Parade Technologies Reports Second Quarter 2023 Financial Results

Financial Highlights:

• Q223 consolidated revenue US$104.18 million, compared with US$216.70 million in the year-ago quarter
• Q223 consolidated net income US$13.98 million; Basic and Fully diluted after-tax EPS US$0.18 (NT$5.44) and US$0.18 (NT$5.40), 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 2023 ended June 30, 2023, and provided guidance for the third quarter of fiscal year 2023.

Consolidated revenue was US$104.18 million and consolidated net income was US$13.98 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.18 (NT$5.44) and US$0.18 (NT$5.40), respectively. These results compared to consolidated revenue US$216.70 million and consolidated net income of US$60.94 million, or US$0.76 (NT$22.51) and US$0.75 (NT$22.18) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the second quarter of 2023 consolidated revenue increased 4.19% sequentially and was down 51.93% year-over-year.

The gross profit in the second quarter of 2023 was US$45.80 million, representing an increase of 3.98% from the previous quarter and a decrease of 55.26% compared to the same quarter of last year.

On May 24, 2023, Parade announced the availability of the PS8833 USB4/TBT4/DP 2.1 retimer and PS8836 USB 3.2/DP 2.1 retimer for commercial and consumer PCs, host systems and peripherals. PS8833 features full capabilities of USB4®, DisplayPort 2.1™ and Thunderbolt™ 4.0 with 50% reduction in power consumption. Its pin compatibility with PS8830 USB4/TBT4 retimer currently shipping in customer systems, greatly simplifies OEM design for product longevity. PS8836 offers USB 3.2 Gen 2×2 with DP 2.1 and is pin compatible with PS8833. The PS8833 / PS8836 pin compatible solutions allow OEMs to easily offer a full range of USB4 and USB 3.2 product offerings.

On July 26, 2023, Parade has demonstrated the lowest latencies in the industry with its new PS8936 PCIe/CXL re-timer solution. PS8936 retimer chip developed for PCI Express Rev. 5.0 and Compute Express Link (CXL), supporting sixteen bidirectional lanes. In addition to supporting the 32 Gbps data rate offered by the PCI Express 5.0 specification, it also supports all lower data rates, to provide backward compatibility with earlier PCI Express revisions. The promise of CXL is to enable scalable, high-performance coherent memory. While CXL can rely on the continual advances in PCIe Express to address its ever-increasing bandwidth needs, access time is an equally critical factor for memory performance. As larger CXL architectures are built, they will inevitably encounter situations where signal integrity places limits on both scale and flexibility, and retimers will be needed. With Parade’s patented low-latency retimers, these systems can be built without compromising signal integrity or performance.

Based on current business outlook, Parade is providing the following guidance for the third quarter of fiscal 2023:

• Revenue: US$107 ~119 Million
• Gross Margin: 43% ~47%
• Operating Expense: US$30 ~33 Million

The financial figures detailed above for the second quarter of 2023 have been audited 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.

CONSOLIDATED INCOME STATEMENTS	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,
	2023			2023			2023			2022			2023			2022			2023			2023			2023			2022			2023			2022
Revenue		104,178			99,990			104,178			216,699			204,168			427,422			3,199,298			3,039,712			3,199,298			6,383,951			6,239,010			12,282,094
Cost of goods sold		58,380			55,947			58,380			114,340			114,327			224,288			1,792,845			1,700,797			1,792,845			3,368,457			3,493,642			6,445,908
Gross profit		45,798			44,043			45,798			102,359			89,841			203,134			1,406,453			1,338,915			1,406,453			3,015,494			2,745,368			5,836,186
Research & development expenses		20,293			19,892			20,293			21,483			40,185			42,709			623,198			604,717			623,198			632,873			1,227,915			1,226,997
Sales & marketing expenses		7,188			7,198			7,188			7,907			14,386			16,121			220,732			218,822			220,732			232,925			439,554			462,836
General & administrative expenses		4,888			4,993			4,888			6,549			9,881			12,998			150,109			151,797			150,109			192,942			301,906			373,450
Expected credit loss		–			84			–			–			84			–			–			2,549			–			–			2,549			–
Total operating expenses		32,369			32,167			32,369			35,939			64,536			71,828			994,039			977,885			994,039			1,058,740			1,971,924			2,063,283
Operating income		13,429			11,876			13,429			66,420			25,305			131,306			412,414			361,030			412,414			1,956,754			773,444			3,772,903
Non-operating income and (expenses)		2,055			1,268			2,055			566			3,323			536			63,081			38,560			63,081			16,662			101,641			15,837
Income before income taxes		15,484			13,144			15,484			66,986			28,628			131,842			475,495			399,590			475,495			1,973,416			875,085			3,788,740
Income tax expense		1,505			1,523			1,505			6,049			3,028			11,718			46,226			46,299			46,226			178,193			92,525			336,882
Net income		13,979			11,621			13,979			60,937			25,600			120,124			429,269			353,291			429,269			1,795,223			782,560			3,451,858
EPS – Basic (In Dollar)	$	0.18		$	0.15		$	0.18		$	0.76		$	0.33		$	1.51		$	5.44		$	4.51		$	5.44		$	22.51		$	9.94		$	43.42
Shares used in computing EPS-Basic (In thousands)		78,947			78,373			78,947			79,766			78,692			79,496			78,947			78,373			78,947			79,766			78,692			79,496
EPS – Diluted (In Dollar)	$	0.18		$	0.15		$	0.18		$	0.75		$	0.32		$	1.48		$	5.40		$	4.46		$	5.40		$	22.18		$	9.85		$	42.67
Shares used in computing EPS-Diluted (In thousands)		79,545			79,207			79,545			80,951			79,413			80,905			79,545			79,207			79,545			80,951			79,413			80,905

