SHANGHAI, China, Aug. 7, 2012 (GLOBE NEWSWIRE) -- RDA Microelectronics (Nasdaq:RDA) ("RDA Microelectronics" or the "Company"), a fabless semiconductor company that designs, develops and markets Radio Frequency (RF) and mixed-signal wireless SoC semiconductors for cellular, connectivity and broadcast applications, today announced its financial results for the second quarter ended June 30, 2012.
Second Quarter Financial Highlights (in US dollars):
- Revenue was $94.4 million, representing an increase of 40.0% from the $67.4 million in the second quarter 2011 and 31.1% from the $72.0 million in the first quarter of 2012.
- Gross margin was 31.0%, exceeding the Company's guidance of 30.5% to 30.9%, compared to 34.1% in the second quarter of 2011 and 35.9% in the previous quarter.
- GAAP net income was $12.2 million, or $0.25 per diluted ADS, compared to $11.8 million, or $0.25 per diluted ADS, in the second quarter 2011 and $13.9 million, or $0.30 per diluted ADS, in the previous quarter.
- Non-GAAP net income was $15.2 million, or $0.32 per diluted ADS, compared to $12.8 million, or $0.27 per diluted ADS, in the second quarter of 2011 and $15.1 million, or $0.33 per diluted ADS, in the previous quarter.
For a reconciliation of non-GAAP financial measures, please refer to the tables included in this press release.
Second Quarter and Recent Business Highlights:
- Launched the RDA8851 single-chip GSM/GPRS baseband SoC, the most integrated and cost-effective baseband SoC available in the market.
- Introduced the RDA6585 multi-mode front-end module for quad-band GSM/EDGE/TD-SCDMA handsets, positioning RDA to capitalize on the market's ongoing transition from 2G to 3G.
- Unveiled the industry's first QFN front-end modules for GSM handsets, which provide the best cost performance for RDA customers.
- Ramped volume shipments of Wi-Fi, Bluetooth and FM combo chipsets ahead of schedule to increase the Company's silicon content per handset in the growing low-cost smartphone market.
- Introduced the RDA5850 integrated Bluetooth solution for non-handset applications, significantly expanding the Company's opportunities in the consumer electronics market beyond handset applications.
- Achieved top ranking at the Samsung Electro-Mechanics interim quality assurance seminar, reflecting the Company's focus on expanding global Tier one customer relationships.
Commenting on the results, Vincent Tai, chairman and CEO of RDA Microelectronics, said, "The second quarter reflected strong operational results with revenue increasing 40% year-over-year, driven by the addition of baseband revenue. Our baseband revenue ramped quickly in the quarter, however, we experienced a product shortage related to testing capacity at one of our suppliers, which has now been resolved. Also during the quarter, we continued to experience pricing pressure and accelerated our cost-down efforts to partially offset these challenges. Additionally, we are seeing a slowdown in exports to India due to depreciation of the Indian currency. We generated $20 million in cash flow from operations, which will help fund continued investment in product integration and development for next-generation products.
"Additionally, we made significant progress on our aggressive product roadmap. Initial demand for our first single-chip baseband SoC, the 8853, has been very high. We moved ahead of schedule to recently launch our 8851 baseband, the most integrated and cost-effective single-chip baseband SoC for the high volume GSM/GPRS feature phone market. This product has been well received by our customers and offers an improved gross margin profile as we move into volume production in the second half of the year. We are also launching additional products such as our integrated 2G PA and 3G switch platforms tailored for use in 3G smartphone designs. On the connectivity front, we are seeing strong demand for our Wi-Fi, Bluetooth and FM combo chipset due to the rapid growth of low-cost smartphones in China. In addition, we have leveraged our success in the Bluetooth market for handsets and launched the 5850, which integrates an MCU with Bluetooth, to expand into the non-handset, consumer electronics market."
Mr. Tai concluded, "Our strong financial results and recent product introductions validate RDA's world-class technical capabilities and competitive strengths in producing high quality, low cost designs. We believe RDA is well positioned to successfully execute on our strategy of increasing our share of the high volume feature phone market, while positioning the Company to penetrate the rapidly growing, low-cost smartphone market in China and the emerging markets."
