Vimicro Announces Second-Quarter 2012 Results
Revenues and Non-GAAP Net Income Exceed Guidance
Returns to Profitability on Non-GAAP Basis
BEIJING, Aug. 8, 2012 /PRNewswire-Asia-FirstCall/ -- Vimicro International Corporation (NASDAQ: VIMC) ("Vimicro" or the "Company"), a leading PC-camera processor and IP-based surveillance solution provider, today announced financial results for the second quarter ended June 30, 2012.
(Logo - http://photos.prnewswire.com/prnh/20070528/CNM014LOGO )
Second-Quarter 2012 Results
Net revenue in the second quarter of 2012 was $20.1 million, as compared to net revenue of $11.6 million in the first quarter and $14.2 million from continuing operations in the year-ago quarter. Second-quarter revenues exceeded guidance of a sequential increase of approximately 40%, or $16.2 million. The 41.8% year-over-year revenue increase was driven by growth in sales of both PC-camera processors and surveillance solutions.
Gross profit in the second quarter was $6.9 million, as compared with $4.8 million in the year-ago quarter. The gross margin in the second quarter was 34.1%, compared with 33.5% in the year-ago quarter and 30.6% in the first quarter, owing to a more favorable product mix.
Operating expenses in the second quarter were $8.5 million, as compared to $12.3 million in the year-ago quarter. Operating expenses decreased year-over-year and sequentially due to the success of the Company's restructuring efforts and cost-control initiatives. The operating loss was $1.6 million, as compared to $7.5 million in the year-ago quarter.
Vimicro returned to non-GAAP profitability in the second quarter, and non-GAAP net income attributable to Vimicro International Corporation was $729,000, or approximately $0.02 per ADS on diluted basis, as compared to a non-GAAP net loss attributable to Vimicro of $5.6 million, or $0.09 per ADS from continuing operations in the year-ago quarter. The non-GAAP net income attributable to Vimicro International Corporation excludes $1.1 million of non-cash, share-based compensation and also exceeded guidance of a loss of approximately $1.5 million.
Vimicro recorded positive cash flow from operations of $4.7 million in the second quarter. As of June 30, 2012, the Company had cash and cash equivalents of approximately $35.5 million, held-to-maturity securities of $4.0 million, and restricted cash of $6.3 million, totaling $45.8 million. Total current assets were approximately $92.5 million, and Vimicro had working capital of approximately $61.7 million, $0.5 million of notes payable, and $4.7 million of long-term bank loans on its balance sheet, as of June 30, 2012.
Dr. John Deng, Vimicro's Chairman and Chief Executive Officer, commented, "We are pleased to report significantly improved results for the second quarter, in particular reporting positive cash flow from operations and returning to profitability on a non-GAAP basis. These results demonstrate the success of the decisions we have made to refocus and streamline our company. Revenue growth was solid across both segments, and we are particularly pleased with the 61% year-over-year growth in sales of surveillance solutions. We believe Vimicro has passed the turning point, and we look forward to stronger quarterly results throughout the remainder of the year, in particular for our surveillance business."
Business Outlook
For the third quarter of 2012, Vimicro expects revenues of $20 to $22 million.
Second-Quarter Earnings Release and Conference Call Information
Vimicro releases second-quarter 2012 results on Wednesday, August 8 before the U.S. market opens. The Company will also hold a conference call at 8:00 a.m. EDT on Wednesday, August 8, 2012, to discuss financial results for the second quarter ended June 30, 2012.
To participate in the conference call, please dial one of the following numbers five to ten minutes prior to the scheduled conference call time: (866) 770-7051 or (617) 213-8064. The conference call ID number is 72770360.
If you are unable to participate in the call at this time, a replay will be available starting on Wednesday, August 8, 2012 at 10:00 a.m. EDT, through 11:59 p.m. EDT on Wednesday, August 15, 2012. To access the replay, dial (888) 286-8010 or (617) 801-6888. The conference call ID number is 32661936.
This conference call will also be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://www.media-server.com/m/acs/dd95d589a96443b5c3141c59ed7e06e2. Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software.
About Vimicro International Corporation
Vimicro International Corporation is a leading multimedia semiconductor and solution provider that designs, develops and markets mixed-signal semiconductor products and system-level solutions that enable multimedia capabilities in a variety of products for PC/notebook, consumer electronics and surveillance markets. Vimicro is aggressively expanding business into the surveillance market with system-level solutions and semiconductor products to capitalize on China's domestic demand. Vimicro's ADSs, each of which represents four ordinary shares, are currently trading on the NASDAQ Global Market under the ticker symbol "VIMC."
