2013 Q4 Financial Results

MediaTek Inc. Reports Fourth Quarter 2013 and Full Year 2013 Consolidated Results 

Consolidated Revenue:

MediaTek Inc. today announced financial results of fourth-quarter ended December 31, 2013. Fourth quarter revenue was NT$39,798 million, up 2.0% sequentially, and up 48.8% year-over-year. The sequential revenue growth was mainly driven by increasing demand for smartphone and tablet.

Annual revenue totaled NT$136,056 million.

Consolidated Gross Profit and Gross Margin:

The fourth-quarter gross profit was NT$18,190 million, up 6.1% sequentially, and up 63.9% year-over-year. Gross margin for the quarter was 45.7%, up 1.8 percentage points sequentially and up 4.2 percentage points year-over-year. The sequential increase was mainly due to favorable smartphone product mix.

Gross profit of the year amounted to NT$59,806 million (gross margin: 44.0%).

Consolidated Operating Expenses (including employee profit sharing expenses):

Operating expenses for the quarter was NT$9,787 million (24.6% of revenue), compared with NT$9,274 million (23.8% of revenue) in the previous quarter, and NT$7,596 million (28.4% of revenue) in the same period last year. The sequential increase in operating expenses was mainly due to seasonal higher operating expenses towards year-end.

Operating expenses for the quarter included:

- R&D expenses of NT$7,372 million (18.5% of revenue), increased from NT$7,075 million in 3Q13, and increased from NT$5,927 million in 4Q12.

- Selling expenses of NT$1,407 million (3.5% of revenue), increased from NT$1,205 million in 3Q13, and increased from NT$858 million in 4Q12.

- Administration expenses of NT$1,009 million (2.5% of revenue), increased from NT$995 million in

3Q13, and increased from NT$811 million in 4Q12.

Full-year 2013 operating expense was NT$34,562 million (25.4% of revenue).

Consolidated Operating Profit and Operating Margin:  Operating profit for the quarter was NT$8,403 million, up 6.8% sequentially, and up 140.0% year-over-year. Operating margin for the quarter was 21.1%, increased from 20.2% in the previous quarter, and increased from 13.1% in the year-ago quarter.

Operating profit of the year was NT$25,244 million (operating margin: 18.6%).

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

Non-operating income of NT$1,044 million, or 2.6% of revenue, was mainly from interest income and investment income. Income tax expense for the quarter was NT$830 million.

Net non-operating income of the year amounted to NT$4,303 million.

Consolidated Net Income and Net Profit Margin and EPS:

Net income was NT$8,616 million, up 2.4% sequentially, and up 92.4% year-over-year. Net profit margin for the quarter was 21.6%, same as 21.6% in the previous quarter, and increased from 16.8% in the year-ago quarter. EPS was NT$6.43, compared with NT$6.28 in the prior quarter and NT$3.67 in the year-ago quarter.

Full year 2013 net income was NT$27,485 million. Accumulated EPS was NT$20.51 for the year.

Consolidated Cash and Financial Assets-Current:

Cash and financial assets-current at the end of the quarter was NT$139,219 million. This represents 53.8% of the company’s total assets. Cash and financial assets-current was NT$113,192 million and NT$90,590 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$ 7,628 million. The accounts receivable turnover was 21 days based on quarterly average net receivables divided by annualized net revenue. The turnover was lower than 25 days last quarter, and 25 days in the year-ago quarter.

Consolidated Inventory:

Net inventory was NT$9,244 million at the end of the quarter. The inventory turnover was 47 days based on quarterly average inventory divided by annualized cost of goods sold. The turnover was lower than 50 days in the last quarter, and 76 days in the year-ago quarter.

Consolidated Cash Flow from Operations:

Cash flow from operations during the quarter was NT$16,624 million, an increase of NT$9,971 million from the prior quarter and an increase of NT$2,647 million from the year-ago quarter.

Earnings Webcast

MediaTek will hold a public webcast today (January 27) 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_64&version=e)

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

(http://www.mzcan.com/cancast/taiwan/index.php?id=tw2454_65&version=e)

Dial-in Number: +886-2-21928016 Password: 772239#

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.

