Rda Microelectronics (NASDAQ:RDA)

First Quarter 2012 Results

• Revenue was $72.0 million, exceeding the Company's guidance of $69 million to $71 million, and representing an increase of 30.5% from the $55.2 million in the first quarter 2011 and a decrease of 12.6% from the $82.4 million in the fourth quarter of 2011.
• Gross margin of 35.9% was at the high end of the Company's guidance, compared to 35.3% in the previous quarter and 33.3% in the first quarter of 2011.
• Operating margin was 20.0%, an increase from 15.0% in the first quarter of 2011 and comparable to the previous quarter.
• GAAP net income was $13.9 million, or $0.30 per diluted ADS, compared to $7.6 million, or $0.16 per diluted ADS, in the first quarter of 2011 and $16.6 million, or $0.37 per diluted ADS, in the previous quarter.
• Non-GAAP net income was $15.1 million, or $0.33 per diluted ADS, compared to $8.5 million, or $0.18 per diluted ADS, in the first quarter of 2011 and $17.4 million, or $0.39 per diluted ADS, in the previous quarter.

Commenting on the results, Vincent Tai, chairman and CEO of RDA Microelectronics, said, "During the first quarter, we continued to achieve strong results as revenue and profit increased significantly over the prior year comparable period. Our efficient operating model continued to produce solid margin performance and strong cash flow generation. First quarter revenue exceeded our guidance as demand strengthened after the Chinese New Year holiday. Increased shipment volumes of our Bluetooth and Power Amplifier products offset price declines experienced during the quarter. Additionally, our aggressive cost-down efforts for these products allowed us to meet our operating performance targets and maintain our market share leadership position. We were also pleased to reach a significant milestone for the Company in which cumulative IC shipments exceeded 2 billion units.

"Also notable in the quarter, we announced our acquisition of Coolsand's baseband IP, which significantly expands our total addressable market. We have completed the integration and hired the necessary personnel to support our future development work and ramping volume shipments. Initial customer demand for our 55nm integrated baseband product is very strong, and we are tracking well to our roadmap for future product introductions. RDA is solidly positioned for further market share gains in the global 2G marketplace with both our RF and baseband products, especially in the emerging markets outside of China. We have also taken steps to increase our presence in 3G with the introduction of new high performance products for the WCDMA and TD-SCDMA markets. Our second quarter growth will be driven by expanding volumes of our baseband product. Additionally, our products targeted at the smartphone market, such as the WiFi, Bluetooth and FM three-in-one combo chip, are on track with design-ins with our customers, and we expect to generate revenue from our WiFi combo chip in the second quarter, ahead of our original schedule. We remain focused on gaining meaningful share of the low cost smartphone market in China as the transition from feature phone to smart phone accelerates."

Second Quarter 2012 Business Outlook:

For the second quarter of 2012, the Company expects revenue to be in the range of $94 million to $100 million, an increase of 40% to 48% year-over-year and 31% to 39% sequentially, reflecting the addition of baseband revenue. The Company expects gross margins to be in the range of 30.5% to 30.9% as a result of the consolidation of the lower margin baseband revenue from the Coolsand acquisition. The Company expects to expand gross margin toward the 35% corporate target in the coming quarters through cost-down efforts for its baseband products as well as increased shipments of higher margin products.

SHANGHAI, China, March 26, 2012 (GLOBE NEWSWIRE) -- RDA Microelectronics (Nasdaq:RDA) ("RDA"), a fabless semiconductor company that designs, develops and markets Radio Frequency (RF) and mixed-signal semiconductors for cellular, connectivity and broadcast applications, today announced that it has acquired all of the baseband intellectual property of Coolsand Holding Co., Ltd., a privately held baseband company with business operations in China, and its subsidiaries ("Coolsand"). The consideration paid is $46 million, comprised of approximately $20 million in cash and 15 million RDA ordinary shares. The market value of the shares totals approximately $26 million as determined by the March 21, 2012 NASDAQ closing price of RDA's American Depositary Shares, each representing six ordinary shares.  

The asset purchase provides significant strategic benefits to RDA's business, including:

• Expanding its product offerings to provide a comprehensive portfolio of integrated and standalone solutions for China handset manufacturers;
• Increasing silicon content per handset significantly;
• Extending its total addressable market (TAM) to include the worldwide baseband market;
• Diversifying and expanding its long-term revenue growth prospects; and
• Increasing its customer leverage and market share expansion opportunities.

Commenting on the purchase, Vincent Tai, chairman and CEO of RDA Microelectronics, stated, "We are now able to provide competitive baseband products alongside our comprehensive RF and mixed-signal offerings for the handset market. The addition of baseband products expands our total addressable market and silicon content per handset, simplifies the supply chain for our customers, and opens the way for further market share gains. Baseband is a large and growing market and potentially represents a significant revenue opportunity for RDA. We believe we are in a good position to be a strong competitor in this market and take share as a result of our strong product roadmap.

