SHANGHAI, China, Nov. 6, 2012 (GLOBE NEWSWIRE) -- RDA Microelectronics (Nasdaq:RDA) ("RDA Microelectronics" or the "Company"), a fabless semiconductor company that designs, develops and markets wireless SoC and Radio Frequency (RF) semiconductors for cellular, connectivity and broadcast applications, today announced its financial results for the third quarter ended September 30, 2012.
Third Quarter Financial Highlights (in US dollars):
- Revenue was $109.3 million, increasing 15.8% from the $94.4 million in the previous quarter and 30.2% from the $83.9 million in the third quarter of 2011.
- Gross margin was 31.1%, compared to 31.0% in the previous quarter and 34.9% in the third quarter of 2011.
- GAAP net income was $13.5 million, or $0.28 per diluted ADS, compared to $12.2 million, or $0.25 per diluted ADS, in the second quarter of 2012 and $15.7 million, or $0.34 per diluted ADS, in the third quarter of 2011.
- Non-GAAP net income was $16.7 million, or $0.35 per diluted ADS, compared to $15.2 million, or $0.32 per diluted ADS, in the previous quarter and $16.8 million, or $0.36 per diluted ADS, in the third quarter of 2011.
- The Company declared a special one-time cash dividend of US$0.20 per ordinary share, or US$1.20 per American depositary share ("ADS") for a total amount of US$55.9 million.
For a reconciliation of non-GAAP financial measures, please refer to the tables included in this press release.
Third Quarter and Recent Business Highlights:
- Achieved volume shipments of DVB-S tuners to LG Innotek for TVs sold in Europe.
- Achieved volume shipments of SP3T switch for use in Samsung's 2G handsets, reflecting the Company's progress on expanding global Tier-one customer relationships.
- Shipped 1 million units of the recently launched RDA8851, the industry's most integrated single-chip baseband SoC.
- Surpassed 1 million units shipped per month in September for the Company's WiFi, Bluetooth and FM three-in-one combo chip.
- Began volume shipments of the RDA6815 low-band WCDMA Power Amplifier.
- Began volume shipments of the RDA5850 Bluetooth embedded controller for non-handset applications.
Commenting on the results, Vincent Tai, chairman and CEO of RDA Microelectronics, said, "Revenue grew 16% sequentially as a result of increased customer demand for our baseband products and WiFi combo chips. Baseband shipments continued to ramp quickly throughout the quarter. Shipment volumes exceeded 10 million units per month beginning in August due to strong adoption in the high volume GSM feature phone market. Our newly launched RDA8851, the most integrated and cost-effective 2G baseband available, reached 1 million units shipped in the third quarter. Due to rapidly growing demand for this product, we expect unit volumes to continue ramping as we capture additional market share. The RDA8851 is ideally suited for ultra-low cost handsets where growth rates are the highest in the 2G market, in particular for emerging markets outside of China. We are very pleased with our initial success at expanding our baseband customer base and expect to begin shipping to additional local Tier-one brands in China and the emerging markets in the fourth quarter.
"We are also increasing our participation in the fast growing smartphone market to expand RDA's addressable market opportunities. During the quarter, our WiFi combo chips surpassed 1 million units shipped per month, and our current design win activity supports further volume growth. We are building on this base with new product development efforts to further expand our penetration of the smartphone market, including our highly anticipated 2.75G EDGE smartphone baseband product, which will be launched in early 2013. We are also securing design wins for our 3G PA solutions, while devoting resources for further development of multi-mode multi-band PAs, standalone and integrated GPS solutions and more advanced baseband chips for 3G handsets.
"Our strong financial results reflect our continued commitment to gaining market share in the 2G market and expanding our penetration of the low-cost smartphone market while investing aggressively in the development of highly integrated products for 3G and 4G."
Third Quarter Operating Summary:
- Revenue was $109.3 million, compared to $94.4 million in the previous quarter and $83.9 million in the third quarter of 2011. The growth in revenue was mainly driven by market share gains for baseband and ramping shipments of the WiFi combo chip due to growth in the Chinese smartphone market.
