RDA Microelectronics (Nasdaq:RDA) ("RDA Microelectronics" or the
"Company"), a fabless semiconductor company that designs, develops
and markets wireless systems-on-chip and radio-frequency (RF)
semiconductors for cellular, connectivity and broadcast
applications, today announced its financial results for the first
quarter ended March 31, 2013.
First Quarter Financial Highlights (in
US dollars):
- Revenue was $97.1 million, exceeding the Company's guidance of
$96 million to $97 million, and representing an increase of 34.9%
from the $72.0 million in the first quarter of 2012.
- Gross margin was 32.1%, compared to 31.7% in the previous
quarter and 35.9% in the first quarter of 2012.
- GAAP net income was $10.7 million, or $0.22 per diluted ADS,
compared to $13.4 million, or $0.28 per diluted ADS, in the
previous quarter and $13.9 million, or $0.30 per diluted ADS, in
the first quarter of 2012.
- Non-GAAP net income was $13.7 million, or $0.28 per diluted
ADS, compared to $16.4 million, or $0.34 per diluted ADS, in the
previous quarter and $15.1 million, or $0.33 per diluted ADS, in
the first quarter of 2012.
For a reconciliation of non-GAAP financial measures, please
refer to the tables included in this press release.
First Quarter and Recent Business
Highlights:
- Began sampling the 40nm single-die RDA8810 EDGE smartphone
baseband.
- Launched the RDA6861, a multimode front-end module for
quad-band GSM/EDGE and WCDMA/CDMA/LTE handheld cellular
devices.
- Achieved volume production of EDGE transceivers for the Samsung
Galaxy S® III.
- Announced volume shipments of GPS low noise amplifiers for
Samsung 3G handsets.
- Reported volume shipments of DVB-S tuners to Samsung
Electro-Mechanics.
- Priced an offering of 9,602,000 American Depositary Shares
("ADSs") including the underwriter overallotment allocations, each
representing six ordinary shares of the Company. The Company
offered 100,000 ADSs and the selling shareholders offered 9,502,000
ADSs. The Company received no proceeds on the sale of shares by the
selling shareholders.
"First quarter revenue increased 35% year-over-year as a result
of strong baseband shipments and increasing volumes of our WiFi
combo chip for low-cost smartphones," said Vincent Tai, chairman
and CEO of RDA Microelectronics. "Our 8851 baseband, the most
integrated and advanced SoC for the high volume GSM handset market,
reached record shipment levels in March enabling us to strengthen
our position as the second leading supplier to China handset
manufacturers. We also further expanded our penetration of the
smartphone market with increasing shipments of our WiFi combo
solutions and TD-SCDMA PA products as market demand improved
following the Chinese New Year holiday.
"To further expand our smartphone silicon content, we began
sampling our RDA8810 EDGE baseband product. This product integrates
an ARM® Cortex®-A5 processor, dedicated modem processor, RF
transceiver and power management unit in a single 40nm CMOS die.
Our competitors require multiple dies and multiple chips to provide
equivalent functions. In addition to superior integration, the 8810
uses more advanced memory interfaces and handles 1080p video
playback at 30 frames per second. These powerful features enable
the highest performance at the lowest cost, which is ideally suited
for low-cost smartphone market as well as the rapidly growing
tablet market. We also launched sampling of the RDA6861, our first
multimode front-end module for GSM/EDGE and WCDMA/CDMA/LTE
handsets.
"The rapid adoption of our baseband and smartphone products is
proof of our ability to capture share of large and growing markets
with our advanced integration capabilities, technical expertise and
strong customer relationships. I believe we will be able to
replicate this success in the smartphone market with our EDGE and
multimode products as well as our future WCDMA and LTE offerings.
Our aggressive product roadmap and consistent execution have
positioned the Company to further extend our successful market
share strategy and expand into other high volume and high ASP
markets to drive growth."
First Quarter Operating
Summary:
- Revenue was $97.1 million, compared to $115.6 million in the
previous quarter and $72.0 million in the first quarter of 2012.
The sequential decline of 16.0% was mainly due to typical
seasonality related to the Chinese New Year holiday. The
year-over-year increase is due to the addition of baseband as well
as strong sales of GSM PAs and WiFi combo chips.
- Gross margin was 32.1%, compared with 31.7% in the previous
quarter and 35.9% in the first quarter of 2012. The sequential
increase in gross margin was driven by higher sales of the RDA8851,
which carries higher gross margin than the legacy baseband
products, and increased WiFi combo chip volumes. The decrease in
gross margin over the prior year period reflected lower GSM PA
gross margins.
- R&D expenses were $15.9 million, compared to $17.8 million
in the previous quarter and $8.3 million in the first quarter of
2012. The sequential decrease in R&D expenses was mainly due to
lower performance-based employee compensation costs partially
offset by higher IP expenses for LTE product development.
- SG&A expenses were $4.3 million, compared to $5.8 million
in the previous quarter and $3.2 million in the prior year period.
The sequential decrease in SG&A expenses was mainly due to
lower performance-based employee compensation costs.
- Non-GAAP net income was $13.7 million, compared to $16.4
million in the previous quarter and $15.1 million in the first
quarter of 2012.
