2014

Actions Semiconductor Reports First Quarter 2014 Results

ZHUHAI, China, May 6, 2014 /PRNewswire/ -- Actions Semiconductor Co., Ltd. (Nasdaq: ACTS) ("Actions Semiconductor" or "the Company"), one of China's leading fabless semiconductor companies that provides comprehensive portable multimedia and mobile internet system-on-a-chip (SoC) solutions for portable consumer electronics, today reported its financial results for the first quarter ended March 31, 2014.

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

Revenue for the first quarter of 2014 was $11.3 million, as compared to revenue of $17.6 million for the fourth quarter of 2013, and $16.4 million for the first quarter of 2013.

Net loss attributable to Actions Semiconductor's shareholders for the first quarter of 2014 was $5.5 million or $0.080 per basic and diluted American Depositary Share ("ADS"). This compares to net loss attributable to Actions Semiconductor's shareholders of $0.8 million or $0.012 per basic and diluted ADS, for the fourth quarter of 2013, and net income attributable to Actions Semiconductor's shareholders of $0.4 million or $0.006 per basic and diluted ADS, for the first quarter of 2013.

Actions Semiconductor reported gross margin of 23.1% for the first quarter of 2014, compared to gross margin of 22.2% for the fourth quarter of 2013, and 36.2% for the first quarter of 2013. The Company ended the first quarter with $219.4 million in cash and cash equivalents, together with time deposits, trading securities and marketable securities, current and non-current.

Since the share repurchase program commenced in 2007, the Company has invested approximately $51.5 million in repurchasing its shares. As of March 31, 2014, approximately 22.5 million ADSs were repurchased. The Company's Board of Directors today authorized an increase to 50 million ADSs from 30 million ADSs for the share repurchase program. In addition, at the Company's 2014 annual general meeting held today, shareholders approved the Company's future repurchases from time to time of its Ordinary Shares and ADSs (and the underlying Ordinary Shares representing such ADSs) at such time, at such price, and in such manner and on such other terms as determined by the Company's Board of Directors.

"In the first quarter of 2014, the whitebox tablet market experienced soft demand, primarily due to the buildup of inventory by tablet manufacturers in late 2013 in advance of the Chinese New Year holiday. Combined with more intense competition in the whitebox tablet market following the entry of two large players and typical seasonality related to the Chinese New Year holiday, revenue came in below our expectations. Meanwhile, our bottom line was impacted by our ongoing aggressive pricing strategy, an unanticipated inventory write-down which reduced gross margin by about 4% and a $2.5 million unrealized, non-cash foreign exchange loss associated with the rapid depreciation of the Chinese RMB against the U.S. dollar," stated Dr. Zhenyu Zhou, CEO of Actions Semiconductor.

"Although more intense competition and other dynamics in the whitebox tablet market are expected to impact our near term performance, we believe the tablet market still holds the strongest growth potential for Actions. We expect growth in shipments of our OWL Series product family for tablets in the remainder of the year. We also anticipate good traction from our new quad-core solution for Over-the-top (OTT) set top boxes with advanced multimedia features and Bluetooth 4.0 dual-mode boombox solutions."

"In terms of our corporate development, we have initiated a reorganization of our group structure which will put us in a better position to monetize the vast intellectual property portfolio we have developed over the years, including entering into additional licensing contracts and joint venture agreements. We are also mindful of the intense competition for quality engineers in China. We will be rethinking and rolling out better incentive programs for our employees in the coming months, particularly with respect to our talented engineers," Dr. Zhou concluded.

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.

Based on current market trends, the Company expects revenue in the second quarter of 2014 to be in the range of $15.0 to $17.0 million. The Company expects revenue in the second half of 2014 to return to a strong growth trajectory, driven primarily by growth in shipments of its OWL Series product family of chipsets.

Conference Call Details

Actions Semiconductor's first quarter of fiscal year 2014 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time, on Tuesday, May 6, 2014. To participate in the live call, analysts and investors should dial 1-888-549-7750 (within U.S.) or 1-480-629-9722 (outside U.S.) at least ten minutes prior to the call. The conference ID number is 4680482. 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 May 16, 2014 by dialing 1-800-406-7325 (within U.S.) or 1-303-590-3030 (outside U.S.) and entering access code 4680482.

