BEIJING, Nov. 29, 2010 /PRNewswire-Asia-FirstCall/ --
Vimicro International Corporation (Nasdaq: VIMC) ("Vimicro"), a
leading multimedia semiconductor and solution provider, today
announced financial results for the third quarter ended
September 30, 2010.
(Logo: http://photos.prnewswire.com/prnh/20070528/CNM014LOGO
)
Third Quarter 2010
Net revenue in the third quarter of 2010 was $26.5 million, compared to $26.4 million in the second quarter of 2010 and
$20.5 million in the third quarter of
2009. Revenue in the third quarter of 2010 reflects increased
revenue from Vimicro's surveillance business.
For the first nine months of 2010, revenue totaled $73.0 million, a 48% increase compared to
$49.2 million for the same period in
2009 primarily due to the Company's expanded product offerings in
high growth markets.
Dr. John Deng, Vimicro's Chairman
and Chief Executive Officer, commented, "In the third quarter,
revenue from our new surveillance business improved as a result of
the Company's increased marketing efforts and new contract wins,
but recognized revenue has not yet reached the levels originally
forecast. Another contributing factor was the delayed release of
our SVAC standard, which was just recently approved by the
Standardization Administration of China. Our notebook camera processor business
remains solid as we maintain our leadership position in high-end
notebooks. In mobile, we continued to ship volume orders to large
mobile OEMs and secured new customer contracts."
Gross margin in the third quarter of 2010 was 31% compared to
34% in the previous quarter due to product mix within the quarter.
Operating expenses remained flat sequentially at $13.9 million in the third quarter.
The Company recognized approximately $0.5
million of grants during the third quarter, and expects to
recognize increased levels of grant benefits in the coming
quarters. In addition, the Company initiated cost control programs
including cutting variable expenses, lowering IP purchases and
halting investment in non-core product lines and projects.
Collectively, these actions will help the Company to achieve its
financial goals, while establishing a more profitable operating
model.
Third quarter 2010 net loss, prepared in accordance with U.S.
Generally Accepted Accounting Principles (GAAP), was $5.3 million, which included $1.1 million in share-based compensation expense,
compared to a loss of $4.3 million,
including $0.9 million in share-based
compensation, in the second quarter. After excluding loss
attributable to non-controlling interest, net loss attributed to
Vimicro was $3.8 million in the third
quarter, or $0.10 loss per ADS (each
representing four ordinary shares), compared to a net loss of
$2.8 million, or $0.08 loss per ADS, in the second quarter of
2010.
Business Outlook
Vimicro anticipates fourth quarter revenue to range between
$26 million and $28 million.
Surveillance revenue is expected to increase, driven by new product
introductions and expanded sales and marketing efforts in multiple
regions. The Company also anticipates a modest improvement in
mobile sales volume and comparable volume in notebook products. The
Company expects to achieve non-GAAP breakeven in the coming
quarters and further contribute to future profitability on a
sustainable basis through aggressive growth efforts and SVAC
adoption in the surveillance market, business restructuring and
operating expense controls implemented in the fourth quarter and
first half of 2011.
Financial Results Conference Call and Webcast
Vimicro will host a conference call and Webcast November 29, 2010 at 4:30
p.m. Eastern Time to discuss the Company's recent results.
Investors and other interested parties may access the call by
dialing 800.299.9630 (or +1-617.786.2904
outside of the U.S.) with the pass code 42807962, at least
10 minutes prior to the start of the call.
In addition, an audio Webcast will be available in the Investor
Relations section of the Company's Web site at
http://www.vimicro.com. Following the live Webcast, an archived
version will be available on the Company's Web site. A telephone
replay of the call will also be available approximately two hours
after the call and will be available until December 6, 2010 at midnight (ET). The replay
number is 888-286-8010 with a pass code of 71992356. International
callers should dial +1-617-801-6888 and enter the same pass code at
the prompt.
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 the consumer electronics and communications markets.
Vimicro is also expanding business into the surveillance market
with system-level solutions and semiconductor products. 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
(loss)/income from operations, non-GAAP net (loss)/income
attributed to Vimicro International Corporation and non-GAAP
diluted net (loss)/income 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 expenses. 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 as of
September 30, 2010, which was
RMB 6.7011 to $1.00.
