updated 2/22/2011 7:17:28 AM ET 2011-02-22T12:17:28

SHANGHAI, Feb. 22, 2011 (GLOBE NEWSWIRE) -- RDA Microelectronics, Inc. (Nasdaq:RDA), a fabless semiconductor company that designs, develops and markets radio-frequency and mixed-signal chips for cellular, broadcast and connectivity applications, today announced its financial results for the fourth quarter and full year ended December 31, 2010.

  • Revenue for the fourth quarter of 2010 was US$57.5 million, unchanged from US$57.5 million for the previous quarter, and an increase of 74.4% compared to US$33.0 million for the fourth quarter of 2009. For 2010, revenue was US$191.2 million, an increase of 61.5% compared to US$118.4 million for 2009.
     
  • Gross margin for the fourth quarter of 2010 was 32.4%, compared to 30.2% for the previous quarter, and 20.1% for the fourth quarter of 2009.
     
  • Adjusted (non-GAAP) net income, which excludes share-based compensation, was US$10.2 million for the fourth quarter of 2010, a 20.5% increase compared to US$8.5 million for the previous quarter, and a 703.4% increase compared to US$1.3 million for the fourth quarter of 2009. Adjusted (non-GAAP) net income for 2010 was US$27.5 million, an increase of 126.4% compared to US$12.1 million for 2009. Adjusted (non-GAAP) net income per diluted American Depository Share (ADS) for the fourth quarter of 2010 was US$0.24, compared to US$0.23 for the previous quarter and US$0.03 for the fourth quarter of 2009. Adjusted (non-GAAP) net income per ADS for 2010 was US$0.71, compared to US$0.34 for 2009. Please refer to the tables captioned "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.
     
  • U.S. GAAP net income for the fourth quarter of 2010 was US$2.5 million, compared to US$8.3 million for the previous quarter and US$1.0 million for the fourth quarter of 2009. The decrease from the previous quarter was attributable to the immediate recognition of US$6.9 million in share-based compensation expenses related to November 2009 grants of Restricted Share Units (RSUs) and January 2010 grants of RSUs and Restricted Shares (RS) following the completion of our Initial Public Offering (IPO) in November 2010.  U.S. GAAP net income for 2010 was US$19.1 million, compared to US$11.3 million for 2009.
     
  • The RSU grants in November 2009 and January 2010 and RS grants in January 2010 carried a qualified IPO performance condition. The associated share-based compensation expenses were immediately recognized upon the completion of our IPO in November 2010.
     
  • U.S. GAAP net income per diluted ADS for the fourth quarter of 2010 was US$0.05, compared to US$0.17 for the previous quarter and US$0.01 for the fourth quarter of 2009. The decrease from the previous quarter was due to the immediate recognition of share based compensation and the preferred share accretion prior to our IPO. Please refer to the table captioned "Pro-Forma for Conversion of Preferred Shares" at the end of this press release. For EPS calculation, preferred share accretion has stopped upon the conversion to common shares on November 10, 2010. U.S. GAAP net income per diluted ADS for 2010 was US$0.33, compared to US$0.19 for 2009.

"We are very pleased with our financial results in the fourth quarter, which was our first quarter as a publicly traded company," said Vincent Tai, chairman and CEO. "For the fourth quarter of 2010, we achieved 74.4% revenue growth year-over-year. Gross margin improved by more than two percentage points sequentially to 32.4%, due to significant cost reductions with the migration to advanced technologies and ramping volumes of new products that carry higher gross margins. During 2010, with enhanced products and customer support, we continued to expand the market share of our Bluetooth system-on-chip and ramped up innovative new products, such as our IPD Front End Module and Low Noise Block products."

"Looking ahead, we will continue to leverage our RF and mixed-signal design expertise to expand our highly integrated and innovative product offerings and provide more competitive solutions to our customers. We are encouraged that Chinese handset manufacturers continue to do well in emerging markets, which will be favorable for RDA going forward."    

Fourth Quarter 2010 Business Highlights

  • Ramped up shipments of Integrated Passive Device (IPD) Front End Modules and Low Noise Block (LNB) products
  • Obtained TD-SCDMA transceiver order from China Mobile through one of our baseband partners
  • Shifted majority of Bluetooth volume to 110nm process technology
  • Sampled new 55nm Bluetooth system-on-chip on schedule

Fourth Quarter 2010 Financial Summary:

