FORM 6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule
13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of August, 2006
Commission File Number: 000-51847
Himax Technologies, Inc.
(Exact name of registrant as specified in its charter)
10th Floor, No. 605, Chungshan Road
Hsinhua, Tainan County 712
Taiwan, Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes No X Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes No X Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
| Himax Technologies, Inc. | ||||
| INDEX TO EXHIBITS | ||||
| Exhibit | ||||
| 99.1 | Press release entitled, “HIMAX REPORTS SECOND QUARTER 2006 RESULTS” dated August 10, 2006. | |||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HIMAX TECHNOLOGIES, INC. | ||
| By: | /s/ Max Chan | |
| Name: | Max Chan | |
| Title: | Chief Financial Officer | |
Date: August 9, 2006
3
HIMAX REPORTS SECOND QUARTER 2006 RESULTS
Tainan, Taiwan, August 10, 2006 - Himax Technologies, Inc. (“Himax” or ”Company”)
(Nasdaq: HIMX) today reported financial results for the second quarter ended June 30, 2006.
Net revenue for the second quarter of 2006 was $171.7 million, a 53.8% increase as compared to $111.6 million for the second quarter of 2005, and a 1.8% decrease as compared to $174.9 million in the first quarter of 2006. Net income for the second quarter of 2006 was $19.5 million, or $0.10 per diluted share, representing a 49.4% increase compared to net income of $13.1 million, or $0.07 per diluted share in the second quarter of 2005, and an 11.0% decrease compared to $21.9 million, or $0.12 per diluted share in the first quarter of 2006. Share-based compensation was $1.1 million, $1.5 million and $1.1 million in the second quarter of 2006, the second quarter of 2005 and the first quarter of 2006, respectively.
Gross margin in the second quarter of 2006 was 19.2%, as compared to 22.8% in the second quarter of 2005, and 21.5% in the first quarter of 2006. Operating margin was 11.0% in the second quarter of 2006, as compared to 12.8% in the second quarter of 2005, and 13.5% in the first quarter of 2006.
Excluding share-based compensation, gross margin was 19.2% in the second quarter of 2006, 22.8% in the second quarter of 2005, and 21.5% in the first quarter of 2006, with an operating margin of 11.6% 14.1%, and 14.1%, respectively.
A reconciliation of our gross margin and operating margin excluding share-based compensation, a non-GAAP financial measure, to GAAP gross margin and GAAP operating margin, our most comparable GAAP figure, is set out in the attached reconciliation schedule.
Jordan Wu, President and Chief Executive Officer of Himax, commented, “The second quarter was a challenging one for panel and component manufacturers alike. We achieved revenues in line with prior guidance notwithstanding the negative business environment. Notably, while our revenue from related parties declined in the quarter due to short-term inventory adjustments, our revenue from non-affiliate parties increased. Overall, we think our more diversified customer mix puts us in a stronger position now than before.”
Max Chan, Chief Financial Officer of Himax, said, “Our operating income for the second quarter increased 32.4% to $18.9 million from $14.3 million for the same period a year ago and decreased 20.0% compared to $23.6 million in the first quarter 2006. This primarily reflects the above average price pressure facing the industry. Due to the difficult market conditions in the second quarter, our blended gross margin came in at the low-end of our historical range.”
Looking forward, Mr. Wu added, “We expect the business environment in the third quarter of 2006 will be slightly better than the second quarter of 2006. Overall, we expect net revenue in the third quarter of 2006 to grow in the range of mid to high single digit rate as compared to the second
1
quarter of 2006. Our Non-GAAP diluted EPS, excluding share-based compensation is expected to be at a similar level as that of the second quarter. We expect diluted GAAP EPS to be in the range of $0.03 to $0.04. This includes a charge of share-based compensation of approximately $12 to $14 million, or $0.06 to $0.07 per diluted share. The expected increase in share-based compensation is due to new grants of restricted share units, which is expected to occur at the end of September 2006.”
A reconciliation of our diluted EPS excluding share-based compensation, a non-GAAP financial measure, to diluted GAAP EPS, our most comparable GAAP figure, is set out in the attached reconciliation schedule.
