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 SHEETS As 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 FLOWS For 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