About Actions Semiconductor

Actions Semiconductor is one of China's leading fabless semiconductor companies that provides comprehensive portable multimedia and mobile internet system-on-a-chip (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. 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 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 the outlook for its dual-core and quad-core solutions for tablets, cloud-connected devices and other multimedia devices in domestic and overseas markets, customer acceptance of the Actions Semiconductor's new products and corresponding increases in market share, 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 growth. 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:

Elaine Ketchmere, CFA

Ally Xie, CA, CPA

Compass Investor Relations

Actions Semiconductor

eketchmere@compass-ir.com

investor.relations@actions-semi.com

+1-310-528-3031

+86-756-3392353*1018

 

ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands of U.S. dollars)



At March 31,


At December 31,


At March 31,


2014


2013


2013


(unaudited)


(audited)


(unaudited)

ASSETS






Current assets:






  Cash and cash equivalents

40,596


53,263


57,511

  Time deposit

322


327


-

  Restricted deposits

37,823


27,181


15,322

  Marketable securities

124,509


126,607


139,520

  Trading securities

73


74


74

   Accounts receivable, net of allowance for doubtful accounts of $23, nil
       and nil as of March 31, 2014, December 31, 2013 and March 31,
       2013, respectively

6,784


5,782


5,248

  Amount due from a related party

725


1,301


292

  Amount due from an equity method investee

42


38


36

  Inventories, net of inventory written-down of $1,965, $1,558 and
      $704 as of March 31, 2014, December 31, 2013 and March 31, 2013,
      respectively

25,308


20,278


16,961

  Prepaid expenses and other current assets

3,466


3,972


10,734

  Income tax recoverable

46


67


189

  Deferred tax assets

578


416


422

Total current assets

240,272


239,306


246,309







  Investments in equity method investees

17,779


17,843


14,262

  Other investments

15,627


15,648


16,308

  Marketable securities

16,099


17,139


11,269

  Rental deposits

70


61


58

  Property, plant and equipment, net

31,142


31,896


31,876

  Land use right

1,542


1,588


1,579

  Acquired intangible assets, net

10,862


12,218


10,022

  Deposit paid for acquisition of intangible assets

380


145


-

  Deferred tax assets

93


99


76

TOTAL ASSETS

333,866


335,943


331,759







LIABILITIES AND EQUITY






Current liabilities:






  Accounts payable

9,992


6,016


11,656

  Accrued expenses and other current liabilities

5,024


6,127


8,340

  Short-term bank loans

40,500


35,500


25,500

  Other liabilities

1,331


1,362


2,351

  Income tax payable

49


49


135

  Deferred tax liabilities

417


343


607

Total current liabilities

57,313


49,397


48,589







Other liabilities

370


412


13

Payable for acquisition of intangible assets

-


-


128

Deferred tax liabilities

3,493


3,589


3,299

Total liabilities

61,176


53,398


52,029

Equity:






 Ordinary shares

1


1


1

 Additional paid-in capital

18,584


18,882


20,257

 Accumulated other comprehensive income

36,672


40,734


36,246

 Retained earnings

217,464


222,959


223,256

Total Actions Semiconductor Co., Ltd. shareholders' equity

272,721


282,576


279,760

Non-controlling interest

(31)


(31)


(30)

Total equity

272,690


282,545


279,730

TOTAL LIABILITIES AND EQUITY

333,866


335,943


331,759

 

ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

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










Three months  ended


Three months ended


Three months ended



March 31,


December 31,


March 31,



2014


2013


2013



(unaudited)


(unaudited)


(unaudited)








Revenues:







  Third-parties:







   System-on-a-chip products


9,566


15,095


15,769

   Semiconductor product testing services


27


29


17



9,593


15,124


15,786

  Related-parties:







   System-on-a-chip products


1,719


2,451


629

  Total revenues


11,312


17,575


16,415

Cost of revenues:







  Third-parties:







   System-on-a-chip products


(7,451)


(11,567)


(10,063)

   Semiconductor product testing services


(18)


(13)


(5)



(7,469)


(11,580)


(10,068)

  Related-parties:







   System-on-a-chip products


(1,227)


(2,094)


(399)

  Total cost of revenues


(8,696)


(13,674)


(10,467)

Gross profit


2,616


3,901


5,948

Other operating income


479


1,517


74

Operating expenses:







  Research and development


(6,776)


(6,086)


(6,022)

  General and administrative


(2,037)


(2,547)


(1,977)

  Selling and marketing


(384)


