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Actions Semiconductor Reports Fourth Quarter and Fiscal Year 2010 Results
Jan 27, 2011 (03:01 PM EST)


ZHUHAI, China, Jan. 27, 2011 /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 fourth quarter and fiscal year ended December 31, 2010.

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

Revenue for the fourth quarter of 2010 was $10.7 million, as compared to revenue of $9.3 million for the third quarter of 2010, and $7.9 million for the fourth quarter of 2009.  Revenue for the year ended December 31, 2010 was $37.6 million, compared to revenue of $44.1 million for the year ended December 31, 2009.

Net loss attributable to Actions Semiconductor's shareholders for the fourth quarter of 2010 was $0.15 million, or $0.00 per ADS.  This compares to net income attributable to Actions Semiconductor's shareholders of $1.9 million, or $0.03 per ADS, for the third quarter of 2010, and a net loss attributable to Actions Semiconductor's shareholders of $7.5 million, or $0.10 per ADS, for the fourth quarter of 2009.  Net income for the full year of 2010 was $0.4 million, compared to a net loss of $10.4 million reported for the full year 2009.  Net income per ADS was $0.01 for 2010, compared to net loss per ADS of $0.14 reported for the full year 2009.

Actions Semiconductor reported gross margin of 37.1% for the fourth quarter of 2010, as compared to gross margin of 40.1% for the third quarter of 2010, and 34.9% for the fourth quarter of 2009.  Fourth quarter 2010 gross margin decreased, after a sequential increase in the first three quarters in 2010, primarily due to an inventory write off of $0.2 million.  The Company ended the year 2010 with $42.9 million in cash and cash equivalents together with time deposits.  Trading securities and marketable securities, current and non-current, were $189.7 million at the end of the year.

Since the share repurchase programs commenced in 2007, the Company has invested approximately $35.2 million in repurchasing its shares. As of December 31, 2010, approximately 14.9 million American Depositary Shares (ADSs) were repurchased. 

"We are pleased to exit 2010 with better than expected results for the fourth quarter," stated Mr. Niccolo Chen, CEO of Actions Semiconductor.  "Our fourth quarter results were driven by a strong increase in product shipments as the Company experienced improved demand for our new products addressing the faster growing segments of the MP4 market as well our high-volume automotive and boom box products. We enjoyed the first revenue contribution from our new gaming product line, Series G1000.  This product family provides a compelling platform for Gaming PMP manufacturers to deliver gaming devices cost effectively with high quality video functions.

"During 2010, we made progress on our product diversification strategy and achieved the milestone of penetrating into the advanced video PMP markets.  We introduced three new product families targeted toward mobile video entertainment markets.  We believe that we are beginning to benefit from the investments we have been making in R&D. Heading into 2011, we have increasing momentum in a number of markets that we serve, such as video gaming, digital video recording, Android based PMP, TV box, HD 1080P & 720P MP4, automotive audio, and boom box," 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 first quarter of fiscal year 2011 ending March 31, 2011, Actions Semiconductor estimates revenue in the range of $7.5 to $8.5 million, gross margin will be approximately 40% and operating expenses higher on a sequential basis.  The first quarter 2011 estimates include share-based compensation of approximately $0.6 million.

Conference Call Details

Actions Semiconductor's fourth quarter and fiscal year 2010 teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Thursday, January 27, 2011.  To participate in the live call, analysts and investors should dial 877-941-2068 (within U.S.) or 480-629-9712 (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 www.actions-semi.com. An audio replay of the call will be available to investors through January 28, 2011, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the passcode 4399701.

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.

Investor Contacts:


Lisa Laukkanen

Edward Chen

The Blueshirt Group

Investor Relations at Actions Semiconductor

lisa@blueshirtgroup.com

edward@actions-semi.com

415-217-4967

+86-756-3392353*1110



ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED BALANCE SHEET

(in thousands of U.S. dollars)








At December 31,


At September 30,


At December 31,


2010


2010


2009


(unaudited)


(unaudited)


(audited)

ASSETS






Current assets:






 Cash and cash equivalents

42,872


53,919


87,706

 Time deposits

34


32


62

 Marketable securities

164,336


158,259


139,984

 Trading securities

535


510


-

 Accounts receivable, net

1,844


2,163


1,891

 Amount due from a related party

569


677


530

 Amount due from an equity method investee

94


300


492

 Notes receivable

-


60


-

 Inventories

4,832


6,128


4,501

 Prepaid expenses and other current assets

3,242


2,809


1,258

 Deferred tax assets

399


303


371

 Income tax receivable

-


190


-

Total current assets

218,757


225,350


236,795







 Investment in equity method investees

6,401


6,158


1,577

 Other investments (NIL, NIL and $420 carried at fair value as of December 31, 2010, September 30, 2010 and December 31, 2009 respectively)

