UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 14, 2019
Commission File Number: 000-55843
Techpoint, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware |
80-0806545 |
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
2550 N. First Street, #550
San Jose, CA 95131 USA
(408) 324-0588
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 2.02 Results of Operations and Financial Condition.
On February 14, 2019 (Japanese Standard Time), Techpoint, Inc. (the “Company”) filed with the Tokyo Stock Exchange a Japanese report referred to as “Kessan Tanshin,” which contained the Company’s unaudited financial results for the year ended December 31, 2018 (the “Tanshin”). A copy of the English translation of the Tanshin is attached hereto as Exhibit 99.1 and is incorporated herein.
The information in this Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
This Form 8-K, including Exhibit 99.1, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 31E of the Securities Exchange Act of 1934, including but not limited to statements about the Company’s anticipated financial results for the year ending December 31, 2019. The forward-looking statements in this Form 8-K involve risks and uncertainties, and actual results may differ materially from those referred to in these forward-looking statements due to a number of factors, including but not limited to: the effect of competitive and economic factors on the Company’s business; the fact that the Company has a limited operating history which makes it difficult to evaluate its current and future prospects and future performance; changes in laws and regulations, including international trade regulations, that may impact the Company, its customers or its suppliers; fluctuations in results from period to period as a result of unpredictable volume and timing of customer orders; uncertain demand in the Company’s primary markets; the potential for decreases in the overall average selling prices of its products; changes in the relative sales mix of its products; changes in its cost of finished goods; changes in customer order patterns including order cancellations; the Company’s ability to successfully develop, introduce and sell new or enhanced products in a timely manner; and other events that could disrupt supply, delivery, or demand of the Company’s products. These and other risks that could affect our financial results are set forth in the “Risk Factors” section of the Company’s registration statement on Form 10-K filed with the Securities and Exchange Commission at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Item 7.01 Regulation FD Disclosure.
Item 2.02 is incorporated herein by reference.
In the Tanshin, for the year ended December 31, 2018 and 2017, the Company presents non-GAAP income from operations based on the exclusion of stock-based compensation expense and non-GAAP net income based on the exclusion of stock-based compensation expense and the relating tax impact.
The following tables contain a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Year Ended December 31, 2018 |
|
Income From Operations |
|
|
Net Income |
|
||
GAAP |
|
$ |
1,815 |
|
|
$ |
1,885 |
|
Stock-based compensation expense |
|
|
1,364 |
|
|
|
1,364 |
|
Adjustment for taxes (1) |
|
|
- |
|
|
|
(106 |
) |
Non-GAAP |
|
$ |
3,179 |
|
|
$ |
3,143 |
|
|
|
|
|
|
|
|
|
|
(1) Adjustment for taxes based on assumed 7.74% effective tax rate. |
|
|
|
|
|
|
|
|
Year Ended December 31, 2017 |
|
Income From Operations |
|
|
Net Income |
|
||
GAAP |
|
$ |
6,345 |
|
|
$ |
3,757 |
|
Stock-based compensation expense |
|
|
1,448 |
|
|
|
1,448 |
|
Adjustment for taxes (1) |
|
|
- |
|
|
|
(580 |
) |
Non-GAAP |
|
$ |
7,793 |
|
|
$ |
4,625 |
|
|
|
|
|
|
|
|
|
|
(1) Adjustment for taxes based on assumed 40.07% effective tax rate. |
|
|
|
|
|
|
|
|
1
Note to non-GAAP financial information: The Company uses non-GAAP measures of adjusted income from operations and net income, which are adjusted from results based on GAAP to exclude certain expenses. The Company provides these non-GAAP financial measures to enhance the overall understanding of the Company’s current financial performance and its prospects for the future. The Company’s management believes that non-GAAP results provide useful information to the Company’s board of directors, management and investors as these non-GAAP results exclude certain expenses that management believes are not indicative of the Company’s core operating results. These non-GAAP results are some of the primary measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in the Company’s industry.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
|
Description |
|
|
|
99.1 |
|
2
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
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Techpoint, Inc. |
|
|
|
|
|
Date: February 14, 2019 |
|
By: |
/s/ Fumihiro Kozato |
|
|
|
Fumihiro Kozato |
|
|
|
President and Chief Executive Officer (Principal Executive Officer) |
3
Exhibit 99.1
Financial Results for the Year Ended December 31, 2018 (Unaudited)
February 14, 2019
Company Name: |
|
Techpoint, Inc. |
Listed Exchange: |
|
Mothers market of the Tokyo Stock Exchange |
Identification Code: |
|
6697 |
Website URL: |
|
www.techpoint.co.jp |
Representative: |
|
Fumihiro Kozato, President and Chief Executive Officer |
Contact: |
|
Hiroki Yomogita, Vice President Corporate Marketing |
|
|
President of Techpoint Japan KK |
|
|
03-6205-8405 |
Expected Date of Annual Shareholders Meeting: |
|
May 31, 2019 |
Expected Date of Annual Securities Report Filing: |
|
March 14, 2019 |
Expected Date of Dividend Payment: |
|
Not Applicable |
Supplementary Materials for Financial Results: |
|
Included |
Earnings Announcement for Financial Results: |
|
Included |
1. |
Financial Results for the Year Ended December 31, 2018 (January 1, 2018 to December 31, 2018) |
|
(1) |
Consolidated Operating Results |
(Unit: thousands, % change as compared to the previous year)
|
|
Revenue |
|
|
Income from Operations |
|
|
Income Before Income Taxes |
|
|
Net Income |
|
|
Non-GAAP Net Income |
|
|||||||||||||||||||||||||
Year Ended December 31, |
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
||||||||||
2018 |
|
$ |
31,098 |
|
|
|
(0.1 |
)% |
|
$ |
1,815 |
|
|
|
(71.4 |
)% |
|
$ |
2,044 |
|
|
|
(67.4 |
)% |
|
$ |
1,885 |
|
|
|
(49.8 |
)% |
|
$ |
3,143 |
|
|
|
(32.0 |
)% |
|
|
¥ |
3,451,878 |
|
|
|
|
|
|
¥ |
201,465 |
|
|
|
|
|
|
¥ |
226,884 |
|
|
|
|
|
|
¥ |
209,235 |
|
|
|
|
|
|
¥ |
348,873 |
|
|
|
|
|
2017 |
|
$ |
31,142 |
|
|
|
14.7 |
% |
|
$ |
6,345 |
|
|
|
18.3 |
% |
|
$ |
6,272 |
|
|
|
16.9 |
% |
|
$ |
3,757 |
|
|
|
7.9 |
% |
|
$ |
4,625 |
|
|
|
22.8 |
% |
|
|
¥ |
3,456,762 |
|
|
|
|
|
|
¥ |
704,295 |
|
|
|
|
|
|
¥ |
696,192 |
|
|
|
|
|
|
¥ |
417,027 |
|
|
|
|
|
|
¥ |
513,375 |
|
|
|
|
|
Our consolidated financial statements are prepared in U.S. dollars. For amounts disclosed in Japanese yen, an exchange rate of ¥111.00 Japanese yen to $1.00 U.S. dollar was used based on the Telegraphic Transfer Middle Rate quoted by Mitsubishi UFJ Financial Group’s official index as of December 28, 2018.
