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2014

OmniVision Reports Financial Results For the Fourth Quarter of Fiscal 2013

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SANTA CLARA, Calif., May 30, 2013 /PRNewswire/ -- OmniVision Technologies, Inc. (Nasdaq: OVTI), a leading developer of advanced digital imaging solutions, today reported financial results for the fiscal fourth quarter and fiscal year ended April 30, 2013.

Revenues for the fourth quarter of fiscal 2013 were $336.2 million, as compared to $423.5 million in the third quarter of fiscal 2013, and $218.5 million in the fourth quarter of fiscal 2012. GAAP net income in the fourth quarter of fiscal 2013 was $8.9 million, or $0.17 per diluted share, as compared to net income of $21.3 million, or $0.40 per diluted share in the third quarter of fiscal 2013, and $2.7 million, or $0.05 per diluted share in the fourth quarter of fiscal 2012.

Non-GAAP net income in the fourth quarter of fiscal 2013 was $17.5 million, or $0.31 per diluted share. Non-GAAP net income in the third quarter of fiscal 2013 was $31.5 million, or $0.56 per diluted share. Non-GAAP net income in the fourth quarter of fiscal 2012 was $10.9 million, or $0.20 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 months and fiscal year ended April 30, 2013 and 2012 and for the three months ended January 31, 2013.

Revenues for the fiscal year ended April 30, 2013 were $1.4 billion, as compared to $897.7 million in fiscal 2012. GAAP net income for fiscal 2013 was $42.9 million, or $0.80 per diluted share, as compared to GAAP net income for fiscal 2012 of $65.8 million, or $1.13 per diluted share.

Non-GAAP net income for fiscal 2013 was $79.0 million, or $1.41 per diluted share. Non-GAAP net income for fiscal 2012 was $95.5 million, or $1.60 per diluted share.

GAAP gross margin for the fourth quarter of fiscal 2013 was 17.5%, as compared to 16.9% for the third quarter of fiscal 2013 and 22.5% for the fourth quarter of fiscal 2012. The sequential increase in fourth quarter gross margin reflected a favorable change in product mix, partially offset by the unfavorable impacts from a decrease in revenues recorded on the sale of previously written-down inventory and an increase in allowance for excess and obsolete inventories.

The Company ended the period with cash, cash equivalents and short-term investments totaling $212.3 million, a slight decrease of $8.0 million from the previous quarter.

"In fiscal 2013, we completed a record year both in terms of revenues and unit shipments. We are proud to have exceeded a billion dollars in revenues and would like to thank our suppliers, employees and customers," said Shaw Hong, chief executive officer of OmniVision Technologies, Inc. "We believe that our reported results are beginning to validate our cost reduction efforts, and we will strive to further improve our cost structure."

Outlook

Based on current trends, the Company expects revenues for the first quarter of fiscal 2014 will be in the range of $355 million to $390 million and GAAP net income per share will be between $0.21 and $0.38 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 $0.35 and $0.52 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 866-825-1709 (domestic) or 617-213-8060 (international) and entering passcode 98371745.

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 19121760.

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, tablets, notebooks 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 July 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; competition in current and emerging markets for image sensor products, including pricing pressures that could result from competition; our ability to increase the average selling prices or lower the costs associated with the development and manufacture of our new, complex products and technologies; fluctuations of wafer manufacturing costs, manufacturing yields, manufacturing capacity and other manufacturing processes and the impact on gross margins; the continued growth and development of current markets and the emergence of new markets in which we sell, or may sell, our products; fluctuations in sales mix and average selling prices; our ability to timely complete the product development cycle for new sensors; our ability to obtain design wins from various image sensor device manufacturers including manufacturers of mobile phones, tablets, notebooks and webcams, entertainment devices, security and surveillance systems, digital still and video cameras, automotive and medical imaging systems; our dependence on third party wafer foundries and their ability to manufacture our wafers in the required quantities, at acceptable quality, yields and costs, and in a timely manner; our ability to accurately forecast customer demand for our products; the impact of general economic conditions on orders from the end-user customers of our products; the market acceptance of products into which our products are designed; the development, production, introduction and marketing of new products and technology; the occurrence of litigation regarding our intellectual property or indemnification claims from our suppliers or customers relating to our intellectual property; our strategic investments and relationships, and other risks detailed from time to time in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent Annual Report on Form 10-K and recent Quarterly Reports on Form 10-Q. We expressly disclaim 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 July 31, 2013


GAAP

Range of Estimates


Non-GAAP

Range of Estimates


From

To

Adjustment

From

To

Net income per share

$    0.21

$    0.38

       $    0.14   (1)

$    0.35

$    0.52


(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)



April 30,


2013

2012

ASSETS



Current assets:



