SUNNYVALE, CA — February 20, 2002 — OMNIVISION Technologies, Inc. (Nasdaq: OVTI), a market-leading independent supplier of single CameraChip™ solutions for high-volume imaging applications, today reported financial results for its third fiscal quarter ended January 31, 2002.
Third fiscal quarter revenues were $10.0 million, a 23 percent increase from revenues of $8.1 million reported for the year ago third fiscal quarter and a decrease of 19 percent from revenues of $12.3 million reported in the prior quarter. The increase from the year ago quarter was primarily due to the diversification into several markets in addition to the PC camera market, including security/home entertainment camera, cell phone camera and digital still camera markets. The decrease in revenues from the second quarter was due to the decrease in revenues from the home entertainment/home surveillance camera market. The third quarter revenues of $10 million were in line with OMNIVISION’s revenue expectations of $9 – $11 million, even though the home entertainment/home surveillance camera market accounted for a very small percent of revenues instead of the 10 percent of revenues expected in the guidance for the third quarter.
Gross margin for the third fiscal quarter was 42.5 percent, up from 38.1 percent in the prior quarter. The third quarter gross profit includes a one-time benefit of approximately $1.3 million from the sale of inventory previously written-off in the third quarter of fiscal 2001, which is partially offset by an inventory write-down of approximately $600,000 in the third quarter of fiscal 2002. Without the effect of these inventory items, gross margin in the third fiscal quarter 2002 would be 35.1 percent, consistent with earlier guidance. Product mix and overall product yields will continue to influence gross profit margins in the future.
Expenses for research and development in the quarter increased to $1.9 million or 18.6 percent of revenues from the previous fiscal quarter of $1.8 million or 14.7 percent of revenues. Research and development expenses increased on a dollar basis primarily due to the higher cost of masks and engineering wafers in the development of new parts. Selling, general and administrative expenses in the quarter decreased to $2.2 million or 22.1 percent of revenues from the previous quarter of $3.4 million or 27.6 percent of revenues. The decrease in selling, general and administrative expense was primarily a result of lower legal expenses.
Net income for the third fiscal quarter was $330,000 or earnings per share of $0.01 on 24.5 million diluted shares. For the year ago third fiscal quarter, the company reported a net loss of $15.6 million or a net loss per share of $0.73 on 21.4 million basic shares.
“We are pleased that the results of the third quarter are in line with our expectations and continue to validate our strategy of applying proprietary design technology to highly integrated still-photo and video camera solutions for high-volume imaging applications,” stated Shaw Hong, President and Chief Executive Officer of OMNIVISION. “By way of example, Hyundai Curitel selected OMNIVISION for cell phone cameras because we demonstrated a commitment to provide products that meet Hyundai Curitel’s stringent market demand criteria of small size, low power and high-quality imaging capabilities. We feel very positive about our short and longer term strategy and business development across each of our target applications.”
Guidance for the fourth fiscal quarter ending April 30, 2002 is for revenues to increase to a range between $12 and $13 million, and for earnings per share to be in a range of $0.01 to $0.03.
OMNIVISION Product and Market Advances
Mobile Phone Cameras
OMNIVISION’s business for mobile phone camera solutions is benefiting from the growing world-wide cell phone, and network, ability to support the capture and sending of photographs.
The OMNIVISION CameraChip™ and module solutions offer unique geometry advantages and other performance benefits for the cell phone market, and OMNIVISION is working diligently to provide technology and products tailored to the cell phone and mobile consumer markets.
As further evidence of this focus, OMNIVISION has opened a European sales office to better support European demand for cameras for mobile phones, and for automotive and digital still camera applications. The new office, located in Oakham near London, has resources for supporting both sales and localized design integration.
Digital Still Cameras and Video Cameras
Advancing OMNIVISION’s competitive position in the digital still camera market is the recent announcement by OMNIVISION about broad support from three leading digital signal processing (DSP) chip providers — Grandtech, Sunplus and Winbond — each of which has announced digital still camera reference designs that incorporate their own DSP and OMNIVISION’s 1.3 mega-pixel CameraChip™.
These reference designs help digital still camera manufacturers integrate complementary technologies quickly, enabling them to more rapidly bring low-cost digital cameras to market.