Our comprehensive income for the year ended December 31, 2018 and 2017 was $1.9 million (¥209.2 million, 49.8%) and $3.8 million (¥417.0 million, 7.9%), respectively. Our non-GAAP operating income for the year ended December 31, 2018 was $3.2 million (¥352.9 million) based on the exclusion of stock-based compensation of $1.4 million (¥151.4 million). Our non-GAAP net income for the year ended December 31, 2018 was $3.1 million (¥348.9 million) based on the exclusion of stock-based compensation of $1.4 million (¥151.4 million) and the relating income tax impact based on a 7.74% effective tax rate. Our non-GAAP operating income for the year ended December 31, 2017 was $7.8 million (¥865.0 million) based on the exclusion of stock-based compensation of $1.4 million (¥160.7 million). Our non-GAAP net income for the year ended December 31, 2017 was $4.6 million (¥513.4 million) based on the exclusion of stock-based compensation of $1.4 million (¥160.7 million) and the relating income tax impact based on a 40.07% effective tax rate.
(Unit: $ or ¥, except for % data)
Year Ended December 31, |
|
Basic EPS |
|
|
Diluted EPS |
|
|
Non-GAAP Basic EPS |
|
|
Ratio of Net Income to Equity |
|
|
Ratio of Income Before Tax to Total Assets |
|
|
Operating Margin |
|
||||||
2018 |
|
$ |
0.11 |
|
|
$ |
0.10 |
|
|
$ |
0.19 |
|
|
|
7.0 |
% |
|
|
7.1 |
% |
|
|
5.8 |
% |
|
|
¥ |
12 |
|
|
¥ |
11 |
|
|
¥ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
0.31 |
|
|
|
19.7 |
% |
|
|
29.8 |
% |
|
|
20.4 |
% |
|
|
¥ |
28 |
|
|
¥ |
27 |
|
|
¥ |
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unit: thousands, except per share and % data)
Year Ended December 31, |
|
Total Assets |
|
|
Net Assets |
|
|
Total Stockholders' Equity |
|
|
Stockholders' Equity Ratio |
|
|
Stockholders' Equity Per Share |
|
|||||
2018 |
|
$ |
30,706 |
|
|
$ |
28,631 |
|
|
$ |
28,631 |
|
|
|
93.2 |
% |
|
$ |
1.67 |
|
|
|
¥ |
3,408,366 |
|
|
¥ |
3,178,041 |
|
|
¥ |
3,178,041 |
|
|
|
|
|
|
¥ |
185 |
|
2017 |
|
$ |
26,592 |
|
|
$ |
24,968 |
|
|
$ |
24,968 |
|
|
|
93.9 |
% |
|
$ |
1.49 |
|
|
|
¥ |
2,951,712 |
|
|
¥ |
2,771,448 |
|
|
¥ |
2,771,448 |
|
|
|
|
|
|
¥ |
165 |
|
|
(3) |
Consolidated Cash Flows |
(Unit: thousands)
Year Ended December 31, |
|
Net Cash Provided by Operating Activities |
|
|
Net Cash Used in Investing Activities |
|
|
Net Cash Provided by Financing Activities |
|
|
Cash and Cash Equivalents |
|
||||
2018 |
|
$ |
4,440 |
|
|
$ |
(376 |
) |
|
$ |
341 |
|
|
$ |
25,941 |
|
|
|
¥ |
492,840 |
|
|
¥ |
(41,736 |
) |
|
¥ |
37,851 |
|
|
¥ |
2,879,451 |
|
2017 |
|
$ |
4,359 |
|
|
$ |
(170 |
) |
|
$ |
7,341 |
|
|
$ |
21,536 |
|
|
|
¥ |
483,849 |
|
|
¥ |
(18,870 |
) |
|
¥ |
814,851 |
|
|
¥ |
2,390,496 |
|
2. |
Dividends |
(Unit: $ or ¥, except for % data)
|
|
Annual Dividend |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Year Ended December 31, |
|
First Quarter |
|
|
Second Quarter |
|
|
Third Quarter |
|
|
Year-End |
|
|
Total |
|
|
Total Dividends |
|
|
Payout Ratio |
|
|
Ratio of Total Dividends to Net Assets |
|
||||||||
2017 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
2018 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
2019 (Forecast) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
3. |
Forecasted Operating Results for the Year Ended December 31, 2019 (January 1, 2019 to December 31, 2019) |
(Unit: thousands, except per share and % data)
|
|
Revenue |
|
|
Income from Operations |
|
|
Income Before Income Taxes |
|
|
Net Income |
|
|
Non-GAAP Net Income |
|
|||||||||||||||||||||||||
Year Ending December 31, |
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
|
Amount |
|
|
% Change |
|
||||||||||
2019 |
|
$ |
32,745 |
|
|
|
5.3 |
% |
|
$ |
2,408 |
|
|
|
32.7 |
% |
|
$ |
2,432 |
|
|
|
19.0 |
% |
|
$ |
1,900 |
|
|
|
0.8 |
% |
|
$ |
3,035 |
|
|
|
-3.4 |
% |
|
|
¥ |
3,634,695 |
|
|
|
|
|
|
¥ |
267,288 |
|
|
|
|
|
|
¥ |
269,952 |
|
|
|
|
|
|
¥ |
210,900 |
|
|
|
|
|
|
¥ |
336,885 |
|
|
|
|
|
Year Ending December 31, |
|
Basic EPS |
|
|
Diluted EPS |
|
|
Non-GAAP Basic EPS |
|
|||
2019 |
|
$ |
0.11 |
|
|
$ |
0.10 |
|
|
$ |
0.18 |
|
|
|
¥ |
12 |
|
|
¥ |
11 |
|
|
¥ |
20 |
|
