Analysis on Demand

[ygtrdr]

Hey David, check out new chinese IPO CISG. They sell underwritten insurance policies and as you know the insurance market in china has huge growth potential.

[usedcasting]

Hi David, could you possibly take a look at NM sometime if you think its worth it.

Cheers

uc.

[David Randolph]

Hi David, could you possibly take a look at NM sometime if you think its worth it.

Cheers

uc.

NM looks very attractive at first sight, better than TBSI and EXM. Perhaps this will be my chance of getting back into the Shipping industry, thanks usedcasting

[David Randolph]

Hi David, could you possibly take a look at NM sometime if you think its worth it.

Cheers

uc.

NM looks very attractive at first sight, better than TBSI and EXM. Perhaps this will be my chance of getting back into the Shipping industry, thanks usedcasting

I was excited about NM and even though of buying it today, but when I saw the following heavy dilution ...



... and further plans for a spin off:

• Navios Maritime Holdings Inc. Announces Filing of Registration Statement for Initial Public Offering by Navios Maritime Partners L.P.
PR Newswire (Fri, Oct 26)

I got less enthusiastic.

I'll have to take it easy and keep studying new stocks until I find the appropriate long term holdings for the Main Portfolio. I dislike when management has this tendency to dilute shareholders value, especially when they don't need to, as is NM's case.

[usedcasting]

David, thanks for the input. Yes I to saw that dilution. To bad.

Thanks again!

uc.

[BigSully1]

Hey David, This one looks real interesting. SPRD - Spreadtrum Communications. Chinese. Don't know anything about, just read the ER this morn.

Spreadtrum Communications, Inc. Announces Third Quarter 2007 Results: Robust Increase in Baseband Shipments Drove Strong Revenue Growth
Wednesday October 31, 4:05 pm ET 
Third Quarter 2007 Financial Summary: -- Total revenue increased 20% sequentially and 44% year-over-year to US$38.6 million. Baseband revenue grew 25% sequentially and 118% year-over-year. -- Gross margin increased to 45.6% in 3Q07 from 43.2% in 3Q06 and 45.5% in 2Q07. -- Operating margin increased to 11.7% in 3Q07 from 7.9% in 2Q07 but decreased from 13.8% in 3Q06. -- Net income increased 118% sequentially and 64% year-over-year to US$6.1 million. -- Diluted earnings per American Depositary Share (ADS) was US$0.13, up 86% from US$0.07 in 2Q07 and 18% from US$0.11 in 3Q06.
Third Quarter 2007 Business Highlights: -- The Company began sampling its SC6600H product, a new baseband chip that is optimized for the music mobile phone with high-quality music playback functionality that enables CD sound quality playback. -- The Company began sampling its SC6600R product, a new high performance baseband chip with high-end functions that is targeted at the mainstream mobile phone market. -- The Company began sampling its SV6111 product, which the Company believes is the world's first commercial AVS audio/video decoder chip. -- Set-top boxes using the Company's SV6111 chip successfully passed China Netcom's commercial trials. -- The Company entered into a TD-SCDMA strategic partnership agreement with Zhongxing Telecommunication Equipment Co., Ltd (ZTE). -- The Company hosted its first Technology Forum in Shanghai, at which the Company and its customers, suppliers, and business partners convened to exchange thoughts and perspectives on, among other topics, recent achievements, market trends, and strategies for future growth and development in China's wireless semiconductor and communications industry.


SHANGHAI, China, Oct. 31 /Xinhua-PRNewswire/ -- Spreadtrum Communications, Inc. (Nasdaq: SPRD; the "Company"), a fabless semiconductor company that designs, develops, and markets baseband processor solutions for the mobile wireless communications market, today announced its third quarter 2007 financial results. Under accounting principles generally accepted in the United States of America (US GAAP), diluted earnings per ADS was US$0.13 in the third quarter of 2007 (3Q07), an increase of 18% from US$0.11 in the same period in 2006 (3Q06) and 86% from US$0.07 in the second quarter of 2007 (2Q07). Net income for 3Q07 was US$6.1 million, an increase of 64% from US$3.7 million in 3Q06 and 118% from US$2.8 million in 2Q07.
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US GAAP net income for 3Q07 included US$1.5 million of share-based compensation expense. Excluding the share-based compensation, the Company's non-GAAP net income for 3Q07 was US$7.6 million. Diluted non-GAAP earnings per ADS in 3Q07 was US$0.16.

Commenting on the results, the Company's President and CEO, Dr. Ping Wu, said:

"We are pleased with our performance in the third quarter. We have experienced two consecutive quarters of 37% growth in the shipments of our baseband semiconductors and believe that we are continuing to gain share in the Chinese mobile handset market. Our shipments of baseband semiconductors for the nine-month period already exceeded our shipments for all of last year.

On the new product front, the results of our recent strategic R&D investments became more apparent as we refreshed our portfolio with several product extensions that should position us well for next year. In the third quarter, we announced and began sampling three new chips--our SC6600H and SC6600R baseband chips and SV6111 AVS audio/video decoder chip. The SC6600H is designed to enable CD sound quality playback on music mobile phones, while the SC6600R is a high-performance, high-function baseband chip targeted at the mainstream mobile phone market. The SV6111, which we believe is the first decoder chip to support the Chinese AVS standard, successfully passed China Netcom's commercial trial tests in October.

On the 3G front, we continue to work towards the commercialization of the TD-SCDMA standard. We entered into a strategic partnership agreement with ZTE, the largest TD-SCDMA equipment supplier in the first phase of TD-SCDMA deployment. We are cooperating with ZTE in a number of projects designed to improve the functionality of TD-SCDMA system and terminals and introduce additional TD-SCDMA commercial products. This month, we announced sampling of our SC8800S chip, a TD-SCDMA/GSM dual-mode baseband chip designed to support HSDPA/EDGE and dedicated for the data card market. Also in this month, ZTE used our TD-SCDMA baseband to demonstrate the feasibility of multimedia broadcast multicast services (MBMS) over a TD-SCDMA network."

Third Quarter 2007 Financial Review

Revenue

Revenue in the third quarter totaled US$38.6 million, representing increases of 44% from 3Q06 and 20% from 2Q07. Revenue from baseband semiconductors was US$34.2 million, or 89% of revenue, up from 59% of revenue in 3Q06 and 85% of revenue in 2Q07. Revenue from turnkey solutions was US$4.4 million, which represented 11% of revenue, down from 41% of revenue in 3Q06 and 15% of revenue in 2Q07.

Revenue from baseband semiconductors increased by 118% from 3Q06 and 25% from 2Q07 to US$34.2 million. Unit shipments of baseband semiconductors increased by 37% from 2Q07. Nearly all baseband semiconductor shipments in the third quarter were 2G/2.5G related products. The average selling price per unit for baseband semiconductors declined by 9% from 2Q07.

Revenue from turnkey solutions decreased by 60% from 3Q06 and 9% from 2Q07 to US$4.4 million, as a result of the Company's prior decision to phase out its SP7000 series handset boards by the end of 2006 and gradually phase out its SM5100 series modules.

Gross Margin

The gross margin for the quarter was 45.6%, up from 43.2% in 3Q06 and flat from 45.5% in 2Q07. This margin improvement from the same period in 2006 was primarily due to a more favorable revenue mix from baseband products, as the Company continues to gradually phase out its lower margin turnkey solutions. The cost of revenue in 3Q07 totaled US$21.0 million, representing increases of 38% and 20% from 3Q06 and 2Q07, respectively. The year-over-year increase in absolute dollars was driven by an increase in the total cost of baseband semiconductors from higher volumes partially offset by a decline in the total cost of turnkey solutions. The total cost of turnkey solutions declined as the Company phased out its SP7000 series handset board business by the end of 2006 and continued to de-emphasize its SM5100 series module business. The sequential increase was driven by an increase in total wafer fabrication and assembly and testing costs as a result of the 37% increase in baseband unit volume from 2Q07.

