Parade Technologies Reports Second Quarter 2020 Financial Results

Financial Highlights:

  • Q220 consolidated revenue US$121.54 million, compared with US$90.70 million in the year-ago quarter
  • Q220 consolidated net income US$28.22 million; Basic and Fully diluted after-tax EPS US$0.36 (NT$10.81) and US$0.35 (NT$10.54), respectively

SAN JOSE, Calif.–(BUSINESS WIRE)–Parade Technologies, Ltd. (Taipei Exchange: 4966.TWO), a leading high-speed interface IC supplier, today announced financial results for the second quarter fiscal year 2020 ended June 30, 2020, and provided guidance for the third quarter of fiscal year 2020.

Consolidated revenue was US$121.54 million and consolidated net income was US$28.22 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.36 (NT$10.81) and US$0.35 (NT$10.54), respectively. These results compared to consolidated revenue US$90.70 million and consolidated net income of US$17.57 million, or US$0.23 (NT$7.10) and US$0.22 (NT$6.84) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the second quarter of 2020 consolidated revenue increased 23.57% sequentially and was up 34.00% year-over-year.

The gross profit in the second quarter of 2020 was US$53.81 million, representing an increase of 22.57% from the previous quarter and an increase of 41.22% compared to the same quarter of last year.

On May 6, 2020, Parade announced the mass production of the PS8925 PCI Express Gen 4 retimer for enterprise system deployment. The device has completed rigorous testing and validation in enterprise-level network and storage systems now entering production. The PS8925 is a 4-lane device within Parade’s family of PCI Express Gen 4 retimer IC products that support up to 16 bi-directional lanes using 32 high-speed data channels operating at 16 Gbps.

On June 2, 2020, Parade announced the completion its acquisition of Fresco Logic, Inc. Parade believes the synergy of Fresco’s USB expertise with Parade’s proven high-speed data transport experience will greatly benefit Parade’s USB4 product integration development. Leveraging the intellectual property portfolio of each company should serve to position Parade as a key supplier of integrated solutions for USB4 host, hub, docking, and device applications. As an established leader in interface devices for USB, PCI Express, and DisplayPort, all of which will now be supported through the high-speed USB4 interface, the acquisition of Fresco Logic presents an evolutionary growth opportunity for Parade.

On June 16, 2020, AIC Inc. and Parade Technologies jointly announced the two companies will align on PCI Express Gen 4 retimer technologies to enable the launch of a pioneering PCI Express Gen 4 appliance. AIC’s server hardware, supporting multiple PCI Express Gen 4 slots in a single rackmount chassis, is a flexible and compact extension box accommodating accelerators such as GPUs, NIC, FPGA and NVMe drives. Utilizing Parade’s PCI Express Gen 4 retimer chip, AIC’s high-density PCI Express Gen 4 appliance provides stable data transport of the doubled data rate of PCI Express Gen 4 at 16 Gbps, compared to 8 Gbps of PCI Express Gen 3. And this partnership provides a gateway for early entry into the PCI Express Gen 4 market for both companies.

On July 14, 2020, Parade announced two new eDP Tcon devices developed for high-performance PC gaming applications along with new complementary LCD source drivers. The new Tcon devices, the DP808 and DP807, enable resolution support up to UHD while providing a fast 120 Hz refresh rate, and even higher refresh rates at lower resolutions. The DP808 and DP807 provide high-speed SIPI™ outputs to the source drivers that drive the LCD display. To support the higher pixel rate capabilities of the DP808 and DP807, Parade has also introduced the TC2082, TC2090, and TC2101 SIPI source drivers.

Based on current business outlook, Parade is providing the following guidance for the third quarter of fiscal 2020:

  • Revenue: US$135 ~149 Million
  • Gross Margin: 41.5% ~44.5%
  • Operating Expense: US$26 ~27 Million

The financial figures detailed above for the second quarter of 2020 have been 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 Six Months ended Sequential Quarter Three Months ended Six Months ended
Jun 30, Mar 31, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Mar 31, Jun 30, Jun 30, Jun 30, Jun 30,