The forecasted basic and diluted EPS for the year ended December 31, 2019 was computed using a forecasted weighted average shares outstanding for the year ended December 31, 2019. The forecasted non-GAAP figures exclude stock-based compensation of $1.5 million (¥161.3 million) and the relating income tax impact based on a 21.9% effective tax rate.
Our forecasts are made in U.S. dollars.
|
(1) |
Changes in subsidiaries during the period: Not Applicable |
|
(2) |
Changes in accounting policies |
|
1. |
Due to codification revisions: None |
|
2. |
Due to other reasons: None |
|
(3) |
Stock information: |
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
||
Common stock |
|
|
17,130,507 |
|
|
|
16,752,171 |
|
Treasury stock |
|
|
— |
|
|
|
— |
|
Weighted average shares outstanding in computing net income per share allocable to common stockholders |
|
|
16,982,648 |
|
|
|
7,145,641 |
|
Audit Procedures:
This Tanshin is not in scope for audit procedures by our independent auditors under the Financial Instruments and Exchange Act of Japan. Additionally, as of the date of this Tanshin, audit procedures performed in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) in the United States have yet to be completed. The Company’s independent auditors have not compiled or been involved in the preparation of the forecasted financial results for the year ending December 31, 2019. Accordingly, they assume no responsibility for the accuracy or presentation of this information.
Forward Looking Statements:
The Tanshin includes forward-looking statements that involve a number of risks and uncertainties, many of which are beyond the Company’s control. The Company’s actual results may differ from those anticipated or expressed in these forward-looking statements as a result of various factors. All statements other than statements of historical facts contained in the Tanshin, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in the Tanshin may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Any forward-looking statement made by us in the Tanshin speaks only as of the date on which it is made. We disclaim any duty to update any of these forward-looking statements after the date of the Tanshin, except as required by law.
Investors Meeting:
The investor meeting for holders of our Japanese depositary shares (“JDSs”) is scheduled for early June 2019 in Tokyo. Please refer to our website for details on our planned Investors Meetings.
|
|
Page |
1. |
Management’s Discussion and Analysis of: |
|
(1) |
2 |
|
(2) |
3 |
|
(3) |
3 |
|
(4) |
4 |
|
|
|
|
2. |
4 |
|
|
|
|
3. |
Consolidated Financial Statements and Supplementary Data (Unaudited) |
|
(1) |
5 |
|
(2) |
6 |
|
(3) |
7 |
|
(4) |
8 |
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(5) |
9 |
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|
|
|
Our consolidated financial statements are prepared in U.S. dollars. For amounts disclosed in Japanese yen, an exchange rate of ¥111.00 Japanese yen to $1.00 U.S. dollar was used based on the Telegraphic Transfer Middle Rate quoted by Mitsubishi UFJ Financial Group’s official index as of December 28, 2018. Our JDSs are traded on the Mothers market of the Tokyo Stock Exchange. Each JDS represents one share of common stock.
1
Revenue
Revenue decreased by $44,000 (¥5 million), or 0.1%, for the year ended December 31, 2018 as compared to the year ended December 31, 2017. This decrease was driven by a shift in product mix as we continue to develop and expand our product offerings particularly in the automotive market and the demand increases for our integrated HD-TVI transmitters and Image Signal Processor products which resulted in a 24% decrease in overall average selling prices, partially offset by a 31% increase in volume of shipments as a result of increased demand for these newer generation products. For the year ended December 31, 2018 and 2017, we recorded revenue of $4.8 million (¥530 million) and $3.0 million (¥333 million) from sales into the automotive market, respectively. For the year ended December 31, 2018 and 2017, we derived 15% and 10% of our revenue from sales into the automotive market, respectively.
