Actions Semiconductor Reports Third Quarter 2014 Results

Actions Semiconductor Co., Ltd. (Nasdaq: ACTS) ("Actions Semiconductor" or "the Company"), one of China's leading fabless semiconductor companies that provides comprehensive portable multimedia and mobile internet system-on-a-chip (SoC) solutions for portable consumer electronics, today reported its financial results for the third quarter ended September 30, 2014.

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

Revenue for the third quarter of 2014 was $13.1 million, as compared to revenue of $12.0 million for the second quarter of 2014, and $16.9 million for the third quarter of 2013.

Net loss attributable to Actions Semiconductor's shareholders for the third quarter of 2014 was $9.2 million or $0.137 per basic and diluted American Depositary Share ("ADS"). This compares to net loss attributable to Actions Semiconductor's shareholders of $3.5 million or $0.050 per basic and diluted ADS, for the second quarter of 2014, and net loss attributable to Actions Semiconductor¡¯s shareholders of $0.2 million or $0.002 per basic and diluted ADS, for the third quarter of 2013.

Actions Semiconductor reported gross margin of 14.6% for the third quarter of 2014, compared to gross margin of 18.4% for the second quarter of 2014, and 33.2% for the third quarter of 2013. Gross margin was impacted by fierce competition in the tablet market and a net inventory write-down that reduced margin by nearly 7%. The Company ended the third quarter with $161.3 million in cash and cash equivalents, together with time deposits, trading securities and marketable securities, current and non-current.

Since the share repurchase program commenced in 2007, the Company has invested approximately $78.9 million in repurchasing its ADSs and ordinary shares, including $25.0 million representing the equivalent of 10.0 million ADSs repurchased through a Dutch auction tender offer in September 2014. As of September 30, 2014, the equivalent of approximately 33.7 million ADSs were repurchased.

"In the third quarter of 2014, revenue came in toward the low end of our expectations, primarily due to a supply shortage of 8-inch wafers for multimedia products from our foundry. Competition in the worldwide tablet market remained intense, keeping selling prices and margins low. Lower gross margin, combined with mask expenses related to our new application processor enabled by 28nm process technology and expenses related to our Dutch auction tender offer contributed to the loss for the quarter," stated Dr. Zhenyu Zhou, CEO of Actions Semiconductor.

"Shipments of dual-core solutions accounted for the majority of tablet shipments during the quarter, and we saw a twofold increase in shipments of quad-core solutions, indicative of the accelerated migration from dual-core to quad-core solutions in the overseas tablet market. We expect another sequential increase in shipments in the fourth quarter, although challenging conditions in the tablet market will persist for the next few quarters.

"As we approach the end of 2014, we believe we are through the most challenging period in our tablet business and are preparing to harvest our investments in 28nm process technology and 64-bit architecture in the year ahead. We recently launched our first 28nm OWL series chipset, the ATM7059, which will target the branded and whitebox tablet market and Over-the-top ("OTT") set-top box market, with a 64-bit solution to be launched before year end. We also see strong potential in the Bluetooth boombox market, especially our Bluetooth 4.0 solutions, which we expect to be a major revenue driver in 2015 following the launch of our RF and audio processing integrated single chip SoC for Bluetooth boomboxes and headphones," Dr. Zhou concluded.

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.

Based on current market trends, the Company expects revenue in the fourth quarter of 2014 to be in the range of $14.0 to $16.0 million. The Company expects a sequential improvement in shipments in the fourth quarter of 2014, although challenging conditions in the tablet market will continue to impact revenue and margins in the near term.

www.actions-semi.com

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