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Actions Semiconductor Reports Second Quarter 2010 Results
Aug 03, 2010 (04:08 PM EDT)


ZHUHAI, China, Aug. 3 /PRNewswire-Asia/ -- Actions Semiconductor Co., Ltd. (Nasdaq: ACTS), one of China's leading fabless semiconductor companies that provides comprehensive mixed-signal system-on-a-chip (SoC) and multimedia digital signal processing (DSP) solutions for portable consumer electronics, today reported its financial results for the second quarter ended June 30, 2010.

All financial results are reported on a U.S. GAAP basis.

Revenue for the second quarter of 2010 was $9.7 million, as compared to revenue of $7.9 million for the first quarter of 2010, and $10.5 million for the second quarter of 2009.

Net loss attributable to Actions Semiconductor's shareholders for the second quarter of 2010 was $0.4 million, or $0.01 per ADS compared to net loss attributable to Actions Semiconductor's shareholders of $0.9 million, or $0.01 per ADS, for the first quarter of 2010, and net loss attributable to Actions Semiconductor's shareholders of $0.8 million, or $0.01 per ADS, for the second quarter of 2009.

Actions Semiconductor reported gross margin of 39.6% for the second quarter of 2010, as compared to gross margin of 39.6% for the first quarter of 2010, and 27.7% for the second quarter of 2009. The Company ended the quarter with $71.4 million in cash and cash equivalents together with time deposits. Trading securities and marketable securities, current and non-current, were $174.1 million at the end of the quarter.

Since the share repurchase programs started in 2007, the Company has invested approximately $31.2 million in repurchasing its shares. As of June 30, 2010, approximately 13.1 million American Depositary Shares (ADSs) were repurchased.

"We were pleased to deliver better than expected results for the second quarter," stated Mr. Niccolo Chen, CEO of Actions Semiconductor. "Our gross margin continued to benefit from our ongoing cost reduction programs as well as solid revenue contributions from our high-end products. Average selling prices ("ASP") remained relatively stable, despite increased shipment volumes into lower-end applications such as the automotive and boom box sectors.

"Building on the traction we have experienced with our Series 13 and Series 25 products targeting the QVGA and D1 markets, we are continuing to expand the advanced applications and end-markets addressed by our product portfolio through our R&D efforts. We believe the high-end MP4 sectors offer attractive opportunities to drive growth and margin performance. We remain confident in our ability to strategically position the Company to take advantage of the gradual rebound in demand for consumer electronics and to improve our performance over time," concluded Mr. Chen.

Business Outlook

The following statements are based upon management's current expectations. These statements are forward-looking, and actual results may differ materially. The Company undertakes no obligation to update these statements.

For the third quarter of fiscal year 2010 ending September 30, 2010, Actions Semiconductor estimates revenue in the range of $9.0 to $10.0 million, gross margin slightly lower than second quarter, and operating expenses slightly higher on a sequential basis without factoring in additional R&D expenses associated with our pending acquisition in the third quarter. The third quarter 2010 estimates include share-based compensation of approximately $0.1 million.

Conference Call Details

Actions Semiconductor's second quarter 2010 teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Tuesday, August 3, 2010. To participate in the live call, analysts and investors should dial 877-941-2069 (within U.S.) or 480-629-9713 (outside U.S.) at least ten minutes prior to the call. Actions Semiconductor will also offer a live and archived webcast of the conference call, accessible from the "Investor Relations" section of the company's website at http://www.actions-semi.com . An audio replay of the call will be available to investors through August 4, 2010, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the passcode 432970.

About Actions Semiconductor

Actions Semiconductor is one of China's leading fabless semiconductor companies that provides mixed-signal and multimedia SoC solutions for portable consumer electronics. Actions Semiconductor products include SoCs, firmware, software, solution development kits, as well as detailed specifications of other required components and the providers of those components. Actions Semiconductor also provides total product and technology solutions that allow customers to quickly introduce new portable consumer electronics to the mass market in a cost effective way. The company is headquartered in Zhuhai, China, with offices in Beijing, Shanghai, and Shenzhen. For more information, please visit the Actions Semiconductor website at http://www.actions-semi.com .

