SUNNYVALE , Calif., Nov. 29 /PRNewswire-FirstCall/ -- OmniVision Technologies, Inc. (Nasdaq: OVTI), a leading supplier of CMOS image sensors, today reported financial results for the fiscal second quarter ended October 31, 2007 .
Revenue for the second quarter of fiscal 2008 was
Non-GAAP net income in the second quarter of fiscal 2008, which excludes
stock-based compensation expense and the related tax effects, was
Gross margin for the second quarter of fiscal 2008 was 25.2%, compared to 23.4% for the first quarter of fiscal 2008. The increase in gross margin reflects lower production costs and improved yields.
The Company ended the period with cash, cash equivalents and short-term
investments totaling
"Our record second quarter performance across multiple markets reflected continued demand for our products and our ability to increase our market share," said Shaw Hong, OmniVision's president and chief executive officer, "We are seeing acceleration of our Emerging Products business, acceleration of demand for our higher resolution sensors for developed markets and the continued expansion of adoption rates in new markets."
"The combination of industry leading technology, timely and efficient delivery of our products, and a high level of customer service will continue to deliver value to our customers and to our stockholders," Mr. Hong concluded.
Outlook
Based on current trends, the Company expects fiscal third quarter 2008
revenues will be in the range of
Conference Call
OmniVision Technologies will host a conference call today at 2:00 p.m. Pacific Time to discuss further these results. This conference call can be accessed via a webcast at http://www.ovt.com. The call may also be accessed by dialing 800-706-7745 or 617-614-3472 and indicating passcode 26606734.
A replay of the call will remain available at http://www.ovt.com for approximately twelve months. A replay of the call will also be available for 48 hours beginning approximately one hour after the call. To access the replay, dial 888-286-8010 or 617-801-6888 and enter passcode 41536514.
About OmniVision
OmniVision Technologies, Inc. designs and markets high-performance semiconductor image sensors. Its OmniPixel(R), OmniPixel2(TM), OmniPixel3(TM) and CameraChip(TM) products are highly integrated single-chip CMOS image sensors for mass-market consumer and commercial applications such as mobile phones, digital still cameras, security and surveillance systems, interactive video games, PCs and automotive imaging systems. Additional information is available at http://www.ovt.com.
Safe Harbor Statement
Certain statements in this press release, including statements relating to the Company's expectations regarding (i) the acceleration of our emerging products business and of demand for our higher resolution products, the continued expansion of adoption rates in new markets, and our ability to deliver value to our customers and stockholders and (ii) revenues and earnings per share for the quarter ending January 31, 2008 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, competition in current and emerging markets for image sensor products, including pricing pressures that could result from competition; the Company's ability to obtain design wins from various image sensor device manufacturers including manufacturers of mobile phone, laptops and PCs, digital still cameras and automobile manufacturers; wafer manufacturing yields and other manufacturing processes; the Company's ability to accurately forecast customer demand for its products; the development, production, introduction and marketing of new products and technology; the potential loss of 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; 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 most recent Quarterly Report 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 both of 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 earnings per share which are adjusted from results based on GAAP. In particular, the Company excludes stock-based compensation expense under FAS 123(R), one-time litigation settlement expense, and the related tax effects. The non-GAAP financial measures which the Company discloses also exclude the effects of FAS 123(R) on the number of diluted common shares used in calculating non-GAAP diluted earnings 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 its performance. The Company's objective is to minimize any confusion in the financial markets by providing non-GAAP net income and non-GAAP earnings 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 statements.
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. A material limitation associated with the use of these measures as compared to the related GAAP measures is that the non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Other than share-based compensation, 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 diluted share items to exclude the accounting treatment of share-based compensation, they should not be viewed as a non-GAAP presentation reflecting the elimination of the underlying share-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 share-based compensation programs. The Company compensates for these limitations by providing full disclosure of the net income and earnings per share on a basis prepared in accordance with GAAP to enable investors to consider net income and earnings 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 expense 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 and the number of option exercises and sales during the quarter.
