BEIJING, June 2, 2014 /PRNewswire/ -- Vimicro
International Corporation (NASDAQ: VIMC) ("Vimicro" or the
"Company"), a leading video surveillance technology and solution
provider in China, today announced
financial results for the first quarter ended March 31, 2014.
First-Quarter 2014 Results
Net revenue in the first quarter of 2014 was $16.4 million, as compared to net revenue of
$7.9 million in the year-ago quarter
and $21.4 million in the fourth
quarter of 2013. Surveillance revenues were $11.8 million in the first quarter, representing
72.1% of total revenues and up 314.8% year over year. Net revenues
were in line with the Company's guidance of $15 million to $17 million.
Gross profit in the first quarter was $5.5 million, as compared with $1.6 million in the year-ago quarter and
$7.1 million in the fourth quarter of
2013. The gross margin in the first quarter was 33.5%, as
compared to 20.1% in the year-ago quarter and 33.2% in the fourth
quarter of 2013.
Operating expenses in the first quarter were $8.6 million, as compared to $5.5 million in the year-ago quarter. The
increase was mainly due to the higher research and development
expense, which was $3.9 million in
the quarter, as compared to $1.2
million in the year-ago quarter. The difference was
primarily due to $1.8 million fewer
government grants recognized. Government grants are normally
recognized when the corresponding project expenses are incurred,
and the Company has historically tended to recognize higher grants
in the second and fourth quarters. Operating loss was $3.1 million in the quarter, as compared to an
operating loss of $3.9 million in the
year-ago quarter.
In the first quarter of 2014, non-GAAP net loss attributable to
Vimicro International Corporation was $3.3
million, or approximately $0.14 per ADS on a diluted basis, as compared to
a non-GAAP net loss attributable to Vimicro of $2.2 million, or $0.08 per diluted ADS in the year-ago quarter.
Non-GAAP net income attributable to Vimicro International
Corporation in the first quarter of 2014 and the year-ago quarter
excludes $0.2 million and
$0.2 million of non-cash, share-based
compensation, respectively. GAAP net loss attributable to Vimicro
in the first quarter was $3.5
million, or $0.14 per diluted
ADS, as compared to net loss from continuing operations of
approximately $2.4 million, or
$0.08 per diluted ADS, in the
year-ago quarter.
Balance Sheet
As of March 31, 2014, the Company
had cash and cash equivalents of approximately $23.4 million and restricted cash of $0.6 million, totaling $24.0 million. The decrease in cash and cash
equivalents was primarily due to a payment of $5.5 million, which was the second payment of an
$11.1 million stock repurchase
announced in December 2013, in
addition to an operating cash outflows. Management expects that the
cash level will increase after the second quarter, due to
anticipated receipts of government grants and collection of
accounts receivable. Total current assets were approximately
$105.5 million, and Vimicro had
working capital of approximately $55.1
million and $26 million of
long-term bank loans and liabilities on its balance sheet, as of
March 31, 2014.
Dr. John Deng, Vimicro's Chairman
and Chief Executive Officer, commented, "We are pleased with our
results in the first quarter of 2014, which demonstrate continued
strong growth in our core Surveillance Solutions Products business
line. As a co-leading developer of China's national SVAC (Surveillance Video and
Audio Coding) video surveillance technology standard, Vimicro is
benefiting greatly from the central government's push for
nationwide SVAC adoption at the provincial and municipal levels,
while remaining fully committed to expanding the application of
SVAC across different industries. Our strategic alliance with State
Grid Hunan Electric Power Corporation is a strong testament of our
progress in this aspect. Looking ahead, we expect to receive
another sizable SVAC order later this quarter, as well as
participate in the large upcoming SVAC demonstration in
Guangdong province in a
significant way in the second half of this year, as we continue to
expand beyond the strong base of cities and provinces we
established last year with new orders and geographies to capitalize
on the fast-growing market for SVAC products."
Business Outlook
For the second quarter of 2014, the Company continues to expect
total revenues of $19 million to $21
million, as compared to revenues of $11.1 million in the second quarter of 2013.
Conference Call Information
The Company will host a conference call at 9:00 a.m. (U.S. Eastern Daylight Time) /
6:00 a.m. (U.S. Pacific Daylight
Time) / 9:00 p.m. (Beijing / Hong
Kong time) on Tuesday, June 3,
2014 to discuss the Company's first-quarter 2014 financial
results.
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) 318-8614 or (617) 399-5133. The
conference call ID number is 33648156.
If you are unable to participate in the call at this time, a
replay will be available starting at 1:00
p.m. Eastern Daylight Time on Tuesday, June 3, 2014, through 11:59 p.m. Eastern Daylight Time on Tuesday, June 10, 2014. To access the replay,
dial (888) 286-8010 or (617) 801-6888. The replay call ID number is
94836440.