2020

2020

2020

2019

2020

2019

2020

2020

2020

2019

2020

2019

 
Revenue

121,543

98,360

121,543

90,703

219,903

184,423

3,632,919

2,961,629

3,632,919

2,824,499

6,594,548

5,713,877

Cost of goods sold

67,738

54,462

67,738

52,602

122,200

107,080

2,024,686

1,639,853

2,024,686

1,638,014

3,664,539

3,317,585

Gross profit

53,805

43,898

53,805

38,101

97,703

77,343

1,608,233

1,321,776

1,608,233

1,186,485

2,930,009

2,396,292

Research & development expenses

15,198

13,898

15,198

13,353

29,096

26,140

454,265

418,478

454,265

415,819

872,743

810,026

Sales & marketing expenses

5,239

4,864

5,239

4,463

10,103

8,998

156,612

146,442

156,612

138,991

303,054

278,805

General & administrative expenses

4,516

3,641

4,516

3,123

8,157

6,223

134,965

109,645

134,965

97,252

244,610

192,829

Total operating expenses

24,953

22,403

24,953

20,939

47,356

41,361

745,842

674,565

745,842

652,062

1,420,407

1,281,660

Operating income

28,852

21,495

28,852

17,162

50,347

35,982

862,391

647,211

862,391

534,423

1,509,602

1,114,632

Non-operating income and expenses

143

817

143

1,083

960

1,608

4,256

24,608

4,256

33,701

28,864

49,902

Income before income taxes

28,995

22,312

28,995

18,245

51,307

37,590

866,647

671,819

866,647

568,124

1,538,466

1,164,534

Income tax expense

772

1,625

772

678

2,397

1,433

23,084

48,928

23,084

21,110

72,012

44,383

Net income

28,223

20,687

28,223

17,567

48,910

36,157

843,563

622,891

843,563

547,014

1,466,454

1,120,151

EPS – Basic (In Dollar)

$0.36

$0.27

$0.36

$0.23

$0.63

$0.47

$10.81

$8.00

$10.81

$7.10

$18.81

$14.57

Shares used in computing EPS-Basic (In thousands)

78,034

77,872

78,034

77,008

77,955

76,883

78,034

77,872

78,034

77,008

77,955

76,883

EPS – Diluted (In Dollar)

$0.35

$0.26

$0.35

$0.22

$0.61

$0.45

$10.54

$7.79

$10.54

$6.84

$18.33

$14.00

Shares used in computing EPS-Diluted (In thousands)

80,012

79,965

80,012

80,012

80,021

80,006

80,012

79,965

80,012

80,012

80,021

80,006

UNAUDITED CONSOLIDATED BALANCE SHEETS USD in Thousands NTD in Thousands
As of June 30, 2020 and 2019 Jun 30, Jun 30, Jun 30, Jun 30,

2020

2019

2020

2019

Current assets
Cash & cash equivalents

272,560

 

241,339

 

8,075,953

 

7,495,983

 

Accounts receivable, net

57,635

 

43,527

 

1,707,712

 

1,351,940

 

Inventories, net

33,248

 

36,945

 

985,135

 

1,147,504

 

Prepayments

11,555

 

7,807

 

342,377

 

242,492

 

Other current assets

12,444

 

10,785

 

368,725

 

334,995

 

Total current assets

387,442

 

340,403

 

11,479,902

 

10,572,914

 

Non-current assets
Property, plant and equipment, net

10,211

 

9,251

 

302,529

 

287,329

 

Right-of-use assets

5,023

 

7,017

 

148,839

 

217,949

 

Intangible assets

113,516

 

82,160

 

3,363,513

 

2,551,886

 

Deferred income tax assets

5,253

 

2,465

 

155,633

 

76,565

 

Other non-current assets

898

 

876

 

26,608

 

27,217

 

Total non-current assets

134,901

 

101,769

 

3,997,122

 

3,160,946

 

Total Assets

522,343

 

442,172

 

15,477,024

 

13,733,860

 

 
Current Liabilities
Accounts payable

29,177

 

30,762

 

864,510

 

955,482

 

Other payables

70,442

 

55,496

 

2,137,572

 

1,694,109

 

Current income tax liabilities

18,975

 

17,443

 

562,223

 

541,772

 

Lease liabilities – current

1,936

 

2,056

 

57,378

 

63,867

 

Other current liabilities

8,201

 

6,593

 

