Actions Semiconductor Reports Second Quarter 2011 Results

ZHUHAI, China, August 9, 2011 /PRNewswire-Asia/ -- 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 its financial results for the second quarter ended June 30, 2011.

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

Revenue for the second quarter of 2011 was $10.5 million, as compared to revenue of $9.4 million for the first quarter of 2011, and $9.7 million for the second quarter of 2010.

Net income attributable to Actions Semiconductor's shareholders for the second quarter of 2011 was $0.5 million or $0.007 per ADS. This compares to net income attributable to Actions Semiconductor's shareholders of $5,000 or $0.00007 per ADS, for the first quarter of 2011, and a net loss attributable to Actions Semiconductor's shareholders of $0.4 million or $0.006 per ADS, for the second quarter of 2010.

Actions Semiconductor reported gross margin of 37.9% for the second quarter of 2011, compared to gross margin of 39.1% for the first quarter of 2011, and 39.6% for the second quarter of 2010. The Company ended the second quarter of 2011 with $30.7 million in cash and cash equivalents. Restricted cash, trading securities, and marketable securities, current and non-current, were $186.6 million at the end of the second quarter.

Since the share repurchase program commenced in 2007, the Company has invested approximately $39.9 million in repurchasing its shares. As of June 30, 2011, approximately 16.9 million American Depositary Shares (ADSs) were repurchased.

"Our sales were in line with expectations for the second quarter,” stated Mr. Niccolo Chen, CEO of Actions Semiconductor.  “Demand in our fast growing, automotive/boom box segment increased in what is typically a seasonally slower quarter.  We continued to enjoy leading market share in key business segments such as small color display MP3, QVGA MP4, and D1 PMP with gaming functions.  In the high end market segments, our Series 27 and 28 high definition products secured more than 10 design wins in the second quarter, and we saw continued interest from brand name customers in China.  Our newly launched Series 70 provides a superior performance to cost ratio for Android based smart handheld applications.  The Android based MID is in pilot production, and has already teamed up with one of China’s brand name customers.

“As we head into the second half of 2011, we remain encouraged by the traction and momentum we have gained with our new products and believe we are positioned for growth,” concluded Mr. Chen.

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 third quarter of fiscal year 2011 ending September 30, 2011, Actions Semiconductor estimates revenue in the range of $12.0 to $13.0 million, gross margin will be approximately 40% and operating expenses higher on a sequential basis.

Conference Call Details

Actions Semiconductor's second quarter 2011 teleconference and webcast is scheduled to begin at 5:30 p.m. Eastern Time, on Tuesday, August 9, 2011. To participate in the live call, analysts and investors should dial 888-846-5003 (within U.S.) or 480-629-9859 (outside U.S.) 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 to investors through August 19, 2011 by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering access code 4459538.

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. 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, Shanghai, 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. Such forward-looking statements include statements concerning signs of positive indicators in the industry for next year, growth in the market driven by continued proliferation of applications within the PMP market and incremental rebound of overall demand for these products, Actions Semiconductor's belief that it is positioned to capture some upside from these trends, and Actions Semiconductor's future expectations with respect to revenue, gross margin, operating expenses and share-based compensation expense.  Actions Semiconductor uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are estimates reflecting current assumptions, expectations and projections about future events and involve significant risks, both known and unknown, uncertainties and other factors that may cause Actions Semiconductor's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, 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 most recently filed Forms F-1, 20-F and 6-Ks. Other unknown or unpredictable factors also could have material adverse effects on Actions Semiconductor's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as required by law, Actions Semiconductor undertakes no obligation and does not intend to update or revise any forward-looking statement to reflect subsequent events or changed assumptions or circumstances.

Investor Contacts:

Lisa Laukkanen	Edward Chen
The Blueshirt Group	Investor Relations at Actions Semiconductor
lisa@blueshirtgroup.com	edward@actions-semi.com
415-217-4967	+86-756-3392353*1110

ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED BALANCE SHEET

(in thousands of U.S. dollars)

