BEIJING, April 30, 2013 /PRNewswire-FirstCall/
-- Vimicro International Corporation (NASDAQ: VIMC) ("Vimicro"
or the "Company"), a leading image processing IC and surveillance
solution provider, today announced financial results for the fourth
quarter and full year ended December 31,
2012.
Fourth-quarter Highlights:
- Net revenues grew 14.0% to $18.8
million from $16.5 million
from continuing operations in the year-ago quarter
- Gross margins expanded to 37.7%, as compared to 34.9% in the
year-ago quarter
- Vimicro remained profitable on an adjusted basis for the third
consecutive quarter, with adjusted net income attributable to
Vimicro of $2.6 million, or
$0.08 per diluted ADS.
Full-year Highlights:
- Net revenues from continuing operations increased 20.7% to
$71.2 million
- Surveillance revenue grew 47.0% to $17.8
million from $12.1 million in
the prior year. Gross margins increased to 36.6% from 34.8% in the
prior year
- Net income from continuing operation attributable to Vimicro
was $1.38 million, or $0.04 per diluted ADS.
Fourth-Quarter 2012 Results
Net revenue in the fourth quarter of 2012 was $18.8 million, as compared to net revenue from
continuing operations of $21.7
million in the third quarter and $16.5 million from continuing operations in the
year-ago quarter. (Results for the fourth quarter of 2011 and
the third quarter of 2012 have been adjusted for continuing
operations to reflect the divestiture of certain business lines.)
Fourth-quarter revenues were below the guidance range of
$20 to $23 million due to the delayed
recognition of one large contract valued at around $3 million. The contract will be recognized from
the second quarter in 2013.
Gross profit in the fourth quarter was $7.1 million, as compared with $5.8 million in the year-ago quarter. The
gross margin in the fourth quarter was 37.7%, as compared with
34.9% in the year-ago quarter and 38.0% in the third
quarter.
Operating expenses in the fourth quarter were $8.7 million, as compared to $16.5 million in the year-ago quarter, and
include a $1.4 million impairment of
an investment in a subsidiary. Operating expenses in the
year-ago quarter include a $6.6
million asset-impairment charge. Operating expenses
decreased year-over-year due to the Company's successful
cost-reduction efforts and the receipt of government R&D
subsidies for the development of SVAC-related and other products.
The operating loss was $1.6 million
in the quarter, as compared to a loss of $10.8 million in the year-ago quarter.
Excluding $2.7 million for the
accounts receivable provision and the investment impairment,
operating income would have been approximately $1.1 million.
Non-GAAP net income attributable to Vimicro International
Corporation was $2.6 million, or
approximately $0.08 per ADS on
diluted basis, as compared to a non-GAAP net loss from continuing
operations attributable to Vimicro of $4.1
million, or $0.12 per ADS in
the year-ago quarter. Non-GAAP net income attributable to
Vimicro International Corporation excludes $0.4 million of non-cash, share-based
compensation.
In the fourth quarter of 2012, Vimicro remained profitable on a
GAAP basis, reporting GAAP net income attributable to Vimicro of
$2.2 million, or $0.07 per diluted ADS, as compared to a loss of
$4.2 million, or $0.12 per diluted ADS in the year-ago
quarter.
Full-Year 2012 Results
For the year ended December 31,
2012, net revenue from continuing operations was
$71.2 million, up 20.7% from
$59.0 million in 2011. The
increase in sales was attributable to higher sales of both PC and
notebook multimedia processors and surveillance products. These
figures exclude $1.4 million and
$12.5 million in revenue from
discontinued operations in 2012 and 2011, respectively.
Cost of revenue in 2012 was $45.1
million, as compared with $38.5
million in the prior year, and includes a $1.4 million impairment of an investment in a
subsidiary. The gross margin in 2012 was 36.6%, as compared
with 34.8% in the previous year.
Operating expenses in 2012 were $31.7
million and included $1.4
million investment impairment at a subsidiary, as compared
to $49.1 million in the prior year,
which includes a $6.6 million
asset-impairment charge. Operating expenses decreased due to
the Company's successful cost-reduction efforts and the receipt of
government R&D subsidies for the development of SVAC-related
and other products.
Non-GAAP net income attributable to Vimicro International
Corporation, excluding $2.1 million
in share-based compensation, was $1.5
million, or approximately $0.05 per ADS, compared to a loss of $25.8 million, or $0.71 per ADS, in 2011. The full-year 2012
GAAP net loss attributable to Vimicro was $0.6 million.