Q4 FY13 Consolidated Income Statement

(In NT$ millions, except per share amounts)

4Q13

3Q13

4Q12

Q-Q

Y-Y

Net Revenue

39,798

39,008

26,737

2.0%

48.8%

Cost of Goods Sold

(21,608)

(21,867)

(15,640)

Gross Profit

18,190

17,140

11,097

6.1%

63.9%

Selling expenses

(1,407)

(1,205)

(858)

Administration expenses

(1,009)

(995)

(811)

R&D expenses

(7,372)

(7,075)

(5,927)

Operating Expenses

(9,787)

(9,274)

(7,596)

Operating Income

8,403

7,866

3,501

6.8%

140.0%

Net Non-operating Income

1,044

1,169

1,069

Income Before Income Tax

9,446

9,035

4,570

Income tax expense

(830)

(619)

(91)

Consolidated Net Income

8,616

8,416

4,479

2.4%

92.4%

EPS Attributable to the Parent(NT$)

6.43

6.28

3.67

Note: Numbers do not add up due to rounding.

Q4 FY13 Supplemental Information: Percentage of Revenue 

4Q13

3Q13

4Q12

Gross profit

45.7%

43.9%

41.5%

Selling expenses

(3.5 %)

(3.1 %)

(3.2 %)

Administration expenses

(2.5 %)

(2.6 %)

(3.0 %)

R&D expenses

(18.5 %)

(18.1 %)

(22.2 %)

Operating profit

21.1%

20.2%

13.1%

Non-operating income

2.6%

3.0%

4.0%

Income tax expense

(2.1 %)

(1.6 %)

(0.3 %)

Net profit

21.6%

21.6%

16.8%

Note: Numbers do not add up due to rounding.

MediaTek Inc.

FY13 Consolidated Income Statement

(In NT$ millions, except per share amounts)

2013

2012

Y-Y

Net Revenue

136,056

99,263

37.1%

Cost of Goods Sold

(76,250)

(58,204)

Gross Profit

59,806

41,059

45.7%

Selling expenses

(4,562)

(3,115)

Administration expenses

(3,546)

(2,912)

R&D expenses

(26,454)

(22,629)

Operating Expenses

(34,562)

(28,656)

Operating Income

25,244

12,403

103.5%

Net Non-operating Income

4,303

4,082

Income Before Income Tax

29,547

16,485

Income tax expense

(2,062)

(941)

Consolidated Net Income

27,485

15,545

76.8%

EPS Attributable to the Parent(NT$)

20.51

12.81

Note: Numbers do not add up due to rounding.

FY13 Supplement Information: Percentage of Revenue 

2013

2012

Gross profit

44.0%

41.4%

R&D expense

(19.4 %)

(22.8 %)

Selling expenses

(3.4 %)

(3.1 %)

Administration expenses

(2.6 %)

(2.9 %)

Operating profit

18.6%

12.5%

Non-operating income

3.2%

4.1%

Income tax expense

(1.5 %)

(0.9 %)

Net profit

20.2%

15.7%

Note: Numbers do not add up due to rounding.

MediaTek Inc.

Consolidated Balance Sheet

(In NT$ millions)

4Q13

3Q13

4Q12

Cash & Financial assets-current

139,219

113,192

90,590

Accounts receivable

7,628

11,059

6,585

Inventories

9,244

12,938

13,867

Funds and investments

68,040

66,540

64,966

Intangible assets

15,509

15,332

15,727

Total assets

258,537

238,195

210,407

Short-term loans

29,052

19,760

8,880

Accounts payable

10,944

12,520

9,047

Other current liabilities

21,287

18,690

15,052

Long-term liabilities & Other liabilities

1,902

2,125

1,969

Stockholders’ equity

195,353

185,099

175,458

MediaTek Inc.

Consolidated Cash Flow Summary

(In NT$ millions)

4Q13

3Q13

4Q12

Cash flow from operations

16,624

9,971

2,647

Cash flow from investing

(1,164)

(374)

14

Cash flow from financing

9,310

(8,301)

(1,720)

Effect of exchange rate changes

611

(905)

(220)

Net increase in cash & equivalents

25,381

392

722

Cash & equivalents at quarter end

132,998

107,617

85,867

Note: Numbers do not add up due to rounding.