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Actions Semiconductor Reports Second Quarter 2011 Results

Aug 9, 2011

ZHUHAI, China, Aug. 9, 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 second quarter ended June 30, 2011.

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

Revenue for the second quarter of 2011 was $10.5 million, as compared to revenue of $9.4 million for the first quarter of 2011, and $9.7 million for the second quarter of 2010.

Net income attributable to Actions Semiconductor's shareholders for the second quarter of 2011 was $0.5 million or $0.007 per ADS. This compares to net income attributable to Actions Semiconductor's shareholders of $5,000 or $0.00007 per ADS, for the first quarter of 2011, and a net loss attributable to Actions Semiconductor's shareholders of $0.4 million or $0.006 per ADS, for the second quarter of 2010.

Actions Semiconductor reported gross margin of 37.9% for the second quarter of 2011, compared to gross margin of 39.1% for the first quarter of 2011, and 39.6% for the second quarter of 2010. The Company ended the second quarter of 2011 with $30.7 million in cash and cash equivalents. Restricted cash, trading securities, and marketable securities, current and non-current, were $186.6 million at the end of the second quarter.

Since the share repurchase program commenced in 2007, the Company has invested approximately $39.9 million in repurchasing its shares. As of June 30, 2011, approximately 16.9 million American Depositary Shares (ADSs) were repurchased.

"Our sales were in line with expectations for the second quarter," stated Mr. Niccolo Chen, CEO of Actions Semiconductor. "Demand in our fast growing, automotive/boom box segment increased in what is typically a seasonally slower quarter. We continued to enjoy leading market share in key business segments such as small color display MP3, QVGA MP4, and D1 PMP with gaming functions. In the high end market segments, our Series 27 and 28 high definition products secured more than 10 design wins in the second quarter, and we saw continued interest from brand name customers in China.  Our newly launched Series 70 provides a superior performance to cost ratio for Android based smart handheld applications. The Android based MID is in pilot production, and has already teamed up with one of China's brand name customers.

"As we head into the second half of 2011, we remain encouraged by the traction and momentum we have gained with our new products and believe we are positioned for growth," 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 2011 ending September 30, 2011, Actions Semiconductor estimates revenue in the range of $12.0 to $13.0 million, gross margin will be approximately 40% and operating expenses higher on a sequential basis.

Conference Call Details

Actions Semiconductor's second quarter 2011 teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Tuesday, August 9, 2011. To participate in the live call, analysts and investors should dial 888-846-5003 (within U.S.) or 480-629-9859 (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 August 19, 2011 by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering access code 4459538.

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 June 30,


At March 31,


At December 31,


2011


2011


2010


(unaudited)


(unaudited)


(audited)

ASSETS






Current assets:






 Cash and cash equivalents

30,719


111,871


42,872

 Time deposits

-


-


34

 Restricted cash

36


-


-

 Marketable securities ($14,680, $14,490 and $14,296 carried at fair value as of
 June 30, 2011, March 31, 2011 and December 31, 2010 respectively)

171,026


80,931


164,336

 Trading securities

557


543


535

 Accounts receivable, net

1,776


1,831


1,844

 Amount due from a related party

312


1,240


559

 Amount due from equity method investees

93


90


104

 Inventories

8,063


5,336


4,832

 Prepaid expenses and other current assets

3,565


2,561


3,242

 Deferred tax assets

261


231


399

Total current assets

216,408


204,634


218,757







 Investment in equity method investees

14,448


7,666


6,401

 Other investments

17,316


17,305


2,764

 Marketable securities

14,989


25,166


24,831

 Rental deposits

48


40


40

 Property, plant and equipment, net

30,927


27,280


24,604

 Land use right

1,578


1,566


1,554

 Acquired intangible assets, net

5,574


5,721


4,318

 Deposit paid for acquisition of intangible assets

1,100


1,100


2,408

 Deferred tax assets

59


73


88

 Goodwill

468


468


468

TOTAL ASSETS

302,915


291,019


286,233







LIABILITIES AND EQUITY






Current liabilities:






 Accounts payable

6,869


4,371


2,850

 Accrued expenses and other current liabilities

6,232


4,862


7,247

 Short-term bank loan

12,000


6,000


-

 Other liabilities

2,145


2,479


2,502

 Income tax payable

97


240


140

 Deferred tax liabilities

388


265


446

Total current liabilities

27,731


18,217


13,185







Other liabilities

-


-


83

Deferred tax liabilities

2544


2,438


2,286

Total liabilities

30,275


20,655


15,554

Equity:






Ordinary shares

1


1


1

Additional paid-in capital

21,220


21,695


24,252

Accumulated other comprehensive income

28,899


26,660


24,420

Retained earnings

222,549


222,037


222,032

Total Actions Semiconductor Co., Ltd. shareholders' equity

272,669


270,393


270,705

Noncontrolling interest

(29)


(29)


(26)

Total equity

272,640


270,364


270,679

TOTAL LIABILITIES AND EQUITY

302,915


291,019


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


Six months ended


Six months ended


June 30,


June 30,


June 30,


June 30,


2011


2010


2011


2010


 (unaudited)  


(unaudited)


 (unaudited)  


 (unaudited)  









Revenues:








 Third-parties:








  System-on-a-chip products

8,679


7,906


15,703


14,191

  Semiconductor product testing services

99


36


179


58


8,778


7,942


15,882


14,249

 Related-parties:








  System-on-a-chip products

1,699


1,720


3,961


3,303

 Total revenues

10,477


9,662


19,843


17,552

Cost of revenues:








 Third-parties:








