Parade Technologies Reports Third Quarter 2018 Financial Results

Financial Highlights:

• Q318 consolidated revenue US$85.58 million, compared with US$90.62 million in the year-ago quarter

• Q318 consolidated net income US$16.48 million; Basic and Fully diluted after-tax EPS US$0.21 (NT$6.57) and US$0.21 (NT$6.33), 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 2018 ended September 30, 2018, and provided guidance for the fourth quarter of fiscal year 2018.

Consolidated revenue was US$85.58 million and consolidated net income was US$16.48 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.21 (NT$6.57) and US$0.21 (NT$6.33), respectively. These results compared to consolidated revenue US$90.62 million and consolidated net income of US$22.29 million, or US$0.29 (NT$8.89) and US$0.28 (NT$8.55) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the third quarter of 2018 consolidated revenue increased 13.09% sequentially and was down 5.57% year-over-year.

The gross profit in the third quarter of 2018 was US$35.88 million, representing an increase of 15.56% from the previous quarter and a decrease of 3.66% compared to the same quarter of last year.

On August 29, 2018, Parade announced the PS8818, a USB Type-C 10 Gigabits/sec retimer that supports both USB 3.1 Gen 2 and DisplayPort 1.4a Alternate Mode. The PS8818 is designed to drive the USB Type-C receptacle on a USB host system that supports USB 3.1 up to the Gen 2 data rate (10 Gigabits/sec) and DisplayPort Alt Mode, as a video source, up to HBR3 (8.1 Gigabits/sec link rate). The PS8818 serves as a high-speed signal repeater, restoring signal integrity for either the USB or DisplayPort signals. The PS8818 complements Parade’s existing family of USB Type-C port configuration switches that also include the repeater function.

On September 18, 2018, Parade introduced the TrueTouch® TC3315, an integrated display driver and touchscreen controller solution. The TC3315 combines Parade’s broad portfolio of patented touchscreen technology, as well as proven display processing and high-speed signal interface technology, to provide best-in-class performance for smartphone FHD / FHD+ LTPS in-cell displays. Fabricated on advanced 55nm process technology, the TC3315 exhibits 29% lower power than the competing devices and is supported with ample wafer fab capacity.

Based on current business outlook, Parade is providing the following guidance for the fourth quarter of fiscal 2018:

• Revenue: US$94 ~104 Million
• Gross Margin: 40% ~43%
• Operating Expense: US$19.00 ~20.00 Million

The financial figures detailed above for the third quarter of 2018 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 OF COMPREHENSIVE 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,
		2018			2018			2018			2017			2018			2017			2018			2018			2018			2017			2018			2017
Revenue		85,579			75,671			85,579			90,624			241,903			252,180			2,624,695			2,252,718			2,624,695			2,743,199			7,240,554			7,694,666
Cost of goods sold		49,698			44,621			49,698			53,381			142,034			150,191			1,524,239			1,328,378			1,524,239			1,615,839			4,250,654			4,582,986
Gross profit		35,881			31,050			35,881			37,243			99,869			101,989			1,100,456			924,340			1,100,456			1,127,360			2,989,900			3,111,680
Research & development expenses		12,927			12,851			12,927			11,299			37,980			33,610			396,484			382,557			396,484			342,025			1,136,567			1,026,307
Sales & marketing expenses		4,048			3,621			4,048			4,309			11,795			12,325			124,156			107,788			124,156			130,437			352,836			376,239
General & administrative expenses		2,736			2,703			2,736			2,869			8,191			7,768			83,910			80,474			83,910			86,853			245,005			237,047
Total operating expenses		19,711			19,175			19,711			18,477			57,966			53,703			604,550			570,819			604,550			559,315			1,734,408			1,639,593
Operating income		16,170			11,875			16,170			18,766			41,903			48,286			495,906			353,521			495,906			568,045			1,255,492			1,472,087
Non-operating income and expenses		242			86			242			(19	)		270			(3	)		7,425			2,559			7,425			(576	)		8,284			(75	)
Income before income taxes		16,412			11,961			16,412			18,747			42,173			48,283			503,331			356,080			503,331			567,469			1,263,776			1,472,012
Income tax (benefit) expense		(72	)		(361	)		(72	)		(3,539	)		(443	)		(779	)		(2,225	)		(10,738	)		(2,225	)		(107,128	)		(13,246	)		(22,755	)
Net income		16,484			12,322			16,484			22,286			42,616			49,062			505,556			366,818			505,556			674,597			1,277,022			1,494,767
EPS - Basic (In Dollar)		$0.21			$0.16			$0.21			$0.29			$0.56			$0.65			$6.57			$4.80			$6.57			$8.89			$16.66			$19.76
Shares used in computing EPS-Basic (In thousands)		76,956			76,418			76,956			75,904			76,667			75,637			76,956			76,418			76,956			75,904			76,667			75,637
EPS - Diluted (In Dollar)		$0.21			$0.16			$0.21			$0.28			$0.53			$0.63			$6.33			$4.63			$6.33			$8.55			$16.01			$19.06
Shares used in computing EPS-Diluted (In thousands)		79,844			79,243			79,844			78,859			79,759			78,416			79,844			79,243			79,844			78,859			79,759			78,416

