2019. It expects to see a small revenue contribution
during Q4 of this year with a number of leading end customers.
Furthermore, the Company is the industry leader in TDDI with active
stylus by partnering with the world's top brands for pen tablets
and interactive pen displays. The Company is pleased to have begun
shipments during the first quarter of its TDDI for automotive
display to a leading panel customer for a prominent auto
manufacturer. The initial volume started small but the pipeline for
next year’s mass production looks promising. While both segments
are smaller than smartphone in terms of volume, they enjoy better
margin and growth opportunities for Himax’s TDDI solutions in the
near future.
As expected, the Company’s traditional discrete
driver IC sales into smartphone increased strongly in the second
quarter as its design-win with a major Chinese smartphone maker
went into production during March and a significant shipment took
place in the second quarter. Despite this rebound, Himax is seeing
the traditional discrete driver ICs’ addressable market being
quickly replaced by TDDI and AMOLED in smartphone. As a result, it
expects traditional discrete driver ICs for smartphone to decline
substantially in the third quarter of 2019 and beyond.
Combining shipment of TDDI and discrete
smartphone driver, Himax’s Q3 sales into the smartphone market is
expected to decrease by around 10% sequentially.
A major development trend Himax is seeing is
increased utilization of OLED display designs for smartphones,
triggered by increased AMOLED capacity and under-display
fingerprint sensing technology which is currently only applicable
with AMOLED displays. Although it expects this trend to negatively
impact the demand for TDDI and corresponding ASP’s, Himax has been
collaborating closely with leading panel makers across China for
AMOLED product development. While the Company doesn’t expect
revenue contribution anytime soon, it does believe AMOLED driver
ICs will be one of the long-term growth engines for its small panel
driver IC business.
In the automotive display segment, the market
has been depressed by declining new car registrations, particularly
in China. Himax continues to face weak demand and expect Q3 sales
to be flat sequentially. Looking forward, against the backdrop of a
feeble car market, the penetration of displays into vehicles is
maturing. Therefore, it doesn’t expect the same kind of growth that
it enjoyed in the past several years in the automotive segment.
However, the Company will continue to lead in this space by
bringing new technologies to market including TDDI, AMOLED and
local dimming timing controller. The Company believes such new
technologies will help rejuvenate the industry and bring its
automotive sales back to a growth trajectory.
Himax’s tablet and consumer electronics
businesses represented around 12.4% of its total sales in the
second quarter. As the overall markets remain weak, it expects
tablet business to decrease by more than 30% in the third quarter
mainly due to a major end customer’s inventory adjustment. As
mentioned earlier, the Company has started to provide OEMs with
samples for its world leading in-cell TDDI that supports the use of
active stylus for tablet during the first quarter. The Company will
report progress in due course. Combing tablet and consumer
electronics businesses, Himax expects sales to decrease by around
25% sequentially in the third quarter.
For third-quarter, revenue for the small and
medium-sized driver IC business is expected to decrease by around
10% sequentially.
Non-Driver Product
Categories3D Sensing SolutionsHimax
continues to participate in most of the smartphone OEMs’ ongoing 3D
sensing projects covering structured light and time-of-flight
(ToF). As the Company reported earlier, in the past, its structured
light-based 3D sensing total solution targeting Android
smartphone’s front-facing application was unsuccessful due to high
hardware cost, long development lead time, and the lack of killer
applications. Since then, the Company has adjusted its structured
light-based 3D sensing technology development to focus on
applications for non-smartphone segments which are typically less
sensitive to cost and always require a total solution. The Company
teamed up with industry-leading facial recognition algorithm and
application processor partners to develop new 3D sensing
applications for smart door lock and have started design-in
projects with certain end customers. Separately the Company is
collaborating with partners who wish to take advantage of its 3D
sensing know-how to automate traditional manufacturing and thereby
improve its efficiency and cost. A prototype of the cutting-edge
manufacturing line is being built on Himax’s premises and it
believes this project can represent a major step forward in its
alternative 3D sensing applications. Himax is still in the early
stage of exploring the full business potential for structured light
3D sensing technology but believe it will be applicable in a wide
range of industries, particularly those demanding high level of
depth accuracy.
On ToF 3D sensing, the Company has seen
increasing adoption of world-facing solutions to enable advanced
photography, distance/dimension measurement and 3D depth
information generation for AR applications. Very recently, thanks
to ToF sensor technology advancement, some OEMs are also exploring
ToF 3D for front-facing facial recognition and payment
certification. As a technology leader in the 3D sensing space,
Himax is an active participant in smartphone OEMs’ design projects
for new devices involving ToF technology by offering WLO optics
and/or transmitter modules with its unique eye-safety protection
design.
WLOAs anticipated, the second
quarter WLO revenue declined sequentially due to reduced shipment
to Himax’s anchor customer as per their lower seasonal demand. The
sequential shipment decline led to lower capacity utilization and
therefore negatively impacted its second quarter gross margin. That
said, the Company’s shipments to the anchor customer in the first
half of 2019 recorded a nice growth from last year. Furthermore,
based on the customer’s shipment forecast, it expects the third
quarter WLO revenue to rise significantly with the strong momentum
expected to carry through the second half of the year.
Himax’s advancements in technology have enabled
the Company to remain an industry leader and an active ecosystem
participant for the creation of breakthrough products and
technologies. In addition to 3D sensing for smartphone
applications, it has various engagements in other markets. For
example, the automotive sector is developing as an attractive
market with substantial opportunities for its WLO product line in
2D/3D in-cabin optical sensing for driver monitoring/identification
and advanced parking assist system.
