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Vimicro Announces Unaudited Second-Quarter 2015 Financial Results

Second-Quarter 2015 Financial Highlights - Second-quarter revenues of $31.7 million, up 32.1% year over year - Quarterly video surveillance revenues of $30.3 million, up 50.8% year over year - Quarterly gross margin at 47.5%, as compared to 37.8% year over year, and 40.1% quarter over quarter - Quarterly non-GAAP net income attributable to Vimicro of $6.0 million, as compared to non-GAAP net income attributable to Vimicro of $2.8 million year over year - Non-GAAP net income attributable to Vimicro per diluted ADS at $0.17 for the quarter, as compared to $0.10 per diluted ADS year over year

August 13, 2015 3:52 AM EDT

BEIJING, Aug. 13, 2015 /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, 2015.

Second-Quarter 2015 Results

Net revenue in the second quarter of 2015 was $31.7 million, as compared to net revenue of $24.0 million in the year-ago quarter and $19.2 million in the first quarter of 2015. Video surveillance revenues were $30.3 million in the second quarter, representing 95.6% of total net revenues and up 50.8% year over year.

Gross profit in the second quarter was $15.1 million, as compared with $9.1 million in the year-ago quarter and $7.7 million in the first quarter of 2015. The gross margin in the second quarter was 47.5%, as compared to 37.8% in the year-ago quarter and 40.1% in the first quarter of 2015. The higher margin in the quarter was a result of several projects with relatively higher margin recognized during the quarter.

Operating expenses in the second quarter of 2015 were $9.0 million, as compared to $10.3 million in the year-ago quarter and $7.6 million quarter over quarter. Research and development expenses were $2.0 million for the second quarter net of $3.2 million government grants applied (research and development expenses would have been $5.2 million without government grants for the quarter), as compared to $1.8 million year over year and $1.9 million quarter over quarter. Sales and marketing expenses were $2.8 million for the second quarter, as compared to $2.4 million year over year and $2.3 million quarter over quarter. General and administrative expenses were $4.2 million in the second quarter, as compared to $6.1 million year over year and $3.4 million quarter over quarter.

Operating income was $6.0 million in the second quarter of 2015, as compared to the operating loss of $1.2 million in the year-ago quarter and the operating income of $0.2 million quarter over quarter.

The equity in loss of an equity investee was $2.4 million in the second quarter of 2015, as compared to the equity in profit of an equity investee of $1.8 million year over year and the equity in loss of an equity investee of $0.5 million quarter over quarter.

Net loss attributable to non-controlling interests was $1.3 million in the second quarter of 2015, as compared to net loss attributable to non-controlling interests of $0.9 million year over year and net income attributable to non-controlling interests of $1.5 million quarter over quarter.

In the second quarter of 2015, non-GAAP net income attributable to Vimicro was $6.0 million, or approximately $0.17 per ADS on a diluted basis, as compared to a non-GAAP net income attributable to Vimicro of $2.8 million, or $0.10 per diluted ADS in the year-ago quarter. Non-GAAP net income attributable to Vimicro in the second quarter of 2015 and the year-ago quarter excludes $0.8 million and $0.1 million of non-cash, share-based compensation, respectively. GAAP net income attributable to Vimicro in the second quarter was $5.3 million, or $0.15 per diluted ADS, as compared to net income of $2.7 million, or $0.10 per diluted ADS, in the year-ago quarter.

Balance Sheet

As of June 30, 2015, the Company had cash and cash equivalents of approximately $37.7 million. Total current assets were approximately $201.8 million, and Vimicro had working capital of approximately $88.2 million and $24.0 million of long-term bank loans and liabilities on its balance sheet as of June 30, 2015. 

Recent Events

- Winning of competitive bid for the provision of SVAC-compliant video surveillance cameras and system to Jincheng Municipal Government in Shanxi Province, with contract value of $22 million;

- Multiple contract wins in Taiyuan City, Shanxi Province, to provide SVAC-compliant video surveillance cameras and system of traffic control and monitoring to the Traffic Police Detachment of Taiyuan City, aggregated to $12.88 million.