The non-GAAP gross margin was 45.7%, up from 43.4% in 3Q06 and unchanged from 2Q07.

Operating Expenses

Total operating expenses in 3Q07, which include selling, general and administrative (SG&A) expenses and research and development (R&D) expenses, were US$13.1 million, representing increases of 66% from 3Q06 and 8% from 2Q07. Excluding the share-based compensation expense, total operating expenses increased 62% year-over-year and 9% sequentially.

Total operating expenses for the quarter represented 33.9% of revenue, compared to 29.4% and 37.6% of revenue in 3Q06 and 2Q07, respectively. The Company's operating margin decreased from 13.8% in 3Q06 but increased from 7.9% in 2Q07 to 11.7% in 3Q07. The year-over-year decline in operating margin was due to higher R&D expenses as a result of the Company's strategic decision to expand its product portfolio. The non-GAAP operating margin in 3Q07 was 15.7%, down from 16.7% in 3Q06 but up from 12.6% in 2Q07.

SG&A expenses in 3Q07 increased by 39% from 3Q06 and decreased by 2% from 2Q07 and represented 10.5% of revenue, down from 10.9% of revenue in 3Q06 and 12.9% of revenue in 2Q07. The year-over-year dollar increase was driven primarily by higher salary and benefits as a result of headcount addition, especially at the senior management level, share-based compensation expense, depreciation, insurance, business tax, and shipping expense. The sequential dollar decrease was driven primarily by decreases in business tax expense and professional fees, partially offset by higher salary and benefits, insurance, and other administrative expenses.

R&D expenses in 3Q07 increased 82% year-over-year and 13% sequentially and represented 23.3% of revenue in 3Q07, compared to 18.5% in 3Q06 and 24.7% in 2Q07. The year-over-year dollar increase was driven primarily by the Company's efforts to expand its product portfolio, and this increase included higher salary and benefits, share-based compensation expense, tape-out expense, depreciation and amortization expense, and travel expense. The sequential dollar increase was primarily driven by higher salary and benefits, depreciation and amortization expense, travel expense, and utilities expenses.

Non-Operating Income

In 3Q07, the Company recorded net interest income of US$1.7 million, representing increases of US$1.5 million from 3Q06 and US$1.4 million from 2Q07. The increases were primarily attributed to interest earned from investing the higher balance of cash and cash equivalents arising from the Company's initial public offering.

Earnings

The Company's net income totaled US$6.1 million in 3Q07, an increase of 64% from US$3.7 million in 3Q06 and 118% from US$2.8 million in 2Q07. The net margin was 15.7%, up from 13.9% in 3Q06 and 8.6% in 2Q07. Diluted earnings per ADS was US$0.13, up 18% from US$0.11 in 3Q06 and 86% from US$0.07 in 2Q07.

Non-GAAP diluted earnings per ADS for 3Q07 was US$0.16, up from US$0.13 in 3Q06 and US$0.11 in 2Q07.

Balance Sheet

As of September 30, 2007, the Company had US$147.0 million in cash and cash equivalents, which represented an increase of US$105.6 million from June 30, 2007. The Company's initial public offering, which settlement took place in early July, contributed US$100.0 million of this increase. Accounts receivable (A/R) decreased from US$6.7 million at June 30, 2007 to US$3.0 million at September 30, 2007, and the average A/R days decreased from 25 days to 11 days. Inventory at September 30, 2007 was US$15.0 million, fairly comparable with the inventory at June 30, 2007, and the inventory days decreased from 77 days to 65 days. Total assets as of September 30, 2007 were US$215.5 million, up 95% from US$110.3 million at June 30, 2007.

Current liabilities decreased from US$38.5 million at June 30, 2007 to US$35.5 million at September 30, 2007, primarily due to a decrease in accounts payable. Long-term liabilities at September 30, 2007 were US$4.8 million, compared to US$4.3 million at June 30, 2007. The increase was primarily due to an increase in long-term payable related to acquired intangibles.

On July 2, 2007, the Company issued 8 million ADSs, or 24 million ordinary shares, in connection with its initial public offering. There were approximately 126.6 million ordinary shares outstanding at September 30, 2007, equivalent to approximately 42.2 million American Depositary Shares. The weighted average diluted share count in the third quarter was 46.9 million ADSs.

Cash Flow

In 3Q07, the Company generated US$17.2 million cash from operating activities. The Company also spent US$6.9 million on property and equipment, of which approximately US$5.7 million represented the final payment for the Company's current headquarters building, and US$1.6 million on intangible assets. In addition, the Company spent approximately US$3.0 million on the final installment of its purchase of land use rights for a parcel of land near its current headquarters building. Cash and cash equivalents balance at September 30, 2007 increased by US$105.6 million as compared to balance as of June 30, 2007. US$100.0 million of this increase came from the net proceeds of the Company's initial public offering.

Business Outlook:

The Company currently expects revenue in the fourth quarter of 2007 to be approximately US$46 million to US$47 million, which represents a sequential increase of 19% to 22% from US$38.6 million in the third quarter of 2007. The Company estimates that its operating margin will likely increase from 11.7% in 3Q07 to slightly over 13% in 4Q07.

Webcast of Conference Call:

The Company's management team will conduct a conference call at 6:00 pm Eastern Time on October 31, 2007. A webcast of the conference call will be accessible on the Company's web site at http://www.spreadtrum.com. The conference call can also be accessed via the following telephone numbers:


     USA (Toll Free):       +1-866-679-8035
     USA (Toll):            +1-617-213-4848
     Hong Kong (Toll Free): 800-962-844
     China (Toll Free):     10-800-130-0399
     Participant Passcode:  8804 0657

A replay of the conference call will be available for seven days via the following telephone numbers:


     USA (Toll Free):       +1-888-286-8010
     USA (Toll):            +1-617-801-6888
     Participant Passcode:  5949 5354

Discussion of Non-GAAP Financial Measures

In addition to disclosing financial results prepared in accordance with US GAAP, the Company's earnings release contains non-GAAP financial measures that exclude the effects of share-based compensation. The non-GAAP financial measures used by management and disclosed by the Company exclude the income statement effects of all forms of share-based compensation.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with US GAAP. The financial results reported in accordance with US GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measures used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies.

The Company believes that the presentation of non-GAAP gross margin, non- GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per ADS provides important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations. The non-GAAP diluted earnings per ADS is calculated by dividing non-GAAP net income by the US GAAP weighted average diluted shares outstanding.

Listed below are share-based compensation amounts included in net income that management excludes in computing the non-GAAP financial measures referred

to in the text of this press release. A reconciliation of GAAP to non-GAAP results is presented after the consolidated balance sheets.