2,764


2,757


3,258

 Marketable securities ($14,296, $14,177 and NIL carried at fair value as of December 31, 2010, September 30, 2010 and December 31, 2009 respectively)

24,831


24,623


23,773

 Rental deposits

40


42


46

 Property, plant and equipment, net

24,604


20,770


14,437

 Land use right

1,554


1,549


1,546

 Acquired intangible assets, net

4,318


4,565


3,625

 Deposit paid for acquisition of intangible assets

2,408


1,975


-

 Deferred tax assets

88


103


149

 Goodwill

468


468


-

TOTAL ASSETS

286,233


288,360


285,206







LIABILITIES AND EQUITY






Current liabilities:






 Accounts payable

2,850


5,721


2,355

 Accrued expenses and other current liabilities

7,247


5,969


4,626

 Other liabilities

2,502


2,260


2,124

 Income tax payable

140


102


129

 Deferred tax liabilities

446


377


284

Total current liabilities

13,185


14,429


9,518







Other liabilities

83


82


319

Deferred tax liabilities

2,286


2,225


2,058

Total liabilities

15,554


16,736


11,895

Equity:






Ordinary shares

1


1


1

Additional paid-in capital

24,252


26,317


31,423

Accumulated other comprehensive income

24,420


23,116


20,239

Retained earnings

222,032


222,184


221,648

Total Actions Semiconductor Co., Ltd. shareholders' equity

270,705


271,618


273,311

Noncontrolling interest

(26)


6


-

Total equity

270,679


271,624


273,311

TOTAL LIABILITIES AND EQUITY

286,233


288,360


285,206



ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

(in thousands of U.S. dollars, except per share amounts)












Three months ended


Three months ended


Year ended


Year ended



December 31,


December 31,


December 31,


December 31,



2010


2009


2010


2009



(unaudited)


(audited)


 (unaudited)  


 (audited)  










Revenues:









 Third-parties:









  System-on-a-chip products


8,731


6,787


29,939


31,482

  Semiconductor product testing services


44


53


151


203



8,775


6,840


30,090


31,685

 Related-parties:









  System-on-a-chip products


1,960


1,097


7,495


12,455

 Total revenues


10,735


7,937


37,585


44,140

Cost of revenues:









 Third-parties:









  System-on-a-chip products


(5,596)


(4,337)


(18,521)


(21,322)

  Semiconductor product testing services


(24)


(33)


(81)


(117)



(5,620)


(4,370)


(18,602)


(21,439)

 Related-parties:









  System-on-a-chip products


(1,127)


(800)


(4,325)


(8,771)

 Total cost of revenues


(6,747)


(5,170)


(22,927)


(30,210)

Gross profit


3,988


2,767


14,658


13,930

Other operating income


22


595


966


918

Gain on deemed disposal


-


-


-


1,736

Operating expenses:









 Research and development


(4,425)


(4,552)


(17,325)


(19,295)

 General and administrative


(2,204)


(2,249)


(8,125)


(8,812)

 Selling and marketing


(420)


(244)


(1,208)


(1,115)

Total operating expenses


(7,049)


(7,045)


(26,658)


(29,222)

Loss from operations


(3,039)


(3,683)


(11,034)


(12,638)

Other income (expense)


794


29


2,348


(654)

Dividend income


-


20


-


440

Fair value change in trading securities


1


-


(2)


40

Gain on disposal of other investment


-


-


137


-

Interest income


2,503


2,679


9,608


10,977

Interest expense


-


-


-


(57)

Other-than-temporary impairment loss on investments


-


(6,397)


-


(7,407)

Income (loss) before income taxes, equity in net (loss) of
equity method investees and noncontrolling interest


259


(7,352)


1,057


(9,299)

Income tax (expense) credit


(86)


152


(422)


(537)

Equity in net loss of equity method investees


(357)


(302)


(781)


(826)

Remeasurement gain on equity interest on acquisition of a subsidiary


-


-


494


-

Net  (loss) income


(184)


(7,502)


348


(10,662)

Less: Net loss attributable to noncontrolling interest


32


-


36


264

Net  (loss) income attributable to Actions Semiconductor Co., Ltd.


(152)


(7,502)


384


(10,398)










Net (loss) income per share-basic:









Net (loss) income attributable to Actions Semiconductor Co., Ltd.


(0.000)


(0.016)


0.001


(0.023)










Net  (loss) income per share-diluted:









Net  (loss) income attributable to Actions Semiconductor Co., Ltd.