WiseEyeWiseEye is the Company’s
ultra-low power, AI-based, smart sensing solution. During Computex
2019, in partnership with Quanta Computer, the world’s largest
notebook ODM, Himax unveiled the world’s first human-aware
intelligent vision solution for notebooks, WiseEye 2.0 NB. This
solution was built on Emza’s unique AI-based algorithm as well as
Himax’s proprietary computer vision processor and CMOS image
sensor, all built with ultra-low power design. Emza, based in
Israel, is Himax’s wholly owned subsidiary and a pioneer
specialized in AI-based algorithm for ultra-low power intelligent
image sensing. WiseEye 2.0 NB enables seamless integration of
sensing user context awareness for an improved notebook user
experience and extended battery life. New product features include,
among others, device wake-up when user is present, screen lock when
absent, screen dimming when disengaged, and privacy alerts when a
second person is identified in the field of view. Additionally, the
AI-based always-on sensor can detect user engagement levels, based
on presence and face posing, to enable power management of the
display and maximize battery life. Since Computex, the Company has
extended its dialogue to most OEMs who are all looking to include
AI low power sensors into their platforms. Himax is targeting their
next generation product launches for the 2020 back to school
season.
While the Company’s focus is currently on
notebooks, intelligent ultra-low power human detection and people
counting can be widely utilized. In the future, it will expand into
the residential security, smart home, smart building, consumer
appliances, automotive and industrial segments.
CMOS Image SensorFor the
traditional human vision segments, Himax sees strong demand in
notebooks, where Himax is one of the market leaders, and increased
shipments for multimedia applications such as car recorders,
surveillance, drones, home appliances, and consumer electronics,
among others. Additionally, it has seen increased shipment and new
design-wins in the automotive segment covering before-market
solutions such as surround view and rear-view camera.
CMOS image sensor is a critical component in the
WiseEye solution the Company mentioned earlier. Himax has made a
huge effort to combine the capabilities of high quality HD image
capturing and ultra-low-power, low resolution visual sensing into
one single sensor, the industry’s first with such design. With this
2-in-1 sensor, notebook manufacturers can simplify their product
designs and save the cost for an additional camera needed for
context awareness. The first generation of the 2-in-1 sensor is
designed with state-of-the-art stack-die technology to achieve a
die size small enough to fit in to the industry’s next generation
ultra slim notebook computers. In addition, its sensor has
incorporated an RGB-IR design to enable Windows Hello facial
recognition. The new 2-in-1 CMOS sensor will be available by the
end of 2019.
LCOSIn 2018, many AR goggle
devices were launched, targeting primarily niche industrial or
business applications, with top name multinationals continuing to
invest heavily to develop the ecosystem - applications, software,
operating system, system electronics, and optics. While AR goggles
will take a few more years to fully grow into its market potential,
Himax believes LCOS remains the mainstream technology in this
space. The Company’s technology leadership and proven manufacturing
expertise has made it a preferred partner with AR goggle device
customers for their ongoing engineering projects. In addition,
Himax continues to make great progress in developing high-end
holographic head-up displays for high-end automotive. LCOS for both
goggle device and HUD enjoy much higher ASP and better gross margin
for Himax and represents a long-term growth driver for the
Company.
For non-driver IC business, driven by strong
growth in WLO and CIS, the Company expects revenue to increase by
about 30% sequentially in the third quarter.
Third
Quarter 2019 Guidance |
The Company is
providing the following financial guidance for the third quarter of
2019: |
Net Revenue: |
|
To decrease around 2% to 7% sequentially |
Gross Margin: |
|
To be around flat
sequentially, depending on final product mix |
IFRS Loss: |
|
To be around 3.5 to 5.5 cents
per diluted ADS |
Non-IFRS Loss(1): |
|
To be around 3.3 to 5.3
cents per diluted ADS |
(1) Non-IFRS Loss excludes share-based
compensation and aquisition-related charges
This year, Himax will not issue restricted share
units (RSU) to employees in September like previous years. Thus,
its third quarter guidance has not assumed any RSU expense in the
third quarter 2019. RSU is part of the Company’s share-based
compensation plan which it usually rewards employees with an annual
bonus at the end of September. In 2018, the RSU grant totaled $3.9
million, out of $3.8 million was vested immediately and expensed in
the third quarter. The remainder was vested equally at the first,
second and third anniversaries of the grant date. The decision of
not issuing RSU in 2019 was made with full consideration of Himax’s
2019 financial results and operational requirement.
HIMAX TECHNOLOGIES SECOND QUARTER 2019
EARNINGS CONFERENCE CALL
DATE: |
Thursday,
August 8th, 2019 |
TIME: |
U.S. 8:00 a.m.
EDT |
|
Taiwan 8:00 p.m |
DIAL IN: |
U.S. +1 (866) 444-9147 |
|
INTERNATIONAL +1 (678) 509-7569 |
CONFERENCE ID |
7284304 |
WEBCAST: |
https://edge.media-server.com/mmc/p/wyiecbs8 |
A replay of the call will be available beginning
two hours after the call through 11:30 a.m. US EDT on August 16th,
2019 (11:30 p.m. Taiwan time, August 16th, 2019) on
www.himax.com.tw and by telephone at +1 (855) 859-2056 (US
Domestic) or +1 (404) 537-3406 (International). The conference ID
number is 7284304. This call is being webcast by Nasdaq and can be
accessed by clicking on this link or Himax’s website, where the
webcast can be accessed through August 8th, 2020.
