Second Quarter Revenue Increased 13.5%
Sequentially and 16.9% Year-Over-Year Gross Margin
Expanded to 32.3% Declares $0.10 Per ADS Cash
Dividend for Third Quarter 2013
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 second
quarter ended June 30, 2013 and a recurring quarterly cash dividend
policy.
Second Quarter Financial Highlights (in
US dollars):
- Revenue was $110.3 million, within the Company's guidance of
$109 million to $111 million, and representing an increase of 13.5%
from the $97.1 million in the first quarter and 16.9% from the
$94.4 million in the second quarter of 2012.
- Gross margin was 32.3%, compared to 32.1% in the previous
quarter and 31.0% in the second quarter of 2012.
- GAAP net income was $13.7 million, or $0.29 per diluted ADS,
compared to $10.7 million, or $0.22 per diluted ADS in the previous
quarter and $12.2 million, or $0.25 per diluted ADS, in the second
quarter of 2012.
- Non-GAAP net income was $16.9 million, or $0.35 per diluted
ADS, compared to $13.7 million, or $0.28 per diluted ADS, in the
previous quarter and $15.2 million, or $0.32 per diluted ADS, in
the second quarter of 2012.
For a reconciliation of non-GAAP financial measures, please
refer to the tables included in this press release.
Second Quarter and Recent Business
Highlights:
- Secured SP3T switch design wins for 2G and 3G Samsung
smartphones, demonstrating RDA's commitment to grow its global
smartphone market share in emerging markets as well as developed
regions, such as Europe.
- Expanded sampling of the RDA8810 EDGE baseband smartphone
solution and introduced sampling of the RDA8811 EDGE baseband for
tablets.
- Introduced 802.11n WiFi combo chip integrating WiFi 802.11n,
Bluetooth and FM on a single die for smartphone and tablet
applications in China and the emerging markets.
In regards to the Company's second quarter financial results,
Vincent Tai, chairman and CEO of RDA Microelectronics commented,
"Second quarter revenue increased 17% over the prior year quarter
as a result of increased sales of our baseband products as well as
higher volumes of our WiFi combo chip. We are pleased with our
continued progress to penetrate the ultra-low cost feature phone
market with our highly integrated 2G baseband solution. The 8851,
which represents the large majority of our shipments, continues to
be well-received by customers as we increase our silicon content
and addressable market.
"To further expand our future growth opportunities, we have
sampled our 8810 EDGE baseband solution for low-cost smartphones.
In addition to the rapid growth of smartphones in China, this
product is well suited for emerging markets where EDGE is the
predominate network for low-cost smartphones. We remain on track to
reach volume shipments of our smartphone baseband in the fourth
quarter of this year.
"In addition to the smartphone market, we began sampling our
8811 EDGE product specifically designed to address significant
opportunities in the tablet market. Similar to its sister product,
RDA8811 is a highly integrated solution that incorporates an ARM®
Cortex®-A5 application processor with the EDGE modem on a single
chip, which provides significant competitive advantages. RDA is
once again offering the highest level of product integration
available in the market. We also recently launched our second
generation WiFi combo chip, which integrates WiFi 802.11n,
Bluetooth and FM on a single die for both smartphone and tablet
applications.
"These recent product introductions serve as good examples of
RDA's ability to leverage our advanced R&D capabilities and
broad range of IP to efficiently develop products and aggressively
penetrate large and growing markets. We also remain on track to
begin sampling our WCDMA baseband by year-end and continue to make
further progress on our TD-SCDMA and LTE solutions."
Commenting on the dividend declaration, Mr. Tai concluded, "We
are also pleased to announce a recurring quarterly dividend for RDA
shareholders. This decision reflects our confidence in the
Company's business model and sustainable free cash flow to not only
support our growth initiatives, but also return capital to our
investors on a regular basis."
Second Quarter Operating
Summary:
- Revenue was $110.3 million, compared to $97.1 million in the
previous quarter and $94.4 million in the second quarter of 2012.
The sequential increase in revenue mainly resulted from more
working days in the second quarter.
- Gross margin was 32.3%, compared to 32.1% in the previous
quarter and 31.0% in the second quarter of 2012. The sequential
increase in gross margin was due to ongoing product cost reduction
initiatives. The increase in gross margin over the prior year
period was driven by increasing shipments of the higher margin
RDA8851 baseband solution.
- R&D expenses were $17.7 million, compared to $15.9 million
in the previous quarter and $12.5 million in the second quarter of
2012. The increase in R&D was mainly due to higher tape-out
expenses for new product development as well as higher employee
compensation costs.
- SG&A expenses were $4.5 million, compared with $4.3 million
in the previous quarter and $4.0 million in the prior year
period.
- Non-GAAP net income was $16.9 million, compared to $13.7
million in the previous quarter and $15.2 million in the second
quarter of 2012.
