Himax Technologies, Inc. Reports Third Quarter 2020 Financial Results; Provides Fourth Quarter 2020 Guidance
Himax Technologies reported Q3 2020 earnings exceeding guidance across key metrics, including revenue of $239.9M, a 28.3% sequential increase. Gross margin reached 22.3%, up 130 bps QoQ, and IFRS profit per ADS was 4.9 cents, surpassing expectations. The company anticipates a 10% sequential revenue increase in Q4, driven by strong demand in monitors, notebooks, and tablets. Smartphone TDDI revenue is expected to grow significantly, despite ongoing foundry capacity constraints. Overall, Himax forecasts continued growth and margin improvement into 2021.
- Q3 revenue increased 28.3% sequentially to $239.9M, exceeding guidance of 20%.
- Q3 gross margin was 22.3%, surpassing prior guidance and showing a sequential increase of 130 bps.
- Q3 IFRS profit per diluted ADS of 4.9 cents exceeded guidance of 2.0 to 2.8 cents, reflecting better-than-expected sales.
- Foundry capacity constraints limit the ability to meet growing smartphone and tablet TDDI demand.
- Traditional smartphone DDIC sales are projected to decline in Q4 due to a temporary spike in Q3.
Company Q3 2020 Revenue, Gross Margin and EPS all Exceed Guidance; Revenue, Gross Margin and EPS all meet Its Pre-Announced Key Financial Results
Provides Q4 2020 Guidance: Revenue to increase by around 10% sequentially, Gross Margin is expected to be around
- Q3 revenue increased 28.3% sequentially to $239.9M, exceeding the guidance of an increase of around
20% sequentially - Product sales: large driver ICs, 23.2% of revenue, down 6.3% QoQ; small and medium-sized driver ICs, 63.2% of revenue, up 53.5% QoQ; non-driver products, 13.6% of revenue, up 13.3% QoQ
- Q3 IFRS gross margin was 22.3%, up 130 bps sequentially, exceeding the guidance of flat to slightly down from the
21.0% of the second quarter - Q3 IFRS profit was $8.5M, or 4.9 cents per diluted ADS, exceeding the guidance of around 2.0 cents to 2.8 cents per diluted ADS. It is higher than profit of $1.4M, or 0.8 cents per diluted ADS in Q2 2020
- Q3 non-IFRS profit was $12.6M, or 7.3 cents per diluted ADS, exceeding the guidance of around 3.5 cents to 4.3 cents per diluted ADS. It is higher than profit of $1.7M, or 1.0 cent per diluted ADS in Q2 2020
- Display drivers for TV, tablet, smartphone and automotive as well as CMOS image sensors all contributed to the better-than-guided sales in Q3
- Q3 Gross margin sequential increase was contributed by a favorable product mix of more shipments of better margin products such as tablet and automotive ICs, higher engineering fee income and resales of certain products whose values have been written-off previously in accordance with the Company’s inventory management protocol
- The extension of strong demand derived from persisting homeworking and distance education results in growing monitor and notebook demands till end of 2020
- The smartphone market has regained some momentum in Q3, and the momentum seems to have carried into Q4. On the backdrop of a rebounding smartphone market, the Company’s smartphone TDDI revenue is projected to have nice high-teens sequential growth in Q4 although foundry capacity remains a growth constraint. Traditional DDICs for smartphone, after a temporary spike in Q3, is set to decline double-digit in Q4
- Tablet has been one of the Company’s top sales contributors throughout 2020
- Company is a pioneer in the tablet TDDI technology and led the market for mass production in Q1 2020. At present, the Company is the dominant supplier for literally all leading Android names. The Company expects a sequential increase of around
80% for tablet TDDI in Q4 as the penetration of in-cell touch into tablet continues to accelerate - Q3 Driver IC revenue for automotive was up 13.2% QoQ and up 3.9% YoY, despite a sluggish global automotive market. The sequential growth was owed, to a large extent, to the aggressive pursuit of market share gains by China panel maker customers to which the Company is a major supplier. As the panels inside a car continue to grow in both number and size, the demand for automotive driver ICs is well positioned for healthy growth in the coming years
- For Q4, the Company expects further revenue growth from the already high level of Q3 in most of its business sectors. Capacity shortage remains a major factor that negatively impacts the Company’s capabilities to make more shipments to customers. In consideration of capacity constraints which may not be resolved shortly, the Company often has to strategically prioritize the production of products for those customer models where the Company is the key supplier and/or enjoy better profitability
- Himax’s WiseEye total solution offering focuses on notebook, TV, doorbell, door lock and air conditioner applications and is in partnership with leading players in their respective industries. A number of these solutions are slated to enter mass production in 2021. For the other type of business model where Himax only offers key parts, the Company actively participates in the AI and cloud ecosystems. The Company is making another major breakthrough with another world-leading cloud service provider other than Google
TAINAN, Taiwan, Nov. 12, 2020 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2020.
“Gross margin expansion has always been at the top of our agenda and we will surely work hard toward continuous profitability improvement. The upbeat Q4 gross margin guidance is mainly a reflection of the tight foundry capacity which results in better pricing and more favorable product mix,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax.
