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8-K - 8-K - OMNIVISION TECHNOLOGIES INCa12-28271_18k.htm

Exhibit 99.1

 

GRAPHIC

 

OMNIVISION REPORTS FINANCIAL RESULTS

FOR THE SECOND QUARTER OF FISCAL 2013

 

~ Second Quarter Revenues Grow 79% Year-Over-Year ~

 

SANTA CLARA, Calif., — November 29, 2012 — OmniVision Technologies, Inc. (Nasdaq: OVTI), a leading developer of advanced digital imaging solutions, today reported financial results for the second quarter of fiscal 2013 that ended on October 31, 2012.

 

Revenues for the second quarter of fiscal 2013 were $390.1 million, as compared to $258.1 million in the first quarter of fiscal 2013, and $217.9 million in the second quarter of fiscal 2012. GAAP net income in the second quarter of fiscal 2013 was $10.3 million, or $0.19 per diluted share, as compared to net income of $2.3 million, or $0.04 per diluted share in the first quarter of fiscal 2013, and $21.1 million, or $0.35 per diluted share in the second quarter of fiscal 2012.

 

Non-GAAP net income in the second quarter of fiscal 2013 was $18.6 million, or $0.33 per diluted share. Non-GAAP net income in the first quarter of fiscal 2013 was $11.6 million, or $0.21 per diluted share. Non-GAAP net income in the second quarter of fiscal 2012 was $30.1 million, or $0.48 per diluted share. Non-GAAP net income excludes stock-based compensation expenses and the related tax effects. Please refer to the attached schedule for a reconciliation of GAAP net income to non-GAAP net income for the three and six months ended October 31, 2012 and 2011 and for the three months ended July 31, 2012.

 

GAAP gross margin for the second quarter of fiscal 2013 was 16.6%, as compared to 19.1% for the first quarter of fiscal 2013 and 30.6% for the second quarter of fiscal 2012. The sequential decrease in second quarter gross margin reflected an increase in shipment mix of our advanced products that carried high manufacturing costs.

 

The Company ended the period with cash, cash equivalents and short-term investments totaling $139.6 million, a decrease of $97.0 million from the previous quarter. The decrease was caused by a $106.6 million increase in accounts receivable, the result of a significant sequential increase in revenues.

 

“Once again, I am pleased to report that OmniVision has achieved the high end of its revenues guidance, and that the company remains well-positioned to maintain its sales momentum into the third fiscal quarter,” said Shaw Hong, chief executive officer of OmniVision Technologies, Inc. “We have taken, and will continue to take, actions to improve our corporate gross margins.”

 



 

“In addition, I am pleased to announce the addition of Raymond Wu to OmniVision’s management team,” continued Hong. “Raymond, one of our co-founders, has agreed to re-join us as our President, effective December 1, 2012. During his previous tenure, Raymond’s intellect, experience and influence extended to market development, engineering and sales. We are enthused by his return, and with his knowledge of our company and the industry, I expect Raymond to make significant contributions to OmniVision’s continued growth in the years to come.”

 

Outlook

 

Based on current trends, the Company expects revenues for the third quarter of fiscal 2013 will be in the range of $390 million to $425 million and GAAP net income per share will be between $0.17 and $0.30 per diluted share. Excluding the estimated expense and related tax effects associated with stock-based compensation, the Company expects its non-GAAP net income per share will be between $0.33 and $0.46 per diluted share. Refer to the table below for a reconciliation of GAAP to non-GAAP net income.

 

Conference Call

 

OmniVision Technologies, Inc. will host a conference call today at 5:00 p.m. Eastern time to discuss these results further. This conference call can be accessed via a webcast at www.ovt.com. The call can also be accessed by dialing 866-202-4683 (domestic) or 617-213-8846 (international) and entering passcode 90641132.

 

A replay of the call will remain available at www.ovt.com for approximately twelve months. A replay of the call will also be available for one week beginning approximately one hour after the conclusion of the call. To access the replay, dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter passcode 13057519.

 

About OmniVision

 

OmniVision Technologies, Inc. is a leading developer of advanced digital imaging solutions. Its CameraChip™ and CameraCubeChip™ products using CameraCubeChip™, OmniBSI™, OmniBSI+™, OmniBSI-2™, OmniPixel®, OmniPixel2™, OmniPixel3™ and OmniPixel3-HS™ technologies are highly integrated, single-chip CMOS image sensors for consumer and commercial applications including mobile phones, notebooks, tablets and webcams, entertainment devices, security and surveillance systems, digital still and video cameras, automotive and medical imaging systems. Additional information is available at www.ovt.com.

