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Actions Semiconductor Reports Third Quarter 2010 Results

Nov 02, 2010 (04:11 PM EDT)
URL: http://www.techweb.com/show-press-release/X818323/actions-semiconductor-reports-third-quarter-2010-results.html

ZHUHAI, China, Nov. 2, 2010 /PRNewswire-Asia-FirstCall/ -- 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 third quarter ended September 30, 2010.

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

Revenue for the third quarter of 2010 was $9.3 million, as compared to revenue of $9.7 million for the second quarter of 2010, and $13.4 million for the third quarter of 2009.

Net income attributable to Actions Semiconductor's shareholders for the third quarter of 2010 was $1.9 million, or $0.03 per ADS. The results for the third quarter of 2010 include a foreign exchange gain of $1.1 million, a reversal of over-estimated employee stock-based compensation expenses of $0.8 million, and a gain of $0.5 million resulting from the acquisition of additional equity interest in Mavrix. This compares to a net loss attributable to Actions Semiconductor's shareholders of $0.4 million, or $0.01 per ADS, for the second quarter of 2010, and a net loss attributable to Actions Semiconductor's shareholders of $0.6 million, or $0.01 per ADS, for the third quarter of 2009.

Actions Semiconductor reported gross margin of 40.1% for the third quarter of 2010, as compared to gross margin of 39.6% for the second quarter of 2010, and 30.8% for the third quarter of 2009. The Company ended the quarter with $54.0 million in cash and cash equivalents together with time deposits. Trading securities and marketable securities, current and non-current, were $183.4 million at the end of the quarter.

Since the share repurchase programs started in 2007, the Company has invested approximately $33.2 million in repurchasing its shares. As of September 30, 2010, approximately 14.0 million American Depositary Shares (ADSs) were repurchased.

"Our results were in line with expectations for the third quarter," stated Mr. Niccolo Chen, CEO of Actions Semiconductor. "Our gross margin continued to benefit from increased revenue contributions from our high-end products, enhanced processing technology, and fine-tuned product designs. This product mix shift also resulted in improved Average Selling Prices ("ASP") during the quarter.

"We continue to work diligently on our product development activities and recently introduced our new Series 27 product family that enables an advanced and cost effective high definition 720P MP4 mobile entertainment platform for consumers. We remain focused on introducing products that provide a compelling functionality to cost ratio and believe our commitment to R&D will position the Company for improved 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 fourth quarter of fiscal year 2010 ending December 31, 2010, Actions Semiconductor estimates revenue in the range of $8.5 to $9.5 million, gross margin approximately flat with third quarter, and operating expenses slightly higher on a sequential basis. The fourth quarter 2010 estimates include share-based compensation of approximately $0.7 million.

Conference Call Details

Actions Semiconductor's third quarter 2010 teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Tuesday, November 2, 2010. To participate in the live call, analysts and investors should dial 877-941-2322 (within U.S.) or 480-629-9715 (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 November 3, 2010, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the passcode 4375446.

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 September 30,

At June 30,

At December 31,


2010

2010

2009


(unaudited)

(unaudited)

(audited)

ASSETS




Current assets:




 Cash and cash equivalents

53,919

71,311

87,706

 Time deposits

32

47

62

 Marketable securities

158,259

135,278

139,984

 Trading securities

510

495

-

 Accounts receivable, net

2,163

1,986

1,891

 Amount due from a related party

677

457

530

 Amount due from an equity method investee

300

287

492

 Notes receivable

60

-

-

 Inventories

6,128

3,356

4,501

 Prepaid expenses and other current assets

2,809

2,815

1,258

 Deferred tax assets

303

583

371

 Income tax receivable

190

188

-

Total current assets

225,350

216,803

236,795





 Investment in equity method investees

6,158

1,751

1,577

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

2,757

2,746

3,258

 Marketable securities ($14,177, $13,989 and NIL carried at fair value as of  September 30, 2010, June 30, 2010 and December 31, 2009 respectively)

