BEIJING, April 30 /Xinhua-PRNewswire/ -- Vimicro International Corporation (Nasdaq: VIMC), a leading fabless semiconductor company that designs and develops multimedia semiconductor products and solutions, today announced financial results for the fourth quarter of 2007, the fiscal year ended December 31, 2007 and the first quarter ended March 31, 2008.
( Logo: http://www.prnasia.com/sa/200705282028.jpg )
Fourth Quarter and Fiscal Year 2007
Net revenue in the fourth quarter of 2007 was $24.3 million as compared to $25.1 million reported in the third quarter of 2007 and $34.2 million in the fourth quarter of 2006.
Net income in the fourth quarter of 2007, prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), was $1.4 million, compared with net income of $0.3 million in the third quarter of 2007 and $1.6 million in the fourth quarter of 2006. Diluted earnings per ADS (each representing four ordinary shares) were $0.04, compared with earnings per ADS of $0.01 in the third quarter of 2007 and $0.04 in the fourth quarter of 2006.
Non-GAAP net income in the fourth quarter, which excluded $0.5 million in share-based compensation expense, was $1.9 million, compared to net income of $1.9 million in the third quarter of 2007 and $2.9 million in the fourth quarter of 2006. Non-GAAP diluted earnings per ADS for the fourth quarter of 2007 were $0.05, compared with earnings per ADS of $0.05 in the third quarter of 2007 and $0.08 in the fourth quarter of 2006.
For the fiscal year ended December 31, 2007, net revenue was $92.8 million as compared to $126.6 million in the fiscal year ended December 31, 2006. Fiscal year 2007 net loss, prepared in accordance with U.S. GAAP, was $2.0 million, compared with net income of $9.7 million in fiscal year 2006. Non-GAAP net income for fiscal year 2007 was $2.9 million, which excluded $4.9 million for the amortization of stock-based compensation expenses, as compared to non-GAAP net income of $13.2 million in 2006, which excluded $3.5 million for the amortization of stock-based compensation expenses. Diluted loss per ADS for the fiscal year 2007 was ($0.06) and non-GAAP diluted earnings per ADS for the fiscal year 2007 were $0.08.
First Quarter 2008
Net revenue in the first quarter of 2008 was $16.2 million as compared to $16.9 million reported in the first quarter of 2007.
First quarter 2008 net loss prepared in accordance with U.S. GAAP was $3.2 million, compared with a loss of $3.8 million in the first quarter of 2007. The US GAAP loss per ADS (each representing four ordinary shares) was ($0.09), compared with a loss of ($0.11) per ADS in the first quarter of 2007.
Non-GAAP net loss in the first quarter, which excluded $1.8 million in share-based compensation expense, was $1.4 million compared with a loss of $2.5 million in the first quarter of 2007. Non-GAAP loss per ADS for the first quarter of 2008 was ($0.04) compared with a loss of ($0.07) per ADS in the first quarter of 2007.
"2007 was a challenging year for Vimicro as a combination of factors impacted our results throughout the year," commented Dr. John Deng, Vimicro's Chairman and Chief Executive Officer. "Our revenue during the year was primarily affected by our strategic decision to transition away from third-party sensor business and to apply a greater focus on our own products. In addition, we also experienced pressure on average selling prices resulting from a competitive environment in our PC camera business. However, despite these factors, we were able to maintain our market share and leading position within the PC camera and mobile multimedia markets, while at the same time we invested heavily in R&D to further strengthen our product pipeline and expand our addressable markets."
Deng further commented, "Additionally, similar to the first quarter last year, our results were impacted by seasonality within our customer base and end markets as well as that associated with the New Year holiday in China. Looking forward to the second quarter and the remainder of 2008, we are encouraged by our prospects and expect healthy growth throughout the year driven by strength within our embedded notebook camera product line, as well as growth within the mobile, personal media player and surveillance camera markets."
Business Outlook
For the second quarter of 2008, Vimicro expects revenue to range between $22 million and $24 million.