Revenue by geographic region
The table below sets forth the major components of the change in revenue by geographic region for the year ended December 31, 2018 and 2017:
|
|
Year Ended |
|
|||||
|
|
December 31, |
|
|||||
|
|
2018 |
|
|
2017 |
|
||
China |
|
|
84 |
% |
|
|
85 |
% |
South Korea |
|
|
9 |
|
|
|
9 |
|
Japan |
|
|
4 |
|
|
|
3 |
|
Taiwan |
|
|
3 |
|
|
|
3 |
|
Other |
|
|
— |
|
|
|
— |
|
Total revenue |
|
|
100 |
% |
|
|
100 |
% |
Cost of revenue and gross margin
Cost of revenue increased $2.1 million (¥233 million), or 15.8%, for the year ended December 31, 2018 as compared to the year ended December 31, 2017. Gross margin decreased to 51% for the year ended December 31, 2018 from 58% for the year ended December 31 2017. The increase in cost of revenue was primarily driven by a 31% increase in unit sales offset by changes in product mix. The decrease in gross margin was driven by the shift in product mix causing a 24% decrease in overall average selling prices.
Gross margin fluctuations are due to changes in product mix and fluctuations in period costs. We expect gross margins to fluctuate in future periods due to changes in product mix, average unit selling prices, manufacturing costs, manufacturing yields, levels of inventory valuation, if any, and levels of product demand.
Research and development expense
Research and development expense increased $1.9 million (¥216 million), or 36.2%, for the year ended December 31, 2018 as compared to the year ended December 31, 2017. This increase was primarily due to a $1.1 million (¥123 million) increase in tape-out expenses, a $0.4 million (¥39 million) increase in personnel costs due to a 14% increase in headcount as a result of expanding operations, and a $0.2 million (¥27 million) increase in product development costs relating to design, prototype, and software expenses.
Selling, general and administrative expense
Selling, general and administrative expenses increased by $0.4 million (¥49 million), or 7.2%, for the year ended December 31, 2018 as compared to the year ended December 31, 2017. This increase was primarily due to a $0.3 million (¥31 million) increase in professional service fees due to costs associated with being a public company, a $0.3 million (¥31 million) increase in personnel costs, rent, and other office expenses due to a 10% increase in headcount as a result of expanding operations, offset by a $0.2 million (¥23 million) decrease in stock-based compensation.
2
Other income increased by $0.3 million (¥34 million) for the year ended December 31, 2018 primarily due to foreign currency exchange transactions and foreign currency fluctuations from IPO proceeds received in Japanese yen in September 2017.
Provision for income taxes
The provision for income taxes decreased by $2.4 million (¥262 million), or 93.7%, for the year ended December 31, 2018 as compared to the year ended December 31, 2017. The decrease in the provision for income taxes is primarily due to a decrease in taxable income, a reduction in the U.S. corporate tax rate to 21% as a result of tax law changes during December 2017, and an increase in tax benefits from stock-option exercises and dispositions.
Net Income
As a result of the foregoing, net income decreased by $1.9 million (¥208 million), or 49.8%, for the year ended December 31, 2018 as compared to the year ended December 31, 2017.
Our cash and cash equivalents as of December 31, 2018 were $25.9 million (¥2,879 million). We believe our existing cash and cash equivalents, and cash we expect to generate from operations, will be sufficient to meet our anticipated cash needs for at least the next 12 months.
Operating Activities
During the year ended December 31, 2018, net cash provided by operating activities was $4.4 million (¥493 million), primarily due to net income of $1.9 million (¥209 million), non-cash charges of $1.8 million (¥195 million) primarily driven by stock-based compensation, depreciation and amortization and deferred income taxes, and cash inflow provided by the change in net operating assets and liabilities of $0.8 million (¥89 million). The cash inflow provided by the change in net operating assets and liabilities was primarily due to a $0.6 million (¥71 million) cash inflow in inventory due to product sales in excess of units manufactured during the period, and a $0.2 million (¥17 million) cash inflow in accounts payable driven by the timing of payments made to our vendors.
Investing Activities
During the year ended December 31, 2018, cash used in investing activities was $0.4 million (¥42 million) due to purchases of property and equipment.
Financing Activities
During the year ended December 31, 2018, cash provided by financing activities was $0.3 million (¥38 million) primarily due to net proceeds from the exercise of stock options.
The following assumptions are used for the Forecasted Consolidated Results of Operations for the year ending December 31, 2019.
Revenue
Revenue for the year ending December 31, 2019 is expected to be $32.7 million (¥3,635 million), an increase of 5.3% as compared to revenue for the year ended December 31, 2018, driven by increased automotive market sales. Automotive market revenue is expected to increase by $4.4 million (¥490 million), or 92.4%, to $9.2 million (¥1,019 million) for the year ending December 31, 2019 from $4.8 million (¥530 million) for the year ended December 31, 2018. This growth is expected to be driven by the increased use of rear view cameras, car navigation, and drive recorder systems by automotive manufacturers in Japan and Asia. The Company expects to derive 28.0% of its fiscal 2019 revenue from the automotive market as compared to 15.3% for fiscal 2018.
Security surveillance revenue is expected to decrease by 10.5% in fiscal 2019 as compared to fiscal 2018. Beginning in the first half of fiscal 2018, the Company’s DVR customers began to transition from existing “H.264” to next generation “H.265” DVR technology. Although this transition is expected to be complete by the first quarter of fiscal 2019, given the macroeconomic factors related to a slowing China market, the Company expects its security surveillance revenue to be adversely effected for fiscal 2019.
