All financial results are reported on a U.S. GAAP basis.
Revenue for the third quarter of 2014 was $13.1 million, as compared to revenue of $12.0 million for the second quarter of 2014, and $16.9 million for the third quarter of 2013.
Net loss attributable to Actions Semiconductor's shareholders for the third quarter of 2014 was $9.2 million or $0.137 per basic and diluted American Depositary Share ("ADS"). This compares to net loss attributable to Actions Semiconductor's shareholders of $3.5 million or $0.050 per basic and diluted ADS, for the second quarter of 2014, and net loss attributable to Actions Semiconductor¡¯s shareholders of $0.2 million or $0.002 per basic and diluted ADS, for the third quarter of 2013.
Actions Semiconductor reported gross margin of 14.6% for the third quarter of 2014, compared to gross margin of 18.4% for the second quarter of 2014, and 33.2% for the third quarter of 2013. Gross margin was impacted by fierce competition in the tablet market and a net inventory write-down that reduced margin by nearly 7%. The Company ended the third quarter with $161.3 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 $78.9 million in repurchasing its ADSs and ordinary shares, including $25.0 million representing the equivalent of 10.0 million ADSs repurchased through a Dutch auction tender offer in September 2014. As of September 30, 2014, the equivalent of approximately 33.7 million ADSs were repurchased.
"In the third quarter of 2014, revenue came in toward the low end of our expectations, primarily due to a supply shortage of 8-inch wafers for multimedia products from our foundry. Competition in the worldwide tablet market remained intense, keeping selling prices and margins low. Lower gross margin, combined with mask expenses related to our new application processor enabled by 28nm process technology and expenses related to our Dutch auction tender offer contributed to the loss for the quarter," stated Dr. Zhenyu Zhou, CEO of Actions Semiconductor.
"Shipments of dual-core solutions accounted for the majority of tablet shipments during the quarter, and we saw a twofold increase in shipments of quad-core solutions, indicative of the accelerated migration from dual-core to quad-core solutions in the overseas tablet market. We expect another sequential increase in shipments in the fourth quarter, although challenging conditions in the tablet market will persist for the next few quarters.
"As we approach the end of 2014, we believe we are through the most challenging period in our tablet business and are preparing to harvest our investments in 28nm process technology and 64-bit architecture in the year ahead. We recently launched our first 28nm OWL series chipset, the ATM7059, which will target the branded and whitebox tablet market and Over-the-top ("OTT") set-top box market, with a 64-bit solution to be launched before year end. We also see strong potential in the Bluetooth boombox market, especially our Bluetooth 4.0 solutions, which we expect to be a major revenue driver in 2015 following the launch of our RF and audio processing integrated single chip SoC for Bluetooth boomboxes and headphones," 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 fourth quarter of 2014 to be in the range of $14.0 to $16.0 million. The Company expects a sequential improvement in shipments in the fourth quarter of 2014, although challenging conditions in the tablet market will continue to impact revenue and margins in the near term.
Conference Call Details
Actions Semiconductor's third quarter of fiscal year 2014 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time, on Tuesday, November 4, 2014. To participate in the live call, analysts and investors should dial 1-888-427-9419 (within U.S.) or 1-719-325-2463 (outside U.S.) at least ten minutes prior to the call. The conference ID number is 2795511. 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 14, 2014 by dialing 1-888-203-1112 (within U.S.) or 1-719-457-0820 (outside U.S.) and entering access code 2795511.