                                       Three months ended
                         September 30, 2006  June 30, 2007  September 30, 2007
                                  (in thousands of US dollars)

  Share-based compensation:
     Cost of revenue              $  44          $  52               $  54
     Research and development       385            563                 582
     Selling, general, and
      Administrative                333            904                 891



                       Spreadtrum Communications, Inc.
                        Consolidated Income Statements
     (in thousands of US dollars, except per share data and percentages)
                                 (unaudited)

                                       Three months ended         Change from
                              September    June 30,   September    3Q06   2Q07
                               30, 2006        2007    30, 2007

    Revenue                     $26,701     $32,187     $38,570     44%    20%
    Cost of revenue              15,161      17,543      20,996     38%    20%
    Gross profit                 11,540      14,644      17,574     52%    20%
    Operating expenses
       Research & development     4,945       7,952       8,997     82%    13%
       Selling, general &
        administrative            2,914       4,149       4,059     39%   (2)%
       Total operating
        expenses                  7,859      12,101      13,056     66%     8%
    Operating income              3,681       2,543       4,518     23%    78%
    Non-operating income
     (expense)
       Interest income              134         299       1,676   1151%   461%
       Interest expense              (5)         (6)        (18)   260%   200%
       Other income, net            207         116         347     68%   199%
       Total non-operating
        income                      336         409       2,005    497%   390%
    Income before tax             4,017       2,952       6,523     62%   121%
    Income tax expense              314         171         465     48%   172%
    Net income                   $3,703      $2,781      $6,058     64%   118%

    Basic earnings per ADS        $0.74       $0.41       $0.14   (81)%  (66)%
    Diluted earnings per ADS      $0.11       $0.07       $0.13     18%    86%

    Margin analysis:
    Gross margin                   43.2%       45.5%       45.6%
    Operating margin               13.8%        7.9%       11.7%
    Net margin                     13.9%        8.6%       15.7%

    Weighted average ADS
     equivalent:(1)
    Basic                     5,002,184   6,859,226  42,005,199
    Diluted                  34,033,283  39,240,015  46,940,325


    (1) Assumes all outstanding ordinary shares are represented by ADSs.  Each
        ADS represents three ordinary shares.



                       Spreadtrum Communications, Inc.
                        Consolidated Income Statements
     (in thousands of US dollars, except per share data and percentages)
                                 (unaudited)

                                                Nine months ended
                                             September     September
                                              30, 2006      30, 2007    Change
    Revenue                                    $76,113       $96,924       27%
    Cost of revenue                             46,869        53,493       14%
    Gross profit                                29,244        43,431       49%
    Operating expenses
       Research & development                   13,160        22,945       74%
       Selling, general & administrative         7,247        12,128       67%
       Total operating expenses                 20,407        35,073       72%
    Operating income                             8,837         8,358      (5)%
    Non-operating income (expense)
       Interest income                             554         2,414      336%
       Interest expense                            (43)          (30)    (30)%
       Other income, net                           437           794       82%
       Total non-operating income                  948         3,178      235%
    Income before tax                            9,785        11,536       18%
    Income tax expense                             730           665      (9)%
    Net income                                  $9,055       $10,871       20%

    Basic earnings per ADS                       $1.84         $0.59     (68)%
    Diluted earnings per ADS                     $0.27         $0.26      (4)%

    Margin analysis:
    Gross margin                                 38.4%         44.8%
    Operating margin                             11.6%          8.6%
    Net margin                                   11.9%         11.2%

    Weighted average ADS equivalent:(2)
    Basic                                    4,907,441    18,307,807
    Diluted                                 33,130,200    41,531,113


    (2) Assumes all outstanding ordinary shares are represented by ADSs.
        Each ADS represents three ordinary shares.



                       Spreadtrum Communications, Inc.
                    Condensed Consolidated Balance Sheets
                         (in thousands of US dollars)

                                         December 31,    June 30,    September
                                          2006 (Note)       2007      30, 2007
    Cash and cash equivalents                $47,254     $41,336      $146,973
    Term deposit                               1,281          --            --
    Accounts receivable, net                  11,384       6,674         3,020
    Inventories                               13,617      14,925        15,020
    Deferred tax assets                          202         202           202
    Prepaid expenses and other current
     assets                                    1,101       5,638         3,716
    Total current assets                      74,839      68,775       168,931

    Property and equipment, net               18,944      21,468        22,388
    Acquired intangible assets, net            5,920      12,489        13,622
    Deferred tax assets                        1,060       1,087         1,035
    Other long term assets                     3,339       6,512         9,567
    Total assets                             104,102     110,331       215,543

    Current portion of long term loan            576         985           666
    Accounts payable                          12,980      12,317        10,874
    Advances from customers                    3,297       4,428         7,229
    Obligation on acquisition of building      9,236       5,531            --
    Income tax payable                         1,849       2,008         2,397
    Accrued expenses and other current
     liabilities                              13,363      13,262        14,294
    Total current liabilities                 41,301      38,531        35,460

    Long term loan                             3,842       3,283         3,329
    Deferred tax liabilities                      17          17            17
    Other long-term obligations                   --         971         1,433
    Total long term liabilities                3,859       4,271         4,779

    Total liabilities                         45,160      42,802        40,239
    Shareholders' equity                      58,942      67,529       175,304
    Total liabilities & shareholders'
     equity                                 $104,102    $110,331      $215,543

    Note: The financial information at December 31, 2006 is derived from the
          Company's audited consolidated financial statements in its
          prospectus.



                       Spreadtrum Communications, Inc.
                           Supplemental Information
               (in thousands of US dollars, except percentages)


    Revenue (US$000)                        4Q05      1Q06      2Q06      3Q06
    Baseband Semiconductor                $3,028    $4,849   $11,760   $15,684
    Turnkey Solutions                     17,566    14,842    17,961    11,017
    Total                                $20,594   $19,691   $29,721   $26,701

    As % of Total Revenue
    Baseband Semiconductor                   15%       25%       40%       59%
    Turnkey Solutions                        85%       75%       60%       41%

    Gross Margin                           25.0%     31.4%     38.8%     43.2%


    Revenue (US$000)                        4Q06      1Q07      2Q07      3Q07
    Baseband Semiconductor               $22,645   $20,589   $27,357   $34,161
    Turnkey Solutions                      8,317     5,578     4,830     4,409
    Total                                $30,962   $26,167   $32,187   $38,570

    As % of Total Revenue
    Baseband Semiconductor                   73%       79%       85%       89%
    Turnkey Solutions                        27%       21%       15%       11%

    Gross Margin                           46.4%     42.9%     45.5%     45.6%


                       Spreadtrum Communications, Inc.
                  Reconciliation of GAAP to Non-GAAP Results
     (in thousands of US dollars, except per share data and percentages)
                                 (unaudited)

                                                   Three months ended
                                          September     June 30,     September
                                           30, 2006         2007      30, 2007
    Cost of revenue                         $15,161      $17,543       $20,996
       Adjustment for share-based
        compensation                            (44)         (52)          (54)
    Cost of revenue (non-GAAP)              $15,117      $17,491       $20,942

    Operating income                         $3,681       $2,543        $4,518
       Adjustment for share-based
        compensation within:
             Cost of revenue                     44           52            54
             Research and development           385          563           582
             Selling, general, and
              administrative                    333          904           891
    Operating income (non-GAAP)              $4,443       $4,062        $6,045

    Net income                               $3,703       $2,781        $6,058
       Adjustment for share-based
        compensation within:
             Cost of revenue                     44           52            54
             Research and development           385          563           582
             Selling, general, and
              administrative                    333          904           891
    Net income (non-GAAP) *                  $4,465       $4,300        $7,585

    Diluted earnings per ADS                  $0.11        $0.07         $0.13
       Adjustment for share-based
        compensation                           0.02         0.04          0.03
    Diluted earnings per ADS (non-GAAP)*      $0.13        $0.11         $0.16

    Gross margin                              43.2%        45.5%         45.6%
       Adjustment for share-based
        compensation                           0.2%         0.2%          0.1%
    Gross margin (non-GAAP)                   43.4%        45.7%         45.7%

    Operating margin                          13.8%         7.9%         11.7%
       Adjustment for share-based
        compensation                           2.9%         4.7%          4.0%
    Operating margin (non-GAAP)               16.7%        12.6%         15.7%

    Net margin                                13.9%         8.6%         15.7%
       Adjustment for share-based
        compensation                           2.9%         4.7%          4.0%
    Net margin (non-GAAP)*                    16.8%        13.3%         19.7%

    * The non-GAAP adjustment does not take into consideration the impact of
      taxes.