3
The Company expects revenue in the first half of fiscal 2019 to be negatively impacted by a slowing China market, ongoing trade discussions between US and China, and seasonal factors such as Lunar New Year holidays. These factors will cause revenue in the first half of fiscal 2019 and the first quarter of fiscal 2019, specifically, to be abnormally low. The Company anticipates that only 36.7% of revenue for fiscal 2019 will be derived in the first half of fiscal 2019. Sales are projected to recover beginning in the second half of fiscal 2019 driven by sales in the automotive market. The Company expects revenue and operating profit in the second half of fiscal 2019 to increase as compared to the second half of fiscal 2018.
Potential upside for the Company’s fiscal 2019 revenue projection is dependent upon the recovery of the China market. To expand our technological offerings, we continue to seek growth opportunities including, but not limited to, licensure, M&A, and other ventures. However, we have no agreements or understandings with respect to any licenses, acquisitions or similar transactions at this time.
Operating Income
Fiscal 2019 operating profit is expected to be $2.4 million (¥267 million), a 32.7% increase from fiscal 2018 driven by an increase in revenue and a reduction in research and development expense of 0.6%, offset by increased expenses resulting from an increase in headcount. The Company expects overall operating expense to increase by 0.9% in fiscal 2019 as compared to fiscal 2018.
Dividend Policy
We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. In addition, our ability to pay cash dividends on our capital stock could be restricted by the terms of any future debt financing arrangement.
Any future determination to pay dividends on our common stock will be at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements and contractual restrictions. If we pay any dividends, including the fees and expenses payable thereunder, we will pay JDS holders to the same extent as holders of our common stock, subject to the terms of the August 31, 2017 trust agreement between the Company; Mizuho Securities Co., Ltd.; Mitsubishi UFJ Trust and Banking Corporation; and The Master Trust Bank of Japan, Ltd.
2019 Dividend Forecast
We do not expect to declare or pay cash dividends for the year ending December 31, 2019.
The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). As the Company is developing business globally, we believe that by using GAAP we can properly reflect our business and benefit Japanese and other foreign investors. The Company has adopted ASU 2014-09, Revenue from Contracts with Customers (ASC 606) in the first quarter of fiscal 2018 under the modified retrospective approach. There was no cumulative impact from adopting the new standard on the Company’s condensed consolidated financial statements for the year ended December 31, 2018.
4
|
Consolidated Financial Statements and Supplementary Data (Unaudited) |
(Unit: thousands, except share data)
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
||||||||||
|
|
$ |
|
|
¥ |
|
|
$ |
|
|
¥ |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
25,941 |
|
|
¥ |
2,879,451 |
|
|
$ |
21,536 |
|
|
¥ |
2,390,496 |
|
Accounts receivable |
|
|
236 |
|
|
|
26,196 |
|
|
|
93 |
|
|
|
10,323 |
|
Inventory |
|
|
2,207 |
|
|
|
244,977 |
|
|
|
2,847 |
|
|
|
316,017 |
|
Prepaid expenses and other current assets |
|
|
936 |
|
|
|
103,896 |
|
|
|
978 |
|
|
|
108,558 |
|
Total current assets |
|
|
29,320 |
|
|
|
3,254,520 |
|
|
|
25,454 |
|
|
|
2,825,394 |
|
Property and equipment - net |
|
|
611 |
|
|
|
67,821 |
|
|
|
325 |
|
|
|
36,075 |
|
Deferred tax assets |
|
|
560 |
|
|
|
62,160 |
|
|
|
652 |
|
|
|
72,372 |
|
Other assets |
|
|
215 |
|
|
|
23,865 |
|
|
|
161 |
|
|
|
17,871 |
|
Total assets |
|
$ |
30,706 |
|
|
¥ |
3,408,366 |
|
|
$ |
26,592 |
|
|
¥ |
2,951,712 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,063 |
|
|
¥ |
117,993 |
|
|
$ |
760 |
|
|
¥ |
84,360 |
|
Accrued liabilities |
|
|
718 |
|
|
|
79,698 |
|
|
|
573 |
|
|
|
63,603 |
|
Liability related to early exercised stock options |
|
|
136 |
|
|
|
15,096 |
|
|
|
152 |
|
|
|
16,872 |
|
Customer deposits |
|
|
2 |
|
|
|
222 |
|
|
|
6 |
|
|
|
666 |
|
Total current liabilities |
|
|
1,919 |
|
|
|
213,009 |
|
|
|
1,491 |
|
|
|
165,501 |
|
Other liabilities |
|
|
156 |
|
|
|
17,316 |
|
|
|
133 |
|
|
|
14,763 |
|
Total liabilities |
|
|
2,075 |
|
|
|
230,325 |
|
|
|
1,624 |
|
|
|
180,264 |
|
Commitments and contingencies (Note 5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.0001 per share - 5,000,000 shares authorized as of December 31, 2018 and 2017; nil shares issued and outstanding as of December 31, 2018 and 2017 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock, par value $0.0001 per share - 75,000,000 shares authorized as of December 31, 2018 and 2017; 17,130,507 and 16,752,171 shares issued and outstanding as of December 31, 2018 and 2017, respectively |