“The foundry industry appears to be going through a structural change in the supply-demand dynamics for the mature process nodes - both 8” and 12”. We believe the current tightness is likely to persist throughout the next few years. We are experiencing major foundry supply shortage in quite a few of our business areas, including TDDI and DDIC for smartphone, tablet and automotive applications as well as CMOS Image Sensor. For next year’s wafer demands, we have secured with our foundry partners a capacity which is already larger than our total shipment for this year. On top of that, we are developing additional capacities for various product areas with an aim to further our available foundry pool for the next few years. Some of these new capacities will start making contributions next year. We will report the progress in due course. Another important factor for continuous gross margin improvement will come from a number of our non-driver products which are either already in volume production and look on track to grow in size, such as timing controller and ultralow power CIS, or will be new additions to our revenue stream, such as the WiseEye total solution and the WE-I ASIC chip. Again, gross margin expansion will continue to be one of our major business goals for next year and beyond,” concluded Mr. Jordan Wu.
Third Quarter 2020 Financial Results
The Company recorded net revenue of
Revenue from large display drivers was
Small and medium-sized display drivers recorded a very strong third quarter, with revenues of
The Company’s smartphone sales, the best performing product category of all in Q3, reached a quarterly record-high of
The Q3 strength in smartphone TDDI reflected customers’ aggressive new product launch plans with the Company’s TDDI solutions as well as its ability to price its products higher to reflect the tight wafer foundry situation. Amid the economic downturn and lackluster overall smartphone consumption, OEMs are pushing more for budget handsets using TFT-LCD screens, instead of the more expensive AMOLED displays. Sales of traditional smartphone DDICs also surged by
Revenue for tablet posted a third consecutive record-high, with Q3 sales growing
Himax’s third quarter driver IC revenue for automotive was up
Third quarter revenue from the Company’s non-driver businesses was
Gross margin for the third quarter was
The Company’s IFRS operating expenses were
IFRS operating margin for the third quarter was
IFRS profit for the third quarter was
Third quarter non-IFRS profit was
Balance Sheet and Cash Flow
Himax had
Accounts receivable as of the end of September 2020 were
Himax’s inventories as of September 30, 2020 were
Net cash inflow from operating activities for the third quarter was
Third quarter capital expenditures amounted to
Share Buyback Update
As of September 30, 2020, Himax had 172.4 million ADS outstanding, little changed from last quarter. On a fully diluted basis, the total number of ADS outstanding was 173.4 million.
Q4 2020 Outlook
The Company briefly comments on the background for its upbeat Q4 gross margin guidance and its view on the sustainability of the higher margin.
First off, gross margin expansion has always been at the top of Himax’s agenda and the Company will surely work hard toward continuous profitability improvement. The upbeat Q4 gross margin guidance is mainly a reflection of the tight foundry capacity which results in better pricing and more favorable product mix. The foundry industry appears to be going through a structural change in the supply-demand dynamics for the mature process nodes - both 8” and 12”. Himax believes the current tightness is likely to persist throughout the next few years. Major volume applications such as display drivers for TDDI and AMOLED, PMIC for 5G smartphone, CIS that is ever upgrading in resolution, just to name a few, are significantly expanding in wafer consumption and competing for the same pool of mature nodes while the industry has no major expansion plan in sight for such capacity.
Himax is experiencing major foundry supply shortages in quite a few of its business areas, including TDDI and DDIC for smartphone, tablet and automotive applications as well as CMOS Image Sensor. For next year’s wafer demands, the Company has secured with its foundry partners a capacity which is already larger than its total shipment for this year. On top of that, Himax is developing additional capacities for various product areas with an aim to further its available foundry pool for the next few years. Some of these new capacities will start making contributions next year. The Company will report the progress in due course.
Another important factor for continuous gross margin improvement will come from a number of the Company's non-driver products which are either already in volume production and look on track to grow in size, such as timing controller and ultralow power CIS, or will be new additions to its revenue stream, such as the WiseEye total solution and the WE-I ASIC chip.
Again, gross margin expansion will continue to be one of Himax’s major business goals for next year and beyond.
Display Driver IC Business
LDDIC
For the fourth quarter, the Company expects large display driver IC revenue to increase by high-single-digit sequentially. This is due to the extension of strong demand derived from persisting homeworking and distance education, resulting in growing monitor and notebook demands. The Company expects a decent sequential increase of around
With respect to TV, Himax expects mid-single-digit sequential decline in the next quarter owing to a correction to a surge in TV demand in the previous quarter. Recently, the Company saw top-tier TV brands with aggressive promotion tactics in 8K TVs in anticipation of major sporting events resuming across many countries after a long lockdown. Himax’s 8K TV display drivers and timing controller ICs have been widely adopted by multiple leading end customers.
It is worth highlighting that Himax has been developing and delivering timing controller products for many years and this segment already represents more than
SMDDIC
Begin with the Himax’s smartphone business segment. The Company’s TDDI product roadmap as well as new design-wins and new production plans all position Himax well to gain market share throughout 2020 and into 2021.
The pandemic has weighed on the global smartphone shipment significantly due to supply chain disruption at the beginning of the year, followed by a lackluster consumer demand. However, the smartphone market has regained some momentum in Q3, and the momentum seems to have carried into Q4. On the backdrop of a rebounding smartphone market, the Company's smartphone TDDI revenue is projected to have nice high-teens sequential growth in the fourth quarter although foundry capacity remains a growth constraint. Traditional display driver ICs for smartphone, after a temporary spike in Q3, is set to decline double digit in Q4.