This conference call will also be broadcast live over the
Internet and can be accessed by all interested parties by clicking
on: http://edge.media-server.com/m/p/9s28rx58/lan/en. 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 (NASDAQ: VIMC) is a leading
video surveillance technology and solution provider that designs,
develops and markets a full range of video surveillance products
and solutions to governments, private enterprises, and consumers in
China. Vimicro co-developed SVAC
(Surveillance Video and Audio Coding), the national video
surveillance technological standard, which demonstrates its unique
strengths in proprietary multimedia IC technology, making it a
leader in China's fast-growing
security and surveillance market. Vimicro is headquartered in
Beijing, China and has
subsidiaries and offices throughout China and in Silicon Valley. Vimicro's ADSs
each represent four ordinary shares and are traded on the NASDAQ
Global Market exchange 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 continuing operations, non-GAAP net
income/(loss) from continuing operations attributable to Vimicro
International Corporation and non-GAAP net income/(loss) from
continuing operations attributable to Vimicro International
Corporation per diluted ADS, which are adjusted from the most
directly comparable financial measures calculated and presented in
accordance with GAAP to exclude 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, which
was RMB 6.1521 to $1.00 on
March 31, 2014.
- 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)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
|
|
|
(unaudited)
|
|
(audited)
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
23,423
|
|
35,869
|
|
Restricted
cash
|
584
|
|
1,727
|
|
Accounts and notes
receivable, net of provision for doubtful accounts of $2,228 and
$2,322 as of December 31, 2013, and March 31, 2014
respectively
|
23,038
|
|
24,996
|
|
Amounts due from
related parties, net of provision for doubtful accounts of $2,156
and $2,136 as of December 31, 2013, and March 31, 2014,
respectively
|
34,879
|
|
25,820
|
|
Inventories,
net
|
13,044
|
|
13,812
|
|
Prepayments and other
current assets, net of provision for doubtful accounts of $429 and
$426 as of December 31, 2013 and March 31, 2014,
respectively
|
10,554
|
|
7,517
|
Total current
assets
|
105,522
|
|
109,741
|
Investments in an
equity investee
|
2,910
|
|
4,794
|
Property, equipment
and software, net
|
27,166
|
|
26,124
|
Land use
rights
|
15,336
|
|
15,518
|
Other
assets
|
2,004
|
|
2,055
|
|
|
Total
assets
|
152,938
|
|
158,232
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
24,179
|
|
21,839
|
|
Amounts due to
related parties
|
6,886
|
|
7,040
|
|
Taxes
payable
|
7,223
|
|
6,991
|
|
Advances from
customers
|
212
|
|
1,447
|
|
Accrued expenses and
other current liabilities
|
6,317
|
|
6,632
|
|
Deferred government
grant
|
5,607
|
|
8,057
|
Total current
liabilities
|
50,424
|
|
52,006
|
Deferred government
grant-non current
|
1,497
|
|
1,511
|
Deferred tax
liabilities
|
14
|
|
14
|
Product
warranty
|
1,327
|
|
1,065
|
Long-term bank
loan
|
13,004
|
|
13,121
|
Other long-term
liabilities
|
13,004
|
|
8,201
|
Total
liabilities
|
79,270
|
|
75,918
|
Equity:
|
|
|
|
|
Ordinary
shares,$0.0001 par value, 500,000,000 shares authorized,
155,152,737 shares issued and 104,014,754 shares outstanding as of
December 31,2013 and 157,630,477 shares issued and 95,224,739
shares outstanding as of March 31, 2014
|
14
|
|
15
|
|
Additional paid-in
capital
|
154,240
|
|
158,384
|
|
Treasury stock at
cost, 41,872,088 shares as of December 31, 2013 and 43,873,952
shares as of March 31, 2014
|
(16,948)
|
|
(15,961)
|
|
Accumulated other
comprehensive income
|
11,407
|
|
11,387
|
|
Accumulated
deficit
|
(95,133)
|
|
(91,667)
|
|
Statutory
reserve
|
2,782
|
|
2,782
|
|
|
Total shareholders'
equity attributable to Vimicro International Corporation
|
56,362
|
|
64,940
|
|
Noncontrolling
interest
|
17,306
|
|
17,374
|
|
|
Total
equity
|
73,668
|
|
82,314
|
|
|
Total liabilities and
equity
|
152,938
|
|
158,232
|
VIMICRO
INTERNATIONAL CORPORATION