|
|
2 |
|
|
|
222 |
|
|
|
2 |
|
|
|
222 |
|
Additional paid-in-capital |
|
|
19,358 |
|
|
|
2,148,738 |
|
|
|
17,580 |
|
|
|
1,951,380 |
|
Retained earnings |
|
|
9,271 |
|
|
|
1,029,081 |
|
|
|
7,386 |
|
|
|
819,846 |
|
Total stockholders’ equity |
|
|
28,631 |
|
|
|
3,178,041 |
|
|
|
24,968 |
|
|
|
2,771,448 |
|
Total liabilities and stockholders’ equity |
|
$ |
30,706 |
|
|
¥ |
3,408,366 |
|
|
$ |
26,592 |
|
|
¥ |
2,951,712 |
|
5
(Unit: thousands, except share and per share data)
|
|
Year Ended December 31, 2018 |
|
|
Year Ended December 31, 2017 |
|
||||||||||
|
|
$ |
|
|
¥ |
|
|
$ |
|
|
¥ |
|
||||
Revenue |
|
$ |
31,098 |
|
|
¥ |
3,451,878 |
|
|
$ |
31,142 |
|
|
¥ |
3,456,762 |
|
Cost of revenue |
|
|
15,316 |
|
|
|
1,700,076 |
|
|
|
13,221 |
|
|
|
1,467,531 |
|
Gross profit |
|
|
15,782 |
|
|
|
1,751,802 |
|
|
|
17,921 |
|
|
|
1,989,231 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
7,331 |
|
|
|
813,741 |
|
|
|
5,383 |
|
|
|
597,513 |
|
Selling, general and administrative |
|
|
6,636 |
|
|
|
736,596 |
|
|
|
6,193 |
|
|
|
687,423 |
|
Total operating expenses |
|
|
13,967 |
|
|
|
1,550,337 |
|
|
|
11,576 |
|
|
|
1,284,936 |
|
Income from operations |
|
|
1,815 |
|
|
|
201,465 |
|
|
|
6,345 |
|
|
|
704,295 |
|
Other income (expense) |
|
|
229 |
|
|
|
25,419 |
|
|
|
(73 |
) |
|
|
(8,103 |
) |
Income before income taxes |
|
|
2,044 |
|
|
|
226,884 |
|
|
|
6,272 |
|
|
|
696,192 |
|
Income taxes |
|
|
159 |
|
|
|
17,649 |
|
|
|
2,515 |
|
|
|
279,165 |
|
Net income |
|
$ |
1,885 |
|
|
¥ |
209,235 |
|
|
$ |
3,757 |
|
|
¥ |
417,027 |
|
Net income allocable to preferred stockholders |
|
$ |
— |
|
|
¥ |
— |
|
|
$ |
1,936 |
|
|
¥ |
214,896 |
|
Net income allocable to common stockholders |
|
$ |
1,885 |
|
|
¥ |
209,235 |
|
|
$ |
1,821 |
|
|
¥ |
202,131 |
|
Net income per share allocable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.11 |
|
|
¥ |
12 |
|
|
$ |
0.25 |
|
|
¥ |
28 |
|
Diluted |
|
$ |
0.10 |
|
|
¥ |
11 |
|
|
$ |
0.24 |
|
|
¥ |
27 |
|
Weighted-average shares outstanding in computing net income per share allocable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,982,648 |
|
|
|
|
|
|
|
7,145,641 |
|
|
|
|
|
Diluted |
|
|
17,991,131 |
|
|
|
|
|
|
|
8,056,329 |
|
|
|
|
|
Other comprehensive income |
|
$ |
— |
|
|
¥ |
— |
|
|
$ |
— |
|
|
¥ |
— |
|
Comprehensive income |
|
$ |
1,885 |
|
|
¥ |
209,235 |
|
|
$ |
3,757 |
|
|
¥ |
417,027 |
|
6
(Unit: thousands, except share data)
|
|
Convertible Preferred Stock |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Additional Paid-In Capital |
|
|
Retained Earnings |
|
|
Total Stockholders' Equity |
|
|||||||
Balances as of December 31, 2016 |
|
|
10,742,500 |
|
|
$ |
8,794 |
|
|
|
3,725,238 |
|
|
$ |
— |
|
|
$ |
813 |
|
|
$ |
3,629 |
|
|
$ |
13,236 |
|
|
|
|
— |
|
|
¥ |
976,134 |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
90,243 |
|
|
¥ |
402,819 |
|
|
¥ |
1,469,196 |
|
Conversion of convertible preferred stock to common stock upon IPO |
|
|
(10,742,500 |
) |
|
$ |
(8,794 |
) |
|
|
10,742,500 |
|
|
$ |
2 |
|
|
$ |
8,792 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
— |
|
|
¥ |
(976,134 |
) |
|
|
— |
|
|
¥ |
222 |
|
|
¥ |
975,912 |
|
|
¥ |
— |
|
|
¥ |
— |
|
Issuance of common stock upon IPO, net of issuance costs |
|
|
— |
|
|
$ |
— |
|
|
|
1,520,000 |
|
|
$ |
— |
|
|
$ |
5,157 |
|
|
$ |
— |
|
|
$ |
5,157 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
572,427 |
|
|
¥ |
— |
|
|
¥ |
572,427 |
|
Issuance of common stock upon exercise of over-allotment option, net of issuance costs |
|
|
— |
|
|
$ |
— |
|
|
|
228,000 |
|
|
$ |
— |
|
|
$ |
1,200 |
|
|
$ |
— |
|
|
$ |
1,200 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
133,200 |
|
|
¥ |
— |
|
|
¥ |
133,200 |
|
Issuance of common stock upon exercise of stock options and vesting of early exercised options |
|
|
— |
|
|
$ |
— |
|
|
|
506,433 |
|
|
$ |
— |
|
|
$ |
170 |
|
|
$ |
— |
|
|
$ |
170 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
18,870 |
|
|
¥ |
— |
|
|
¥ |
18,870 |
|
Issuance of common stock upon vesting of RSUs |
|
|
— |
|
|
$ |
— |
|
|
|
30,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
Stock-based compensation |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
1,448 |
|
|
$ |
— |
|
|
$ |
1,448 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
160,728 |
|
|
¥ |
— |
|
|
¥ |
160,728 |
|
Net income |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,757 |
|
|
$ |
3,757 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
|
¥ |
417,027 |
|
|
¥ |
417,027 |
|