As the Company stated before, AMOLED technology has advanced to become the mainstream display for high-end smartphones. Himax is highly committed in this field. Much progress has been made by collaborating with leading panel makers across China. Himax’s development started from smartphone, and extends to wearable, tablet and automotive with Chinese panel makers. Himax believes AMOLED driver IC will become one of the major growth engines for the Company’s small and medium panel driver IC business from 2021.
Turning to the tablet business, tablet has been one of Himax’s top sales contributors throughout 2020. In the fourth quarter, it is on track for another sequential growth of over
For traditional DDIC for tablet, the Company expects low-teens sequential decline for Q4, but sales to be up more than
Turning to the automotive sector. As the panels inside a car continue to grow in both number and size, the demand for automotive driver ICs is well positioned for healthy growth in the coming years. Although the global car demand has been badly hit by Covid-19, especially in the first half of the year, the market is showing signs of gradual recovery starting Q3. Himax’s automotive ICs, which enjoy higher gross margins, are experiencing a solid rebound lately with car makers rushing in for inventory replenishment after quite a few sluggish quarters.
The demand of automotive display ICs for more sophisticated and higher performing displays has continued its rising trajectory. Advanced new features such as in-cell touch, local dimming, cascade-topology connection and P2P high-speed interface bridging functions are being adopted with Himax being the primary partner for major automotive panel makers and tier-1 players to enable these new technologies. With these new technologies on track for more shipments starting 2021, Himax is confident that its automotive segment is hitting another inflection point with a strong and positive long-term outlook.
For the fourth quarter, revenue for the small and medium-sized driver IC business is expected to increase by around mid-teens sequentially with demand continuing to surpass supply. Capacity shortage remains a major factor that negatively impacts its capabilities to make more shipments to customers. In consideration of capacity constraints which may not be resolved shortly, the Company often has to strategically prioritize the production of products for those customer models where Himax is the key supplier and/or enjoy better profitability.
Non-Driver Product Categories
WLO
The fourth quarter WLO revenue declined sequentially as a result of lower shipments to an anchor customer. Himax’s WLO factory will continue to manufacture the anchor customer’s legacy product going forward. With the Company’s exceptional technologies of WLO in nanoimprinting manufacturing and diffraction optics design, it has been engaged by multiple customers / partners to develop future generation products covering a wide range of applications such as ToF 3D sensing, waveguide for AR goggles, biomedical devices and others.
3D Sensing
In smart phone application, Himax targets next generation Android smartphones and the Company is collaborating with leading laser and ToF sensor vendors to develop a new world-facing 3D sensing camera whereby it provides optical components and/or projectors which are critical for the performance of the whole ToF solution.
For non-smartphone 3D-sensing engagements where the Company provides a structured light-based 3D sensing total solution, its target markets range from smart door lock, facial recognition-based e-payment, business access control to biomedical inspection device. A number of recent design-wins will enter into mass production soon.
Alternatively, Himax also offers a market leading 3D decoder ASIC to those customers who wish to design their own structured light 3D sensing solution. Here the Company has had quite a few design-wins from customers targeting China’s vast e-payment market with some shipments already starting in the fourth quarter. The Company is also working with customers for industrial robotics, smart door lock and home security, all of which carry great potential for Himax’s 3D business in the future.
Ultralow power smart sensing
In order for Himax’s WiseEye technology to reach its maximum potential, it has adopted a flexible business model whereby, in addition to a total solution where it provides processor, image sensor and AI algorithm, the Company also offers those key parts individually in order to address the customer’s different needs and widen its market reach.
For the total solution offering, the Company’s current focus applications include notebook, TV, doorbell, door lock, and air conditioner as it continues to work out new solutions to cover further edge device AI markets. In partnership with leading players in their respective industries, a number of these solutions are slated to enter mass production in 2021. For the other type of business model where Himax only offers key parts, its strategy is to actively participate in the ecosystems led by the world’s leading AI and cloud service providers. In addition to the collaboration with Google on their TensorFlow Lite for Microcontrollers that Himax announced previously, the Company is making another major breakthrough by partnering with another world-leading cloud service provider with a business focus more toward healthcare, financial services, government, retail and industrial manufacturing. Separately, to further lower the technical barrier for using Himax’s WiseEye solution, the Company teamed up with a leading online store specialized in easy development tools for machine learning on edge devices. Himax is extremely excited about the rapid business progress and believes the Company’s WiseEye offerings will become a major contributor to its P&L in the near future.
CMOS Image Sensor
The Company continues to see extremely strong demands for its CMOS image sensors for IP camera and notebook, but its actual shipment has been badly capped by the foundry capacity available to it. Separately, Himax’s industry-first 2-in-1 CMOS image sensor that supports RGB mode for video conferencing and ultralow power AI mode for facial recognition has penetrated the laptop ecosystem for their most stylish super slim bezel designs. The Company expects to have small volume shipment toward late 2020 with more to come in next year.
Regarding ultralow power always-on CMOS image sensor, which targets in battery powered or always-on applications, Himax is getting promising feedback and design adoptions from customers in various markets, such as car recorders, surveillance, smart electric meters, drones, home appliances, and consumer electronics. In Q4, CIS revenue is expected to be flat sequentially although demand is much stronger than that. Again, its shipment is capped by foundry capacity constraint.
For non-driver IC business, the Company expects revenue to decrease by low-single-digit sequentially in the fourth quarter.