24,623

38,287

23,773

 Rental deposits

42

53

46

 Property, plant and equipment, net

20,770

18,502

14,437

 Land use right

1,549

1,537

1,546

 Acquired intangible assets, net

4,565

3,154

3,625

 Deposit paid for acquisition of land use right

-

901

-

 Deposit paid for acquisition of intangible assets

1,975

1,100

-

 Deferred tax assets

103

117

149

 Goodwill

468

-

-

TOTAL ASSETS

288,360

284,951

285,206





LIABILITIES AND EQUITY




Current liabilities:




 Accounts payable

5,721

3,947

2,355

 Accrued expenses and other current liabilities

5,969

6,193

4,626

 Other liabilities

2,260

2,296

2,124

 Income tax payable

102

208

129

 Deferred tax liabilities

377

374

284

Total current liabilities

14,429

13,018

9,518





Other liabilities

82

122

319

Deferred tax liabilities

2,225

2,129

2,058

Total liabilities

16,736

15,269

11,895

Equity:




Ordinary shares

1

1

1

Additional paid-in capital

26,317

28,428

31,423

Accumulated other comprehensive income

23,116

20,920

20,239

Retained earnings

222,184

220,333

221,648

Total Actions Semiconductor Co., Ltd. shareholders' equity

271,618

269,682

273,311

Noncontrolling interest

6

-

-

Total equity

271,624

269,682

273,311

TOTAL LIABILITIES AND EQUITY

288,360

284,951

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

Nine months ended

Nine months ended


September 30,

September 30,

September 30,

September 30,


2010

2009

2010

2009


(unaudited)

(unaudited)

 (unaudited)  

 (unaudited)  






Revenues:





 Third-parties:





  System-on-a-chip products

7,017

9,059

21,208

24,695

  Semiconductor product testing services

49

66

107

150


7,066

9,125

21,315

24,845

 Related-parties:





  System-on-a-chip products

2,232

4,307

5,535

11,358

 Total revenues

9,298

13,432

26,850

36,203

Cost of revenues:





 Third-parties:





  System-on-a-chip products

(4,352)

(6,303)

(12,925)

(16,984)

  Semiconductor product testing services

(24)

(26)

(57)

(85)


(4,376)

(6,329)

(12,982)

(17,069)

 Related-parties:





  System-on-a-chip products

(1,198)

(2,964)

(3,198)

(7,971)

 Total cost of revenues

(5,574)

(9,293)

(16,180)

(25,040)

Gross profit

3,724

4,139

10,670

11,163

Other operating income

470

50

944

323

Gain on deemed disposal

-

1,736

-

1,736

Operating expenses:





 Research and development

(3,906)

(5,077)

(12,900)

(14,743)

 General and administrative

(1,829)

(2,394)

(5,921)

(6,564)

 Selling and marketing

(236)

(290)

(788)

(870)

Total operating expenses

(5,971)

(7,761)

(19,609)

(22,177)

Loss from operations

(1,777)

(1,836)

(7,995)

(8,955)

Other income (expense)

1,072

42

1,555

(684)

Dividend income

-

420

-

420

Fair value change in financial instruments

-

-

133

42

Interest income

2,427

2,307

7,105

8,297

Interest expense

-

-

-

(59)

Other-than-temporary impairment loss on investments

-

(1,010)

-

(1,010)

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

1,722

(77)

798

(1,949)

Income tax expense

(370)

(446)

(336)

(688)

Equity in net income (loss) of equity method investees

1

(183)

(424)

(523)

Fair value change in an equity method investee

494

-

494

-

Net income (loss)

1,847

(706)

532

(3,160)

Less: Net loss attributable to noncontrolling interest

4

76

4

264

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

1,851

(630)

536

(2,896)






Net income (loss) per share-basic:





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

0.004

(0.001)

0.001

(0.006)






Net income (loss) per share-diluted:





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

0.004

(0.001)

0.001

(0.006)






Basic (per ADS)

0.026

(0.008)

0.007

(0.038)

Diluted (per ADS)

0.025

(0.008)

0.007

(0.038)






Weighted-average shares used in computation:





Basic

435,141,252

458,739,496

441,018,361

462,823,200

Diluted

450,202,980

458,739,496

457,882,992

462,823,200






Weighted-average ADS used in computation :