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 increase its sales of PC camera processors, as well as video surveillance products; the expected growth of the video surveillance market; 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 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 and fluctuations in the markets in which the Company competes. 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)

June 30,

March 31,

2015

2015

(Unaudited)

(Unaudited)

ASSETS

    Current Assets

         Cash and cash equivalents

37,665

57,971

         Restricted cash

27

27

         Accounts receivable, net of provision

22,191

26,038

         Amounts due from related parties, net of provision

117,949

120,124

         Inventories

15,215

15,089

         Prepayments and other current assets, net of provision

7,710

6,805

         Deferred tax assets

1,015

1,010

    Total current assets

201,772

227,064

     Long-term investment

604

601

     Property, equipment and software, net

62,956

57,604

     Land use rights

15,216

15,188

     Deferred tax assets-non current

704

700

     Other long-term assets

1,582

1,587

    Total assets

282,834

302,744

LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities

         Accounts payable

37,474

47,950

         Amounts due to related parties

54

6,586

         Taxes payable

18,144

18,040

         Advances from customers

23,638

23,623

         Accrued expenses and other current liabilities

15,891

11,272

         Deferred government grant

14,922

17,798

         Short-term bank loan

1,963

1,954

         Deferred income from equity investee

1,469

11,833

    Total current liabilities

113,555

139,056

    Deferred government grant-non current

1,507

1,500

    Deferred tax liabilities

5

5

    Product warranty

3,526

3,432

    Long-term bank loan

9,160

9,117

    Other long-term liabilities

9,814

9,768

    Total liabilities

137,567

162,878

    Equity

         Ordinary shares

16

16

         Additional paid-in capital

205,797

204,884

         Treasury stock at cost, net

(12,644)

(12,858)

         Accumulated other comprehensive income

10,240

10,103

         Accumulated deficit

(84, 954)

(90,239)

         Statutory reserve

4,068

4,068

       Total shareholders' equity attributable to Vimicro International Corporation

122,523

115,974

       Noncontrolling interest

22,744

23,892

    Total equity

145,267

139,866

    Total liabilities and equity

282,834

302,744

 

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,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net revenues

31,741

24,033

50,964

40,441

  Third parties

6,743

7,254

12,377

17,045

  Related parties

24,998

16,779

38,587

23,396

Cost of revenues

(16,669)

(14,942)

(28,177)

(25,828)

Gross profit

15,072

9,091

22,787

14,613

Operating expenses:

Research and development, net

(2,034)

(1,781)

(3,927)

(5,635)

Selling and marketing

(2,828)

(2,436)

(5,110)

(4,793)

General and administrative

(4,183)

(6,055)

(7,568)

(8,485)

Total operating expenses:

(9,045)

(10,272)

(16,605)

(18,913)

Income/(loss) from operations:

6,027

(1,181)

6,182

(4,300)

Other income/(expense):

Interest expense, net

(134)

(34)

(185)

(35)

Foreign exchange gain/(loss)

605

(23)

472

(515)

Gain on disposal of equity interest

-

1,319

-

1,319

Other, net

642

1

642

73

Income/(loss) before income taxes and equity in profit of   an equity investee:

7,140

82

7,111

(3,458)

Income tax expense

(671)

-

(671)

(208)

Income/(loss) before equity in profit of an equity investee

6,469

82

6,440

(3,666)

Equity in (loss)/profit of an equity investee, net of tax

(2,436)

1,768

(2,897)

2,137

Net income/(loss)

4,033

1,850

3,543

(1,529)

Net (loss)/income attributable to noncontrolling interest

(1,252)

(857)

241

(771)

Net income/(loss) attributable to Vimicro International    Corporation

5,285

2,707

3,302

(758)

Income/(loss) per share

Basic

0.04

0.03

0.03

(0.01)

Diluted

0.04

0.02

0.02

(0.01)

Income/(loss) per ADS

Basic

0.17

0.11

0.11

(0.03)

Diluted

0.15

0.10

0.10

(0.03)

Weighted average number of ordinary shares Outstanding

   Basic

123,265,907

95,319,165

118,438,212

95,716,466

   Diluted

140,416,527

112,341,075

134,692,155

95,716,466

Weighted average number of ADS outstanding

Basic

30,816,477

23,829,791

29,609,553

23,929,117

Diluted

35,104,132

28,085,269

33,673,039

23,929,117

Other comprehensive income/ (loss), net of tax

Foreign currency translation adjustment, net of tax of nil

239

(1,287)

79

(1,112)

Other comprehensive income/(loss), net of tax

239

(1,287)

79

(1,112)

Comprehensive income/(loss)

4, 272

563

3,622

(2,641)

Comprehensive (loss)/income attributable to     noncontrolling interest

(1,148)

(859)

269

(618)

Comprehensive income/(loss) attributable to Vimicro     International Corporation

5,420

1,422

3,353

(2,023)

Components of share-based compensation expenses are        included in the following expense captions

Research and development, net

(142)

(34)

(287)

(94)

Selling and marketing

(55)

(18)

(97)

(37)

General and administrative

(554)

(70)

(801)

(157)

Total

(751)

(122)

(1,185)

(288)

Contact:

Vimicro International CorporationInvestor RelationsPhone: +8610-5884-8898E-mail: [email protected]

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/vimicro-announces-unaudited-second-quarter-2015-financial-results-300128078.html

SOURCE Vimicro International Corporation



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