Fourth Quarter 2020 Guidance | |
The Company is providing the following financial guidance for the fourth quarter of 2020: | |
Net Revenue: | To increase by around |
Gross Margin: | To be around |
IFRS Profit: | To be around 15.0 cents to 16.0 cents per diluted ADS |
Non-IFRS Profit (1): | To be around 15.1 cents to 16.1 cents per diluted ADS |
(1) Non-IFRS Profit excludes share-based compensation and acquisition-related charges |
For the fourth quarter, Himax expects further revenue growth from the already high level of Q3 in most of its business sectors. Gross margin shall see a major uptick and could reach a quarterly historical high for Himax.
With the increase in revenue and margin growth in fourth quarter, net income shall increase sequentially. To further reward employees, there would be another
HIMAX TECHNOLOGIES THIRD QUARTER 2020 EARNINGS CONFERENCE CALL | |
DATE: | Thursday, November 12th, 2020 |
TIME: | U.S. 8:00 a.m. EST |
Taiwan 9:00 p.m. | |
DIAL IN: | U.S. +1 (866) 444-9147 |
INTERNATIONAL+1 (678) 509-7569 | |
CONFERENCE ID: | 4408778 |
WEBCAST: | https://edge.media-server.com/mmc/p/x93vx34d |
A replay of the call will be available beginning two hours after the call through 11:30 a.m. US EST on November 20th, 2020 (12:30 a.m. Taiwan time, November 21st, 2020) 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 4408778. 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 November 12th, 2021.
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 phones, tablets, laptops, TVs, PC cameras, automobiles, security, medical devices, home appliance and Internet of Things. Founded in 2001 and headquartered in Tainan, Taiwan, Himax currently employs around 2,000 people from three Taiwan-based offices in Tainan, Hsinchu and Taipei and country offices in China, Korea, Japan, Israel, and the US. Himax has 2,915 patents granted and 551 patents pending approval worldwide as of September 30th, 2020. Himax has retained its position as the leading display imaging processing semiconductor solution provider to consumer electronics brands worldwide.
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, 2019 filed with the SEC, as may be amended.
Company Contacts:
Eric Li, Chief IR/PR Officer
Himax Technologies, Inc.
Tel: +886-6-505-0880 Ext.60145
Fax: +886-2-2314-0877
Email: hr_ir@himax.com.tw
www.himax.com.tw
Karen Tiao, Investor Relations
Himax Technologies, Inc.
Tel: +886-2-2370-3999 Ext. 22326
Fax: +886-2-2314-0877
Email: hx_ir@himax.com.tw
www.himax.com.tw
Investor Relations - US Representative
Mark Schwalenberg, Senior Vice President
MZ North America
Tel: +1-312-261-6430
Email: HIMX@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 September 30, | Three Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | |||||||||
Revenues | $ | 239,934 | $ | 164,254 | $ | 186,984 | |||||
Costs and expenses: | |||||||||||
Cost of revenues | 186,329 | 132,239 | 147,726 | ||||||||
Research and development | 33,073 | 29,156 | 28,403 | ||||||||
General and administrative | 6,530 | 6,053 | 5,662 | ||||||||
Sales and marketing | 4,558 | 4,447 | 3,548 | ||||||||
Total costs and expenses | 230,490 | 171,895 | 185,339 | ||||||||
Operating income (loss) | 9,444 | (7,641 | ) | 1,645 | |||||||
Non operating income (loss): | |||||||||||
Interest income | 157 | 416 | 263 | ||||||||
Changes in fair value of financial assets at fair value through profit or loss | 131 | (1 | ) | (83 | ) | ||||||
Foreign currency exchange gains (losses), net | (139 | ) | 91 | 1 | |||||||
Finance costs | (314 | ) | (634 | ) | (551 | ) | |||||
Share of profits (losses) of associates | (191 | ) | (135 | ) | 12 | ||||||
Other income | 96 | 19 | 22 | ||||||||
(260 | ) | (244 | ) | (336 | ) | ||||||
Profit (loss) before income taxes | 9,184 | (7,885 | ) | 1,309 | |||||||
Income tax expense | 1,124 | - | 365 | ||||||||
Profit (loss) for the period | 8,060 | (7,885 | ) | 944 | |||||||
Loss attributable to noncontrolling interests | 391 | 705 | 439 | ||||||||
Profit (loss) attributable to Himax Technologies, Inc. stockholders | $ | 8,451 | $ | (7,180 | ) | $ | 1,383 | ||||
Basic earnings (loss) per ADS attributable to Himax Technologies, Inc. stockholders | $ | 0.049 | $ | (0.042 | ) | $ | 0.008 | ||||
Diluted earnings (loss) per ADS attributable to Himax Technologies, Inc. stockholders | $ | 0.049 | $ | (0.042 | ) | $ | 0.008 | ||||
Basic Weighted Average Outstanding ADS | 172,730 | 172,541 | 172,618 | ||||||||
Diluted Weighted Average Outstanding ADS | 173,447 | 172,541 | 173,158 |
Himax Technologies, Inc. | |||||||||||
Unaudited Condensed Consolidated Statements of Profit or Loss | |||||||||||
(Amounts in Thousands of U.S. Dollars, Except Share and Per Share Data) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Revenues | $ | 611,512 | $ | 496,906 | |||||||
