Himax Technologies, Inc.

Hello, ladies and gentlemen, and welcome to Highmark Technologies, Inc. Second Quarter 2022 Earnings Conference Call. At this time, all participants are on listen-only mode. Later, we conduct a question-answer session. Instructions will follow at that time. You will need to press star 1-1 on your phone. Again, that is star 1-1 on your phone. Ask a question. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Mark Sloanberg. from MZ Group. Please go ahead.

Thank you. Welcome, everyone, to the HIMAC's second quarter 2022 earnings call. Joining us from the company are Mr. Jordan Wu, President and Chief Executive Officer, Ms. Jessica Pan, Chief Financial Officer, and Mr. Eric Lee, Chief IRPR Officer. After the company's prepared comments, we have allocated time for questions in a Q&A session. If you have not yet received a copy of today's results released, please email HIMX at mzgroup.us. Access the press release on financial portals or download a copy from IMAX's website at www.imax.com.tw. Unless otherwise specified, we will discuss our financials based on non-IFRS measures. You can find the related reconciliation IFRS on our website. Before we begin formal remarks, I'd like to remind everyone that some of the statements in this conference call, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this conference call. A list of risk factors can be found in the company's SEC filings form 20F for the year ended December 31st, 2021 in the section entitled risk factors as may be amended. Except for the company's full year of 2021 financials, which were provided in the company's 20F and filed with the SEC on March 23rd, 2022, the financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS accounting. Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and external audits by an independent auditor to which we subject our annual consolidated financial statement and may vary materially from the audited consolidated financial information for the same period. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. I will now turn the call over to Mr. Eric Lee.

Eric, the floor is yours. Thank you, Mark, and thank you, everyone, for joining us. My name is Eric Lee, Chief IRPR Officer at HMAC. On today's call, I will first review HIMAC's consolidated financial performance for the second quarter 2022, followed by our third quarter 2022 outlook. Jordan will then give an update on the status of our business, after which we will test questions. The second quarter presented a challenging business environment, yet we continue to diligently focus on navigating these obstacles wire position ourselves for long-term sustainable growth. Assessorating interest rate hikes to combat rising inflection, ongoing rolling lockdowns in China and the Russian-Ukrainian war continue to plague business activities and reduce consumer confidence. The gloomy visibility of our end customer led to reduced and shorter forecasts along with the most stringent inventory control across the board from brands to panel houses. We revised our guidance on June 20, 2022 to better reflect these soft conditions. Our second quarter revenues, gross margin, and EPS were all in line with the updated guidance range. Second quarter net revenues of $312.6 million, decreased 24.3% sequentially, but were within our updated guidance of a decline of 22% to 27%. Our gross margin came in at 43.6%, a decrease from 47% last quarter, but within our initial guidance of around 43% to 45%. Non-IFRS profit per diluted ADS was 43.9 cents, an upper range of the updated guidance of 40 to 45 cents. IFRS profit per diluted ADS was 40.4 cents, a high end of the updated guidance of 36.5 to 41.5 cents. Revenue from large distraught drivers was $68.6 million in Q2, a decrease of 38% sequentially. TV and notebook IC revenues were down double digits sequentially due to customers' inventory control on the backdrop of slowing end-market sales through and the reduced business visibility. Monitor IC sales declined sequentially in Q2, but increased more than 100% year-over-year for the six months ended June 30, 2022, thanks to substantial shipment growth for high-end area, such as. Hello, this is Alex from Himex. Can you hear us now? Yes. Okay. Sorry, so.