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
|
(Amounts expressed in
thousands of U.S. dollars, except number of shares and per share
data)
|
|
|
|
|
|
|
|
|
|
2014
Q1
|
|
2013
Q4
|
|
2013
Q1
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
Net
revenue
|
16,408
|
|
21,425
|
|
7,854
|
|
Cost of
revenue
|
(10,886)
|
|
(14,316)
|
|
(6,274)
|
Gross
profit
|
5,522
|
|
7,109
|
|
1,580
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development, net
|
(3,854)
|
|
(2,388)
|
|
(1,182)
|
|
Selling and
marketing
|
(2,357)
|
|
(2,575)
|
|
(2,011)
|
|
General and
administrative
|
(2,430)
|
|
(3,954)
|
|
(2,304)
|
Total operating
expenses
|
(8,641)
|
|
(8,917)
|
|
(5,497)
|
Loss from
operations
|
(3,119)
|
|
(1,808)
|
|
(3,917)
|
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
|
Interest income,
net
|
(1)
|
|
(24)
|
|
35
|
|
Foreign exchange
gain/(loss), net
|
(492)
|
|
393
|
|
36
|
|
Gain on disposal of
equity interest
|
–
|
|
6
|
|
–
|
|
Other, net
|
72
|
|
308
|
|
1
|
Loss before income
taxes and equity in profit / (loss) of an equity
investee
|
(3,540)
|
|
(1,125)
|
|
(3,845)
|
Income tax (expense)
/ benefit
|
(208)
|
|
(691)
|
|
100
|
Loss before equity in
profit / (loss) of an equity investee
|
(3,748)
|
|
(1,816)
|
|
(3,745)
|
Equity in profit /
(loss) of an equity investee, net of tax
|
369
|
|
(250)
|
|
(85)
|
Net
loss
|
(3,379)
|
|
(2,066)
|
|
(3,830)
|
|
|
|
|
|
|
|
Net income/(loss)
attributable to noncontrolling interest
|
86
|
|
70
|
|
(1,387)
|
Net loss
attributable to Vimicro International Corporation
|
(3,465)
|
|
(2,136)
|
|
(2,443)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
|
Basic
|
(0.04)
|
|
(0.02)
|
|
(0.02)
|
|
Diluted
|
(0.04)
|
|
(0.02)
|
|
(0.02)
|
|
|
|
|
|
|
|
Loss per
ADS
|
|
|
|
|
|
|
Basic
|
(0.14)
|
|
(0.08)
|
|
(0.08)
|
|
Diluted
|
(0.14)
|
|
(0.08)
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares
|
|
|
|
|
|
Outstanding
|
|
|
|
|
|
|
Basic
|
96,201,434
|
|
113,512,173
|
|
115,546,597
|
|
Diluted
|
96,201,434
|
|
113,512,173
|
|
115,546,597
|
Weighted average
number of ADS outstanding
|
|
|
|
|
|
|
Basic
|
24,050,359
|
|
28,378,043
|
|
28,886,649
|
|
Diluted
|
24,050,359
|
|
28,378,043
|
|
28,886,649
|
|
|
|
|
|
|
|
Other comprehensive
income/(loss), net of tax
|
|
|
|
|
|
|
Foreign currency
translation adjustment, net of tax of nil
|
179
|
|
43
|
|
116
|
|
Reclassification of
foreign currency translation adjustment into earnings due to
disposal of VMF Shanghai
|
–
|
|
–
|
|
–
|
|
Other comprehensive
income, net of tax
|
179
|
|
43
|
|
116
|
|
Comprehensive
loss
|
(3,201)
|
|
(2,023)
|
|
(3,714)
|
|
Comprehensive
income/(loss) attributable to noncontrolling interest
|
239
|
|
280
|
|
(1,344)
|
|
Comprehensive loss
attributable to Vimicro International Corporation
|
(3,440)
|
|
(2,303)
|
|
(2,370)
|
|
|
|
|
|
|
|
Components of
share-based compensation expenses are included in the following
expense captions:
|
|
|
|
|
|
|
Research and
development, net
|
(60)
|
|
(795)
|
|
(95)
|
|
Selling and
marketing
|
(19)
|
|
(123)
|
|
(24)
|
|
General and
administrative
|
(87)
|
|
(382)
|
|
(85)
|
Total
|
(166)
|
|
(1,300)
|
|
(204)
|
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
|
|
Three months
ended
|
|
Three months
ended
|
|
March 31,
2014
|
|
December 31,
2013
|
|
March 31,
2013
|
|
GAAP
|
|
Adjust-
|
|
Non-GAAP
|
|
GAAP
|
|
Adjust-
|
|
Non-GAAP
|
|
GAAP
|
|
Adjust-
|
|
Non-GAAP
|
|
Result
|
|
ment
|
|
Result
|
|
Result
|
|
ment
|
|
Result
|
|
Result
|
|
ment
|
|
Result
|
Loss from
operations
|
(3,379)
|
|
166
|
|
(3,213)
|
|
(2,066)
|
|
1,300
|
|
(766)
|
|
(3,830)
|
|
204
|
|
(3,626)
|
Net loss attributable
to Vimicro International Corporation
|
(3,465)
|
|
166
|
|
(3,299)
|
|
(2,136)
|
|
1,300
|
|
(836)
|
|
(2,443)
|
|
204
|
|
(2,239)
|
Loss attributable to
Vimicro International Corporation per diluted ADS
|
(0.14)
|
|
0.00
|
|
(0.14)
|
|
(0.08)
|
|
0.05
|
|
(0.03)
|
|
(0.08)
|
|
0.00
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) The adjustment is
to exclude non-cash share-based compensation for employees and
non-employee.
|
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SOURCE Vimicro International Corporation