Costs and expenses: | |||||||||||
Cost of revenues | 476,727 | 395,078 | |||||||||
Research and development | 89,165 | 87,815 | |||||||||
General and administrative | 17,996 | 17,730 | |||||||||
Sales and marketing | 11,888 | 13,246 | |||||||||
Total costs and expenses | 595,776 | 513,869 | |||||||||
Operating income (loss) | 15,736 | (16,963 | ) | ||||||||
Non operating income (loss): | |||||||||||
Interest income | 816 | 1,492 | |||||||||
Changes in fair value of financial assets at fair value through profit or loss | (17 | ) | 6 | ||||||||
Foreign currency exchange gains (losses), net | (193 | ) | 401 | ||||||||
Finance costs | (1,458 | ) | (1,655 | ) | |||||||
Share of losses of associates | (270 | ) | (96 | ) | |||||||
Other income | 153 | 66 | |||||||||
(969 | ) | 214 | |||||||||
Profit (loss) before income taxes | 14,767 | (16,749 | ) | ||||||||
Income tax expense | 2,953 | - | |||||||||
Profit (loss) for the period | 11,814 | (16,749 | ) | ||||||||
Loss attributable to noncontrolling interests | 1,314 | 2,099 | |||||||||
Profit (loss) attributable to Himax Technologies, Inc. stockholders | $ | 13,128 | $ | (14,650 | ) | ||||||
Basic earnings (loss) per ADS attributable to Himax Technologies, Inc. stockholders | $ | 0.076 | $ | (0.085 | ) | ||||||
Diluted earnings (loss) per ADS attributable to Himax Technologies, Inc. stockholders | $ | 0.076 | $ | (0.085 | ) | ||||||
Basic Weighted Average Outstanding ADS | 172,643 | 172,541 | |||||||||
Diluted Weighted Average Outstanding ADS | 173,284 | 172,541 |
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 September 30, | Three Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | ||||||||||
Share-based compensation | ||||||||||||
Cost of revenues | $ | 72 | $ | - | $ | 5 | ||||||
Research and development | 4,076 | 60 | 122 | |||||||||
General and administrative | 328 | 22 | 15 | |||||||||
Sales and marketing | 537 | 10 | 26 | |||||||||
Income tax benefit | (1,081 | ) | (21 | ) | (31 | ) | ||||||
Total | $ | 3,932 | $ | 71 | $ | 137 | ||||||
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 | $ | 276 | $ | 276 | $ | 277 | ||||||
Income tax benefit | (65 | ) | (64 | ) | (65 | ) | ||||||
Total | $ | 211 | $ | 212 | $ | 212 | ||||||
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: | Nine Months Ended September 30, | |||||||
2020 | 2019 | |||||||
Share-based compensation | ||||||||
Cost of revenues | $ | 87 | $ | - | ||||
Research and development | 4,467 | 86 | ||||||
General and administrative | 368 | 26 | ||||||
Sales and marketing | 603 | 19 | ||||||
Income tax benefit | (1,176 | ) | (30 | ) | ||||
Total | $ | 4,349 | $ | 101 | ||||
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 | $ | 829 | $ | 1,217 | ||||
Income tax benefit | (194 | ) | (309 | ) | ||||
Total | $ | 635 | $ | 908 | ||||
Himax Technologies, Inc. | ||||||||||||
IFRS Unaudited Condensed Consolidated Statements of Financial Position | ||||||||||||
(Amounts in Thousands of U.S. Dollars) | ||||||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 131,823 | $ | 96,130 | $ | 116,579 | ||||||
Financial assets at amortized cost | 8,294 | 10,929 | 11,278 | |||||||||
Financial assets at fair value through profit or loss | 2,734 | - | 97 | |||||||||
Accounts receivable, net | 221,100 | 206,075 | 157,320 | |||||||||
Inventories | 125,725 | 161,474 | 167,581 | |||||||||
Income taxes receivable | 81 | 75 | 55 | |||||||||
Restricted deposit | 104,000 | 164,000 | 164,000 | |||||||||
Other receivable from related party | 1,200 | 1,200 | 1,200 | |||||||||
Other current assets | 26,294 | 24,246 | 19,732 | |||||||||
Total current assets | 621,251 | 664,129 | 637,842 | |||||||||
Financial assets at fair value through profit or loss | 13,480 | 13,352 | 9,761 | |||||||||
Financial assets at fair value through other comprehensive income | 730 | 737 | 703 | |||||||||
Equity method investments | 3,761 | 3,660 | 4,036 | |||||||||
Property, plant and equipment, net | 135,123 | 137,530 | 141,835 | |||||||||
Deferred tax assets | 14,714 | 14,537 | 13,389 | |||||||||
Goodwill | 28,138 | 28,138 | 28,138 | |||||||||
Other intangible assets, net | 7,550 | 7,953 | 9,161 | |||||||||
Restricted deposit | 138 | 135 | 128 | |||||||||
Other non-current assets | 2,105 | 2,033 | 2,149 | |||||||||
205,739 | 208,075 | 209,300 | ||||||||||
Total assets | $ | 826,990 | $ | 872,204 | $ | 847,142 | ||||||
Liabilities and Equity | ||||||||||||
Current liabilities: | ||||||||||||
Short-term unsecured borrowings | $ | - | $ | 58,437 | $ | 90,606 | ||||||
Current portion of long-term unsecured borrowings | 6,000 | - | - | |||||||||
Short-term secured borrowings | 104,000 | 164,000 | 164,000 | |||||||||
Accounts payable | 153,153 | 161,474 | 114,825 | |||||||||
Income taxes payable | 5,340 | 3,960 | 1,618 | |||||||||