The agreements with the DSP companies strengthen the commitment to the digital still and video camera markets that OMNIVISION recently demonstrated in its announcement of its second-generation 1.3 mega-pixel (1280×1024) CameraChip™. Designed for the high-volume, low-cost digital still and video camera markets, the color OV9620 and black-and-white OV9120 are smaller and lower-cost versions of OMNIVISION’s mega-pixel products announced in April of last year. These second-generation 1.3 mega-pixel CameraChips™ are designed for digital still camera, machine vision, automotive and surveillance camera applications, as well as for newer emerging markets such as commercial security, biometric products and dual-mode digital cameras.
Notably, when combined with back-end chips, these 1.3 mega-pixel CameraChips™ can be designed into low-cost, high-speed products that attach to computers using USB Full Speed/High Speed or Fire Wire (1394) interfaces and can be used in Web-casting and video conferencing solutions.
Security Cameras
In an ongoing effort to expand OMNIVISION’s business in the security market, the company recently announced its new low-power, highly integrated CameraChip™. The new offering, the OV7421, based on OMNIVISION’s CMOS CameraChip™ technology, is targeted for security and surveillance applications due to its low (.08) lux capabilities, enabling imaging products to be more sensitive and provide higher quality images in low light conditions. This new offering is intended for lower cost and higher volume commercial and home entertainment/security and surveillance applications.
OMNIVISION Conference Call
OMNIVISION’s third fiscal quarter conference call is scheduled for today February 20, 2002 at 2:00 p.m. PST. To listen to the call, please dial (703) 871-3599 or (877) 817-7175 at least 5 minutes prior to the start. Interested parties also have the opportunity to listen to the conference call live via Webcast at www.companyboardroom.com. The Webcast will be available at that address for 90 days. A replay of the call will be available through February 27th by dialing (703) 925-2435 or (888) 266-2086, code #5829692.
About OMNIVISION
OMNIVISION Technologies, Inc. is an independent CameraChip™ solutions provider. Utilizing proprietary design technology for its highly integrated still-photo and video camera solutions for high-volume imaging applications, OMNIVISION integrates multiple image processing and capture functions into a single CameraChip™ design. With the addition of only a lens, the result is a low-cost CameraChip™ that consumes less power, has a greater environmental functioning range and has a smaller footprint than competing multi-chip image sensor solutions. OMNIVISION’s CameraChip™ solutions are in cell phones, personal digital assistants, automobiles and industrial machine vision applications, as well as surveillance and biometric security applications. OMNIVISION is based in Sunnyvale, California. For more information about the company, visit our Website at www.ovt.com.
OMNIVISION is traded on the Nasdaq National Market System under the symbol OVTI. More information about the Company is located on the World Wide Web at: http://www.ovt.com.
OMNIVISION and CameraChip™ are trademarks of OMNIVISION Technologies, Inc. All other trade, product or service names referenced in this release may be trademarks or registered trademarks of their respective holders.
Safe Harbor
The foregoing press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are subject to significant risks and uncertainties. In particular the statements relating to the Company’s fourth fiscal quarter financial results; the fluctuations of gross margins in the future; the Company’s feelings about its short and longer term strategy and business development in each of its target applications; the Company’s efforts towards providing products for the cell phone and mobile consumer markets; the support to be provided by the Company’s European sales office; European demand for the Company’s products; the advancement of the Company’s competitive position in the digital still camera market; the product qualities of Grandtech, Sunplus and Winbond’s reference designs; the markets for which the second generation 1.3 mega-pixel CameraChips™ are designed; the product capabilities of the second generation 1.3 mega-pixel CameraChips™ and the security applications which are targeted by the Company’s new low-power, highly integrated CameraChip™ are forward looking statements. Factors which could cause actual results to differ materially from those described in the Company’s forward looking statements include: the recent economic slowdown may continue to reduce the Company’s revenues and earnings and harm its business; failure to obtain design wins from camera manufacturers could inhibit the Company’s ability to diversify its customer base; any delay in the introduction, manufacture and development of new products could adversely affect the Company’s revenues, earnings and gross margins as well as its strategy to diversify its customer base; the Company may not be able to compete successfully in its current markets and in emerging markets due to intense competition; the Company’s dependence upon a few key customers may adversely affect the Company’s revenues and earnings; a decline in the average selling price of the Company’s products may result in a decline in the Company’s gross margins and the other risks detailed from time to time in the Company’s Securities and Exchange Commission filings and reports, including, but not limited to, the Company’s quarterly reports filed in calendar year 2001. The Company disclaims any obligation to update information contained in any forward looking statement.