- Gross margin was 31.1%, compared with 31.0% in the previous quarter and 34.9% in the third quarter of 2011. The sequential increase in gross margin reflected higher shipments of the WiFi combo chip as well as increasing shipments of the higher margin 8851 baseband product, offset by shipments of lower margin legacy baseband solutions. The decrease in gross margin over the prior year period was primarily due to the addition of baseband revenue with lower than consolidated average gross margin.
- R&D expenses were $16.0 million, compared to $12.5 million in the previous quarter and $9.6 million in the third quarter of 2011. The sequential increase in R&D expenses was mainly due to higher tape-out expenses for development of new products targeting the 3G/4G and smartphone market.
- SG&A expenses were $4.0 million, compared to $4.0 million in the previous quarter and $3.9 million in the prior year period.
- Non-GAAP net income was $16.7 million, compared to $15.2 million in the previous quarter and $16.8 million in the third quarter of 2011.
Balance Sheet and Cash Flow Summary as of September 30, 2012:
- Cash, cash equivalents and short-term investments were $167.0 million, compared to $159.0 million as of June 30, 2012. In the third quarter of 2012, the Company generated $10.8 million in cash from operations, compared to $20.0 million in the prior quarter. Not reflected in the third quarter cash balance is a one-time special cash dividend totaling $55.9 million that was announced on September 13, 2012 and paid on October 18, 2012.
- Accounts receivable increased to $28.2 million, compared to $21.5 million as of June 30, 2012, primarily due to the growth in business volumes. AR days decreased to 20 days from 22 days in the previous quarter.
- Inventory increased $13.9 million to $58.5 million from $44.6 million as of June 30, 2012. The increase of inventory was mainly due to an inventory build in advance of the National Day Chinese holiday and growth in baseband.
- Accounts payable was $55.8 million, compared to $54.0 million as of June 30, 2012.
Fourth Quarter 2012 Business Outlook:
For the fourth quarter of 2012, the Company expects revenue to be in the range of $100 million to $110 million, an increase of 21.4% to 33.6% year-over-year. The Company expects gross margins to be in the range of 31.1% to 32.1%.
Conference Call:
RDA Microelectronics will host a conference call and live webcast for analysts and investors at 8:00 a.m. Eastern Time on November 6, 2012 (9:00 p.m. in China).
- For parties in the United States and Canada, please call 1-877-280-7280, conference code 37806505
- For parties in Hong Kong, please call 800933597, conference code 37806505
- Other International parties please call 1-678-825-8232, conference code 37806505
RDA Microelectronics will provide a live webcast of the conference call that will be accessible from the "Investors" section of the Company's website at www.rdamicro.com. The webcast will be archived on the website for a period of 30 days. An audio replay of the conference call will also be available two hours after the call and will be available for ten days. To hear the replay, parties in the United States and Canada should call 1-855-859-2056 and enter pass code 37806505, International parties should call 1-404-537-3406 and enter the same pass code.
About RDA Microelectronics
RDA Microelectronics is a fabless semiconductor company that designs, develops and markets wireless SoC and radio-frequency (RF) semiconductors for cellular, connectivity and broadcast applications. The Company's product portfolio currently includes baseband, RF front-end modules, power amplifiers, transceivers, Bluetooth system-on-chip, Wi-Fi, Bluetooth and FM combo chips, FM radio receivers, set-top box tuners, analog mobile television receivers, CMMB mobile television receivers, walkie-talkie transceivers and LNB satellite down converters. For additional information, please see the Company's website at http://www.rdamicro.com.
Forward-Looking Statements
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Any statements in this press release that are not historical facts are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include the Company's anticipated growth strategies; its future results of operations and financial condition; economic conditions in China; the regulatory environment in China; the Company's ability to attract customers and leverage its brand; trends and competition in the semiconductor industry; migration to new technology; the entry into baseband, new TV and display market and other factors and risks detailed in the Company's filings with the Securities and Exchange Commission. This press release also contains statements or projections that are based upon information available to the public, as well as other information from sources which the Company believes to be reliable but whose accuracy or completeness the Company cannot guarantee. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
Non-GAAP Financial Measures
To supplement the Company's unaudited consolidated financial results presented in accordance with U.S. GAAP, the Company uses adjusted (non-GAAP) net income and net income per diluted ADS, adjusted (non-GAAP) R&D expense and adjusted (non-GAAP) SG&A expense, which are defined as non-GAAP financial measures by the SEC. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see below and the tables captioned "Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.