		At June 30,				At March 31,				At December 31,
		2011				2011				2010
		(unaudited)				(unaudited)				(audited)
ASSETS
Current assets:
Cash and cash equivalents			30,719				111,871				42,872
Time deposits			-				-				34
Restricted cash			36				-				-
Marketable securities ($14,680, $14,490 and $14,296 carried at fair value as of   June 30, 2011, March 31, 2011 and December 31, 2010 respectively)			171,026				80,931				164,336
Trading securities			557				543				535
Accounts receivable, net			1,776				1,831				1,844
Amount due from a related party			312				1,240				559
Amount due from equity method investees			93				90				104
Inventories			8,063				5,336				4,832
Prepaid expenses and other current assets			3,565				2,561				3,242
Deferred tax assets			261				231				399
Total current assets			216,408				204,634				218,757
Investment in equity method investees			14,448				7,666				6,401
Other investments			17,316				17,305				2,764
Marketable securities			14,989				25,166				24,831
Rental deposits			48				40				40
Property, plant and equipment, net			30,927				27,280				24,604
Land use right			1,578				1,566				1,554
Acquired intangible assets, net			5,574				5,721				4,318
Deposit paid for acquisition of intangible assets			1,100				1,100				2,408
Deferred tax assets			59				73				88
Goodwill			468				468				468
TOTAL ASSETS			302,915				291,019				286,233
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable			6,869				4,371				2,850
Accrued expenses and other current liabilities			6,232				4,862				7,247
Short-term bank loan			12,000				6,000
Other liabilities			2,145				2,479				2,502
Income tax payable			97				240				140
Deferred tax liabilities			388				265				446
Total current liabilities			27,731				18,217				13,185
Other liabilities											83
Deferred tax liabilities			2,544				2,438				2,286
Total liabilities			30,275				20,655				15,554
Equity:
Ordinary shares			1				1				1
Additional paid-in capital			21,220				21,695				24,252
Accumulated other comprehensive income			28,899				26,660				24,420
Retained earnings			222,549				222,037				222,032
Total Actions Semiconductor Co., Ltd. shareholders' equity			272,669				270,393				270,705
Noncontrolling interest			(29	)			(29	)			(26	)
Total equity			272,640				270,364				270,679
TOTAL LIABILITIES AND EQUITY			302,915				291,019				286,233

ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

(in thousands of U.S. dollars, except per share amounts)

		Three months ended				Three months ended				Six months ended				Six months ended
		June 30,				June 30,				June 30,				June 30,
		2011				2010				2011				2010
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Revenues:
Third-parties:
System-on-a-chip products			8,679				7,906				15,703				14,191
Semiconductor product testing services			99				36				179				58
			8,778				7,942				15,882				14,249
Related-parties:
System-on-a-chip products			1,699				1,720				3,961				3,303
Total revenues			10,477				9,662				19,843				17,552
Cost of revenues:
Third-parties:
System-on-a-chip products			(5,492	)			(4,780	)			(9,841	)			(8,573	)
Semiconductor product testing services			(54	)			(18	)			(96	)			(33	)
			(5,546	)			(4,798	)			(9,937	)			(8,606	)
Related-parties:
System-on-a-chip products			(960	)			(1,040	)			(2,269	)			(2,000	)
Total cost of revenues			(6,506	)			(5,838	)			(12,206	)			(10,606	)
Gross profit			3,971				3,824				7,637				6,946
Other operating income			405				341				622				474
Operating expenses:
Research and development			(5,590	)			(4,437	)			(10,647	)			(8,994	)
General and administrative			(2,226	)			(2,352	)			(3,921	)			(4,092	)
Selling and marketing			(327	)			(305	)			(592	)			(551	)
Total operating expenses			(8,143	)			(7,094	)			(15,160	)			(13,637	)
Loss from operations			(3,767	)			(2,929	)			(6,901	)			(6,217	)
Other income			1,316				452				2,427				482
Dividend income from an other investment			432				-				432				-
Fair value change in financial instruments			1				1				2				133
Interest income			3,025				2,244				5,857				4,678
Interest expense			(32	)			-				(51	)			-
Income(loss) before income taxes, equity in net loss of equity method investees and non-controlling interest			975				(232	)			1,766				(924	)
Income tax (expense) credit			(136	)			64				(394	)			34
Equity in net loss of equity method investees			(327	)			(273	)			(858	)			(425	)
Net income(loss)			512				(441	)			514				(1,315	)
Less: Net loss attributable to non-controlling interest			-				-				3				-
Net income(loss) attributable to Actions Semiconductor Co.,Ltd.			512				(441	)			517				(1,315	)
Net income(loss) per share: Basic
Net income(loss) attributable to Actions Semiconductor Co.,Ltd. Shareholders			0.001				(0.001	)			0.001				(0.003	)
Net income(loss) per share: Diluted
Net income(loss) attributable to Actions Semiconductor Co.,Ltd. Shareholders			0.001				(0.001	)			0.001				(0.003	)
Basic(per ADS)			0.007				(0.006	)			0.007				(0.018	)
Diluted (per ADS)			0.007				(0.006	)			0.007				(0.018	)
Weighted-average shares used in computation:
Basic			417,488,882				441,181,871				420,101,361				444,005,616
Diluted			433,424,029				441,181,871				436,864,716				444,005,616
Weighted-average ADS used in computation :
Basic			69,581,480				73,530,312				70,016,894				74,000,936
Diluted			72,237,338				73,530,312				72,810,786				74,000,936
Note: Equity compensation recorded in each
expense classification above is as follows:
Research and development			517				663				964				1,353
General and administrative			141				225				264				500
Selling and marketing			25				38				49				79
Cost of revenues			11				-				16				-

