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RDA MICROELECTRONICS ADS
Symbol U : RDA
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RDA Microelectronics Announces Fourth Quarter and Full Year 2012 Financial Results

2013-02-07 05:00 ET - News Release

SHANGHAI, China, Feb. 7, 2013 (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 fourth quarter and full year ended December 31, 2012.

Fiscal Year 2012 Financial Highlights (in US dollars):

  • Revenue was $391.3 million, increasing 35.5% from the $288.9 million in the previous year.
  • Gross margin was 32.2% compared to 34.5% in 2011.
  • Cash generated from operations was $59.1 million, compared to $63.2 million in the previous year.
  • GAAP net income was $52.9 million, or $1.12 per diluted ADS, compared to $51.6 million, or $1.11 per diluted ADS, in 2011.
  • Non-GAAP net income was $63.4 million, or $1.34 per diluted ADS, compared to $55.5 million, or $1.19 per diluted ADS in the previous year.
  • The Company paid a special dividend of $0.20 per ordinary share, or $1.20 per ADS, returning $55.6 million of capital to shareholders.

Fourth Quarter Financial Highlights (in US dollars):

  • Revenue was $115.6 million, exceeding the Company's guidance of $100 million to $110 million, and representing an increase of 5.8% from the $109.3 million in the previous quarter and 40.4% from the $82.4 million in the fourth quarter of 2011.
  • Gross margin was 31.7%, compared to 31.1% in the previous quarter and 35.3% in the fourth quarter of 2011.
  • GAAP net income was $13.4 million, or $0.28 per diluted ADS, compared to $13.5 million, or $0.28 per diluted ADS, in the previous quarter and $16.6 million, or $0.37 per diluted ADS, in the fourth quarter of 2011.
  • Non-GAAP net income was $16.4 million, or $0.34 per diluted ADS, compared to $16.7 million, or $0.35 per diluted ADS, in the previous quarter and $17.4 million, or $0.39 per diluted ADS, in the fourth quarter of 2011.

For a reconciliation of non-GAAP financial measures, please refer to the tables included in this press release.

Fourth Quarter and Recent Business Highlights:

  • Surpassed 15 million baseband units shipped per month beginning in November 2012.
  • The single chip RDA8851 exceeded 50% of total baseband shipments in the quarter.
  • Launched high band WCDMA PA products for band 1 (2100 MHz) and band 2 (1900 MHz) applications to complete the Company's 3G WCDMA PA offering for emerging markets.

Commenting on the results, Vincent Tai, chairman and CEO of RDA Microelectronics, said, "Full year 2012 revenue grew 36 percent over 2011, reflecting strong customer adoption of our baseband solutions combined with market share gains for our GSM PAs as well as ramping of our products targeting the 3G and smartphone markets. Our baseband shipments increased significantly in the fourth quarter, exceeding 15 million units per month beginning in November from a run rate of 10 million units per month achieved in August. This rapid ramping of shipments is due to our market share gains for sub-$10 feature phones in emerging markets outside of China. As a result, we exceeded our guidance during the quarter. Additionally, shipments of our high value RDA8851 baseband SoC reached crossover by exceeding more than 50% of our total baseband shipments. I believe we can continue to gain market share in the high volume ultra-low cost feature phone market in 2013 as we further penetrate local tier-one manufacturers."

Mr. Tai further commented, "Our continued progress and execution within the GSM baseband market also allows us to leverage this success in the smartphone market with the same customer base and platforms. We have begun penetrating this segment of the market with new products, like our WiFi combo chip, and anticipate gaining additional traction with our EDGE baseband and multi-mode PAs that are expected to begin sampling in early 2013. These products target established, high volume markets where RDA has a strong local position and differentiated solutions that offer customers exceptional performance and integration at a low cost. We anticipate that many of our RDA8851 baseband customers will be early adopters of these future products.

"Looking forward, we continue to focus on delivering strong profitability, cash flow and margin improvement, while investing in product development to drive our future growth in the smartphone, 3G, 4G and TV markets. Our consistent execution across all product categories serves as proof of RDA's ability to extend our successful track record into other growing markets with our established customer relationships, strong market position and technology innovations."

Fourth Quarter Operating Summary:

  • Revenue was $115.6 million, compared to $109.3 million in the previous quarter and $82.4 million in the fourth quarter of 2011. The growth in revenue was mainly driven by continued market share gains from baseband.
  • Gross margin was 31.7%, compared with 31.1% in the previous quarter and 35.3% in the fourth quarter of 2011. The sequential increase in gross margin reflected increasing shipments of the higher margin baseband product RDA8851. The decrease in gross margin over the prior year period was primarily due to the addition of baseband revenue, which consisted predominately of products with lower than consolidated average corporate gross margin.
  • R&D expenses were $17.8 million, compared to $16.0 million in the previous quarter and $8.7 million in the fourth quarter of 2011. SG&A expenses were $5.8 million, compared to $4.0 million in the previous quarter and $3.9 million in the prior year period.
  • The sequential increases in R&D and SG&A expenses reflect performance-based employee compensation expenses accrued in the quarter.
  • GAAP net income was $13.4 million, compared to $13.5 million in the previous quarter and $16.6 million in the fourth quarter of 2011.
  • Non-GAAP net income was $16.4 million, compared to $16.7 million in the previous quarter and $17.4 million in the fourth quarter of 2011.