Second Quarter Operating Summary:
- Revenue was $94.4 million, compared to $67.4 million in the second quarter of 2011 and $72.0 million in the previous quarter. The increase in revenue primarily reflects the addition of baseband product revenue in the second quarter.
- Gross margin of 31.0% declined from the 34.1% in the second quarter of 2011 and 35.9% in the previous quarter due mainly to the addition of baseband revenue, which currently carries lower than corporate average gross margin, and 2G PA pricing pressure.
- R&D expenses were $12.5 million, compared to $7.2 million in the second quarter of 2011 and $8.3 million in the previous quarter. Excluding $1.8 million in increased acquisition-related amortization in the second quarter and $1.6 million government subsidies in the first quarter, the sequential increase in R&D expenses amounted to approximately $1.0 million and was mainly due to higher tape-out expenses for new product development.
- SG&A expenses were $4.0 million, an increase from $3.4 million in the second quarter of 2011 and $3.2 million in the previous quarter. The sequential increase was due to the addition of field application engineers to support the baseband business. SG&A expenses as a percentage of revenue was 4.2%, a decrease from 5.1% in second quarter of 2011 and 4.4% in previous quarter.
- Non-GAAP net income increased to $15.2 million from $12.8 million in second quarter of 2011 and $15.1 million in previous quarter as a result of higher revenue.
Balance Sheet and Cash Flow Summary as of June 30, 2012:
- Cash, cash equivalents and short-term investments were $159.0 million, compared to $142.9 million as of March 31, 2012. In the second quarter of 2012, the Company generated $20.0 million in cash from operations, compared to $18.8 million in the prior quarter.
- Accounts receivable decreased to $21.5 million, compared to $24.1 million as of March 31, 2012 primarily due to collection of Coolsand's outstanding receivables.
- Inventory increased $15.3 million to $44.6 million from the $29.3 million as of March 31, 2012 due to the addition of the baseband business. Inventory days were 51 days, decreasing from 64 days in previous quarter. The shorter inventory days were mainly due to the baseband supply constraints experienced in the second quarter.
- Accounts payable was $54.0 million, compared to $34.5 million as of March 31, 2012.
Third Quarter 2012 Business Outlook:
For the third quarter of 2012, the Company expects revenue to be in the range of $100 million to $110 million, an increase of 19% to 31% year-over-year and 6% to 17% sequentially. The Company expects gross margins to be in the range of 30.8% to 31.2%.
Conference Call:
RDA Microelectronics will host a conference call and live webcast for analysts and investors at 8:00 a.m. EDT on August 7, 2012 (8:00 p.m. in China).
- For parties in the United States and Canada, please call 1-877-280-7280, conference code 97722994
- For parties in Hong Kong, please call 800933597, conference code 97722994
- Other International parties please call 1-678-825-8232, conference code 97722994
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 seven days. To hear the replay, parties in the United States and Canada should call 1-855-859-2056 and enter pass code 97722994, 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 radio-frequency and mixed-signal wireless SoC semiconductors for cellular, connectivity and broadcast applications. The Company's product portfolio currently includes power amplifiers, transceivers and front-end modules, baseband, 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 | |||
