TAINAN, Taiwan, Feb. 9, 2011 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. ("Himax" or "Company") (Nasdaq:HIMX) today reported financial results for the fourth quarter and full year ended December 31, 2010.
For the fourth quarter of 2010, Himax reported net revenues of $141.2 million, representing a 21.0% decrease from $178.7 million in the fourth quarter of 2009, and a 2.1% increase from $138.3 million in the third quarter of 2010. Gross margin was 21.5% in the fourth quarter of 2010, up 150 basis points year-over-year and down 140 basis points, sequentially. Operating income in the fourth quarter was $12.9 million, compared to $13.1 million for the same period last year and operating loss of $0.7 million in the previous quarter.
Net income attributable to Himax stockholders for the fourth quarter of 2010 was $11.7 million or $0.066 per diluted ADS, up from $11.0 million or $0.061 per diluted ADS in the fourth quarter of 2009, and up from $0.4 million or $0.003 per diluted ADS in the third quarter of 2010.
Excluding share-based compensation and acquisition-related charges, non-GAAP operating income for the fourth quarter of 2010 was $14.5 million, down from $15.4 million in the same period last year, and up from $7.3 million in the previous quarter.
Non-GAAP net income attributable to Himax stockholders for the fourth quarter of 2010 was $13.0 million or $0.073 per diluted ADS, up from $12.6 million or $0.069 per diluted ADS in the fourth quarter of 2009, and up from $7.0 million or $0.040 per diluted ADS in the third quarter of 2010.
Reconciliation of gross margin, operating margin (loss), net margin and diluted EPS excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to GAAP gross margin, GAAP operating margin (loss), GAAP net margin and diluted GAAP EPS, most comparable GAAP figure, is set out in the attached reconciliation schedule.
Jordan Wu, President and Chief Executive Officer of Himax, commented, "2010 was a year full of both challenges and excitement. While we lost share in large panel drivers, we also gained a lot of ground in small and medium size panels. Also, we picked up strong momentum in 2010 across all of our non-driver businesses, which we have cultivated for a long time. We believe the strong momentum will continue into this year and beyond."
Mr. Wu continued, "Our revenues totaled $642.7 million in 2010, representing a 7.2% decline year-over-year. The decline was caused by the 25.7% year over year reduction of large-panel drivers, which represented 57.0% of 2010 revenue, as compared to 71.3% in 2009. We don't expect further loss of market share for large-sized drivers with our existing major customers for this year. Moreover, we are confident that we will gain share in China where there are aggressive panel capacity expansion plans offering attractive new driver business opportunities in the near term, especially in the large panel segment.
Small- and medium-sized drivers, on the other hand, grew 46.5% year over year, representing 34.8% of our total revenue, as compared to 22.0% a year ago. This strong growth momentum in the small and medium drivers will continue into this year, thanks to the expanding markets for several emerging product segments, especially smart phones and tablet PCs.
Non-driver products grew 13.8% year over year, representing 8.2% of our total sales, as compared to 6.7% a year ago. We achieved numerous milestones for non-driver products in 2010. Firstly 2010 was the year when we commenced mass production for several new product areas, including CMOS image sensors, wafer-level optics, wafer-level camera modules, 2D to 3D conversion solutions and touch controller ICs. These milestones are illustrations of our strong R&D capability and our commitment to a more diversified product portfolio. It has also paved the way for strong long term growth. Moreover, our LCOS pico-projector solutions, power management ICs and WLED drivers all showed significant year-over-year shipment and revenue growth in 2010. We are confident that the strong momentum will continue into 2011 and beyond for every non-driver product segment.
Gross margin in 2010 was 21.0% compared to 20.5% in 2009. Our net income was $33.2 million, or 19 cents per ADS, compared to $39.7 million, or 21 cents per ADS in the previous year. We expect to see contribution from our non-driver products to our gross profit and bottom line this year, on top of their contributions to the top line. Other than a short period of ramping time in the initial stage of mass production, each of our non-driver products exhibits higher gross margin than our driver products. We believe, with further ramp-up in non-driver products, we will be able to improve our gross margin from the current level."