  • Revenue in the fourth quarter of 2010 was US$57.5 million, compared with US$57.5 million in the previous quarter and US$33.0 million in the fourth quarter of 2009. The year-over-year revenue growth was primarily driven by share gains of existing products, the growth of the export market addressed by our customers and the ramp of our new products.
  • Gross margin in the fourth quarter of 2010 was 32.4%, compared with 30.2% in the previous quarter and 20.1% in the fourth quarter of 2009. The expansion from the previous quarter was primarily driven by cost reductions from process technology migration and a favorable product mix.
  • R&D expenses in the fourth quarter of 2010 were US$11.2 million, compared with US$6.3 million in the previous quarter and US$3.9 million in the fourth quarter of 2009. The increase was primarily due to US$4.1 million in share-based compensation recognized immediately upon the completion of our IPO in November 2010. Adjusted (non-GAAP) R&D expenses, which exclude share-based compensation, for the fourth quarter of 2010 increased by 7.7% from the previous quarter and by 75.8% year-over-year. The year-over-year increase in adjusted (non-GAAP) R&D expense was primarily due to our investment in new product development and the acquisition of intellectual property.
  • SG&A expenses in the fourth quarter of 2010 were US$5.0 million, compared with US$1.9 million in the previous quarter and US$1.5 million in the fourth quarter of 2009. The increase was primarily due to US$2.8 million in share-based compensation recognized immediately upon the completion of our IPO in November 2010.  Adjusted (non-GAAP) SG&A expense, which excludes share-based compensation, for the fourth quarter of 2010 increased by 1.3% from the previous quarter and by 28.5% year-over-year. The year-over-year increase in adjusted (non-GAAP) SG&A expense was mainly due to investments to expand our sales network and field engineering support.  

Please refer to the tables captioned "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

Selected Balance Sheet and Cash Flow Items:

  • As of December 31, 2010, cash and cash equivalents and short-term investments (time deposits with original maturity dates longer than three months and less than one year) were US$106.1 million, compared to US$34.1 million as of September 30, 2010 and US$26.0 million as of December 31, 2009. The increase between September 30, 2010 and December 31, 2010, primarily resulted from IPO proceeds. In the fourth quarter of 2010, we generated US$3.4 million cash from operations, an increase of 233.6% compared to US$1.0 million in the third quarter of 2010.  
  • As of December 31, 2010, accounts receivable was US$22.7 million, compared to US$18.5 million as of September 30, 2010, and US$4.6 million as of December 31, 2009. The increase from September 30, 2010 was primarily related to distributors choosing to take full 30-day credit terms.  
  • As of December 31, 2010, inventory was US$35.5 million, compared to US$28.4 million as of September 30, 2010, and US$25.4 million as of December 31, 2009. The increase from September 30, 2010 was primarily due to higher inventory build levels in anticipation of higher demand.
  • As of December 31, 2010, accounts payable was US$20.5 million, compared to US$17.8 million as of September 30, 2010, and US$20.2 million as of December 31, 2009. The decrease from December 31, 2009 was primarily due to prompt payment to suppliers.

First Quarter 2011 Business Outlook:

For the first quarter of 2011, we expect revenues to be in the range of $52 - $54 million, reflecting historical seasonal patterns during the first quarter of each year due to the Chinese New Year holiday and the resulting shortened sales period, as well as a modest component supply constraint related to our IPD Front End Module product. This constraint has already been resolved and we do not expect it to impact shipments beyond the first quarter of 2011. We expect gross margins to be in the range of 32.0 % - 33.0 %, as we continue to benefit from the migration to advanced process technologies. This outlook reflects our current and preliminary view and may be subject to change. Please see "Forward-Looking Statements" at the end of this press release.

Conference Call:

RDA Microelectronics management will host a conference call at 8:00 a.m. (Eastern)/5:00 a.m. (Pacific) on Tuesday, February 22, 2011, which is 9:00 p.m. (China/Hong Kong) on Tuesday, February 22, 2011, to discuss our financial results and recent business activities.  

  • Parties in the United States and Canada can access the conference call at 1-877-941-2321, conference code 4407231.
  • Parties in Hong Kong can access the conference call at 852-3009-5027, conference code 4407231.
  • Other international parties can access the call at 1-480-629-9714, conference code 4407231.

RDA Microelectronics will offer a live webcast of the conference call, which will also include forward-looking information. The webcast will be accessible from the "Investors" section of the company's website at www.rdamicro.com . The webcast will be archived for a period of 30 days. An audio replay of the conference call will also be available two hours after the call and will run for ten days. To hear the replay, parties in the United States and Canada should call 1-800-406-7325 and enter pass code 4407231. International parties should call 1-303-590-3030 and enter pass code 4407231.

About RDA Microelectronics

RDA Microelectronics is a fabless semiconductor company that designs, develops and markets radio-frequency and mixed-signal semiconductors. Our product portfolio currently includes power amplifiers, transceivers and front-end modules, FM radio receivers, set-top box tuners, analog mobile television receivers, walkie-talkie transceivers, LNB satellite down converters, and Bluetooth system-on-chips. For additional information, please see our 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 our anticipated growth strategies; our future results of operations and financial condition; economic conditions in China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the semiconductor industry; and other factors and risks detailed in our 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 we believe to be reliable but whose accuracy or completeness we cannot guarantee.  We undertake 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 our unaudited consolidated financial results presented in accordance with U.S. GAAP, we use 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.