 



 

Safe Harbor Statement

 

Certain statements in this press release, including statements relating to our expectations regarding revenues and earnings per share for the three months ending January 31, 2013 are forward-looking statements. These forward-looking statements are based on management’s current expectations, and certain factors could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, our ability to maintain and increase sales to current key customers and end-users of our products; fluctuations of wafer manufacturing costs, manufacturing yields, manufacturing capacity and other manufacturing processes and the impact on gross margins; the potential loss or reduction of orders from one or more key customers or distributors; the continued growth and development of current markets and the emergence of new markets in which the Company sells, or may sell, its products; fluctuations in sales mix and average selling prices; our ability to timely complete the product development cycle for new sensors; the Company’s ability to obtain design wins from various image sensor device manufacturers including manufacturers of mobile phones, tablets and other entertainment devices, laptops and personal computers, digital still cameras and automobile manufacturers; competition in current and emerging markets for image sensor products, including pricing pressures that could result from competition; the impact of general economic conditions on orders from the end-user customers of our products; the Company’s ability to accurately forecast customer demand for its products; the market acceptance of products into which the Company’s products are designed; the development, production, introduction and marketing of new products and technology; the acceptance of the Company’s products in such current and new markets; the Company’s strategic investments and relationships, and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings and reports, including, but not limited to, the Company’s most recent Annual Report on Form 10-K and recent Quarterly Reports on Form 10-Q. The Company expressly disclaims any obligation to update information contained in any forward-looking statement.

 

Use of Non-GAAP Financial Information

 

To supplement the reader’s overall understanding of both its reported results presented in accordance with U.S. generally accepted accounting principles (“GAAP”) and its outlook, the Company also presents non-GAAP measures of net income and net income per share which are adjusted from results based on GAAP. In particular, the Company excludes stock-based compensation expenses and the related tax effects. The non-GAAP financial measures which the Company discloses also exclude the effects of stock-based compensation on the number of basic and diluted common shares used in calculating non-GAAP basic and diluted net income per share. The Company provides these non-GAAP financial measures to enhance an investor’s overall understanding of its current financial performance and to assess its prospects for the future. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with its GAAP results and the accompanying reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting the Company’s business. The economic basis for the Company’s decision to use non-GAAP financial measures is that the adjustments to net income did not reflect the on-going relative strength of the Company’s performance. The Company’s objective is to minimize any confusion in the financial markets by providing non-GAAP net income and non-GAAP net income per share measurements and disclosing the related components. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

 



 

The Company uses non-GAAP financial measures for internal management purposes to conduct and evaluate its business, when publicly providing its business outlook and to facilitate period-to-period comparisons. The Company views non-GAAP net income per share as a primary indicator of the profitability of its underlying business. In addition, because stock-based compensation is a non-cash expense and is offset in full by a credit to paid-in capital, it has no effect on total stockholders’ equity. As the calculation of non-GAAP financial measures differs between companies, the non-GAAP financial measures used by the Company may not be comparable to similarly titled measures used by other companies. Other than stock-based compensation and the related tax effects, these differences may cause the Company’s non-GAAP measures to not be directly comparable to other companies’ non-GAAP measures. Although these non-GAAP financial measures adjust cost, expenses and basic and diluted share items to exclude the accounting treatment of stock-based compensation, they should not be viewed as a non-GAAP presentation reflecting the elimination of the underlying stock-based compensation programs. Thus, the Company’s non-GAAP presentations are not intended to present, and should not be used, as a basis for assessing what its operating results might be if it were to eliminate its stock-based compensation programs. The Company compensates for these limitations by providing full disclosure of the net income and net income per share on a basis prepared in accordance with GAAP to enable investors to consider net income and net income per share determined under GAAP as well as on an adjusted basis, and perform their own analysis, as appropriate. As a result of the foregoing limitations, the Company does not use, nor does the Company intend to use, the non-GAAP financial measures when assessing the Company’s performance against that of other companies.

 

Estimating stock-based compensation expenses and the related tax effects for a future period is subject to inherent risks and uncertainties, including but not limited to the price of the Company’s stock, stock market volatility, expected option life, risk-free interest rates, and the number of option exercises and sales during the quarter.

 

OMNIVISION TECHNOLOGIES, INC.

 

RECONCILIATION OF GUIDANCE FOR GAAP NET INCOME PER DILUTED SHARE

TO PROJECTED NON-GAAP NET INCOME PER DILUTED SHARE

(unaudited)

 

 

 

Three Months Ending January 31, 2013

 

 

 

GAAP
Range of Estimates

 

 

 

Non-GAAP
Range of Estimates

 

 

 

From

 

To

 

Adjustment

 

From

 

To

 

Net income per share

 

$

0.17

 

$

0.30

 

$

0.16

(1)

$

0.33

 

$

0.46

 

 


(1)       Reflects estimated adjustment for expense and related tax effects associated with stock-based compensation.