Investor Conference Call / Webcast Details
The Company’s management will review detailed second quarter 2006 results on Wednesday, August 9, 2006 at 7:00 PM EST (7:00 AM, August 10, Taiwan time). The conference call-in
number is +1-201-689-8560 (international) and +1-877-407-0784 (U.S. domestic). A live webcast of the conference call will be available on the Company’s website at www.himax.com.tw. The playback will be available beginning two hours after the conclusion of the conference call and will be accessible by dialing
+1-201-612-7415 (international) and 1-877-660-6853 (U.S. domestic). The account number to access the replay is 3055 and the confirmation ID number is 207865.
About Himax Technologies, Inc.
Himax Technologies, Inc. designs, develops and markets semiconductors that are critical components of flat panel displays. The Company’s principal products are display drivers for
large-sized TFT-LCD panels, which are used in desktop monitors, notebook computers and televisions, and display drivers for small- and medium-sized TFT-LCD panels, which are used in mobile handsets and consumer electronics products such as digital
cameras, mobile gaming devices and car navigation displays. In addition, the Company is expanding its product offering to include LCD TV chipset solutions and LCOS microdisplays. Based in Tainan, Taiwan, the Company has regional offices in Hsinchu
and Taipei, Taiwan; Suzhou and Shenzhen, China; Yokohama, Japan and Anyangsi Kyungkido, South Korea.
| Contacts: | ||||
| Max Chan | Jackson Ko | In the U.S. | ||
| Chief Financial Officer | Investor Relations | David Pasquale | ||
| Himax Technologies, Inc. | Himax Technologies, Inc. | The Ruth Group | ||
| +886-2-3393-0877 Ext. 22300 | +886-2-3393-0877 Ext. 22240 | 646-536-7006 | ||
| max_chan@himax.com.tw | jackson_ko@himax.com.tw | dpasquale@theruthgroup.com |
Forward-Looking Statements:
Certain statements in this press release, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of
risks and uncertainties that could cause actual events or results to differ materially from those described in this press release. Factors that could cause actual results to differ include general business and economic conditions and the state of
the semiconductor industry; level of competition; demand for end-use applications products; reliance on a small group of principal customers; continued success in technological innovations; development of alternative flat panel display technologies;
ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; shortages in supply of key components; changes in environmental laws and regulations;
exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; and other risks described from time to time in the Company’s SEC filings, including its Form F-1 dated March 13, 2006, as amended. We undertake no
obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
– Tables Attached –
2
| Himax Technologies, Inc. |
| Unaudited Condensed Consolidated Statements of Income |
| (These interim financials do not fully comply with US GAAP because they omit all interim |
| disclosure required by US GAAP.) |
| (Figures in Thousands of U.S. Dollars, Except Per Share Data) |
| Three Months Ended June 30, |
Three Months Ended Mar 31, |
|||||||||||
| 2006 | 2005 | 2006 | ||||||||||
| Revenues | ||||||||||||
| Revenues from third parties, net | $ | 84,634 | $ | 42,790 | $ | 65,427 | ||||||
| Revenues from related parties, net | 87,041 | 68,843 | 109,432 | |||||||||
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| 171,675 | 111,633 | 174,859 | ||||||||||
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| Costs and expenses: | ||||||||||||
| Cost of revenues | 138,766 | 86,214 | 137,298 | |||||||||
| Research and development | 11,603 | 8,896 | 10,902 | |||||||||
| General and administrative | 1,334 | 1,392 | 2,058 | |||||||||
| Sales and marketing | 1,097 | 873 | 1,007 | |||||||||
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| Total costs and expenses | 152,800 | 97,375 | 151,265 | |||||||||
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| Operating income | 18,875 | 14,258 | 23,594 | |||||||||
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| Non operating income (loss): | ||||||||||||
| Interest income | 1,843 | 48 | 205 | |||||||||
| Impairment loss on an investment | (1,500 | ) | --- | --- | ||||||||
| Foreign exchange gains (losses), net | 1,398 | 676 | (232 | ) | ||||||||