We believe 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 GAAP financial measures, provide meaningful supplemental information regarding our performance and that both management and investors benefit from referring to these non-GAAP financial measures in assessing our historical performance and when planning and forecasting our performance in future periods. We believe that excluding share-based compensation expenses helps both management and investors to get a better understanding of our 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 all items that impact our operating expenses and net income for the period. In addition, our 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 we do. We compensate 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, 2009 September 30, 2010 December 31, 2010
  (unaudited) (unaudited) (unaudited)
  (amounts in thousands of USD, except number

of shares and per share data)

ASSETS      
Current assets       
Cash and cash equivalents  24,638  23,301  98,920
Short-term investments  1,318  10,776  7,142
Restricted cash  350  --  --
Accounts receivable  4,603  18,540  22,715
Inventories   25,403  28,425  35,494
Prepaid expenses and other current assets  1,330  1,314  1,580
Deferred tax assets  87  4  5
Total current assets  57,729  82,360  165,856
       
Non-current assets       
Property, plant and equipment, Net  2,318  2,193  2,201
Other long term receivable  39  81  62
Deferred tax assets  185  229  127
Total assets  60,271  84,863  168,246
       
LIABILITIES      
Current liabilities       
Accounts payable  20,183  17,827  20,524
Accrued expenses and other current liabilities 7,689 10,152 12,935
Deferred revenue  5,419  7,830  6,722
Total current liabilities  33,291  35,809  40,181
Total liabilities  33,291  35,809  40,181
     
CONVERTIBLE REDEEMABLE PREFERRED SHARES    
Series A Preferred Share  12,880  12,880  --
Series B Preferred Share  6,281  6,281  --
Series C Preferred Share  11,157  11,157  --
       
SHAREHOLDERS' EQUITY/(DEFICIT)      
Ordinary shares  503  523  2,615
Additional paid-in capital  5,090  9,944  113,359
Recourse loans  (1,667)  (1,225)  --
Accumulated other comprehensive income  472  606  695
Retained earnings/(Accumulated deficit)  (7,736)  8,888  11,396
Total shareholders' equity/(deficit)  (3,338)  18,736  128,065
       
Total liabilities, convertible redeemable preferred  shares and shareholders' equity/(deficit)  60,271  84,863  168,246
           
           
RDA MICROELECTRONICS, INC.          
Consolidated Statement of Operations Information        
         
  Quarter Ended Year Ended
  December

31, 2009
September

30, 2010
December

31, 2010
December

31, 2009
December

31, 2010
  (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
  (amounts in thousands of USD, except number

of shares and per share data)
   
Revenue  32,953  57,494  57,478  118,373  191,163
Cost of revenue  (26,321)  (40,123)  (38,849)  (87,410)  (134,258)
Gross profit  6,632  17,371  18,629  30,963  56,905
           
Operating expenses:          
Research and development  (3,940)  (6,331)  (11,225)  (14,475)  (25,815)
Selling, general and administrative  (1,542)  (1,921)  (5,004)  (4,649)  (9,939)
Total operating expenses  (5,482)  (8,252)  (16,229)  (19,124)  (35,754)
Operating income  1,150  9,119  2,400  11,839  21,151
Other income(expense):          
Interest income  25  63  75  57  209
Other income (expense), net  (35)  42  295  (213)  280
Income before income tax expense  1,140  9,224  2,770  11,683  21,640
Income tax expense  (110)  (973)  (262)  (377)  (2,508)
Net income  1,030  8,251  2,508  11,306  19,132
           
Earnings per ordinary share          
- Basic  0.00  0.04  0.01  0.05  0.06
- Diluted  0.00  0.03  0.01  0.03  0.05
           
Earnings per ADS          
- Basic  0.02  0.22  0.05  0.28  0.39
- Diluted  0.01  0.17  0.05  0.19  0.33
           
 Weighted average ordinary shares outstanding          
- Basic  42,341,769  52,284,221  171,018,736  38,671,413  82,221,102
- Diluted  63,828,923  67,009,129  187,700,084  58,901,016  97,358,770
       
Share-based compensation was allocated in operating expenses as follows:      
           
Research and development  149  143  4,561  532  4,990
Selling, general and administrative  92  81  3,140  310  3,385
       
       
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, 2010
   GAAP Share-based Non-GAAP 
   Results Compensation Results
Research and development  11,225  4,561  6,664
Selling, general and administrative  5,004  3,140  1,864
Total operating expenses  16,229  7,701  8,528
Operating income  2,400  7,701  10,101
Net income   2,508  7,701  10,209
       