About Himax Technologies, Inc.
Himax Technologies, Inc. (NASDAQ: HIMX) is a
fabless semiconductor solution provider dedicated to display
imaging processing technologies. Himax is a worldwide market leader
in display driver ICs and timing controllers used in TVs, laptops,
monitors, mobile phones, tablets, digital cameras, car navigation,
virtual reality (VR) devices and many other consumer electronics
devices. Additionally, Himax designs and provides controllers for
touch sensor displays, in-cell Touch and Display Driver Integration
(TDDI) single-chip solutions, LED driver ICs, power management ICs,
scaler products for monitors and projectors, tailor-made video
processing IC solutions, silicon IPs and LCOS micro-displays for
augmented reality (AR) devices and heads-up displays (HUD) for
automotive. The Company also offers digital camera solutions,
including CMOS image sensors and wafer level optics for AR devices,
3D sensing and machine vision, which are used in a wide variety of
applications such as mobile phone, tablet, laptop, TV, PC camera,
automobile, security, medical devices, home appliance and Internet
of Things. Founded in 2001 and headquartered in Tainan, Taiwan,
Himax currently employs around 2,100 people from three Taiwan-based
offices in Tainan, Hsinchu and Taipei and country offices in China,
Korea, Japan, Israel, and the US. Himax has 2,931 patents granted
and 561 patents pending approval worldwide as of June 30th, 2019.
Himax has retained its position as the leading display imaging
processing semiconductor solution provider to consumer electronics
brands worldwide.
http://www.himax.com.tw
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, 2018 filed with the SEC, as may be amended.
Company Contacts:
Jackie Chang, CFOHimax
Technologies, Inc.Tel: +886-2-2370-3999 Ext.22300 OrUS Tel:
+1-949-585-9838 Ext.252Fax: +886-2-2314-0877Email:
jackie_chang@himax.com.twwww.himax.com.tw
Ophelia Lin, Investor
RelationsHimax Technologies, Inc.Tel: +886-2-2370-3999
Ext.22202Fax: +886-2-2314-0877 Email:
ophelia_lin@himax.com.tw www.himax.com.tw
Sky Wang, Investor RelationsHimax Technologies,
Inc.US Tel: +1-949-585-9838 Ext.223Fax: +1-312-445-3643Email:
sky_wang@himax.com.tw www.himax.com.tw
Investor Relations - US RepresentativeMike
Cole, Senior Vice PresidentMZ North AmericaTel:
949-259-4988Email: mike.cole@mzgroup.uswww.mzgroup.us
|
|
-Financial Tables- |
Himax Technologies, Inc. |
Unaudited Condensed Consolidated Statements of
Profit or
Loss |
(These interim financials do not fully comply with
IFRS because they omit all interim
disclosure required by
IFRS) |
(Amounts in Thousands of U.S. Dollars, Except
Share and Per Share Data) |
|
|
|
|
|
Three Months Ended June
30, |
|
Three Months Ended March
31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
169,318 |
|
|
$ |
181,365 |
|
|
$ |
163,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
136,370 |
|
|
|
139,571 |
|
|
|
126,469 |
|
Research and development |
|
28,302 |
|
|
|
30,444 |
|
|
|
30,357 |
|
General and administrative |
|
6,155 |
|
|
|
5,632 |
|
|
|
5,522 |
|
Sales and marketing |
|
4,436 |
|
|
|
5,218 |
|
|
|
4,363 |
|
Total costs and expenses |
|
175,263 |
|
|
|
180,865 |
|
|
|
166,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
(5,945 |
) |
|
|
500 |
|
|
|
(3,377 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Non operating income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
514 |
|
|
|
672 |
|
|
|
562 |
|
Changes in fair value of financial assets at fair value through
profit or loss |
|
24 |
|
|
|
(25 |
) |
|
|
(17 |
) |
Foreign currency exchange gains, net |
|
33 |
|
|
|
242 |
|
|
|
277 |
|
Finance costs |
|
(545 |
) |
|
|
(265 |
) |
|
|
(476 |
) |
Share of profit (losses) of associates |
|
(2 |
) |
|
|
(1,099 |
) |
|
|
41 |
|
Other income |
|
24 |
|
|
|
1,677 |
|
|
|
23 |
|
|
|
48 |
|
|
|
1,202 |
|
|
|
410 |
|
Profit (loss) before income
taxes |
|
(5,897 |
) |
|
|
1,702 |
|
|
|
(2,967 |
) |
Income tax expense |
|
- |
|
|
|
306 |
|
|
|
- |
|
Profit (loss) for the period |
|
(5,897 |
) |
|
|
1,396 |
|
|
|
(2,967 |
) |
Loss
attributable to noncontrolling interests |
|
746 |
|
|
|
650 |
|
|
|
648 |
|
Profit (loss)
attributable to Himax Technologies, Inc. stockholders |
$ |
(5,151 |
) |
|
$ |
2,046 |
|
|
$ |
(2,319 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per ADS attributable to Himax Technologies, Inc.
stockholders |
$ |
(0.030 |
) |
|
$ |
0.012 |
|
|
$ |
(0.013 |
) |
Diluted earnings
(loss) per ADS attributable to Himax Technologies, Inc.