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

Statements contained in this release that are not historical facts are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements concerning signs of positive indicators in the industry for next year, growth in the market driven by continued proliferation of applications within the PMP market and incremental rebound of overall demand for these products, Actions Semiconductor's belief that it is positioned to capture some upside from these trends, and Actions Semiconductor's future expectations with respect to revenue, gross margin, operating expenses and share-based compensation expense. Actions Semiconductor uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are estimates reflecting current assumptions, expectations and projections about future events and involve significant risks, both known and unknown, uncertainties and other factors that may cause Actions Semiconductor's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, customers' cancellation or modification of their orders; our failure to accurately forecast demand for our products; the loss of, or a significant reduction in orders from, any of our significant customers; fluctuations in our operating results; our inability to develop and sell new products; defects in or failures of our products; the expense and uncertainty involved in our customer design-win efforts; the financial viability of the distributors of our products; consumer demand; worldwide economic and political conditions; fluctuations in our costs to manufacture our products; our reliance on third parties to manufacture, test, assemble and ship our products; our ability to retain and attract key personnel; our ability to compete with our competitors; and our ability to protect our intellectual property rights and not infringe the intellectual property rights of others. Other factors that may cause our actual results to differ from those set forth in the forward-looking statements contained in this press release and that may affect our prospects in general are described in our filings with the Securities and Exchange Commission, including our most recently filed Forms F-1, 20-F and 6-Ks. Other unknown or unpredictable factors also could have material adverse effects on Actions Semiconductor's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as required by law, Actions Semiconductor undertakes no obligation and does not intend to update or revise any forward-looking statement to reflect subsequent events or changed assumptions or circumstances.

    For further information, please contact:

    The Blueshirt Group
     Lisa Laukkanen
     Email: lisa@blueshirtgroup.com
     Tel:   +1-415-217-4967


    Investor Relations at Actions Semiconductor
     Edward Chen
     Email: edward@actions-semi.com
     Tel:   +86-756-3392353 ext. 1110



                         ACTIONS SEMICONDUCTOR CO., LTD.
                           CONSOLIDATED BALANCE SHEET
                         (in thousands of U.S. dollars)

                                             At June    At March  At December
                                            30, 2010    31, 2010    31, 2009
                                          (unaudited) (unaudited)   (audited)
    ASSETS
    Current assets:
      Cash and cash equivalents               71,311      99,924      87,706
      Time deposits                               47          47          62
      Marketable securities                  135,278     133,434     139,984
      Trading securities                         495         500          --
      Accounts receivable, net                 1,986       1,940       1,891
      Amount due from a related party            457         767         530
      Amount due from an equity method
       investee                                  287         404         492
      Inventories                              3,356       3,555       4,501
      Prepaid expenses and other current
       assets                                  2,815       1,339       1,258
      Deferred tax assets                        583         285         371
      Income tax receivable                      188          55          --
    Total current assets                     216,803     242,250     236,795

      Investment in equity method
       investees                               1,751       2,025       1,577
      Other investments (NIL, NIL and
       $420 carried at fair value as of
       June 30, 2010, March 31, 2010 and
       December 31, 2009 respectively)         2,746       3,639       3,258
      Marketable securities ($13,989,
       $13,917 and NIL carried at fair
       value as of June 30, 2010, March
       31, 2010 and December 31, 2009
       respectively)                          38,287      13,917      23,773
      Rental deposits                             53          61          46
      Property, plant and equipment, net      18,502      16,341      14,437
      Land use right                           1,537       1,538       1,546
      Acquired intangible assets, net          3,154       3,552       3,625
      Deposit paid for acquisition of
       land use right                            901          --          --
      Deposit paid for acquisition of
       intangible assets                       1,100          --          --
      Deferred tax assets                        117         131         149
    TOTAL ASSETS                             284,951     283,454     285,206

    LIABILITIES AND EQUITY
    Current liabilities:
      Accounts payable                         3,947       2,518       2,355
      Accrued expenses and other current
       liabilities                             6,193       5,291       4,626
      Other liabilities                        2,296       2,196       2,124
      Income tax payable                         208        --           129
      Deferred tax liabilities                   374         380         284
    Total current liabilities                 13,018      10,385       9,518

