Parade Technologies Reports First Quarter 2023 Financial Results

Parade Technologies Reports First Quarter 2023 Financial Results

Financial Highlights:

Q123 consolidated revenue US$99.99 million, compared with US$210.72 million in the year-ago quarter

Q123 consolidated net income US$11.62 million; Basic and Fully diluted after-tax EPS US$0.15 (NT$4.51) and US$0.15 (NT$4.46), 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 first quarter fiscal year 2023 ended March 31, 2023, and provided guidance for the second quarter of fiscal year 2023.
Consolidated revenue was US$99.99 million and consolidated net income was US$11.62 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.15 (NT$4.51) and US$0.15 (NT$4.46), respectively. These results compared to consolidated revenue US$210.72 million and consolidated net income of US$59.19 million, or US$0.75 (NT$20.91) and US$0.73 (NT$20.55) per basic and fully diluted share, in the year-ago quarter.
In US dollars, the first quarter of 2023 consolidated revenue decreased 1.44% sequentially and was down 52.55% year-over-year.
The gross profit in the first quarter of 2023 was US$44.04 million, representing a decrease of 1.42% from the previous quarter and a decrease of 56.30% compared to the same quarter of last year.
On February 22, 2023, Parade announced a new offering in its high-speed connectivity product category. The PS5510 which is an updated version of the FL5500 USB hub controller featuring ultra-low power operation and hardware-accelerated secure firmware updates. PS5510 is compliant with the USB 3.2 specification and offers 5 SuperSpeed+ ports (1 up/4 down), each capable of providing 10Gbps data connectivity. The upstream port and 2 downstream ports support the features required for USB-C connections while all of the ports may be used for legacy USB Type-A connections. One additional USB 2.0-only port is provided for an additional hard-wired device, often needed in the target applications. With its ultra-low power operation and on-chip RSA/SHA-256 hardware to support secure in-field firmware upgrades, PS5510 is ideal for port expansion on USB4 and Thunderbolt™ docking solutions as well as monitors and mini-docks/dongles.
On March 22, 2023, Parade announced a new offering in its eDP Timing Controller with Embedded Driver (TED) product category. The TC3230 features support for higher resolutions as well as the most advanced Embedded DisplayPort features for power savings. TC3230 is compliant with the eDP 1.5 standard and supports Multi-SST Operation (MSO), Panel Self-Refresh, DSC 1.2a, ALPM, and more. The TC3220 is configurable to support all panel resolutions up to 2560×1600 using an 18 or 24-bit color format. Adding a second TC3230, in MSO+DSC mode, enables panel resolutions up to 3840×2160. With support for the standard based embedded video interface protocols offered by major CPU, GPU and SoC vendors, system implementation is straight-forward. The integrated source drivers support up to 2562 output channels with support for dual-gate and MUX2/MUX3 sub-pixel driving structures. The TC3230 is designed for Chip on Glass (COG) application on LTPS (Low Temperature Polycrystalline Silicon), a-Si (Amorphous Silicon) or Oxide type TFT panels. It requires no external crystal or timing reference, includes a programmable gamma buffer, as well as Parade’s exclusive Smart-Backlight™ feature for additional color and power optimization. The fully programmable row and column driver timing enables the TC3230 to serve a broad range of panels types, and it provides synchronization signals that support a wide range of touch controllers.
On March 29, 2023, Parade announced the availability of the PS8838 USB 3.2 / DP 2.1 MUX and PS8839 USB 3.2 / DP 2.1 DeMUX for commercial and consumer PCs, host systems and peripherals. PS8838 features a DisplayPort 2.1 and USB 3.2 Gen 2×1 MUX with retiming, targeting USB-C host systems and docks. PS8839 is a DeMUX/Retimer device optimized for sink applications including docks and peripherals. The PS8838 and PS8839 are fully compliant with USB-IF USB 3.2 specification supporting up to Gen 2×1 or 10Gbps and VESA DP 2.1 standard up to UHBR20. The devices support low power consumption for standby and low power states, greatly extending the battery life of mobile devices and enabling system EnergyStar compliance.
Based on current business outlook, Parade is providing the following guidance for the second quarter of fiscal 2023:

Revenue: US$98 ~110 Million

Gross Margin: 43% ~47%

Operating Expense: US$29.5 ~32.5 Million

The financial figures detailed above for the first quarter of 2023 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 INCOME STATEMENTS
USD in Thousands

NTD in Thousands

Sequential Quarter

Three Months ended

Sequential Quarter

Three Months ended

Mar 31,

Dec 31,

Mar 31,

Mar 31,

Mar 31,

Dec 31,

Mar 31,

Mar 31,

2023

2022

2023

2022

2023

2022

2023

2022

 