Balances as of December 31, 2017 |
|
|
— |
|
|
$ |
— |
|
|
|
16,752,171 |
|
|
$ |
2 |
|
|
$ |
17,580 |
|
|
$ |
7,386 |
|
|
$ |
24,968 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
222 |
|
|
¥ |
1,951,380 |
|
|
¥ |
819,846 |
|
|
¥ |
2,771,448 |
|
Issuance of common stock upon exercise of stock options and vesting of early exercised options |
|
|
— |
|
|
$ |
— |
|
|
|
368,632 |
|
|
$ |
— |
|
|
$ |
423 |
|
|
$ |
— |
|
|
$ |
423 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
46,953 |
|
|
¥ |
— |
|
|
¥ |
46,953 |
|
Issuance of common stock upon vesting of RSUs |
|
|
— |
|
|
$ |
— |
|
|
|
10,500 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
Shares repurchased for tax withholdings on vesting of RSUs |
|
|
— |
|
|
$ |
— |
|
|
|
(796 |
) |
|
$ |
— |
|
|
$ |
(9 |
) |
|
$ |
— |
|
|
$ |
(9 |
) |
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
(999 |
) |
|
¥ |
— |
|
|
¥ |
(999 |
) |
Stock-based compensation |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
1,364 |
|
|
$ |
— |
|
|
$ |
1,364 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
151,404 |
|
|
¥ |
— |
|
|
¥ |
151,404 |
|
Net income |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,885 |
|
|
$ |
1,885 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
— |
|
|
¥ |
— |
|
|
¥ |
209,235 |
|
|
¥ |
209,235 |
|
Balances as of December 31, 2018 |
|
|
— |
|
|
$ |
— |
|
|
|
17,130,507 |
|
|
$ |
2 |
|
|
$ |
19,358 |
|
|
$ |
9,271 |
|
|
$ |
28,631 |
|
|
|
|
— |
|
|
¥ |
— |
|
|
|
— |
|
|
¥ |
222 |
|
|
¥ |
2,148,738 |
|
|
¥ |
1,029,081 |
|
|
¥ |
3,178,041 |
|
7
(Unit: thousands, except share data)
|
|
Year Ended December 31, 2018 |
|
|
Year Ended December 31, 2017 |
|
||||||||||
|
|
$ |
|
|
¥ |
|
|
$ |
|
|
¥ |
|
||||
Cash Flows From Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,885 |
|
|
¥ |
209,235 |
|
|
$ |
3,757 |
|
|
¥ |
417,027 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
244 |
|
|
|
27,084 |
|
|
|
207 |
|
|
|
22,977 |
|
Stock-based compensation |
|
|
1,364 |
|
|
|
151,404 |
|
|
|
1,448 |
|
|
|
160,728 |
|
Write-off of deferred costs |
|
|
57 |
|
|
|
6,327 |
|
|
|
— |
|
|
|
— |
|
Write-off of long lived assets |
|
|
— |
|
|
|
— |
|
|
|
9 |
|
|
|
999 |
|
Deferred income taxes |
|
|
92 |
|
|
|
10,212 |
|
|
|
370 |
|
|
|
41,070 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(143 |
) |
|
|
(15,873 |
) |
|
|
(14 |
) |
|
|
(1,554 |
) |
Inventory |
|
|
640 |
|
|
|
71,040 |
|
|
|
(264 |
) |
|
|
(29,304 |
) |
Prepaid expenses and other current assets |
|
|
42 |
|
|
|
4,662 |
|
|
|
(705 |
) |
|
|
(78,255 |
) |
Other assets |
|
|
(56 |
) |
|
|
(6,216 |
) |
|
|
(18 |
) |
|
|
(1,998 |
) |
Accounts payable |
|
|
151 |
|
|
|
16,761 |
|
|
|
85 |
|
|
|
9,435 |
|
Accrued expenses |
|
|
145 |
|
|
|
16,095 |
|
|
|
180 |
|
|
|
19,980 |
|
Customer deposits |
|
|
(4 |
) |
|
|
(444 |
) |
|
|
(739 |
) |
|
|
(82,029 |
) |
Other liabilities |
|
|
23 |
|
|
|
2,553 |
|
|
|
43 |
|
|
|
4,773 |
|
Net cash provided by operating activities |
|
|
4,440 |
|
|
|
492,840 |
|
|
|
4,359 |
|
|
|
483,849 |
|
Cash Flows From Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(376 |
) |
|
|
(41,736 |
) |
|
|
(170 |
) |
|
|
(18,870 |
) |
Net cash used in investing activities |
|
|
(376 |
) |
|
|
(41,736 |
) |
|
|
(170 |
) |
|
|
(18,870 |
) |
Cash Flows From Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from exercise of stock options |
|
|
407 |
|
|
|
45,177 |
|
|
|
98 |
|
|
|
10,878 |
|
Payment for shares withheld for tax withholdings on vesting of RSUs |
|
|
(9 |
) |
|
|
(999 |
) |
|
|
— |
|
|
|
— |
|
Payments of deferred costs |
|
|
(57 |
) |
|
|
(6,327 |
) |
|
|
(2,096 |
) |
|
|
(232,656 |
) |
Proceeds from initial public offering, net of underwriter commissions |
|
|
— |
|
|
|
— |
|
|
|
9,339 |
|
|
|
1,036,629 |
|
Net cash provided by financing activities |
|
|
341 |
|
|
|
37,851 |
|
|
|
7,341 |
|
|
|
814,851 |
|
Net increase in cash and cash equivalents |
|
|
4,405 |
|
|
|
488,955 |
|
|
|
11,530 |
|
|
|
1,279,830 |
|
Cash and cash equivalents at beginning of period |
|
|
21,536 |
|
|
|
2,390,496 |
|
|
|
10,006 |
|
|
|
1,110,666 |
|
Cash and cash equivalents at end of period |
|
$ |
25,941 |
|
|
¥ |
2,879,451 |
|
|
$ |
21,536 |
|
|
¥ |
2,390,496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
44 |
|
|
¥ |
4,884 |
|
|
$ |
2,585 |
|
|
¥ |
286,935 |
|
Supplemental Disclosure of Noncash Investing and Financing Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment purchased but not yet paid |
|
$ |
173 |
|
|
¥ |
19,203 |
|
|
$ |
21 |
|
|
¥ |
2,331 |
|
Vesting of early exercised options |
|
$ |
74 |
|
|
¥ |
8,214 |
|
|
$ |
99 |
|
|
¥ |
10,989 |
|
Conversion of preferred stock to common stock upon initial public offering |
|
$ |
— |
|
|
¥ |
— |
|
|
$ |
8,792 |
|
|
¥ |
975,912 |
|
8
Going Concern
Not applicable.
