Company's Board of Directors Authorizes Additional Share Repurchase Program of Up To 12 Million ADSs
ZHUHAI, China, Jan. 22 /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 financial results for the fourth quarter and full year ended December 31, 2008.
All financial results are reported on a U.S. GAAP basis.
Revenue for the fourth quarter of 2008 was $16.1 million, as compared to revenue of $27.3 million for the third quarter of 2008, and $32.3 million for the fourth quarter of 2007. Revenue for the year ended December 31, 2008 was $95.1 million, compared to revenue of $116.6 million for the year ended December 31, 2007.
Net income for the fourth quarter of 2008 was $0.5 million, or $0.01 per ADS, compared to $7.3 million, or $0.09 per ADS, for the third quarter of 2008, and compared to $19.4 million, or $0.23 per ADS, for the fourth quarter of 2007. Included in net income for the fourth quarter of 2007 was a $5.9 million tax refund, or $0.07 per ADS, resulting from a tax refund program Zhuhai Municipal Tax Bureau formed to encourage local business development of Foreign Invested Enterprises. There was no such income related to tax refund in the year 2008. Net income for the full year of 2008 was $26.1 million, compared to $51.6 million reported for the full year 2007. Net income per ADS was $0.31 for 2008, compared to the $0.60 per ADS reported for the full year 2007.
Actions Semiconductor reported gross margin of 44.7% for the fourth quarter of 2008. For the full year of 2008, gross margin was 50.1%. The Company ended the year with $45.5 million in cash and cash equivalents together with time deposits. Marketable securities and trading securities at the end of the year were $220.5 million.
In the fourth quarter the Company increased its equity ownership interest in a development stage enterprise, with a focus on the mobile digital TV and multimedia markets, from 14.42% to 19.82% through an additional cash investment of US$3 million. As a result of increasing its investment, Actions has representation on the board of directors of the invested enterprise and consequently the latter has been retroactively accounted for as an equity method investee. The comparative September 30th, 2008 and December 31st, 2007 balance sheets, income statements, and statements of cash flows have been restated to reflect the retroactive changes. The impact to the various statements is summarized in a table to follow.
The Company also reported that during the quarter it has significantly increased its repurchase on its American Depositary Shares (ADSs). As of December 31, 2008, the Company has invested approximately $16.0 million in the program, representing over 5.1 million ADSs. At the end of fiscal year 2008, the Company had approximately 81 million equivalent ADSs outstanding.
Furthermore, the board of directors approved an add-on share repurchase program under which the Company may repurchase up to 12 million additional ADSs through December 31, 2010.
"Despite the unprecedented challenges in the macroeconomic environment in 2008, we were able to deliver on a number of our business objectives for the year. We maintained a solid balance sheet and strong cash position, further penetrated international markets, and enhanced our engineering resources. Unfortunately, the global financial crisis has impacted the consumer electronics market and the growth of our business," stated Mr. Nan-Horng Yeh, CEO of Actions Semiconductor.
"Looking to 2009, we expect the operating environment to continue to be challenging. We have conducted a comprehensive review to identify additional operating efficiencies and we will continue to implement stringent expense controls. We believe we are well-positioned for the long-term given our strong balance sheet and market share. We remain committed to our continued product development efforts, aggressive share repurchase program, prudent management of our high level of cash, and conservative investment strategy which all complement our core business model and enable maximum operating flexibility."
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 first quarter of fiscal year 2009 ended March 31, 2009, Actions Semiconductor estimates revenue in the range of $8 to $11 million, gross margin of 30%-35%, and operating expenses relatively lower than 2008 annual average. The first quarter 2009 estimates include share-based compensation expense in the range of $1.1 to $1.2 million.
Conference Call Details
Actions Semiconductor's fourth quarter and full year 2008 teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Wednesday, January 21, 2009. To participate in the live call, analysts and investors should dial 800-265-0241 (within U.S.) or 617-847-8704 (outside U.S.) and enter passcode 26795801 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 January 28, 2009, by dialing 888-286-8010 (within U.S.) or 617-801-6888 (outside U.S.) and entering the passcode 64308097.
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. Forward-looking statements, including financial projections and forecasts, involve risks and uncertainties that could cause Actions Semiconductor's actual results to differ materially from our current expectations. Factors that could cause Actions Semiconductor's results to differ materially from those set forth in these forward-looking statements include 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. Actions Semiconductor undertakes no obligation to update or revise forward-looking statements to reflect subsequent events or changed assumptions or circumstances.
