Actions Semiconductor Reports Record Results for Fourth Quarter
and Full Year 2006
Q4 Net Revenues of $49.5 Million
2006 Net Revenues of $170.4 Million

ZHUHAI, China, February 6, 2007 - Actions Semiconductor Co., Ltd. (Nasdaq: ACTS), one of China’s leading fabless semiconductor companies that provides comprehensive mixed-signal system-on-a-chip (SoC) and multimedia digital signal processing (DSP) solutions for portable consumer electronics, today reported record financial results for the fourth quarter and year ended December 31, 2006.

All financial results are reported on U.S. GAAP basis.

Revenue for the fourth quarter of 2006 was $49.5 million, a 24% increase over revenue of $39.9 million for the fourth quarter of 2005, and an 8% increase over revenue of $45.7 million for the third quarter of 2006. Revenue for the year ended December 31, 2006 was $170.4 million, a 14% increase over revenue of $149.6 million for the year ended December 31, 2005.

Net income for the fourth quarter of 2006 was $21.3 million, or $0.25 per ADS, compared to $19.9 million, or $0.24 per ADS,for the fourth quarter of 2005, and compared to $20.5 million, or $0.24 per ADS, for the third quarter of 2006. Net income for the full year of 2006 was $74.8 million, compared to $73.6 million reported for the full year 2005. Net income per ADS was $0.87 for 2006 based on 86 million ADS, compared to the $0.91 per ADS reported for the full year 2005 based on 80.5 million ADS.

Actions Semiconductor reported operating margins of 43.1% and gross margins of 51.9% for the fourth quarter of 2006. For the full year of 2006, operating margin was 44.7%, and gross margin was 55.5%. The Company ended the year with $137.8 million in cash and cash equivalents, and $45.7 million in time deposits, which have original maturity of more than three months but less than one year.
 
“We achieved another year of record results in 2006 with revenues topping $170 million, unit shipments at all-time highs, and excellent market reception of our Series 9. We started to ship samples of our latest Series 13, which positions us for another year of continued market leadership,” commented Nan-Horng Yeh, Chief Executive Officer of Actions Semiconductor. “In fact, for 2006, Actions remained the clear market leader with the dominant market share position in terms of Personal Media Player SOC units shipped worldwide. In just the fourth quarter, Actions shipped in excess of 24 million units, which we believe accounted for approximately 50% of the units shipped worldwide.”

“In addition to delivering record revenues in 2006, we continued our track record of exceptional profitability and technology innovation,” continued Mr. Yeh. “Both annual gross and operating margins were at healthy levels: 55.5% and 44.7% respectively, again placing Actions in the upper tier of profitability for fabless semiconductor companies worldwide. On the technology front, samples distributed earlier this month of our Series 13 with full video functionality have been well-received. The Series 13 product family enhances Actions’ competitive position by expanding our higher end product offerings. We continued to make excellent progress in broadening and advancing our product mix, with over 60% of our fourth quarter revenues derived from sales of our 9 Series. In addition, we have completed the production transition of our products to 0.18 micron process technology, which will help us to maintain our excellent cost profile. We are optimistic about the tremendous opportunities that lie ahead, and look forward to working with our valued partners to continue building a world-class fabless consumer semiconductor company,” concluded Mr. Yeh.
 

Business Outlook

The following statements are based upon management’s current expectations. These statements are forward-looking, and actual results may differ materially. The company undertakes no obligation to update these statements.

For the quarter ended March 31, 2007, Actions Semiconductor estimates revenue in the range of $34 to $37 million, and, fully diluted earnings per ADS of $0.15 to $0.19.

Conference Call Details

The Actions Semiconductor Fourth Quarter teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Tuesday, February 6, 2007. To participate in the live call, analysts and investors should dial (800) 706-7745 or (617) 614-3472 and enter passcode 75524559 at least ten minutes prior to the call. Actions Semiconductor will also offer a live and archived webcast of the conference call, accessible from the “Investor Relations” section of the company’s website at www.actions-semi.com. An audio replay of the call will be available through February 13, 2007, by dialing (888) 286-8010 and entering the passcode: 51626654. Callers outside the U.S. and Canada may access the replay by dialing (617) 801-6888 and entering the passcode: 51626654.

About Actions Semiconductor

Actions Semiconductor is one of China's leading fabless semiconductor companies that provides mixed-signal and multimedia SoC solutions for portable consumer electronics. Actions Semiconductor products include SoCs, firmware, software, solution development kits, as well as detailed specifications of other required components and the providers of those components. Actions Semiconductor also provides total product and technology solutions that allow customers to quickly introduce new portable consumer electronics to the mass market in a cost effective way. The company is headquartered in Zhuhai, China, with offices in Beijing and Shenzhen. For more information, please visit the Actions Semiconductor website at http://www.actions-semi.com.
 