As of December 31, 2012, the
Company had cash and cash equivalents of approximately $55.5 million and restricted cash of $2.6 million, totaling $58.1 million. Total current assets were
approximately $103.5 million, and
Vimicro had working capital of approximately $64.3 million, and $4.8
million of long-term bank loans on its balance sheet, as of
December 31, 2012.
Dr. John Deng, Vimicro's Chairman
and Chief Executive Officer, commented, "In 2012, we saw the
success of strategic decisions we made to refocus Vimicro on our
surveillance business and streamline our cost structure. We
turned profitable in the second quarter, and Vimicro was also
profitable on an adjusted basis for the year. Revenues grew
again on an annual basis in 2012, and surveillance revenues grew a
healthy 47%. Vimicro has now established a solid financial
foundation, upon which we can continue to invest in the development
of SVAC-based products and which we expect to deliver future growth
and profitability for our shareholders."
Business Outlook
For the first quarter of 2013, Vimicro expects seasonally lower
revenues in security-surveillance and lower revenues year-over-year
in its PC and notebook multimedia processor business, alongside a
temporary decline of orders from a major PC and notebook
customer.
Fourth-Quarter Earnings Release and Conference Call
Information
Vimicro plans to release fourth-quarter and full-year 2012
results on Tuesday, April 30, 2013,
after the U.S. market closes. The Company will also hold a
conference call at 6:00 p.m. EDT on
Tuesday, April 30, 2013, to discuss
financial results for the fourth quarter and full year ended
December 31, 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: (877) 703 6103 or (857) 244 7302. The
conference call ID number is. 34129518.
If you are unable to participate in the call at this time, a
replay will be available starting at 9:00
p.m. Eastern Daylight Time on Tuesday, April 30, 2013, through 11:59 a.m. Eastern Daylight Time on Wednesday, May 8, 2013. To access the replay,
dial (888) 286-8010 or (617) 801-6888. The conference call ID
number is 67376125.
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/5634ee5f9ba4c50cfda90f6530992c9a.
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) from continuing operations 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 6.2855 to $1.00 on
December 31, 2012.
- financial tables follow -
VIMICRO
INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts
expressed in thousands of U.S. dollars, except number of shares and
per share data)
|
|
December 31,
|
|
2011
|
2012
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash equivalents
|
$49,227
|
$55,532
|
Restricted cash
|
3,520
|
2,593
|
Accounts and notes receivable, net of provision for
doubtful accounts of $1,822
and $2,172 as of December 31, 2011
and 2012, respectively
|
17,895
|
24,564
|
Amounts due from related parties, net of provision
for doubtful accounts of nil
and $1,749 as of December 31, 2011
and 2012, respectively
|
4,831
|
4,225
|
Inventories, net
|
18,734
|
11,362
|
Prepayments and other current assets, net of
provision for doubtful accounts of
$162 and $144 as of December 31,
2011 and 2012, respectively
|
4,057
|
4,809
|
Deferred tax assets
|
356
|
418
|
Total
current assets
|
98,620
|
103,503
|
Investment
in an unconsolidated affiliate, at cost
|
1,520
|
2
|
Investment
in equity investee
|
-
|
4,218
|
Property,
equipment and software, net
|
14,266
|
20,457
|
Land use
rights
|
21,488
|
14,774
|
Deferred
tax assets-noncurrent
|
112
|
169
|
Other
assets
|
1,291
|
1,371
|
Total assets
|
137,297
|
144,494
|
|
|
|
Liabilities and Equity
|
|
|
Current
liabilities:
|
|
|