Mr. Wu continued, "Entering into 2011, we are seeing encouraging signs in literally all aspects of our businesses, including large panel driver business where we suffered last year. We are therefore optimistic that our business is bottoming out and we are on track again to see top line and bottom line growth starting this year, following three years of decline. Equally important, looking ahead, we foresee a more balanced business portfolio with the large panel driver business accounting for a smaller percentage of our total sales. We also anticipate small panel drivers and non-drivers, which do not rely on a small number of large customers, to contribute significantly to our total sales.
2011 will be marked as a year of transition for us. Seeing the exciting upside potential, we continue to invest heavily on R&D, which will result in less than satisfactory first quarter profitability, as will be provided by the guidance below. Nevertheless, we believe we will be able to grow both our top and bottom lines each quarter during 2011."
Mr. Wu continued, "Another important task for this year is the listing of our planned Taiwan Depositary Receipts, or TDR. The filing, however, can only be made after the publication of the 2010 full year US GAAP audited financial reports, which is scheduled for the end of April. Prior year audited financial report is one of the essential documents required for official TDR application with the Taiwan Stock Exchange. We expect the issuance of TDR will provide a more convenient platform for our Asia-based investors and would help better reflect our corporate value through increased liquidity. We will provide application updates along the way."
Mr. Wu added, "Moving to our first quarter 2011 guidance, we expect revenues to remain flat or go up slightly, with our non-driver products to account for over 10% of the total sales, the first time in our history. However, we expect gross margin to decline within 1 percentage point. The decline in gross margin is primarily due to certain ramping-up expenses involved in non-driver products in their early stage of mass production. With further shipment ramp-up, we do expect non-driver products to contribute positively to our overall gross margin soon after this quarter. As mentioned earlier, R&D expenses are projected to increase from last quarter. Finally, our GAAP earnings per ADS is expected to be in the range of 1-2 cents."
Investor Conference Call / Webcast Details
The Company's management will review detailed fourth quarter 2010 results on Wednesday, February 9, 2011 at 6:00 PM NYC (7:00 AM, Thursday, February 10, Taiwan time). The conference dial-in numbers are +1-201-689-8471 (international) and +1-877-407-4018 (U.S. domestic). A live webcast of the conference call will be available on the Company's website at . The playback will be available beginning two hours after the call through 1:00 PM Taiwan time on Wednesday, February 16, 2011 (midnight U.S. Eastern Standard Time) at www.himax.com.tw and by telephone at +1-858-384-5517 (international) or +1-877-870-5176 (U.S. domestic). The conference ID number is 364670.
About Himax Technologies, Inc.
Himax Technologies, Inc. designs, develops, and markets semiconductors that are critical components of flat panel displays. The Company's principal products are display drivers for large-sized TFT-LCD panels, which are used in desktop monitors, notebook computers and televisions, and display drivers for small- and medium-sized TFT-LCD panels, which are used in mobile handsets and consumer electronics products such as netbook computers, digital cameras, mobile gaming devices, portable DVD players, digital photo frame and car navigation displays. In addition, the Company is expanding its product offerings to include timing controllers, touch controller ICs, LCD TV and monitor chipset solutions, LCOS projector solutions, power management ICs, CMOS Image Sensors, Infinitely Color Technology and 2D to 3D conversion solutions. Based in Tainan, Taiwan, the Company has regional offices in Hsinchu and Taipei, Taiwan; Ninbo, Foshan, Fuqing, Beijing, Shanghai, Suzhou and Shenzhen, China; Yokohama and Matsusaka, Japan; Cheonan-si, Chungcheongnam-do, South Korea; and Irvine, California, USA.
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; the uncertainty of success in our Taiwan listing plan which is still under review by Taiwan regulatory authorities and subject to change due to, among other things, changes in either Taiwan or US authorities' policies and Taiwan regulatory authorities' acceptance of the Company's Taiwan listing application 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, 2009 filed with SEC on dated June 3, 2010, as amended.
CONTACT: Jessie Wang / Jessica Huang Investor Relations Himax Technologies, Inc. +886-2-2370-3999 Ext. 22618 / 22513 jessie_wang@himax.com.tw jessica_huang@himax.com.tw In the U.S. Joseph Villalta The Ruth Group +1-646-536-7003 jvillalta@theruthgroup.com