Balance Sheet and Cash Flow Summary as of
June 30,
2013:
- Cash, cash equivalents and short-term investments increased to
$122.9 million, compared to $114.2 million as of March 31, 2013. In
the second quarter of 2013, the Company generated $16.8 million in
cash from operations, compared to $1.9 million used in the prior
quarter.
- Repurchased 281,488 shares of ADS's for $2.9 million under the
Company's stock repurchase authorization during the quarter.
- Accounts receivable was $41.8 million, compared to $39.8
million as of March 31, 2013, reflecting higher revenue during the
period.
- Inventory decreased $3.6 million to $56.1 million.
- Accounts payable was $47.6 million, compared to $59.0 million
as of March 31, 2013.
Dividend Policy and First Quarterly Pay-Out
The Board of Directors of the Company approved a new dividend
policy, pursuant to which, starting from the third quarter of 2013,
the Company will issue a recurring cash dividend every quarter in
an amount to be determined by the Board of Directors based on the
Company's financial performance and cash position in the preceding
quarters.
Under this policy, the Board declared the Company's first
quarterly cash dividend of $0.10 per ADS, each representing six
ordinary shares of the Company, for the third quarter of 2013. The
cash dividend will be payable on September 20, 2013 to shareholders
of record at the close of business on August 30, 2013. Dividends to
be paid to the Company's ADS holders through the depositary bank
will be subject to the terms of the deposit agreement, including
the fees and expenses payable thereunder.
Third Quarter
2013 Business
Outlook:
For the third quarter of 2013, the Company expects revenue to be
in the range of $105 million to $115 million. The Company expects
gross margins to be approximately 32.6 %.
Conference Call:
RDA Microelectronics will host a conference call and live
webcast for analysts and investors at 8:00 a.m. Eastern Time on
Tuesday, August 6, 2013 (8:00 p.m. in Shanghai, China).
- For parties in the United States and Canada, please call
1-877-280-7280, conference code 12417207
- For parties in Hong Kong, please call 800933597, conference
code 12417207
- Other International parties please call 1-678-825-8232,
conference code 12417207
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 12417207, 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 Balance
Sheet Information |
|
June 30, 2012 |
March 31, 2013 |
June 30, 2013 |
|
(unaudited) |
(unaudited) |
(unaudited) |
|
(amounts in thousands of USD,
except number of shares and per share data) |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
55,550 |
71,727 |
69,255 |
Short-term investments-time
deposit |
103,459 |
42,476 |
53,691 |
Accounts receivable |
21,516 |
39,778 |
41,808 |
Inventories |
44,561 |
59,735 |
56,106 |
Prepaid expenses and other
current assets |
6,524 |
11,662 |
8,398 |
Deferred tax assets |
5 |
-- |
-- |
Total current
assets |
231,615 |
225,378 |
229,258 |
|
|
|
|
Non-current assets |
|
|
|
Property, plant and
equipment, Net |
8,305 |
10,012 |
10,291 |
Intangible Assets |
52,595 |
52,111 |
49,801 |
Goodwill |
8,900 |
8,900 |
8,900 |
Other long-term assets |
2,079 |
3,695 |
4,903 |
Investment |
48 |
-- |
-- |
Total assets |
303,542 |
300,096 |
303,153 |
|
|
|
|
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
54,015 |
58,965 |
47,575 |
Accrued expenses and other
current liabilities |
19,266 |
24,776 |
25,054 |
Deferred revenue |
6,623 |
9,098 |
9,975 |
Total current
liabilities |
79,904 |
92,839 |
82,604 |
|
|
|
|
Other long-term liability |
-- |
-- |
521 |
Deferred tax Liability |
95 |
92 |
83 |
|
|
|
|
Total liabilities |
79,999 |
92,931 |
83,208 |
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
Ordinary shares |
2,820 |
2,885 |
2,891 |
Additional paid-in capital |
144,821 |
146,734 |
147,969 |
Recourse loans |
(1,301) |
(2,106) |
(2,241) |
Accumulated other comprehensive
income |
1,083 |
1,260 |
1,567 |
Treasury stock |
(12,969) |
(12,687) |
(15,023) |
Retained earnings |
89,089 |
71,079 |
84,782 |
Total shareholders'
equity |
223,543 |
207,165 |
219,945 |
|
|
|
|
Total liabilities and shareholders'
equity |
303,542 |
300,096 |
303,153 |
|
|
|
|
RDA MICROELECTRONICS,
INC. |
Consolidated Statement of
Operations Information |