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, Shenzhen, Hong Kong and Taipei. 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 new products enabled by 28nm process technology and 64-bit CPU for tablets and high-end OTT set-top boxes and new RF and audio processing integrated single chip SoC for Bluetooth boomboxes, customer acceptance of the Actions Semiconductor¡¯s new products and corresponding increases in market share, Actions Semiconductor's belief that it is through the most challenging period in its tablet business and is positioned to capture some upside from its new products and Actions Semiconductor's future expectations with respect to revenue. 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 |
Semiconductor |
|
+1-310-528-3031 |
+86-756-3392353*1018 |
|
ACTIONS SEMICONDUCTOR CO., LTD. | |||||
|
CONSOLIDATED CONDENSED BALANCE SHEETS | |||||
|
(in thousands of U.S. dollars) | |||||
|
|
|
|
|
|
|
|
|
At September 30, |
|
At June 30, |
|
At December 31, |
|
|
2014 |
|
2014 |
|
2013 |
|
|
(unaudited) |
|
(unaudited) |
|
(audited) |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
78,520 |
|
60,888 |
|
53,263 |
|
Time deposit |
161 |
|
327 |
|
327 |
|
Restricted deposits |
38,985 |
|
32,463 |
|
27,181 |
|
Marketable securities |
43,520 |
|
79,664 |
|
126,607 |
|
Trading securities |
74 |
|
74 |
|
74 |
|
Accounts receivable, net of allowance for doubtful accounts of $379, $185 and $nil
|
4,520 |
|
5,196 |
|
5,782 |
|
Amount due from a related party |
1,032 |
|
737 |
|
1,301 |
|
Amount due from an equity method investee |
46 |
|
43 |
|
38 |
|
Inventories, net of inventory written-down of $3,747, $2,845 and $1,558 as of
|
22,806 |
|
27,216 |
|
20,278 |
|
Prepaid expenses and other current assets |
3,563 |
|
3,831 |
|
3,972 |
|
Income tax recoverable |
154 |
|
85 |
|
67 |
|
Dividend receivable |
- |
|
425 |
|
- |
|
Deferred tax assets |
848 |
|
809 |
|
416 |
|
Total current assets |
194,229 |
|
211,758 |
|
239,306 |
|
|
|
|
|
|
|
|
Investments in equity method investees |
27,061 |
|
26,992 |
|
17,843 |
|
Other investments |
15,639 |
|
15,625 |
|
15,648 |
|
Marketable securities |
- |
|
16,067 |
|
17,139 |
|
Rental deposits |
55 |
|
61 |
|
61 |
|
Property, plant and equipment, net |
31,183 |
|
30,886 |
|
31,896 |
|
Land use right |
1,545 |
|
1,530 |
|
1,588 |
|
Acquired intangible assets, net |
17,684 |
|
19,115 |
|
12,218 |
|
Deposit paid for acquisition of intangible assets |
430 |
|
489 |
|
145 |
|
Deferred tax assets |
85 |
|
89 |
|
99 |
|
TOTAL ASSETS |
287,911 |
|
322,612 |
|
335,943 |
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
5,170 |
|
7,267 |
|
6,016 |
|
Accrued expenses and other current liabilities |
9,680 |
|
9,521 |
|
6,127 |
|
Short-term bank loans |
33,500 |
|
34,500 |
|
35,500 |
|
Other liabilities |
1,728 |
|
1,698 |
|
1,362 |
|
Income tax payable |
49 |
|
49 |
|
49 |
|
Deferred tax liabilities |
108 |
|
339 |
|
343 |
|
Total current liabilities |
50,235 |
|
53,374 |
|
49,397 |
|
|
|
|
|
|
|
|
Other liabilities |
229 |
|
- |
|
412 |
|
Deferred tax liabilities |
958 |
|
988 |
|
3,589 |
| Total liabilities |
51,422 |
|
54,362 |
|
53,398 |
|
Equity: |
|
|
|
|
|
|
Ordinary shares |
1 |
|
1 |
|
1 |
|
Additional paid-in capital |
63,017 |
|
63,012 |
|
63,001 |
|
Treasury Stock |
(70,170) |
|
(45,055) |
|
(44,119) |
|
Accumulated other comprehensive income |
38,919 |
|
36,327 |
|
40,734 |
|
Retained earnings |
204,754 |
|
213,997 |
|
222,959 |
|
Total Actions Semiconductor Co., Ltd. shareholders' equity |
236,521 |
|
268,282 |
|