About Spreadtrum Communications, Inc.:

Spreadtrum Communications, Inc. (Nasdaq: SPRD; the "Company") is a fabless semiconductor company that designs, develops, and markets baseband processor solutions for the mobile wireless communications market. The Company combines its semiconductor design expertise with its software development capabilities to deliver highly-integrated baseband processors with multimedia functionality and power management. The Company has developed its solutions based on an open development platform, enabling its customers to develop customized wireless products that are feature-rich and meet their cost and time-to-market requirements.

Safe Harbor Statements:

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding trends in the semiconductor industry in China, the Company's share in the Chinese mobile handset market, the positioning of the Company with respect to new chips announced in the third quarter and this month, the Company's cooperation with ZTE in projects designed to improve the functionality of TD-SCDMA system and terminals and introduce additional TD-SCDMA commercial products, the expected phase-out of the Company's SM5100 series modules, the Company's expectations with respect to the revenue and operating margin for the fourth quarter of 2007, and the Company's future results of operations, financial condition, and business prospects. These statements are forward-looking in nature and involve risks and uncertainties that may cause actual market trends and the Company's actual results to differ materially from those expressed or implied in these forward- looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, continuing competitive pressure in the semiconductor industry and the effect of such pressure on prices; unpredictable changes in technology and consumer demand for mobile phones; uncertainty regarding the timing and pace of deployment of 3G wireless networks that support TD-SCDMA in China; uncertainty regarding the timing and pace of the commercial deployment of AVS-based products in China; the Company's ability to sustain recent rates of growth; the state of and any change in the Company's relationship with its major customers; and changes in political, economic, legal and social conditions in China. For additional discussion of these risks and uncertainties and other factors, please consider the information contained in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"), including the registration statement on Form F-1 filed on June 26, 2007, as amended, especially the sections under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and such other documents that the Company may file with the SEC from time to time, including on Form 6-K. The Company assumes no obligation to update any forward-looking statements, which apply only as of the date of this press release.




--------------------------------------------------------------------------------
Source: Spreadtrum Communications, Inc.

[BigSully1]

HIMX - Himax   Taiwan

Himax Reports Third Quarter 2007 Results
Thursday November 1, 4:00 pm ET




* Third quarter 2007 revenue increased to $243.3 million - record
   high since inception
* Third quarter 2007 gross margin increased to 22.5% - marks
   fourth consecutive quarter of improvement
* Fourth quarter 2007 revenue expected to grow around mid-single
   digits, with gross margin to remain flat, and EPS to be in the
   range of $0.16 to $0.17

           Board Authorizes $40 Million Share Buyback Program

TAINAN, Taiwan, Nov. 1, 2007 (PRIME NEWSWIRE) -- Himax Technologies, Inc. (``Himax'' or ``Company'') (NasdaqGS:HIMX - News) today reported financial results for the third quarter ended September 30, 2007.

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Net revenue for the third quarter of 2007 was $243.3 million, representing 37.4% growth year-over-year and 9.2% growth sequentially.

Gross margin was 22.5% in the third quarter of 2007, up 510 basis points year-over-year and 210 basis points sequentially.

Operating margin was 8.2% in the third quarter of 2007. Operating income was $19.9 million, up from $0.8 million in the same period last year, and down from $24.9 million in the previous quarter.

Net income for the third quarter of 2007 was $21.8 million, up from $2.6 million in the same period last year, and down from $26.8 million in the previous quarter. The decline is primarily due to the grant of 2007 annual restricted share units at the end of September. This represents earnings per share of $0.11 per basic and diluted share, compared to $0.01 per basic and diluted share in the third quarter of 2006, and $0.14 per basic and diluted share in the second quarter of 2007.

Excluding share-based compensation and acquisition-related charges, non-GAAP operating margin was 14.9% in the third quarter of 2007. Non-GAAP operating income was $36.2 million, up from $12.2 million in the same period last year, and up from $28.1 million in the previous quarter.

Non-GAAP net income was $38.0 million, up from $14.1 million in the same period last year, and up from $30.0 million in the previous quarter. This represents earnings per share of $0.19 per basic and diluted share, compared to $0.07 per basic and diluted share in the third quarter of 2006, and $0.15 per basic and diluted share in the second quarter of 2007.

Share-based compensation was $15.7 million, compared to $11.5 million in the third quarter of 2006, and $1.5 million in the second quarter of 2007. Acquisition-related charges were $0.6 million, compared to $0 in the third quarter of 2006 and $1.6 million in the second quarter of 2007.

A reconciliation of our gross margin, operating margin and diluted EPS excluding share-based compensation and acquisition-related charges, a non-GAAP financial measure, to GAAP gross margin, GAAP operating margin and diluted GAAP EPS, our most comparable GAAP figure, is set out in the attached reconciliation schedule.

Jordan Wu, President and Chief Executive Officer of Himax, commented, ``We are pleased with the third quarter results as we achieved record high revenues. We were able to improve our gross margin for the fourth consecutive quarter, resulting in a seven fold increase in our year-over-year GAAP net income. Separately, on October 12, we announced plans to spin-off our TV and monitor chipset operation which will be named Himax Media Solutions, Inc., a wholly-owned subsidiary of Himax Taiwan upon its establishment. Himax Media Solutions, Inc. will be focusing on expanding market share in the global TV and monitor chipset market opportunity. We have identified certain strategic investors and plan to invite them to partner with us in the future. We believe this new company structure will allow us to better focus our resources for the global TV and monitor chipset market opportunity.''

Mr. Wu added, ``On November 1st, our board approved a share repurchase program that authorizes the Company to repurchase up to $40 million worth of the Company's American Depository Receipts. The program does not obligate Himax to acquire any particular amount of ADRs and may be modified or suspended at any time at the Company's sole discretion. With the repurchase program, we reaffirm our confidence and optimism in the long term future of the company. This also demonstrates our commitment to deliver value to our shareholders.''

Max Chan, Chief Financial Officer of Himax, said, ``We made our 2007 annual restricted share units grant of approximately $26.4 million at the end of September. Approximately 54.5%, or $14.4 million was paid out in cash, and vested and expensed immediately. The remainder of the grant will be vested in three equal installments over the next three years. Total share-based compensation accrued in the third quarter, including expenses from legacy grants amounted to $15.7 million, or $0.08 per diluted share.''

Looking forward, Mr. Wu added, ``We expect revenue to grow around mid-single digit in the fourth quarter and gross margin to remain flat. We expect diluted GAAP EPS to be in the range of $0.16 to $0.17. ''

Investor Conference Call / Webcast Details

The Company's management will review detailed third quarter 2007 results on Thursday, November 1, 2007 at 7:00 PM EDT (7:00 AM, Friday, November 2, Taiwan time). The conference call-in number is +1-201-689-8560 (international) and +1-877-407-0784 (U.S. domestic). A live webcast of the conference call will be available on the Company's website at http://www.himax.com.tw. The playback will be available beginning two hours after the conclusion of the conference call and will be accessible by dialing +1-201-612-7415 (international) and 1-877-660-6853 (U.S. domestic). The account number to access the replay is 3055 and the confirmation ID number is 258193.

About Himax Technologies, Inc.

Himax Technologies, Inc. designs, develops and markets semiconductors that are critical components of flat panel displays. The Company's principal products are display drivers for large-sized TFT-LCD panels, which are used in desktop monitors, notebook computers and televisions, and display drivers for small- and medium-sized TFT-LCD panels, which are used in mobile handsets and consumer electronics products such as digital cameras, mobile gaming devices and car navigation displays. In addition, the Company is expanding its product offering to include television semiconductor solutions, as well as LCOS products Based in Tainan, Taiwan, the Company has regional offices in Hsinchu and Taipei, Taiwan; Suzhou and Shenzhen, China; Yokohama, Japan and Anyangsi Kyungkido, South Korea; and Irvine, California, USA.

