Parade Technologies Reports Third Quarter 2020 Financial Results

Financial Highlights:

  • Q320 consolidated revenue US$150.15 million, compared with US$101.45 million in the year-ago quarter
  • Q320 consolidated net income US$36.75 million; Basic and Fully diluted after-tax EPS US$0.47 (NT$13.80) and US$0.46 (NT$13.52), 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 third quarter fiscal year 2020 ended September 30, 2020, and provided guidance for the fourth quarter of fiscal year 2020.

Consolidated revenue was US$150.15 million and consolidated net income was US$36.75 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.47 (NT$13.80) and US$0.46 (NT$13.52), respectively. These results compared to consolidated revenue US$101.45 million and consolidated net income of US$21.87 million, or US$0.28 (NT$8.86) and US$0.28 (NT$8.67) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the third quarter of 2020 consolidated revenue increased 23.53% sequentially and was up 48.00% year-over-year.

The gross profit in the third quarter of 2020 was US$66.07 million, representing an increase of 22.80% from the previous quarter and an increase of 51.67% compared to the same quarter of last year.

On August 13, 2020, Parade announced the mass production of the PS8926 PCI Express Gen 4 retimer for enterprise system deployment. This integrated device has completed rigorous testing and validation in enterprise-level network and storage systems now entering production. The PS8926 supports up to 16 bi-directional PCI Express Gen 4 lanes using 32 high-speed data channels operating at 16 Gbps. Parade’s PCI Express Gen 4 family of retimer devices, including the PS8925, PS8926, and PS8926A, all support Parade’s exclusive PABR (Protocol Aware Bit-level Retimer) mode that reduces latency to 2 nsec, well below the typical 43 nsec expected for a spec-compliant PCI Express Gen 4 retimer, increasing data throughput and greatly reducing memory access time.

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

  • Revenue: US$135 ~149 Million
  • Gross Margin: 41.5% ~44.5%
  • Operating Expense: US$27.0 ~28.0 Million

The financial figures detailed above for the third 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 Nine Months ended Sequential Quarter Three Months ended Nine Months ended
Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, Sep 30, Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, Sep 30,

2020

2020

2020

2019

2020

2019

2020

2020

2020

2019

2020

2019

 
Revenue

150,146

 

121,543

150,146

 

101,447

370,049

285,870

4,421,777

 

3,632,919

4,421,777

 

3,165,157

11,016,325

8,879,034

Cost of goods sold

84,072

 

67,738

84,072

 

57,883

206,272

164,963

2,475,915

 

2,024,686

2,475,915

 

1,805,971

6,140,454

5,123,556

Gross profit

66,074

 

53,805

66,074

 

43,564

163,777

120,907

1,945,862

 

1,608,233

1,945,862

 

1,359,186

4,875,871

3,755,478

Research & development expenses

16,443

 

15,198

16,443

 

13,523

45,539

39,663

484,243

 

454,265

484,243

 

421,915

1,356,986

1,231,941

Sales & marketing expenses

6,413

 

5,239

6,413

 

4,778

16,516

13,776

188,851

 

156,612

188,851

 

149,079

491,905

427,884

General & administrative expenses

4,640

 

4,516

4,640

 

3,433

12,797

9,656

136,635

 

134,965

136,635

 

107,113

381,245

299,942

Expected credit loss

 

 

12

12

 

 

367

367

Total operating expenses

27,496

 

24,953

27,496

 

21,746

74,852

63,107

809,729

 

745,842

809,729

 

678,474

2,230,136

1,960,134

Operating income

38,578

 

28,852

38,578

 

21,818

88,925

57,800

1,136,133

 

862,391

1,136,133

 

680,712

2,645,735

1,795,344

Non-operating income and expenses

(87

)

143

(87

)

1,197

873

2,805

(2,557

)

4,256

(2,557

)

37,370

26,307

87,272

Income before income taxes

38,491

 

28,995

38,491

 

23,015

89,798

60,605

1,133,576

 

866,647

1,133,576

 

718,082

2,672,042

1,882,616

Income tax expense

1,745

 

772

1,745

 

1,150

4,142

2,583

51,404

 

23,084

51,404

 

35,891

123,416

80,274

Net income

36,746

 

28,223

36,746

 

21,865

85,656

58,022

1,082,172

 

843,563

1,082,172

 

682,191

2,548,626

1,802,342

EPS – Basic (In Dollar)

$0.47

 

$0.36

$0.47

 

$0.28

$1.09

$0.76

$13.80

 

$10.81

$13.80

 

$8.86

$32.58

$23.58

Shares used in computing EPS-Basic (In thousands)

78,437

 

78,034

78,437

 

76,980

78,229

76,436

78,437

 

78,034

78,437

 

76,980

78,229

76,436

EPS – Diluted (In Dollar)

$0.46

 

$0.35

$0.46

 

$0.28

$1.07

$0.74

$13.52

 

$10.54

$13.52

 

$8.67

$31.77

$22.97

Shares used in computing EPS-Diluted (In thousands)

80,018

 

80,012

80,018

 

78,648

80,230

78,470

80,018

 

80,012

80,018

 

78,648

80,230

78,470

UNAUDITED CONSOLIDATED BALANCE SHEETS USD in Thousands NTD in Thousands
As of September 30, 2020 and 2019 Sep 30, Sep 30, Sep 30, Sep 30,

2020

2019

2020

2019

Current assets
Cash & cash equivalents

271,266

 

232,943

 

7,893,836

 

7,230,564

 

Accounts receivable, net

60,524

 

50,367

 

1,761,246

 

1,563,373

 