    Other liabilities                            122         326         319
    Deferred tax liabilities                   2,129       2,072       2,058
    Total liabilities                         15,269      12,783      11,895
    Equity:
     Ordinary shares                               1           1           1
     Additional paid-in capital               28,428      29,822      31,423
     Accumulated other comprehensive
      income                                  20,920      20,074      20,239
     Retained earnings                       220,333     220,774     221,648
    Total Actions Semiconductor Co., Ltd.
     shareholders' equity                    269,682     270,671     273,311
    TOTAL LIABILITIES AND EQUITY             284,951     283,454     285,206



                         ACTIONS SEMICONDUCTOR CO., LTD.
                  CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
             (in thousands of U.S. dollars, except per share amounts)

                            Three months Three months  Six months   Six months
                                ended        ended        ended        ended
                              June 30,     June 30,     June 30,     June 30,
                                2010         2009         2010         2009
                             (unaudited)  (unaudited)  (unaudited)  (unaudited)

    Revenues:
      Third-parties:
       System-on-a-chip
        products                 7,906        7,406       14,191       15,636
       Semiconductor
        product testing
        services                    36           49           58           84
                                 7,942        7,455       14,249       15,720
      Related-parties:
       System-on-a-chip
        products                 1,720        3,077        3,303        7,051
      Total revenues             9,662       10,532       17,552       22,771
    Cost of revenues:
      Third-parties:
       System-on-a-chip
        products                (4,780)      (5,306)      (8,573)     (10,681)
       Semiconductor
        product testing
        services                   (18)         (27)         (33)         (59)
                                (4,798)      (5,333)      (8,606)     (10,740)
      Related-parties:
       System-on-a-chip
        products                (1,040)      (2,284)      (2,000)      (5,007)
      Total cost of
       revenues                 (5,838)      (7,617)     (10,606)     (15,747)
    Gross profit                 3,824        2,915        6,946        7,024
    Other operating income         341            6          474          273
    Operating expenses:
      Research and
       development              (4,437)      (4,956)      (8,994)      (9,666)
      General and
       administrative           (2,352)      (1,795)      (4,092)      (4,170)
      Selling and
       marketing                  (305)        (290)        (551)        (580)
    Total operating
     expenses                   (7,094)      (7,041)     (13,637)     (14,416)
    Loss from operations        (2,929)      (4,120)      (6,217)      (7,119)
    Other income (expense)         452          161          482         (726)
    Fair value change in
     financial instruments           1            1          133           42
    Interest income              2,244        3,116        4,678        5,990
    Interest expense                --          (32)          --          (59)
    Loss before income
     taxes, equity in net
     loss of equity
     method investees and
     non-controlling
     interest                     (232)        (874)        (924)      (1,872)
    Income tax credit
     (expense)                      64          153           34         (242)
    Equity in net loss of
     equity method
     investees                    (273)        (161)        (425)        (340)

    Net loss                      (441)        (882)      (1,315)      (2,454)
    Less: Net loss
     attributable to non-
     controlling interest           --          105           --        1,885
    Net loss attributable
     to Actions
     Semiconductor
     Co., Ltd.                    (441)        (777)      (1,315)        (569)

    Net loss per share-
     basic and diluted:
    Net loss attributable
     to Actions
     Semiconductor
     Co., Ltd.                  (0.001)      (0.002)      (0.003)      (0.005)

    Basic and diluted (per
     ADS)                       (0.006)      (0.010)      (0.018)      (0.029)

    Weighted-average
     shares used in
     computation:
    Basic                  441,181,871  461,911,062  444,005,616  464,898,891
    Basic and diluted      441,181,871  461,911,062  444,005,616  464,898,891

    Weighted-average ADS
     used in computation :
    Basic                   73,530,312   76,985,177   74,000,936   77,483,149
    Basic and diluted       73,530,312   76,985,177   74,000,936   77,483,149

