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Omnivision Technologies Conference Call Highlights


OmniVision Technologies, Inc. (NASDAQ: OVTI) reported its first quarter highlights on Tuesday. Shares of the company are down a 1 percent.

Below are some key highlights from its conference call.

Performance Metrics:

• We reported fiscal Q2 revenues of $394 million, a decrease of 3% sequentially and 1% year-over-year.
• During the quarter we shipped 246 million sensors. On a non-GAAP basis gross margin was 22.2% and net income was $37 million, or $0.60 per diluted share.
• We are happy to report an eighth consecutive quarter of gross margin expansion.
• Our balance sheet remained strong with cash and short-term investments of $525 million.
• A few months ago we received a preliminary non-binding proposal letter from Hua Capital Management Ltd., or HCM.
• A Beijing-based investment management company, pursuant to which a group of investors led by HCM proposes to acquire all of the outstanding shares of common stock of the company in cash at $29 per share.
• The company's Board of Directors is reviewing and evaluating HCM's proposal.
• No decision has been made with respect to the proposed transaction and there's no assurance that this or any other transaction may be consummated.
• We are focused on operating our business.
• We do not intend to provide updates with respect to this or any other transaction, except as required by applicable law.
• I'm satisfied with the performance of the company in fiscal Q2.
• Despite the intense competitive dynamic in our markets, our results exceeded the high end of our expectation on all metrics.
• Our core mobile phone market experienced strong demand from Asia-based OEMs, especially in the China region.
• And India has become a key geography for us.
• Our automotive business is continuing on a strong growth trajectory, and our security business is poised to become our next significant end market.
• OmniVision's long-term goal is to drive profitable revenue growth from diverse applications, products and end markets. In order to achieve our goal we must:
• First, continue to innovate it so that we can develop new products and applications;
• Second, expand our market opportunity; third, continue to work with our supply channel to optimize cost and increase capacity to better support our customers' need.
• First, focus on technology and new application development.
• We have continued to focus on technology innovation as the basis for our success.
• Designed on an advanced semiconductor process, we have successfully launched our PureCel technology.
• Currently, we have ramped into production an array of our flagship PureCel sensors targeted across all the major segments of the mobile market.
• PureCel sensors provide superior image quality, light sensitivity and power efficiency.
• We are currently shipping multiple PureCel sensors that cover all the resolution from 1080p, 5-megapixel, 8-megapixel as well 13-megapixel in high volumes to multiple OEMs.
• We have also extended our PureCel technology with our next-generation technology called PureCel-S.
• PureCel-S is based on a stacked-die concept to further drive our imaging performance leadership.
• Die stacking is attractive to OEMs since it improves camera performance, processing speed, and allows a thinner form factor for consumer devices.
• In addition to performance and the form factor benefits, die stacking also enables different manufacturing processes to be used for different layers, which allows for a more efficient supply chain.
• We have assembled the first four members of our high-resolution stacked die sensor family, the 13-megapixel, 16-megapixel, 21-megapixel, and 23-megapixel PureCel-S sensors.
• OmniVision has continued to innovate on other technologies. We have launched into mass production companion technologies, such as ISPs, ASICs, as well as compact camera modules called CCC.
• Our goal is to enable our customers' time to market and develop new applications for cameras.
• Given that OEMs have expressed significant interest in next-generation camera technologies to further differentiate their flagship devices, OmniVision has an entire suite of technologies to enable new applications with our image sensors.
• We are working with multiple partners on applications such as computational imaging to enable multiple-camera systems as well as machine vision to enable human interface systems such as gesture recognition, eye tracking and iris recognition, et cetera.
• The average selling price in our second quarter was $1.60 as compared to $1.63 in our prior quarter.
• The slight downward step in ASP was due to strong competition leading to general price erosion in the consumer space, offset partially by a mix shift to higher resolutions.
• Our fiscal 2015 second quarter gross margin was 22% compared with the 21.7% that we reported in our prior quarter.

Posted-In: conference callEarnings News


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