Accounts payable
|
9,280
|
7,281
|
Notes payable
|
1,013
|
-
|
Amounts due to related parties
|
963
|
2,184
|
Taxes payable
|
1,209
|
2,318
|
Advances from customers
|
1,916
|
222
|
Accrued expenses and other current
liabilities
|
8,333
|
14,750
|
Deferred government grant
|
5,910
|
12,476
|
Total
current liabilities
|
28,624
|
39,231
|
|
|
|
Deferred
tax liabilities
|
33
|
23
|
Product
warranty
|
300
|
466
|
Long-term
bank loan
|
-
|
4,773
|
Other
long-term liabilities
|
-
|
4,772
|
Total
liabilities
|
28,957
|
49,265
|
Shareholders' Equity:
|
|
|
Ordinary shares, $0.0001 par value, 500,000,000
shares authorized,
139,953,296 and
116,599,856
|
-
|
-
|
shares issued and outstanding as of December 31, 2011
and 2012,
respectively
|
15
|
15
|
Additional paid-in capital
|
158,879
|
161,017
|
Treasury stock
|
(6,490)
|
(13,886)
|
Accumulated other comprehensive income
|
12,850
|
11,394
|
Accumulated deficit
|
(82,630)
|
(83,249)
|
Statutory reserve
|
2,782
|
2,782
|
Total shareholders' equity attributable to Vimicro
International Corporation
|
85,406
|
78,073
|
Noncontrolling
interest
|
22,934
|
17,156
|
Total equity
|
108,340
|
95,229
|
Total liabilities and equity
|
$137,297
|
$144,494
|
|
|
|
VIMICRO
INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
(Amounts
expressed in thousands of U.S. dollars, except number of shares and
per share data)
|
|
2012
Q4
|
2012
Q3
|
2011
Q4
|
FY2012
|
FY2011
|
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(audited)
|
(audited)
|
Net
revenue
|
$18,829
|
$21,747
|
$16,520
|
$71,187
|
$58,972
|
Cost of revenue
|
(11,733)
|
(13,489)
|
(10,749)
|
(45,146)
|
(38,459)
|
Gross
profit
|
7,095
|
8,258
|
5,770
|
26,041
|
20,513
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Research and development, net
|
(1,022)
|
(1,840)
|
(4,080)
|
(8,881)
|
(19,005)
|
Selling and marketing
|
(2,240)
|
(2,484)
|
(2,646)
|
(9,174)
|
(12,050)
|
General and administrative
|
(5,403)
|
(2,452)
|
(3,224)
|
(12,244)
|
(11,480)
|
Asset impairment
|
-
|
-
|
(6,599)
|
(1,448)
|
(6,599)
|
Total
operating expenses
|
(8,664)
|
(6,776)
|
(16,548)
|
(31,747)
|
(49,134)
|
Income/(loss) from operations
|
(1,569)
|
1,482
|
(10,778)
|
(5,706)
|
(28,621)
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
Interest income
|
17
|
3
|
111
|
234
|
673
|
Foreign exchange gain/(loss), net
|
190
|
(86)
|
340
|
(19)
|
1,678
|
Gain on disposal of marketable equity
securities
|
-
|
-
|
-
|
-
|
1,517
|
Gain on disposal of equity interest
|
1,472
|
-
|
-
|
1,472
|
-
|
Others, net
|
166
|
1
|
472
|
169
|
492
|
Income/
(loss) before income taxes and share of
profit/ (loss) of an unconsolidated affiliates
|
276
|
1,400
|
(9,855)
|
(3,850)
|
(24,261)
|
Income tax
(expense)/ benefit
|
387
|
(228)
|
877
|
(210)
|
861
|
Net
income/ (loss) before share of profit/(loss) of an
unconsolidated affiliates
|
663
|
1,172
|
(8,978)
|
(4,060)
|
(23,400)
|
|
|
|
|
|
|
Equity in
profit/(loss) of an unconsolidated affiliate,
net of
tax
|
(87)
|
-
|
-
|
(87)
|
-
|
Net
income/ (loss) from continuing operations
|
575
|
1,172
|
(8,978)
|
(4,147)
|
(23,400)
|
|
|
|
|
|
|
Income/
(loss) from discontinued operations, net of
income
tax
|
-
|
(1,641)
|
(7,326)
|
(3,109)
|
(16,718)
|
Net
income/ (loss)
|
575
|
(468)
|
(16,304)
|
(7,256)
|
(40,118)
|
|
|
|
|
|
|
Loss
attributable to non-controlling interest
|
(1,627)
|
(1,666)
|
(5,629)
|
(6,637)
|
(11,918)
|
Income/
(loss) attributed to Vimicro
International Corporation
|
$2,202
|
$1,198
|
($10,675)
|
($619)
|
($28,200)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/
(loss) per share
|
|
|
|
|
|
continuing operations
|
|
|
|
|
|
Basic
|
$0.02
|
$0.02
|
($0.03)
|
$0.01
|
($0.10)
|
Diluted
|
0.02
|