 



 

OMNIVISION TECHNOLOGIES, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)

 

 

 

October 31,

 

April 30,

 

 

 

2012

 

2012

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

115,511

 

$

290,492

 

Short-term investments

 

24,096

 

40,515

 

Accounts receivable, net of allowances for doubtful accounts and sales returns

 

249,283

 

107,793

 

Inventories

 

398,694

 

291,340

 

Prepaid and deferred income taxes

 

4,717

 

4,083

 

Prepaid expenses and other current assets

 

9,405

 

8,542

 

Total current assets

 

801,706

 

742,765

 

Property, plant and equipment, net

 

154,045

 

144,792

 

Long-term investments

 

127,178

 

128,940

 

Goodwill

 

10,227

 

10,227

 

Intangibles, net

 

63,300

 

69,028

 

Other long-term assets

 

16,951

 

7,205

 

Total assets

 

$

1,173,407

 

$

1,102,957

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

193,608

 

$

159,860

 

Accrued expenses and other current liabilities

 

40,367

 

35,416

 

Income tax payable

 

 

987

 

Deferred revenues, less cost of revenues

 

14,094

 

10,115

 

Current portion of long-term debt

 

2,141

 

3,146

 

Total current liabilities

 

250,210

 

209,524

 

Long-term liabilities:

 

 

 

 

 

Long-term income taxes payable

 

85,143

 

88,159

 

Non-current portion of long-term debt

 

39,008

 

39,337

 

Other long-term liabilities

 

5,003

 

5,058

 

Total long-term liabilities

 

129,154

 

132,554

 

Total liabilities

 

379,364

 

342,078

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.001 par value; 100,000 shares authorized; 74,141 shares issued and 53,542 outstanding at October 31, 2012 and 72,964 shares issued and 52,365 outstanding at April 30, 2012, respectively

 

74

 

73

 

Additional paid-in capital

 

596,643

 

575,935

 

Accumulated other comprehensive income

 

2,753

 

2,970

 

Treasury stock, 20,599 at October 31, 2012 and April 30, 2012, respectively

 

(278,683

)

(278,683

)

Retained earnings

 

473,256

 

460,584

 

Total stockholders’ equity

 

794,043

 

760,879

 

Total liabilities and stockholders’ equity

 

$

1,173,407

 

$

1,102,957

 

 



 

OMNIVISION TECHNOLOGIES, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

October 31,

 

October 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

Revenues

 

$

390,137

 

$

217,919

 

$

648,201

 

$

493,990

 

Cost of revenues

 

325,453

 

151,258

 

534,302

 

339,936

 

Gross profit

 

64,684

 

66,661

 

113,899

 

154,054

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research, development and related

 

30,361

 

29,027

 

59,209

 

57,372

 

Selling, general and administrative

 

18,131

 

15,771

 

36,859

 

31,874

 

Amortization of acquired patent portfolio

 

2,322

 

2,322

 

4,643

 

4,643

 

Total operating expenses

 

50,814

 

47,120

 

100,711

 

93,889

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

13,870

 

19,541

 

13,188

 

60,165

 

Benefit from acquisition of production operations from VisEra

 

 

8,626

 

 

8,626

 

Equity in earnings of investees, net

 

1,192

 

677

 

2,332

 

1,694

 

Interest expense, net

 

(728

)

(247

)

(1,486

)

(469

)

Other income (expense), net

 

222

 

(888

)

316

 

(1,138

)

Income before income taxes

 

14,556

 

27,709

 

14,350

 

68,878

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

4,211

 

6,624

 

1,678

 

5,821

 

Net income

 

$

10,345

 

$

21,085

 

$

12,672

 

$

63,057

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.19

 

$

0.35

 

$

0.24

 

$

1.07

 

Diluted

 

$

0.19

 

$

0.35

 

$

0.24

 

$

1.03

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

53,514

 

59,612

 

53,172

 

59,131

 

Diluted

 

53,675

 

60,207

 

53,310

 

60,984

 

 



 

OMNIVISION TECHNOLOGIES, INC.

 

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(in thousands, except per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

Three Months
Ended

 

 

 

October 31,

 

October 31,

 

July 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

2012

 

GAAP net income

 

$

10,345

 

$

21,085

 

$

12,672

 

$

63,057

 

$

2,327

 

Add:

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation in cost of revenues

 

977

 

712

 

2,037

 

1,176

 

1,060

 

Stock-based compensation in research, development and related expenses

 

4,113

 

3,249

 

8,865

 

5,853

 

4,752

 

Stock-based compensation in selling, general and administrative expenses

 

3,344

 

2,788

 

7,060

 

5,005

 

3,716

 

(Increase) decrease in provision for income taxes without the effect of stock-based compensation

 

(228

)

2,224

 

(522

)

2,154

 

(294

)

Non-GAAP net income

 

$

18,551

 

$

30,058

 

$

30,112

 

$

77,245

 

$

11,561

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP provision for income taxes

 

$

4,211

 

$

6,624

 

$

1,678

 

$

5,821

 

$

(2,533

)

(Increase) decrease in provision for income taxes without the effect of stock-based compensation

 

(228

)

2,224

 

(522

)

2,154

 

(294

)

Non-GAAP provision for income taxes

 

$

4,439

 

$

4,400

 

$

2,200

 

$

3,667

 

$

(2,239

)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.35

 

$

0.50

 

$

0.57

 

$

1.31

 

$

0.22

 

Diluted

 

$

0.33

 

$

0.48

 

$

0.54

 

$

1.24

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing non-GAAP net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

53,514

 

59,612

 

53,172

 

59,131

 

52,830

 

Diluted

 

56,211

 

62,544

 

55,695

 

62,469

 

55,186

 

 

Contact Information

Investor Relations:

Mary McGowan

Blackburn Communications

408.653.3263

invest@ovt.com