OMNIVISION TECHNOLOGIES, INC. RECONCILIATION OF GUIDANCE FOR GAAP EARNINGS PER SHARE TO PROJECTED NON-GAAP EARNINGS PER SHARE (unaudited) Three Months Ending January 31, 2008 GAAP Non-GAAP Range of Estimates Range of Estimates From To Adjustment From To Earnings per share $0.26 $0.39 $0.15(1) $0.41 $0.54 (1) Reflects estimated adjustment for expense and related tax effects associated with stock-based compensation in accordance with FAS123(R). OMNIVISION TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited) October 31, April 30, 2007 2007 ASSETS Current assets: Cash and cash equivalents $207,606 $190,878 Short-term investments 116,326 114,432 Accounts receivable, net of allowances for doubtful accounts and sales returns 87,720 65,666 Inventories 133,370 119,663 Refundable and deferred income taxes 3,862 3,356 Prepaid expenses and other current assets 7,016 8,717 Recoverable insurance proceeds 13,000 13,000 Total current assets 568,900 515,712 Property, plant and equipment, net 83,146 64,363 Long-term investments 81,460 67,281 Goodwill 7,541 7,541 Intangibles, net 17,212 20,493 Other long-term assets 12,909 12,669 Total assets $771,168 $688,059 LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $87,849 $56,290 Accrued expenses and other current liabilities 18,877 17,524 Litigation settlement accrual 13,000 13,750 Income taxes payable 10,859 61,617 Deferred income 6,697 8,873 Current portion of long-term debt 654 631 Total current liabilities 137,936 158,685 Long-term liabilities: Long-term income taxes payable(1) 59,758 - Non-current portion of long-term debt 27,270 27,576 Other long-term liabilities 5,824 6,998 Total long-term liabilities 92,852 34,574 Total liabilities 230,788 193,259 Minority interest 4,470 4,344 Stockholders' equity: Common stock, $0.001 par value; 100,000 shares authorized; 61,709 issued and 55,273 outstanding at October 31, 2007 and 60,811 shares issued and 54,941 outstanding at April 30, 2007, respectively 62 61 Additional paid-in capital 354,605 329,012 Accumulated other comprehensive income 1,163 867 Treasury stock, 6,436 and 5,870 at October 31, 2007 and April 30, 2007, respectively (89,184) (79,568) Retained earnings 269,264 240,084 Total stockholders' equity 535,910 490,456 Total liabilities, minority interest and stockholders' equity $771,168 $688,059 (1) On May 1, 2007, the Company adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes." Accordingly, as of May 1, 2007, the Company recorded an additional $4.3 million in overall income tax liabilities and reclassified certain tax liabilities totaling $64.3 million to "Long-term income taxes payable." 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, 2007 2006 2007 2006 Revenues $232,622 $137,656 $405,756 $274,531 Cost of revenues 173,998 92,101 306,524 179,256 Gross profit 58,624 45,555 99,232 95,275 Operating expenses: Research, development and related 20,178 18,657 37,604 35,499 Selling, general and administrative 15,787 15,774 30,952 28,225 Litigation settlement - 3,300 - 3,300 Total operating expenses 35,965 37,731 68,556 67,024 Income from operations 22,659 7,824 30,676 28,251 Interest income, net 3,325 3,366 6,686 6,769 Other income (expense), net (338) 669 (78) 1,646 Income before income taxes and minority interest 25,646 11,859 37,284 36,666 Provision for income taxes 5,151 3,907 3,791 10,531 Minority interest (15) 2,537 6 4,839 Net income $20,510 $5,415 $33,487 $21,296 Net income per share: Basic $0.37 $0.10 $0.61 $0.39 Diluted $0.36 $0.10 $0.60 $0.38 Shares used in computing net income per share: Basic 54,985 54,620 54,868 54,511 Diluted 56,449 55,624 55,503 55,689 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 October 31, October 31, 2007 2006 2007 2006 GAAP net income $20,510 $5,415 $33,487 $21,296 Add: Stock-based compensation in cost of revenues 969 1,015 1,922 1,953 Stock-based compensation in research, development and related expenses 3,410 3,629 5,695 6,656 Stock-based compensation in selling, general and administrative expenses 3,455 4,178 6,369 6,668 (Increase) decrease in provision for income taxes without the effect of stock-based compensation 809 (674) 1,429 (922) Non-GAAP net income after adjustment for stock-based compensation 29,153 13,563 48,902 35,651 Add: Litigation settlement expense - 3,300 - 3,300 Less: Provision for income taxes without the effect of litigation settlement expense - (1,155) - (1,155) Non-GAAP net income $29,153 $15,708 $48,902 $37,796 Diluted non-GAAP net income per share $0.51 $0.28 $0.86 $0.67 Shares used in computing diluted non-GAAP net income per share 57,564 55,710 56,754 56,490SOURCE OmniVision Technologies, Inc.
