BEIJING, Aug. 8, 2012 /PRNewswire-Asia-FirstCall/ --
Vimicro International Corporation (NASDAQ: VIMC) ("Vimicro" or the
"Company"), a leading PC-camera processor and IP-based surveillance
solution provider, today announced financial results for the second
quarter ended June 30, 2012.
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Second-Quarter 2012 Results
Net revenue in the second quarter of 2012 was $20.1 million, as compared to net revenue of
$11.6 million in the first quarter
and $14.2 million from continuing
operations in the year-ago quarter. Second-quarter revenues
exceeded guidance of a sequential increase of approximately 40%, or
$16.2 million. The 41.8%
year-over-year revenue increase was driven by growth in sales of
both PC-camera processors and surveillance solutions.
Gross profit in the second quarter was $6.9 million, as compared with $4.8 million in the year-ago quarter. The
gross margin in the second quarter was 34.1%, compared with 33.5%
in the year-ago quarter and 30.6% in the first quarter, owing to a
more favorable product mix.
Operating expenses in the second quarter were $8.5 million, as compared to $12.3 million in the year-ago
quarter. Operating expenses decreased year-over-year and
sequentially due to the success of the Company's restructuring
efforts and cost-control initiatives. The operating loss was
$1.6 million, as compared to
$7.5 million in the year-ago
quarter.
Vimicro returned to non-GAAP profitability in the second
quarter, and non-GAAP net income attributable to Vimicro
International Corporation was $729,000, or approximately $0.02 per ADS on diluted basis, as compared to a
non-GAAP net loss attributable to Vimicro of $5.6 million, or $0.09 per ADS from continuing operations in the
year-ago quarter. The non-GAAP net income attributable to
Vimicro International Corporation excludes $1.1 million of non-cash, share-based
compensation and also exceeded guidance of a loss of approximately
$1.5 million.
Vimicro recorded positive cash flow from operations of
$4.7 million in the second
quarter. As of June 30, 2012,
the Company had cash and cash equivalents of approximately
$35.5 million, held-to-maturity
securities of $4.0 million, and
restricted cash of $6.3 million,
totaling $45.8 million. Total current
assets were approximately $92.5
million, and Vimicro had working capital of approximately
$61.7 million, $0.5 million of notes payable, and $4.7 million of long-term bank loans on its
balance sheet, as of June 30,
2012.
Dr. John Deng, Vimicro's Chairman
and Chief Executive Officer, commented, "We are pleased to report
significantly improved results for the second quarter, in
particular reporting positive cash flow from operations and
returning to profitability on a non-GAAP basis. These results
demonstrate the success of the decisions we have made to refocus
and streamline our company. Revenue growth was solid across
both segments, and we are particularly pleased with the 61%
year-over-year growth in sales of surveillance solutions. We
believe Vimicro has passed the turning point, and we look forward
to stronger quarterly results throughout the remainder of the year,
in particular for our surveillance business."
Business Outlook
For the third quarter of 2012, Vimicro expects revenues of
$20 to $22 million.
Second-Quarter Earnings Release and Conference Call
Information
Vimicro releases second-quarter 2012 results on Wednesday, August 8 before the U.S. market
opens. The Company will also hold a conference call at
8:00 a.m. EDT on Wednesday, August 8, 2012, to discuss financial
results for the second quarter ended June
30, 2012.
To participate in the conference call, please dial one of the
following numbers five to ten minutes prior to the scheduled
conference call time: (866) 770-7051 or (617) 213-8064. The
conference call ID number is 72770360.
If you are unable to participate in the call at this time, a
replay will be available starting on Wednesday, August 8, 2012 at 10:00 a.m. EDT, through 11:59 p.m. EDT on Wednesday, August 15, 2012. To access the replay,
dial (888) 286-8010 or (617) 801-6888. The conference call ID
number is 32661936.
This conference call will also be broadcast live over the
Internet and can be accessed by all interested parties by clicking
on
http://www.media-server.com/m/acs/dd95d589a96443b5c3141c59ed7e06e2.
Please access the link at least fifteen minutes prior to the start
of the call to register, download, and install any necessary audio
software.
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 PC/notebook, consumer electronics and surveillance
markets. Vimicro is aggressively expanding business into the
surveillance market with system-level solutions and semiconductor
products to capitalize on China's
domestic demand. 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
income/(loss) from operations, non-GAAP net income/(loss)
attributed to Vimicro International Corporation and non-GAAP
diluted net income /(loss) 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 expense. 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, which
was RMB 6.3249 to $1.00 on
June 29, 2012.