      Cash and cash equivalents

$       190,171

$       290,492

      Short-term investments

22,164

40,515

      Accounts receivable, net of allowances for doubtful accounts and sales returns

166,517

107,793

      Inventories

430,315

291,340

      Prepaid and deferred income taxes

4,028

4,083

      Prepaid expenses and other current assets

11,982

8,542

            Total current assets

825,177

742,765

Property, plant and equipment, net

160,630

144,792

Long-term investments

139,746

128,940

Goodwill     

10,227

10,227

Intangibles, net

56,804

69,028

Other long-term assets

34,430

7,205

                  Total assets

$    1,227,014

$    1,102,957




LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:



      Accounts payable

$       188,261

$       159,860

      Accrued expenses and other current liabilities

40,274

35,416

      Income tax payable

2,904

987

      Deferred revenues, less cost of revenues

15,493

10,115

      Current portion of long-term debt

3,769

3,146

            Total current liabilities

250,701

209,524

Long-term liabilities:



      Long-term income taxes payable

90,777

88,159

      Non-current portion of long-term debt

35,709

39,337

      Other long-term liabilities

4,618

5,058

            Total long-term liabilities

131,104

132,554

            Total liabilities

381,805

342,078




Stockholders' equity:



      Common stock, $0.001 par value; 100,000 shares authorized; 74,574 shares issued and 53,975 outstanding at April 30, 2013 and 72,964 shares issued and 52,365 outstanding at April 30, 2012, respectively

75

73

      Additional paid-in capital

616,379

575,935

      Accumulated other comprehensive income

3,952

2,970

      Treasury stock, 20,599 at April 30, 2013 and 2012, respectively

(278,683)

(278,683)

      Retained earnings

503,486

460,584

            Total stockholders' equity

845,209

760,879

            Total liabilities and stockholders' equity

$    1,227,014

$    1,102,957







OMNIVISION TECHNOLOGIES, INC.


CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)



Three Months Ended

Year Ended


April 30,

April 30,


2013

2012

2013

2012

Revenues

$ 336,215

$   218,547

$  1,407,929

$   897,730

Cost of revenues

277,486

169,446

1,163,815

649,719

      Gross profit

58,729

49,101

244,114

248,011






Operating expenses:





      Research, development and related

26,605

27,165

113,194

110,730

      Selling, general and administrative

17,878

16,167

72,958

63,883

      Amortization of acquired patent portfolio

2,322

2,322

9,286

9,286

            Total operating expenses

46,805

45,654

195,438

183,899






Income from operations

11,924

3,447

48,676

64,112

Benefit from acquisition of production operations from VisEra

8,626

Equity in earnings of investees, net

577

829

3,832

3,066

Interest expense, net

(499)

(903)

(2,700)

(2,106)

Other income (expense), net

45

308

356

(1,050)

Income before income taxes

12,047

3,681

50,164

72,648






Provision for income taxes

3,125

1,000

7,262

6,799

Net income

$    8,922

$       2,681

$       42,902

$     65,849






Net income per share:





      Basic

$   0.17

$      0.05

$          0.80

$      1.16

      Diluted

$   0.17

$      0.05

$          0.80

$      1.13






Shares used in computing net income per share:





      Basic

53,943

52,334

53,529

56,666

      Diluted

54,061

52,994

53,671

58,233



OMNIVISION TECHNOLOGIES, INC.


RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(in thousands, except per share amounts)

(unaudited)



Three Months Ended

Year Ended

Three Months
Ended


April 30,

April 30,

January 31,


2013

2012

2013

2012

2013

GAAP net income

$     8,922

$     2,681

$   42,902

$   65,849

$     21,308

Add:






      Stock-based compensation in cost of revenues

871

930

3,822

2,937

914

      Stock-based compensation in research, development and related expenses

3,660

3,891

16,193

13,362

3,668

      Stock-based compensation in selling, general and administrative expenses

3,230

3,154

13,496

11,025

3,206

Decrease in provision for income taxes without the effect of stock-based compensation

777

210

2,617

2,335

2,362

Non-GAAP net income

$   17,460

$   10,866

$   79,030

$   95,508

$     31,458







GAAP provision for income taxes

$     3,125

$     1,000

$     7,262

$     6,799

$       2,459

Decrease in provision for income taxes without the effect of stock-based compensation

777

210

2,617

2,335

2,362

Non-GAAP provision for income taxes

$     2,348

$        790

$     4,645

$     4,464

$            97







Non-GAAP net income per share:






            Basic

$      0.32

$      0.21

$      1.48

$      1.69

$         0.58

            Diluted

$      0.31

$      0.20

$      1.41

$      1.60

$         0.56







Shares used in computing non-GAAP net income per share:






            Basic

53,943

52,334

53,529

56,666

53,830

            Diluted

56,525

54,751

56,092

59,510

56,453

SOURCE OmniVision Technologies, Inc.



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