Parade Technologies Reports Fourth Quarter and Fiscal 2017 Financial Results

Parade Technologies, Ltd. (Taipei Exchange: 4966.TWO), a leading high-speed interface IC supplier, today announced financial results for the fourth fiscal quarter and fiscal year 2017 ended December 31, 2017, and provided guidance for the first quarter of fiscal year 2018.

Consolidated revenue was US$88.25 million and consolidated net income was US$14.51 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.19 (NT$5.73) and US$0.18 (NT$5.51), respectively. These results compared to consolidated revenue US$77.02 million and consolidated net income of US$10.90 million, or US$0.14 (NT$4.52) and US$0.14 (NT$4.40) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the fourth quarter of 2017 consolidated revenue decreased 2.62% sequentially and was up 14.58% year-over-year.

The gross profit in the fourth quarter of 2017 was US$35.72 million, representing a decrease of 4.09% from the previous quarter and an increase of 15.03% compared to the same quarter of last year.

The Company also reported financial results for fiscal year 2017. Consolidated revenue was US$340.43 million, representing an increase of 20.59% from US$282.29 million in the prior year. Gross profit was US$137.71 million and operating income was US$64.77 million. Net income for fiscal year 2017 was US$63.57 million, or US$0.84 (NT$25.49) per basic share and US$0.81 (NT$24.55) per fully diluted share. These results compared with net income of US$42.02 million, or US$0.56 (NT$18.04) per basic share and US$0.54 (NT$17.58) per fully diluted share in the prior year.

On December 5, 2017, Parade announced a new addition to its USB 3.1 Gen 2 10Gbit/sec retimer product family. The PS8817 features two bidirectional USB Gen-2 ports through the integration of four retimer channels, providing two downstream and two upstream connections. It also supports both Gen 2 (10Gbit/sec) as well as Gen 1 (5Gbit/sec) operation and the Intel DCI (Direct Connect Interface) for closed-chassis debugging over the USB port. The PS8817 primarily targets USB Host systems such as PCs and workstation/servers, but can also be applied to USB Device systems including docking stations.

Based on current business outlook, Parade is providing the following guidance for the first quarter of fiscal 2018:

  • Revenue: US$77.5 ~84.5 Million
  • Gross Margin: 40% ~43%
  • Operating Expense: US$18.25 ~19.25 Million

The financial figures detailed above for the fourth quarter of 2017 and for the year ended December 31, 2017 have not been audited or reviewed by independent accountants.

About Parade Technologies, Ltd.

Parade Technologies, Ltd. is a leading supplier of mixed-signal ICs for a variety of popular display and high-speed interface standards used in computers, consumer electronics and display panels. The fabless semiconductor company was founded in 2005 and publicly listed on Taipei Exchange (“TPEx”) in 2011 (stock code: 4966). Parade’s portfolio of IC products serves the growing demand for HDMI™, DisplayPort™, SATA, and USB ICs for display, storage and interface applications.

In addition to being a technology innovator, Parade is an active participant and leader in industry standards-setting organizations. Parade Technologies, Inc., a wholly owned US-based subsidiary of Parade Technologies, Ltd., is a member of VESA (Video Electronics Standard Association). Parade Technologies, Inc. has made key contributions to the development of VESA’s DisplayPort™ digital video interface standard.

Parade leverages its close relationships with market leading Tier-1 OEMs to develop ICs that provide unique system capabilities. Many of the company’s devices integrate proprietary technologies that offer superior system signal integrity, advanced system integration and enhanced power efficiency. As a result of the company’s “standards-plus” design philosophy, Parade ICs have been designed into products offered by nearly every leading computer and display vendor worldwide.

Parade Technologies, Ltd. and Subsidiaries.

The reader is advised that these consolidated financial statements have been prepared originally in NT$ and conformed with the adoption of IFRSs. In the event of any differences between NT$ and US$ version, the NT$ version shall prevail.

