BEIJING, Nov. 10, 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 third quarter ended September 30, 2014.
Third-Quarter 2014 Results
Net revenue in the third quarter of 2014 was $27.6 million, as compared to net revenue of
$24.2 million in the year-ago quarter
and $24.0 million in the second
quarter of 2014. Surveillance revenues were $23.9 million in the third quarter, representing
86.6% of total net revenues and up 28.2% year over year. Gross
profit in the third quarter was $10.9
million, as compared with $9.5
million in the year-ago quarter and $9.1 million in the second quarter of 2014. The
gross margin in the third quarter was 39.4%, as compared to 39.5%
in the year-ago quarter and 37.8% in the second quarter of
2014.
Operating expenses in the third quarter were $6.5 million, as compared to $8.8 million in the year-ago quarter and
$10.3 million quarter over quarter.
Research and development expenses were $1.3
million for the quarter net of $3.6
million government grants applied (research and development
expenses would have been $4.9 million
without government grants for the quarter), as compared to
$4.1 million year over year and
$1.8 million quarter over quarter.
Sales and marketing expenses were $2.7
million for the quarter, as compared to $2.2 million year over year and $2.4 million quarter over quarter. General and
administrative expenses were $2.4
million in the third quarter, as compared to $2.5 million year over year and $6.1 million quarter over quarter.
Operating income was $4.4 million
in the quarter, as compared to the operating income of $0.7 million in the year-ago quarter and the
operating loss of $1.2 million
quarter over quarter.
The equity in profit of an equity investee was $0.5 million, as compared to $1.9 million year over year and $1.8 million quarter over quarter. This equity
pick-up is from the Company's joint venture, Shanxi Zhongtianxin
Science and Technology Co. Ltd.
In the third quarter of 2014, non-GAAP net income attributable
to Vimicro International Corporation was $3.5 million, or approximately $0.12 per ADS on a diluted basis, as compared to
a non-GAAP net income attributable to Vimicro of $2.0 million, or $0.06 per diluted ADS in the year-ago quarter.
Non-GAAP net income attributable to Vimicro International
Corporation in the third quarter of 2014 and the year-ago quarter
excludes $0.1 million and
$0.2 million of non-cash, share-based
compensation, respectively. GAAP net income attributable to Vimicro
in the third quarter was $3.3
million, or $0.12 per diluted
ADS, as compared to net income of $1.8
million, or $0.06 per diluted
ADS, in the year-ago quarter.
Balance Sheet
As of September 30, 2014, the
Company had cash and cash equivalents of approximately $27.6 million and restricted cash of $0.03 million, totaling $27.6 million. Total current assets were
approximately $142.5 million, and
Vimicro had working capital of approximately $64.1 million and $29.9
million of long-term bank loans and liabilities on its
balance sheet, as of September 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 third
quarter. For the nine-month period ended September 30, 2014, we achieved significant
non-GAAP net income of $3 million and
$0.11 per diluted ADS, while
maintaining a decent revenue growth of 57.9% on a year-over-year
basis, driven by strong growth in our video surveillance business.
With continued contract wins from our traditional territories such
as Shanxi Province, and entrance
into new geographic base such as Hunan
Province, we are seeing greater demand for SVAC-compliant
video surveillance products across the country. We are confident
that our financials will continue to show satisfactory results
going forward, while benefiting from China's mega-trend of expedited adoption of
domestic IT technology and national standard. 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:
-Multiple wins of competitive bid in Taiyuan City, Shanxi Province, to provide SVAC-compliant
video surveillance system and products totaling to$52.2
million;
-Winning of competitive bid in Chenzhou City, Hunan Province, with contract value of
$29.2 million signaling the first
city-wide adoption of SVAC national standard in Hunan Province;
-Our joint venture, Shanxi Zhongtianxin Science and Technology
Co. Ltd., securing a $65 million
revolving line of credit, to enable Vimicro to maintain the current
pace of market expansion in China's robust video surveillance market;
-Strategic cooperation with Inspur (Langchao), a leading server
and storage equipment manufacturer and cloud computer solution
provider in China, to jointly
tackle China's video surveillance
market in areas of solution and application development,
maintenance and services, sales and marketing;
-Ranked number four in the newly released Top 100 Security and
Surveillance Manufacturers in China, behind the top three companies of
Hikvision, Dahua, and Huawei;
-The release of next generation of our flagship Starlight Camera
at 2014 International Exhibition on Public Safety and Security in
Beijing;
-A series of investor events in China, including participating in Industrial
Securities TMT Investor Forum in Shenzhen and non-deal roadshow in Shenzhen, Shanghai, and Beijing, following initial coverage by
Industrial Securities in China
Business Outlook
For the fourth quarter of 2014, the Company expects the total
net revenues in the range of $30 million to
$32 million.
