Actions Semiconductor Reports Third Quarter 2011 Results Revenue Up 65% Year-Over-Year and 46% Sequentially

ZHUHAI, China, Nov. 8, 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 third quarter ended September 30, 2011.

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

Revenue for the third quarter of 2011 increased 46% to $15.3 million, as compared to revenue of $10.5 million for the second quarter of 2011, and 65% from the third quarter of 2010 revenue of $9.3 million.

Net income attributable to Actions Semiconductor's shareholders for the third quarter of 2011 was $2.6 million or $0.04 per ADS. This compares to net income attributable to Actions Semiconductor's shareholders of $0.5 million or $0.007 per ADS, for the second quarter of 2011, and net income attributable to Actions Semiconductor's shareholders of $1.9 million or $0.03 per ADS, for the third quarter of 2010.

During the third quarter of 2011, Actions recorded an impairment charge of $888 thousand for goodwill and in-process R&D technology related to the acquisition of Mavrix Technologies in August 2010.

Actions Semiconductor reported gross margin of 40.6% for the third quarter of 2011, compared to gross margin of 37.9% for the second quarter of 2011, and 40.1% for the third quarter of 2010. The Company ended the third quarter of 2011 with $70.7 million in cash and cash equivalents. Trading securities, and marketable securities, current and non-current, were $152.1 million at the end of the third quarter.

Since the share repurchase program commenced in 2007, the Company has invested approximately $40.2 million in repurchasing its shares. As of September 30, 2011, approximately 17.1 million American Depositary Shares (ADSs) were repurchased.

"Despite a challenging operating environment for many semiconductor companies, Actions delivered better than expected results for the third quarter," stated Niccolo Chen, CEO of Actions Semiconductor. "Strong demand for our products across a number of end markets, especially in our fast growing, automotive/boom box product category, resulted in 46% sequential growth in revenue and increased profitability. We saw an improvement in our average selling prices during the quarter as our product mix shifted to include more high end products such as our MP4 products targeting gaming applications. We continued to enjoy leading market share in key markets such as small color display and QVGA MP4 products. We began shipping commercial volumes of our high definition products during the quarter and we are pleased with the overall market acceptance of our products targeting the high end markets.

"As we head into the fourth quarter, like many semiconductor companies, we will manage our business for a cautious demand environment," 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 2011 ending December 31, 2011, Actions Semiconductor estimates revenue in the range of $12 to $13 million, gross margin of approximately 40% and operating expenses higher on a sequential basis.

Conference Call Details

Actions Semiconductor's third quarter 2011 teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Tuesday, November 8, 2011. To participate in the live call, analysts and investors should dial 877-941-4774 (within U.S.) or 480-629-9760 (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 November 19, 2011 by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering access code 4483427.

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. 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,


2011


2011


2010


(unaudited)


(unaudited)


(audited)

ASSETS






Current assets:






 Cash and cash equivalents

70,653


30,719


42,872

 Time deposits

-


-


34

 Restricted cash

-


36


-

 Marketable securities ($nil, $14,680 and $14,296 carried at fair value as of
 September 30, June 30, 2011 and December 31, 2010 respectively)

136,321


171,026


164,336

 Trading securities

526


557


535

 Accounts receivable, net

2,541


1,776


1,844

 Amount due from a related party

321


312


559

 Amount due from equity method investees

81


93


104

 Inventories

8,353


8,063


4,832

 Prepaid expenses and other current assets

2,874


3,565


3,242

 Deferred tax assets

318


261


399

Total current assets

221,988


216,408


218,757







 Investment in equity method investees

14,578


14,448


6,401

 Other investments

17,331


17,316


2,764

 Marketable securities

15,264


14,989


24,831

 Rental deposits

49


48


40

 Property, plant and equipment, net

31,244


30,927


24,604

 Land use right

1,598


1,578


1,554

 Acquired intangible assets, net

4,959


5,574


4,318

 Deposit paid for acquisition of intangible assets

1,100


1,100


2,408

 Deferred tax assets

43


59


88

 Goodwill

-


468


468

TOTAL ASSETS

308,154


302,915


286,233







LIABILITIES AND EQUITY






Current liabilities:






 Accounts payable

7,491


6,869


2,850

 Accrued expenses and other current liabilities

5,270


6,232


7,247

 Short-term bank loan

12,000


12,000


-

 Other liabilities

1,712


2,145


2,502

 Income tax payable

451


97


140

 Deferred tax liabilities

239


388


446

Total current liabilities

27,163


27,731


13,185







Other liabilities

-


-


83

Deferred tax liabilities

2,786


2,544


2,286

Total liabilities

29,949


30,275


15,554

Equity:






Ordinary shares

1


1


1

Additional paid-in capital

20,945


21,220


24,252

Accumulated other comprehensive income

32,081


28,899


24,420

Retained earnings

225,198


222,549


222,032

Total Actions Semiconductor Co., Ltd. shareholders' equity

278,225


272,669


270,705

Noncontrolling interest

(20)


(29)


(26)

Total equity

278,205


272,640


270,679

TOTAL LIABILITIES AND EQUITY

308,154


302,915


286,233



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,


2011


2010


2011


2010


(unaudited)


(unaudited)


(unaudited)


 (unaudited)  









Revenues:








 Total revenues

15,349


9,298


35,192


26,850

 Total cost of revenues

(9,117)


(5,574)


(21,323)


(16,180)

Gross profit

6,232


3,724


13,869


10,670

Other operating income

674


470


1,296


944

Operating expenses:








 Research and development

(5,455)


(3,906)


(16,102)


(12,900)