Forward-Looking Statements:

Certain statements in this press release, 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 press release. Factors that could cause actual results to differ include general business and economic conditions and the state of the semiconductor industry; level of competition; demand for end-use applications products; reliance on a small group of principal customers; continued success in technological innovations; development of alternative flat panel display technologies; ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; shortages in supply of key components; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; and other risks described from time to time in the Company's SEC filings, including its Form 20-F dated June 22, 2007, as amended. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.



                       Himax Technologies, Inc.
        Unaudited Condensed Consolidated Statements of Income
  (These interim financials do not fully comply with US GAAP because
        they omit all interim disclosure required by US GAAP.)

    (Figures in Thousands of U.S. Dollars, Except Per Share Data)

                                              Three Months Ended
                                      --------------------------------
                                          September 30,       June 30,
                                        2007        2006        2007
                                      --------    --------    --------
Revenues
  Revenues from third parties, net    $ 91,960    $ 88,878    $102,276
  Revenues from related parties, net   151,377      88,227     120,607
                                      --------    --------    --------
                                       243,337     177,105     222,883
                                      --------    --------    --------
Costs and expenses:
  Cost of revenues                     188,626     146,287     177,452
  Research and development              26,171      24,267      15,328
  General and administrative             4,891       3,190       3,222
  Sales and marketing                    3,758       2,586       1,995
                                      --------    --------    --------
    Total costs and expenses           223,446     176,330     197,997
                                      --------    --------    --------
Operating income                       19,891         775      24,886
                                      --------    --------    --------

Non operating income (loss):
Interest income                         1,429       2,000       1,514
Foreign exchange gains (losses), net      (29)     (1,298)         36
Other income, net                         166          59         159
                                      --------    --------    --------
                                         1,566         761       1,709
                                      --------    --------    --------
Income before income taxes
  and minority interest                 21,457       1,536      26,595
Income tax benefit                         --      (1,246)         --
                                      --------    --------    --------
Income before minority interest        21,457       2,782      26,595
Minority interest, net of tax             316        (157)        247
                                      --------    --------    --------
Net income                           $ 21,773    $  2,625    $ 26,842
                                      ========    ========    ========
Basic earnings per ordinary share
  and ADS                             $   0.11    $   0.01    $   0.14
                                      ========    ========    ========
Diluted earnings per ordinary share
  and ADS                             $   0.11    $   0.01    $   0.14
                                      ========    ========    ========

Basic Weighted Average
  Outstanding Shares                   197,690     197,110     197,656
Diluted Weighted Average
  Outstanding Shares                   197,733     199,729     198,013


                       Himax Technologies, Inc.
             Unaudited Supplemental Financial Information
                (Figures in Thousands of U.S. Dollars)

The amount of share-based compensation
included in applicable costs and
expenses categories is summarized
as follows:
                                              Three Months Ended
                                      --------------------------------
                                          September 30,       June 30,
                                        2007        2006        2007
                                      --------    --------    --------
Share-based compensation
   Cost of revenues                   $    355    $    208    $     25
   Research and development             11,795       8,963       1,201
   General and administrative            1,718       1,090         151
   Sales and marketing                   1,842       1,195         156
                                      --------    --------    --------
Total                                $ 15,710    $ 11,456    $  1,533
                                      ========    ========    ========

The amount of acquisition-related
charges included in applicable
expenses categories is summarized
as follows:

   Research and development           $    250    $     --    $  1,234
   Sales and marketing                     304          --         408
                                      --------    --------    --------
Total                                $    554    $     --    $  1,642
                                      ========    ========    ========

                       Himax Technologies, Inc.
         Unaudited Condensed Consolidated Statements of Income
     (Figures in Thousands of U.S. Dollars, Except Per Share Data)

                                            Nine Months Ended
                                               September 30,
                                            2007           2006
                                         ---------      ---------
Revenues
   Revenues from third parties, net      $ 270,072      $ 238,939
   Revenues from related parties, net      381,039        284,700
                                         ---------      ---------
                                           651,111        523,639
                                         ---------      ---------
Costs and expenses:
   Cost of revenues                        514,908        422,351
   Research and development                 56,299         46,772
   General and administrative               11,113          6,582
   Sales and marketing                       7,254          4,690
                                         ---------      ---------
Total costs and expenses                  589,574        480,395
                                         ---------      ---------

Operating income                           61,537         43,244
                                         ---------      ---------

Non operating income (loss):
Interest income                             4,325          4,048
Impairment loss on an investment               --         (1,500)
Foreign exchange losses, net                 (483)          (132)
Interest expense                               --           (311)
Other income, net                             367            172
                                         ---------      ---------
                                             4,209          2,277
                                         ---------      ---------
Income before income taxes and
  minority interest                         65,746         45,521
Income tax expense                             --          1,491
                                         ---------      ---------
Income before minority interest            65,746         44,030
Minority interest, net of tax                 888             59
                                         ---------      ---------
Net income                              $  66,634      $  44,089
                                         =========      =========

Basic earnings per ordinary share
  and ADS                                $    0.34      $    0.23
                                         =========      =========
Diluted earnings per ordinary share
  and ADS                                $    0.34      $    0.23
                                         =========      =========

Basic Weighted Average
  Outstanding Shares                       197,671        190,484
Diluted Weighted Average
  Outstanding Shares                       197,834        193,698

                       Himax Technologies, Inc.
             Unaudited Supplemental Financial Information
                (Figures in Thousands of U.S. Dollars)

The amount of share-based compensation
included in applicable costs and
expenses categories is summarized
as follows:
                                            Nine Months Ended
                                               September 30,
                                            2007           2006
                                         ---------      ---------
Share-based compensation
   Cost of revenues                      $     405      $     250
   Research and development                 14,183         10,645
   General and administrative                2,020          1,293
   Sales and marketing                       2,154          1,469
                                         ---------      ---------
Total                                   $  18,762      $  13,657
                                         =========      =========

The amount of acquisition-related
charges included in applicable
expenses categories is summarized
as follows:

   Research and development              $   2,273      $      --
   Sales and marketing                         810             --
                                         ---------      ---------
Total                                   $   3,083      $      --
                                         =========      =========


                       Himax Technologies, Inc.
            Unaudited Condensed Consolidated Balance Sheets
     (Figures in Thousands of U.S. Dollars, Except Per Share Data)


                                        Sept. 30,  June 30,   Dec. 31,
                                          2007       2007       2006
                                        --------   --------   --------
Assets
Current assets:
Cash and cash equivalents              $119,246   $137,508   $109,753
Marketable securities
  available-for-sale                      16,109     13,327      8,828
Restricted cash equivalents                 171        171        108
Accounts receivable, less
  allowance for doubtful
  accounts, sales returns
  and discounts                          101,467    116,812    112,767
Accounts receivable from
  related parties, less
  allowance for doubtful
  accounts, sales returns
  and discounts                          178,099    137,602    116,850
Inventories                             125,983    125,146    101,341
Deferred income taxes                     6,829      6,829      6,744
Prepaid expenses and
  other current assets                    12,903     10,113     10,324
                                        --------   --------   --------
Total current assets                   $560,807   $547,508   $466,715
                                        --------   --------   --------
Property, plant and
  equipment, net                          46,070     45,801     38,895
Deferred income taxes                    12,842     12,842     11,405
Intangible assets, net                   33,711     34,273        393
Investments in non-
  marketable securities                    2,584      1,857        817
Refundable deposits and
  prepaid pension costs                      612        593        569
                                        --------   --------   --------
                                          95,819     95,366     52,079
                                        --------   --------   --------
Total assets                           $656,626   $642,874   $518,794
                                        ========   ========   ========

