OmniVision Reports Financial Results for Fourth Quarter and Fiscal 2008
Posted on May 29, 2008
Filed Under Tech Biz
SUNNYVALE, Calif., May 29 /PRNewswire-FirstCall/ — OmniVision
Technologies, Inc. (Nasdaq: OVTI), a leading supplier of CMOS image
sensors, today reported financial results for the fiscal fourth quarter and
fiscal year ended April 30, 2008.
Revenues for the fourth quarter of fiscal 2008 were $169.0 million,
compared to $224.9 million in the third quarter of fiscal 2008, and $119.2
million in the fourth quarter of fiscal 2007. GAAP net income in the fourth
quarter of fiscal 2008 was $9.1 million, or $0.17 per diluted share,
compared to $22.5 million, or $0.40 per diluted share, in the third quarter
of fiscal 2008, and a GAAP net loss of $1.5 million, or $(0.03) per share
in the fourth quarter of fiscal 2007.
Non-GAAP net income in the fourth quarter of fiscal 2008, which
excludes stock-based compensation expense and the related tax effects under
FAS 123(R), was $14.3 million and non-GAAP earnings were $0.27 per diluted
share, compared to $31.1 million and non-GAAP earnings of $0.55 per diluted
share in the third quarter of fiscal 2008. Similarly, non-GAAP net income
in the fourth quarter of fiscal 2007 was $3.1 million and non-GAAP earnings
were $0.06 per diluted share.
Revenues for the fiscal year ended April 30, 2008 were $799.6 million,
compared to $528.1 million in fiscal 2007. GAAP net income for fiscal 2008
was $65.1 million, or $1.19 per diluted share, compared to net income of
$24.0 million, or $0.43 per diluted share, in fiscal 2007.
Non-GAAP net income for fiscal 2008, which excludes stock-based
compensation expense and the related tax effects, was $94.3 million and
non-GAAP earnings were a record $1.69 per diluted share. Non-GAAP net
income for fiscal 2007, which excludes stock-based compensation expense,
litigation settlement expense and the related tax effects, was $52.1
million and non-GAAP earnings were $0.93 per diluted share. Refer to the
attached schedule for a reconciliation of GAAP net income/(loss) to
non-GAAP net income for the three and twelve months ended April 30, 2008
and 2007.
Gross margin for the fourth quarter of fiscal 2008 was 27.2%, compared
to 27.1% for the third quarter of fiscal 2008 and 22.3% for the fourth
quarter of fiscal 2007.
The Company ended the fiscal year with cash, cash equivalents and
short-term investments totaling $269.3 million, a decrease of $94.0 million
from the previous quarter. The decrease includes approximately $74.7
million in cash used for the repurchase of the Company’s common stock.
“Although revenues for our fourth quarter were somewhat weaker during
our seasonally slow period of the year than we had expected, we finished
off a stellar year in which our revenues grew by more than 50%,” said Shaw
Hong, OmniVision’s president and chief executive officer. “In the coming
year, we will continue our focus on developing new technology, strong
marketing, delivery of volume production and the highest quality of service
to our customers,” Mr. Hong concluded.
Outlook
Based on current trends, the Company expects fiscal first quarter 2009
revenues will be in the range of $170 million to $190 million and earnings
will be between $0.14 and $0.27 per share, on a diluted basis. Excluding
the estimated expense and related tax effects associated with stock-based
compensation in accordance with FAS 123(R), the Company expects its
non-GAAP net income will be in the range of $0.27 to $0.40 per diluted
share. Refer to the table below for a reconciliation of GAAP to non-GAAP
net income.
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 866-510-0711 or 617-597-5379 and indicating passcode 90795567.
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 58041880.