The Company believes that adjusted (non-GAAP) net income and net income per diluted ADS, adjusted (non-GAAP) R&D expense and adjusted (non-GAAP) SG&A expense, viewed in conjunction with the GAAP financial measures, provide meaningful supplemental information regarding the Company's performance and that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's historical performance and when planning and forecasting the Company's performance in future periods. The Company believes that excluding share-based compensation expenses and amortization of acquired and licensed intangibles helps both management and investors to get a better understanding of its ongoing business. Adjusted (non-GAAP) net income and net income per diluted ADS, adjusted (non-GAAP) R&D expense and adjusted (non-GAAP) SG&A expense do not include share-based compensation expenses and amortization of acquired and licensed intangibles that impact the Company's operating expenses and net income for the period. In addition, the Company's adjusted (non-GAAP) net income and net income per diluted ADS, adjusted (non-GAAP) R&D expense and adjusted (non-GAAP) SG&A expense may not be comparable to measures with the same or similar titles utilized by other companies, since other companies may not calculate such measures in the same manner as the Company does. The Company compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. Reconciliations of GAAP and non-GAAP results are included at the end of this press release.
| RDA MICROELECTRONICS, INC. | |||
| Consolidated Balance Sheet Information | |||
| September 30, 2011 | June 30, 2012 | September 30, 2012 | |
| (unaudited) | (unaudited) | (unaudited) | |
|
(amounts in thousands of USD, except number of shares and per share data) |
|||
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 120,038 | 55,550 | 58,848 |
| Short-term investments-time deposit | 35,000 | 103,459 | 108,098 |
| Accounts receivable | 37,873 | 21,516 | 28,229 |
| Inventories | 37,278 | 44,561 | 58,486 |
| Prepaid expenses and other current assets | 3,321 | 6,524 | 10,011 |
| Deferred tax assets | 1 | 5 | 3 |
| Total current assets | 233,511 | 231,615 | 263,675 |
| Non-current assets | |||
| Property, plant and equipment, Net | 3,548 | 8,305 | 8,386 |
| Intangible Assets | -- | 52,595 | 50,805 |
| Goodwill | -- | 8,900 | 8,900 |
| Other long-term assets | 303 | 2,079 | 3,206 |
| Investment | -- | 48 | 48 |
| Deferred tax assets | 11 | -- | -- |
| Total assets | 237,373 | 303,542 | 335,020 |
| LIABILITIES | |||
| Current liabilities | |||
| Accounts payable | 31,906 | 54,015 | 55,808 |
| Accrued expenses and other current liabilities | 23,929 | 19,266 | 24,739 |
| Deferred revenue | 14,806 | 6,623 | 16,536 |
| Dividend payable | -- | -- | 55,946 |
| Total current liabilities | 70,641 | 79,904 | 153,029 |
| Deferred tax Liability | -- | 95 | 89 |
| Total liabilities | 70,641 | 79,999 | 153,118 |
| Commitments and contingencies | |||
| SHAREHOLDERS' EQUITY | |||
| Ordinary shares | 2,635 | 2,820 | 2,885 |
| Additional paid-in capital | 116,582 | 144,821 | 146,674 |
| Recourse loans | -- | (1,301) | (1,567) |
| Accumulated other comprehensive income | 1,051 | 1,083 | 1,042 |
| Treasury stock | -- | (12,969) | (14,139) |
| Retained earnings | 46,464 | 89,089 | 47,007 |
| Total shareholders' equity | 166,732 | 223,543 | 181,902 |
