Parade Technologies Reports Third Quarter 2017 Financial Results

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November 2, 2017 7:57 AM EDT

Financial Highlights:

  • Q317 consolidated revenue US$90.62 million, compared with US$65.86 million in the year-ago quarter
  • Q317 consolidated net income US$22.29 million; Basic and Fully diluted after-tax EPS US$0.29 (NT$8.89) and US$0.28 (NT$8.55), respectively

SAN JOSE, Calif.--(BUSINESS WIRE)-- Parade Technologies, Ltd. (Taipei Exchange: 4966.TWO), a leading high-speed interface IC supplier, today announced financial results for the third quarter fiscal year 2017 ended September 30, 2017, and provided guidance for the fourth quarter of fiscal year 2017.

Consolidated revenue was US$90.62 million and consolidated net income was US$22.29 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.29 (NT$8.89) and US$0.28 (NT$8.55), respectively. These results compared to consolidated revenue US$65.86 million and consolidated net income of US$9.56 million, or US$0.13 (NT$4.03) and US$0.12 (NT$3.94) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the third quarter of 2017 consolidated revenue increased 5.48% sequentially and was up 37.59% year-over-year.

The gross profit in the third quarter of 2017 was US$37.24 million, representing an increase of 7.99% from the previous quarter and an increase of 34.71% compared to the same quarter of last year.

In Year 2013, Parade engaged PwC Hong Kong to file a Section 70A Claim under the IRO (Inland Revenue Ordinance), applying for correction of tax assessment of years 2011 to 2012 based on ground that part of its profits shall be treated as profits derived from offshore sources and thus non-taxable. In August 2017, Hong Kong IRD (Inland Revenue Department) concluded the case and agreed the methodology adopted by the Company. Subsequently, the Company had received from Hong Kong IRD the tax refund of total HK$39.86 million (equivalent to $5.12 million) for tax overpaid for Years 2011 and 2012 which is reported as the income tax benefit in Q3 2017.

On September 19, 2017, Parade announced another addition to its portfolio of jitter cleaning devices for high speed data interfaces. The new PS8421 is an HDMI™ 2.0 jitter-cleaning repeater chip that includes a 2:1 input MUX, allowing the selection between one of two HDMI 2.0 inputs. Application for the device includes use within a personal computer to select between two HDMI 2.0 sources, such as between an integrated GPU and discrete GPU. The device can also be used within an Ultra High Definition 4K display to select between two HDMI 2.0 inputs.

Based on current business outlook, Parade is providing the following guidance for the fourth quarter of fiscal 2017:

  • Revenue: US$83.5 ~91.5 Million
  • Gross Margin: 40% ~43%
  • Operating Expense: US$18.25 ~19.25 Million

The financial figures detailed above for the third quarter of 2017 have been reviewed by independent accountants.

About Parade Technologies, Ltd.

Parade Technologies, Ltd. is a leading supplier of mixed-signal ICs for a variety of popular display and high-speed interface standards used in computers, consumer electronics and display panels. The fabless semiconductor company was founded in 2005 and publicly listed on Taipei Exchange (TPEx) in 2011 (stock code: 4966). Parade’s portfolio of IC products serves the growing demand for HDMI™, DisplayPort™, SATA, and USB ICs for display, storage and interface applications.

In addition to being a technology innovator, Parade is an active participant and leader in industry standards-setting organizations. Parade Technologies, Inc., a wholly owned US-based subsidiary of Parade Technologies, Ltd., is a member of VESA (Video Electronics Standard Association). Parade Technologies, Inc. has made key contributions to the development of VESA’s DisplayPort™ digital video interface standard.

Parade leverages its close relationships with market leading Tier-1 OEMs to develop ICs that provide unique system capabilities. Many of the company’s devices integrate proprietary technologies that offer superior system signal integrity, advanced system integration and enhanced power efficiency. As a result of the company’s “standards-plus” design philosophy, Parade ICs have been designed into products offered by nearly every leading computer and display vendor worldwide.