"Our collaboration with Coolsand over the past two years has yielded valuable knowledge in development, sales, marketing and support for baseband products. We have established a strong working relationship, which we believe will reduce integration risk and ultimately contribute to the reception and success of our products in the marketplace. Our co-developed baseband product is the most integrated 2G baseband available in its category with superior hardware integration and best-in-class architecture. Development work is currently in process for our next generation baseband products, including WCDMA and TD-SCDMA products. We expect to hire approximately 45 of Coolsand's employees, most of which are engineers. Coolsand baseband products have been gaining market share rapidly, and we plan to leverage our existing sales channels and strong customer base, which currently exceeds 800 companies, to continue the market share expansion.  

"We expect that our strong R&D capabilities and efficient operating model, combined with our core competencies in product integration, circuit design know-how and cost control, will allow us to further extend our success to the baseband market. I believe this is the right time to enter this market based on RDA's market position and solid customer relationships. We have proven technological advantages that we believe will enable us to capitalize on the tremendous opportunities in the baseband market and drive our future growth."

Fourth Quarter 2011 Results

• Revenue was $82.4 million, exceeding the Company's guidance of $80 million to $82 million, and represented a decrease of 1.9% from the $83.9 million in the third quarter of 2011 and an increase of 43.3% from the $57.5 million in the fourth quarter 2010.
• Gross margin was 35.3%, which was at the high end of the Company's guidance of 35.0% to 35.3%, compared to 34.9% in the previous quarter and 32.4% in the fourth quarter of 2010.
• Operating margin was 20.0%, expanded from 18.8% in the previous quarter and 4.2% in the fourth quarter of 2010.
• Net income was $16.6 million, or $0.37 per diluted ADS, compared to $15.7 million, or $0.34 per diluted ADS in the previous quarter, and $2.5 million, or $0.05 per diluted ADS, in the fourth quarter of 2010.

Commenting on the results, Vincent Tai, chairman and CEO of RDA Microelectronics, said, "I am very pleased to report record results for 2011, in which we grew revenue by over 50 percent and generated exceptional profitability and cash flow despite the challenging global economic conditions. During the year, we became the leading market share provider for both Bluetooth and Front End Module/Power Amplifier products for the Chinese handset manufacturer market, complementing our number one position in FM and DVB-S Tuner products. In the fourth quarter, our Power Amplifiers reached record shipments as a result of continued market share gains for our IPD Front End Module. In addition to these achievements, we also expanded our operating margin to 20% in the fourth quarter due to our efficient operating model and cost structure, which allows us to be highly competitive in the marketplace.

"To further expand our penetration of the 3G/4G smartphone market, we also introduced several new products that will increase our addressable silicon content in handsets. These products include a highly integrated Wi-Fi combo chip, a WCDMA four transmit mode power amplifier, and a CMMB Mobile TV Chip for TD-SCDMA. We believe there are growing opportunities for low-end smartphones, specifically in China, as this market segment is expected to ramp quickly in the coming year to meet the demand for additional feature sets as the 3G market evolves."

First Quarter 2012 Business Outlook:

For the first quarter of 2012, the Company expects revenue to be in the range of $69 million to $71 million, an increase of 25% to 29% year-over-year or down 14% to 16% sequentially, reflecting typical seasonal patterns including the shortened sales period due to the Chinese New Year. The Company expects gross margins to be in the range of 35.6% to 35.9% as it benefits from continued cost reductions through design enhancement and further growth of higher gross margin products.

SHANGHAI, China, Jan. 4, 2012 (GLOBE NEWSWIRE) -- RDA Microelectronics (Nasdaq:RDA) ("RDA Microelectronics" or the "Company"), a fabless semiconductor company that designs, develops and markets Radio Frequency (RF) and mixed-signal semiconductors for cellular, connectivity and broadcast applications, today announced that it has signed an IP license and development agreement with Trident Microsystems. According to the terms of the agreement, RDA will pay US$16.0 million in cash to secure a non-exclusive, worldwide, non-transferrable license to develop, manufacture and sell derivative versions of the Trident SX5 Digital TV SoC platform for a period of 10 years.

"We are pleased to have entered into this agreement, positioning RDA to expand into the TV market and replicate the success we have achieved in the mobile handset market. We have taken advantage of a unique opportunity to license some of the best TV-related IP and patents available in the market today," commented Vincent Tai, chairman and CEO of RDA Microelectronics. "Licensing these technologies from Trident provides RDA a solid foundation to begin developing products for the TV and display markets. We anticipate it will require around two years of development to launch our first product, which we believe is approximately half the time it would have taken if we had internally developed the technology on our own.

