BEIJING, Aug. 26, 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 second quarter ended June 30, 2014.
Second-Quarter 2014 Results
Net revenue in the second quarter of 2014 was $24.0 million, as compared to net revenue of
$11.1 million in the year-ago quarter
and $16.4 million in the first
quarter of 2014. Surveillance revenues were $20.1 million in the second quarter, representing
83.7% of total revenues and up 272.4% year over year. Gross profit
in the second quarter was $9.1
million, as compared with $4.2
million in the year-ago quarter and $5.5 million in the first quarter of 2014. The
gross margin in the second quarter was 37.8%, as compared to 37.5%
in the year-ago quarter and 33.7% in the first quarter of 2014.
Operating expenses in the second quarter were $10.3 million, as compared to $10 million in the year-ago quarter and
$8.6 million quarter over quarter.
There were two one-time adjustments made to research and
development and general administrative expenses in the second
quarter: one was $2.5 million
recovery of previously expensed purchased equipment from R&D
expenses into finished goods for sale; the other was $3 million provision made for doubtful accounts
of accounts receivable. Research and development expenses were
$1.8 million for the quarter given
the $2.5 million adjustment, as
compared to $3.9 million in Q1.
General and administrative expenses were $6.1 million in the second quarter including
provision for doubtful accounts made, as compared to $2.4 million in Q1. Operating loss was
$1.2 million in the quarter, as
compared to the operating loss of $5.9
million in the year-ago quarter and the operating loss of
$3.1 million quarter over
quarter.
The company reported a gain on disposal of equity interest of
Vimicro Shenzhen for $1.3 million for
the quarter. Due to increased video surveillance business at our
joint venture, Zhongtianxin, in Shanxi
Province, the company reported $1.8
million equity in profit of an equity investee for the
quarter.
In the second quarter of 2014, non-GAAP net income attributable
to Vimicro International Corporation was $2.8 million, or approximately $0.10 per ADS on a diluted basis, as compared to
a non-GAAP net loss attributable to Vimicro of $5.5 million, or $0.19 per diluted ADS in the year-ago quarter.
Non-GAAP net income attributable to Vimicro International
Corporation in the second quarter of 2014 and the year-ago quarter
excludes $0.1 million and
$0.1 million of non-cash, share-based
compensation, respectively. GAAP net income attributable to Vimicro
in the second quarter was $2.7
million, or $0.10 per diluted
ADS, as compared to net loss from continuing operations of
approximately $5.7 million, or
$0.2 per diluted ADS, in the year-ago
quarter.
Balance Sheet
As of June 30, 2014, the Company
had cash and cash equivalents of approximately $22.4 million and restricted cash of $0.02 million, totaling $22.5 million. Total current assets were
approximately $108.9 million, and
Vimicro had working capital of approximately $54.4 million and $29.2
million of long-term bank loans and liabilities on its
balance sheet, as of June 30,
2014.
Dr. John Deng, Vimicro's Chairman
and Chief Executive Officer, commented, "We are very pleased to
report a solid financial and operational result for the second
quarter. We achieved significant quarterly revenue growth of more
than 100% year-over-year, and turned profitable with meaningful net
profit reported for the quarter, which further demonstrates
continued strong growth in our video surveillance business. With
the increasing number of SVAC adoption orders, continued
penetration into existing geographic bases and expansion of our
SVAC adoption into new territories and industries, we have begun
seeing our strong execution and right strategy reflected in our
financials in the second quarter. Vimicro is benefiting from
China's mega-trend of expedited
adoption of domestic IT technology and national standard. We are
seeing greater demand for video surveillance products due to ever
greater concerns and priority placed on public security by the
government in the wake of recent events. We are fully committed to
continuous enhancement of our competency and competitiveness by
investing in research and development of core chip and algorithm
technology for video surveillance market. As a co-leading developer
of SVAC national video surveillance standard and the only proven
provider of SVAC-compliant technology and solution, Vimicro will
capitalize on its first-mover advantages to further establish
itself in China's robust video
surveillance market.
Recent Events:
-Contract win of Wanbolin District SVAC-compliant Video
Surveillance Project valued at $5
million and the two contract wins totaled $14.2 million to supply 31-Street Traffic Control
Video Surveillance Projects in Taiyuan City of Shanxi Province;
-Contract win to supply SVAC-compliant video surveillance
products and systems to Handan City of Hebei Province at
$3.7 million;
-Two contract wins to supply SVAC-compliant video surveillance
products and systems to Maoming City in Guangdong Province and Lanzhou City in Gansu Province, with estimated aggregated
contract value of $4.8 million;
-In order to focus more on video surveillance business,
Raymond Zhang, CTO of Vimicro, took
over the overall management of IC design, which was previously
managed by Jun Zhu, Senior Vice
President of IC Design, who retired from the company in August.
Business Outlook
For the third quarter of 2014, the Company continues to expect
total revenues of $25 million to $27
million.