Diluted earnings per ordinary share  0.01  0.03  0.04
Diluted earnings per ADS  0.06  0.18  0.24
       
Weighted average ordinary shares outstanding-Diluted  256,234,711  256,234,711  256,234,711
       
  Quarter Ended September 30, 2010
   GAAP Share-based Non-GAAP 
   Results  Compensation Results
Research and development  6,331  143  6,188
Selling, general and administrative  1,921  81  1,840
Total operating expenses  8,252  224  8,028
Operating income  9,119  224  9,343
Net income   8,251  224  8,475
       
Diluted earnings per ordinary share  0.04  0.00  0.04
Diluted earnings per ADS  0.22  0.01  0.23
       
Weighted average ordinary shares outstanding-Diluted  224,638,771  224,638,771  224,638,771
       
  Quarter Ended December 31, 2009
  GAAP Share-based Non-GAAP 
   Results  Compensation Results
Research and development  3,940  149  3,791
Selling, general and administrative  1,542  92  1,450
Total operating expenses  5,482  241  5,241
Operating income  1,150  241  1,391
Net income   1,030  241  1,271
       
Diluted earnings per ordinary share  0.00  0.00  0.01
Diluted earnings per ADS  0.03  0.01  0.03
       
Weighted average ordinary shares outstanding-Diluted  221,458,565  221,458,565  221,458,565
       
       
RDA MICROELECTRONICS, INC.      
Reconciliation of GAAP and Non-GAAP Results    
(amounts in thousands of USD, except number of shares and per share data)  
   
  Year Ended December 31, 2010
  GAAP Share-based Non-GAAP 
   Results  Compensation Results
Research and development  25,815  4,990  20,825
Selling, general and administrative  9,939  3,385  6,554
Total operating expenses 35,754 8,375 27,379
       
Operating income  21,151  8,375  29,526
Net income   19,132  8,375  27,507
       
Diluted earnings per ordinary share  0.08  0.04  0.12
Diluted earnings per ADS  0.49  0.22  0.71
       
Weighted average ordinary shares outstanding-Diluted 232,219,685 232,219,685 232,219,685
       
  Year Ended December 31, 2009
  GAAP Share-based Non-GAAP 
   Results Compensation Results
Research and development  14,475  532  13,943
Selling, general and administrative  4,649  310  4,339
Total operating expenses 19,124 842 18,282
       
Operating income  11,839  842  12,681
Net income   11,306  842  12,148
       
Diluted earnings per ordinary share  0.05  0.00  0.06
Diluted earnings per ADS  0.31  0.02  0.34
       
Weighted average ordinary shares outstanding-Diluted 216,530,658 216,530,658 216,530,658
       
           
RDA MICROELECTRONICS, INC.          
Pro-Forma for Conversion of Preferred Shares (Unaudited)          
(amounts in thousands of USD, except number of shares and per share data)        
         
  Quarter Ended Year Ended
Numerator: December

31, 2009
September

30, 2010
December

31, 2010
December

31, 2009
December

31, 2010
Actual net income attributable to ordinary shareholders  147  1,929  1,541  1,827  5,290
Pro forma effect of the Preferred Shares  883  6,322  967  9,479  13,842
Numerator for pro forma basic and diluted calculation  1,030  8,251  2,508  11,306  19,132
Denominator:          
Actual weighted average ordinary shares outstanding for basic calculation  42,341,769  52,284,221  171,018,736  38,671,413  82,221,102
Pro forma effect of the Preferred Shares  157,629,642  157,629,642  68,534,627  157,629,642  134,860,916
Denominator for pro forma basic calculation  199,971,411  209,913,863  239,553,363  196,301,055  217,082,018
Actual denominator for diluted calculation  63,828,923  67,009,129  187,700,084  58,901,016  97,358,770
Pro forma effect of the Preferred Shares  157,629,642  157,629,642  68,534,627  157,629,642  134,860,916
Denominator for pro forma diluted calculation  221,458,565  224,638,771  256,234,711  216,530,658  232,219,685
Pro-forma basic earnings per ordinary share  0.01  0.04  0.01  0.06  0.09
Pro-forma diluted earnings per ordinary share  0.00  0.04  0.01  0.05  0.08
Pro-forma basic earnings per ADS  0.03  0.24  0.06  0.35  0.53
Pro-forma diluted earnings per ADS  0.03  0.22  0.06  0.31  0.49
CONTACT:  For investor and media inquiries, please contact: 
   
          Lily Dong, Chief Financial Officer
          RDA Microelectronics, Inc.
          +86-21-5027-1108
          ir@rdamicro.com
        
          or
 
          Julie Cunningham
          The Blueshirt Group
          +1 415-217-2632
          ir@rdamicro.com

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