-Financial tables follow -
Vimicro
International Corporation
|
Consolidated Balance Sheets
|
(Amounts expressed in thousands of U.S. dollars,
except number of share data)
|
|
|
6/30/2012
|
12/31/2011
|
|
(unaudited)
|
(audited)
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$35,536
|
$49,227
|
Restricted cash
|
6,275
|
3,520
|
Held-to-maturity
|
3,953
|
0
|
Accounts and notes
receivable, net of provision for doubtful accounts of $1,822
and $2,340 as of December 31, 2011 and June 30, 2012,
respectively
|
20,445
|
17,895
|
Amounts due from related
party
|
4,559
|
4,831
|
Inventories
|
18,265
|
18,734
|
Prepayments and other
current assets, net of provision for doubtful accounts of $162 and
$180 as of December 31, 2011 and June 30, 2012,
respectively
|
3,129
|
4,057
|
Deferred tax
assets
|
357
|
356
|
Total current assets
|
92,519
|
98,620
|
Investment
in an unconsolidated affiliate
|
1,514
|
1,520
|
Property,
equipment and software, net
|
14,826
|
14,266
|
Land use
rights
|
21,254
|
21,488
|
Deferred
tax assets-non current
|
112
|
112
|
Other
assets
|
1,238
|
1,291
|
Total assets
|
131,463
|
137,297
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable
|
7,984
|
9,280
|
Notes payable
|
485
|
1,013
|
Amounts due to related
party
|
1,447
|
963
|
Taxes payable
|
2,053
|
1,209
|
Advances from
customers
|
2,405
|
1,916
|
Accrued expenses and other
current liabilities
|
7,162
|
8,333
|
Deferred government
grant
|
9,264
|
5,910
|
Total current liabilities
|
30,800
|
28,624
|
Non-Current liabilities:
|
|
|
Deferred tax
liabilities
|
33
|
33
|
Product warranty
|
386
|
300
|
Long-term bank
loan
|
4,743
|
0
|
Total liabilities
|
35,962
|
28,957
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
Shareholders' equity:
|
|
|
Ordinary shares,$0.0001 par
value, 500,000,000 shares authorized,
|
|
|
139,953,296 and 118,889,892
shares issued and outstanding
|
|
|
as of December 31, 2011 and
June 30, 2012, respectively
|
15
|
15
|
Additional paid-in
capital
|
160,131
|
158,879
|
Treasury stock
|
(13,077)
|
(6,490)
|
Accumulated other
comprehensive income
|
12,688
|
12,850
|
Accumulated
deficit
|
(86,649)
|
(82,630)
|
Statutory reserve
|
2,782
|
2,782
|
Total shareholders' equity attributable to Vimicro International
Corporation
|
75,890
|
85,406
|
Non-controlling
interest
|
19,611
|
22,934
|
Total shareholders' equity
|
95,501
|
108,340
|
|
|
|
Total liabilities and shareholders' equity
|
131,463
|
137,297
|
Vimicro
International Corporation
|
Consolidated Statement of Comprehensive
Loss
|
(Amounts expressed in thousands of U.S. dollars,
except number of shares and per share data)
|
|
|
|
2012 Q2
|
|
2012 Q1
|
|
2011 Q2
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Net
revenue
|
|
20,140
|
|
11,570
|
|
14,200
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
(13,275)
|
|
(8,027)
|
|
(9,437)
|
|
|
|
|
|
|
|
Gross
profit
|
|
6,865
|
|
3,543
|
|
4,763
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Research
and development, net
|
|
(3,052)
|
|
(3,482)
|
|
(5,676)
|
Selling
and marketing
|
|
(2,348)
|
|
(2,476)
|
|
(3,681)
|
General
and administrative
|
|
(3,097)
|
|
(3,041)
|
|
(2,953)
|
Total
operating expenses
|
|
(8,497)
|
|
(8,999)
|
|
(12,310)
|
Loss from
operations
|
|
(1,632)
|
|
(5,456)
|
|
(7,547)
|
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
|
Interest
income
|
|
125
|
|
90
|
|
165
|
Foreign
exchange gain/(loss), net
|
|
(159)
|
|
36
|
|
447
|
