Techwell Q3 2009 Financial Results Examined
Major DVR encoder/component supplier Techwell reported significantly improved financial results for Q3 2009, following a series of very bad quarters. The earnings call transcript provides an extensive discussion by Techwell management on performance [link no longer available].
"Security revenue declined 8% year-over-year, but increased 59% sequentially." The year over year decline was over 35% earlier in 2009. While revenue is still down, it is now improving from the bottom. They also provide upward guidance for Q4 2009 security revenue.
They expect the market to return to 20% annual growth rate consistent with pre-recession levels. China's growth was cited as the most important factor. They cite an unnamed report that projects global DVR channels to grow 21% from 45 to 55 million between 2009 and 2010. I find that hard to believe.
In October 2009, Techwell acquired a "video technology company focused on the security surveillance market." The price was $4.2 Million USD, less the value of assumed liabilities. They did not provide much detail, only saying that, the acquired company "developed a very cost-effective video technology that will help us accelerate our product development effort in the DVR and IT camera markets."