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Original Source: FD (FAIR DISCLOSURE) WIRE
. Steven Horwitz, OmniVision Technologies, Inc., Investor Relations
. Shaw Hong, OmniVision Technologies, Inc., President and CEO . Peter Leigh, OmniVision Technologies, Inc., CFO . Aaron Husock, Morgan Stanley, Analyst . Tayyib Shah, Longbow Research, Analyst . Kevin Cassidy, Thomas Weisel Partners, Analyst . Ray Cisneros, OmniVision Technologies, Inc., VP of Sales . Paul Coster, JPMorgan, Analyst
. Bruce Weyer, OmniVision Technologies, Inc., VP of Marketing . Tristan Gerra, Robert W. Baird, Analyst . Quinn Bolton, Needham & Company, Analyst . Daniel Gelbtuch, CIBC, Analyst . Amit Kapur, Piper Jaffray, Analyst . Doug Freedman, American Technology Research, Analyst . Adam Benjamin, Jefferies, Analyst . Hans Mosesmann, Raymond James, Analyst
OVTI reported 2Q08 revenue of $232.6m, GAAP net income of $20.5m and GAAP diluted EPS of $0.36. For 3Q08, the Co. expects revenue to be $220-240m and GAAP diluted EPS to be $0.26-0.39.
A. Key Data From Call 1. 2Q08 revenue = $232.6m. 2. 2Q08 GAAP net income = $20.5m. 3. 2Q08 non-GAAP net income = $29.1m. 4. 2Q08 GAAP diluted EPS = $0.36. 5. 2Q08 non-GAAP diluted EPS = $0.51. 6. 2Q08 GM = 25.2%. 7. 2Q08 DSO = 35. 8. Inventory at 10/31/07 = $133.4m. 9. Cash, cash equivalents, and short-term investments at 2Q08-end = $323.9m. 10. 3Q08 revenue guidance = $220-240m.
11. 3Q08 GAAP diluted EPS guidance = $0.26-0.39. 12. 3Q08 non-GAAP diluted EPS guidance = $0.41-0.54.
S1. 2Q08 Business Review (S.H.) 1. Overview: 1. Revenue reached a record $233m. 2. GAAP earnings were $0.36 per diluted share.
3. Excluding stock-based compensation expenses, non-GAAP earnings
were $0.51 per diluted share. 4. Cash and short-term investments remain strong totaling about $324m at 2Q08-end. 5. In 2Q08, sold a record 120m sensors vs. approx. 86m in 1Q08 and 65m in 2Q07. 6. Throughout 2Q08, continued to see record strong demand for OVTI's products across all geographies. 7. Success today and in the future depends on the ability to execute on the three key elements of OVTI's strategy: 1. Technology leadership.
2. Efficient and timely delivery of product to customers. 3. Providing customers with the highest level of service and support.
8. As OVTI looks to build on its market leadership position, Co.
has several technology advantages. 1. The 1.75 micron pixel is the basis of OmniPixel3 architecture is proving itself a market leader. 2. For this architecture, OVTI was able to shrink the size of the pixel to fit into smaller camera models and achieve
lower cost. 9. Has been able to achieve image quality substantially better than the prior 2.2 micron pixel generation. 10. Believes that OVTI is ahead of the competition in development of its next-generation technology for the high performance 1.4 micron pixel. 1. This pixel size will enable the next-generation of higher resolutions in even smaller form factors. 2. Details:
1. System-on-chip solutions with high dynamic range (HDR) anti-shake and near infrared capabilities serving the handset,
digital camera, PC camera, auto, security, medical, and gaming
markets are also industry leaders. 1. Has Wavefront Coding technology for extended depth of field applications. 2. By itself, leading technology does not make a bench. 1. OVTI has demonstrated the ability to deliver its market leading technology to its customers.
3. Amongst the important ways in which OVTI consistently deliver
products are: 1. Has established key partnerships to ensure that OVTI has an efficient manufacturing process. 2. Has strong strategic alliance with TSMC, including being one of their top customers.
3. Works closely with TSMC to maintain highest quality in color
filter and micro-lens JV, VisEra. 4. Works closely with TSMC to optimize production at XinTec, OVTI's primary chip-scale packaging (CSP) provider. 5. Earlier this year to add further CSP capacity, OVTI added a new supplier WLCSP. 6. OVTI designed, installed and now is in production with the own automatic testers to make the final testing process more efficient and effective. 7. These actions contributed to the shipment of well over 300m units of more than 50 types of products in the last four quarters. 8. This represents (indiscernible) 15% unit increase over the previous four quarters. 4. Combination of technology leadership and ability to
efficiently deliver products enables OVTI to secure design
wins. 5. With service and support, OVTI serves its customers maximize their ability to ship high production volumes. 6. Builders and employees are exclusively focused on the image
sensor market. 1. No other co. has unveiled the level of dedication to image sensors from one end of the organization to the other.
2. Business is providing solution to meet needs of the customers.
3. Has been able to meet customer needs by having offices around the world throughout North America, US, Europe, and Asia. 4. This worldwide presence has given OVTI its customers the confidence that Co. can meet their needs efficiently and effectively. 3. Mainstream Product: 1. Mobile handsets accounted for approx. 65% of revenues in 2Q08. 2. In 2Q08, benefited from strong demand for sensors across
multiple resolutions. 3. During 2Q08, continued to sees strong demand for 1/5-inch 2-megapixel sensor product. 4. A mix of 2-megapixel and higher resolution centers approach 15% of total units in 2Q08. 1. This sensor continues to win socket design, which is a key to increasing OVTI's market share. 5. Adoption of 2-megapixel is a promising sign for higher resolution sensors. 6. The new 1/5-inch 2-megapixel sensors have already achieved
early socket design wins from customers looking to upgrade
from VGA and 1-megapixel sensors. 1. These customers informed OVTI that Co.'s products are significantly ahead of those of the competitors. 2. This feedback provides OVTI with early indication that OmniPixel3 and expanded system on the chip platform with HDR, anti-shake and (indiscernible) should be successful. 7. As the market continues to move to higher resolution sensors, OVTI is encouraged with the level of interest and early design wins with the 1/5-inch 3-megapixel sensor. 1. OVTI is winning sockets at a very fast pace, including multiple tier one design wins.
2. The 1/5-inch 3-megapixel sensor based on 1.75 micron pixel is the most advanced in the marketplace today. 3. Believes OVTI's sensor produces the highest quality images and has the best low light sensitivity. 4. …