| June 30, 2011 | Mar 31, 2012 | June 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 | 93,874 | 66,856 | 55,550 |
| Short-term investments-time deposit | 31,700 | 76,036 | 103,459 |
| Accounts receivable | 26,477 | 24,114 | 21,516 |
| Inventories | 40,258 | 29,298 | 44,561 |
| Prepaid expenses and other current assets | 3,681 | 5,895 | 6,524 |
| Deferred tax assets | 39 | 8 | 5 |
| Total current assets | 196,029 | 202,207 | 231,615 |
| Non-current assets | |||
| Property, plant and equipment, Net | 2,708 | 5,547 | 8,305 |
| Intangible Assets | -- | 55,327 | 52,595 |
| Goodwill | -- | 8,900 | 8,900 |
| Other long-term assets | 209 | 1,266 | 2,079 |
| Investment | -- | 48 | 48 |
| Deferred tax assets | 9 | -- | -- |
| Total assets | 198,955 | 273,295 | 303,542 |
| LIABILITIES | |||
| Current liabilities | |||
| Accounts payable | 22,490 | 34,546 | 54,015 |
| Accrued expenses and other current liabilities | 17,893 | 18,197 | 19,266 |
| Deferred revenue | 8,960 | 9,590 | 6,623 |
| Total current liabilities | 49,343 | 62,333 | 79,904 |
| Deferred tax Liability | -- | 69 | 95 |
| Total liabilities | 49,343 | 62,402 | 79,999 |
| Commitments and contingencies | |||
| SHAREHOLDERS' EQUITY | |||
| Ordinary shares | 2,620 | 2,819 | 2,820 |
| Additional paid-in capital | 115,356 | 144,112 | 144,821 |
| Recourse loans | -- | (1,174) | (1,301) |
| Accumulated other comprehensive income | 885 | 1,148 | 1,083 |
| Treasury stock | -- | (12,887) | (12,969) |
| Retained earnings | 30,751 | 76,875 | 89,089 |
| Total shareholders' equity | 149,612 | 210,893 | 223,543 |
| Total liabilities and shareholders' equity | 198,955 | 273,295 | 303,542 |
| RDA MICROELECTRONICS, INC. | ||||||
| Consolidated Statement of Operations Information | ||||||
| Quarter Ended | ||||||
| June 30, 2011 | Mar 31, 2012 | June 30, 2012 | ||||
| (unaudited) | (unaudited) | (unaudited) | ||||
| (amounts in thousands of USD, except number of shares and per share data) | ||||||
| Revenue | 67,424 | 71,995 | 94,370 | |||
| Cost of revenue | (44,440) | (46,129) | (65,088) | |||
| Gross profit | 22,984 | 25,866 | 29,282 | |||
| Operating expenses: | ||||||
| Research and development | (7,223) | (8,264) | (12,464) | |||
| Selling, general and administrative | (3,431) | (3,192) | (3,957) | |||
| Total operating expenses | (10,654) | (11,456) | (16,421) | |||
| Operating income | 12,330 | 14,410 | 12,861 | |||
| Other income: | ||||||
| Interest income | 469 | 770 | 927 | |||
| Other income (expense), net | 155 | -- | (370) | |||
| Income before income taxes | 12,954 | 15,180 | 13,418 | |||
| Income tax expense | (1,174) | (1,330) | (1,204) | |||
| Net income | 11,780 | 13,850 | 12,214 | |||
| Earnings per ADS | ||||||
| - Basic | 0.27 | 0.32 | 0.27 | |||
| - Diluted | 0.25 | 0.30 | 0.25 | |||
| Weighted average ADS equivalent: [1] | ||||||
| - Basic | 43,848,200 | 43,160,918 | 45,509,278 | |||
| - Diluted | 46,562,429 | 45,685,683 | 48,066,210 | |||
| Share-based compensation was allocated in operating expenses as follows: | ||||||
| Research and development | 578 | 371 | 333 | |||
| Selling, general and administrative | 468 | 372 | 358 | |||
| [1] Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents six ordinary shares. | ||||||
| RDA MICROELECTRONICS, INC. | ||
| Consolidated Statement of Operations Information | ||
| Six Months Ended | ||
| June 30, 2011 | June 30, 2012 | |
| (unaudited) | (unaudited) | |
| (amounts in thousands of USD, except number of shares and per share data) | ||