ACTIONS SEMICONDUCTOR CO., LTD.
CONSOLIDATED BALANCE SHEET
(in thousands of U.S. dollars)
At December 31, At September 30, At December 31,
2008 2008 2007
---- ---- ----
(unaudited) (unaudited) (restated)
ASSETS
Current assets:
Cash and cash
equivalents 45,435 53,286 72,054
Time deposits 61 62 2,613
Restricted cash 440 6,860 1,782
Marketable securities 201,151 195,565 165,317
Trading securities 19,299 9,339 -
Accounts receivable,
net 3,932 8,885 6,046
Notes receivable 74 206 372
Inventories 8,720 7,992 12,542
Prepaid expenses and
other current assets 1,532 2,463 2,479
Deferred tax assets 686 996 739
--- --- ---
Total current assets 281,330 285,654 263,944
Investment in an
affiliate 4,142 1,358 1,719
Other investments 7,044 5,057 5,479
Rental deposits 39 87 79
Property, plant and
equipment, net 7,144 7,221 6,436
Land use right 1,580 1,596 1,509
Acquired intangible
assets, net 4,197 4,782 5,849
Deposit paid for
acquisition of
property, plant and
equipment 403 35 27
Deposit paid to
establish an
investment - 10,239 -
Deferred tax assets 206 220 -
TOTAL ASSETS 306,085 316,249 285,042
======= ======= =======
LIABILITIES AND
SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable 4,050 7,268 12,334
Accrued expenses and
other current
liabilities 6,846 12,101 9,435
Other liabilities 1,818 1,046 884
Loan from minority
shareholder 1,500 1,500 -
Short-term bank loan - - 1,519
Income tax payable 221 556 749
Deferred tax
liabilities 480 176 -
--- --- -
Total current liabilities 14,915 22,647 24,921
Other liabilities 249 294 686
Deferred tax liabilities 1,750 1,391 -
Total liabilities 16,914 24,332 25,607
------ ------ ------
Minority interest 35 140 204
-- --- ---
Shareholders' equity:
Ordinary shares 1 1 1
Additional paid-in
capital 36,606 38,784 43,679
Accumulated other
comprehensive income 20,483 21,496 9,628
Retained earnings 232,046 231,496 205,923
------- ------- -------
Total shareholders'
equity 289,136 291,777 259,231
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 306,085 316,249 285,042
======= ======= =======
ACTIONS SEMICONDUCTOR CO., LTD.
CONSOLIDATED INCOME STATEMENT
(in thousands of U.S. dollars, except per share amounts)
Three Three
months months Year Year
ended ended ended ended
December 31, December 31, December 31, December 31,
------------ ------------ ------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (restated)
Revenues 16,052 32,331 95,130 116,628
Cost of
revenues (8,879) (15,218) (47,425) (56,918)
------ ------- ------- -------
Gross profit 7,173 17,113 47,705 59,710
Other
operating
income 159 12 797 392
Operating
expenses:
Research and
development (5,047) (3,443) (19,477) (12,381)
General and
administrative (2,746) (2,380) (10,399) (10,485)
Selling and
marketing (449) (658) (1,694) (1,880)
---- ---- ------ ------
Total
operating
expenses (8,242) (6,481) (31,570) (24,746)
------ ------ ------- -------
Income from
operations (910) 10,644 16,932 35,356
Other
income (expense) (414) 7,172 1,213 11,570
Dividend
income - - 20 -
Fair value
change in
trade
securities 44 - 92 -
Interest
income 3,147 1,973 11,912 7,162
Interest
expense - (20) (4) (82)
- --- -- ---
Income before
income taxes,
equity in net
income(loss)
of an
affiliate and
minority
interests 1,867 19,769 30,165 54,006
Income tax (1,207) (497) (3,632) (2,202)
Equity in net
income(loss)
of an
affiliate (216) 36 (576) (383)
Minority
interests 105 75 166 220
--- -- --- ---
Net income 549 19,383 26,123 51,641
=== ====== ====== ======
Net income
per share:
Basic and
diluted per
share: 0.00 0.04 0.05 0.10
==== ==== ==== ====
Basic and
diluted (per
ADS) 0.01 0.23 0.31 0.60
==== ==== ==== ====
Weighted-
average
shares used
in
computation:
Basic and
diluted 491,689,408 509,793,348 501,763,805 513,588,069
=========== =========== =========== ===========
Weighted-
average ADS
used in
computation :
Basic and
diluted 81,948,235 84,965,558 83,627,301 85,598,012
========== ========== ========== ==========
Note: Stock
compensation
recorded in
each
expense