Fourth Quarter, Fiscal Year 2007 and First Quarter 2008 Financial Results Conference Call and Web Cast
Vimicro will host a conference call and Web cast today, April 29, 2008, at 5:30 p.m., Eastern Time, to discuss the Company's fourth quarter 2007, fiscal year 2007 and first quarter 2008 financial results. Investors and other interested parties may access the call by dialing 800-638-4930 (or +1-617-614-3944 outside of the U.S.), with the pass code 82115850, at least 10 minutes prior to the start of the call.
In addition, an audio Web cast will be available in the Investor Relations section of the Company's Web site at http://www.vimicro.com . Following the live Web cast, an archived version will be available on the Company's Web site. A telephone replay of the call will also be available approximately two hours after the call and will be available until May 6, 2008 at midnight (ET). The replay number is 888-286-8010 with a pass code of 29162053. International callers should dial +1-617-801-6888 and enter the same pass code at the prompt.
About Vimicro International Corporation
Vimicro International Corporation is a worldwide leading fabless semiconductor company that designs, develops and markets proprietary embedded multimedia signal processing chips and solutions that enable multimedia applications for mobile phones over 2.5G/3G networks and PCs over broadband Internet. 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: our limited history of achieving net profit; our growth strategies; our future business development, results of operations and financial condition; our ability to develop and sell mobile multimedia processors that meet changing consumer preferences and industry standards; decrease in the demand for our notebook and PC camera multimedia processors and third-party image sensors which we bundle with some of our PC camera multimedia processors; that multimedia opportunities associated with the 3G build out in China will make a significant contribution to our longer-term growth; our ability to increase our penetration of the PC and notebook multimedia markets; our ability to secure sufficient foundry capacity in a timely manner; our ability to maintain existing customers and attract new customers; and the expected growth of the mobile multimedia processor market. Further information regarding these and other risks is included in our 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 April 29, 2008, 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 net income and non-GAAP diluted net earnings 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 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 as of December 31, 2007 and March 31, 2008, depending on the period discussed (the fourth quarter of 2007 and the first quarter of 2008), which were RMB 7.3046 to US$1.00 and RMB 7.019 to US$1.00, respectively.
Vimicro International Corporation
Consolidated Statements of Income
(Amounts expressed in thousands of U.S. dollars, except number of
share data)
2008 Q1 2007 Q4 2007 Q3
(unaudited) (unaudited) (unaudited)
Net revenue 16,234 24,281 25,096
Cost of revenue (11,108) (16,940) (17,301)
Gross profit 5,126 7,341 7,795
Operating expenses*
Research and
development, net (5,668) (4,068) (5,244)
Sales and marketing (1,126) (897) (1,208)
General and
administrative (2,963) (2,642) (2,456)
(Loss) income from
operations (4,631) (266) (1,113)
Other income (expense):
Interest income 772 831 1,009
Others, net 631 697 373
(Loss) income before
income taxes and share
of loss of associated
company and minority
interest (3,228) 1,262 269
Income taxes expense -- 99 (5)
Net (loss) income
before share of loss
of associated company
and minority interest (3,228) 1,361 264
Share of gain of
associated company,
net of tax -- -- 1
Net (loss) income
before minority
interest (3,228) 1,361 265
Net (loss) income (3,228) 1,361 265
Other comprehensive
income (loss):
Foreign currency
translation adjustment 2,392 1,565 665
