Second Quarter 2008 Highlights:
- Reported net revenue of $17.0 million, an increase of 15 percent year-over-year and 9 percent sequentially
- Attained gross margin of 62 percent
- Achieved GAAP net income per diluted share of $0.08
Second Quarter 2008 Results:
Total revenue for the second quarter of 2008 was $17.0 million as compared to revenue of $15.6 million in the preceding quarter and $14.7 million in the second quarter of 2007. Total revenue was within the Company’s previously stated guidance range of $16.5 million to $17.5 million and comprised of $12.9 million in security surveillance, $2.0 million in LCD display, $2.1 million in video decoders and $44,000 of other revenue.
“We are pleased with the results of the second quarter, which were highlighted by a notable increase in total revenue and continued strong gross margins,” stated Hiro Kozato, President and Chief Executive Officer of Techwell. “Our security surveillance business grew significantly year-over-year as this market continues to expand while our emerging LCD display business grew despite a very challenging automotive end market.”
Mr. Kozato continued, “Looking forward, our security surveillance and LCD display businesses are expected to remain strong. We have seen demand for our security surveillance products exceed our expectations for the first half of the year and expect demand from China and Taiwan customers in particular to continue to grow rapidly. Although we believe there will continue to be macroeconomic pressures impacting the automotive market, we expect our design win momentum within rear seat entertainment, in-car navigation, and rear view mirror applications will enable us to continue to grow quarterly revenues in this segment.”
Gross margin for the second quarter was 62 percent as compared to 61 percent in the previous quarter and 59 percent reported in the same period a year ago. Operating expenses for the second quarter totaled $8.0 million, or 47 percent of total revenue. This compares to operating expenses of $7.2 million, or 46 percent of revenue, in the preceding quarter and $5.7 million, or 39 percent of revenue, in the same period one year ago.
Net income for the second quarter of 2008 was $1.8 million, or $0.08 per diluted share. This compares to net income in the first quarter of 2008 of $1.9 million, or $0.09 per diluted share, and net income of $2.6 million, or $0.12 per diluted share, in the second quarter of 2007. The effective tax rate for the second quarter of 2008 was 40 percent, compared to an effective tax rate of 39 percent in the prior quarter and 30 percent in the second quarter of 2007.
Net income includes pre-tax stock-based compensation expenses of approximately $1.9 million, equating to a $0.09 per diluted share charge. Net income for the first quarter of 2008 included pre-tax stock-based compensation expenses of approximately $1.7 million, equating to a $0.08 per diluted share charge. Net income for the second quarter of 2007 included pre-tax stock-based compensation expenses of approximately $1.2 million, equating to a $0.05 per diluted share charge. Shares used to compute GAAP net income per diluted share for the second quarter of 2008 totaled 22.1 million shares.
Cash and cash equivalents, short and long term investments increased by $2.6 million in the quarter, resulting in a balance of approximately $73.8 million as of June 30, 2008, compared to approximately $68.4 million as of December 31, 2007 and $60.9 million as of June 30, 2007.
Business Outlook
Techwell expects revenue for the third quarter of 2008 to range between $18 million and $19 million. Additional financial details regarding the Company’s business outlook will be provided during its conference call at 2:15 P.M. Pacific Time (PT) today, Wednesday, July 30, 2008.
Second Quarter 2008 Conference Call and Webcast Information
Techwell, Inc. will host a conference call with the financial community
today, July 30, 2008, at 2:15 P.M. Pacific Time (PT), 5:15 P.M. Eastern
Time (ET). The conference call will be broadcast live on the Company’s
Investor Relations website at
http://www.techwellinc.com.
Those parties interested in participating via telephone should dial 1-888-679-8034
with the conference ID number 42790136. International
participants should dial 1-617-213-4847 and provide the same pass code
at the prompt. A telephonic replay of the call will be available
approximately two hours after the end of the call and will be available
until midnight ET on Tuesday, August 5, 2008. The replay number is 1-888-286-8010
with a pass code of 80904858. International callers should
dial 1-617-801-6888 and enter the same pass code at the prompt. An
archived version of the webcast will also be available on the Company ’ s
website.