| Interest expense | (27 | ) | --- | (284 | ) | |||||||
| Other income, net | 58 | 87 | 55 | |||||||||
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| 1,772 | 811 | (256 | ) | |||||||||
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| Income before income taxes and minority interest | 20,647 | 15,069 | 23,338 | |||||||||
| Income tax expense | 1,246 | 2,047 | 1,491 | |||||||||
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| Income before minority interest | 19,401 | 13,022 | 21,847 | |||||||||
| Minority interest, net of tax | 124 | 47 | 92 | |||||||||
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| Net income | $ | 19,525 | $ | 13,069 | $ | 21,939 | ||||||
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| Basic earnings per ordinary share and ADS | $ | 0.10 | $ | 0.07 | $ | 0.12 | ||||||
| Diluted earnings per ordinary share and ADS | $ | 0.10 | $ | 0.07 | $ | 0.12 | ||||||
| Basic Weighted Average Outstanding Shares | 195,535 | 175,660 | 178,575 | |||||||||
| Diluted Weighted Average Outstanding Shares | 198,512 | 180,464 | 182,271 | |||||||||
3
| Himax Technologies, Inc. |
| Unaudited Supplemental Financial Information |
| (Figures in Thousands of U.S. Dollars) |
| Three | ||||||||||||
| Months | ||||||||||||
| The amount of share-based compensation | Three Months | Ended | ||||||||||
| included in applicable costs and expenses | Ended June 30, | Mar 31, | ||||||||||
| categories is summarized as follows: | 2006 | 2005 | 2006 | |||||||||
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| Share-based compensation | ||||||||||||
| Cost of revenues | $ | 18 | $ | 33 | $ | 24 | ||||||
| Research and development | 818 | 1,126 | 864 | |||||||||
| General and administrative | 98 | 166 | 105 | |||||||||
| Sales and marketing | 129 | 203 | 145 | |||||||||
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| Total | $ | 1,063 | $ | 1,528 | $ | 1,138 | ||||||
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4
| Himax Technologies, Inc. |
| Unaudited Condensed Consolidated Statements of Income |
| (Figures in Thousands of U.S. Dollars, Except Per Share Data) |
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2006 | 2005 | |||||||
| Revenues | ||||||||
| Revenues from third parties, net | $ | 150,061 | $ | 73,041 | ||||
| Revenues from related parties, net | 196,473 | 135,009 | ||||||
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| 346,534 | 208,050 | |||||||
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| Costs and expenses: | ||||||||
| Cost of revenues | 276,064 | 161,241 | ||||||
| Research and development | 22,505 | 17,087 | ||||||
| General and administrative | 3,392 | 2,579 | ||||||
| Sales and marketing | 2,104 | 1,691 | ||||||
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| Total costs and expenses | 304,065 | 182,598 | ||||||
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| Operating income | 42,469 | 25,452 | ||||||
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| Non operating income (loss): | ||||||||
| Interest income | 2,048 | 50 | ||||||
| Impairment loss on an investment | (1,500 | ) | --- | |||||
| Foreign exchange gains, net | 1,166 | 484 | ||||||
| Interest expense | (311 | ) | (7 | ) | ||||
| Other income, net | 113 | 131 | ||||||
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| 1,516 | 658 | |||||||
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| Income before income taxes and | ||||||||
| minority interest | 43,985 | 26,110 | ||||||
| Income tax expense | 2,737 | 3,008 | ||||||
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| Income before minority interest | 41,248 | 23,102 | ||||||
| Minority interest, net of tax | 216 | 100 | ||||||
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| Net income | $ | 41,464 | $ | 23,202 | ||||
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| Basic earnings per ordinary share and ADS | $ | 0.22 | $ | 0.13 | ||||
| Diluted earnings per ordinary share and ADS | $ | 0.22 | $ | 0.13 | ||||
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5
Himax Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Figures in Thousands of U.S. Dollars)
| Jun 30, | Mar 31, | Dec 31, | |||||||
| 2006 | 2006 | 2005 | |||||||
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| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 166,884 | $ | 31,247 | $ | 7,086 | |||
| Marketable securities available-for-sale | 1,930 | 3,150 | 3,989 | ||||||
