Image sensor company sees profit and revenues drop

OmniVision Technologies has reported financial results for its third quarter ended January 31, 2007.

OmniVision Technologies, a supplier of CMOS image sensors, has reported financial results for its third quarter which ended on 31st January, 2007.

Revenue for the quarter was US $134.4 million, compared with $137.7 million in the second quarter of fiscal 2007, and $137.3 million in the third quarter of fiscal 2006.

GAAP net income in the quarter, which includes stock-based compensation expense and the related tax effects under FAS 123, was $4.1 million, or $0.07 per diluted share, compared with GAAP net income of $5.4 million, or $0.10 per diluted share, in the second quarter of fiscal 2007.

GAAP net income in the third quarter of fiscal 2006, prior to the company's adoption of FAS 123, was $29.6 million, or $0.53 per diluted share.

Non-GAAP net income in the quarter, which excludes stock-based compensation expense and the related tax effects, was $11.1 million and earnings were $0.20 per diluted share.

Gross margin for the third quarter was 24.9% compared with 33.1% last quarter.

The reduction in gross margin reflects continued pricing pressure during the quarter, coupled with the fact that during the quarter, the company was selling higher cost inventory that was built in previous quarters.

In December 2006, pursuant to the terms of the mutual agreement between the company and its joint venture with Taiwan Semiconductor Manufacturing Company, VisEra Technologies Company, the company assumed responsibility for production logistics management previously provided by VisEra.

As a consequence, the company concluded that it was no longer the primary beneficiary of the joint venture, as defined under FIN 46R and deconsolidated VisEra as of January 1, 2007.

The deconsolidation of VisEra had no material impact on the company's reported revenue or reported net income for the three and nine months ended 31st January 2007.

The company ended the period with cash, cash equivalents and short-term investments totaling $341 million, a decrease of $9 million from the previous quarter.

The company today announced that its Board of Directors has authorised the repurchase of up to $100 million of its outstanding common stock.

Subject to applicable securities laws, the shares may be repurchased from time to time in the open market.

Such purchases will be at times and in amounts as the company deems appropriate, based on factors such as market conditions, legal requirements and other corporate considerations.

"Our product development teams achieved several notable successes during the January quarter", says Shaw Hong, OmniVision's President and Chief Executive Officer.

"We have completed the development work for our first TrueFocus camera with wavefront coding technology for the mobile handset market and are now shipping samples to interested customers".

"We began sample shipments of a 5.17Mpixel auto-focus camera module for mobile handsets".

"We also introduced a 1/10 inch VGA CameraChip sensor for entry-level mobile handsets, secondary cameras for 3G phones and PC notebooks".

"Amid an increasingly competitive environment, these product introductions demonstrate our determination to achieve our goal of recapturing our traditional position as the product leader in the image sensor market".

"We plan to continue to invest in research and development to stay at the leading edge of the technology curve for our markets".

"We believe that our April fiscal quarter will be a difficult one".

"However, we can already see the demand environment for our products improving in the July fiscal quarter.

"To demonstrate its confidence in the long-term prospects for our business, our Board of Directors has approved a $100 million stock repurchase program", says Hong.

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