Balance Sheet and Cash Flow Summary as of
March 31,
2013:
- Cash, cash equivalents and short-term investments were $114.2
million, compared to $117.5 million as of December 31, 2012. In the
first quarter of 2013, the Company used $1.9 million in cash from
operations, compared to $8.7 million generated in the prior
quarter. The sequential decrease in cash flow is mainly due to the
payment of accrued 2012 performance-based employee compensation
expenses and an increase in inventory.
- Accounts receivable increased to $39.8 million, compared to
$31.7 million as of December 31, 2012, reflecting accelerated order
builds late in the quarter following the Chinese New Year
holiday.
- Inventory increased $7.7 million to $59.7 million to support
expected order growth in the second quarter.
- Accounts payable was $59.0 million, compared to $45.1 million
as of December 31, 2012.
Second Quarter
2013 Business
Outlook:
For the second quarter of 2013, the Company expects revenue to
be in the range of $109 million to $111 million, an increase of
12.2% to 14.3% sequentially and an increase of 15.5% to 17.6%
year-over-year. The Company expects gross margins to be
approximately 32.3%.
Share Repurchase Program:
The Company also announced that it is extending the share
repurchase program under an open authorization originally approved
by the Company's board of directors in 2011. The Company had
previously fulfilled a $15 million repurchase authorization as of
March 2013. The Company will continue to repurchase ADSs in the
open market from time to time in amounts that it deems appropriate
under predetermined pricing and volume limitations.
Conference Call:
RDA Microelectronics will host a conference call and live
webcast for analysts and investors at 8:00 a.m. Eastern Time on May
7, 2013 (8:00 p.m. in Shanghai, China).
- For parties in the United States and Canada, please call
1-877-280-7280, conference code 33074276
- For parties in Hong Kong, please call 800933597, conference
code 33074276
- Other International parties please call 1-678-825-8232,
conference code 33074276
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 33074276, 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 system-on-chip and
radio-frequency semiconductors for cellular, connectivity and
broadcast applications. The Company's product portfolio currently
includes baseband, radio-frequency 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 Statement of
Operations Information |
|
Quarter
Ended |
|
March
31, 2012 |
December
31, 2012 |
March
31, 2013 |
|
(unaudited) |
(unaudited) |
(unaudited) |
|
(amounts in thousands of USD,
except number of shares and per share data) |
Revenue |
71,995 |
115,605 |
97,146 |
Cost of revenue |
(46,129) |
(78,949) |
(65,922) |
Gross profit |
25,866 |
36,656 |
31,224 |
|
|
|
|
Operating expenses: |
|
|
|
Research and development |
(8,264) |
(17,840) |
(15,922) |
Selling, general and administrative |
(3,192) |
(5,836) |
(4,306) |
Total operating
expenses |
(11,456) |
(23,676) |
(20,228) |
Operating income |
14,410 |
12,980 |
10,996 |
Other income: |
|
|
|
Interest income |
770 |
808 |
766 |
Impairment Loss |
-- |
(48) |
-- |
Other income(expense), net |
-- |
425 |
20 |
Income before income
taxes |
15,180 |
14,165 |
11,782 |
Income tax expense |
(1,330) |
(801) |
(1,074) |
Net income |
13,850 |
13,364 |
10,708 |
|
|
|
|
|
|
|
|
Earnings per ADS |
|
|
|
- Basic |
0.32 |
0.29 |
0.23 |
- Diluted |
0.30 |
0.28 |
0.22 |
|
|
|
|
Weighted average ADS equivalent: [1] |
|
|
|
- Basic |
43,160,918 |
46,327,608 |
46,405,847 |
- Diluted |
45,685,683 |
48,010,144 |
48,119,292 |
|
|
|
|
Share-based compensation was
allocated in operating expenses as follows: |
|
|
|
Research and development |
371 |
383 |
357 |
Selling, general and administrative |
372 |
431 |
373 |
|
|
|
|
[1] Assumes all outstanding
ordinary shares are represented by ADSs. Each ADS represents
six ordinary shares. |
|
|
|
|
RDA MICROELECTRONICS,
INC. |
Consolidated Balance
Sheet Information |
|
March 31, 2012 |
December 31, 2012 |
March 31, 2013 |
|
(unaudited) |
(unaudited) |
(unaudited) |
|
(amounts in thousands of USD,
except number of shares and per share data) |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