| Restricted cash equivalents and marketable | |||||||||
| securities | 395 | 14,558 | 14,053 | ||||||
| Accounts receivable, less allowance for sales | |||||||||
| returns and discounts | 86,907 | 73,178 | 80,158 | ||||||
| Accounts receivable from related parties | 66,434 | 71,540 | 69,688 | ||||||
| Inventories | 99,605 | 99,539 | 105,004 | ||||||
| Deferred income taxes | 11,331 | 9,645 | 8,965 | ||||||
| Prepaid expenses and other current assets | 16,142 | 10,328 | 11,113 | ||||||
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| Total current assets | $ | 449,628 | $ | 313,185 | $ | 300,056 | |||
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| Property and equipment, net | 29,128 | 25,943 | 24,426 | ||||||
| Deferred income taxes | 135 | 145 | 151 | ||||||
| Intangible assets, net | 68 | 74 | 81 | ||||||
| Investments in non-marketable securities | 313 | 1,813 | 1,813 | ||||||
| Refundable deposits | 511 | 488 | 712 | ||||||
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| 30,155 | 28,463 | 27,183 | |||||||
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| Total assets | $ | 479,783 | $ | 341,648 | $ | 327,239 | |||
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| Liabilities and stockholders’ equity | |||||||||
| Current liabilities: | |||||||||
| Short-term debt | $--- | $ | 38,577 | $ | 27,274 | ||||
| Current portion of long-term debt | --- | --- | 89 | ||||||
| Accounts payable | 98,015 | 85,489 | 105,801 | ||||||
| Income tax payable | 12,858 | 15,915 | 13,625 | ||||||
| Other accrued expenses and other current | |||||||||
| liabilities | 11,985 | 12,167 | 13,995 | ||||||
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| Total current liabilities | $ | 122,858 | $ | 152,148 | $ | 160,784 | |||
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| Minority interest | $ | 449 | $ | 609 | $ | 624 | |||
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| Stockholders’ equity: | |||||||||
| Ordinary share, US$0.0001 par value, | |||||||||
| 500,000,000 shares authorized | 19 | 18 | 18 | ||||||
| Additional paid-in capital | 247,653 | 99,570 | 98,450 | ||||||
| Accumulated other comprehensive income | 13 | 37 | 36 | ||||||
| Unappropriated earnings | 108,791 | 89,266 | 67,327 | ||||||
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| Total stockholders’ equity | $ | 356,476 | $ | 188,891 | $ | 165,831 | |||
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| Total liabilities and stockholders’ equity | $ | 479,783 | $ | 341,648 | $ | 327,239 | |||
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6
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
| Three
Months Ended June 30, |
Three Months Ended March 31, |
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| 2006 | 2005 | 2006 | ||||||||||
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| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 19,525 | $ | 13,069 | $ | 21,939 | ||||||
| Adjustments to reconcile net income to net cash provided by | ||||||||||||
| operating activities: | ||||||||||||
| Depreciation and amortization | 1,204 | 892 | 1,218 | |||||||||
| Share-based compensation expenses | 1,063 | 1,528 | 1,138 | |||||||||
| Minority interest, net of tax | (124 | ) | (47 | ) | (92 | ) | ||||||
| Loss on disposal of property and equipment | 5 | --- | 31 | |||||||||
| Gain on sale of marketable securities, net | (55 | ) | (80 | ) | (58 | ) | ||||||
| Impairment loss on an investment | 1,500 | --- | --- | |||||||||
| Deferred income taxes | (1,677 | ) | (749 | ) | (679 | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (13,672 | ) | (15,520 | ) | 6,998 | |||||||
| Accounts receivable from related parties | 5,076 | (4,633 | ) | (1,879 | ) | |||||||
| Inventories | (4,009 | ) | 1,972 | 5,464 | ||||||||
| Prepaid expenses and other current assets | (2,838 | ) | (1,823 | ) | 1,801 | |||||||
| Accounts payable | 12,525 | 18,716 | (20,312 | ) | ||||||||
| Income tax payable | (3,056 | ) | 1,764 | 2,333 | ||||||||
| Other accrued expenses and other current liability | (195 | ) | 678 | (1,746 | ) | |||||||
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| Net cash provided by operating activities | 15,272 | 15,767 | 16,156 | |||||||||
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| Cash flows from investing activities: | ||||||||||||
| Purchase of land, property and equipment | (4,065 | ) | (1,060 | ) | (3,886 | ) | ||||||