(614)


(495)

Total operating expenses


(9,197)


(9,247)


(8,494)

Loss from operations


(6,102)


(3,829)


(2,472)

Other (loss) income


(2,504)


779


220

Other-than-temporary impairment loss on investments


-


(681)


-

Interest income


3,080


3,241


3,198

Interest expense


(137)


(146)


(100)

(Loss) income before income taxes, equity in net income (loss)
      of  equity method investees and non-controlling interest


(5,663)


(636)


846

Income tax credit (expense)


165


(108)


(353)

Equity in net income (loss) of equity method investees


3


(82)


(73)

Net (loss) income 


(5,495)


(826)


420

Add: Net loss attributable to non-controlling interest


-


1


1

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

(5,495)


(825)


421








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






Basic (per share)


(0.013)


(0.002)


0.001








Diluted (per share)


(0.013)


(0.002)


0.001








Basic (per ADS)


(0.080)


(0.012)


0.006

Diluted (per ADS)


(0.080)


(0.012)


0.006








Weighted-average shares outstanding used in computation:







Basic


411,501,170


412,162,575


410,117,085

Diluted


411,501,170


412,162,575


419,861,988








Weighted-average ADS outstanding used in computation :







Basic


68,583,528


68,693,763


68,352,848

Diluted


68,583,528


68,693,763


69,976,998








Note: Share-based compensation recorded in each







expense classification above is as follows:







  Research and development


4


74


164

  General and administrative


3


25


50

  Selling and marketing


(1)


3


8

  Cost of revenues


-


-


-

 

ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)










Three months ended


Three months ended


Three months ended



March 31,


December 31,


March 31,



2014


2013


2013



(unaudited)


(unaudited)


(unaudited)

Operating activities:







Net (loss) income 


(5,495)


(826)


420

Adjustments to reconcile net (loss) income to net cash provided by operating activities:







  Depreciation of property, plant and equipment


503


508


547

  Amortization of land use right


9


9


9

  Amortization of acquired intangible assets


1,138


923


866

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

-


(846)


-

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


(3)


-


7

  Impairment loss recognised in respect of other investments


-


681


-

  Equity in net (income) loss of equity method investees


(3)


82


73

  Share-based  compensation


6


102


222

  Deferred tax


(179)


94


269

  Changes in operating assets and liabilities:







    Accounts receivable


(1,046)


1,525


706

    Notes receivable


-


37


-

    Amount due from a related party


576


(1,301)


48

    Amount due from an equity method investee


(4)


37


43

    Inventories


(5,468)


5,344


(4,954)

    Prepaid expenses and other current assets


415


(930)


(1,435)

    Accounts payable


4,058


(330)


3,570

    Accrued expenses and other current liabilities


(1,232)


348


(563)

    Income tax recoverable


19


13


-

    Income tax payable


-


1


86

    Rental deposit (paid) received 


(11)


5


(9)

Net cash (usded in) provided by operating activities


(6,717)


5,476


(95)








Investing activities:







  Proceeds from redemption of marketable securities


41,432


13,434


7,354

  Proceeds from disposal of property, plant and equipment


18


25


-

  Proceeds from disposal of intangible assets


24


-


-

  Purchase of marketable securities


(39,284)


(30,529)


(16,024)

  Purchase of property, plant and equipment


(483)


(340)


(24)

  Purchase of intangible assets


(20)


(1,199)


(42)

  Deposit paid for acquisition of intangible assets


(240)


(145)



  Increase in restricted deposits


(11,021)


(5,960)


(5,296)

Net cash used in investing activities


(9,574)


(24,714)


(14,032)








Financing activities:







  Raise of short-term bank loans


10,000


5,000


-

  Advance subsidy from local authorities of Zhuhai, the PRC


-


412


290

  Proceeds from exercise of share-based awards


757


471


1,370

  Repayment of short-term bank loan


(5,000)


-


-

  Repurchase of ordinary shares


(1,061)


(1,845)


(1,537)

Net cash provided by financing activities


4,696


4,038


123








Net decrease in cash and cash equivalents


(11,595)


(15,200)


(14,004)








Cash and cash equivalents at the beginning of the period


53,263


67,884


71,336








Effect of exchange rate changes on cash


(1,072)


579


179

Cash and cash equivalents at the end of the period


40,596


53,263


57,511

SOURCE Actions Semiconductor Co., Ltd.



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