Liabilities, minority interest
  and stockholders' equity
Current liabilities:
Accounts payable                       $160,269   $171,218   $120,407
Income tax payable                        7,333      7,333     11,666
Dividends payable                        39,710         --         --
Other accrued expenses and
  other current liabilities               15,738     16,023     21,206
                                        --------   --------   --------
Total current liabilities              $223,050   $194,574   $153,279
Accrued pension liability              $    196   $    196   $    192
                                        --------   --------   --------
Total liabilities                      $223,246   $194,770   $153,471
                                        --------   --------   --------
Minority interest                      $  3,084   $  1,715   $  1,396
                                        --------   --------   --------
Stockholders' equity:

Ordinary share, US$0.0001 par value,
  198,548,799, 197,661,063, and
  193,600,302 shares issued and
  outstanding at September 30, 2007,
  June 30, 2007 and December 31, 2006,
  respectively                                20         20         19
Additional paid-in capital              260,980    259,189    221,666
Accumulated other comprehensive loss       (146)      (198)      (275)
Unappropriated earnings                 169,442    187,378    142,517
                                        --------   --------   --------
Total stockholders' equity             $430,296   $446,389   $363,927
                                        --------   --------   --------
Total liabilities, minority interest
  and stockholders' equity              $656,626   $642,874   $518,794
                                        ========   ========   ========


                       Himax Technologies, Inc.
       Unaudited Condensed Consolidated Statements of Cash Flows
                (Figures in Thousands of U.S. Dollars)

                                               Three Months Ended
                                        ------------------------------
                                           September 30,      June 30,
                                          2007       2006       2007
                                        --------   --------   --------
Cash flows from operating activities:
Net income                             $ 21,773   $  2,625   $ 26,842
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
   Depreciation and amortization           4,179      1,119      2,587
   Write-off of in-process research
    and development                           --         --        900
   Share-based compensation expenses       1,284     11,456      1,533
   Minority interest, net of tax            (316)       157       (247)
   Loss (gain) on disposal of
    property, plant and equipment            (16)        --        204
   Gain on sale of subsidiary shares
    and investments in non-marketable
    securities, net                         (112)       (11)      (125)
   Gain on sale of marketable
    securities, net                          (31)       (12)       (23)
   Deferred income taxes                      --        132       (727)
   Inventories write downs                 3,264        469      5,103
Changes in operating assets and
  liabilities:
   Accounts receivable                    15,850    (14,772)    (8,661)
   Accounts receivable from related
    parties                              (40,994)    (5,096)   (31,856)
   Inventories                            (4,032)    (7,838)   (10,868)
   Prepaid expenses and other
    current assets                        (4,390)    (2,530)       486
   Accounts payable                      (10,949)     8,815     49,753
   Income tax payable                         --     (1,075)    (4,333)
   Other accrued expenses and other
    current liabilities                     (114)     3,477      4,071
                                        --------   --------   --------
     Net cash provided by
      (used in) operating activities     (14,604)    (3,084)    34,639
                                        --------   --------   --------
Cash flows from investing
  activities:
   Purchase of property, plant
    and equipment                         (2,500)    (5,691)    (6,877)
   Proceeds from sale of property,
    plant and equipment                        3         --          3
   Purchase of available-for-sales
    marketable securities                (12,144)   (10,608)   (11,723)
   Sales and maturities of
    available-for-sale marketable
    securities                             9,404      8,480     11,258
   Proceeds from sale of subsidiary
    shares and investments in non-
    marketable securities by Himax
    Technologies Limited                     144         27        131
   Purchase of investments in non-
    marketable securities                   (750)    (1,410)    (1,040)
   Purchase of subsidiary shares
    from minority interest                  (112)       (64)       (46)
   Refund from (increase in)
    refundable deposits                      (15)       (92)        76
   Release (pledge) of restricted
    cash equivalents                          --        424        (91)
                                        --------   --------   --------
     Net cash used in
      investing activities                (5,970)    (8,934)    (8,309)
                                        --------   --------   --------


                       Himax Technologies, Inc.
       Unaudited Condensed Consolidated Statements of Cash Flows
                (Figures in Thousands of U.S. Dollars)

                                            Three Months Ended
                                  -----------------------------------
                                       September 30,         June 30,
                                     2007        2006          2007
                                  ---------    ---------    ---------
Cash flows from financing
  activities:
   Proceeds from issuance of
    new shares by subsidiaries    $   2,290    $     655    $      --
   Acquisition of ordinary
    shares for retirement                --           --         (625)
                                  ---------    ---------    ---------
     Net cash provided by (used
      in) financing activities        2,290          655         (625)
                                  ---------    ---------    ---------
Effect of exchange rate
  changes on cash and cash
  equivalents                            22           73          (35)
                                  ---------    ---------    ---------
Net increase (decrease) in
  cash and cash equivalents         (18,262)     (11,290)      25,670
Cash and cash equivalents
  at beginning of period            137,508      166,884      111,838
                                  ---------    ---------    ---------
Cash and cash equivalents
  at end of period                $ 119,246    $ 155,594    $ 137,508
                                  =========    =========    =========
Supplemental disclosures of
  cash flow information:
   Cash paid during the
    period for income taxes       $      24    $      21    $   4,706
                                  =========    =========    =========
Supplemental disclosures of
  non-cash investing and
  financing activities:
   Payable for purchase of
    equipment and construction
    in progress                   $       6    $  (1,750)   $  (4,473)
                                  =========    =========    =========
   Dividends payable              $  39,710    $      --    $      --
                                  =========    =========    =========

                       Himax Technologies, Inc.
         Unaudited Supplemental Data - Reconciliation Schedule
                (Figures in Thousands of U.S. Dollars)

Gross Margin and Operating Margin Excluding Share-based Compensation
and Acquisition-Related Charges:

                                           Three Months Ended
                                   --------------------------------
                                       September 30,       June 30,
                                     2007        2006        2007
                                   --------    --------    --------
Revenues                          $243,337    $177,105    $222,883

Gross profit                        54,711      30,818      45,431
Add: Share-based compensation
  - Cost of revenues                    355         208          25
Gross profit excluding share-
  based compensation                 55,066      31,026      45,456
Gross margin excluding share-
  based compensation                   22.6%       17.5%       20.4%

Operating income                    19,891         775      24,886
Add: Share-based compensation       15,710      11,456       1,533
Operating income excluding
  share-based compensation           35,601      12,231      26,419
Add: Acquisition-related
  charges - In-process R&D
             write off                   --          --         900
          - Intangible assets
             amortization               554          --         742
Operating income excluding
  share-based compensation
  and acquisition-related
  charges                            36,155      12,231      28,061
Operating margin excluding
  share-based compensation
  and acquisition-related
  charges                              14.9%        6.9%       12.6%
Net income excluding
  share-based compensation
  and acquisition-related
  charges                            38,037      14,081      30,017
Net margin excluding
  share-based compensation
  and acquisition-related
  charges                              15.6%        8.0%       13.5%


   * Gross margin excluding share-based compensation equals gross
     profit excluding share-based compensation divided by revenues
   * Operating margin excluding share-based compensation and
     acquisition-related charges equals operating income excluding
     share-based compensation and acquisition-related charges divided
     by revenues
   * Net margin excluding share-based compensation and
     acquisition-related charges equals net income excluding
     share-based compensation and acquisition-related charges divided
     by revenues


                       Himax Technologies, Inc.
         Unaudited Supplemental Data - Reconciliation Schedule
                (Figures in Thousands of U.S. Dollars)

Gross Margin and Operating Margin Excluding Share-based Compensation
and Acquisition-Related Charges:
                                         Nine Months Ended
                                            September 30,
                                         2007          2006
                                       --------      --------
Revenues                              $651,111      $523,639