UNAUDITED CONSOLIDATED BALANCE SHEETS			USD in Thousands						NTD in Thousands
As of September 30, 2018 and 2017			Sep 30,			Sep 30,			Sep 30,			Sep 30,
			2018			2017			2018			2017
Current assets
Cash & cash equivalents			162,980			138,663			4,975,769			4,195,948
Accounts receivable, net			55,861			49,076			1,705,446			1,485,047
Inventories, net			31,210			36,063			952,833			1,091,244
Other current assets			16,407			9,924			500,896			300,307
Total current assets			266,458			233,726			8,134,944			7,072,546
Non-current assets
Property, plant and equipment, net			8,129			7,882			248,173			238,508
Intangible assets			84,743			89,127			2,587,229			2,696,985
Deferred income tax assets			1,788			2,100			54,590			63,555
Other non-current assets			816			800			24,902			24,197
Total non-current assets			95,476			99,909			2,914,894			3,023,245
Total Assets			361,934			333,635			11,049,838			10,095,791
Current Liabilities
Accounts payable			21,893			25,064			668,385			758,445
Other payables			17,385			16,659			530,770			504,097
Current income tax liabilities			18,831			19,507			574,899			590,272
Other current liabilities			5,383			7,643			164,366			231,276
Total current liabilities			63,492			68,873			1,938,420			2,084,090
Equity
Ordinary shares			26,021			25,805			790,158			783,562
Capital reserves			93,071			84,484			2,823,022			2,560,911
Retained earnings			202,137			176,404			6,186,796			5,437,423
Other equity			(22,787	)		(21,931	)		(688,558	)		(770,195	)
Total equity			298,442			264,762			9,111,418			8,011,701
Total liabilities and equity			361,934			333,635			11,049,838			10,095,791

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS			USD in Thousands						NTD in Thousands
For nine months ended September 30, 2018 and 2017			Sep 30,			Sep 30,			Sep 30,			Sep 30,
			2018			2017			2018			2017
Cash flows from operating activities
Income before income tax for the period			42,173			48,283			1,263,776			1,472,012
Depreciation and amortization			8,524			7,200			255,046			219,898
Share-based compensation cost			6,056			4,681			180,521			142,953
Interest income			(62	)		(43	)		(1,874	)		(1,319	)
Income and expenses having no effect on cash flows			14,518			11,838			433,693			361,532
Accounts receivable			(3,589	)		(1,518	)		(109,571	)		(45,937	)
Inventories			3,065			(9,733	)		93,573			(294,519	)
Other current assets			(6,699	)		(2,398	)		(204,536	)		(72,591	)
Net changes in assets relating to operating activities			(7,223	)		(13,649	)		(220,534	)		(413,047	)
Accounts payable			(3,895	)		(4,961	)		(118,912	)		(150,128	)
Other payables			(3,248	)		(236	)		(99,167	)		(7,140	)
Other current liabilities			(2,897	)		(2,070	)		(88,431	)		(62,622	)
Net changes in liabilities relating to operating activities			(10,040	)		(7,267	)		(306,510	)		(219,890	)
Cash provided by operations			39,428			39,205			1,170,425			1,200,607
Interest received			49			39			1,465			1,186
Income taxes paid			(857	)		(867	)		(25,639	)		(26,479	)
Income tax refund received			-			5,120			-			156,380
Net cash provided by operating activities			38,620			43,497			1,146,251			1,331,694
Cash flows from investing activities
Acquisition of equipment			(1,835	)		(5,049	)		(54,895	)		(154,202	)
Acquisition of intangible assets			(2,166	)		(2,250	)		(64,816	)		(68,720	)
Decrease in refundable deposits			2			45			72			1,369
Net cash used in investing activities			(3,999	)		(7,254	)		(119,639	)		(221,553	)
Cash flows from financing activities
Proceeds from exercise of employee stock options			442			971			13,227			29,665
Purchase of treasury shares			(2,760	)		(1,998	)		(80,688	)		(60,844	)
Treasury shares reissued to employees			2,760			1,998			80,688			60,844
Distribution of cash dividends			(33,182	)		(22,962	)		(965,599	)		(695,744	)
Cash dividend regain from canceled share-based compensation			27			6			826			190
Net cash used in financing activities			(32,713	)		(21,985	)		(951,546	)		(665,889	)
Effect of exchange rate changes on cash and cash equivalents			1,017			(582	)		137,476			(279,143	)
Increase in cash and cash equivalents			2,925			13,676			212,542			165,109
Cash and cash equivalents at beginning of period			160,055			124,987			4,763,227			4,030,839
Cash and cash equivalents at end of period			162,980			138,663			4,975,769			4,195,948

View source version on businesswire.com: https://www.businesswire.com/news/home/20181031005230/en/

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

Source: Parade Technologies, Ltd.

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