0.01
|
(0.03)
|
0.01
|
(0.10)
|
discontinued operations
|
|
|
|
|
|
Basic
|
0.00
|
(0.01)
|
(0.05)
|
(0.02)
|
(0.09)
|
Diluted
|
0.00
|
(0.01)
|
(0.05)
|
(0.02)
|
(0.09)
|
Income/
(loss) per share
|
|
|
|
|
|
Basic
|
$0.02
|
$0.01
|
($0.08)
|
($0.01)
|
($0.19)
|
Diluted
|
0.02
|
0.00
|
(0.08)
|
(0.01)
|
(0.19)
|
|
|
|
|
|
|
Income/
(loss) per ADS
|
|
|
|
|
|
continuing operations
|
|
|
|
|
|
Basic
|
$0.07
|
$0.08
|
($0.12)
|
0.04
|
(0.37)
|
Diluted
|
0.07
|
0.04
|
(0.12)
|
0.04
|
(0.37)
|
discontinued operations
|
|
|
|
|
|
Basic
|
0.00
|
(0.04)
|
(0.18)
|
(0.06)
|
(0.41)
|
Diluted
|
0.00
|
(0.02)
|
(0.18)
|
(0.06)
|
(0.41)
|
Income/
(loss) per ADS
|
|
|
|
|
|
Basic
|
$0.07
|
$0.04
|
($0.31)
|
(0.02)
|
(0.78)
|
Diluted
|
0.07
|
0.02
|
(0.31)
|
(0.02)
|
(0.78)
|
|
|
|
|
|
|
Weighted
average number of ordinary shares
|
|
|
|
|
|
outstanding
|
|
|
|
|
|
Basic
|
117,771,601
|
118,625,664
|
140,005,158
|
123,253,931
|
145,123,889
|
Diluted
|
124,994,625
|
240,326,416
|
140,005,158
|
127,624,447
|
145,123,889
|
Weighted
average number of ADS outstanding
|
|
|
|
|
|
Basic
|
29,442,900
|
29,656,416
|
35,001,289
|
30,813,483
|
36,280,972
|
Diluted
|
31,248,656
|
60,081,604
|
35,001,289
|
31,906,112
|
36,280,972
|
|
|
|
|
|
|
Other
comprehensive income/ (loss):
|
|
|
|
|
|
Foreign currency translation adjustment
|
(1,140)
|
(254)
|
920
|
(1,530)
|
3,309
|
Unrealized (loss)/gain on marketable
equity
securities
|
-
|
-
|
(401)
|
-
|
149
|
Reclassification of unrealized gain on
marketable equity security into
earnings, net of
tax
|
-
|
-
|
-
|
-
|
(1,517)
|
Comprehensive income/ (loss)
|
(565)
|
(722)
|
(15,785)
|
(8,786)
|
(38,177)
|
Comprehensive income/ (loss) attributable to
non-controlling interest
|
(1,467)
|
(1,923)
|
(5,406)
|
(6,711)
|
(10,444)
|
Comprehensive income/ (loss) attributable to
Vimicro International Corporation
|
902
|
1,201
|
(10,379)
|
(2,075)
|
(27,733)
|
|
|
|
|
|
|
Components of share-based compensation
expenses are included in the following expense
captions:
|
|
|
|
|
|
R&D
|
(207)
|
(220)
|
(93)
|
(973)
|
(782)
|
S&M
|
(43)
|
(40)
|
(14)
|
(151)
|
(80)
|
G&A
|
(144)
|
(168)
|
(76)
|
(949)
|
(1,559)
|
Total
|
(394)
|
(427)
|
(183)
|
(2,073)
|
(2,421)
|
Reconciliations of non-GAAP results of operations
measures to the nearest comparable GAAP measures (*)
(Amounts
expressed in thousands of U.S. dollars, except per share data,
unaudited)
|
|
Three
months ended
December 30, 2012
|
Three
months ended
September 30, 2012
|
Three
months ended
December 30, 2011
|
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Result
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Result
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
Income/(loss) from
continuing operations
|
$575
|
$394
|
$969
|
$1,172
|
$427
|
$1,599
|
($8,978)
|
$183
|
($8,795)
|
Income/(loss) attributed to
Vimicro International
Corporation
|
2,202
|
394
|
2,596
|
2,417
|
427
|
2,844
|
(4,234)
|
183
|
(4,051)
|
Income/(loss) from
continuing operations per
diluted ADS(**)
|
0.07
|
0.01
|
0.08
|
0.08
|
0.02
|
0.10
|
(0.12)
|
0.00
|
(0.12)
|
|
Twelve
months ended
December 30, 2012
|
Twelve
months ended
December 30, 2011
|
|
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Result
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Result
|
|
Income/(loss) from
continuing operations
|
(4,147)
|
$2,074
|
($2,073)
|
($23,400)
|
$2,421
|
($20,979)
|
|
Income/(loss) attributed to
Vimicro International
Corporation
|
(619)
|
2,074
|
1,454
|
(28,200)
|
2,421
|
(25,779)
|
|
Income/(loss) from
continuing operations per
diluted ADS(**)
|
($0.02)
|
$0.07
|
$0.05
|
($0.78)
|
$0.07
|
($0.71)
|
|
(*) 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