Basic

72,523,542

76,456,583

73,503,060

77,137,200

Diluted

75,033,830

76,456,583

76,313,832

77,137,200






Note: Stock compensation recorded in each





expense classification above is as follows:





 Research and development

(127)

561

1,226

1,893

 General and administrative

(32)

326

468

1,019

 Selling and marketing

(8)

46

71

153



ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)


Three months ended

Nine months ended

Nine months ended


September 30,

September 30,

September 30,


2010

2010

2009


(unaudited)

 (unaudited)  

 (unaudited)  

Operating activities:




Net income (loss)

1,851

536

(2,896)

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




 Operating activities:




 Depreciation of property, plant and equipment

450

1,386

1,591

 Land use right

9

25

-

 Allowance for doubtful accounts receivable

-

(102)

-

 Amortization of acquired intangible assets

445

1,429

2,358

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

(108)

(225)

(226)

 Write down of inventories

-

-

(36)

 Loss (gain) on disposal of property, plant and equipment

1

54

(7)

 Gain on disposal of other investment

-

(137)

-

 Equity in net (income) loss of equity method investees

(1)

425

524

 Fair value change in an equity method investee

(494)

(494)

-

 Share-based compensation

(167)

1,765

3,065

 Fair value change in trading securities

(15)

(12)

(40)

 Deferred taxes

395

374

662

 Proceeds from disposal of trading securities

-

5

30,649

 Purchase of trading securities

-

(470)

(11,310)

 Net loss attributable to noncontrolling interest

(4)

(4)

(264)

 Gain on disposal of a subsidiary

-

-

(1,736)

 Other-than-temporary impairment loss on investments

-

-

1,010

 Changes in operating assets and liabilities:

-

-

-

   Accounts receivable

(176)

(169)

(2,268)

   Amount due from a related party

(220)

(147)

(1,454)

   Notes receivable

(60)

(60)

(9)

   Inventories

(1,892)

(733)

3,238

   Amount due from an equity method investee

(8)

200

-

   Prepaid expenses and other current assets

195

(921)

(593)

   Accounts payable

1,303

2,882

1,888

   Accrued expenses and other current liabilities

(846)

(2,840)

1,870

   Income tax receivable

100

(88)

-

   Income tax payable

(208)

(127)

(60)

   Deposit paid for acquisition of land use right

-

(901)

-

   Rental deposit  refunded (paid)

4

(3)

(29)

Net cash provided by operating activities

554

1,648

25,927





Investing activities:




 Investment in an equity method investees

(4,406)

(5,006)

(1,500)

 Proceeds from the disposal of other investments

-

1,251

44

 Proceeds from redemption of marketable securities

15,023

60,258

-

 Purchase of marketable securities

(23,024)

(77,713)

(10,789)

 Proceeds from disposal of property, plant and equipment

-

-

27

 Deposit paid for acquisition of property, plant and equipment

-

-

(1,733)

 Purchase of property, plant and equipment

(2,210)

(4,635)

(4,918)

 Purchase of intangible assets

(1,250)

(1,577)

(2,687)

 Deposit paid for acquisition of intangible assets

(876)

(1,976)

-

 Decrease in restricted cash

-

-

399

 Decrease in time deposits

15

30

7

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

(937)

(937)

-

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

(10,110)

(10,110)

(2,707)

 Net cash used in investing activities

(27,775)

(40,415)

(23,857)





Financing activities:




 Repayment of short-term bank loans

-

-

(2)

 Repayment of amount due from a former subsidiary

11,020

11,020

-

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

-

79

965

 Issuance of ordinary shares for share option plan

107

171

1,885

 Repurchase of ordinary shares

(2,051)

(7,042)

(7,353)

Net cash provided by (used in) financing activities

9,076

4,228

(4,505)





Net decrease in cash and cash equivalents

(18,145)

(34,539)

(2,435)





Cash and cash equivalents at the beginning of the period

71,311

87,706

45,435





Effect of exchange rate changes on cash

753

752

1

Cash and cash equivalents at the end of the period

53,919

53,919

43,001


-  

-  

-  



SOURCE Actions Semiconductor Co., Ltd.