| Revenue | 122,575 | 166,365 |
| Cost of revenue | (81,226) | (111,217) |
| Gross profit | 41,349 | 55,148 |
| Operating expenses: | ||
| Research and development | (14,486) | (20,728) |
| Selling, general and administrative | (6,247) | (7,149) |
| Total operating expenses | (20,733) | (27,877) |
| Operating income | 20,616 | 27,271 |
| Other income (expense): | ||
| Interest income | 579 | 1,697 |
| Other income (expense), net | 141 | (370) |
| Income before income taxes | 21,336 | 28,598 |
| Income tax expense | (1,980) | (2,534) |
| Net income | 19,356 | 26,064 |
| Earnings per ADS | ||
| - Basic | 0.44 | 0.59 |
| - Diluted | 0.41 | 0.56 |
| Weighted average ADS equivalent: | ||
| - Basic | 43,816,082 | 44,335,098 |
| - Diluted | 46,669,754 | 46,875,947 |
| Share-based compensation was allocated in operating expenses as follows: | ||
| Research and development | 1,146 | 704 |
| Selling, general and administrative | 820 | 730 |
| 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 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 March 31, 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 | 8,264 | 11% | 371 | 480 | 1% | 7,413 | 10% | |||||||
| Selling, general and administrative | 3,192 | 4% | 372 | -- | 1% | 2,820 | 3% | |||||||
| Total operating expenses | 11,456 | 15% | 743 | 480 | 2% | 10,233 | 13% | |||||||
| Operating income | 14,410 | 20% | 743 | 480 | 1% | 15,633 | 21% | |||||||
| Net income | 13,850 | 19% | 743 | 480 | 1% | 15,073 | 20% | |||||||
| Diluted earnings per ADS | 0.30 | 0.02 | 0.01 | 0.33 | ||||||||||
| Weighted average ADS-Diluted | 45,685,683 | 45,685,683 | 45,685,683 | 45,685,683 | ||||||||||
| Quarter Ended June 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 | 7,223 | 11% | 578 | -- | 1% | 6,645 | 10% | |||||||
| Selling, general and administrative | 3,431 | 5% | 468 | -- | 1% | 2,963 | 4% | |||||||
| Total operating expenses | 10,654 | 16% | 1,046 | -- | 2% | 9,608 | 14% | |||||||
| Operating income | 12,330 | 18% | 1,046 | -- | 2% | 13,376 | 20% | |||||||
| Net income | 11,780 | 17% | 1,046 | -- | 2% | 12,826 | 19% | |||||||
| Diluted earnings per ADS | 0.25 | 0.02 | -- | 0.27 | ||||||||||
| Weighted average ADS outstanding-Diluted | 46,562,429 | 46,562,429 | 46,562,429 | 46,562,429 | ||||||||||
| Six Months 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 | 20,728 | 12% | 704 | 2,745 | 2% | 17,279 | 10% | |||||||
| Selling, general and administrative | 7,149 | 4% | 730 | -- | 0% | 6,419 | 4% | |||||||
| Total operating expenses | 27,877 | 16% | 1,434 | 2,745 | 2% | 23,698 | 14% | |||||||
| Operating income | 27,271 | 16% | 1,434 | 2,745 | 2% | 31,450 | 18% | |||||||
| Net income | 26,064 | 16% | 1,434 | 2,745 | 2% | 30,243 | 18% | |||||||
| Diluted earnings per ADS | 0.56 | 0.03 | 0.06 | 0.65 | ||||||||||
| Weighted average ADS outstanding-Diluted | 46,875,947 | 46,875,947 | 46,875,947 | 46,875,947 | ||||||||||
| Six Months Ended June 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 | 14,486 | 12% | 1,146 | -- | 1% | 13,340 | 11% | |||||||
| Selling, general and administrative | 6,247 | 5% | 820 | -- | 1% | 5,427 | 4% | |||||||
| Total operating expenses | 20,733 | 17% | 1,966 | -- | 2% | 18,767 | 15% | |||||||
| Operating income | 20,616 | 17% | 1,966 | -- | 2% | 22,582 | 19% | |||||||
| Net income | 19,356 | 16% | 1,966 | -- | 2% | 21,322 | 18% | |||||||
| Diluted earnings per ADS | 0.41 | 0.04 | -- | 0.45 | ||||||||||
| Weighted average ADS outstanding-Diluted | 46,669,754 | 46,669,754 | 46,669,754 | 46,669,754 | ||||||||||