Gross profit                           136,203       101,288
Add: Share-based compensation
  - Cost of revenues                        405           250
Gross profit excluding share-
  based compensation                    136,608       101,538
Gross margin excluding share-
  based compensation                       21.0%         19.4%

Operating income                        61,537        43,244
Add: Share-based compensation           18,762        13,657
Operating income excluding
  share-based compensation               80,299        56,901
Add: Acquisition-related
  charges - In-process R&D write
             off                          1,600            --
          - Intangible assets
             amortization                 1,483            --
Operating income excluding
  share-based compensation
  and acquisition-related charges        83,382        56,901
Operating margin excluding
  share-based compensation
  and acquisition-related
  charges                                  12.8%         10.9%
Net income excluding share-
  based compensation and
  acquisition-related charges            88,479        57,746
Net margin excluding share-
  based compensation and
  acquisition-related charges              13.6%         11.0%

   * Gross margin excluding share-based compensation equals gross
     profit excluding share-based compensation divided by revenues
   * Operating margin excluding share-based compensation and
     acquisition-related charges equals operating income excluding
     share-based compensation and acquisition-related charges divided
     by revenues
   * Net margin excluding share-based compensation and
     acquisition-related charges equals net income excluding
     share-based compensation and acquisition-related charges divided
     by revenues

                       Himax Technologies, Inc.
         Unaudited Supplemental Data - Reconciliation Schedule

Diluted Earnings Per Share Excluding Share-based Compensation
and Acquisition-Related Charges:

                               Three Months Ended    Nine Months Ended
                                  September 30,         September 30,
                                      2007                  2007
                               ------------------    -----------------
Diluted GAAP EPS                     $0.11                 $0.34

Add: Estimated share-based
  compensation per diluted
  share                               $0.08                 $0.09
Add: Estimated acquisition-
  related charges                     $  --                 $0.02
Diluted non-GAAP EPS excluding
   share-based compensation and
   acquisition-related charges        $0.19                 $0.45

Numbers do not add up due to rounding



Contact:
          Himax Technologies, Inc.
          Max Chan, Chief Financial Officer
            +886-2-3393-0877 Ext. 22300
            [email protected]
          Jackson Ko/Jessie Wang, Investor Relations
            +886-2-3393-0877
            Ext. 22240/22618
            [email protected]
            [email protected]

          In the U.S.
          The Ruth Group
          David Pasquale
          +1-646-536-7006
          [email protected]

[BigSully1]

SWIM - Investools

Investools Reports Record Third Quarter 2007 Financial Results
Thursday November 1, 4:05 pm ET 
Revenue up 111% to Record $84 Million for the Third Quarter
Net Income Swings to $13 Million Profit, $0.19 Per Share, from Prior Year Third Quarter Loss of $0.12 Per Share


NEW YORK, Nov. 1 /PRNewswire-FirstCall/ -- Investools Inc. (Nasdaq: SWIM - News), a leading provider of online brokerage and investor education services, today announced financial results and selected operating metrics for the third quarter and nine months ended September 30, 2007.

    Consolidated financial highlights for the third quarter include:

    -- Record Revenues of $84 million.
    -- Record Net Income of $13 million.
    -- Sales Transaction Volume of $80 million.
    -- Non-GAAP Adjusted EBITDA (before certain items) was $20 million, or 25%
       of Sales Transaction Volume.

"Strong financial results for the third quarter exceeded our forecasts as thinkorswim's active retail accounts took advantage of market volatility and the addition of 9,400 funded accounts added scale to our rapidly growing brokerage business," said Lee K. Barba, Chairman and CEO of Investools Inc. "We successfully executed a 'portfolio' acquisition strategy in our investor education business to expand branded student acquisition to record levels while diversifying partner acquisition channels to grow future student acquisition and reduce shareholder exposure to channel concentration."

thinkorswim highlights for the third quarter ended September 30, 2007 compared to the year-ago period:


    -- Record brokerage revenue of $32 million, up 108%.
    -- New accounts opened, net, of 17,900, up 201%.
    -- Record new accounts funded of 9,400, up 280%.
    -- Funded accounts totaled 47,850 as of September 30, 2007, up 198%.
    -- Retail DARTs of 29,600, up 279%.
    -- Active Trader DARTs of 25,100, up 82%.
    -- Total client assets $2.18 billion, up 145%.
    -- Average client account balance of $43,500 trading 170 times per year.

"thinkorswim has continued to build scale and improve operating margins by attracting record numbers of active, funded accounts. Consistent monthly release upgrades continue to differentiate the thinkorswim platforms and provide unique features including the recent launch of free CNBC Plus streaming, live and commercial-free CNBC video with VOD ticker searchable archived news, thinkscripts rules-based-trading functionality and thinkmobile trading access," said Lee K. Barba, Chairman and CEO of Investools Inc.

Investor Education Group highlights for the third quarter ended September 30, 2007 compared to the year-ago period:


    -- Revenue of $52 million, up 30%.
    -- Sales Transaction Volume of $47 million, a 16% decline.
    -- Price and offer changes continue to fuel efficient graduate growth:
       -- Record Investools marketed graduates of 7,300, up 65%.
       -- Total paid graduates of 9,470 during the quarter.
       -- Active Investor Toolbox subscribers of 98,000, up 15%.

"We achieved breakout records for Investools branded student acquisition in the third quarter through expanded marketing campaigns, particularly on a national level, that acquired students at a reduced cost from previous quarters. By shifting to a 'portfolio' approach to student acquisition and establishing several new relationships, we simultaneously reduced the risk to shareholders of historic partner concentration," said Lee K. Barba, Chairman and CEO of Investools Inc.

Outlook

"We expect continued growth in revenue and expanding bottom line margins for the fourth quarter based on record October results. Our profitable account acquisition and education models continue to convert to high-value retail thinkorswim trading accounts even as we have tripled open accounts in the last twelve months. As a result, we continue to expect Investools will generate positive GAAP earnings for the balance of 2007 and into 2008," concluded Mr. Barba.

Conference Call / Webcast Information

Investools will conduct a conference call to discuss third quarter results at 4:30 p.m. Eastern Time today. The call is being webcast and will be available through Investools' website at www.investools.com under Investor Relations and through thinkorswim's website at www.thinkorswim.com under Investor Relations.

About Investools (Nasdaq: SWIM - News)

Investools Inc. offers market-leading investor education and brokerage and related financial products and services for self-directed investors. Investools Education Group offers a full range of investor education products and services that provide lifelong learning in a variety of interactive delivery formats, including instructor-led synchronous and asynchronous online courses, in-person workshops, one-on-one and one-to-many online coaching programs and telephone, live-chat and email support. thinkorswim Inc., Investools' financial technology pioneer and industry-leading online brokerage firm, is focused on providing services to self-directed options traders and active traders. thinkorswim offers customers a broad range of products including equity securities, fixed income, index products, options, futures, other derivatives and foreign exchange. thinkorswim provides unique front end trading platforms that allow its customers to trade electronically and provides sophisticated trading tools and analytics, including tools for implementing complex, multi-leg options strategies. The products and services offered by Investools Inc. have received numerous accolades from third parties including thinkorswim's ranking by Barron's as its top rated software-based online broker and best for options traders (2006 & 2007), and Prophet's top Barron's ranking for best technical analysis tools (2006).

[David Randolph]

Hi Big, thanks for the info, but this should be placed at the "Your Stocks" thread. Thanks

[BigSully1]

They aren't my stocks, at least not yet. Just thought they might be worthy of a look. But I'll stop it.

[davidmoliv]

Hello David.
Your opinion about INSM would be apreciated.

Thanks in advance.

