2013 Q3 Financial Results

MediaTek Inc. Reports Third Quarter 2013 Consolidated Results

Consolidated Revenue:

MediaTek Inc. today announced financial results of third-quarter ended September 30, 2013. Third quarter revenue was NT$39,008 million, up 17.2% sequentially, and up 32.4% year-over-year. Third quarter revenue growth was mainly driven by seasonal growth from all business lines, out of which smartphone grew relatively rapidly in China and emerging market.

Consolidated Gross Profit and Gross Margin:

The third-quarter gross profit was NT$17,140 million, up 19.2% sequentially, and up 41.1% year-over-year. Gross margin for the quarter was 43.9%, up 0.7 percentage points sequentially and up 2.7 percentage points year-over-year. The increase of gross margin was mainly due to higher contribution from mid-to-high end smartphone .

Consolidated Operating Expenses (including employee profit sharing expenses):

Operating expenses for the quarter was NT$9,274 million (23.8% of revenue), compared with NT$8,497 million (25.5% of revenue) in the previous quarter, and NT$7,919 million (26.9% of revenue) in the same period last year. The increase of operating expenses compared with the previous quarter and the year-ago quarter was mainly due to revenue growth. Operating expenses for the quarter included:

Consolidated Operating Profit and Operating Margin:  Operating profit for the quarter was NT$7,866 million, up 33.6% sequentially, and up 85.9% year-over-year. Operating margin for the quarter was 20.2%, increased from 17.7% in the previous quarter, and increased from 14.4% in the year-ago quarter.

Consolidated Non-operating Income (loss) and Income Tax:

Non-operating income of NT$1,169 million, or 3.0% of revenue, was mainly from interest income and investment income. Income tax expense for the quarter was NT$619 million.

Consolidated Net Income and Net Profit Margin and EPS:

Net income was NT$8,416 million, up 25.3% sequentially, and up 71.2% year-over-year. Net profit margin for the quarter was 21.6%, increased from 20.2% in the previous quarter, and increased from 16.7% in the year-ago quarter. EPS was NT$6.28, compared with NT$5.01 in the prior quarter and NT$3.97 in the year-ago quarter.

Consolidated Cash and Financial Assets-Current:

Cash and financial assets-current at the end of the quarter was NT$113,192 million. This represents 47.5% of the company’s total assets. Cash and financial assets-current was NT$112,749 million and NT$91,197 million at the end of previous quarter and the year-ago quarter, respectively. Financial assets-current portfolio includes mutual funds, bonds, and derivatives.

Consolidated Accounts Receivable:

Accounts receivable (net) at the end of the quarter was NT$ 11,059 million. The accounts receivable turnover was 25 days based on quarterly average net receivables divided by annualized net revenue. The turnover was higher than 24 days last quarter, and same as 25 days in the year-ago quarter.

Consolidated Inventory:

Net inventory was NT$12,938 million at the end of the quarter. The inventory turnover was 50 days based on quarterly average inventory divided by annualized cost of goods sold. The turnover was lower than 57 days in the last quarter, and 61 days in the year-ago quarter.

Consolidated Cash Flow from Operations:

Cash flow from operations during the quarter was NT$9,971 million, an increase of NT$9,921 million from the prior quarter and an increase of NT$4,221 million from the year-ago quarter.

Earnings Webcast

MediaTek will hold a public webcast today (November 1) at 2:00 p.m. Taipei Time in Mandarin, and at 4:00 p.m. in English. A live webcast of the conference call will be available through the Investor Relations section of the MediaTek website. Investors who want to raise questions may use the toll number attached below.

Schedule and Webcast Links:

Time

2:00 – 3:00 p.m. (Taiwan Time): In Mandarin

(http://www.mzcan.com/cancast/taiwan/index.php?id=tw2454_62&version=e)

4:00 – 5:00 p.m. (Taiwan Time): In English

(http://www.mzcan.com/cancast/taiwan/index.php?id=tw2454_63&version=e)

Dial-in Number: +852 3027 5500 (Password: 898604#)

About MediaTek Inc.

MediaTek Inc. is a leading fabless semiconductor company for wireless communications and digital multimedia solutions. The company is a market leader and pioneer in cutting-edge SOC system solutions for wireless communications, high-definition TV, optical storage, and DVD and Blu-ray products. Founded in 1997 and listed on Taiwan Stock Exchange under the code "2454", MediaTek is headquartered in Taiwan and has sales or research subsidiaries in Mainland China, Singapore, India, U.S., Japan, Korea, Denmark, England, Sweden and Dubai. For more information, please visit MediaTek’s website at www.mediatek.com

MediaTek Inc.

Q3 FY13 Consolidated Income Statement

(In NT$ millions, except per share amounts)

3Q13

2Q13

3Q12

Q-Q

Y-Y

Net Revenue

39,008

33,276

29,471

17.2%

32.4%

Cost of Goods Sold

(21,867)

(18,891)

(17,320)

Gross Profit

17,140

14,385

12,151

19.2%

41.1%

Selling expenses

(1,205)

(1,101)

(911)

Administration expenses

(995)

(880)

(684)

R&D expenses

(7,075)

(6,516)

(6,324)

Operating Expenses

(9,274)

(8,497)

(7,919)

Operating Income

7,866

5,888

4,232

33.6%

85.9%

Net Non-operating Income

1,169

1,256

872

Income Before Income Tax

9,035

7,143

5,104

Income tax expense

(619)

(427)

(187)

Consolidated Net Income

8,416

6,716

4,917

25.3%

71.2%

EPS Attributable to the Parent(NT$)

6.28

5.01

3.97

Note: Numbers do not add up due to rounding. 

Q3 FY13 Supplemental Information: Percentage of Revenue 

3Q13

2Q13

3Q12

Gross profit

43.9%

43.2%

41.2%

Selling expenses

(3.1 %)

(3.3 %)

(3.1 %)

Administration expenses

(2.6 %)

(2.6 %)

(2.3 %)

R&D expenses

(18.1 %)

(19.6 %)

(21.5 %)

Operating profit

20.2%

17.7%

14.4%

Non-operating income

3.0%

3.8%

3.0%

Income tax expense

(1.6 %)

(1.3 %)

(0.6 %)

Net profit

21.6%

20.2%

16.7%

Note: Numbers do not add up due to rounding.

MediaTek Inc.

Consolidated Balance Sheet

(In NT$ millions)

3Q13

2Q13

3Q12

Cash & Financial assets-current

113,192

112,749

91,197

Accounts receivable

11,059

10,389

8,216

Inventories

12,938

10,956

12,091

Funds and investments

66,540

67,469

65,873

Intangible assets

15,332

15,481

16,134

Total assets

238,195

237,353

211,344

Short-term loans

19,760

16,114

10,504

Accounts payable

12,520

10,873

12,054

Other current liabilities

18,690

29,871

14,378

Long-term liabilities & Other liabilities

2,125

2,143

1,796

Stockholders’ equity

185,099

178,353

172,611

MediaTek Inc.

Consolidated Cash Flow Summary

(In NT$ millions)

3Q13

2Q13

3Q12

Cash flow from operations

9,971

9,921

4,221

Cash flow from investing

(374)

(751)

(1,339)

Cash flow from financing

(8,301)

3,305

(11,869)

Effect of exchange rate changes

(905)

659

(928)

Net increase in cash & equivalents

392

13,134

(9,915)

Cash & equivalents at quarter end

107,617

107,225

85,146

Note: Numbers do not add up due to rounding.