Other payable to related party | 2,480 | 2,740 | 2,620 | |||||||||
Other current liabilities | 38,700 | 34,749 | 37,458 | |||||||||
Total current liabilities | 309,673 | 425,360 | 411,127 | |||||||||
Long-term unsecured borrowings | 54,000 | - | - | |||||||||
Net defined benefit liabilities | 51 | 50 | 149 | |||||||||
Deferred tax liabilities | 1,222 | 1,284 | 1,440 | |||||||||
Other non-current liabilities | 16,689 | 9,989 | 4,471 | |||||||||
71,962 | 11,323 | 6,060 | ||||||||||
Total liabilities | 381,635 | 436,683 | 417,187 | |||||||||
Equity | ||||||||||||
Ordinary shares | 107,010 | 107,010 | 107,010 | |||||||||
Additional paid-in capital | 106,276 | 105,686 | 104,829 | |||||||||
Treasury shares | (8,486 | ) | (8,656 | ) | (8,764 | ) | ||||||
Accumulated other comprehensive income | (980 | ) | (1,110 | ) | (1,334 | ) | ||||||
Retained earnings | 238,931 | 230,564 | 229,507 | |||||||||
Equity attributable to owners of Himax Technologies, Inc. | 442,751 | 433,494 | 431,248 | |||||||||
Noncontrolling interests | 2,604 | 2,027 | (1,293 | ) | ||||||||
Total equity | 445,355 | 435,521 | 429,955 | |||||||||
Total liabilities and equity | $ | 826,990 | $ | 872,204 | $ | 847,142 | ||||||
Himax Technologies, Inc. | ||||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||
(Amounts in Thousands of U.S. Dollars) | ||||||||||||
Three Months Ended September 30, | Three Months Ended June 30, | |||||||||||
2020 | 2019 | 2020 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Profit (loss) for the period | $ | 8,060 | $ | (7,885 | ) | $ | 944 | |||||
Adjustments for: | ||||||||||||
Depreciation and amortization | 5,530 | 6,004 | 5,881 | |||||||||
Share-based compensation expenses | 251 | 92 | 168 | |||||||||
Gain on disposal of property, plant and equipment, net | (2 | ) | - | (242 | ) | |||||||
Changes in fair value of financial assets at fair value through profit or loss | (131 | ) | 1 | 83 | ||||||||
Interest income | (157 | ) | (416 | ) | (263 | ) | ||||||
Finance costs | 314 | 634 | 551 | |||||||||
Income tax expense | 1,124 | - | 365 | |||||||||
Share of losses (profits) of associates | 191 | 135 | (12 | ) | ||||||||
Inventories write downs | 2,205 | 8,174 | 3,413 | |||||||||
Unrealized foreign currency exchange losses (gains) | 32 | 182 | (59 | ) | ||||||||
17,417 | 6,921 | 10,829 | ||||||||||
Changes in: | ||||||||||||
Accounts receivable | (15,025 | ) | 18,905 | (19,340 | ) | |||||||
Inventories | 33,544 | 12,780 | (16,456 | ) | ||||||||
Other current assets | (398 | ) | 2,649 | (602 | ) | |||||||
Accounts payable | (8,321 | ) | (19,399 | ) | 15,875 | |||||||
Other payable to related party | (260 | ) | 260 | 300 | ||||||||
Net defined benefit liabilities | 1 | - | 1 | |||||||||
Other current liabilities | 3,579 | 2,180 | 1,365 | |||||||||
Other non-current liabilities | 4,139 | 200 | - | |||||||||
Cash generated from operating activities | 34,676 | 24,496 | (8,028 | ) | ||||||||
Interest received | 120 | 213 | 548 | |||||||||
Interest paid | (313 | ) | (639 | ) | (555 | ) | ||||||
Income tax paid | (1,010 | ) | (86 | ) | (1,123 | ) | ||||||
Net cash provided by (used in) operating activities | 33,473 | 23,984 | (9,158 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||
Acquisitions of property, plant and equipment | (1,162 | ) | (31,222 | ) | (708 | ) | ||||||
Proceeds from disposal of property, plant and equipment | 2 | - | 247 | |||||||||
Acquisitions of intangible assets | - | (18 | ) | (6 | ) | |||||||
Acquisitions of financial assets at amortized cost | (866 | ) | (959 | ) | (1,425 | ) | ||||||
Proceeds from disposal of financial assets at amortized cost | 3,787 | 1,896 | 1,446 | |||||||||
Acquisitions of financial assets at fair value through profit or loss | (9,547 | ) | (4,339 | ) | (2,483 | ) | ||||||
Proceeds from disposal of financial assets at fair value through profit or loss | 6,866 | 21,287 | 2,502 | |||||||||
Proceeds from capital reduction of investment | - | 17 | - | |||||||||
Acquisitions of equity method investments | - | (129 | ) | - |
Himax Technologies, Inc. | ||||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||
(Amounts in Thousands of U.S. Dollars) | ||||||||||||
Three Months Ended September 30, | Three Months Ended June 30, | |||||||||||
2020 | 2019 | 2020 | ||||||||||
Decrease (increase) in refundable deposits | (345 | ) | 21 | 177 | ||||||||
Releases (pledges) of restricted deposit | (3 | ) | 323 | (3 | ) | |||||||
Cash received in advance from disposal of land | 1,486 | - | - | |||||||||
Net cash provided by (used in) investing activities | 218 | (13,123 | ) | (253 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Payments of cash dividends | (4 | ) | - | - | ||||||||
Proceeds from issuance of new shares by subsidiaries | 884 | - | - | |||||||||