Basis of Consolidation and Accounting Standards
The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated. The functional currency of each of the Company’s subsidiaries is the U.S. dollar. Foreign currency gains or losses are recorded as other income (expense) in the Consolidated Statements of Operations.
Segment Information
The Company’s chief operating decision maker, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance on a regular basis. Accordingly, the Company considers itself to be one reportable segment, which is comprised of one operating segment, the designing, marketing and selling of mixed-signal integrated circuits for the security surveillance and automotive markets.
Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):
|
|
Year Ended |
|
|||||
|
|
December 31, |
|
|||||
|
|
2018 |
|
|
2017 |
|
||
China |
|
$ |
26,175 |
|
|
$ |
26,453 |
|
South Korea |
|
|
2,685 |
|
|
|
2,857 |
|
Japan |
|
|
1,310 |
|
|
|
941 |
|
Taiwan |
|
|
897 |
|
|
|
821 |
|
Other |
|
|
31 |
|
|
|
70 |
|
Total revenue |
|
$ |
31,098 |
|
|
$ |
31,142 |
|
Revenue by principal product lines were as follows (in thousands):
|
|
Year Ended |
|
|||||
|
|
December 31, |
|
|||||
|
|
2018 |
|
|
2017 |
|
||
Security surveillance |
|
$ |
26,325 |
|
|
$ |
28,143 |
|
Automotive |
|
|
4,773 |
|
|
|
2,999 |
|
Total revenue |
|
$ |
31,098 |
|
|
$ |
31,142 |
|
9
For the periods presented prior to the Company’s IPO, basic and diluted net income per common share are presented in conformity with the two-class method required for participating securities. Prior to the closing of the Company’s IPO, all outstanding shares of its Series Seed, Series A, and Series B convertible preferred shares, which were participating securities, were converted to common stock on a one-to-one basis. The common stock issued for the conversion of 10,742,500 preferred shares were included in calculation of the weighted average shares outstanding for the year ended December 31, 2017. Each JDS represents one share of common stock.
The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except per share data):
|
|
Year Ended |
|
|||||
|
|
December 31, |
|
|||||
|
|
2018 |
|
|
2017 |
|
||
Numerator: |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,885 |
|
|
$ |
3,757 |
|
Net income allocable to preferred stockholders |
|
|
— |
|
|
|
1,936 |
|
Net income allocable to common stockholders |
|
|
1,885 |
|
|
|
1,821 |
|
Diluted: |
|
|
|
|
|
|
|
|
Net income |
|
|
1,885 |
|
|
|
3,757 |
|
Net income allocable to preferred stockholders |
|
|
— |
|
|
|
1,823 |
|
Net income allocable to common stockholders |
|
|
1,885 |
|
|
|
1,934 |
|
Denominator: |
|
|
|
|
|
|
|
|
Basic shares: |
|
|
|
|
|
|
|
|
Weighted-average shares used in computing basic net income per share allocable to common stockholders |
|
|
16,982,648 |
|
|
|
7,145,641 |
|
Diluted shares: |
|
|
|
|
|
|
|
|
Effect of potentially dilutive securities: |
|
|
|
|
|
|
|
|
Stock options (1) |
|
|
1,008,483 |
|
|
|
910,688 |
|
Weighted-average shares used in computing diluted net income per common share allocable to common stockholders |
|
|
17,991,131 |
|
|
|
8,056,329 |
|
Net income per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.11 |
|
|
$ |
0.25 |
|
Diluted |
|
$ |
0.10 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income (2) : |
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
3,143 |
|
|
$ |
4,625 |
|
Non-GAAP net income allocable to preferred stockholders |
|
|
— |
|
|
|
2,383 |
|
Non-GAAP net income allocable to common stockholders |
|
|
3,143 |
|
|
|
2,242 |
|
Basic shares: |
|
|
|
|
|
|
|
|
Weighted-average shares used in computing basic non-GAAP net income per share allocable to common stockholders |
|
|
16,982,648 |
|
|
|
7,145,641 |
|
Non-GAAP net income per common share: |
|
|
|
|
|
|
|
|
Non-GAAP Basic |
|
$ |
0.19 |
|
|
$ |
0.31 |
|
|
(1) |
Includes vesting of early-exercised options. |
|
(2) |
Please refer to “Consolidated Operating Results” under “Financial Results for the Year Ended December 31, 2018 (January 1, 2018 to December 31, 2018)” for further non-GAAP information. |
10