         

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

USD in Thousands

NTD in Thousands

Sequential Quarter   Three Months ended   Twelve Months ended Sequential Quarter   Three Months ended   Twelve Months ended
Dec 31,   Sept 30, Dec 31,   Dec 31, Dec 31,   Dec 31, Dec 31,   Sept 30, Dec 31,   Dec 31, Dec 31,   Dec 31,
2017 2017 2017 2016 2017 2016 2017 2017 2017 2016 2017 2016
 
Revenue 88,248 90,624 88,248 77,017 340,428 282,294 2,657,137 2,743,199 2,657,137 2,446,822 10,351,803 9,106,654
Cost of goods sold   52,528   53,381     52,528   45,963   202,719   166,376   1,581,628   1,615,839     1,581,628   1,460,249   6,164,614   5,367,234
Gross profit   35,720   37,243     35,720   31,054   137,709   115,918   1,075,509   1,127,360     1,075,509   986,573   4,187,189   3,739,420
Research & development expenses 12,037 11,299 12,037 11,212 45,647 44,410 362,427 342,025 362,427 356,194 1,388,734 1,432,375
Sales & marketing expenses 4,345 4,309 4,345 4,129 16,670 16,714 130,829 130,437 130,829 131,176 507,068 539,294
General & administrative expenses   2,850   2,869     2,850   2,268   10,618   8,712   85,818   86,853     85,818   72,066   322,865   281,170
Total operating expenses   19,232   18,477     19,232   17,609   72,935   69,836   579,074   559,315     579,074   559,436   2,218,667   2,252,839
Operating income   16,488   18,766     16,488   13,445   64,774   46,082   496,435   568,045     496,435   427,137   1,968,522   1,486,581
Non-operating income and expenses   59   (19 )   59   215   56   319   1,780   (576 )   1,780   6,836   1,705   10,160
Income before income taxes   16,547   18,747     16,547   13,660   64,830   46,401   498,215   567,469     498,215   433,973   1,970,227   1,496,741
Income tax (benefit) expense   2,035   (3,539 )   2,035   2,760   1,256   4,385   61,273   (107,128 )   61,273   87,684   38,518   140,605
Net income   14,512   22,286     14,512   10,900   63,574   42,016   436,942   674,597     436,942   346,289   1,931,709  

1,356,136

EPS - Basic (In Dollar) $ 0.19 $ 0.29 $ 0.19 $ 0.14 $ 0.84 $ 0.56 $ 5.73 $ 8.89 $ 5.73 $ 4.52 $ 25.49 $ 18.04
Shares used in computing EPS-Basic (In thousands) 76,235 75,904 76,235 76,667 75,793 75,190 76,235 75,904 76,235 76,667 75,793 75,190
EPS - Diluted (In Dollar) $ 0.18 $ 0.28 $ 0.18 $ 0.14 $ 0.81 $ 0.54 $ 5.51 $ 8.55 $ 5.51 $ 4.40 $ 24.55 $ 17.58
Shares used in computing EPS-Diluted (In thousands)   79,343   78,859     79,343   78,652   78,683   77,124   79,343   78,859     79,343   78,652   78,683   77,124
 
   
UNAUDITED CONSOLIDATED BALANCE SHEETS USD in Thousands NTD in Thousands
As of December 31, 2017 and 2016 Dec 31,   Dec 31, Dec 31,   Dec 31,
2017 2016 2017 2016
Current assets
Cash & cash equivalents 160,055 124,987 4,763,227 4,030,839
Accounts receivable, net 52,272 47,558 1,555,625 1,533,751
Inventories, net 34,275 26,329 1,020,015 849,120
Other current assets 9,681   7,533   288,120   242,910  
Total current assets 256,283   206,407   7,626,987   6,656,620  
Non-current assets
Property, plant and equipment, net 8,786 4,417 261,470 142,448
Intangible assets 88,725 92,387 2,640,450 2,979,491
Deferred income tax assets 1,300 1,618 38,694 52,166
Other non-current assets 818   845   24,344   27,247  
Total non-current assets 99,629   99,267   2,964,958   3,201,352  
Total Assets 355,912   305,674   10,591,945   9,857,972  
 