For further
information about Vimicro, please contact:
|
|
|
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Jack Guo, Acting
CFO and Vice
President
Phone:
+86-10-6894-8888 ext. 7379
Email:
jackguo@vimicro.com
|
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Shelton Group Investor
Relations
Leanne K. Sievers, EVP
Phone: +1-949-224-3874
Email: lsievers@sheltongroup.com
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Vimicro International
Corporation
Consolidated Balance
Sheets
(Amounts expressed in thousands of
U.S. dollars, except number of share
data)
|
|
|
|
|
|
|
|
9/30/2010
|
|
12/31/2009
|
|
|
(unaudited)
|
|
(audited)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
81,214
|
|
84,510
|
|
Short-term time
deposits
|
12,235
|
|
43,935
|
|
Restricted
cash
|
1,627
|
|
132
|
|
Marketable equity
securities
|
1,198
|
|
543
|
|
Accounts receivable, net
of provision for doubtful accounts
|
15,144
|
|
9,462
|
|
Notes
receivable
|
478
|
|
-
|
|
Inventories
|
17,586
|
|
8,804
|
|
Prepayments and other
current assets
|
7,714
|
|
4,155
|
|
Deferred tax
assets
|
3
|
|
3
|
|
Total current assets
|
137,199
|
|
151,544
|
|
|
|
|
|
|
Property, equipment and
software, net
|
9,743
|
|
9,015
|
|
Land use
rights
|
20,512
|
|
10,905
|
|
Intangible assets,
net
|
3,144
|
|
3,819
|
|
Goodwill
|
2,057
|
|
2,019
|
|
Other assets
|
979
|
|
973
|
|
Total assets
|
173,634
|
|
178,275
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
6,194
|
|
4,958
|
|
Notes payable
|
244
|
|
-
|
|
Taxes payable
|
1,529
|
|
879
|
|
Advances from
customers
|
605
|
|
649
|
|
Accrued expenses and
other current liabilities
|
6,150
|
|
5,900
|
|
Deferred government
grants
|
3,908
|
|
3,844
|
|
Deferred tax
liabilities
|
57
|
|
0
|
|
Total current liabilities
|
18,687
|
|
16,230
|
|
Non-Current liabilities:
|
|
|
|
|
Deferred tax
liabilities
|
30
|
|
196
|
|
Product
warranty
|
90
|
|
25
|
|
Total liabilities
|
18,807
|
|
16,451
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Ordinary shares,$0.0001
par value, 500,000,000 shares authorized,
|
|
|
|
|
148,024,068 and 147,643,168 shares issued and
outstanding
|
|
|
|
|
as of
September 30, 2010 and December 31, 2009, respectively
|
15
|
|
15
|
|
Additional paid-in
capital
|
155,457
|
|
151,672
|
|
Treasury
stock
|
(2,664)
|
|
(2,664)
|
|
Accumulated other
comprehensive income
|
11,574
|
|
9,967
|
|
Accumulated
deficit
|
(46,759)
|
|
(35,786)
|
|
Statutory
reserve
|
2,782
|
|
2,782
|
|
Total shareholders equity attributable
to Vimicro International Corporation
|
120,405
|
|
125,986
|
|
Noncontrolling
interest
|
34,422
|
|
35,838
|
|
Total shareholders' equity
|
154,827
|
|
161,824
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity
|
173,634
|
|
178,275
|
|
|
|
|
|
Vimicro International
Corporation
Consolidated Statement Of Operations
And Comprehensive Income
(Amounts expressed in thousands of
U.S. dollars, except number of share data)
|
|
|
2010
Q3
|
|
2010
Q2
|
|
2009
Q3
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Net revenue
|
26,493
|
|
26,368
|
|
20,500
|
|
Cost of revenue
|
(18,284)
|
|
(17,314)
|
|
(14,692)
|
|
|
|
|
|
|
|
|
Gross profit
|
8,209
|
|
9,054
|
|
5,808
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Research
and development, net
|
(7,823)
|
|
(8,250)
|
|
(6,322)
|
|
Selling and
marketing
|
(2,336)
|
|
(1,969)
|
|
(1,323)
|
|
General and
administrative
|
(3,765)
|
|
(3,161)