282,576 |
|
Non-controlling interest |
(32) |
|
(32) |
|
(31) |
|
Total equity |
236,489 |
|
268,250 |
|
282,545 |
|
TOTAL LIABILITIES AND EQUITY |
287,911 |
|
322,612 |
|
335,943 |
|
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, |
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
System-on-a-chip products |
|
13,084 |
|
16,830 |
|
36,317 |
|
51,710 |
|
Semiconductor product testing services |
|
27 |
|
54 |
|
81 |
|
106 |
|
Total revenues |
|
13,111 |
|
16,884 |
|
36,398 |
|
51,816 |
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
System-on-a-chip products |
|
(11,188) |
|
(11,248) |
|
(29,633) |
|
(34,246) |
|
Semiconductor product testing services |
|
(11) |
|
(27) |
|
(38) |
|
(45) |
|
Total cost of revenues |
|
(11,199) |
|
(11,275) |
|
(29,671) |
|
(34,291) |
|
Gross profit |
|
1,912 |
|
5,609 |
|
6,727 |
|
17,525 |
|
Other operating income |
|
30 |
|
501 |
|
659 |
|
653 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
(10,667) |
|
(6,547) |
|
(24,057) |
|
(19,909) |
|
General and administrative |
|
(3,130) |
|
(2,133) |
|
(7,954) |
|
(6,217) |
|
Selling and marketing |
|
(556) |
|
(447) |
|
(1,574) |
|
(1,443) |
|
Total operating expenses |
|
(14,353) |
|
(9,127) |
|
(33,585) |
|
(27,569) |
|
Loss from operations |
|
(12,411) |
|
(3,017) |
|
(26,199) |
|
(9,391) |
|
Other income (expenses) |
|
846 |
|
187 |
|
(1,651) |
|
1,557 |
|
Dividend income from an other investment |
|
- |
|
- |
|
423 |
|
493 |
|
Interest income |
|
2,029 |
|
2,926 |
|
7,912 |
|
9,117 |
|
Interest expense |
|
(87) |
|
(128) |
|
(383) |
|
(352) |
|
(Loss) income before income taxes, equity in net income (loss) of
|
|
(9,623) |
|
(32) |
|
(19,898) |
|
1,424 |
|
Income tax credit (expense) |
|
353 |
|
(197) |
|
1,459 |
|
(295) |
|
Equity in net income (loss) of equity method investees |
|
27 |
|
77 |
|
234 |
|
(182) |
|
Net (loss) income |
|
(9,243) |
|
(152) |
|
(18,205) |
|
947 |
|
Add: Net loss attributable to non-controlling interest |
|
- |
|
- |
|
- |
|
1 |
|
Net (loss) income attributable to Actions Semiconductor Co., Ltd. |
|
(9,243) |
|
(152) |
|
(18,205) |
|
948 |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Actions Semiconductor Co., Ltd. |
|
|
|
|
|
|
|
|
|
Basic (per share) |
|
(0.023) |
|
(0.000) |
|
(0.044) |
|
0.002 |
|
Diluted (per share) |
(0.023) |
|
(0.000) |
|
(0.044) |
|
0.002 | |
|
|
|
|
|
|
|
|
|
|
|
Basic (per ADS) |
|
(0.137) |
|
(0.002) |
|
(0.267) |
|
0.014 |
|
Diluted (per ADS) |
|
(0.137) |
|
(0.002) |
|
(0.267) |
|
0.013 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computation: |
|
|
|
|
|
|
|
|
|
Basic |
|
403,462,431 |
|
413,849,403 |
|
409,491,710 |
|
412,083,249 |
|
Diluted |
|
403,462,431 |
|
413,849,403 |
|
409,491,710 |
|
425,687,178 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average ADS used in computation : |
|
|
|
|
|
|
|
|
|
Basic |
|
67,243,739 |
|
68,974,901 |
|
68,248,618 |
|
68,680,542 |
|
Diluted |
|
67,243,739 |
|
68,974,901 |
|
68,248,618 |
|
70,947,863 |
|
|
|
|
|
|
|
|
|
|
|
Note: Share-based compensation recorded in each |
|
|
|
|
|
|
|
|
|
expense classification above is as follows: |
|
|
|
|
|
|
|
|
|
Research and development |
|
3 |
|
68 |
|
10 |
|
273 |
|
General and administrative |
|
1 |
|
22 |
|
5 |
|
54 |
|
Selling and marketing |
|
- |
|
3 |
|
- |
|
14 |
|
Cost of revenues |
|
- |
|
- |
|
- |
|
49 |
|
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, |
|
|
2014 |
|
2014 |
|
2013 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Operating activities: |
|
|
|
|
|
|
Net (loss) income |