Forward-Looking Statements
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the quotations from management in this announcement, as well as Vimicro's expectations and forecasts, contain forward-looking statements. Vimicro may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Vimicro's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the company's ability to develop and sell new mobile multimedia products; the expected growth of the mobile multimedia market; the company's ability to increase sales of notebook camera multimedia processors; the company's ability to retain existing customers and acquire new customers and respond to competitive market conditions; the company's ability to respond in a timely manner to the evolving multimedia market and changing consumer preferences and industry standards and to stay abreast of technological changes; the company's ability to secure sufficient foundry capacity in a timely manner; the company's ability to effectively protect its intellectual property and the risk that it may infringe on the intellectual property of others; and cyclicality of the semiconductor industry. Further information regarding these and other risks is included in Vimicro's annual report on Form 20-F filed with the Securities and Exchange Commission. Vimicro does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of the date hereof, and Vimicro undertakes no duty to update such information, except as required under applicable law.
Non-GAAP Measures
To supplement the consolidated financial statements presented in accordance with GAAP, Vimicro uses non-GAAP measures of non-GAAP income/(loss) from operations, non-GAAP net income/(loss) attributed to Vimicro International Corporation and non-GAAP diluted net income /(loss) per ADS, which are adjusted from the most directly comparable financial measures calculated and presented in accordance with GAAP to exclude amortization of share-based compensation expense. These non-GAAP financial measures are provided to enhance investors' overall understanding of the company's financial performance as they exclude share-based expenses that are not expected to result in future cash payments. The non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in our business for the foreseeable future. We compensate for these limitations by providing the relevant disclosure of our share-based compensation charges in our reconciliations to the GAAP measures. For more information on the non-GAAP financial measures, please see the tables captioned "Reconciliation of non- GAAP results of operations measures to the nearest comparable GAAP measures" set forth at the end of this release.
Vimicro believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of Vimicro's liquidity and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Vimicro's historical liquidity. Vimicro computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The accompanying tables have more details on the GAAP financial measures that are most comparable to non-GAAP financial measures and the related reconciliations between financial measures.
Currency Translation
This announcement contains translations of certain RMB amounts into U.S. dollars. Unless otherwise noted, all translations from RMB to U.S. dollars are based on the applicable exchange rates quoted by the Bank of China, which was RMB 6.3249 to $1.00 on June 29, 2012.
-Financial tables follow -
| Vimicro International Corporation |
||
| Consolidated Balance Sheets |
||
| (Amounts expressed in thousands of U.S. dollars, except number of share data) |
||
| 6/30/2012 |
12/31/2011 |
|
| (unaudited) |
(audited) |
|
| Assets |
||
| Current assets: |
||
| Cash and cash equivalents |
$35,536 |
$49,227 |
| Restricted cash |
6,275 |
3,520 |
| Held-to-maturity |
3,953 |
0 |
| Accounts and notes receivable, net of provision for doubtful accounts of $1,822 and $2,340 as of December 31, 2011 and June 30, 2012, respectively |
20,445 |
17,895 |
| Amounts due from related party |
4,559 |
4,831 |
| Inventories |
18,265 |
18,734 |
| Prepayments and other current assets, net of provision for doubtful accounts of $162 and $180 as of December 31, 2011 and June 30, 2012, respectively |
3,129 |
4,057 |
| Deferred tax assets |
357 |
356 |
| Total current assets |
92,519 |
98,620 |
| Investment in an unconsolidated affiliate |
1,514 |
1,520 |
| Property, equipment and software, net |
14,826 |
14,266 |
| Land use rights |
21,254 |
21,488 |
| Deferred tax assets-non current |
112 |
112 |
| Other assets |
1,238 |
1,291 |
| Total assets |
131,463 |
137,297 |
| Liabilities and Shareholders' Equity |
||
| Current liabilities: |
||
| Accounts payable |
7,984 |
9,280 |
| Notes payable |
485 |
1,013 |
| Amounts due to related party |
1,447 |
963 |
| Taxes payable |
2,053 |
1,209 |
| Advances from customers |
2,405 |
1,916 |
| Accrued expenses and other current liabilities |
7,162 |
8,333 |
| Deferred government grant |
9,264 |
5,910 |
| Total current liabilities |
30,800 |
28,624 |
| Non-Current liabilities: |