CONSOLIDATED BALANCE SHEETS As of June 30, 2023 and 2022	USD in Thousands						NTD in Thousands
	Jun 30,			Jun 30,			Jun 30,			Jun 30,
	2023			2022			2023			2022
Current assets
Cash & cash equivalents	225,120			408,717			7,010,227			12,147,059
Accounts receivable, net	54,721			71,597			1,704,022			2,127,869
Inventories, net	114,368			107,911			3,561,433			3,207,122
Other current assets	32,666			25,492			1,017,219			757,629
Total current assets	426,875			613,717			13,292,901			18,239,679
Non-current assets
Property, plant and equipment, net	14,970			17,920			466,159			532,593
Right-of-use assets	5,083			6,759			158,295			200,863
Intangible assets	101,772			106,129			3,169,177			3,154,145
Deferred income tax assets	11,143			10,232			346,988			304,090
Other non-current assets	150,473			78,140			4,685,730			2,322,312
Total non-current assets	283,441			219,180			8,826,349			6,514,003
Total Assets	710,316			832,897			22,119,250			24,753,682
Current Liabilities
Accounts payable	29,194			56,079			909,092			1,666,672
Other payables	54,820			100,695			1,687,909			2,892,562
Current income tax liabilities	9,528			30,317			296,692			901,030
Lease liabilities – current	2,960			3,037			92,194			90,253
Other current liabilities	6,490			13,823			202,110			410,818
Total current liabilities	102,992			203,951			3,187,997			5,961,335
Non-current Liabilities
Lease liabilities – non-current	2,123			3,722			66,101			110,610
Total non-current liabilities	2,123			3,722			66,101			110,610
Equity
Ordinary shares	26,735			26,740			811,747			811,895
Capital reserves	134,946			138,074			4,212,672			4,188,380
Retained earnings	498,502			500,731			14,740,781			14,948,952
Other equity	(10,321	)		(18,513	)		493,401			(661,362	)
Treasury shares	(44,661	)		(21,808	)		(1,393,449	)		(606,128	)
Total equity	605,201			625,224			18,865,152			18,681,737
Total liabilities and equity	710,316			832,897			22,119,250			24,753,682

CONSOLIDATED STATEMENTS OF CASH FLOWS For six months ended June 30, 2023 and 2022	USD in Thousands						NTD in Thousands
	Jun 30,			Jun 30,			Jun 30,			Jun 30,
	2023			2022			2023			2022
Cash flows from operating activities
Income before income tax for the period	28,628			131,842			875,085			3,788,740
Depreciation and amortization (including the right-of-use assets)	11,132			11,081			340,100			318,238
Expected credit loss	84			–			2,549			–
Loss on disposal of equipment	–			1			–			34
Loss on disposal of intangible assets	125			–			3,814			–
Share-based compensation cost	17,735			16,451			537,517			479,230
Interest income	(2,925	)		(158	)		(89,352	)		(4,627	)
Income and expenses having no effect on cash flows	26,151			27,375			794,628			792,875
Accounts receivable	(20,098	)		(21,214	)		(625,845	)		(630,493	)
Inventories	31,124			(32,133	)		969,215			(954,979	)
Other current assets	(27,673	)		(31,800	)		(737,173	)		(893,882	)
Net changes in assets relating to operating activities	(16,647	)		(85,147	)		(393,803	)		(2,479,354	)
Accounts payable	16,191			15,233			504,193			452,730
Other payables	(9,303	)		(1,814	)		(289,726	)		(53,915	)
Other current liabilities	(6,983	)		3,779			(217,466	)		112,320
Net changes in liabilities relating to operating activities	(95	)		17,198			(2,999	)		511,135
Cash inflow generated from operations	38,037			91,268			1,272,911			2,613,396
Interest received	2,925			158			89,352			4,627
Income taxes paid	(6,247	)		(816	)		(190,854	)		(23,433	)
Income taxes received	–			19			–			554
Net cash provided by operating activities	34,715			90,629			1,171,409			2,595,144
Cash flows from investing activities
Acquisition of equipment	(2,812	)		(3,854	)		(85,894	)		(110,678	)
Acquisition of intangible assets	(170	)		(34	)		(5,181	)		(977	)
Decrease in refundable deposits	6,821			74			212,389			2,193
Increase in other prepayments	(6,505	)		(4,552	)		(198,738	)		(130,729	)
Net cash flows used in investing activities	(2,666	)		(8,366	)		(77,424	)		(240,191	)
Cash flows from financing activities
Proceeds from exercise of employee stock options	–			2,376			–			68,228
Repayment of the principal portion of lease liabilities	(1,786	)		(1,931	)		(54,554	)		(55,475	)
Treasury shares reissued to employees	25,424			34,533			760,161			959,141
Distribution of cash dividends	(60,062	)		(40,752	)		(1,724,498	)		(1,147,980	)
Cash dividend regain from canceled share-based compensation	73			52			2,184			1,517
Net cash flows used in financing activities	(36,351	)		(5,722	)		(1,016,707	)		(174,569	)
Effect of exchange rate changes	2,285			(257	)		(42,435	)		764,932
Net (decrease) increase in cash and cash equivalents	(2,017	)		76,284			34,843			2,945,316
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	225,120			408,717			7,010,227			12,147,059

 

Contacts

Parade Technologies

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

ir@paradetech.com