ACTIONS SEMICONDUCTOR CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

		Three months ended				Six months ended				Six months ended
		June 30,				June 30,				June 30,
		2011				2011				2010
		(unaudited)				(unaudited)				(unaudited)
Operating activities:
Net income (loss)			512				514				(1,315	)
Adjustments to reconcile net income (loss) to net cash provided by
Operating activities:
Depreciation of property, plant and equipment			440				903				936
Land use right			9				18				16
Allowance for doubtful accounts receivable			-				-				(102	)
Amortization of acquired intangible assets			376				778				984
Utilization of subsidy from local authorities of Beijing and Zhuhai, the People's Republic of China ("PRC")			(366	)			(523	)			(117	)
Write down of inventories			106				167				-
Loss on disposal of property, plant and equipment			7				7				53
Loss on disposal of intangible assets			2				2				-
Gain on disposal of other investment			(195	)			(195	)			(137	)
Equity in net loss of equity method investees			328				859				426
Equity compensation			694				1,293				1,932
Fair value change in trading securities			(1	)			(2	)			3
Deferred taxes			212				365				(21	)
Proceeds from disposal of trading securities			-				-				5
Purchase of trading securities			-				-				(470	)
Changes in operating assets and liabilities:
Accounts receivable			56				69				7
Amount due from a related party			928				247				73
Inventories			(2,783	)			(3,298	)			1,159
Amount due from an equity method investee			-				17				208
Prepaid expenses and other current assets			(972	)			(233	)			(1,116	)
Accounts payable			2,443				3,928				1,579
Accrued expenses and other current liabilities			4,330				3,885				(1,994	)
Income tax receivable			-				-				(188	)
Income tax payable			(144	)			(45	)			81
Deposit paid for acquisition of land use right			-				-				(901	)
Rental deposit refunded			(8	)			(8	)			(7	)
Net cash provided by operating activities			5,974				8,748				1,094
Investing activities:
Increase in an equity method investees			(7,076	)			(9,676	)			(600	)
Proceeds from the disposal of other investments			195				195				1,251
Purchase of other investments			-				(13,727	)			-
Proceeds from redemption of marketable securities			123,846				230,679				45,235
Purchase of marketable securities			(203,397	)			(225,646	)			(54,689	)
Proceeds from disposal of property, plant and equipment			1				1				-
Purchase of property, plant and equipment			(6,751	)			(11,068	)			(2,425	)
Purchase of intangible assets			(165	)			(1,154	)			(327	)
Deposit paid for acquisition of intangible assets			-				-				(1,100	)
Increase in restricted cash			(36	)			(36	)			-
Decrease in time deposits			-				34				15
Net cash used in  investing activities			(93,383	)			(30,398	)			(12,640	)
Financing activities:
Proceeds from short-term bank loans			6,000				12,000				-
Advance subsidy from local authorities of Shenzhen and Zhuhai, the PRC			-				16				79
Issuance of ordinary shares for share option plan			242				376				64
Repurchase of ordinary shares			(1,411	)			(4,701	)			(4,991	)
Net cash from (used in) financing activities			4,831				7,691				(4,848	)
Net decrease in cash and cash equivalents			(82,578	)			(13,959	)			(16,394	)
Cash and cash equivalents at the beginning of the period			111,871				42,872				87,706
Effect of exchange rate changes on cash			1,426				1,806				(1	)
Cash and cash equivalents at the end of the period			30,719				30,719				71,311