 
Parade Technologies, Ltd. and Subsidiaries.
                       

The reader is advised that these consolidated financial statements have been prepared originally in NT$ and conformed with the adoption of IFRSs.  In the event of any differences between NT$ and US$ version, the NT$ version shall prevail.

 
                                           

UNAUDITED CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME

USD in Thousands NTD in Thousands

Sequential Quarter

Three Months ended Nine Months ended Sequential Quarter Three Months ended Nine Months ended
Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, Sep 30, Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, Sep 30,
2017 2017 2017 2016 2017 2016 2017 2017 2017 2016 2017 2016
 
Revenue 90,624 85,915 90,624 65,863 252,180 205,277 2,743,199 2,599,780 2,743,199 2,089,160 7,694,666 6,659,832
Cost of goods sold 53,381   51,426   53,381   38,216   150,191   120,413 1,615,839   1,556,152 1,615,839   1,212,205 4,582,986   3,906,985
Gross profit 37,243   34,489   37,243   27,647   101,989   84,864 1,127,360   1,043,628 1,127,360   876,955 3,111,680   2,752,847
Research & development expenses 11,299 11,278 11,299 11,304 33,610 33,198 342,025 341,279 342,025 358,565 1,026,307 1,076,181
Sales & marketing expenses 4,309 4,124 4,309 4,151 12,325 12,585 130,437 124,787 130,437 131,654 376,239 408,118
General & administrative expenses 2,869   2,541   2,869   2,033   7,768   6,444 86,853   76,886 86,853   64,503 237,047   209,104
Total operating expenses 18,477   17,943   18,477   17,488   53,703   52,227 559,315   542,952 559,315   554,722 1,639,593   1,693,403
Operating income 18,766   16,546   18,766   10,159   48,286   32,637 568,045   500,676 568,045   322,233 1,472,087   1,059,444
Non-operating income and expenses (19 ) 1   (19 ) 72   (3 ) 104 (576 ) 44 (576 ) 2,306 (75 ) 3,324
Income before income taxes 18,747   16,547   18,747   10,231   48,283   32,741 567,469   500,720 567,469   324,539 1,472,012   1,062,768
Income tax benefit (expense) (3,539 ) 1,722   (3,539 ) 669   (779 ) 1,625 (107,128 ) 52,117 (107,128 ) 21,224 (22,755 ) 52,921
Net income 22,286   14,825   22,286   9,562   49,062   31,116 674,597   448,603 674,597   303,315 1,494,767   1,009,847
EPS - Basic (In Dollar) $0.29 $0.20 $0.29 $0.13 $0.65 $0.41 $8.89 $5.95 $8.89 $4.03 $19.76 $13.45
Shares used in computing EPS-Basic (In thousands) 75,904 75,444 75,904 75,312 75,637 75,072 75,904 75,444 75,904 75,312 75,637 75,072
EPS - Diluted (In Dollar) $0.28 $0.19 $0.28 $0.12 $0.63 $0.41 $8.55 $5.74 $8.55 $3.94 $19.06 $13.15
Shares used in computing EPS-Diluted (In thousands) 78,859     78,103     78,859     77,011     78,416     76,772 78,859     78,103   78,859     77,011   78,416     76,772
 
 
UNAUDITED CONSOLIDATED BALANCE SHEETS USD in Thousands NTD in Thousands
As of September 30, 2017 and 2016 Sep 30, Sep 30, Sep 30, Sep 30,
2017 2016 2017 2016
Current assets
Cash & cash equivalents 138,663 102,414 4,195,948 3,211,693
Accounts receivable, net 49,076 40,099 1,485,047 1,257,503
Inventories, net 36,063 24,824 1,091,244 778,475
Other current assets 9,924   7,206   300,307   225,971  
Total current assets 233,726   174,543   7,072,546   5,473,642  
Non-current assets
Property, plant and equipment, net 7,882 4,402 238,508 138,072
Intangible assets 89,127 95,322 2,696,985 2,989,278
Deferred income tax assets 2,100 2,459 63,555 77,113
Other non-current assets 800   870   24,197   27,294  
Total non-current assets 99,909   103,053   3,023,245   3,231,757  
Total Assets 333,635   277,596   10,095,791   8,705,399  
 