About OmniVision
OmniVision Technologies, Inc. designs and markets high-performance
semiconductor image sensors. Its OmniPixel(R), OmniPixel2(TM),
OmniPixel3(TM), OmniPixel3-HS(TM), OmniBSI(TM) and CameraChip(TM) products
are highly integrated single-chip CMOS image sensors for mass-market
consumer and commercial applications such as mobile phones, notebooks and
PCs, digital still cameras, security and surveillance systems, interactive
video games, automotive and medical 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 revenues and earnings per share for
the quarter ending July 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; the market
acceptance of products into which the Company’s products are designed; the
potential impact of general economic conditions, 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), a 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 July 31, 2008
GAAP Non-GAAP
Range of Estimates Range of Estimates
From To Adjustment From To
Earnings per share $ 0.14 $ 0.27 $ 0.13 (1) $ 0.27 $ 0.40
(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)
April 30,
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $ 217,340 $ 190,878
Short-term investments 51,993 114,432
Accounts receivable, net of allowances
for doubtful accounts and sales returns 105,338 65,666
Inventories 115,127 119,663
Deferred income taxes 2,823 3,356
Prepaid expenses and other current assets 7,430 8,717
Recoverable insurance proceeds — 13,000
Total current assets 500,051 515,712
Property, plant and equipment, net 92,451 64,363
Long-term investments 85,419 67,281
Goodwill 7,541 7,541
Intangibles, net 13,928 20,493
Other long-term assets 18,956 12,669
Total assets $ 718,346 $ 688,059
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 57,760 $ 56,290
Accrued expenses and other
current liabilities 17,069 17,524
Litigation settlement accrual — 13,750
Income taxes payable 2,637 61,617
Deferred revenues, less cost of revenues 8,238 8,873
Current portion of long-term debt 651 631
Total current liabilities 86,355 158,685
Long-term liabilities:
Long-term income taxes payable(1) 78,031 –
Non-current portion of long-term debt 32,830 27,576
Other long-term liabilities 6,955 6,998
Total long-term liabilities 117,816 34,574
Total liabilities 204,171 193,259
Minority interest 4,444 4,344
Stockholders’ equity:
Common stock, $0.001 par value; 100,000
shares authorized; 62,010 issued and 51,046
outstanding at April 30, 2008 and 60,811
shares issued and 54,941 outstanding at
April 30, 2007, respectively 62 61
Additional paid-in capital 373,024 329,012
Accumulated other comprehensive income 1,561 867
Treasury stock, 10,964 and 5,870 at
April 30, 2008 and 2007, respectively (165,768) (79,568)
Retained earnings 300,852 240,084
Total stockholders’ equity 509,731 490,456
Total liabilities, minority interest and
stockholders’ equity $ 718,346 $ 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 as a charge to retained earnings and
reclassified certain tax liabilities totaling $64.3 million to
“Long-term income taxes payable.”
OMNIVISION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
April 30, April 30,
2008 2007 2008 2007
Revenues $ 168,951 $ 119,231 $ 799,628 $ 528,143
Cost of revenues 122,916 92,628 593,377 372,776
Gross profit 46,035 26,603 206,251 155,367
Operating expenses:
Research, development
and related 21,641 15,550 79,369 67,570
Selling, general and
administrative 15,710 13,822 62,228 58,674
Litigation settlement — — — 3,300
Total operating expenses 37,351 29,372 141,597 129,544
Income (loss) from operations 8,684 (2,769) 64,654 25,823
Interest income, net 2,045 3,616 12,128 14,580
Other income (expense), net 427 (2,175) (691) (1,285)
Income (loss) before income
taxes and minority interest 11,156 (1,328) 76,091 39,118
Provision for income taxes 2,120 199 11,049 9,392
Minority interest (89) (74) (33) 5,753
Net income (loss) $ 9,125 $ (1,453) $ 65,075 $ 23,973
Net income (loss) per share:
Basic $ 0.17 $ (0.03) $ 1.20 $ 0.44
Diluted $ 0.17 $ (0.03) $ 1.19 $ 0.43
Shares used in computing net
income (loss) per share:
Basic 52,483 54,929 54,401 54,706
Diluted 52,652 54,929 54,767 55,234
OMNIVISION TECHNOLOGIES, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
April 30, April 30,
2008 2007 2008 2007
GAAP net income (loss) $ 9,125 $ (1,453) $ 65,075 $ 23,973
Add:
Stock-based compensation
in cost of revenues 697 795 3,555 3,716
Stock-based compensation
in research, development
and related expenses 2,736 2,838 12,038 12,521
Stock-based compensation in
selling, general and
administrative expenses 2,694 3,143 12,162 13,423
(Increase) decrease in provision
for income taxes without the
effect of stock-based
compensation (969) (2,187) 1,450 (3,699)
Non-GAAP net income after
adjustment for stock-based
compensation 14,283 3,136 94,280 49,934
Add:
Litigation settlement expense — — — 3,300
Less:
Provision for income taxes
without the effect of
litigation settlement
expense — — — (1,155)
Non-GAAP net income $ 14,283 $ 3,136 $ 94,280 $ 52,079
Diluted non-GAAP net
income per share $ 0.27 $ 0.06 $ 1.69 $ 0.93
Shares used in computing
diluted non-GAAP net
income per share 53,371 55,637 55,829 55,955
SOURCE OmniVision Technologies, Inc.
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