| Total liabilities and shareholders' equity | 237,373 | 303,542 | 335,020 |
| RDA MICROELECTRONICS, INC. | |||
| Consolidated Statement of Operations Information | |||
| Quarter Ended | |||
| September 30, 2011 | June 30, 2012 | September 30, 2012 | |
| (unaudited) | (unaudited) | (unaudited) | |
| (amounts in thousands of USD, except number of shares and per share data) | |||
| Revenue | 83,932 | 94,370 | 109,308 |
| Cost of revenue | (54,632) | (65,088) | (75,307) |
| Gross profit | 29,300 | 29,282 | 34,001 |
| 34.91% | 31.03% | 31.11% | |
| Operating expenses: | |||
| Research and development | (9,556) | (12,464) | (16,029) |
| Selling, general and administrative | (3,929) | (3,957) | (3,977) |
| Total operating expenses | (13,485) | (16,421) | (20,006) |
| Operating income | 15,815 | 12,861 | 13,995 |
| Other income: | |||
| Interest income | 626 | 927 | 1,069 |
| Other income (expense), net | 834 | (370) | (259) |
| Income before income taxes | 17,275 | 13,418 | 14,805 |
| Income tax expense | (1,561) | (1,204) | (1,328) |
| Net income | 15,714 | 12,214 | 13,477 |
| Earnings per ADS | |||
| - Basic | 0.36 | 0.27 | 0.30 |
| - Diluted | 0.34 | 0.25 | 0.28 |
| Weighted average ADS equivalent: [1] | |||
| - Basic | 44,101,282 | 45,509,278 | 45,590,013 |
| - Diluted | 46,684,385 | 48,066,210 | 47,904,835 |
| Share-based compensation was allocated in operating expenses as follows: | |||
| Research and development | 499 | 333 | 446 |
| Selling, general and administrative | 576 | 358 | 518 |
| [1] Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents six ordinary shares. | |||
| RDA MICROELECTRONICS, INC. | ||
| Consolidated Statement of Operations Information | ||
| Nine Months Ended | ||
| September 30, 2011 | September 30, 2012 | |
| (unaudited) | (unaudited) | |
| (amounts in thousands of USD, except number of shares and per share data) | ||
| Revenue | 206,507 | 275,673 |
| Cost of revenue | (135,858) | (186,524) |
| Gross profit | 70,649 | 89,149 |
| Operating expenses: | ||
| Research and development | (24,042) | (36,757) |
| Selling, general and administrative | (10,176) | (11,126) |
| Total operating expenses | (34,218) | (47,883) |
| Operating income | 36,431 | 41,266 |
| Other income (expense): | ||
| Interest income | 1,205 | 2,766 |
| Other income (expense), net | 975 | (629) |
| Income before income taxes | 38,611 | 43,403 |
| Income tax expense | (3,541) | (3,862) |
| Net income | 35,070 | 39,541 |
| Earnings per ADS | ||
| - Basic | 0.80 | 0.88 |
| - Diluted | 0.75 | 0.84 |
| Weighted average ADS equivalent: | ||
| - Basic | 43,910,649 | 44,755,348 |
| - Diluted | 46,674,131 | 47,220,854 |
| Share-based compensation was allocated in operating expenses as follows: | ||
| Research and development | 1,645 | 1,150 |
| Selling, general and administrative | 1,396 | 1,248 |
| RDA MICROELECTRONICS, INC. | |||||||
| Reconciliation of GAAP and Non-GAAP Results | |||||||
| (amounts in thousands of USD, except number of shares and per share data) | |||||||
| Quarter Ended September 30, 2012 | |||||||
| (unaudited) | |||||||
|
GAAP Result |
% of Net Revenue |
Share-based Compensation |
Amortization of Intangible Assets |
Non-GAAP % of Net Revenue |
Non-GAAP Results |
% of Net Revenue |
|
| Research and development | 16,029 | 15% | 446 | 2,265 | 2% | 13,318 | 13% |
| Selling, general and administrative | 3,977 | 3% | 518 | -- | 1% | 3,459 | 2% |