stockholders |
$ |
(0.030 |
) |
|
$ |
0.012 |
|
|
$ |
(0.013 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted Average Outstanding ADS |
|
172,540 |
|
|
|
172,499 |
|
|
|
172,540 |
|
Diluted Weighted Average Outstanding ADS |
|
172,561 |
|
|
|
172,539 |
|
|
|
172,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed Consolidated Statements of Profit or
Loss |
(Amounts in Thousands of U.S. Dollars, Except Share and Per
Share Data) |
|
|
|
Six Months Ended June
30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
332,652 |
|
|
$ |
344,216 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
262,839 |
|
|
|
265,825 |
|
Research and development |
|
|
58,659 |
|
|
|
60,484 |
|
General and administrative |
|
|
11,677 |
|
|
|
10,538 |
|
Sales and marketing |
|
|
8,799 |
|
|
|
10,113 |
|
Total costs and expenses |
|
|
341,974 |
|
|
|
346,960 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(9,322 |
) |
|
|
(2,744 |
) |
|
|
|
|
|
|
|
|
|
Non operating income
(loss): |
|
|
|
|
|
|
|
|
Interest income |
|
|
1,076 |
|
|
|
1,221 |
|
Changes in fair value of financial assets at fair value through
profit or loss |
|
|
7 |
|
|
|
(24 |
) |
Foreign currency exchange gains (losses), net |
|
|
310 |
|
|
|
(16 |
) |
Finance costs |
|
|
(1,021 |
) |
|
|
(517 |
) |
Share of profits (losses) of associates |
|
|
39 |
|
|
|
(1,943 |
) |
Other income |
|
|
47 |
|
|
|
1,681 |
|
|
|
|
458 |
|
|
|
402 |
|
Loss before income
taxes |
|
|
(8,864 |
) |
|
|
(2,342 |
) |
Income tax benefit |
|
|
0 |
|
|
|
(422 |
) |
Loss for the period |
|
|
(8,864 |
) |
|
|
(1,920 |
) |
Loss
attributable to noncontrolling interests |
|
|
1,394 |
|
|
|
1,137 |
|
Loss attributable to
Himax Technologies, Inc. stockholders |
|
$ |
(7,470 |
) |
|
$ |
(783 |
) |
|
|
|
|
|
|
|
|
|
Basic loss per ADS attributable to Himax Technologies,
Inc. stockholders |
|
$ |
(0.043 |
) |
|
$ |
(0.005 |
) |
Diluted loss per ADS
attributable to Himax Technologies, Inc. stockholders |
|
$ |
(0.043 |
) |
|
$ |
(0.005 |
) |
|
|
|
|
|
|
|
|
|
Basic Weighted Average Outstanding ADS |
|
|
172,540 |
|
|
|
172,499 |
|
Diluted Weighted Average Outstanding ADS |
|
|
172,559 |
|
|
|
172,538 |
|
|
|
|
|
|
|
|
|
|
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 profit or loss categories is
summarized as follows: |
Three Months Ended June
30, |
|
Three Months Ended March
31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
Share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
$ |
- |
|
|
$ |
12 |
|
|
$ |
- |
|
Research and development |
|
13 |
|
|
|
58 |
|
|
|
13 |
|
General and administrative |
|
2 |
|
|
|
9 |
|
|
|
2 |
|
Sales and marketing |
|
5 |
|
|
|
14 |
|
|
|
4 |
|
Income tax benefit |
|
(5 |
) |
|
|
(13 |
) |
|
|
(4 |
) |
Total |
$ |
15 |
|
|
$ |
80 |
|
|
$ |
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The amount of
acquisition-related charges included in
applicable statements of profit or loss
categories is summarized as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
$ |
471 |
|
|
$ |
246 |
|
|
$ |
470 |
|
Income tax benefit |
|
(123 |
) |
|
|
(71 |
) |
|
|
(122 |
) |
Total |
$ |
348 |
|
|
$ |
175 |
|
|
$ |
348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 profit or loss categories is
summarized as follows: |
|
Six Months Ended June
30, |
|
|
|
2019 |
|
|
|
2018 |
|
Share-based compensation |
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
- |
|
|
$ |
24 |
|
Research and development |
|
|
26 |
|
|
|
115 |
|
General and administrative |
|
|
4 |
|
|
|
18 |
|
Sales and marketing |
|
|
9 |
|
|
|
27 |
|
Income tax benefit |
|
|
(9 |
) |
|
|
(25 |
) |
Total |
|
$ |
30 |
|
|
$ |
159 |
|
|
|
|
|
|
|
|
|
|
The amount of
acquisition-related charges included in
applicable statements of profit or loss