(9,243) |
|
(18,205) |
|
947 |
|
Adjustments to reconcile net (loss) income to net cash provided by |
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
|
Depreciation of property, plant and equipment |
457 |
|
1,462 |
|
1,564 |
|
Allowance for doubtful accounts receivable |
194 |
|
379 |
|
- |
|
Amortization of land use right |
9 |
|
27 |
|
27 |
|
Amortization and impairment of acquired intangible assets |
1,777 |
|
4,138 |
|
2,557 |
|
Utilization of subsidy from local authorities of Zhuhai,
|
- |
|
- |
|
(222) |
|
Write down of inventories |
902 |
|
2,189 |
|
583 |
|
Gain on disposal of property, plant and equipment |
- |
|
(3) |
|
- |
|
Loss on disposal of intangible assets |
- |
|
415 |
|
- |
|
Share of net (gain) loss of equity method investees |
(27) |
|
(234) |
|
182 |
|
Share-based compensation |
5 |
|
16 |
|
390 |
|
Deferred taxes |
(288) |
|
(3,277) |
|
185 |
|
Dividend income from another investment |
- |
|
(423) |
|
(493) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
510 |
|
862 |
|
(1,330) |
|
Amount due from a related party |
(295) |
|
269 |
|
340 |
|
Inventories |
3,852 |
|
(4,858) |
|
(13,748) |
|
Amount due from an equity method investee |
(3) |
|
(8) |
|
4 |
|
Prepaid expenses and other current assets |
325 |
|
369 |
|
6,852 |
|
Accounts payable |
(2,158) |
|
(815) |
|
(1,868) |
|
Accrued expenses and other current liabilities |
30 |
|
(1,350) |
|
(3,399) |
|
Income tax recoverable |
(68) |
|
(88) |
|
110 |
|
Income tax payable |
- |
|
- |
|
1 |
|
Rental deposit received (paid) |
7 |
|
5 |
|
(16) |
|
Note Receivables |
- |
|
- |
|
(37) |
|
Dividend received |
425 |
|
425 |
|
- |
|
Net cash used in operating activities |
(3,589) |
|
(18,705) |
|
(7,371) |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
Investment in an equity method investee |
- |
|
(9,016) |
|
(3,712) |
|
Proceeds from redemption of marketable securities |
57,955 |
|
153,277 |
|
99,532 |
|
Purchase of marketable securities |
(4,990) |
|
(53,384) |
|
(82,800) |
|
Proceeds from disposal of property, plant and equipment |
1 |
|
20 |
|
16 |
|
Purchase of property, plant and equipment |
(307) |
|
(1,090) |
|
(522) |
|
Purchase of intangible assets |
(159) |
|
(5,438) |
|
(2,685) |
|
Increase in restricted deposits |
(6,165) |
|
(11,885) |
|
(11,199) |
|
Decrease in time deposits |
162 |
|
162 |
|
- |
|
Deposit paid for acquisition of intangible assets |
- |
|
(349) |
|
(759) |
|
Proceeds from disposal of intangible assets |
- |
|
24 |
|
- |
|
Net cash provided by (used in) investing activities |
46,497 |
|
72,321 |
|
(2,129) |
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
Advance subsidy from local authorities of Zhuhai, the PRC |
232 |
|
232 |
|
302 |
|
Proceeds from exercise of share option and restricted stock unit |
757 |
|
2,410 |
|
2,570 |
|
Repurchase of ordinary shares |
(25,872) |
|
(28,461) |
|
(3,008) |
|
Raise of short-term bank loans |
- |
|
10,000 |
|
5,000 |
|
Repayment of short-term bank loans |
(1,000) |
|
(12,000) |
|
- |
|
Net cash (used in) provided by financing activities |
(25,883) |
|
(27,819) |
|
4,864 |
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
17,025 |
|
25,797 |
|
(4,636) |
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
60,888 |
|
53,263 |
|
71,336 |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
607 |
|
(540) |
|
1,184 |
|
Cash and cash equivalents at the end of the period |
78,520 |
|
78,520 |
|
67,884 |
SOURCE Actions Semiconductor Co., Ltd.
| Contact: |
| Actions Semiconductor Co., Ltd.
Web: http://www.actions-semi.com |