| Total operating expenses | 20,006 | 18% | 964 | 2,265 | 3% | 16,777 | 15% |
| Operating income | 13,995 | 13% | 964 | 2,265 | 3% | 17,223 | 16% |
| Net income | 13,477 | 12% | 964 | 2,265 | 3% | 16,705 | 15% |
| Diluted earnings per ADS | 0.28 | 0.02 | 0.05 | 0.35 | |||
| Weighted average ADS-Diluted | 47,904,835 | 47,904,835 | 47,904,835 | 47,904,835 | |||
| Quarter Ended June 30, 2012 | |||||||
| (unaudited) | |||||||
|
GAAP Result |
% of Net Revenue |
Share-based Compensation |
Amortization of Intangible Assets |
Non-GAAP % of Net Revenue |
Non-GAAP Results |
% of Net Revenue |
|
| Research and development | 12,464 | 13% | 333 | 2,265 | 3% | 9,866 | 10% |
| Selling, general and administrative | 3,957 | 4% | 358 | -- | 0% | 3,599 | 4% |
| Total operating expenses | 16,421 | 17% | 691 | 2,265 | 3% | 13,465 | 14% |
| Operating income | 12,861 | 14% | 691 | 2,265 | 3% | 15,817 | 17% |
| Net income | 12,214 | 13% | 691 | 2,265 | 3% | 15,170 | 16% |
| Diluted earnings per ADS | 0.25 | 0.01 | 0.06 | 0.32 | |||
| Weighted average ADS-Diluted | 48,066,210 | 48,066,210 | 48,066,210 | 48,066,210 | |||
| Quarter Ended September 30, 2011 | |||||||
| (unaudited) | |||||||
|
GAAP Result |
% of Net Revenue |
Share-based Compensation |
Amortization of Intangible Assets |
Non-GAAP % of Net Revenue |
Non-GAAP Results |
% of Net Revenue |
|
| Research and development | 9,556 | 11% | 499 | -- | 1% | 9,057 | 10% |
| Selling, general and administrative | 3,929 | 5% | 576 | -- | 1% | 3,353 | 4% |
| Total operating expenses | 13,486 | 16% | 1,075 | -- | 2% | 12,410 | 14% |
| Operating income | 15,815 | 19% | 1,075 | -- | 2% | 16,890 | 21% |
| Net income | 15,714 | 19% | 1,075 | -- | 2% | 16,789 | 21% |
| Diluted earnings per ADS | 0.34 | 0.02 | -- | 0.36 | |||
| Weighted average ADS outstanding-Diluted | 46,684,385 | 46,684,385 | 46,684,385 | 46,684,385 | |||
| Nine Months Ended September 30, 2012 | |||||||
| (unaudited) | |||||||
|
GAAP Result |
% of Net Revenue |
Share-based Compensation |
Amortization of Intangible Assets |
Non-GAAP % of Net Revenue |
Non-GAAP Results |
% of Net Revenue |
|
| Research and development | 36,757 | 13% | 1,150 | 5,010 | 2% | 30,597 | 11% |
| Selling, general and administrative | 11,126 | 4% | 1,248 | -- | 0% | 9,878 | 4% |
| Total operating expenses | 47,883 | 17% | 2,398 | 5,010 | 2% | 40,475 | 15% |
| Operating income | 41,266 | 15% | 2,398 | 5,010 | 2% | 48,673 | 17% |
| Net income | 39,541 | 14% | 2,398 | 5,010 | 2% | 46,948 | 16% |
| Diluted earnings per ADS | 0.84 | 0.05 | 0.11 | 1.00 | |||
| Weighted average ADS outstanding-Diluted | 47,220,854 | 47,220,854 | 47,220,854 | 47,220,854 | |||
| Nine Months Ended September 30, 2011 | |||||||
| (unaudited) | |||||||
|
GAAP Result |
% of Net Revenue |
Share-based Compensation |
Amortization of Intangible Assets |
Non-GAAP % of Net Revenue |
Non-GAAP Results |
% of Net Revenue |
|
| Research and development | 24,042 | 12% | 1,645 | -- | 1% | 22,397 | 11% |
| Selling, general and administrative | 10,176 | 5% | 1,396 | -- | 1% | 8,780 | 4% |
| Total operating expenses | 34,218 | 17% | 3,041 | -- | 2% | 31,177 | 15% |
| Operating income | 36,431 | 18% | 3,041 | -- | 2% | 39,472 | 20% |
| Net income | 35,070 | 17% | 3,041 | -- | 2% | 38,111 | 19% |
| Diluted earnings per ADS | 0.75 | 0.07 | -- | 0.82 | |||
| Weighted average ADS outstanding-Diluted | 46,674,131 | 46,674,131 | 46,674,131 | 46,674,131 | |||