(0.000)


(0.016)


0.001


(0.023)










Basic (per ADS)


(0.002)


(0.099)


0.005


(0.135)

Diluted (per ADS)


(0.002)


(0.099)


0.005


(0.135)










Weighted-average shares used in computation:









Basic


430,634,573


454,845,873


438,401,072


460,812,477

Diluted


430,634,573


454,845,873


457,135,662


460,812,477










Weighted-average ADS used in computation :









Basic


71,772,429


75,807,646


73,066,845


76,802,080

Diluted


71,772,429


75,807,646


76,189,277


76,802,080










Note: Stock compensation recorded in each









expense classification above is as follows:









 Research and development


(159)


582


1,067


2,475

 General and administrative


(64)


316


404


1,335

 Selling and marketing


(12)


43


59


196

 Cost of revenues


2


-


2


-



ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)


Three months ended


Year ended


Year ended


December 31,


December 31,


December 31,


2010


2010


2009


(unaudited)


 (unaudited)  


 (audited)  

Operating activities:






Net (loss) income  

(184)


348


(10,662)

Adjustments to reconcile net (loss) income to net cash provided by






 Operating activities:






 Depreciation of property, plant and equipment

543


1,929


2,073

 Land use right

8


33


34

 Allowance for doubtful accounts receivable

-


(102)


(56)

 Amortization of acquired intangible assets

472


1,901


2,833

 Utilization of subsidy from local authorities of Beijing and Zhuhai, the People's Republic of China ("PRC")

-


(225)


(226)

 Write down of inventories

221


378


294

 (Gain) loss on disposal of property, plant and equipment

(12)


42


(5)

 Gain on disposal of other investment

-


(137)


-

 Equity in net loss of equity method investees

357


782


826

 Remeasurement gain on equity interest on acquisition of a subsidiary

-


(494)


-

 Share-based compensation

(233)


1,532


4,006

 Fair value change in trading securities

1


(2)


(40)

 Deferred taxes

48


422


484

 Gain on deemed disposal

-


-


(1,736)

 Other-than-temporary impairment loss on investments

-


-


7,407

 Changes in operating assets and liabilities:






   Proceeds from disposal of trading securities

-


5


30,649

   Purchase of trading securities

-


(470)


(11,310)

   Accounts receivable

320


151


(1,305)

   Amount due from a related party

108


(39)


967

   Notes receivable

60


-


74

   Inventories

1,112


222


3,152

   Amount due from an equity method investee

210


410


(492)

   Prepaid expenses and other current assets

(405)


(1,326)


(526)

   Accounts payable

(2,914)


(32)


(301)

   Accrued expenses and other current liabilities

1,160


(1,680)


1,597

   Income tax receivable

88


-


-

   Income tax payable

141


14


(93)

   Deposit paid for acquisition of land use right

-


(901)


-

   Rental deposit refunded (paid)

2


(1)


(7)

Net cash provided by operating activities

1,103


2,760


27,637







Investing activities:






 Investment in an equity method investee

(600)


(5,606)


(1,500)

 Proceeds from disposal of other investments

-


1,251


44

 Proceeds from redemption of marketable securities

17,399


77,657


91,066

 Purchase of marketable securities

(22,785)


(100,498)


(53,833)

 Proceeds from disposal of property, plant and equipment

21


21


30

 Deposit paid for acquisition of property, plant and equipment

-


-


(1,733)

 Purchase of property, plant and equipment

(4,216)


(8,851)


(6,613)

 Purchase of intangible assets

(185)


(1,762)


(3,074)

 Deposit paid for acquisition of intangible assets

(432)


(2,408)


-

 Decrease in restricted cash

-


-


440

 (Increase) decrease in time deposits

(2)


28


7

 Acquisition of a subsidiary, net of cash and cash equivalent acquired

-


(937)


-

 Disposal of a subsidiary, net of cash and cash equivalent disposed

-


(10,110)


(2,707)

Net cash (used in) provided by investing activities

(10,800)


(51,215)


22,127







Financing activities:






 Repayment of short-term bank loans

-


-


(2)

 Receipt of amount due from a former subsidiary

-


11,020


-

 Advance subsidy from local authorities of Shenzhen and Zhuhai, the PRC

223


302


750

 Proceeds from exercise of stock options

145


316


-

 Proceeds on issue of shares of subsidiary

-


-


1,885

 Repurchase of ordinary shares

(1,977)


(9,019)


(10,130)

Net cash (used in) provided by financing activities

(1,609)


2,619


(7,497)







Net (decrease) increase in cash and cash equivalents

(11,306)


(45,836)


42,267







Cash and cash equivalents at the beginning of the period

53,919


87,706


45,435







Effect of exchange rate changes on cash

259


1,002


4

Cash and cash equivalents at the end of the period

42,872


42,872


87,706


-  


-  


-  



SOURCE Actions Semiconductor Co., Ltd.