Comprehensive (loss)
income (836) 2,926 930
(Loss) income per share
--Basic (0.02) 0.01 0.00
--Diluted (0.02) 0.01 0.00
(Loss) income per ADS
--Basic (0.09) 0.04 0.01
--Diluted (0.09) 0.04 0.01
Weighted average number
of ordinary shares
outstanding
--Basic 140,059,154 139,947,513 139,912,263
--Diluted 140,059,154 143,316,622 143,674,362
Weighted average number
of ADS outstanding
--Basic 35,014,788 34,986,878 34,978,066
--Diluted 35,014,788 35,829,155 35,918,590
*Components of share-
based compensation
expenses are included
in the following
expense captions:
Research and development (700) (17) (849)
Sales and marketing (261) (46) (211)
General and administrative (835) (511) (592)
2007 Q1 2006 Q4
(unaudited) (unaudited)
Net revenue 16,880 34,194
Cost of revenue (11,633) (24,993)
Gross profit 5,247 9,201
Operating expenses*
Research and development, net (5,708) (4,909)
Sales and marketing (1,394) (1,373)
General and administrative (2,776) (2,326)
(Loss) income from operations (4,631) 593
Other income (expense):
Interest income 1,096 1,170
Others, net (353) (267)
(Loss) income before income taxes and
share of loss of associated company
and minority interest (3,888) 1,496
Income taxes expense 53 133
Net (loss) income before share of
loss of associated company and
minority interest (3,835) 1,629
Share of gain of associated company,
net of tax -- (28)
Net (loss) income before minority
interest (3,835) 1,601
Net (loss) income (3,835) 1,601
Other comprehensive income (loss):
Foreign currency translation
adjustment 453 563
Comprehensive (loss) income (3,382) 2,164
(Loss) income per share
--Basic (0.03) 0.01
--Diluted (0.03) 0.01
(Loss) income per ADS
--Basic (0.11) 0.05
--Diluted (0.11) 0.04
Weighted average number of ordinary
shares outstanding
--Basic 139,435,920 138,637,328
--Diluted 139,435,920 146,334,096
Weighted average number of ADS
outstanding
--Basic 34,858,980 34,659,332
--Diluted 34,858,980 36,583,524
* Components of share-based
compensation expenses are
included in the following
expense captions:
Research and development (682) (698)
Sales and marketing (206) (196)
General and administrative (448) (394)
FY2007 FY2006
(unaudited) (unaudited)
Net revenue 92,753 126,564
Cost of revenue (64,290) (86,183)
Gross profit 28,463 40,381
Operating expenses*
Research and development, net (20,039) (17,320)
Sales and marketing (4,668) (5,365)
General and administrative (10,431) (10,863)
(Loss) income from operations (6,675) 6,833
Other income (expense):
Interest income 4,001 4,281
Others, net 570 (881)
(Loss) income before income taxes and
share of loss of associated company
and minority interest (2,104) 10,233
Income taxes expense 99 (530)
Net (loss) income before share of
loss of associated company and
minority interest (2,005) 9,703
Share of gain of associated company,
net of tax 1 (31)
Net (loss) income before minority
interest (2,004) 9,672
Net (loss) income (2,004) 9,672
Other comprehensive income (loss):
Foreign currency translation
adjustment 3,380 1,391
Comprehensive (loss) income 1,376 11,063
(Loss) income per share
--Basic (0.01) 0.07
--Diluted (0.01) 0.07
(Loss) income per ADS
--Basic (0.06) 0.28
--Diluted (0.06) 0.26
Weighted average number of ordinary
shares outstanding
--Basic 139,709,890 137,592,825
--Diluted 139,709,890 146,962,266
Weighted average number of ADS
outstanding
--Basic 34,927,472 34,398,206
--Diluted 34,927,472 36,740,567
* Components of share-based
compensation expenses are
included in the following
expense captions:
Research and development (2,240) (2,266)
Sales and marketing (654) (436)
General and administrative (2,053) (786)
Vimicro International Corporation
Consolidated Balance Sheets
(Amounts expressed in thousands of U.S. dollars, except number of share
data)
3/31/2008 12/31/2007 9/30/2007
(unaudited) (unaudited) (unaudited)
Assets
Current assets:
Cash 114,414 116,958 119,849
Accounts receivable, net 3,399 5,842 6,200
Notes receivable -- 297 97