  System-on-a-chip products

(5,492)


(4,780)


(9,841)


(8,573)

  Semiconductor product testing services

(54)


(18)


(96)


(33)


(5,546)


(4,798)


(9,937)


(8,606)

 Related-parties:








  System-on-a-chip products

(960)


(1,040)


(2,269)


(2,000)

 Total cost of revenues

(6,506)


(5,838)


(12,206)


(10,606)

Gross profit

3,971


3,824


7,637


6,946

Other operating income

405


341


622


474

Operating expenses:








 Research and development

(5,590)


(4,437)


(10,647)


(8,994)

 General and administrative

(2,226)


(2,352)


(3,921)


(4,092)

 Selling and marketing

(327)


(305)


(592)


(551)

Total operating expenses

(8,143)


(7,094)


(15,160)


(13,637)

Loss from operations

(3,767)


(2,929)


(6,901)


(6,217)

Other income

1,316


452


2,427


482

Dividend income from an other investment

432


-


432


-

Fair value change in financial instruments

1


1


2


133

Interest income

3,025


2,244


5,857


4,678

Interest expense

(32)


-


(51)


-

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

975


(232)


1,766


(924)

Income tax (expense) credit

(136)


64


(394)


34

Equity in net loss of equity method investees

(327)


(273)


(858)


(425)









Net income(loss)

512


(441)


514


(1,315)

Less: Net loss attributable to non-controlling interest

-


-


3


-

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

512


(441)


517


(1,315)









Net income(loss) per share: Basic








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

0.001


(0.001)


0.001


(0.003)









Net income(loss) per share: Diluted








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

0.001


(0.001)


0.001


(0.003)









Basic(per ADS)

0.007


(0.006)


0.007


(0.018)

Diluted (per ADS)

0.007


(0.006)


0.007


(0.018)









Weighted-average shares used in computation:








Basic

417,488,882


441,181,871


420,101,361


444,005,616

Diluted

433,424,029


441,181,871


436,864,716


444,005,616









Weighted-average ADS used in computation :








Basic

69,581,480


73,530,312


70,016,894


74,000,936

Diluted

72,237,338


73,530,312


72,810,786


74,000,936









Note: Equity compensation recorded in each








expense classification above is as follows:








 Research and development

517


663


964


1,353

 General and administrative

141


225


264


500

 Selling and marketing

25


38


49


79

 Cost of revenues

11


-


16


-











ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)


Three months ended


Six months ended


Six months ended


June 30,


June 30,


June 30,


2011


2011


2010


(unaudited)


 (unaudited)  


 (unaudited)  

Operating activities:






Net income (loss)

512


514


(1,315)

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






 Operating activities:






 Depreciation of property, plant and equipment

440


903


936

 Land use right

9


18


16

 Allowance for doubtful accounts receivable

-


-


(102)

 Amortization of acquired intangible assets

376


778


984

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

(366)


(523)


(117)

 Write down of inventories

106


167


-

 Loss on disposal of property, plant and equipment

7


7


53

 Loss on disposal of intangible assets

2


2


-

 Gain on disposal of other investment

(195)


(195)


(137)

 Equity in net loss of equity method investees

328


859


426

 Equity compensation

694


1,293


1,932

 Fair value change in trading securities

(1)


(2)


3

 Deferred taxes

212


365


(21)

 Proceeds from disposal of trading securities

-


-


5

 Purchase of trading securities

-


-


(470)

 Changes in operating assets and liabilities:






   Accounts receivable

56


69


7

   Amount due from a related party

928


247


73

   Inventories

(2,783)


(3,298)


1,159

   Amount due from an equity method investee

-


17


208

   Prepaid expenses and other current assets

(972)


(233)


(1,116)

   Accounts payable

2,443


3,928


1,579

   Accrued expenses and other current liabilities

4,330


3,885


(1,994)

   Income tax receivable

-


-


(188)

   Income tax payable

(144)


(45)


81

   Deposit paid for acquisition of land use right

-


-


(901)

   Rental deposit refunded

(8)


(8)


(7)

Net cash provided by operating activities

5,974


8,748


1,094







Investing activities:






 Increase in an equity method investees

(7,076)


(9,676)


(600)

 Proceeds from the disposal of other investments

195


195


1,251

 Purchase of other investments

-


(13,727)


-

 Proceeds from redemption of marketable securities

123,846


230,679


45,235

 Purchase of marketable securities

(203,397)


(225,646)


(54,689)

 Proceeds from disposal of property, plant and equipment

1


1


-

 Purchase of property, plant and equipment

(6,751)


(11,068)


(2,425)

 Purchase of intangible assets

(165)


(1,154)


(327)

 Deposit paid for acquisition of intangible assets

-


-


(1,100)

 Increase in restricted cash

(36)


(36)


-

 Decrease in time deposits

-


34


15

Net cash used in  investing activities

(93,383)


(30,398)


(12,640)







Financing activities:






 Proceeds from short-term bank loans

6,000


12,000


-

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

-


16


79

 Issuance of ordinary shares for share option plan

242


376


64

 Repurchase of ordinary shares

(1,411)


(4,701)


(4,991)

Net cash from (used in) financing activities

4,831


7,691


(4,848)







Net decrease in cash and cash equivalents

(82,578)


(13,959)


(16,394)







Cash and cash equivalents at the beginning of the period

111,871


42,872


87,706







Effect of exchange rate changes on cash

1,426


1,806


(1)

Cash and cash equivalents at the end of the period

30,719


30,719


71,311


-


-


-



SOURCE Actions Semiconductor Co., Ltd.


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