Conference Call Information
The Company will host the conference call at 8:30 a.m. (U.S. Eastern Daylight Time) /
5:30 a.m. (U.S. Pacific Daylight
Time) / 8:30 p.m. (Beijing / Hong
Kong time) on Wednesday, August 27,
2014 to discuss the Company's second-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. The conference call ID number is 2192998.
4001 200 539 (Mainland
China)
+852 5808 3202 (Hong Kong)
1855 298 3404 (United States)
+1 631 5142 526 (US-New York)
+65 6823 2299 (Singapore/International)
If you are unable to participate in the call at this time, a
replay will be available starting at 12:30
p.m. Eastern Daylight Time on Wednesday, August 27, 2014, through 11:59 a.m. Eastern Daylight Time on Wednesday, September 3, 2014. To access the
replay, dial 4001 842 240 (China)
or 1866 846 0868 (United States).
The replay call ID number is 2192998.
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/p/9mxqbn66. 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 6.1528 to $1.00 on
June 30, 2014.
Contact:
Vimicro International Corporation
Ms. Daisy Wang, IR Manager
Phone: +8610-5884-8898 Ext: 3036
E-mail: ir@vimicro.com
VIMICRO
INTERNATIONAL CORPORATION
CONSOLIDATED
BALANCE SHEETS
(Amounts expressed in
thousands of U.S. dollars, except number of shares and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
|
|
|
2014
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
22,445
|
|
23,423
|
|
|
Restricted
cash
|
|
20
|
|
584
|
|
|
Accounts and notes
receivable, net of provision for doubtful accounts of
$2,322 and $5,742 as of March 31, 2013, and June 30, 2014
respectively
|
|
18,767
|
|
23,038
|
|
|
Amounts due from
related parties, net of provision for doubtful accounts
of $2,136 and $2,136 as of March 31, 2013, and June 30,
2014,
respectively
|
|
40,093
|
|
34,879
|
|
|
Inventories,
net
|
|
18,789
|
|
13,044
|
|
|
Prepayments and other
current assets, net of provision for doubtful
accounts of $426 and $426 as of March 31, 2013 and June 30,
2014,
respectively
|
|
8,829
|
|
10,554
|
|
|
Total current
assets
|
|
108,943
|
|
105,522
|
|
|
Investments in an
equity investee
|
|
4,163
|
|
2,910
|
|
|
Property, equipment
and software, net
|
|
28,003
|
|
27,166
|
|
|
Land use
rights
|
|
15,291
|
|
15,336
|
|
|
Other
assets
|
|
1,673
|
|
2,004
|
|
Total
assets
|
|
158,073
|
|
152,938
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
26,148
|
|
24,179
|
|
|
Amounts due to
related parties
|
|
6,302
|
|
6,886
|
|
|
Taxes
payable
|
|
8,334
|
|
7,223
|
|
|
Advances from
customers
|
|
3,656
|
|
212
|
|
|
Accrued expenses and
other current liabilities
|
|
4,529
|
|
6,317
|
|
|
Deferred government
grant
|
|
5,537
|
|
5,607
|
|
Total current
liabilities
|
|
54,506
|
|
50,424
|
|
|
Deferred government
grant-non current
|
|
1,497
|
|
1,497
|
|
|
Deferred tax
liabilities
|
|
14
|
|
14
|
|
|
Product
warranty
|
|
1,644
|
|
1,327
|
|
|
Long-term bank
loan
|
|
13,002
|
|
13,004
|
|
|
Other long-term
liabilities
|
|
13,002
|
|
13,004
|
|
Total
liabilities
|
|
83,665
|
|
79,270
|
|
Equity
|
|
|
|
|
|
|
Ordinary
shares,$0.0001 par value, 500,000,000 shares authorized,
157,630,477 shares issued and 95,224,739 shares
outstanding as of
March 31 31,2013 and 158,288,809 shares issued and 95,883,071
shares outstanding as of June 30, 2014
|
|
14
|
|
14
|
|
|
Additional paid-in
capital
|
|
153,844
|
|
154,240
|
|
|
Treasury stock at
cost, 43,873,952 shares as of March 31, 2013 and
43,215,620 shares as of June 30, 2014
|
|
(16,377)
|
|
(16,948)
|
|
|
Accumulated other
comprehensive income
|
|
10,122
|
|
11,407
|
|
|
Accumulated
deficit
|
|
(92,426)
|
|
(95,133)
|
|
|
Statutory
reserve
|
|
2,782
|
|
2,782
|
|
|
Total
shareholders' equity attributable to Vimicro International
Corporation
|
|
57,959
|
|
56,362