Revenue

 
99,990
 

 
101,450

 
99,990
 

 
210,723
 

 
3,039,712
 

 
3,181,446

 
3,039,712
 

 
5,898,143
 

Cost of goods sold

 
55,947
 

 
56,774

 
55,947
 

 
109,948
 

 
1,700,797
 

 
1,780,425

 
1,700,797
 

 
3,077,451
 

Gross profit

 
44,043
 

 
44,676

 
44,043
 

 
100,775
 

 
1,338,915
 

 
1,401,021

 
1,338,915
 

 
2,820,692
 

Research & development expenses

 
19,892
 

 
20,074

 
19,892
 

 
21,226
 

 
604,717
 

 
629,511

 
604,717
 

 
594,124
 

Sales & marketing expenses

 
7,198
 

 
6,469

 
7,198
 

 
8,214
 

 
218,822
 

 
202,857

 
218,822
 

 
229,911
 

General & administrative expenses

 
4,993
 

 
4,114

 
4,993
 

 
6,449
 

 
151,797
 

 
129,023

 
151,797
 

 
180,508
 

Expected credit loss

 
(84
)

 

 
(84
)

 

 

 
(2,549
)

 

 
(2,549
)

 

 

Total operating expenses

 
32,167
 

 
30,657

 
32,167
 

 
35,889
 

 
977,885
 

 
961,391

 
977,885
 

 
1,004,543
 

Operating income

 
11,876
 

 
14,019

 
11,876
 

 
64,886
 

 
361,030
 

 
439,630

 
361,030
 

 
1,816,149
 

Non-operating income and (expenses)

 
1,268
 

 
1,800

 
1,268
 

 
(30
)

 
38,560
 

 
56,441

 
38,560
 

 
(825
)

Income before income taxes

 
13,144
 

 
15,819

 
13,144
 

 
64,856
 

 
399,590
 

 
496,071

 
399,590
 

 
1,815,324
 

Income tax expense

 
1,523
 

 
1,335

 
1,523
 

 
5,669
 

 
46,299
 

 
41,861

 
46,299
 

 
158,689
 

Net income

 
11,621
 

 
14,484

 
11,621
 

 
59,187
 

 
353,291
 

 
454,210

 
353,291
 

 
1,656,635
 

EPS – Basic (In Dollar)

$
0.15
 

$
0.18

$
0.15
 

$
0.75
 

$
4.51
 

$
5.67

$
4.51
 

$
20.91
 

Shares used in computing EPS-Basic (In thousands)

 
78,373
 

 
80,160

 
78,373
 

 
79,212
 

 
78,373
 

 
80,160

 
78,373
 

 
79,212
 

EPS – Diluted (In Dollar)

$
0.15
 

$
0.18

$
0.15
 

$
0.73
 

$
4.46
 

$
5.60

$
4.46
 

$
20.55
 

Shares used in computing EPS-Diluted (In thousands)

 
79,207
 

 
81,067

 
79,207
 

 
80,602
 

 
79,207
 

 
81,067

 
79,207
 

 
80,602
 

UNAUDITED CONSOLIDATED BALANCE SHEETSAs of March 31, 2023 and 2022
USD in Thousands

NTD in Thousands

Mar 31,

Mar 31,

Mar 31,

Mar 31,

2023
 

2022
 

2023
 

2022
 

Current assets

Cash & cash equivalents

185,110
 

340,632
 

5,636,592
 

9,752,306
 

Accounts receivable, net

47,877
 

56,022
 

1,457,865
 

1,603,903
 

Inventories, net

131,991
 

93,867
 

4,019,123
 

2,687,412
 

Other current assets

23,515
 

16,992
 

716,041
 

486,468
 

Total current assets

388,493
 

507,513
 

11,829,621
 

14,530,089
 

Non-current assets

Property, plant and equipment, net

16,074
 

17,800
 

489,440
 

509,608
 

Right-of-use assets

6,018
 

8,138
 

183,259
 

232,999
 

Intangible assets

103,274
 

108,218
 

3,144,691
 

3,098,289
 

Deferred income tax assets

11,664
 

9,653
 

355,164
 

276,374
 

Other non-current assets

147,484
 

76,667
 

4,490,886
 

2,194,962
 

Total non-current assets

284,514
 

220,476
 

8,663,440
 

6,312,232
 

Total Assets

673,007
 

727,989
 

20,493,061
 

20,842,321
 

 