Current Liabilities
Accounts payable 25,788 30,025 767,441 968,324
Other payables 20,633 16,895 614,049 544,858
Current income tax liabilities 19,678 16,426 585,621 529,731
Other current liabilities 8,280   9,712   246,422   313,227  
Total current liabilities 74,379   73,058   2,213,533   2,356,140  
Equity
Ordinary shares 25,812 25,457 783,766 773,049
Capital reserves 84,562 71,166 2,562,661 2,159,549
Retained earnings 190,921 150,485 5,874,547 4,638,207
Other equity (19,762 ) (14,492 ) (842,562 ) (68,973 )
Total equity 281,533   232,616   8,378,412   7,501,832  
Total liabilities and equity 355,912   305,674   10,591,945   9,857,972  
 
   
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS USD in Thousands NTD in Thousands
For twelve months ended December 31, 2017 and 2016 Dec 31,   Dec 31, Dec 31,   Dec 31,
2017 2016 2017 2016

Cash flows from operating activities

Income before income tax for the year 64,830 46,401 1,970,227 1,496,741
Depreciation and amortization 9,897 9,041 301,170 291,670
Share-based compensation cost 6,577 4,610 200,144 148,708
Interest income (61 ) (45 ) (1,844 ) (1,460 )
Income and expenses having no effect on cash flows 16,413   13,606   499,470   438,918  
Accounts receivable (4,714 ) (9,396 ) (140,294 ) (303,014 )
Inventories (7,945 ) (7,634 ) (236,455 ) (246,187 )
Other current assets (544 ) 280 (16,221 ) 9,038
Other non-current assets -   194   -   6,266  
Net changes in assets relating to operating activities (13,203 ) (16,556 ) (392,970 ) (533,897 )
Accounts payable (4,238 ) 8,646 (126,119 ) 278,843
Other payables 3,739 4,794 111,259 154,608
Other current liabilities (1,432 ) 1,495   (42,621 ) 48,206  
Net changes in liabilities relating to operating activities (1,931 ) 14,935   (57,481 ) 481,657  
Cash provided by operations 66,109   58,386   2,019,246   1,883,419  
Interest received 55 39 1,661 1,263
Interest payable - (95 ) - (3,087 )
Income tax paid (3,544 ) (529 ) (107,835 ) (17,076 )
Income tax received 5,120   -   156,380   -  
Net cash provided by operating activities 67,740   57,801   2,069,452   1,864,519  

Cash flows from investing activities

Acquisition of equipment (6,610 ) (1,857 ) (201,126 ) (59,919 )
Acquisition of intangible assets (3,823 ) (7,668 ) (116,335 ) (247,366 )
Decrease in refundable deposits 27   64   800   2,070  
Net cash used in investing activities (10,406 ) (9,461 ) (316,661 ) (305,215 )

Cash flows from financing activities

Proceeds from exercise of employee stock options 1,062 583 32,323 18,798
Purchase of treasury shares (1,998 ) - (60,844 ) -
Treasury shares reissued to employees 1,998 1,485 60,844 48,405
Distribution of cash dividends (22,962 ) (11,573 ) (695,744 ) (381,897 )
Cash dividend regain from canceled share-based compensation 12   12   371   385  
Net cash used in financing activities (21,888 ) (9,493 ) (663,050 ) (314,309 )
Effect of exchange rate changes on cash and cash equivalents (378 ) (1,821 ) (357,353 ) (101,907 )
Increase in cash and cash equivalents 35,068 37,026 732,388 1,143,088
Cash and cash equivalents at beginning of year 124,987   87,961   4,030,839   2,887,751  
Cash and cash equivalents at end of year 160,055   124,987   4,763,227   4,030,839