Balance Sheet and Cash Flow Summary as of December 31, 2012:

  • Cash, cash equivalents and short-term investments were $117.5 million, compared to $167.0 million as of September 30, 2012. In the fourth quarter of 2012, the Company generated $8.7 million in cash from operations, compared to $10.8 million in the prior quarter. The Company also paid a one-time special cash dividend totaling $55.6 million on October 18, 2012.
  • Accounts receivable increased to $31.7 million, compared to $28.2 million as of September 30, 2012, reflecting higher sequential revenue.
  • Inventory decreased $6.5 million to $52.0 million from $58.5 million as of September 30, 2012. The decrease of inventory was mainly due to a strong sell-through during the quarter.
  • Accounts payable was $45.1 million, compared to $55.8 million as of September 30, 2012.

First Quarter 2013 Business Outlook:

For the first quarter of 2013, the Company expects revenue to be in the range of $96 million to $97 million, an increase of 33.3% to 34.7% year-over-year, and a decrease of 16.1% to 17.0% sequentially, reflecting historical seasonal patterns including the shortened sales period due to the Chinese New Year holiday. The Company expects gross margins to be approximately 32.0%.

Conference Call:

RDA Microelectronics will host a conference call and live webcast for analysts and investors at 8:00 a.m. Eastern Time on February 7, 2013 (9:00 p.m. in China).

  • For parties in the United States and Canada, please call 1-877-280-7280, conference code 87427013
  • For parties in Hong Kong, please call 800933597, conference code 87427013
  • Other International parties please call 1-678-825-8232, conference code 87427013

A telephone replay of the conference call will be available approximately two hours after the conference call and will be available for a period of 10 days. To hear the replay, parties in the United States and Canada should call 1-855-859-2056 and enter pass code 87427013, International parties should call 1-404-537-3406 and enter the same pass code. Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties on the Investor Relations section of the Company's website at http://www.rdamicro.com.

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      
 December 31, 2011September 30, 2012December 31, 2012
 (unaudited)(unaudited)(unaudited)
  (amounts in thousands of USD, except number of shares and
per share data)
ASSETS   
Current assets       
Cash and cash equivalents  66,178  58,848  75,091
Short-term investments-time deposit  76,009  108,098  42,377
Accounts receivable  43,415  28,229  31,722
Inventories   36,095  58,486  52,007
Prepaid expenses and other current assets  7,122  10,011  11,302
Deferred tax assets  14  3  --
Total current assets 228,833  263,675  212,499
       
Non-current assets       
Property, plant and equipment, Net  5,451  8,386  10,195
Intangible Assets  --  50,805  54,908
Goodwill  --  8,900  8,900
Other long-term assets  8,050  3,206  3,396
Investment   48  48  --
Total assets 242,382  335,020  289,898
       
LIABILITIES      
Current liabilities       
Accounts payable  32,543  55,808  45,063
Accrued expenses and other current liabilities  28,253  24,739  37,869
Deferred revenue  10,651  16,536  10,641
Dividend payable  --  55,946  --
Total current liabilities 71,447  153,029  93,573
    
Deferred tax Liability --  89  98
    
Total liabilities 71,447  153,118  93,671
    
Commitments and contingencies   
    
SHAREHOLDERS' EQUITY      
Ordinary shares  2,639  2,885  2,885
Additional paid-in capital  117,478  146,674  146,887
Recourse loans  (509)  (1,567)  (1,544)
Accumulated other comprehensive income  1,136  1,042  1,207
Treasury stock  (12,835)  (14,139)  (13,579)
Retained earnings  63,026  47,007  60,371
Total shareholders' equity 170,935  181,902  196,227
       
Total liabilities and shareholders' equity 242,382  335,020  289,898
       
RDA MICROELECTRONICS, INC.      
Consolidated Statement of Operations Information    
 Quarter Ended
 December 31, 2011September 30, 2012December 31, 2012
 (unaudited)(unaudited)(unaudited)
  (amounts in thousands of USD, except number of shares and per share data)
Revenue  82,355  109,308  115,605
Cost of revenue  (53,258)  (75,307)  (78,949)
Gross profit 29,097  34,001  36,656
       
