HIMAX TECHNOLOGIES, INC. - Net revenue for the quarter increased 7.5% sequentially to $178.0 million, exceeding previously issued Company guidance.
- Compared to the previous quarter, large-sized panel driver sales increased by 22.9%, small and medium-sized panel driver sales decreased by 2.9% and non-driver sales increased by 10.5%.
- Gross margin for the quarter increased 110 bps to 22.9% from Q3 2015, exceeding Q4 2015 guidance.
- Q4 2015 GAAP net income was $6.1 million or 3.6 cents, exceeding guidance and at the upper end of its preannounced EPS.
- FY 2015 revenues decreased 17.7% year-over-year and gross margin came in at 23.6%. FY 2015 GAAP net income was 14.6 cents per diluted ADS.
- Company's Q1 2016 guidance highlights positive trends in market share gain, new product launches and AR/VR business opportunities for FY2016.
Fourth Quarter 2015 Results Compared to Fourth Quarter 2014 Results (USD in millions) (unaudited) | |||
Q4 2015 | Q4 2014 | CHANGE | |
Net Revenues | $178.0 million | $227.2 million | -21.7% |
Gross Profit | $40.7 million | $56.0 million | -27.3% |
Gross Margin | 22.9 % | 24.7% | -1.8% |
GAAP Net Income Attributable to Shareholders | $6.1 million | $15.6 million | -60.8% |
Non-GAAP Net Income Attributable to Shareholders | $6.5 million (1) | $16.1 million (2) | -59.7% |
GAAP EPS (Per Diluted ADS, USD) | $0.036 | $0.091 | -60.8% |
Non-GAAP EPS (Per Diluted ADS, USD) | $0.038 (1) | $0.094 (2) | -59.8% |
Non-GAAP Net income attributable to common shareholders and EPS excludes $0.2 million share-based compensation expenses, net of tax and
$0.2 million non-cash acquisition related charge, net of tax.
Non-GAAP Net income attributable to common shareholders and EPS excludes $0.4 million of share-based compensation expenses, net of tax and $0.1 million non-cash acquisition related charges, net of tax.
Fourth Quarter 2015 Results Compared to Third Quarter 2015 Results (USD in millions) (unaudited) | |||
Q4 2015 | Q3 2015 | CHANGE | |
Net Revenue | $178.0 million | $165.6 million | +7.5% |
Gross Profit | $40.7 million | $36.1 million | +12.9% |
Gross Margin | 22.9 % | 21.8% | +1.1% |
GAAP Net Income (Loss) Attributable to Shareholders | $6.1 million | $(2.3) million | +362.9% |
Non-GAAP Net Income Attributable to Shareholders | $6.5 million (1) | $1.7 million (2) | +286.4% |
GAAP EPS (Per Diluted ADS, USD) | $0.036 | $(0.014) | +362.3% |
Non-GAAP EPS (Per Diluted ADS, USD) | $0.038 (1) | $0.010 (2) | +285.6% |
Non-GAAP Net income attributable to common shareholders and EPS excludes $0.2 million share-based compensation expenses, net of tax and
$0.2 million non-cash acquisition related charge, net of tax.
Non-GAAP Net income attributable to common shareholders and EPS excludes $3.9 million of share-based compensation expenses, net of tax and $0.1 million non-cash acquisition related charge, net of tax.
"Our 2015 fourth quarter results beat our guidance as preannounced on January 7. Our 2015 fourth quarter revenue was $178.0 million, representing 7.5% sequential increase. It is in line with our preannouncement and outperformed the original guidance of flat to 5% up quarter-over-quarter. Gross margin for the quarter was 22.9%, also beating the original guidance of 'flat to slightly up' sequentially. Fourth quarter GAAP earnings per diluted ADS came in at 3.6 cents, reaching the high end of our preannounced GAAP EPS range of 3.3 to 3.8 cents and beat our initially guided 1.0 to 3.0 cents. The strong result came from all three product categories," began Mr. Jordan Wu, President and Chief Executive Officer of Himax. "Notably, we saw increased market share of our large panel driver ICs, new addition of a major smartphone customer for small and medium-sized driver ICs and shipments of AR/VR related products. 2015 was a difficult year with different challenges every quarter. Despite hints of a continued market softness and tougher competition in mobile devices and TV, we were able to exit the year of 2015 with decent sequential growth. We believe such strength will continue into 2016. During 2015, our increased large panel driver IC market share in China has helped us solidify the foundation of our core business, and has brought in a strong flow sales and new opportunities as our Chinese customers continue to expand their panel capacities while Chinese TV makers are sourcing more panels locally. Equally important, following quite a few quarters of sales decline in small and medium-sized driver ICs, we finally saw smartphone order rebounds coming from the industry's restocking and new model launches in the last quarter, especially from our leading brand customers. Two of the key achievements of our smartphone driver IC business are the completion of our qualification by a primary Korean customer for our OLED driver IC design and the successful launch of our TDDI (Touch
and Display Driver Integration) products in 2015. Both products were actively sought after by mobile device makers, module houses, and panel makers. Lastly, some of the world's largest and most impactful technology companies have continued to work closely with us on their AR/VR devices using our LCOS, WLO and/or driver IC solutions. Some of them have announced the launch of their products in 2016. We are seeing strong momentum across all our major product lines and feel excited about the growth prospect of 2016, despite the uncertain economic environment."