Inventories, net 17,407 13,443 12,418
Prepayments and other current
assets, net 3,989 2,898 2,481
Deferred tax assets 294 283 177
Total current assets 139,503 139,721 141,222
Investment in an associated company 164 157 153
Property, equipment and software,
net 8,361 8,249 9,668
Other assets 8,160 5,904 1,884
Total assets 156,188 154,031 152,927
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable 8,543 7,853 8,150
Taxes payable 1,271 1,226 1,058
Advances from customers 767 154 137
Due to an associated company 60 60 58
Accrued expenses and other
current liabilities 3,359 3,510 5,694
Deferred grants -- -- 67
Total current liabilities 14,000 12,803 15,164
Non-current liabilities:
Deferred tax liabilities 26 26 30
Total liabilities 14,026 12,829 15,194
Shareholders' equity:
Ordinary shares, $.0001 par
value. 140,318,046 and
140,301,378 shares issued and
outstanding as of March 31, 2008
and December 31, 2007, respectively 14 14 14
Additional paid-in capital 138,214 136,418 135,875
Accumulated other comprehensive
income 7,759 5,367 3,802
Accumulated deficit (6,607) (3,379) (4,690)
Statutory reserve 2,782 2,782 2,732
Total shareholders' equity 142,162 141,202 137,733
Total liabilities, redeemable
convertible preferred shares
and shareholders' equity 156,188 154,031 152,927
3/31/2007 12/31/2006
(unaudited) (audited)
Assets
Current assets:
Cash 114,717 114,834
Accounts receivable, net 4,315 6,315
Notes receivable 1,191 2,435
Inventories, net 11,893 11,955
Prepayments and other current
assets, net 2,646 3,353
Deferred tax assets 224 170
Total current assets 134,986 139,062
Investment in an associated company 148 146
Property, equipment and software, net 10,119 8,498
Other assets 834 644
Total assets 146,087 148,350
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 5,980 5,379
Taxes payable 1,085 1,500
Advances from customers 238 246
Due to an associated company 56 56
Accrued expenses and other current
liabilities 5,760 6,072
Deferred grants 127 210
Total current liabilities 13,246 13,463
Non-current liabilities:
Deferred tax liabilities 30 30
Total liabilities 13,276 13,493
Shareholders' equity:
Ordinary shares, $.0001 par value.
140,318,046 and 140,301,378
outstanding as of March 31, 2008
and December 31, 2007, respectively 14 14
Additional paid-in capital 132,785 131,449
Accumulated other comprehensive
income 2,440 1,987
Accumulated deficit (5,160) (1,325)
Statutory reserve 2,732 2,732
Total shareholders' equity 132,811 134,857
Total liabilities, redeemable
convertible preferred shares
and shareholders' equity 146,087 148,350
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 March Three months ended
31, 2008 December 31, 2007
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
Result ment Result Result ment Result
(Loss) income from
operations (4,631) 1,796 (2,835) (266) 574 308
Net (loss) income (3,228) 1,796 (1,432) 1,361 574 1,935
Diluted (loss)
income per ADS (0.09) 0.05 (0.04) 0.04 0.01 0.05
Three months ended Three months ended
September 30, 2007 March 31, 2007
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
Result ment Result Result ment Result
(Loss) income from
operations (1,113) 1,653 540 (4,631) 1,336 (3,295)
Net (loss) income 265 1,653 1,918 (3,835) 1,336 (2,499)
Diluted (loss)
income per ADS 0.01 0.04 0.05 (0.11) 0.04 (0.07)
Three months ended
December 31, 2006
GAAP Adjust- Non-GAAP
Result ment Result
(Loss) income from
operations 593 1,288 1,881
Net (loss) income 1,601 1,288 2,889
Diluted (loss)
income per ADS 0.04 0.04 0.08
Twelve months ended Twelve months ended
December 31, 2007 December 31, 2006
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
Result ment Result Result ment Result
(Loss) income from
operations (6,675) 4,947 (1,728) 6,833 3,488 10,321
Net (loss) income (2,004) 4,947 2,943 9,672 3,488 13,160
Diluted (loss)
income per ADS (0.06) 0.14 0.08 0.26 0.10 0.36
(*) The adjustment is to exclude non-cash for share-based compensation for
employees and non-employees.