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995

Statements contained in this release that are not historical facts are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including financial projections and forecasts, involve risks and uncertainties that could cause Actions Semiconductor's actual results to differ materially from our current expectations. Factors that could cause Actions Semiconductor's results to differ materially from those set forth in these forward-looking statements include customers' cancellation or modification of their orders; our failure to accurately forecast demand for our products; the loss of, or a significant reduction in orders from, any of our significant customers; fluctuations in our operating results; our inability to develop and sell new products; defects in or failures of our products; the expense and uncertainty involved in our customer design-win efforts; the financial viability of the distributors of our products; consumer demand; worldwide economic and political conditions; fluctuations in our costs to manufacture our products; our reliance on third parties to manufacture, test, assemble and ship our products; our ability to retain and attract key personnel; our ability to compete with our competitors; and our ability to protect our intellectual property rights and not infringe the intellectual property rights of others. Other factors that may cause our actual results to differ from those set forth in the forward-looking statements contained in this press release and that may affect our prospects in general are described in our filings with the Securities and Exchange Commission, including our Registration Statement on Form F-1 related to our initial public offering and secondary offering. Actions Semiconductor undertakes no obligation to update or revise forward-looking statements to reflect subsequent events or changed assumptions or circumstances.

For More Information
 
Investor Contacts:
    
Suzanne Craig or Lisa Laukkanen
  
Calvin Lau
The Blueshirt Group
  
Director of Investor Relations
suzanne@blueshirtgroup.com
  
Actions Semiconductor
lisa@blueshirtgroup.com
  
+86-756 3392 353 *1018
415-217-4962 or 415-217-4967
    
   
Chung Hsu
   
Director of Business Development
   
Actions Semiconductor
   
Chung@actions-semi.com
   
+86-756 3392 353 *1015
 
 

Actions Semiconductor Co., Ltd.
CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
 
   
At December 31, 2006
 
At December 31, 2005
  
   
(unaudited)
 
(audited)
 
ASSETS
          
Current assets
          
Cash and cash equivalents
    
137,778
   
108,896
 
Time deposits
    
45,713
   
23,172
 
Restricted Cash
    
-
   
2,478
 
Marketable Securities
    
20,531
   
-
 
Accounts receivable
    
6,007
   
8,025
 
Notes receivable
    
2,154
   
1,722
 
Prepaid expenses and other current assets
    
6,413
   
1,973
 
Amount due from an affiliate
    
133
   
-
 
Inventories
    
6,280
   
7,023
 
Income tax recoverable
    
-
   
11
 
Deferred tax assets
    
626
   
528
 
Total current assets
    
225,635
   
153,828
 
               
Non current assets
              
Investment in an affiliate
    
1,469
   
500
 
Property, plant and equipment, net
    
6,749
   
2,360
 
Rental deposits
    
52
   
11
 
Deposit paid for acquisition of property, plant and equipment
    
91
   
-
 
Acquired intangiable assets, net
    
3,787
   
1,889
 
Total non current assets
    
12,148
   
4,760
 
               
               
TOTAL ASSETS
    
237,783
   
158,588
 
               
LIABILITIES AND SHAREHOLDER'S EQUITY
              
Current liabilities:
              
Accounts payable
    
15,715
   
13,086
 
Accrued expenses and other current liabilities
    
9,412
   
11,776
 
Other liabilities
    
692
   
71
 
Short-term bank loan
    
-
   
2,374
 
Income tax payable
    
2,258
   
-
 
Amount due to shareholders
    
10
   
-
 
 
                
Total current liabilities
    
28,087
   
27,307
 
               
               
Other liabilities
    
-
   
124
 
Total liabilities
    
28,087
   
27,431
 
Minority interest
    
486
   
582
 
               
Shareholders' equity
              
Ordinary shares
    
1
    
1
  
Additional paid-in capital
    
50,341
   
49,629
 
Accumulated other comprehensive income
    
4,396
   
1,224
 
Retained earnings
    
154,472
   
79,721
 
                 
Total shareholders' equity
    
209,210
   
130,575
 
               
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
    
237,783
   
158,588
 
 
              
 
Actions Semiconductor Co., Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands of U.S. dollars, except per share data)
 
   
Three months ended
 
Year ended
  
   
December 31,
2006
 
December 31,
2005
 
December 31,
2006
 
December 31,
2005
  
Net revenues
    
49,538
   
39,899
   
170,363
   
149,622
 
Cost of revenues
    
(23,818
)
  
(17,247
)
  
(75,773
)
  
(60,586
)
Gross profit
    
25,720
   
22,652
   
94,590
   
89,036
 
Other income
    
477
   
167
   
1,634
   
1,122
 
Operating expenses:
                          
Selling and marketing
    
(456
)
  
109
   
(1,570
)
  
(1,375
)
General and administrative
    
(2,227
)
  