Q4 2015 | % | Q4 2014 | % | % Change | |
Display drivers for large-sized panels | $ 62.1 | 34.9% | $65.5 | 28.8% | -5.2 % |
Display drivers for small/medium-sized panels | $ 81.9 | 46.0% | $114.8 | 50.5% | -28.7 % |
Non-driver products | $ 34.0 | 19.1% | $46.9 | 20.7% | -27.4 % |
Total | $ 178.0 | 100.0% | $227.2 | 100.0% | -21.7 % |
Q4 2015 | % | Q3 2015 | % | % Change | |
Display drivers for large-sized panels | $ 62.1 | 34.9% | $50.5 | 30.5% | +22.9 % |
Display drivers for small/medium-sized panels | $ 81.9 | 46.0% | $84.3 | 50.9% | -2.9 % |
Non-driver products | $ 34.0 | 19.1% | $30.8 | 18.6% | +10.5 % |
Total | $ 178.0 | 100.0% | $165.6 | 100.0% | +7.5 % |
Himax's fourth quarter revenue of $178.0 million represented a 7.5% sequential increase from the previous quarter and a 21.7% decrease from the same period last year. Overall, sales came in better than guided across all three product lines during the quarter. Notably, the Company saw increased market share of its large panel driver ICs, new addition of a major smartphone customer for small and medium-sized driver ICs, and shipments of AR/VR related products.
Revenue from large panel display drivers was $62.1 million, up 22.9% sequentially, and down 5.2% from a year ago. Large panel driver ICs accounted for 34.9% of Himax's total revenues for the fourth quarter, compared to 30.5% in the last quarter and 28.8% a year ago. NB demand remained weak, yet the Company's driver IC business for TVs and monitors grew more than 20% sequentially while, according to the market research firm IHS, worldwide TV and monitor panel shipments decreased 2% during the same period. This bright spot, as Himax has repeatedly emphasized, came from its long-standing leading market share in China's fast-expanding panel manufacturing base. If looking only at China, the Company's driver IC revenue grew close to 40% sequentially for each of NB, monitor and TV applications in the fourth quarter of 2015. Overall large panel driver IC for Chinese panel customers grew 16.9% year-over-year. Himax's leading market share, coupled with rapid capacity ramping of Chinese panel customers and more in-sourcing from their
local set maker customers, have led to this favorable result. It is especially worth highlighting that Himax's engineering collaboration and design-in activities with Chinese panel customers remain robust despite the soft market sentiment.
Revenue for small and medium-sized drivers came in at $81.9 million, down 2.9% sequentially and down 28.7% from the same period last year. Driver ICs for small and medium-sized applications accounted for 46.0% of total sales for the fourth quarter, as compared to 50.9% in the previous quarter and 50.5% a year ago. The main reason behind the weak performance was the loss of business from the Company's primary Korean end customer as they replaced the use of LCD displays, for which Himax was a major IC vendor, by AMOLED for their smartphone products, thereby creating a gap in the Company's small and medium-sized business. While with a much reduced volume, Himax remained a major IC partner to this Korean customer for their LCD displays and is working on AMOLED projects with them. Business from Chinese smartphone makers grew significantly over the last quarter due to their new model launches and inventory replenishing, as well as the addition of a Chinese new top-tier customer for one of their high-volume models. Compared to the same quarter last year, revenues for Chinese smartphones stayed around flat. For automotive applications, Himax continued to see solid momentum, growing high teens from the third quarter and around 3% year-over-year. The Company's revenues for tablet segment grew around 9% sequentially, a result of strong shipments to certain international brand customers. The tablet sector registered a year-over-year decline of around 17%, a reflection of the overall weakness of the tablet market.
Revenues from non-driver businesses were $34.0 million, up 10.5% sequentially and down 27.4% from the same period last year. Non-driver products accounted for 19.1% of total revenues, as compared to 18.6% in the previous quarter and 20.7% a year ago. CMOS image sensor business was the main factor behind the year-over-year decline. Himax's CMOS Image sensor business suffered because the Company didn't ramp its 8MP and 13MP sensors as planned due to the lack of Phase Detection Auto Focus (PDAF), a new but nowadays-required feature for high end smartphone. Himax remained one of the market share leaders in notebook sector. The sequential growth of its non-driver segment was mainly contributed by AR/VR related businesses. Himax's LCOS and WLO revenues started to show growth as it started to make shipments to certain leading customers in September. Development fees from AR/VR project engagements with both current and new customers also worked in its favor. Among the non-driver products, power management ICs also delivered impressive growth sequentially.
GAAP gross margin for the fourth quarter was 22.9%, a 110 basis points increase from 21.8% in the previous quarter and down 180 basis points from 24.7% in the same period last year. The gross margin beat the Company's initial guidance mainly due to a more favorable product mix, including more high-end smartphone and tablet driver IC shipments and higher development fee incomes from LCOS and WLO businesses. Such increased development activities will eventually lead to mass production of these products, which will enhance the Company's gross margin even further in the long run. Gross margin expansion was also a testament to Himax's costs-down measures. Gross margin improvement remains one of the Company's business focuses.
Himax Technologies Inc. issued this content on 04 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 04 February 2016 14:55:12 UTC
Original Document: http://www.himax.com.tw/wp-content/uploads/2016/02/HIMAX_4Q15_Earnings_PR_Final.pdf