|
|
(3,126)
|
|
Total operating expenses
|
(13,924)
|
|
(13,380)
|
|
(10,771)
|
|
|
|
|
|
|
|
|
Loss from operations
|
(5,715)
|
|
(4,326)
|
|
(4,963)
|
|
|
|
|
|
|
|
|
Other income:
|
|
|
|
|
|
|
Interest
income
|
263
|
|
292
|
|
377
|
|
Foreign
exchange gain, net
|
356
|
|
54
|
|
16
|
|
Others,
net
|
7
|
|
199
|
|
307
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
(5,089)
|
|
(3,781)
|
|
(4,263)
|
|
|
|
|
|
|
|
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Income taxes expense
|
(245)
|
|
(518)
|
|
0
|
|
|
|
|
|
|
|
|
Net loss before share of gain of an
unconsolidated affiliate
|
(5,334)
|
|
(4,299)
|
|
(4,263)
|
|
|
|
|
|
|
|
|
Equity in profit of an unconsolidated
affiliate, net of tax
|
0
|
|
0
|
|
3
|
|
|
|
|
|
|
|
|
Net loss
|
(5,334)
|
|
(4,299)
|
|
(4,260)
|
|
|
|
|
|
|
|
|
Less: loss attributable to
non-controlling interest
|
(1,564)
|
|
(1,504)
|
|
(1,123)
|
|
|
|
|
|
|
|
|
Loss attributed to Vimicro
International Corporation
|
(3,770)
|
|
(2,795)
|
|
(3,137)
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
Foreign
currency translation adjustment
|
1,102
|
|
458
|
|
84
|
|
Unrealized
gain on marketable equity securities
|
380
|
|
263
|
|
911
|
|
Other comprehensive income
|
1,482
|
|
721
|
|
995
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
(3,852)
|
|
(3,578)
|
|
(3,265)
|
|
Less:
comprehensive loss attributable to non-controlling
interest
|
(1,107)
|
|
(1,319)
|
|
(1,126)
|
|
Comprehensive loss attributable to
Vimicro International Corporation
|
(2,745)
|
|
(2,259)
|
|
(2,139)
|
|
|
|
|
|
|
|
|
Loss per share
|
|
|
|
|
|
|
Basic
|
(0.03)
|
|
(0.02)
|
|
(0.02)
|
|
Diluted
|
(0.03)
|
|
(0.02)
|
|
(0.02)
|
|
|
|
|
|
|
|
|
Loss per ADS
|
|
|
|
|
|
|
Basic
|
(0.10)
|
|
(0.08)
|
|
(0.08)
|
|
Diluted
|
(0.10)
|
|
(0.08)
|
|
(0.08)
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares outstanding
|
|
|
|
|
|
|
Basic
|
147,937,401
|
|
147,690,245
|
|
148,483,022
|
|
Diluted
|
147,937,401
|
|
147,690,245
|
|
148,483,022
|
|
|
|
|
|
|
|
|
Weighted average number of ADS
outstanding
|
|
|
|
|
|
|
Basic
|
36,984,350
|
|
36,922,561
|
|
37,120,755
|
|
Diluted
|
36,984,350
|
|
36,922,561
|
|
37,120,755
|
|
|
|
|
|
|
|
|
Components of share-based compensation
expenses
|
|
|
|
|
|
|
are included in the
following expense captions:
|
|
|
|
|
|
|
R&D
|
(503)
|
|
(422)
|
|
(510)
|
|
S&M
|
(45)
|
|
(50)
|
|
(53)
|
|
G&A
|
(519)
|
|
(477)
|
|
(563)
|
|
Total
|
(1,067)
|
|
(949)
|
|
(1,126)
|
|
|
|
|
|
|
|
|
Note: Certain amounts in prior periods
were reclassified to conform to current period
presentation.
|
|
|
|
|
|
|
|
(Amounts expressed in thousands of
U.S. dollars, except per share data, unaudited)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
September 30,
2010
|
|
June 30,
2010
|
|
September 30,
2009
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
Non-GAAP
|
|
GAAP
|
|
|
|
Non-GAAP
|
|
GAAP
|
|
|
|
Non-GAAP
|
|
|
|
Result
|
|
Adjustment
|
|
Results
|
|
Result
|
|
Adjustment
|
|
Results
|
|
Result
|
|
Adjustment
|
|
Results
|
|
|
Loss from operations
|
(5,715)
|
|
1,067
|
|
(4,648)
|
|
(4,326)
|
|
949
|
|
(3,377)
|
|
(4,963)
|
|
1,126
|
|
(3,837)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(*) The
adjustment is to exclude
non-cash for share-based compensation for employees and
non-employees.
|
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SOURCE Vimicro International Corporation