Third Quarter 2011 Results

• Record revenue of $83.9 million exceeded the Company's guidance of $77 million to $79 million and represented an increase of 24.5% from the $67.4 million in the second quarter of 2011 and 46.0% from the $57.5 million in the third quarter 2010.
• Gross margin was 34.9%, exceeding the Company's guidance, compared to 34.1% in the previous quarter and 30.2% in the third quarter of 2010.
• Cash flow from operations was $30.5 million, compared to $18.1 million in the previous quarter and $1.0 million in the third quarter of 2010.
• Net income was $15.7 million, or $0.34 per diluted American Depository Share (ADS), compared to $11.8 million, or $0.25 per ADS, in the previous quarter and $8.3 million, or $0.17 per ADS, in the third quarter of 2010.

Commenting on the results, Vincent Tai, chairman and CEO of RDA Microelectronics, said, "We achieved a record quarter by delivering strong revenue growth that exceeded our above market guidance as we continued to gain market share across multiple product categories. We also further expanded our gross margin as we accelerated our migration to 55-nanometer process technology. These achievements generated significant free cash flow to support R&D investment for future products and to fund the repurchase of shares for the benefit of our long-term shareholders.

"These financial successes achieved during a difficult global market environment underscore RDA's significant growth opportunities with Chinese handset manufacturers, and we believe this trend will continue. Furthermore, RDA products are available for use with any mobile platform offered in China today, giving us broad and diverse market opportunities in the fast growing mobile market. We also continued to make solid progress with further penetrating global tier one customers and have several ongoing design projects as a result of our commitment to comprehensive engineering support and customer service.

"Looking forward, our continued growth will be driven by increasing market share gains with China handset manufacturers and global tier-one OEMs. Additionally, our record shipments of TD-SCDMA transceivers this quarter are indicative of the growing momentum in the 3G market in China. We are aggressively expanding our new product portfolio with the development of our WCDMA power amplifiers, CMMB Mobile TV ICs for TD-SCDMA handsets, and WiFi products to capitalize on the growth in smartphones. These upcoming new products, along with our current IPD Front End Module and Bluetooth SoC offerings, will drive our future growth and increase our addressable silicon content with new and existing customers."

Fourth Quarter 2011 Business Outlook:

For the fourth quarter of 2011, the Company expects revenue to be in the range of $80 million to $82 million, up 39.2% to 42.7% year-over-year and down 2.3% to 4.7% sequentially, reflecting normal seasonal patterns and continued strong momentum for the Company's IPD Front End Module, Bluetooth system-on-chip, and TD-SCDMA transceivers. The Company expects gross margins to be in the range of 35.0% to 35.3% as it benefits from the continued migration to 55-nanometer for its Bluetooth system-on-chip products and the further growth of higher gross margin products.

SHANGHAI, China, Sept. 23, 2011 (GLOBE NEWSWIRE) -- RDA Microelectronics (Nasdaq:RDA) ("RDA Microelectronics" or the "Company"), a fabless semiconductor company that designs, develops and markets Radio Frequency (RF) and mixed-signal chips for cellular, broadcast and connectivity applications, today announced that the Company plans to execute a share repurchase program whereby the Company may purchase its own American Depositary Shares ("ADSs") with an aggregate value of up to US$5 million. The Company has obtained board approval for the share repurchase program. The Company expects to fund the repurchase out of its existing cash balance, with the cash consideration of such repurchase being paid on its behalf to the relevant ADS holders (or their agents) at the direction of the depositary. The proposed share repurchase may be effected on the open market at prevailing market prices and/or in negotiated transactions off the market from time to time as market conditions warrant in accordance with applicable requirements of Rule 10b5-1 and/or Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended.

We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and capital expenditures for the 12 months following the date of this annual report. We do not anticipate that our current expansion plans will require significant capital commitments due to the scalability of our business model. We do, however, expect to invest in the further development of our technology platform to support our long-term growth.

SHANGHAI, May 9, 2011 (GLOBE NEWSWIRE) -- RDA Microelectronics , a fabless semiconductor company that designs, develops and markets Radio Frequency (RF) and mixed-signal chips for cellular, broadcast and connectivity applications, today announced its financial results for the first quarter ended March 31, 2011.

• Revenue for the first quarter of 2011 was US$55.2 million, exceeding the Company's guidance of US$52-$54 million, compared to US$57.5 million in the immediately preceding quarter and US$35.8 million in the first quarter of 2010, representing a 54.1% year-over-year increase.
• Gross margin for the first quarter of 2011 was 33.3%, exceeding the Company's guidance range of 32%-33%, compared to 32.4% in the immediately preceding quarter and 24.9% in the first quarter of 2010.
• Net income for the first quarter of 2011 was US$7.6 million, compared to US$2.5 million in the immediately preceding quarter and US$2.7 million in the first quarter of 2010.
• Net income per diluted American Depository Share (ADS) for the first quarter of 2011 was US$0.16, compared to US$0.05 in the immediately preceding quarter and US$0.05 in the first quarter of 2010.