|
|
|
Noncontrolling
interest
|
|
16,449
|
|
17,306
|
|
Total
equity
|
|
74,408
|
|
73,668
|
|
Total liabilities
and equity
|
|
158,073
|
|
152,938
|
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)
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Net
revenue
|
|
24,033
|
|
11,091
|
|
40,441
|
|
18,945
|
|
Cost of revenue
|
|
(14,942)
|
|
(6,929)
|
|
(25,828)
|
|
(13,203)
|
|
Gross
profit
|
|
9,091
|
|
4,162
|
|
14,613
|
|
5,742
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and development,
net
|
|
(1,781)
|
|
(4,004)
|
|
(5,635)
|
|
(5,186)
|
|
Selling and marketing
|
|
(2,436)
|
|
(2,661)
|
|
(4,793)
|
|
(4,672)
|
|
General and administrative
|
|
(6,055)
|
|
(3,349)
|
|
(8,485)
|
|
(5,653)
|
|
Total operating
expenses:
|
|
(10,272)
|
|
(10,014)
|
|
(18,913)
|
|
(15,511)
|
|
Loss from
operations:
|
|
(1,181)
|
|
(5,852)
|
|
(4,300)
|
|
(9,769)
|
|
Other
income:
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
(34)
|
|
-
|
|
(35)
|
|
35
|
|
Foreign exchange gain/(loss),
net
|
|
(23)
|
|
587
|
|
(515)
|
|
623
|
|
Gain on disposal of
marketable equity
securities
|
|
1,319
|
|
-
|
|
1,319
|
|
-
|
|
Gain on disposal of equity
interest
|
|
1
|
|
-
|
|
1
|
|
-
|
|
Other, net
|
|
0
|
|
9
|
|
72
|
|
10
|
|
Income/ (loss) before
income taxes and
equity in profit / (loss) of an equity investee:
|
|
82
|
|
(5,256)
|
|
(3,458)
|
|
(9,101)
|
|
Income tax (expense)
/ benefit
|
|
-
|
|
(100)
|
|
(208)
|
|
-
|
|
Income/ Loss before
equity in profit / (loss) of
an equity investee
|
|
82
|
|
(5,356)
|
|
(3,666)
|
|
(9,101)
|
|
Equity in profit /
(loss) of an equity investee,
net of tax
|
|
1,768
|
|
(239)
|
|
2,137
|
|
(324)
|
|
Net income/
(loss)
|
|
1,850
|
|
(5,595)
|
|
(1,529)
|
|
(9,425)
|
|
Net loss /(income)
attributable to
noncontrolling interest
|
|
(857)
|
|
65
|
|
(771)
|
|
(1,322)
|
|
Net income/ (loss)
attributable to Vimicro
International Corporation
|
|
2,707
|
|
(5,660)
|
|
(758)
|
|
(8,103)
|
|
Income/ (loss) per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.03
|
|
(0.05)
|
|
(0.01)
|
|
(0.07)
|
|
Diluted
|
|
0.02
|
|
(0.05)
|
|
(0.01)
|
|
(0.07)
|
|
Income/ (loss) per
ADS
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.11
|
|
(0.20)
|
|
(0.03)
|
|
(0.28)
|
|
Diluted
|
|
0.10
|
|
(0.20)
|
|
(0.03)
|
|
(0.28)
|
|
Weighted average
number of ordinary
shares Outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
95,319,165
|
|
114,809,296
|
|
95,716,466
|
|
115,118,663
|
|
Diluted
|
|
112,341,075
|
|
114,809,296
|
|
95,716,466
|
|
115,118,663
|
|
Weighted average
number of ADS
outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
23,829,791
|
|
28,702,324
|
|
23,929,117
|
|
28,779,666
|
|
Diluted
|
|
28,085,269
|
|
28,702,324
|
|
23,929,117
|
|
28,779,666
|
|
Other comprehensive
income/ (loss),
net of tax
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment, net of tax of nil
|
|
(659)
|
|
283
|
|
(480)
|
|
399
|
|
Other comprehensive income, net
of tax
|
|
(659)
|
|
283
|
|
(480)
|
|
399
|
|
Comprehensive income/ (loss)
|
|
1,191
|
|
(5,312)
|
|
(2,009)
|
|
(9,026)
|
|
Comprehensive loss/(income)
attributable to noncontrolling
interest
|
|
(231)
|
|
279
|
|
8
|
|
(1,065)
|
|
Comprehensive income/ (loss)
attributable to Vimicro International
Corporation
|
|
1,422
|
|
(5,591)
|
|
(2,017)
|
|
(7,961)
|
|
Components of
share-based
compensation expenses are included
in the following expense captions
|
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
(34)
|
|
(56)
|
|
(94)
|
|
(151)
|
|
Selling and marketing
|
|
(18)
|
|
(20)
|
|
(37)
|
|
(44)
|
|
General and administrative
|
|
(70)
|
|
(72)
|
|
(157)
|
|
(157)
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
(122)
|
|
(148)
|
|
(288)
|
|
(352)
|
SOURCE Vimicro International Corporation