Proceeds from short-term unsecured borrowings | 10,000 | 60,000 | 58,403 | |||||||||
Repayments of short-term unsecured borrowings | (68,403 | ) | (46,385 | ) | (67,818 | ) | ||||||
Proceeds from long-term unsecured borrowings | 60,000 | - | - | |||||||||
Proceeds from short-term secured borrowings | 107,000 | 67,000 | 87,000 | |||||||||
Repayments of short-term secured borrowings | (167,000 | ) | (67,000 | ) | (87,000 | ) | ||||||
Release of restricted deposit | 60,000 | - | - | |||||||||
Payment of lease liabilities | (709 | ) | (392 | ) | (669 | ) | ||||||
Proceeds from exercise of employee stock options | 253 | - | 173 | |||||||||
Net cash provided by (used in) financing activities | 2,021 | 13,223 | (9,911 | ) | ||||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (19 | ) | (362 | ) | (225 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 35,693 | 23,722 | (19,547 | ) | ||||||||
Cash and cash equivalents at beginning of period | 96,130 | 92,857 | 115,677 | |||||||||
Cash and cash equivalents at end of period | $ | 131,823 | $ | 116,579 | $ | 96,130 | ||||||
Himax Technologies, Inc. | |||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||
(Amounts in Thousands of U.S. Dollars) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Profit (loss) for the period | $ | 11,814 | $ | (16,749 | ) | ||||||
Adjustments for: | |||||||||||
Depreciation and amortization | 17,165 | 18,533 | |||||||||
Share-based compensation expenses | 763 | 131 | |||||||||
Gain on disposal of property, plant and equipment, net | (244 | ) | (6 | ) | |||||||
Changes in fair value of financial assets at fair value through profit or loss | 17 | (6 | ) | ||||||||
Interest income | (816 | ) | (1,492 | ) | |||||||
Finance costs | 1,458 | 1,655 | |||||||||
Income tax expense | 2,953 | - | |||||||||
Share of losses of associates | 270 | 96 | |||||||||
Inventories write downs | 9,695 | 17,932 | |||||||||
Unrealized foreign currency exchange losses (gains) | (18 | ) | 68 | ||||||||
43,057 | 20,162 | ||||||||||
Changes in: | |||||||||||
Accounts receivable | (56,157 | ) | 31,696 | ||||||||
Inventories | 8,354 | (22,952 | ) | ||||||||
Other current assets | (292 | ) | (2,596 | ) | |||||||
Accounts payable | 38,833 | (35,675 | ) | ||||||||
Other payable to related party | 260 | (1,177 | ) | ||||||||
Net defined benefit liabilities | 1 | 50 | |||||||||
Other current liabilities | 103 | (777 | ) | ||||||||
Other non-current liabilities | 4,065 | 200 | |||||||||
Cash generated from operating activities | 38,224 | (11,069 | ) | ||||||||
Interest received | 849 | 1,315 | |||||||||
Interest paid | (1,498 | ) | (1,675 | ) | |||||||
Income tax paid | (2,673 | ) | (4,356 | ) | |||||||
Net cash provided by (used in) operating activities | 34,902 | (15,785 | ) | ||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions of property, plant and equipment | (4,962 | ) | (43,193 | ) | |||||||
Proceeds from disposal of property, plant and equipment | 249 | 14 | |||||||||
Acquisitions of intangible assets | (78 | ) | (114 | ) | |||||||
Acquisitions of financial assets at amortized cost | (3,028 | ) | (3,286 | ) | |||||||
Proceeds from disposal of financial assets at amortized cost | 5,998 | 3,034 | |||||||||
Acquisitions of financial assets at fair value through profit or loss | (13,135 | ) | (46,971 | ) | |||||||
Proceeds from disposal of financial assets at fair value through profit or loss | 10,465 | 47,007 | |||||||||
Acquisition of business | - | (700 | ) | ||||||||
Acquisition of a subsidiary, net of cash acquired | - | (400 | ) | ||||||||
Proceeds from capital reduction of investment | - | 47 | |||||||||
Acquisitions of equity method investments | - | (129 | ) | ||||||||
Decrease (increase) in refundable deposits | (3,182 | ) | 88 | ||||||||
Releases (pledges) of restricted deposit | (5 | ) | 328 | ||||||||
Cash paid for loan made to related party | - | (1,200 | ) | ||||||||
Cash received from loan made to related party | - | 2,780 | |||||||||
Cash received in advance from disposal of land | 1,486 | - | |||||||||
Net cash used in investing activities | (6,192 | ) | (42,695 | ) | |||||||
Himax Technologies, Inc. | |||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||
(Amounts in Thousands of U.S. Dollars) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from financing activities: | |||||||||||
Payments of cash dividends | (4 | ) | - | ||||||||
Proceeds from issuance of new shares by subsidiaries | 884 | - | |||||||||
Proceeds from short-term unsecured borrowings | 208,137 | 177,006 | |||||||||
Repayments of short-term unsecured borrowings | (265,355 | ) | (106,385 | ) | |||||||
Proceeds from long-term unsecured borrowings | 60,000 | - | |||||||||
Proceeds from short-term secured borrowings | 231,000 | 131,000 | |||||||||