    Note: Stock
     compensation recorded
     in each expense
     classification
     above is as follows:
      Research and
       development                 663          681        1,353        1,332
      General and
       administrative              225          351          500          693
      Selling and
       marketing                    38           54           79          107



                             ACTIONS SEMICONDUCTOR CO., LTD.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (in thousands of U.S. dollars)

                                          Three months Six months  Six months
                                              ended       ended       ended
                                             June 30,    June 30,    June 30,
                                               2010        2010        2009
                                           (unaudited) (unaudited) (unaudited)
    Operating activities:
    Net loss                                    (441)     (1,315)       (569)
    Adjustments to reconcile net loss to
     net cash provided by
      Operating activities:
      Depreciation of property, plant and
       equipment                                 455         936       1,061
      Land use right                               8          16          16
      Allowance for doubtful accounts
       receivable                                 --        (102)        (60)
      Amortization of acquired intangible
       assets                                    448         984       1,580
      Utilization of subsidy from local
       authorities of Beijing and Zhuhai,
       the People's Republic of China
       (PRC)                                    (117)       (117)       (226)
      Write down of inventories                   --          --         (76)
      Loss (gain) on disposal of
       property, plant and equipment              53          53          (7)
      Gain on disposal of other
       investment                                 --        (137)         --
      Equity in net loss of equity method
       investees                                 274         426         340
      Share-based compensation                   926       1,932       2,132
      Fair value change in trading
       securities                                 --           3         (40)
      Deferred taxes                            (234)        (21)        613
      Proceeds from disposal of trading
       securities                                  5           5      30,649
      Purchase of trading securities              --        (470)    (11,310)
      Changes in operating assets and
       liabilities:
        Accounts receivable                      (46)          7        (647)
        Amount due from a related party          310          73         561
        Notes receivable                          --          --          10
        Inventories                              213       1,159       2,488
        Amount due from an equity method
         investee                                120         208          --
        Prepaid expenses and other
         current assets                       (1,035)     (1,116)       (866)
        Accounts payable                       1,416       1,579       1,779
        Accrued expenses and other
         current liabilities                     (77)     (1,994)     (2,203)
        Income tax receivable                   (133)       (188)       (187)
        Income tax payable                       210          81        (212)
        Deposit paid for acquisition of
         land use right                         (901)       (901)         --
        Rental deposit (paid) refunded             8          (7)        (21)
    Net cash provided by operating
     activities                                1,462       1,094      24,805

    Investing activities:
      Increase in an equity method
       investees                                  --        (600)         --
      Proceeds from the disposal of other
       investments                               897       1,251          --
      Proceeds from redemption of
       marketable securities                      --      45,235          --
      Purchase of marketable securities      (25,879)    (54,689)     17,842
      Proceeds from disposal of property,
       plant and equipment                        --          --          27
      Increase in deposit paid for
       acquisition of property, plant and
       equipment                                  --          --      (1,733)
      Purchase of property, plant and
       equipment                              (1,664)     (2,425)     (2,108)
      Purchase of intangible assets              (27)       (327)     (2,185)
      Deposit paid for acquisition of
       intangible assets                      (1,100)     (1,100)         --
      Decrease in restricted cash                 --          --          40
      Increase (decrease) in time
       deposits                                   --          15         (42)
    Net cash (used in) from investing
     activities                              (27,773)    (12,640)     11,841

    Financing activities:
      Repayment of short-term bank loans          --          --          (2)
      Advance subsidy from local
       authorities of Shenzhen and
       Zhuhai, the PRC                            --          79         475
      Issuance of ordinary shares for
       share option plan                          64          64          --
      Repurchase of ordinary shares           (2,384)     (4,991)     (6,328)
    Net cash used in financing activities     (2,320)     (4,848)     (5,855)

    Net (decrease) increase in cash and
     cash equivalents                        (28,631)    (16,394)     30,791

    Cash and cash equivalents at the
     beginning of the period                  99,924      87,706      45,435

    Effect of exchange rate changes on
     cash                                         18          (1)         (4)
    Cash and cash equivalents at the end
     of the period                            71,311      71,311      76,222
                                                  --          --          --

SOURCE Actions Semiconductor Co., Ltd.