(3,033
)
  
(8,996
)
  
(8,968
)
Research and development
    
(2,147
)
  
(1,324
)
  
(9,543
)
  
(7,825
)
Total operating expenses
    
(4,830
)
  
(4,248
)
  
(20,109
)
  
(18,168
)
Income from operations
    
21,367
   
18,571
   
76,115
   
71,990
 
Interest income
    
1,496
   
568
   
4,876
   
1,148
 
Interest expense
   
-
   
(77
)
  
(160
)
  
(77
)
Income before income taxes, equity in net loss of an affiliate and minority interests
    
22,863
   
19,062
   
80,831
   
73,061
 
Income taxes/benefit
    
(1,621
)
  
822
   
(6,020
)
  
526
 
Equity in net loss of an affiliate
    
(16
)
  
-
   
(156
)
  
-
 
Minority interests
    
38
   
18
   
96
   
18
 
Net income
    
21,264
   
19,902
   
74,751
   
73,605
 
                           
Net income per share:
                          
Basis and diluted per share:
    
0.04
    
0.04
    
0.14
    
0.15
  
                           
Basic and diluted (per ADS)
    
0.25
    
0.24
    
0.87
    
0.91
  
                           
Weighted-average shares used in computation
    
516,000,000
    
492,000,000
    
516,000,000
    
483,000,000
  
                           
Weighted-average ADS used in computation
   
86,000,000
    
82,000,000
    
86,000,000
    
80,500,000
  
 
Actions Semiconductor Co., Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands of U.S. dollars)
 
 
  
Year ended December 31, 2006
 
Year ended December 31, 2005
 
Operating activities:
  
 
  
 
  
Net income
   
74,751
   
73,605
 
Adjustments to reconcile net income to net cash provided by operating activities:
    
   
 
Depreciation and amortization of property, plant and equipment
    
991
   
459
 
Amortization of acquired intangible assets
    
990
   
239
 
Utilization of advance subsidy from local authorities of Zhuhai,
    the People's Republic of China (the "PRC")
    
(35
)
  
(77
)
Loss (Gain) on disposal of property, plant and equipment
   
65
   
(52
)
Minority interests
    
(96
)
  
(18
)
Deferred tax
   
(98
)
  
(521
)
Equity in net loss of an affiliate
    
156
   
-
 
Fair value change in marketable securities
    
(29
)
  
-
 
Changes in operating assets and liabilities:
    
   
 
Accounts receivable
    
2,086
   
(4,496
)
Notes receivable
    
(420
)
  
103
 
Inventories
    
911
   
(2,005
)
Prepaid expenses and other current assets
    
(4,030
)
  
(632
)
Amount due from an affiliate
    
(133
)
  
-
 
Income tax recoverable
    
11
   
(11
)
Accounts payable
    
2,184
   
3,243
 
Accrued expenses and other current liabilities
    
(2,776
)
  
7,328
 
Income tax payable
    
2,258
   
(25
)
 
    
 
    
 
  
Net cash provided by operating activities
    
76,786
   
77,140
 
 
    
   
 
Investing activities:
    
   
 
Investment in an affiliate
    
(1,125
)
  
(500
)
Capital contribution from a minority shareholder
    
-
   
600
 
Rental deposit paid
    
(41
)
  
-
 
Proceeds from disposal of property, plant and equipment
    
79
   
109
 
Increase in marketable securities
    
(20,502
)
  
-
 
Purchase of property, plant and equipment
    
(5,793
)
  
(1,429
)
Purchase of acquired intangible assets
    
(1,910
)
  
(1,697
)
Decrease(increase) in restricted cash
    
2,563
   
(2,478
)
Increase in time deposits
   
(21,471
)
  
(23,172
)
 
    
 
    
 
  
Cash used in investing activities
    
(48,200
)
  
(28,567
)
 
    
   
 
Financing activities:
    
   
 
Proceeds from short-term bank loans
    
5,291
   
2,374
 
Repayment of short-term bank loans
    
(7,665
)
  
-
 
Advance subsidy from local authorities of Zhuhai, the PRC
    
447
   
124
 
Issue of shares
    
-
   
44,630
 
Amount due to shareholders
    
77,377
   
-
 
Repayment of amount due to shareholders
    
(77,367
)
  
-
 
Dividend paid
    
-
   
(20,000
)
 
    
 
    
 
  
Cash (used in) provided by financing activities
    
(1,917
)
  
27,128
 
 
    
   
 
Effect of exchange rate changes
    
2,213
   
1,182
 
 
    
   
 
Net increase in cash and cash equivalents
    
28,882
   
76,883
 
 
    
   
 
Cash and cash equivalents at the beginning of the period
    
108,896
   
32,013
 
 
    
 
    
 
  
Cash and cash equivalents at the end of the period
    
137,778
   
108,896