Repayments of short-term secured borrowings | (291,000 | ) | (131,000 | ) | |||||||
Release of restricted deposit | 60,000 | - | |||||||||
Payment of lease liabilities | (1,840 | ) | (1,356 | ) | |||||||
Proceeds from exercise of employee stock options | 426 | - | |||||||||
Net cash provided by financing activities | 2,248 | 69,265 | |||||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (190 | ) | (643 | ) | |||||||
Net increase in cash and cash equivalents | 30,768 | 10,142 | |||||||||
Cash and cash equivalents at beginning of period | 101,055 | 106,437 | |||||||||
Cash and cash equivalents at end of period | $ | 131,823 | $ | 116,579 | |||||||
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 September 30, | Three Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | |||||||||
Revenues | $ | 239,934 | $ | 164,254 | $ | 186,984 | |||||
Gross profit | 53,605 | 32,015 | 39,258 | ||||||||
Add: Share-based compensation – cost of revenues | 72 | - | 5 | ||||||||
Gross profit excluding share-based compensation | 53,677 | 32,015 | 39,263 | ||||||||
Gross margin excluding share-based compensation | 22.4 | % | 19.5 | % | 21.0 | % | |||||
Operating income (loss) | 9,444 | (7,641 | ) | 1,645 | |||||||
Add: Share-based compensation | 5,013 | 92 | 168 | ||||||||
Operating income (loss) excluding share-based compensation | 14,457 | (7,549 | ) | 1,813 | |||||||
Add: Acquisition-related charges –intangible assets amortization | 276 | 276 | 277 | ||||||||
Operating income (loss) excluding share-based compensation and acquisition-related charges | 14,733 | (7,273 | ) | 2,090 | |||||||
Operating margin excluding share-based compensation and acquisition-related charges | 6.1 | % | (4.4 | %) | 1.1 | % | |||||
Profit (loss) attributable to Himax Technologies, Inc. stockholders | 8,451 | (7,180 | ) | 1,383 | |||||||
Add: Share-based compensation, net of tax | 3,932 | 71 | 137 | ||||||||
Add: Acquisition-related charges, net of tax | 211 | 212 | 212 | ||||||||
Profit (loss) attributable to Himax Technologies, Inc. stockholders excluding share-based compensation and acquisition-related charges | 12,594 | (6,897 | ) | 1,732 | |||||||
Net margin attributable to Himax Technologies, Inc. stockholders excluding share-based compensation and acquisition-related charges | 5.2 | % | (4.2 | %) | 0.9 | % | |||||
*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: | ||||||||||
Nine Months Ended September 30, | ||||||||||
2020 | 2019 | |||||||||
Revenues | $ | 611,512 | $ | 496,906 | ||||||
Gross profit | 134,785 | 101,828 | ||||||||
Add: Share-based compensation – cost of revenues | 87 | - | ||||||||
Gross profit excluding share-based compensation | 134,872 | 101,828 | ||||||||
Gross margin excluding share-based compensation | 22.1 | % | 20.5 | % | ||||||
Operating income (loss) | 15,736 | (16,963 | ) | |||||||
Add: Share-based compensation | 5,525 | 131 | ||||||||
Operating income (loss) excluding share-based compensation | 21,261 | (16,832 | ) | |||||||
Add: Acquisition-related charges –intangible assets amortization | 829 | 1,217 | ||||||||
Operating income (loss) excluding share-based compensation and acquisition-related charges | 22,090 | (15,615 | ) | |||||||
Operating margin excluding share-based compensation and acquisition-related charges | 3.6 | % | (3.1 | %) | ||||||
Profit (loss) attributable to Himax Technologies, Inc. stockholders | 13,128 | (14,650 | ) | |||||||
Add: Share-based compensation, net of tax | 4,349 | 101 | ||||||||
Add: Acquisition-related charges, net of tax | 635 | 908 | ||||||||
Profit (loss) attributable to Himax Technologies, Inc. stockholders excluding share-based compensation and acquisition-related charges | 18,112 | (13,641 | ) | |||||||
Net margin attributable to Himax Technologies, Inc. stockholders excluding share-based compensation and acquisition-related charges | 3.0 | % | (2.7 | %) | ||||||
*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 Earnings Per ADS Attributable to Himax Technologies, Inc. Stockholders Excluding Share-based Compensation and Acquisition-Related Charges: (Amounts in U.S. Dollars) | ||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||
2020 | 2020 | |||||
Diluted IFRS earnings per ADS attributable to Himax Technologies, Inc. stockholders | ||||||
Add: Share-based compensation per ADS | ||||||
Add: Acquisition-related charges per ADS | ||||||
Diluted non-IFRS earnings per ADS attributable to Himax Technologies, Inc. stockholders excluding share-based compensation and acquisition-related charges | ||||||
Numbers do not add up due to rounding |
FAQ
What were Himax's Q3 2020 revenue and gross margin results?
What is the Q4 2020 revenue guidance for Himax?
How did Himax's earnings per diluted ADS perform in Q3 2020?
What factors contributed to Himax's Q3 revenue growth?