Conference Call Information
The Company will host the conference call at 8:00 a.m. (U.S. Eastern Daylight Time) /
5:00 a.m. (U.S. Pacific Daylight
Time) / 9:00 p.m. (Beijing / Hong
Kong time) on Tuesday, November 11,
2014 to discuss its third-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 9708621.
4001 200 539 (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 12:00
Eastern Daylight Time on Tuesday,
November 11, 2014, through 23:59 a.m.
Eastern Daylight Time on Monday,
November 17, 2014. To access the replay, dial 4001 842 240
(China) or 1866 846 0868
(United States). The replay call
ID number is 9708621.
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/y4bp6czb. 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 operations, non-GAAP net income/(loss) from
operations attributable to Vimicro International Corporation and
non-GAAP net income/(loss) from 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 its business for
the foreseeable future. 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 People's Bank of China, Assets and liabilities are translated
at the exchange rates on the balance sheet date, equity amounts are
translated at historical exchange rates, and revenues, expenses,
gains, and losses are translated using the average rate for the
period. Translation adjustments arising from these are reported as
foreign currency translation adjustments and have been shown as a
component of other comprehensive income or loss in the consolidated
statements of comprehensive income.
VIMICRO
INTERNATIONAL CORPORATION
|
CONSOLIDATED
BALANCE SHEETS
|
(Amounts expressed in
thousands of U.S. dollars, except number of shares and per share
data)
|
|
|
|
|
|
|
|
September 30,
|
|
June 30,
|
|
|
2014
|
|
2014
|
|
|
(Unaudited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash
and cash equivalents
|
|
27,585
|
|
22,445
|
Restricted cash
|
|
31
|
|
20
|
Accounts and notes receivable, net of provision
|
|
25,453
|
|
18,767
|
Amounts due from related parties, net of provision
|
|
64,542
|
|
40,093
|
Inventories, net
|
|
14,544
|
|
18,789
|
Prepayments and other current assets, net of provision
|
|
10,394
|
|
8,829
|
Total current assets
|
|
142,549
|
|
108,943
|
Investments in an equity investee
|
|
2,191
|
|
4,163
|
Property, equipment and software, net
|
|
28,536
|
|
28,003
|
Land
use rights
|
|
15,249
|
|
15,291
|
Other assets
|
|
1,638
|
|
1,673
|
Total assets
|
|
190,163
|
|
158,073
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
30,648
|
|
26,148
|
Amounts due to related parties
|
|
6,549
|
|
6,302
|
Taxes payable
|
|
12,280
|
|
8,334
|
Advances from customers
|
|
2,041
|
|
3,656
|
Accrued expenses and other current liabilities
|
|
4,715
|
|
4,529
|
Deferred government grant
|
|
22,237
|
|
5,537
|
Total current liabilities
|
|
78,470
|
|
54,506
|
Deferred government grant-non current
|
|
1,497
|
|
1,497
|
Deferred tax liabilities
|
|
14
|
|
14
|
Product warranty
|
|
2,365
|
|
1,644
|
Long-term bank loan
|
|
13,003
|
|
13,002
|
Other long-term liabilities
|
|
13,003
|
|
13,002
|
Total liabilities
|
|
108,352
|
|
83,665
|
Equity
|
|
|
|
|
Ordinary shares
|
|
14
|
|
14
|
Additional paid-in capital
|
|
153,398
|
|
153,844
|
Treasury stock at cost, net
|
|
(13,425)
|
|
(16,377)
|
Accumulated other comprehensive income
|
|
10,132
|
|
10,122
|
Accumulated deficit
|
|
(89,098)
|
|
(92,426)
|
Statutory reserve
|
|
2,782
|
|
2,782
|
Total shareholders' equity attributable to Vimicro International
Corporation
|
|
63,803
