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OmniVision Reports Financial Results For the Second Quarter of Fiscal 2013

Date : 11/30/2012 @ 2:48AM
Source : PR Newswire (US)
Stock : Omnivision Technologies, Inc. (MM) (OVTI)
Quote : 23.36  0.96 (4.29%) @ 2:50AM
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OmniVision Reports Financial Results For the Second Quarter of Fiscal 2013

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OmniVision Reports Financial Results For the Second Quarter of Fiscal 2013

SANTA CLARA, Calif., Nov. 29, 2012 /PRNewswire/ -- 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

SOURCE OmniVision Technologies, Inc.

Copyright 2012 PR Newswire



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