66,856 |
75,091 |
71,727 |
Short-term investments-time deposit |
76,036 |
42,377 |
42,476 |
Accounts receivable |
24,114 |
31,722 |
39,778 |
Inventories |
29,298 |
52,007 |
59,735 |
Prepaid expenses and other current
assets |
5,895 |
11,302 |
11,662 |
Deferred tax assets |
8 |
-- |
-- |
Total current
assets |
202,207 |
212,499 |
225,378 |
|
|
|
|
Non-current assets |
|
|
|
Property, plant and
equipment, Net |
5,547 |
10,195 |
10,012 |
Intangible Assets |
55,327 |
54,908 |
52,111 |
Goodwill |
8,900 |
8,900 |
8,900 |
Other long-term assets |
1,266 |
3,396 |
3,695 |
Investment |
48 |
-- |
-- |
Total assets |
273,295 |
289,898 |
300,096 |
|
|
|
|
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
34,546 |
45,063 |
58,965 |
Accrued expenses and other current
liabilities |
18,197 |
37,869 |
24,776 |
Deferred revenue |
9,590 |
10,641 |
9,098 |
Total current
liabilities |
62,333 |
93,573 |
92,839 |
|
|
|
|
Deferred tax Liability |
69 |
98 |
92 |
|
|
|
|
Total liabilities |
62,402 |
93,671 |
92,931 |
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
Ordinary shares |
2,819 |
2,885 |
2,885 |
Additional paid-in capital |
144,112 |
146,887 |
146,734 |
Recourse loans |
(1,174) |
(1,544) |
(2,106) |
Accumulated other comprehensive
income |
1,148 |
1,207 |
1,260 |
Treasury stock |
(12,887) |
(13,579) |
(12,687) |
Retained earnings |
76,875 |
60,371 |
71,079 |
Total shareholders'
equity |
210,893 |
196,227 |
207,165 |
|
|
|
|
Total liabilities and shareholders'
equity |
273,295 |
289,898 |
300,096 |
|
|
|
|
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
March 31, 2013 |
|
(unaudited) |
|
|
% of |
Share-based |
Amortization of |
Non-GAAP % of |
Non-GAAP |
% of |
|
GAAP Result |
Net Revenue |
Compensation |
Intangible Assets |
Net Revenue |
Results |
Net Revenue |
Research and development |
15,922 |
16% |
357 |
2,265 |
3% |
13,300 |
13% |
Selling, general and administrative |
4,306 |
4% |
373 |
-- |
0% |
3,933 |
4% |
Total operating expenses |
20,228 |
20% |
730 |
2,265 |
3% |
17,233 |
17% |
|
|
|
|
|
|
|
|
Operating income |
10,996 |
11% |
730 |
2,265 |
3% |
13,991 |
14% |
Net income |
10,708 |
11% |
730 |
2,265 |
3% |
13,703 |
14% |
|
|
|
|
|
|
|
|
Diluted earnings per ADS |
0.22 |
|
0.01 |
0.05 |
|
0.28 |
|
|
|
|
|
|
|
|
|
Weighted average ADS-Diluted |
48,119,292 |
|
48,119,292 |
48,119,292 |
|
48,119,292 |
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31, 2012 |
|
(unaudited) |
|
|
% of |
Share-based |
Amortization of |
Non-GAAP % of |
Non-GAAP |
% of |
|
GAAP Result |
Net Revenue |
Compensation |
Intangible Assets |
Net Revenue |
Results |
Net Revenue |
Research and development |
17,840 |
15% |
383 |
2,265 |
2% |
15,192 |
13% |
Selling, general and administrative |
5,836 |
5% |
431 |
-- |
1% |
5,405 |
4% |
Total operating expenses |
23,676 |
20% |
814 |
2,265 |
3% |
20,597 |
17% |
|
|
|
|
|
|
|
|
Operating income |
12,980 |
11% |
814 |
2,265 |
3% |
16,059 |
14% |
Net income |
13,364 |
12% |
814 |
2,265 |
3% |
16,443 |
15% |
|
|
|
|
|
|
|
|
Diluted earnings per ADS |
0.28 |
|
0.01 |
0.05 |
|
0.34 |
|
|
|
|
|
|
|
|
|
Weighted average ADS-Diluted |
48,010,144 |
|
48,010,144 |
48,010,144 |
|
48,010,144 |
|
|
|
|
|
|
|
|
|
|
Quarter Ended
March 31, 2012 |
|
(unaudited) |
|
|
% of |
Share-based |
Amortization of |
Non-GAAP % of |
Non-GAAP |
% of |
|
GAAP Result |
Net Revenue |
Compensation |
Intangible Assets |
Net Revenue |
Results |
Net Revenue |
Research and development |
8,264 |
11% |
371 |
480 |
1% |
7,413 |
10% |
Selling, general and administrative |
3,192 |
5% |
372 |
-- |
1% |
2,820 |
4% |
Total operating expenses |
11,456 |
16% |
743 |
480 |
2% |
10,233 |
14% |
|
|
|
|
|
|
|
|
Operating income |
14,410 |
20% |
743 |
480 |
2% |
15,633 |
22% |
Net income |
13,850 |
19% |
743 |
480 |
2% |
15,073 |
21% |
|
|
|
|
|
|
|
|
Diluted earnings per ADS |
0.30 |
|
0.02 |
0.01 |
|
0.33 |
|
|
|
|
|
|
|
|
|
Weighted average ADS outstanding-Diluted |
45,685,683 |
|
45,685,683 |
45,685,683 |
|
45,685,683 |
|
CONTACT: Lily Dong, Chief Financial Officer
RDA Microelectronics, Inc.
+86-21-5027-1108
ir@rdamicro.com
or
Leanne Sievers, EVP
Shelton Group Investor Relations
949-224-3874
lsievers@sheltongroup.com
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