Current Liabilities

Accounts payable

19,793
 

43,215
 

602,705
 

1,237,258
 

Other payables

30,540
 

40,844
 

929,938
 

1,169,376
 

Current income tax liabilities

9,281
 

24,445
 

282,606
 

699,860
 

Lease liabilities – current

3,292
 

3,487
 

100,249
 

99,818
 

Other current liabilities

6,792
 

10,716
 

206,792
 

306,815
 

Total current liabilities

69,698
 

122,707
 

2,122,290
 

3,513,127
 

Non-current Liabilities

Lease liabilities – non-current

2,726
 

4,652
 

83,010
 

133,181
 

Total non-current liabilities

2,726
 

4,652
 

83,010
 

133,181
 

Equity

Ordinary shares

26,738
 

26,742
 

811,832
 

811,956
 

Capital reserves

136,752
 

146,220
 

4,220,434
 

4,387,899
 

Retained earnings

508,057
 

492,747
 

15,025,235
 

14,627,390
 

Other equity

(11,301
)

(20,527
)

73,644
 

(1,393,138
)

Treasury shares

(59,663
)

(44,552
)

(1,843,384
)

(1,238,094
)

Total equity

600,583
 

600,630
 

18,287,761
 

17,196,013
 

Total liabilities and equity

673,007
 

727,989
 

20,493,061
 

20,842,321
 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWSFor three months ended March 31, 2023 and 2022
USD in Thousands

NTD in Thousands

Mar 31,

Mar 31,

Mar 31,

Mar 31,

2023
 

2022
 

2023
 

2022
 

Cash flows from operating activities

Income before income tax for the period

13,144
 

64,856
 

399,590
 

1,815,324
 

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

5,319
 

5,356
 

161,703
 

149,898
 

Expetced credit loss

84
 


 

2,549
 


 

Loss on disposal of equipment


 

1
 


 

33
 

Loss on disposal of intangible assets

47
 


 

1,422
 


 

Share-based compensation cost

9,653
 

9,097
 

291,744
 

254,632
 

Interest income

(1,525
)

(25
)

(46,376
)

(692
)

Income and expenses having no effect on cash flows

13,578
 

14,429
 

411,042
 

403,871
 

Accounts receivable

(13,254
)

(5,639
)

(403,575
)

(161,444
)

Inventories

13,502
 

(18,088
)

411,136
 

(517,868
)

Other current assets

(11,653
)

(10,577
)

(285,910
)

(298,996
)

Net changes in assets relating to operating activities

(11,405
)

(34,304
)

(278,349
)

(978,308
)

Accounts payable

6,791
 

2,369
 

206,778
 

67,838
 

Other payables

(10,023
)

(8,695
)

(305,192
)

(248,956
)

Other current liabilities

(6,683
)

673
 

(203,487
)

19,264
 

Net changes in liabilities relating to operating activities

(9,915
)

(5,653
)

(301,901
)

(161,854
)

Cash inflow generated from operations

5,402
 

39,328
 

230,382
 

1,079,033
 

Interest received

1,526
 

25
 

46,376
 

692
 

Income taxes paid

(5,021
)

(333
)

(152,638
)

(9,311
)

Net cash provided by operating activities

1,907
 

39,020
 

124,120
 

1,070,414
 

Cash flows from investing activities

Acquisition of equipment

(1,766
)

(1,840
)

(53,688
)

(51,490
)

Acquisition of intangible assets

(134
)

(7
)

(4,068
)

(194
)

Decrease in refundable deposits

6,784
 

24
 

206,557
 

693
 

Increase in other prepayments

(2,070
)

(2,238
)

(62,929
)

(62,653
)

Net cash flows provided by (used in) investing activities

2,814
 

(4,061
)

85,872
 

(113,644
)

Cash flows from financing activities

Proceeds from exercise of employee stock options


 

2,372
 


 

66,397
 

Repayment of the principal portion of lease liabilities

(771
)

(791
)

(23,431
)

(22,149
)

Treasury shares reissued to employees

10,422
 

11,789
 

310,226
 

327,175
 

Distribution of cash dividends

(60,062
)

(40,752
)

(1,724,498
)

(1,147,980
)

Cash dividend regain from canceled share-based compensation

19
 

16
 

555
 

479
 

Net cash flows used in financing activities

(50,392
)

(27,366
)

(1,437,148
)

(776,078
)

Effect of exchange rate changes

3,644
 

606
 

(111,636
)

369,871
 

Net (decrease) increase in cash and cash equivalents

(42,027
)

8,199
 

(1,338,792
)

550,563
 

Cash and cash equivalents at beginning of period

227,137
 

332,433
 

6,975,384
 

9,201,743
 

Cash and cash equivalents at end of period

185,110
 

340,632
 

5,636,592
 

9,752,306
 

  Contacts
Parade Technologies
Yo-Ming Chang, +886-2-2627-9109
ir@paradetech.com