Parade Technologies Reports Fourth Quarter and Fiscal 2018 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 2018 ended December 31, 2018, and provided guidance for the first quarter of fiscal year 2019.

Consolidated revenue was US$101.24 million and consolidated net income was US$22.44 million. Basic and fully diluted after-tax earnings per share (EPS) were US$0.29 (NT$9.01) and US$0.28 (NT$8.66), respectively. These results compared to consolidated revenue US$88.25 million and consolidated net income of US$14.51 million, or US$0.19 (NT$5.73) and US$0.18 (NT$5.51) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the fourth quarter of 2018 consolidated revenue increased 18.30% sequentially and was up 14.72% year-over-year.

The gross profit in the fourth quarter of 2018 was US$42.43 million, representing an increase of 18.24% from the previous quarter and an increase of 18.77% compared to the same quarter of last year.

The Company also reported financial results for fiscal year 2018. Consolidated revenue was US$343.15 million, representing an increase of 0.80% from US$340.43 million in the prior year. Gross profit was US$142.30 million and operating income was US$64.47 million. Net income for fiscal year 2018 was US$65.06 million, or US$0.85 (NT$25.67) per basic share and US$0.81 (NT$24.66) per fully diluted share. These results compared with net income of 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 in the prior year.

Based on current business outlook, Parade is providing the following guidance for the first quarter of fiscal 2019:

  • Revenue: US$88 ~97 Million
  • Gross Margin: 40% ~43%
  • Operating Expense: US$19.5 ~20.5 Million

The financial figures detailed above for the fourth quarter of 2018 and for the year ended December 31, 2018 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). Parades portfolio of IC products serves the growing demand for HDMI„¢, DisplayPort„¢, SATA, and USB ICs for display, storage and interface applications.

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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 VESAs 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 companys devices integrate proprietary technologies that offer superior system signal integrity, advanced system integration and enhanced power efficiency. As a result of the companys 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,
2018 2018 2018 2017 2018 2017 2018 2018 2018 2017 2018 2017
Revenue 101,242 85,579 101,242 88,248 343,145 340,428 3,123,334 2,624,695 3,123,334 2,657,137 10,363,888 10,351,803
Cost of goods sold 58,816 49,698 58,816 52,528 200,850 202,719 1,814,490 1,524,239 1,814,490 1,581,628 6,065,144 6,164,614
Gross profit 42,426 35,881 42,426 35,720 142,295 137,709 1,308,844 1,100,456 1,308,844 1,075,509 4,298,744 4,187,189
Research & development expenses 12,693 12,927 12,693 12,037 50,673 45,647 391,583 396,484 391,583 362,427 1,528,150 1,388,734
Sales & marketing expenses 4,173 4,048 4,173 4,345 15,968 16,670 128,748 124,156 128,748 130,829 481,584 507,068
General & administrative expenses 2,989 2,736 2,989 2,850 11,180 10,618 92,202 83,910 92,202 85,818 337,207 322,865
Total operating expenses 19,855 19,711 19,855 19,232 77,821 72,935 612,533 604,550 612,533 579,074 2,346,941 2,218,667
Operating income 22,571 16,170 22,571 16,488 64,474 64,774 696,311 495,906 696,311 496,435 1,951,803 1,968,522
Non-operating income and expenses 236 242 236 59 506 56 7,277 7,425 7,277 1,780 15,561 1,705
Income before income taxes 22,807 16,412 22,807 16,547 64,980 64,830 703,588 503,331 703,588 498,215 1,967,364 1,970,227
Income tax (benefit) expense 365 (72 ) 365 2,035 (78 ) 1,256 11,248 (2,225 ) 11,248 61,273 (1,998 ) 38,518
Net income 22,442 16,484 22,442 14,512 65,058 63,574 692,340 505,556 692,340 436,942

1,969,362

1,931,709
EPS – Basic (In Dollar) $0.29 $0.21 $0.29 $0.19 $0.85 $0.84 $9.01 $6.57 $9.01 $5.73 $25.67 $25.49
Shares used in computing EPS-Basic (In thousands) 76,822 76,956 76,822 76,235 76,722 75,793 76,822 76,956 76,822 76,235 76,722 75,793
EPS – Diluted (In Dollar) $0.28 $0.21 $0.28 $0.18 $0.81 $0.81 $8.66 $6.33 $8.66 $5.51 $24.66 $24.55

Shares used in computing EPS-Diluted (In thousands)

79,965 79,844 79,965 79,343 79,859 78,683 79,965 79,844 79,965 79,343 79,859 78,683
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UNAUDITED CONSOLIDATED BALANCE SHEETS USD in Thousands NTD in Thousands