classification
above is as
follows:
Cost of
revenues 46 - 112 -
Research and
development 573 - 1,394 -
General and
administrative 273 - 662 -
Selling and
marketing 52 - 127 -
ACTIONS SEMICONDUCTOR CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
Three months Year ended Year ended
ended December 31, December 31,
December 31, 2008 2008 2007
---------------- ------------ ------------
(unaudited) (unaudited) (restated)
Operating activities:
Net income 549 26,123 51,641
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation
and
amortization
of property,
plant and
equipment 567 2,085 1,594
Amortization of
acquired
intangible
assets 788 3,232 2,349
Utilization of
advance subsidy
from local
authorities of
Zhuhai, the
People's Republic
of China(the
"PRC") - - (219)
Loss on
disposal of
property,
plant and
equipment 7 70 320
Gain on disposal of
intangible assets - - (18)
Gain on disposal of
other investment - (6) -
Equity in net loss
of an affiliate 216 576 383
Dividend income - (20) -
Fair value of the
stock options 944 2,295 -
Fair value
change in
trading
securities (44) (92) -
Minority interest (105) (166) (220)
Changes in
operating
assets and
liabilities:
Accounts
receivable 4,945 2,111 (187)
Notes receivable 132 315 1,828
Inventories (762) 4,512 (5,632)
Amount due
from an
affiliate - 52 -
Prepaid expenses
and other
current assets 920 1,601 4,289
Accounts payable (3,200) (8,999) (4,023)
Accrued expenses
and other
current
liabilities (5,025) (5,522) (3,839)
Income tax
payable (332) (576) (1,557)
Rental deposit 48 45 (25)
Deferred taxes 983 2,083 (77)
--- ----- ---
Net cash provided by
operating activities 631 29,719 46,607
--- ------ ------
Investing activities:
Dividend from other
investments - 20 -
Increase in
investment in an
affiliate (3,000) (3,000) (2,281)
Increase in other
investments (2,050) (2,215) (3,831)
Increase in
marketable
securities (6,552) (25,575) (141,108)
Proceeds from
disposal of
trading securities - 17,111 -
Purchase of trading
securities (9,916) (36,318) -
Proceeds from
disposal of
property, plant and
equipment - 18 39
Proceeds from
disposal of
intangible assets - - 64
Increase in deposit
paid for
acquisition of
property, plant
and equipment (368) (368) -
Refund in deposit
paid for establish a
fellow subsidiary 10,239 - -
Purchase of
property,
plant and
equipment (523) (2,429) (2,586)
Purchase of
intangible assets (217) (1,194) (4,241)
Decrease (increase)
in restricted cash 6,387 1,389 (1,626)
Decrease in time
deposits 1 2,691 44,423
- ----- ------
Cash used in
investing
activities (5,999) (49,870) (111,147)
------ ------- --------
Financing activities:
Proceeds from short-
term bank loans - - 1,431
Repayment of short-
term bank loans - (1,580) -
Proceeds from loan
from minority
shareholder - 1,500 -
Advance subsidy from
local authorities of
Zhuhai, the PRC 733 399 1,039
Repurchase of
ordinary shares (3,122) (9,368) (6,662)
Repayment of
amounts due to
shareholders - - (10)
- - ---
Cash used in
financing
activities (2,389) (9,049) (4,202)
------ ------ ------
Effect of exchange
rate changes on
cash (94) 2,581 3,018
Net decrease in cash
and cash equivalents (7,851) (26,619) (65,724)
Cash and cash
equivalents at the
beginning of the
period 53,286 72,054 137,778
------ ------ -------
Cash and cash
equivalents at the
end of the period 45,435 45,435 72,054
------ ------ ------
Retroactive Impacts to Various Statements in Comparative periods
and dates:
(in thousands of U.S. dollars)
Affected statements and accounts - As at Year ended
Increase/(Decrease) Sept. 30th, Dec. 31st,
2008 2007
(unaudited)
Balance Sheet
Investment in an affiliate 1,358 1,719
Other investments (2,281) (2,281)
Total effect on assets (923) (562)
Retained earnings (923) (562)
Affected statements and accounts - 3 months Year ended
Increase/(Decrease) ended Dec. 31st, Dec. 31st,
2007 2007
(unaudited)
Income Statement
Equity in net income (loss) of
an affiliate (40) (562)
Statement of Cash Flows
Equity in net loss of an
affiliate 40 562