|
Quarter
Ended |
|
June
30, 2012 |
March
31, 2013 |
June
30, 2013 |
|
(unaudited) |
(unaudited) |
(unaudited) |
|
(amounts in thousands of USD,
except number of shares and per share data) |
Revenue |
94,370 |
97,146 |
110,294 |
Cost of revenue |
(65,088) |
(65,922) |
(74,618) |
Gross profit |
29,282 |
31,224 |
35,676 |
|
|
|
|
Operating expenses: |
|
|
|
Research and development |
(12,464) |
(15,922) |
(17,669) |
Selling, general and administrative |
(3,957) |
(4,306) |
(4,467) |
Total operating
expenses |
(16,421) |
(20,228) |
(22,136) |
Operating income |
12,861 |
10,996 |
13,540 |
Other income: |
|
|
|
Interest income |
927 |
766 |
810 |
Other income (expense),
net |
(370) |
20 |
768 |
Income before income
taxes |
13,418 |
11,782 |
15,118 |
Income tax expense |
(1,204) |
(1,074) |
(1,414) |
Net income |
12,214 |
10,708 |
13,704 |
|
|
|
|
|
|
|
|
Earnings per ADS |
|
|
|
- Basic |
0.27 |
0.23 |
0.30 |
- Diluted |
0.25 |
0.22 |
0.29 |
|
|
|
|
Weighted average ADS equivalent: [1] |
|
|
|
- Basic |
45,509,278 |
46,405,847 |
46,399,565 |
- Diluted |
48,066,210 |
48,119,292 |
48,015,470 |
|
|
|
|
Share-based compensation was
allocated in operating expenses as follows: |
|
|
|
Research and development |
333 |
357 |
468 |
Selling, general and administrative |
358 |
373 |
431 |
|
|
|
|
[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, 2012 |
June
30, 2013 |
|
(unaudited) |
(unaudited) |
|
(amounts in thousands of USD,
except number of shares and per share data) |
Revenue |
166,365 |
207,440 |
Cost of revenue |
(111,217) |
(140,540) |
Gross profit |
55,148 |
66,900 |
|
|
|
Operating expenses: |
|
|
Research and development |
(20,728) |
(33,591) |
Selling, general and administrative |
(7,149) |
(8,773) |
Total operating
expenses |
(27,877) |
(42,364) |
Operating income |
27,271 |
24,536 |
Other income (expense): |
|
|
Interest income |
1,697 |
1,576 |
Other income (expense),
net |
(370) |
788 |
Income before income
taxes |
28,598 |
26,900 |
Income tax expense |
(2,534) |
(2,488) |
Net income |
26,064 |
24,412 |
|
|
|
|
|
|
Earnings per ADS |
|
|
- Basic |
0.59 |
0.53 |
- Diluted |
0.56 |
0.51 |
|
|
|
Weighted average ADS equivalent: |
|
|
- Basic |
44,335,098 |
46,402,706 |
- Diluted |
46,875,947 |
48,067,381 |
|
|
|
|
|
|
|
|
|
Share-based compensation was
allocated in operating expenses as follows: |
|
|
Research and development |
704 |
825 |
Selling, general and administrative |
730 |
804 |
|
|
|
|
|
|
|
|
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, 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 |
17,669 |
16% |
468 |
2,265 |
2% |
14,936 |
13% |
Selling, general and administrative |
4,467 |
4% |
431 |
-- |
0% |
4,036 |
4% |
Total operating expenses |
22,136 |
20% |
899 |
2,265 |
3% |
18,972 |
17% |
|
|
|
|
|
|
|
|
Operating income |
13,540 |
12% |
899 |
2,265 |
3% |
16,704 |
15% |
Net income |
13,704 |
12% |
899 |
2,265 |
3% |
16,868 |
15% |
|
|
|
|
|
|
|
|
Diluted earnings per ADS |
0.29 |
|
0.01 |
0.05 |
|
0.35 |
|
|
|
|
|
|
|
|
|
Weighted average ADS-Diluted |
48,015,470 |
|
48,015,470 |
48,015,470 |
|
48,015,470 |
|
|
|
|
|
|
|
|
|
|
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
June 30, 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 |
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 outstanding-Diluted |
48,066,210 |
|
48,066,210 |
48,066,210 |
|
48,066,210 |
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 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 |
33,591 |
16% |
825 |
4,530 |
3% |
28,236 |
14% |
Selling, general and administrative |
8,773 |
4% |
804 |
-- |
0% |
7,969 |
4% |
Total operating expenses |
42,364 |
20% |
1,629 |
4,530 |
3% |
36,205 |
17% |
|
|
|
|
|
|
|
|
Operating income |
24,536 |
12% |
1,629 |
4,530 |
3% |
30,695 |
15% |
Net income |
24,412 |
12% |
1,629 |
4,530 |
3% |
30,571 |
15% |
|
|
|
|
|
|
|
|
Diluted earnings per ADS |
0.51 |
|
0.02 |
0.10 |
|
0.63 |
|
|
|
|
|
|
|
|
|
Weighted average ADS outstanding-Diluted |
48,067,381 |
|
48,067,381 |
48,067,381 |
|
48,067,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 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 |
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 |
|
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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