Gain on
disposal of marketable equity securities
|
|
0
|
|
0
|
|
632
|
Others,
net
|
|
1
|
|
1
|
|
15
|
|
|
|
|
|
|
|
Loss
before income taxes and share of profit of an unconsolidated
affiliate
|
|
(1,665)
|
|
(5,329)
|
|
(6,288)
|
|
|
|
|
|
|
|
Income
taxes expense
|
|
(175)
|
|
(194)
|
|
(53)
|
|
|
|
|
|
|
|
Net loss
before share of profit of an unconsolidated affiliate
|
|
(1,840)
|
|
(5,523)
|
|
(6,341)
|
|
|
|
|
|
|
|
Net loss
from continuing operations
|
|
(1,840)
|
|
(5,523)
|
|
(6,341)
|
|
|
|
|
|
|
|
Loss from
discontinued operations, net of income tax
|
|
0
|
|
0
|
|
(2,230)
|
|
|
|
|
|
|
|
Net
loss
|
|
(1,840)
|
|
(5,523)
|
|
(8,571)
|
|
|
|
|
|
|
|
Loss
attributable to non-controlling interest
|
|
(1,497)
|
|
(1,847)
|
|
(2,268)
|
|
|
|
|
|
|
|
Loss
attributed to Vimicro International Corporation
|
|
(343)
|
|
(3,676)
|
|
(6,303)
|
|
|
|
|
|
|
|
Loss per
share - basic and diluted
|
|
|
|
|
|
|
continuing
operations
|
|
(0.00)
|
|
(0.03)
|
|
(0.02)
|
discontinued
operations
|
|
0.00
|
|
0.00
|
|
(0.02)
|
Loss per
share- basic and diluted
|
|
(0.00)
|
|
(0.03)
|
|
(0.04)
|
|
|
|
|
|
|
|
Loss per
ADS Basic and Diluted
|
|
|
|
|
|
|
continuing
operations
|
|
(0.01)
|
|
(0.11)
|
|
(0.11)
|
discontinued
operations
|
|
0.00
|
|
0.00
|
|
(0.06)
|
Loss per
ADS- basic and diluted
|
|
(0.01)
|
|
(0.11)
|
|
(0.17)
|
|
|
|
|
|
|
|
Weighted
average number of ordinary shares outstanding
|
|
|
|
|
|
|
Basic
and Diluted
|
|
121,877,701
|
|
134,898,768
|
|
146,820,790
|
|
|
|
|
|
|
|
Weighted
average number of ADS outstanding
|
|
|
|
|
|
|
Basic
and Diluted
|
|
30,469,425
|
|
33,724,692
|
|
36,705,198
|
|
|
|
|
|
|
|
Other
comprehensive income/(loss):
|
|
|
|
|
|
|
Foreign
currency translation adjustment
|
|
(175)
|
|
36
|
|
867
|
Unrealized
loss on marketable equity securities
|
|
0
|
|
0
|
|
(550)
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
(2,015)
|
|
(5,487)
|
|
(8,254)
|
Comprehensive loss attributable to non-controlling
interest
|
|
(1,498)
|
|
(1,826)
|
|
(1,866)
|
Comprehensive loss attributable to Vimicro
International Corporation
|
|
(517)
|
|
(3,661)
|
|
(6,388)
|
|
|
|
|
|
|
|
Components of share-based compensation
expenses
|
|
|
|
|
|
|
are included in the
following expense captions:
|
|
|
|
|
|
|
R&D
|
|
(462)
|
|
(83)
|
|
(197)
|
S&M
|
|
(50)
|
|
(20)
|
|
(27)
|
G&A
|
|
(560)
|
|
(77)
|
|
(474)
|
Total
|
|
(1,072)
|
|
(180)
|
|
(698)
|
Reconciliations of non-GAAP results of operations
measures to the nearest comparable GAAP measures (*)
|
|
(Amounts expressed in thousands of U.S. dollars,
except number of shares and per share data,
unaudited)
|
|
|
Three
months ended
June 30, 2012
|
Three
months ended
March 31, 2012
|
Three
months ended
June 30, 2011
|
|
GAAP
Result
|
Adjust-
ment
|
Non-GAAP
Result
|
GAAP
Result
|
Adjust-
ment
|
Non-GAAP
Result
|
GAAP
Result
|
Adjust-
ment
|
Non-GAAP
Result
|
Loss from
operations
|
$(1,632)
|
$1,072
|
$(560)
|
$(5,456)
|
$180
|
$(5,276)
|
$(7,547)
|
$698
|
$(6,849)
|
Income/(loss) attributed to Vimicro
International Corporation
|
(343)
|
1,072
|
729
|
(3,676)
|
180
|
(3,496)
|
(6,303)
|
698
|
(5,605)
|
Income/(loss) from continuing
operations per ADS(**)
|
(0.01)
|
0.03
|
0.02
|
(0.11)
|
0.01
|
(0.10)
|
(0.11)
|
0.02
|
(0.09)
|
|
(*) The
adjustment is to exclude non-cash share-based compensation for
employees and non-employees.
|
(**) Loss
per ADS refers to continuing operations
|
SOURCE Vimicro International Corporation