 General and administrative

(2,397)


(1,829)


(6,318)


(5,921)

 Selling and marketing

(296)


(236)


(888)


(788)

Impairment on goodwill and intangible assets

(888)


-


(888)


-

Total operating expenses

(9,036)


(5,971)


(24,196)


(19,609)

Loss from operations

(2,130)


(1,777)


(9,031)


(7,995)

Other income

1,564


1,072


3,991


1,555

Dividend income from an other investment

-


-


432


-

Investment income from an other investment

268


-


268


-

Fair value change in financial instruments

1


-


3


133

Interest income

3,317


2,427


9,174


7,105

Interest expense

(41)


-


(92)


-

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

2,979


1,722


4,745


798

Income tax expense

(403)


(370)


(797)


(336)

Equity in net income (loss) of equity method investees

82


1


(776)


(424)

Fair value change in an equity method investee

-


494


-


494

Net income

2,658


1,847


3,172


532

Less: Net (profit) loss attributable to noncontrolling interest

(9)


4


(5)


4

Net income attributable to Actions Semiconductor Co.,Ltd.

2,649


1,851


3,167


536









Net income per share-basic:








Net income  attributable to Actions Semiconductor Co.,Ltd.

0.006


0.004


0.008


0.001









Net income per share-diluted:








Net income attributable to Actions Semiconductor Co.,Ltd.

0.006


0.004


0.007


0.001









Basic (per ADS)

0.038


0.026


0.045


0.007

Diluted (per ADS)

0.037


0.025


0.044


0.007









Weighted-average shares used in computation:








Basic

417,128,804


435,141,252


418,556,198


441,018,361

Diluted

430,868,090


450,202,980


436,020,121


457,882,992









Weighted-average ADS used in computation :








Basic

69,521,467


72,523,542


69,759,366


73,503,060

Diluted

71,811,348


75,033,830


72,670,020


76,313,832









Note: Stock compensation recorded in each








expense classification above is as follows:








 Research and development

10


(127)


974


1,226

 General and administrative

(10)


(32)


254


468

 Selling and marketing

-


(8)


49


71

 Cost of revenues

1


-


17


-




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,


2011


2011


2010


(unaudited)


(unaudited)


(unaudited)

Operating activities:






Net income

2,658


3,172


532

Adjustments to reconcile net income to net cash provided by






 Operating activities:






 Depreciation of property, plant and equipment

613


1,516


1,386

 Amortization of land use right

9


27


25

 Amortization of allowance for doubtful accounts receivable

-


-


(102)

 Amortization of acquired intangible assets

431


1,209


1,429

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

(472)


(995)


(225)

 Write down of inventories

65


232


-

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

(4)


3


54

 Loss on disposal of intangible assets

2


4


-

 Impairment loss recognised in respect of goodwill

420


420


-

 Impairment loss recognised in respect of Intangible assets

468


468


-

 Investment income from an other investment

(268)


(268)


-

 Gain on disposal of other investment

-


(195)


(137)

 Equity in net (income) loss of equity method investees

(82)


777


425

 Fair value change in an equity method investee

-


-


(494)

 Equity compensation

1


1,294


1,765

 Fair value change in trading securities

42


40


(12)

 Deferred taxes

49


414


374

 Proceeds from disposal of trading securities

-


-


5

 Purchase of trading securities

-


-


(470)

 Changes in operating assets and liabilities:






   Accounts receivable

(763)


(694)


(169)

   Amount due from a related party

(9)


238


(147)

   Notes receivable

-


-


(60)

   Inventories

(230)


(3,528)


(733)

   Amount due from an equity method investee

13


30


200

   Prepaid expenses and other current assets

760


527


(921)

   Accounts payable

517


4,445


2,882

   Accrued expenses and other current liabilities

84


3,969


(2,840)

   Income tax receivable

-


-


(88)

   Income tax payable

353


308


(127)

   Deposit paid for acquisition of land use right

-


-


(901)

   Rental deposit paid

-


(8)


(3)

Net cash provided by operating activities

4,657


13,405


1,648







Investing activities:






 Investment in an equity method investees

-


(9,676)


(5,006)

 Investment income from an other investment

268


268


-

 Proceeds from the disposal of other investments

-


195


1,251

 Purchase of other investments

-


(13,727)


-

 Proceeds from redemption of marketable securities

45,652


276,331


60,258

 Purchase of marketable securities

(9,260)


(234,906)


(77,713)

 Proceeds from disposal of property, plant and equipment

33


34


-

 Purchase of property, plant and equipment

(1,570)


(12,638)


(4,635)

 Purchase of intangible assets

(155)


(1,309)


(1,577)

 Deposit paid for acquisition of intangible assets

-


-


(1,976)

 Decrease in restricted cash

36


-


-

 Decrease in time deposits

-


34


30

 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)

 Net cash provided by (used in) investing activities

35,004


4,606


(40,415)







Financing activities:






 Proceeds from short-term bank loans

-


12,000


-

 Repayment of amount due from a former subsidiary

-


-


11,020

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

-


16


79

 Issuance of ordinary shares for share option plan

88


464


171

 Repurchase of ordinary shares

(364)


(5,065)


(7,042)

Net cash (used in) provided by financing activities

(276)


7,415


4,228







Net increase (decrease) in cash and cash equivalents

39,385


25,426


(34,539)







Cash and cash equivalents at the beginning of the period

30,719


42,872


87,706







Effect of exchange rate changes on cash

549


2,355


752

Cash and cash equivalents at the end of the period

70,653


70,653


53,919



SOURCE Actions Semiconductor Co., Ltd.



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