| Purchase of available-for-sales marketable securities | (8,625 | ) | (13,801 | ) | --- | |||||||
| Sales and maturities of available-for-sale marketable securities | 9,830 | 19,785 | 878 | |||||||||
| Proceeds from sale of subsidiary shares by Himax Technologies | ||||||||||||
| Limited | 55 | --- | 124 | |||||||||
| Purchase of subsidiary shares from minority interest | (84 | ) | (11 | ) | (23 | ) | ||||||
| Return of (increase in) refundable deposits | (23 | ) | (336 | ) | 223 | |||||||
| Release (pledge) of restricted cash equivalents and marketable | ||||||||||||
| securities | 14,101 | 42 | (505 | ) | ||||||||
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| Net cash provided by (used in) investing activities | 11,189 | 4,619 | (3,189 | ) | ||||||||
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7
Himax Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Figures in Thousands of U.S. Dollars)
| Three
Months Ended June 30, |
Three Months Ended March 31, |
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| 2006 | 2005 | 2006 | ||||||||||
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| Cash flows from financing activities: | ||||||||||||
| Proceeds from issuance of ordinary shares | 147,813 | --- | --- | |||||||||
| Proceeds from borrowing of short-term debt | --- | --- | 11,303 | |||||||||
| Repayment of short-term debt | (38,577 | ) | --- | --- | ||||||||
| Repayment of long-term debt | --- | (46 | ) | (89 | ) | |||||||
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| Net cash provided by (used in) financing activities | 109,236 | (46 | ) | 11,214 | ||||||||
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| Effect of exchange rate changes on cash and cash | ||||||||||||
| equivalents | (60 | ) | --- | (20 | ) | |||||||
| Net increase in cash and cash equivalents | 135,637 | 20,340 | 24,161 | |||||||||
| Cash and cash equivalents at beginning of period | 31,247 | 7,822 | 7,086 | |||||||||
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| Cash and cash equivalents at end of period | $ | 166,884 | $ | 28,162 | $ | 31,247 | ||||||
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| Supplemental disclosures of cash flow information: | ||||||||||||
| Cash paid during the period for: | ||||||||||||
| Interest | $ | 28 | $--- | $ | 283 | |||||||
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| Income taxes | $ | 5,549 | $ | 1,090 | $ | 15 | ||||||
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| Supplemental disclosures of non-cash investing | ||||||||||||
| and financing activities: | ||||||||||||
| Increase (decrease) in payable for purchase of | ||||||||||||
| equipment and construction in progress | $ | (18 | ) | $ | (191 | ) | $ | 893 | ||||
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8
Himax Technologies, Inc.
Unaudited
Supplemental Data – Reconciliation Schedule
(Figures in Thousands of U.S.
Dollars, Except Per Share Data)
Gross Margin and Operating Margin Excluding Share-based Compensation:
| Three
Months Ended June 30, |
Three Months Ended Mar 31, |
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| 2006 | 2005 | 2006 | |||||||
| Revenues | $ | 171,675 | $ | 111,633 | $ | 174,859 | |||
| Gross profit | 32,909 | 25,419 | 37,561 | ||||||
| Add: Share-based compensation – Cost of revenues | 18 | 33 | 24 | ||||||
| Gross profit excluding share-based compensation | 32,927 | 25,452 | 37,585 | ||||||
| Gross margin excluding share-based compensation | 19.2% | 22.8% | 21.5% | ||||||
| Operating income | 18,875 | 14,258 | 23,594 | ||||||
| Add: Share-based compensation | 1,063 | 1,528 | 1,138 | ||||||
| Operating income excluding share-based compensation | 19,938 | 15,786 | 24,732 | ||||||
| Operating margin excluding share-based compensation | 11.6% | 14.1% | 14.1% | ||||||
*Gross margin excluding share-based compensation equals gross profit excluding share-based compensation divided by revenues
*Operating margin excluding share-based compensation equals operating income excluding share-based compensation divided by revenues
Diluted Earnings Per Share Excluding Share-based Compensation:
| Three
Months Ended June 30, 2006 |
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| Diluted GAAP EPS | $ | 0.10 | |
| Add: Estimated share-based compensation per diluted share | $ | 0.01 | |
| Diluted non GAAP EPS excluding share-based compensation | $ | 0.10 | |
| Numbers do not add up due to rounding | |||
9