||
| Deferred tax liabilities |
33 |
33 |
| Product warranty |
386 |
300 |
| Long-term bank loan |
4,743 |
0 |
| Total liabilities |
35,962 |
28,957 |
| Commitments and contingencies |
||
| Shareholders' equity: |
||
| Ordinary shares,$0.0001 par value, 500,000,000 shares authorized, |
||
| 139,953,296 and 118,889,892 shares issued and outstanding |
||
| as of December 31, 2011 and June 30, 2012, respectively |
15 |
15 |
| Additional paid-in capital |
160,131 |
158,879 |
| Treasury stock |
(13,077) |
(6,490) |
| Accumulated other comprehensive income |
12,688 |
12,850 |
| Accumulated deficit |
(86,649) |
(82,630) |
| Statutory reserve |
2,782 |
2,782 |
| Total shareholders' equity attributable to Vimicro International Corporation |
75,890 |
85,406 |
| Non-controlling interest |
19,611 |
22,934 |
| Total shareholders' equity |
95,501 |
108,340 |
| Total liabilities and shareholders' equity |
131,463 |
137,297 |
| Vimicro International Corporation |
||||||
| Consolidated Statement of Comprehensive Loss |
||||||
| (Amounts expressed in thousands of U.S. dollars, except number of shares and per share data) |
||||||
| 2012 Q2 |
2012 Q1 |
2011 Q2 |
||||
| (unaudited) |
(unaudited) |
(unaudited) |
||||
| Net revenue |
20,140 |
11,570 |
14,200 |
|||
| Cost of revenue |
(13,275) |
(8,027) |
(9,437) |
|||
| Gross profit |
6,865 |
3,543 |
4,763 |
|||
| Operating expenses: |
||||||
| Research and development, net |
(3,052) |
(3,482) |
(5,676) |
|||
| Selling and marketing |
(2,348) |
(2,476) |
(3,681) |
|||
| General and administrative |
(3,097) |
(3,041) |
(2,953) |
|||
| Total operating expenses |
(8,497) |
(8,999) |
(12,310) |
|||
| Loss from operations |
(1,632) |
(5,456) |
(7,547) |
|||
| Other income: |
||||||
| Interest income |
125 |
90 |
165 |
|||
| Foreign exchange gain/(loss), net |
(159) |
36 |
447 |
|||
| Gain on disposal of marketable equity securities |
0 |
0 |
632 |
|||
| Others, net |
1 |
1 |
15 |
|||
| Loss before income taxes and share of profit of an unconsolidated affiliate |
(1,665) |
(5,329) |
(6,288) |
|||
| Income taxes expense |
(175) |
(194) |
(53) |
|||
| Net loss before share of profit of an unconsolidated affiliate |
(1,840) |
(5,523) |
(6,341) |
|||
| Net loss from continuing operations |
(1,840) |
(5,523) |
(6,341) |
|||
| Loss from discontinued operations, net of income tax |
0 |
0 |
(2,230) |
|||
| Net loss |
(1,840) |
(5,523) |
(8,571) |
|||
| Loss attributable to non-controlling interest |
(1,497) |
(1,847) |
(2,268) |
|||
| Loss attributed to Vimicro International Corporation |
(343) |
(3,676) |
(6,303) |
|||
| Loss per share - basic and diluted |
||||||
| continuing operations |
(0.00) |
(0.03) |
(0.02) |
|||
| discontinued operations |
0.00 |
0.00 |
(0.02) |
|||
| Loss per share- basic and diluted |
(0.00) |
(0.03) |
(0.04) |
|||
| Loss per ADS Basic and Diluted |
||||||
| continuing operations |
(0.01) |
(0.11) |
(0.11) |
|||
| discontinued operations |
0.00 |
0.00 |
(0.06) |
|||
| Loss per ADS- basic and diluted |
(0.01) |
(0.11) |
(0.17) |
|||
| Weighted average number of ordinary shares outstanding |
||||||
| Basic and Diluted |
121,877,701 |
134,898,768 |
146,820,790 |
|||
| Weighted average number of ADS outstanding |
||||||
| Basic and Diluted |
30,469,425 |
33,724,692 |
36,705,198 |
|||
| Other comprehensive income/(loss): |
||||||
| Foreign currency translation adjustment |
(175) |
36 |
867 |
|||
| Unrealized loss on marketable equity securities |
0 |
0 |
(550) |
|||
| Comprehensive loss |
(2,015) |
(5,487) |
(8,254) |
|||
| Comprehensive loss attributable to non-controlling interest |
(1,498) |
(1,826) |
(1,866) |
|||
| Comprehensive loss attributable to Vimicro International Corporation |
(517) |
(3,661) |
(6,388) |
|||
| Components of share-based compensation expenses |
||||||
| are included in the following expense captions: |
||||||
| R&D |
(462) |
(83) |
(197) |
|||
| S&M |
(50) |
(20) |
(27) |
|||
| G&A |
(560) |
(77) |
(474) |
|||
| Total |
(1,072) |
(180) |
(698) |
|||
| Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures (*) |
|||||||||
| (Amounts expressed in thousands of U.S. dollars, except number of shares and per share data, unaudited) |
|||||||||
| Three months ended |
Three months ended |
Three months ended |
|||||||
| GAAP Result |
Adjust- |
Non-GAAP Result |
GAAP Result |
Adjust- |
Non-GAAP Result |
GAAP Result |
Adjust- |
Non-GAAP Result |
|
| Loss from operations |
$(1,632) |
$1,072 |
$(560) |
$(5,456) |
$180 |
$(5,276) |
$(7,547) |
$698 |
$(6,849) |
| Income/(loss) attributed to Vimicro International Corporation |
(343) |
1,072 |
729 |
(3,676) |
180 |
(3,496) |
(6,303) |
698 |
(5,605) |
| Income/(loss) from continuing |
(0.01) |
0.03 |
0.02 |
(0.11) |
0.01 |
(0.10) |
(0.11) |
0.02 |
(0.09) |
| (*) The adjustment is to exclude non-cash share-based compensation for employees and non-employees. |
|||||||||
| (**) Loss per ADS refers to continuing operations |
|||||||||
SOURCE Vimicro International Corporation
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article