242,992

 

204,784

 

Total current liabilities

128,731

 

112,350

 

3,864,675

 

3,460,014

 

Non current Liabilities
Lease liabilities – non-current

3,087

 

4,961

 

91,461

 

154,082

 

Total non current liabilities

3,087

 

4,961

 

91,461

 

154,082

 

Equity
Ordinary shares

26,343

 

26,085

 

800,100

 

792,144

 

Capital reserves

105,244

 

94,579

 

3,201,278

 

2,869,927

 

Retained earnings

281,263

 

228,239

 

8,584,981

 

7,019,459

 

Other equity

(19,029

)

(17,450

)

(963,746

)

(358,316

)

Treasury shares

(3,296

)

(6,592

)

(101,725

)

(203,450

)

Total equity

390,525

 

324,861

 

11,520,888

 

10,119,764

 

Total liabilities and equity

522,343

 

442,172

 

15,477,024

 

13,733,860

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS USD in Thousands NTD in Thousands
For six months ended June 30, 2020 and 2019 Jun 30, Jun 30, Jun 30, Jun 30,

2020

2019

2020

2019

Cash flows from operating activities
Income before income tax for the period

51,307

 

37,590

 

1,538,466

 

1,164,534

 

Depreciation and amortization (including the right-of-use assets)

7,384

 

7,364

 

221,526

 

228,125

 

Share-based compensation cost

5,080

 

4,303

 

156,620

 

132,721

 

Interest income

(857

)

(1,638

)

(25,800

)

(50,792

)

Income and expenses having no effect on cash flows

11,607

 

10,029

 

352,346

 

310,054

 

Accounts receivable

(17,690

)

2,418

 

(524,159

)

75,088

 

Inventories

(1,767

)

(1,144

)

(52,370

)

(35,543

)

Prepayments

(3,212

)

(1,072

)

(95,157

)

(33,282

)

Other current assets

(759

)

50

 

(22,487

)

1,575

 

Net changes in assets relating to operating activities

(23,428

)

252

 

(694,173

)

7,838

 

Accounts payable

2,953

 

(864

)

87,498

 

(26,837

)

Other payables

6,433

 

(721

)

190,622

 

81,336

 

Other current liabilities

1,860

 

2,619

 

55,102

 

(22,402

)

Net changes in liabilities relating to operating activities

11,246

 

1,034

 

333,222

 

32,097

 

Cash provided by operations

50,732

 

48,905

 

1,529,861

 

1,514,523

 

Interest received

857

 

1,637

 

25,715

 

50,733

 

Income taxes paid

(7,036

)

(490

)

(211,067

)

(15,192

)

Income taxes received

1

 

 

12

 

 

Net cash provided by operating activities

44,554

 

50,052

 

1,344,521

 

1,550,064

 

Cash flows from investing activities
Acquisition of equipment

(2,806

)

(676

)

(84,169

)

(20,936

)

Acquisition of intangible assets

(1,787

)

(3,149

)

(53,622

)

(97,547

)

Increase in refundable deposits

(32

)

(67

)

(955

)

(2,089

)

Acquisition of business combinations

(37,169

)

 

(1,112,458

)

 

Net cash used in investing activities

(41,794

)

(3,892

)

(1,251,204

)

(120,572

)

Cash flows from financing activities
Proceeds from exercise of employee stock options

349

 

338

 

10,475

 

10,457

 

Repayment of the principal portion of lease liabilities

(1,126

)

(989

)

(33,769

)

(30,630

)

Cash dividend regain from canceled share-based compensation

48

 

23

 

1,432

 

689

 

Net cash used in financing activities

(729

)

(628

)

(21,862

)

(19,484

)

Effect of exchange rate changes on cash and cash equivalents

149

 

106

 

(101,502

)

74,047

 

Net (decrease) increase in cash and cash equivalents

2,180

 

45,638

 

(30,047

)

1,484,055

 

Cash and cash equivalents at beginning of period

270,380

 

195,701

 

8,106,000

 

6,011,928

 

Cash and cash equivalents at end of period

272,560

 

241,339

 

8,075,953

 

7,495,983

 

 

Contacts

Parade Technologies

Yo-Ming Chang, +886-2-2627-9109

[email protected]

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