Current Liabilities
Accounts payable 25,064 23,150 758,445 725,988
Other payables 16,659 13,294 504,097 416,898
Current income tax liabilities 19,507 14,905 590,272 467,406
Other current liabilities 7,643   5,443   231,276   170,698  
Total current liabilities 68,873   56,792   2,084,090   1,780,990  
Equity
Ordinary shares 25,805 25,462 783,562 773,188
Capital reserves 84,484 71,205 2,560,911 2,160,904
Retained earnings 176,404 139,578 5,437,423 4,291,716
Other equity (21,931 ) (15,441 ) (770,195 ) (301,399 )
Total equity 264,762   220,804   8,011,701   6,924,409  
Total liabilities and equity 333,635   277,596   10,095,791   8,705,399  
 
 
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS USD in Thousands NTD in Thousands
For nine months ended September 30, 2017 and 2016 Sep 30, Sep 30, Sep 30, Sep 30,
2017 2016 2017 2016

Cash flows from operating activities

Income before income tax for the period 48,283 32,741 1,472,012 1,062,768
Depreciation and amortization 7,200 6,761 219,898 219,266
Share-based compensation cost 4,681 3,312 142,953 107,410
Interest income (43 ) (29 ) (1,319 ) (945 )
Income and expenses having no effect on cash flows 11,838   10,044   361,532   325,731  
Accounts receivable (1,518 ) (1,937 ) (45,937 ) (60,730 )
Inventories (9,733 ) (6,128 ) (294,519 ) (192,181 )
Other current assets (2,398 ) 885 (72,591 ) 27,585
Other non-current assets -   194   -   6,093  
Net changes in assets relating to operating activities (13,649 ) (6,986 ) (413,047 ) (219,233 )
Accounts payable (4,961 ) 1,771 (150,128 ) 55,534
Other payables (236 ) 1,193 (7,140 ) 37,418
Other current liabilities (2,070 ) (2,774 ) (62,622 ) (87,010 )
Net changes in liabilities relating to operating activities (7,267 ) 190   (219,890 ) 5,942  
Cash provided by operations 39,205   35,989   1,200,607   1,175,208  
Interest received (paid) 39 (70 ) 1,186 (2,258 )
Income tax paid (867 ) (562 ) (26,479 ) (18,216 )
Income tax refuund received 5,120   -   156,380   -  

Net cash provided by operating activities

43,497   35,357   1,331,694   1,154,734  

Cash flows from investing activities

Acquisition of equipment (5,049 ) (1,282 ) (154,202 ) (41,568 )
Acquisition of intangible assets (2,250 ) (7,542 ) (68,720 ) (244,576 )
Decrease in refundable deposits 45   39   1,369   1,214  
Net cash used in investing activities (7,254 ) (8,785 ) (221,553 ) (284,930 )

Cash flows from financing activities

Proceeds from exercise of employee stock options 971 532 29,665 17,261
Purchase of treasury shares (1,998 ) - (60,844 ) -
Treasury shares reissued to employees 1,998 1,485 60,844 48,405
Distribution of cash dividends (22,962 ) (11,572 ) (695,744 ) (381,897 )
Cash dividend regain from canceled share-based compensation 6   6   190   187  
Net cash used in financing activities (21,985 ) (9,549 ) (665,889 ) (316,044 )
Effect of exchange rate changes on cash and cash equivalents (582 ) (2,570 ) (279,143 ) (229,818 )
Increase in cash and cash equivalents 13,676 14,453 165,109 323,942
Cash and cash equivalents at beginning of period 124,987   87,961   4,030,839   2,887,751  
Cash and cash equivalents at end of period 138,663   102,414   4,195,948   3,211,693  

Parade Technologies
Yo-Ming Chang, +886-2-2627-9109
[email protected]

Source: Parade Technologies, Ltd.


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