Operating expenses:   
Research and development  (8,713)  (16,029)  (17,840)
Selling, general and administrative  (3,897)  (3,977)  (5,836)
Total operating expenses (12,610) (20,006) (23,676)
Operating income 16,487  13,995  12,980
Other income:      
Interest income  718  1,069  808
Impairment Loss  --  --  (48)
Other income(expense), net  486  (259)  425
Income before income taxes 17,691  14,805  14,165
Income tax expense  (1,129)  (1,328)  (801)
Net income 16,562  13,477  13,364
       
       
Earnings per ADS      
- Basic  0.39  0.30  0.29
- Diluted  0.37  0.28  0.28
       
Weighted average ADS equivalent: [1]      
- Basic  42,781,315  45,590,013  46,327,608
- Diluted  45,332,734  47,904,835  48,010,144
       
Share-based compensation was allocated in operating expenses as follows:      
Research and development  408  446  383
Selling, general and administrative  432  518  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  
 Year Ended
 December 31, 2011December 31, 2012
  (unaudited) (unaudited)
  (amounts in thousands of USD, except number of shares and per share data)
Revenue  288,862  391,279
Cost of revenue  (189,116)  (265,474)
Gross profit 99,746  125,805
     
Operating expenses:  
Research and development  (32,756)  (54,598)
Selling, general and administrative  (14,074)  (16,963)
Total operating expenses (46,830) (71,561)
Operating income 52,916  54,244
Other income(expense):    
Interest income  1,925  3,573
Impairment Loss  --  (48)
Other income (expense), net  1,460  (203)
Income before income taxes 56,301  57,566
Income tax expense  (4,671)  (4,662)
Net income 51,630  52,904
     
     
Earnings per ADS    
- Basic  43,757,127  45,135,321
- Diluted  46,467,593  47,405,084
     
Weighted average ADS equivalent:    
- Basic  1.18  1.17
- Diluted  1.11  1.12
     
     
Share-based compensation was allocated in operating expenses as follows:    
Research and development  2,053  1,532
Selling, general and administrative  1,828  1,679
     
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 December 31, 2012
 (unaudited)  
  % of Share-basedAmortization ofNon-GAAP % of Non-GAAP % of 
 GAAP Result Net RevenueCompensationIntangible AssetsNet RevenueResultsNet 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    0.02  0.05    0.34  
               
Weighted average ADS-Diluted  48,010,144    48,010,144  48,010,144    48,010,144  
               
 Quarter Ended September 30, 2012
 (unaudited)  
  % of Share-basedAmortization ofNon-GAAP % of Non-GAAP % of 
 GAAP Result Net RevenueCompensationIntangible AssetsNet RevenueResultsNet 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 December 31, 2011
 (unaudited)  
  % of Share-basedAmortization ofNon-GAAP % of Non-GAAP % of 
 GAAP Result Net RevenueCompensationIntangible AssetsNet RevenueResultsNet Revenue
Research and development  8,713 10%  408  --  0%  8,305 10%
Selling, general and administrative  3,897 5%  432  --  1%  3,465 4%
Total operating expenses
 
 12,610 15%  840  --  1%  11,770 14%
Operating income  16,487 20%  840  --  1%  17,327 21%
Net income   16,562 20%  840  --  1%  17,402 21%
               
Diluted earnings per ADS  0.37    0.02  --     0.39  
               
Weighted average ADS outstanding-Diluted  45,332,734    45,332,734  45,332,734    45,332,734  
               
               
 Year Ended December 31, 2012
 (unaudited)
  % of Share-basedAmortization ofNon-GAAP % of Non-GAAP % of 
 GAAP Result Net RevenueCompensationIntangible AssetsNet RevenueResultsNet Revenue
Research and development  54,598 14%  1,532  7,275 2%  45,791 12%
Selling, general and administrative  16,963 4%  1,679  --  1%  15,284 3%
Total operating expenses
 
 71,561 18%  3,211  7,275 3%  61,075 15%
Operating income  54,244 14%  3,211  7,275 3%  64,730 17%
Net income   52,904 14%  3,211  7,275 3%  63,390 17%
               
Diluted earnings per ADS  47,405,084    47,405,084  47,405,084    47,405,084  
               
Weighted average ADS outstanding-Diluted  1.12    0.07  0.15    1.34  
               
               
 Year Ended December 31, 2011
 (unaudited)  
  % of Share-basedAmortization ofNon-GAAP % of Non-GAAP % of 
 GAAP Result Net RevenueCompensationIntangible AssetsNet RevenueResultsNet Revenue
Research and development  32,756 11%  2,053  --  1%  30,703 10%
Selling, general and administrative  14,074 5%  1,828  --  0%  12,246 5%
Total operating expenses
 
 46,830 16%  3,881  --  1%  42,949 15%
Operating income  52,916 18%  3,881  --  1%  56,797 19%
Net income   51,630 18%  3,881  --  1%  55,511 19%
               
Diluted earnings per ADS  46,467,593    46,467,593  46,467,593    46,467,593  
               
Weighted average ADS outstanding-Diluted  1.11    0.08  --     1.19  
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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