categories is summarized as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
941 |
|
|
$ |
492 |
|
Income tax benefit |
|
|
(245 |
) |
|
|
(142 |
) |
Total |
|
$ |
696 |
|
|
$ |
350 |
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
IFRS Unaudited Condensed
Consolidated
Statements
of Financial
Position |
(Amounts in Thousands of U.S. Dollars) |
|
|
|
June
30,
2019 |
|
March
31, 2019 |
|
June 30,
2018 |
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
92,857 |
|
|
$ |
96,753 |
|
|
$ |
114,480 |
|
Financial assets at amortized cost |
|
|
12,463 |
|
|
|
11,476 |
|
|
|
12,154 |
|
Financial assets at fair value through profit or loss |
|
|
17,034 |
|
|
|
- |
|
|
|
66 |
|
Accounts receivable, net |
|
|
176,224 |
|
|
|
176,152 |
|
|
|
176,286 |
|
Inventories |
|
|
188,535 |
|
|
|
189,317 |
|
|
|
142,077 |
|
Income taxes receivable |
|
|
55 |
|
|
|
55 |
|
|
|
45 |
|
Restricted deposit |
|
|
164,322 |
|
|
|
164,324 |
|
|
|
147,000 |
|
Other receivable from related parties |
|
|
1,200 |
|
|
|
2,780 |
|
|
|
2,803 |
|
Other current assets |
|
|
22,118 |
|
|
|
24,064 |
|
|
|
18,743 |
|
Total current assets |
|
|
674,808 |
|
|
|
664,921 |
|
|
|
613,654 |
|
Financial assets at
fair value through profit or loss |
|
|
9,768 |
|
|
|
9,750 |
|
|
|
1,574 |
|
Financial assets at
fair value through other comprehensive
income |
|
|
710 |
|
|
|
776 |
|
|
|
802 |
|
Equity method
investments |
|
|
4,102 |
|
|
|
4,130 |
|
|
|
9,964 |
|
Property, plant and
equipment, net |
|
|
117,544 |
|
|
|
118,759 |
|
|
|
106,041 |
|
Deferred tax
assets |
|
|
13,428 |
|
|
|
13,698 |
|
|
|
7,834 |
|
Goodwill |
|
|
28,138 |
|
|
|
28,138 |
|
|
|
28,138 |
|
Other
intangible assets, net |
|
|
9,592 |
|
|
|
10,169 |
|
|
|
13,525 |
|
Restricted
deposit |
|
|
129 |
|
|
|
130 |
|
|
|
460 |
|
Other non-current
assets |
|
|
3,321 |
|
|
|
3,682 |
|
|
|
3,660 |
|
|
|
|
186,732 |
|
|
|
189,232 |
|
|
|
171,998 |
|
Total assets |
|
$ |
861,540 |
|
|
$ |
854,153 |
|
|
$ |
785,652 |
|
Liabilities
and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured borrowings |
|
$ |
77,025 |
|
|
$ |
40,000 |
|
|
$ |
- |
|
Secured borrowings |
|
|
164,000 |
|
|
|
164,000 |
|
|
|
147,000 |
|
Financial liability at amortized cost |
|
|
- |
|
|
|
5,071 |
|
|
|
5,003 |
|
Accounts payable |
|
|
134,224 |
|
|
|
147,281 |
|
|
|
128,862 |
|
Income taxes payable |
|
|
1,613 |
|
|
|
5,807 |
|
|
|
1,872 |
|
Other payable to related party |
|
|
2,360 |
|
|
|
3,937 |
|
|
|
2,200 |
|
Other current liabilities |
|
|
38,174 |
|
|
|
41,599 |
|
|
|
58,113 |
|
Total current liabilities |
|
|
417,396 |
|
|
|
407,695 |
|
|
|
343,050 |
|
Net defined benefit
liabilities |
|
|
149 |
|
|
|
150 |
|
|
|
1,125 |
|
Deferred tax
liabilities |
|
|
1,505 |
|
|
|
1,702 |
|
|
|
2,795 |
|
Other non-current
liabilities |
|
|
4,280 |
|
|
|
5,256 |
|
|
|
2,888 |
|
|
|
|
5,934 |
|
|
|
7,108 |
|
|
|
6,808 |
|
Total liabilities |
|
|
423,330 |
|
|
|
414,803 |
|
|
|
349,858 |
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
|
107,010 |
|
|
|
107,010 |
|
|
|
107,010 |
|
Additional paid-in capital |
|
|
104,788 |
|
|
|
104,768 |
|
|
|
106,644 |
|
Treasury shares |
|
|
(8,819 |
) |
|
|
(8,819 |
) |
|
|
(8,878 |
) |
Accumulated other comprehensive income |
|
|
(869 |
) |
|
|
(537 |
) |
|
|
(1,497 |
) |
Retained earnings |
|
|
236,687 |
|
|
|
241,838 |
|
|
|
235,410 |
|
Equity attributable to owners of Himax
Technologies, Inc. |
|
|
438,797 |
|
|
|
444,260 |
|
|
|
438,689 |
|
Noncontrolling
interests |
|
|
(587 |
) |
|
|
(4,910 |
) |
|
|
(2,895 |
) |
Total equity |
|
|
438,210 |
|
|
|
439,350 |
|
|
|
435,794 |
|
Total liabilities and equity |
|
$ |
861,540 |
|
|
$ |
854,153 |
|
|
$ |
785,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts in
Thousands of
U.S.