"We are pleased with our first quarter financial results, having achieved 54.1% revenue growth year-over-year and continued gross margin improvement," said Vincent Tai, chairman and CEO. "We exceeded our guidance for both revenue and gross margin with strong shipments of our Bluetooth and IPD Front End Module products. We believe that we are continuing to gain market share with our innovative IPD Front End Modules, Bluetooth, FM and Low Noise Block products. Looking ahead, we see two main drivers of near-term revenue growth and margin expansion. First, we expect the IPD Front End Module to continue to gain share; and secondly, we expect to significantly ramp production of our 55-nanometer Bluetooth system-on-chip products during the second quarter of 2011. Both of these factors give us confidence that RDA is in an excellent competitive position.

For the second quarter of 2011, the Company expects revenues to be in the range of US$65 - $67 million, reflecting historical seasonal growth patterns during the second quarter of each year and the strong momentum of the Company's IPD Front End Module, Bluetooth system-on-chip, Low Noise Block, and DVB-S tuner products. The Company expects gross margins to be in the range of 33.4 % - 34.0%, as it benefits from the migration to 55-nanometer for its Bluetooth system-on-chip products and the further growth of higher gross margin products. This outlook reflects the Company's current and preliminary view and may be subject to change. Please see "Forward-Looking Statements" at the end of this press release.

Fourth Quarter Highlights:

• 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.
• 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.

"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."

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.
• 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.

RDA Microelectronics, Inc. plans for Initial Public Offering

Company Snapshot:

China-based fabless semiconductor company

Industry Snapshot:

• Wireless communications technologies have evolved through generations of wireless protocols. Most mobile handsets are based on 2G (including 2.5G and 2.75G) technologies, while the increasing availability and adoption of 3G services will lead to greater demand for handsets based on 3G technologies. According to the iSuppli Report, 2G technology is expected to remain the dominant standard in emerging markets and will make up 44% of total mobile handset shipments worldwide in 2014.

• A parallel industry development has been the increasing connectivity, computing and multimedia capabilities of mobile handsets, broadly defined as smartphones or rich feature handsets, for both 2G and 3G technologies. There is growing worldwide demand for smartphones due to the sophisticated computing capabilities, enhanced user interfaces, rich multimedia experiences, and proliferation of internet-centric applications of these devices. The creative use of these features enhances user experience and drives the sale of both 2G and 3G mobile handsets. The attach rates of these rich features are growing, and we believe most of these features will eventually become standard offerings in 2G and 3G mobile handsets.

Use Of proceeds:

We intend to use the net proceeds received by us from this offering for working capital and other general corporate purposes, including to finance our growth, develop new products, and fund capital expenditures. In addition, we may choose to expand our current business through acquisitions of other technologies, products, or businesses. However, we do not have legally binding agreements or commitments for any specific acquisitions at this time.

Underwriter(s):

• Morgan Stanley & Co. International plc
• Credit Suisse Securities (USA) LLC
• Caris & Company, Inc.

Proposed offering price: $8.50 to $10.50

Post IPO Share Calculation: (Using a 6 to 1 Ordinary to ADS conversion ratio).

• 11,007,266: Pre IPO fully diluted share count used in EPS calculation.
• 26,271,607: converted shares immediately prior to the completion of this offering;
•   7,500,000: Newly issued ADS shares
• 1,125,000 : Underwriter over-allotments ADS shares 

GeoTeam® best effort calculation of total post IPO ADS count to be used in EPS calculations, assuming full conversions and a Ordinary to ADS conversion ratio of 6 to 1:   45,903,873

Financial Snapshot:

• Revenue of $118.4 million in 2009 compared to $55.6 million in 2009.
• Net income of $11.3 million in 2009 compared to $657 thousand in 2008.

• Our revenue increased by 66.1% from $45.9 million for the six months ended June 30, 2009 to $76.2 million for the six months ended June 30, 2010
• Net income increased significantly from $3.0 million, or 6.5% of revenue, for the six months ended June 30, 2009 to $8.4 million, or 11.0% of revenue, for the six months ended June 30, 2010.

Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in connection with the audits of our consolidated financial statements as of and for the year ended December 31, 2009, we and our independent registered public accounting firm identified one “material weakness” in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board of the United States. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified related to a failure to maintain effective controls over the period-end financial reporting process. We are in the process of implementing a number of measures to address the weakness that has been identified, including a more comprehensive and thorough review process for the month-end and year-end closing procedures to strengthen our internal controls and help us establish sustainable operational stability and produce our financial statements in a timely manner going forward.