[David Randolph]

Hi David,

If you have time could you look into CHCG. Thank you.

Ken

1. Profile

China 3C Group (CHCG.OB), headquartered in Hangzhou City in China's Zhejiang province, retails and distributes a wide range of consumer electronics, including cell phones, MP3 players, cameras, DVD players, stereo systems and household appliances. China 3C Group also distributes business electronic products such as FAX machines, computers and land line telephones. Four subsidiaries, each offering distinct product lines, retail a broad range of consumer electronic products. These are sold through more than 800 retail outlets, all but one of which are located on the premises of third-party supermarket chains. China 3C's core markets are the city of Shanghai and the eastern coastal provinces of Jiangsu and Zehjiang, among the most densely populated and fastest growing in China.

Around 70% of the company's revenue is generated by its retail business. All but one of its retail units consist of 800+ "stores-in-stores" operating on the premises of supermarket chains. China 3C plans to expand significantly within its core markets, increasing the number of its stores to 2,000 by 2008, and 4,000 by 2010.

2. CHCG.OB's stock market history



CHCG didn't go anywhere since its IPO in early 2004 and that wasn't because of dilution, since the share count has remained relatively stable (for an OTCBB). The current market cap is $233 M.

In terms of revenues, I have $32 M in 2004, $32 M in 2005 and $148 M in 2006. As for 2007, analysts are expecting a whopping $323.5 M. As for EPS, I have $0.24 in 2006 and for 2007 analysts expect $0.47 and estimate $0.62 for 2008.

This means CHCG.OB is growing revenues by 118% from 2006 levels and it is trading at 9.34 times 2007 estimated EPS.

Where's the catch, if any?

3. 2007 History



We've had three research reports for CHCG, made by Taglich Brothers Research:

Taglich Research Reports: CHCG

To be continued ...

[stocky]

David, I want to say that everytime I see .OB stocks in the main portfolio I see MORE and MORE RISK. I think it would be better if we can excuse .OB and .PK [which I know you dont buy, anyway], then it would be a great thing. BRVO.OB and others had been the case [where buy and hold did not work] vs few exceptions like GSB where it did work. I think the risk may not be worth it. If the China story is true, stocks like SOHU should be part of 3SoF rather then any obscure .OB which can cook books or can have layers like Onion.

Also, for starting next year. It will be good idea to have a separate 100k portfolio with 10 holdings for exactly 1 year. This could be termed a midterm/year-end portfolio for members who are neither traders nor long term buy and hold, but still get the benefits of lower taxes and may have shorter time horizon. I think the current 3 stock fire portfolio may well serve short term traders, for holding 33.33% in a single stock means you need to be very short term due to lot of risk associated with position size, even if you have small capital. But on the other hand, if you get into very short term trading then it will put more load on you and may not be a good idea.

So either the fire portfolio could be adjusted to 10 holdings for a year basis, starting January 1 or a completely new one. Which you can update like main. The critical point for this 10 for a year is the time horizon. But obviously I will suggest that it may not be like day trading or the other extreme buy and hold. Akin to swing trading or trend trading.

The current 15 pos. main portfolio, is doing just fine, but if you are actually buying positions in the market then it would be again good idea to have 20 pos. so that you dont move the low floaters if you happen to buy few thousand shares in the market.

Goodluck and yes 3SoF is doing great, but just wanted to give my feedback and some x-mas wish list.

[realcoolhead]

I share the same feeling when I see .OB stock. I remember David once said he would never buy .OB stocks again after CPNE.OB debacle... GSB is different, when David bought it GSB was about to move to AMEX soon.

Also index future is gonna start trading in China soon, which will give traders in China a way to short the market. When Shanghai index went from 5000 to over 6000, more than 1000 stocks in China actually went down. I think a meaningful top is already in for Chinese market, if not the final top. In that case, these Chinese issues traded in US will be dragged down too. Therefore I don't think it is a good idea to initiate any more new China-related stocks: We already have four: SDTH, CHME, ETLT, UTVG, isn't it too much to buy another one? Just my 2 cents.

David, I want to say that everytime I see .OB stocks in the main portfolio I see MORE and MORE RISK. I think it would be better if we can excuse .OB and .PK [which I know you dont buy, anyway], then it would be a great thing. BRVO.OB and others had been the case [where buy and hold did not work] vs few exceptions like GSB where it did work. I think the risk may not be worth it. If the China story is true, stocks like SOHU should be part of 3SoF rather then any obscure .OB which can cook books or can have layers like Onion.

[David Randolph]

David, I want to say that everytime I see .OB stocks in the main portfolio I see MORE and MORE RISK.

I agree, I was just writing an analysis on demand on CHCG.OB, I wasn't going to buy/recommend it.

BRVO.OB and others had been the case [where buy and hold did not work] vs few exceptions like GSB where it did work.

Yes, BRVO.OB was when I learned about dilution and its effects. Actually made good money in that stock (in three trades, I believe), but I was lucky, since I was (very) wrong about the long term. I knew little about fundamental analysis back then.

Also, for starting next year. It will be good idea to have a separate 100k portfolio with 10 holdings for exactly 1 year. This could be termed a midterm/year-end portfolio for members who are neither traders nor long term buy and hold, but still get the benefits of lower taxes and may have shorter time horizon. I think the current 3 stock fire portfolio may well serve short term traders, for holding 33.33% in a single stock means you need to be very short term due to lot of risk associated with position size, even if you have small capital. But on the other hand, if you get into very short term trading then it will put more load on you and may not be a good idea.

My plan is to close the 3 Stocks on Fire Portfolio when it reaches a 100% return. I'm not going for any short term trading anymore, I don't believe in it as a long term strategy and I'm getting older ... I need to do just the right things from now on, or I won't have enough time.

Goodluck and yes 3SoF is doing great, but just wanted to give my feedback and some x-mas wish list.

Thanks stocky, I'll consider your suggestions

I share the same feeling when I see .OB stock. I remember David once said he would never buy .OB stocks again after CPNE.OB debacle... GSB is different, when David bought it GSB was about to move to AMEX soon.

OTCBB stocks are generally riskier than stocks traded in the AMEX, Nasdaq or NYSE, no doubts here. But the information provided by OTCBB traded companies is similar, they file the same forms with the SEC. It's just that OTCBB's often have "tricks" which don't happen on national exchanges (where "tricks" are not allowed) ... but if one studies all the SEC filings, I think the chances of knowing if an OB is good or not improve dramatically.

Also index future is gonna start trading in China soon, which will give traders in China a way to short the market. When Shanghai index went from 5000 to over 6000, more than 1000 stocks in China actually went down. I think a meaningful top is already in for Chinese market, if not the final top. In that case, these Chinese issues traded in US will be dragged down too.

You probably know the Chinese market better than anyone else here realcoolhead, so this prediction deserves a lot of respect (and the Hang Seng fell 5% today - great timing ). But it is a macro call and I don't use them (or try not to use them) anymore in my investment process.

The Chinese stocks I'm holding in the Main Portfolio are trading at rock bottom valuations and I don't think these individual businesses should be worth less just because of a possible crash or bear market in Chinese stocks. As I wouldn't sell my US holdings if there were a US bear market, I wouldn't sell my Chinese holdings if China also went through a bear period.

Therefore I don't think it is a good idea to initiate any more new China-related stocks: We already have four: SDTH, CHME, ETLT, UTVG, isn't it too much to buy another one? Just my 2 cents.

I agree, no more Chinese stocks.

Ok, I was covering CHCG.OB, but I already knew that, whatever the fundamentals, in the end I would write "the Main already has significant exposure to Chinese micro caps, so I'll leave this one aside, even though fundamentals look attractive".

I'll move on to the next stock on the list, thanks for your thoughts