Inventories, net

38,457

 

30,935

 

1,119,095

 

960,219

 

Prepayments

11,195

 

7,579

 

325,790

 

235,264

 

Other current assets

17,589

 

12,020

 

511,837

 

373,108

 

Total current assets

399,031

 

333,844

 

11,611,804

 

10,362,528

 

Non-current assets
Property, plant and equipment, net

12,731

 

8,878

 

370,459

 

275,580

 

Right-of-use assets

5,130

 

6,648

 

149,293

 

206,356

 

Intangible assets

113,120

 

80,403

 

3,291,791

 

2,495,704

 

Deferred income tax assets

6,414

 

2,631

 

186,643

 

81,654

 

Other non-current assets

903

 

849

 

26,285

 

26,344

 

Total non-current assets

138,298

 

99,409

 

4,024,471

 

3,085,638

 

Total Assets

537,329

 

433,253

 

15,636,275

 

13,448,166

 

 
Current Liabilities
Accounts payable

36,293

 

28,202

 

1,056,122

 

875,382

 

Other payables

27,478

 

19,634

 

799,615

 

609,445

 

Current income tax liabilities

21,514

 

18,423

 

626,055

 

571,853

 

Lease liabilities – current

1,987

 

2,159

 

57,827

 

67,029

 

Other current liabilities

8,109

 

6,799

 

235,961

 

211,045

 

Total current liabilities

95,381

 

75,217

 

2,775,580

 

2,334,754

 

Non current Liabilities
Lease liabilities – non-current

3,143

 

4,489

 

91,466

 

139,327

 

Total non-current liabilities

3,143

 

4,489

 

91,466

 

139,327

 

Equity
Ordinary shares

26,597

 

26,313

 

807,581

 

799,222

 

Capital reserves

137,325

 

105,418

 

4,144,850

 

3,207,043

 

Retained earnings

315,705

 

250,934

 

9,667,305

 

7,701,891

 

Other equity

(40,822

)

(25,822

)

(1,850,507

)

(632,346

)

Treasury shares

 

(3,296

)

 

(101,725

)

Total equity

438,805

 

353,547

 

12,769,229

 

10,974,085

 

Total liabilities and equity

537,329

 

433,253

 

15,636,275

 

13,448,166

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS USD in Thousands NTD in Thousands
For nine months ended September 30, 2020 and 2019 Sep 30, Sep 30, Sep 30, Sep 30,

2020

 

2019

 

2020

 

2019

 

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

89,798

 

60,605

 

2,672,042

 

1,882,616

 

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

11,568

 

11,129

 

344,955

 

345,544

 

Expected credit loss

 

12

 

 

367

 

Loss on disposal of equipment

 

4

 

 

128

 

Share-based compensation cost

15,017

 

7,246

 

453,796

 

223,663

 

Interest income

(914

)

(2,625

)

(27,482

)

(81,601

)

Income and expenses having no effect on cash flows

25,671

 

15,766

 

771,269

 

488,101

 

Accounts receivable

(20,580

)

(4,434

)

(598,864

)

(137,631

)

Inventories

(6,976

)

4,866

 

(203,014

)

151,026

 

Prepayments

(2,852

)

(844

)

(82,992

)

(26,189

)

Other current assets

(5,886

)

(1,169

)

(171,270

)

(36,297

)

Net changes in assets relating to operating activities

(36,294

)

(1,581

)

(1,056,140

)

(49,091

)

Accounts payable

10,069

 

(3,425

)

293,008

 

(106,304

)

Other payables

2,839

 

(714

)

82,611

 

(22,168

)

Other current liabilities

1,767

 

(515

)

51,432

 

(15,994

)

Net changes in liabilities relating to operating activities

14,675

 

(4,654

)

427,051

 

(144,466

)

Cash provided by operations

93,850

 

70,136

 

2,814,222

 

2,177,160

 

Interest received

914

 

2,625

 

27,263

 

81,509

 

Income taxes paid

(7,427

)

(834

)

(221,470

)

(25,885

)

Income taxes received

1

 

 

12

 

 

Net cash provided by operating activities

87,338

 

71,927

 

2,620,027

 

2,232,784

 

Cash flows from investing activities
Acquisition of equipment

(6,399

)

(1,388

)

(190,817

)

(43,085

)

Acquisition of intangible assets

(3,952

)

(3,614

)

(117,841

)

(112,205

)

Increase in refundable deposits

(37

)

(40

)

(1,090

)

(1,232

)

Acquisition of business combinations

(37,169

)

 

(1,112,458

)

 

Net cash used in investing activities

(47,557

)

(5,041

)

(1,422,206

)

(156,522

)

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

498

 

458

 

14,865

 

14,224

 

Repayment of the principal portion of lease liabilities

(1,637

)

(1,521

)

(48,834

)

(47,229

)

Treasury shares reissued to employees

3,296

 

3,296

 

101,725

 

101,725

 

Distribution of cash dividends

(39,369

)

(32,529

)

(1,216,887

)

(980,751

)

Cash dividend regain from canceled share-based compensation

53

 

31

 

1,584

 

930

 

Net cash used in financing activities

(37,159

)

(30,265

)

(1,147,547

)

(911,101

)

Effect of exchange rate changes on cash and cash equivalents

(1,736

)

621

 

(262,438

)

53,475

 

Net (decrease) increase in cash and cash equivalents

886

 

37,242

 

(212,164

)

1,218,636

 

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

271,266

 

232,943

 

7,893,836

 

7,230,564

 

 

Contacts

Parade Technologies

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

ir@paradetech.com

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