As of December 31, 2018 and 2017

Dec 31,

Dec 31,

Dec 31,

Dec 31,

2018 2017 2018 2017

Current assets

Cash & cash equivalents 195,701 160,055 6,011,928 4,763,227
Available-for-sale financial assets – current
Accounts receivable, net 45,944 52,272 1,411,407 1,555,625
Inventories, net 35,800 34,275 1,099,789 1,020,015
Other current assets 17,586 9,681 540,247 288,120
Total current assets 295,031 256,283 9,063,371 7,626,987

Non-current assets

Property, plant and equipment, net 10,614 8,786 326,052 261,470
Intangible assets 83,346 88,725 2,560,397 2,640,450
Deferred income tax assets 1,946 1,300 59,772 38,694
Other non-current assets 809 818 24,853 24,344
Total non-current assets 96,715 99,629 2,971,074 2,964,958

Total Assets

391,746

355,912

12,034,445

10,591,945

Current Liabilities

Accounts payable 31,626 25,788 971,566 767,441
Other payables 20,348 20,633 625,103 614,049
Current income tax liabilities 16,002 19,678 491,583 585,621
Other current liabilities 7,315 8,280 224,699 246,422
Total current liabilities 75,291 74,379 2,312,951 2,213,533

Equity

Ordinary shares 26,021 25,812 790,147 783,766
Capital reserves 92,873 84,562 2,817,047 2,562,661
Retained earnings 224,586 190,921 6,879,370 5,874,547
Other equity (20,433 ) (19,762 ) (561,620 ) (842,562 )
Treasury shares (6,592 ) (203,450 )
Total equity 316,455 281,533 9,721,494 8,378,412

Total liabilities and equity

391,746

355,912

12,034,445

10,591,945

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS USD in Thousands NTD in Thousands

For twelve months ended December 31, 2018 and 2017

Dec 31, Dec 31, Dec 31,

Dec 31,
2018 2017 2018

2017

Cash flows from operating activities

Income before income tax for the year 64,980 64,830 1,967,364 1,970,227
Depreciation and amortization 11,527 9,897 347,530 301,170
Share-based compensation cost 8,199 6,577 246,603 200,144
Interest income (270 ) (61 ) (8,277 ) (1,844 )
Income and expenses having no effect on cash flows 19,456 16,413 585,856 499,470
Accounts receivable 6,328 (4,714 ) 194,400 (140,294 )
Inventories (1,526 ) (7,945 ) (46,871 ) (236,455 )
Other current assets (6,050 ) (544 ) (185,878 ) (16,221 )
Net changes in assets relating to operating activities (1,248 ) (13,203 ) (38,349 ) (392,970 )
Accounts payable 5,839 (4,238 ) 179,368 (126,119 )
Other payables (285 ) 3,739 (8,755 ) 111,259
Other current liabilities (966 ) (1,432 ) (29,672 ) (42,621 )
Net changes in liabilities relating to operating activities 4,588 (1,931 ) 140,941 (57,481 )
Cash provided by operations 87,776 66,109 2,655,812

2,019,246
Interest received 277 55 8,356 1,661
Income tax paid (6,057 ) (3,544 ) (182,618 ) (107,835 )

Income tax refund received

5,120 156,380

Net cash provided by operating activities

81,996

67,740 2,481,550 2,069,452

Cash flows from investing activities

Acquisition of equipment (5,221 ) (6,610 ) (157,413 ) (201,126 )
Acquisition of intangible assets (2,886 ) (3,823 ) (87,010 ) (116,335 )
Decrease in refundable deposits 9 27 276 800

Net cash used in investing activities

(8,098 ) (10,406 ) (244,147 ) (316,661 )

Cash flows from financing activities

Proceeds from exercise of employee stock options 489 1,062 14,729 32,323
Purchase of treasury shares (9,352 ) (1,998 ) (284,138 ) (60,844 )
Treasury shares reissued to employees 2,760 1,998 80,688 60,844
Distribution of cash dividends (33,182 ) (22,962 ) (965,599 ) (695,744 )
Cash dividend regain from canceled share-based compensation 34 12 1,060 371

Net cash used in financing activities

(39,251 ) (21,888 ) (1,153,260 )

(663,050 )
Effect of exchange rate changes on cash and cash equivalents 999 (378 ) 164,558 (357,353 )
Increase in cash and cash equivalents 34,646 35,068 1,248,701 732,388
Cash and cash equivalents at beginning of year 160,055 124,987 4,763,227 4,030,839
Cash and cash equivalents at end of year 194,701 160,055 6,011,928 4,763,227

Parade Technologies
Yo-Ming Chang, +886-2-2627-9109
[email protected]