Dollars) |
|
|
Three Months Ended June 30, |
|
Three Months Ended March 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the
period |
|
$ |
(5,897 |
) |
|
$ |
1,396 |
|
|
$ |
(2,967 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
6,209 |
|
|
|
5,180 |
|
|
|
6,320 |
|
Expected credit loss recognized on accounts receivable |
|
|
- |
|
|
|
190 |
|
|
|
- |
|
Share-based compensation expenses |
|
|
20 |
|
|
|
93 |
|
|
|
19 |
|
Gain on disposals of property, plant and equipment |
|
|
- |
|
|
|
- |
|
|
|
(6 |
) |
Gain on re-measurement of the pre-existing relationships in a
business combination |
|
|
- |
|
|
|
(1,662 |
) |
|
|
- |
|
Changes in fair value of financial assets at fair value through
profit or loss |
|
|
(24 |
) |
|
|
25 |
|
|
|
17 |
|
Interest income |
|
|
(514 |
) |
|
|
(672 |
) |
|
|
(562 |
) |
Finance costs |
|
|
545 |
|
|
|
265 |
|
|
|
476 |
|
Income tax expense |
|
|
- |
|
|
|
306 |
|
|
|
- |
|
Share of losses (profit) of associates |
|
|
2 |
|
|
|
1,099 |
|
|
|
(41 |
) |
Inventories write downs |
|
|
5,008 |
|
|
|
3,567 |
|
|
|
4,750 |
|
Foreign currency exchange losses (gains) of financial assets |
|
|
(23 |
) |
|
|
340 |
|
|
|
(91 |
) |
|
|
|
5,326 |
|
|
|
10,127 |
|
|
|
7,915 |
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(71 |
) |
|
|
(9,872 |
) |
|
|
12,862 |
|
Inventories |
|
|
(4,226 |
) |
|
|
2,318 |
|
|
|
(31,506 |
) |
Other receivable from related party |
|
|
- |
|
|
|
(8 |
) |
|
|
- |
|
Other current assets |
|
|
782 |
|
|
|
1,205 |
|
|
|
(6,027 |
) |
Accounts payable |
|
|
(13,057 |
) |
|
|
(6,108 |
) |
|
|
(3,219 |
) |
Other payable to related party |
|
|
(1,577 |
) |
|
|
300 |
|
|
|
140 |
|
Net defined benefit liabilities |
|
|
(1 |
) |
|
|
(53 |
) |
|
|
51 |
|
Other current liabilities |
|
|
(935 |
) |
|
|
1,318 |
|
|
|
(2,022 |
) |
Other non-current liabilities |
|
|
- |
|
|
|
167 |
|
|
|
- |
|
Cash generated from operating activities |
|
|
(13,759 |
) |
|
|
(606 |
) |
|
|
(21,806 |
) |
Interest received |
|
|
845 |
|
|
|
1,014 |
|
|
|
257 |
|
Interest paid |
|
|
(574 |
) |
|
|
(182 |
) |
|
|
(462 |
) |
Income tax paid |
|
|
(4,229 |
) |
|
|
(3,032 |
) |
|
|
(41 |
) |
Net cash used in operating
activities |
|
|
(17,717 |
) |
|
|
(2,806 |
) |
|
|
(22,052 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions of property, plant and equipment |
|
|
(5,711 |
) |
|
|
(17,745 |
) |
|
|
(6,260 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
8 |
|
|
|
- |
|
|
|
6 |
|
Acquisitions of intangible assets |
|
|
(67 |
) |
|
|
(109 |
) |
|
|
(29 |
) |
Acquisitions of financial assets at amortized cost |
|
|
(1,446 |
) |
|
|
(1,135 |
) |
|
|
(881 |
) |
Proceeds from disposals of financial assets at amortized cost |
|
|
335 |
|
|
|
303 |
|
|
|
803 |
|
Acquisitions of financial assets at fair value through profit or
loss |
|
|
(34,537 |
) |
|
|
(7,445 |
) |
|
|
(8,095 |
) |
Proceeds from disposals of financial assets at fair value through
profit or loss |
|
|
17,634 |
|
|
|
7,693 |
|
|
|
8,086 |
|
Acquisition of business |
|
|
- |
|
|
|
- |
|
|
|
(700 |
) |
Acquisition of a subsidiary, net of cash acquired |
|
|
(400 |
) |
|
|
(3,301 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts in
Thousands of
U.S.
Dollars) |
|
|
Three Months Ended June 30, |
|
Three Months Ended March 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from capital
reduction of investment |
|
|
30 |
|
|
|
- |
|
|
|
- |
|
Decrease in refundable
deposits |
|
|
57 |
|
|
|
6 |
|
|
|
10 |
|
Releases of restricted
deposit |
|
|
3 |
|
|
|
21 |
|
|
|
2 |
|
Cash paid for loan made to
related parties |
|
|
(1,200 |
) |
|
|
(530 |
) |
|
|
- |
|
Cash received from loan made
to related party |
|
|
2,780 |
|
|
|
- |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(22,514 |
) |
|
|
(22,242 |
) |
|
|
(7,058 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from unsecured borrowings |
|
|
77,006 |
|
|
|
- |
|
|
|
40,000 |
|
Repayments of unsecured borrowings |
|
|
(40,000 |
) |
|
|
- |
|
|
|
(20,000 |
) |
Proceeds from secured borrowings |
|
|
27,000 |
|
|
|
27,000 |
|
|
|
37,000 |
|
Repayments of secured borrowings |
|
|
(27,000 |
) |
|
|
(27,000 |
) |
|
|
(37,000 |
) |
Payment of lease liabilities |
|
|
(460 |
) |
|
|
- |
|
|
|
(504 |
) |
Net cash provided by financing activities |
|
|
36,546 |
|
|
|
- |
|
|
|
19,496 |
|
Effect of
foreign currency exchange rate
changes on cash and cash equivalents |
|
|
(211 |
) |
|
|
(278 |
) |
|
|
(70 |
) |
Net
decrease in cash and cash
equivalents |
|
|
(3,896 |
) |
|
|
(25,326 |
) |
|
|
(9,684 |
) |
Cash and cash
equivalents at beginning of period |
|
|
96,753 |
|
|
|
139,806 |
|
|
|
106,437 |
|
Cash and cash
equivalents at end of period |
|
$ |
92,857 |
|
|
$ |
114,480 |
|
|
$ |
96,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts in
Thousands of
U.S.