|
|
57,959
|
Noncontrolling interest
|
|
18,008
|
|
16,449
|
Total equity
|
|
81,811
|
|
74,408
|
Total liabilities and equity
|
|
190,163
|
|
158,073
|
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
|
|
Nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Net
revenue
|
|
27,600
|
|
24,153
|
|
68,041
|
|
43,098
|
Cost of
revenue
|
|
(16,722)
|
|
(14,621)
|
|
(42,550)
|
|
(27,824)
|
Gross
profit
|
|
10,878
|
|
9,532
|
|
25,491
|
|
15,274
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
(1,304)
|
|
(4,053)
|
|
(6,939)
|
|
(9,239)
|
Selling and
marketing
|
|
(2,744)
|
|
(2,241)
|
|
(7,537)
|
|
(6,913)
|
General and
administrative
|
|
(2,407)
|
|
(2,536)
|
|
(10,892)
|
|
(8,189)
|
Total operating
expenses:
|
|
(6,455)
|
|
(8,830)
|
|
(25,368)
|
|
(24,341)
|
Income/(Loss) from
operations:
|
|
4,423
|
|
702
|
|
123
|
|
(9,067)
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(41)
|
|
(176)
|
|
(76)
|
|
(141)
|
Foreign exchange
(loss)/gain, net
|
|
(3)
|
|
219
|
|
(518)
|
|
842
|
Gain on disposal of
equity interest
|
|
-
|
|
-
|
|
1,319
|
|
-
|
Other, net
|
|
4
|
|
52
|
|
77
|
|
62
|
Income/ (loss) before
income taxes and equity in profit
of an equity investee:
|
|
4,383
|
|
797
|
|
925
|
|
(8,304)
|
Income tax
(expense)
|
|
(44)
|
|
-
|
|
(252)
|
|
-
|
Income/ Loss before
equity in profit of an equity investee
|
|
4,339
|
|
797
|
|
673
|
|
(8,304)
|
Equity in profit of
an equity investee, net of tax
|
|
547
|
|
1,947
|
|
2,684
|
|
1,623
|
Net income/
(loss)
|
|
4,886
|
|
2,744
|
|
3,357
|
|
(6,681)
|
Net (income)/loss
attributable to noncontrolling interest
|
|
1,558
|
|
923
|
|
787
|
|
(399)
|
Net income/ (loss)
attributable to Vimicro
International Corporation
|
|
3,328
|
|
1,821
|
|
2,570
|
|
(6,282)
|
Income/ (loss) per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
0.03
|
|
0.02
|
|
0.03
|
|
(0.05)
|
Diluted
|
|
0.03
|
|
0.02
|
|
0.02
|
|
(0.05)
|
Income/ (loss) per
ADS
|
|
|
|
|
|
|
|
|
Basic
|
|
0.14
|
|
0.06
|
|
0.11
|
|
(0.22)
|
Diluted
|
|
0.12
|
|
0.06
|
|
0.10
|
|
(0.22)
|
Weighted average
number of ordinary shares Outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
95,883,071
|
|
114,892,652
|
|
95,801,223
|
|
115,082,848
|
Diluted
|
|
111,272,732
|
|
122,741,628
|
|
106,605,080
|
|
117,699,174
|
Weighted average
number of ADS outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
23,970,768
|
|
28,723,163
|
|
23,950,306
|
|
28,770,712
|
Diluted
|
|
27,818,183
|
|
30,685,407
|
|
26,651,270
|
|
29,424,793
|
Other comprehensive
income/ (loss), net of tax
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment, net of tax of nil
|
|
11
|
|
84
|
|
(1,097)
|
|
483
|
Other comprehensive
income, net of tax
|
|
11
|
|
84
|
|
(1,097)
|
|
483
|
Comprehensive income/
(loss)
|
|
4,897
|
|
2,828
|
|
2,260
|
|
(6,198)
|
Comprehensive
loss/(income) attributable to noncontrolling interest
|
|
1,559
|
|
1,003
|
|
939
|
|
(62)
|
Comprehensive income/
(loss) attributable to Vimicro International Corporation
|
|
3,338
|
|
1,825
|
|
1,321
|
|
(6,136)
|
Components of
share-based compensation expenses are included in the following
expense captions
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
(76)
|
|
(55)
|
|
(170)
|
|
(206)
|
Selling and
marketing
|
|
(17)
|
|
(18)
|
|
(54)
|
|
(62)
|
General and
administrative
|
|
(45)
|
|
(82)
|
|
(202)
|
|
(239)
|
|
|
|
|
|
|
|
|
|
Total
|
|
(138)
|
|
(155)
|
|
(426)
|
|
(507)
|
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SOURCE Vimicro International Corporation