Dollars) |
|
|
Six Months Ended June
30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Loss for the period |
|
$ |
(8,864 |
) |
|
$ |
(1,920 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
12,529 |
|
|
|
10,278 |
|
Expected credit loss recognized on accounts receivable |
|
|
- |
|
|
|
190 |
|
Share-based compensation expenses |
|
|
39 |
|
|
|
184 |
|
Gain on disposals of property, plant and equipment |
|
|
(6 |
) |
|
|
- |
|
Gain on re-measurement of the pre-existing relationships in a
business combination |
|
|
- |
|
|
|
(1,662 |
) |
Changes in fair value of financial assets at fair value through
profit or loss |
|
|
(7 |
) |
|
|
24 |
|
Interest income |
|
|
(1,076 |
) |
|
|
(1,221 |
) |
Finance costs |
|
|
1,021 |
|
|
|
517 |
|
Income tax benefit |
|
|
- |
|
|
|
(422 |
) |
Share of losses (profit) of associates |
|
|
(39 |
) |
|
|
1,943 |
|
Inventories write downs |
|
|
9,758 |
|
|
|
6,521 |
|
Foreign currency exchange losses (gains) of financial assets |
|
|
(114 |
) |
|
|
118 |
|
|
|
|
13,241 |
|
|
|
14,550 |
|
Changes in: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
12,791 |
|
|
|
12,299 |
|
Inventories |
|
|
(35,732 |
) |
|
|
(13,398 |
) |
Other receivable from related party |
|
|
- |
|
|
|
(23 |
) |
Other current assets |
|
|
(5,245 |
) |
|
|
(467 |
) |
Accounts payable |
|
|
(16,276 |
) |
|
|
(11,071 |
) |
Other payable to related party |
|
|
(1,437 |
) |
|
|
- |
|
Net defined benefit liabilities |
|
|
50 |
|
|
|
(27 |
) |
Other current liabilities |
|
|
(2,957 |
) |
|
|
(311 |
) |
Other non-current liabilities |
|
|
- |
|
|
|
160 |
|
Cash generated from operating activities |
|
|
(35,565 |
) |
|
|
1,712 |
|
Interest received |
|
|
1,102 |
|
|
|
1,180 |
|
Interest paid |
|
|
(1,036 |
) |
|
|
(352 |
) |
Income tax paid |
|
|
(4,270 |
) |
|
|
(3,069 |
) |
Net cash used in operating activities |
|
|
(39,769 |
) |
|
|
(529 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Acquisitions of property, plant and equipment |
|
|
(11,971 |
) |
|
|
(36,295 |
) |
Proceeds from disposals of property, plant and equipment |
|
|
14 |
|
|
|
- |
|
Acquisitions of intangible assets |
|
|
(96 |
) |
|
|
(203 |
) |
Acquisitions of financial assets at amortized cost |
|
|
(2,327 |
) |
|
|
(3,032 |
) |
Proceeds from disposals of financial assets at amortized cost |
|
|
1,138 |
|
|
|
1,057 |
|
Acquisitions of financial assets at fair value through profit or
loss |
|
|
(42,632 |
) |
|
|
(11,775 |
) |
Proceeds from disposals of financial assets at fair value through
profit or loss |
|
|
25,720 |
|
|
|
34,199 |
|
Acquisition of business |
|
|
(700 |
) |
|
|
(700 |
) |
Acquisition of a subsidiary, net of cash acquired |
|
|
(400 |
) |
|
|
(3,301 |
) |
Proceeds from capital reduction of investment |
|
|
30 |
|
|
|
- |
|
Decrease in refundable deposits |
|
|
67 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Unaudited Condensed
Consolidated Statements of Cash Flows |
(Amounts in
Thousands of
U.S.
Dollars) |
|
|
Six Months Ended June 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Releases of restricted deposit |
|
|
5 |
|
|
|
10 |
|
Cash paid for loan made to related parties |
|
|
(1,200 |
) |
|
|
(780 |
) |
Cash received from loan made to related party |
|
|
2,780 |
|
|
|
- |
|
Income tax paid for disposal of financial assets at fair value
through profit or loss |
|
|
- |
|
|
|
(2,187 |
) |
Net cash used in investing activities |
|
|
(29,572 |
) |
|
|
(23,002 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of new shares by subsidiary |
|
|
- |
|
|
|
11 |
|
Proceeds from unsecured borrowings |
|
|
117,006 |
|
|
|
- |
|
Repayments of unsecured borrowings |
|
|
(60,000 |
) |
|
|
- |
|
Proceeds from secured borrowings |
|
|
64,000 |
|
|
|
27,000 |
|
Repayments of secured borrowings |
|
|
(64,000 |
) |
|
|
(27,000 |
) |
Payment of lease liabilities |
|
|
(964 |
) |
|
|
- |
|
Net cash provided by financing activities |
|
|
56,042 |
|
|
|
11 |
|
Effect of
foreign currency exchange rate
changes on cash and cash equivalents |
|
|
(281 |
) |
|
|
(23 |
) |
Net
decrease in cash and cash
equivalents |
|
|
(13,580 |
) |
|
|
(23,543 |
) |
Cash and cash
equivalents at beginning of period |
|
|
106,437 |
|
|
|
138,023 |
|
Cash and cash
equivalents at end of period |
|
$ |
92,857 |
|
|
$ |
114,480 |
|
|
|
|
|
|
|
|
|
|
Himax Technologies, Inc. |
Non-IFRS 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 June
30, |
|
Three Months Ended March 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
Revenues |
$ |
169,318 |
|
|
$ |
181,365 |
|
|
$ |
163,334 |
|
Gross profit |
|
32,948 |
|
|
|
41,794 |
|
|
|
36,865 |
|
Add: Share-based compensation
– cost of revenues |
|
- |
|
|
|
12 |
|
|
|
- |
|
Gross profit excluding
share-based compensation |
|
32,948 |
|
|
|
41,806 |
|
|
|
36,865 |
|
Gross margin excluding
share-based compensation |
|
19.5 |
% |
|
|
23.1 |
% |
|
|
22.6 |
% |
Operating income (loss) |
|
(5,945 |
) |
|
|
500 |
|
|
|
(3,377 |
) |
Add: Share-based
compensation |
|
20 |
|
|
|
93 |
|
|
|
19 |
|
Operating income (loss)
excluding share-based compensation |
|
(5,925 |
) |
|
|
593 |
|
|
|
(3,358 |
) |
Add: Acquisition-related
charges –intangible assets amortization |
|
471 |
|
|
|
246 |
|
|
|
470 |
|
Operating income (loss)
excluding share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
and acquisition-related charges |
|
(5,454 |
) |
|
|
839 |
|
|
|
(2,888 |
) |
Operating margin excluding
share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
and acquisition-related charges |
|
(3.2 |
%) |
|
|
0.5 |
% |
|
|
(1.8 |
%) |
Profit (loss) attributable to
Himax Technologies, Inc. stockholders |
|
(5,151 |
) |
|
|
2,046 |
|
|
|
(2,319 |
) |
Add: Share-based compensation,
net of tax |
|
15 |
|
|
|
80 |
|
|
|
15 |
|
Add: Acquisition-related
charges, net of tax |
|
348 |
|
|
|
175 |
|
|
|
348 |
|
Profit (loss) attributable to
Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
(4,788 |
) |
|
|
2,301 |
|
|
|
(1,956 |
) |
Net margin attributable to
Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
(2.8 |
%) |
|
|
1.3 |
% |
|
|
(1.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
*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 (loss) excluding share-based compensation
and acquisition-related charges divided by revenues |
*Net margin
attributable to Himax Technologies, Inc. stockholders excluding
share-based compensation and acquisition-related charges equals
profit (loss) attributable to Himax Technologies, Inc. stockholders
excluding share-based compensation and acquisition-related charges
divided by revenues |
|
Himax Technologies, Inc. |
Non-IFRS 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: |
|
|
Six Months Ended June
30, |
|
|
|
2019 |
|
|
|
2018 |
|
Revenues |
|
$ |
332,652 |
|
|
$ |
344,216 |
|
Gross profit |
|
|
69,813 |
|
|
|
78,391 |
|
Add: Share-based compensation
– cost of revenues |
|
|
- |
|
|
|
24 |
|
Gross profit excluding
share-based compensation |
|
|
69,813 |
|
|
|
78,415 |
|
Gross margin excluding
share-based compensation |
|
|
21.0 |
% |
|
|
22.8 |
% |
Operating loss |
|
|
(9,322 |
) |
|
|
(2,744 |
) |
Add: Share-based
compensation |
|
|
39 |
|
|
|
184 |
|
Operating loss excluding
share-based compensation |
|
|
(9,283 |
) |
|
|
(2,560 |
) |
Add: Acquisition-related
charges –intangible assets amortization |
|
|
941 |
|
|
|
492 |
|
Operating loss excluding
share-based compensation and acquisition-related charges |
|
|
(8,342 |
) |
|
|
(2,068 |
) |
Operating margin excluding
share-based compensation and acquisition-related charges |
|
|
(2.5 |
%) |
|
|
(0.6 |
%) |
Loss attributable to Himax
Technologies, Inc. stockholders |
|
|
(7,470 |
) |
|
|
(783 |
) |
Add: Share-based compensation,
net of tax |
|
|
30 |
|
|
|
159 |
|
Add: Acquisition-related
charges, net of tax |
|
|
696 |
|
|
|
350 |
|
Loss attributable to Himax
Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
|
(6,744 |
) |
|
|
(274 |
) |
Net margin attributable to
Himax Technologies, Inc. stockholders excluding share-based
compensation and acquisition-related charges |
|
|
(2.0 |
%) |
|
|
(0.1 |
%) |
|
|
|
|
|
|
|
|
|
*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 (loss) excluding share-based compensation
and acquisition-related charges divided by revenues |
*Net margin
attributable to Himax Technologies, Inc. stockholders excluding
share-based compensation and acquisition-related charges equals
profit (loss) attributable to Himax Technologies, Inc. stockholders
excluding share-based compensation and acquisition-related charges
divided by revenues |
|
Diluted
Loss Per ADS Attributable to Himax Technologies,
Inc. Stockholders Excluding Share-based Compensation and
Acquisition-Related Charges: (Amounts in U.S.
Dollars) |
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
2019 |
|
2019 |
Diluted IFRS loss per ADS
attributable to Himax Technologies, Inc. stockholders |
|
$(0.030) |
|
$(0.043) |
Add: Share-based compensation per ADS |
|
$0.000 |
|
$0.000 |
Add: Acquisition-related charges per ADS |
|
$0.002 |
|
$0.004 |
|
|
|
|
|
Diluted non-IFRS loss per ADS
attributable to Himax Technologies, Inc. |
|
|
|
|
stockholders excluding share-based compensation and
acquisition-related |
|
|
|
|
charges |
|
$(0.028) |
|
$(0.039) |
|
|
|
|
|
Numbers do not add up due to rounding |
|
|
|
|
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