2014 Q2 Financial Results

MediaTek Inc. Reports Second Quarter 2014 Consolidated Results 

Consolidated Revenue:

MediaTek Inc. today announced financial results of second-quarter ended June 30, 2014. Second quarter revenue was NT$54,133 million, up 17.7% sequentially, and up 62.7% year-over-year. The sequential and year-over-year increase was mainly due to MStar revenue recognition as well as revenue growth in smartphone and tablet product lines.

Consolidated Gross Profit and Gross Margin:

The second-quarter gross profit was NT$26,824 million, up 20.7% sequentially, and up 86.5% year-over-year. Gross margin for the quarter was 49.6%, up 1.3 percentage points sequentially and up 6.4 percentage points year-over-year. The sequential and year-over-year increase was mainly due to favorable product mix.

Consolidated Operating Expenses (including employee profit sharing expenses):

Operating expenses for the quarter was NT$14,063 million (26.0% of revenue), compared with NT$11,413 million (24.8% of revenue) in the previous quarter, and NT$8,497 million (25.5% of revenue) in the same period last year. The sequential and year-over-year increase was mainly due to MStar expenses recognition, continuous investment in talents and technologies as well as higher expenses associated with higher sales.

Operating expenses for the quarter included:

Consolidated Operating Profit and Operating Margin:

Operating profit for the quarter was NT$12,760 million, up 18.0% sequentially, and up 116.7% year-over-year. Operating margin for the quarter was 23.6%, increased from 23.5% in the previous quarter, and increased from 17.7% in the year-ago quarter.

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

Non-operating income of NT$1,393 million, or 2.6% of revenue, was mainly from interest income and investment income. Income tax expense for the quarter was NT$1,605 million.

Consolidated Net Income and Net Profit Margin and EPS:

Net income was NT$12,549 million, up 23.8% sequentially, and up 86.9% year-over-year. Net profit margin for the quarter was 23.2%, increased from 22.0% in the previous quarter and 20.2% in the year-ago quarter. EPS was NT$8.03, compared with NT$6.82 in the prior quarter and NT$5.01 in the year-ago quarter.

Consolidated Cash and Financial Assets-Current:

Cash and financial assets-current at the end of the quarter was NT$196,431 million. This represents 60.7% of the company’s total assets. Cash and financial assets-current was NT$173,917 million and NT$112,749 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$ 12,983 million. The accounts receivable turnover was 22 days based on quarterly average net receivables divided by annualized net revenue. The turnover was higher than 21 days last quarter, and lower than 24 days in the year-ago quarter.

Consolidated Inventory:

Net inventory was NT$19,326 million at the end of the quarter. The inventory turnover was 60 days based on quarterly average inventory divided by annualized cost of goods sold. The turnover was higher than 50 days in the last quarter, and higher than 57 days in the year-ago quarter.

Consolidated Cash Flow from Operations:

Cash flow from operations during the quarter was NT$13,044 million, an increase of NT$9,140 million from the prior quarter and an increase of NT$9,921 million from the year-ago quarter.

Earnings Webcast

MediaTek will hold a public webcast today (July 31) 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://mediatek.ic.learn.hinet.net/2014Q2/mediatek.html)

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

(http://mediatek-en.ic.learn.hinet.net/2014Q2/mediatek.html)

Dial-in Number: +886-2-21928016 Password: 591629#

About MediaTek Inc.

MediaTek is a pioneering fabless semiconductor company, and a market leader in cutting-edge systems on a chip for wireless communications and connectivity, HDTV, DVD and Blu-ray. MediaTek created the world's first octa-core smartphone platform with LTE and our CorePilot™ technology releasing the full power of multi-core mobile processors. Through MediaTek Labs, the company is creating a worldwide ecosystem in support of device creation, application development and services based around MediaTek offerings. With an emphasis on enabling technology for the masses and not the chosen, everyone can be an Everyday Genius. MediaTek [TSE:2454] is headquartered in Taiwan and has offices worldwide. Please visit www.mediatek.com for more information.

MediaTek Inc.

Q2 FY14 Consolidated Income Statement

(In NT$ millions, except per share amounts)

2Q14

1Q14

2Q13

Q-Q

Y-Y

Net Revenue

54,133

46,005

33,276

17.7%

62.7%

Cost of Goods Sold

(27,309)

(23,779)

(18,891)

Gross Profit

26,824

22,226

14,385

20.7%

86.5%

Selling expenses

(2,072)

(1,134)

(1,101)

Administration expenses

(1,589)

(1,363)

(880)

R&D expenses

(10,403)

(8,915)

(6,516)

Operating Expenses

(14,063)

(11,413)

(8,497)

Operating Income

12,760

10,813

5,888

18.0%

116.7%

Net Non-operating Income

1,393

688

1,256

Income Before Income Tax

14,153

11,501

7,143

Income tax expense

(1,605)

(1,362)

(427)

Consolidated Net Income

12,549

10,139

6,716

23.8%

86.9%

EPS Attributable to the Parent(NT$)

8.03

6.82

5.01

Note: Numbers do not add up due to rounding.

Q2 FY14 Supplemental Information: Percentage of Revenue 

2Q14

1Q14

2Q13

Gross profit

49.6%

48.3%

43.2%

Selling expenses

(3.8 %)

(2.5 %)

(3.3 %)

Administration expenses

(2.9 %)

(3.0 %)

(2.6 %)

R&D expenses

(19.2 %)

(19.4 %)

(19.6 %)

Operating profit

23.6%

23.5%

17.7%

Non-operating income

2.6%

1.5%

3.8%

Income tax expense

(3.0 %)

(3.0 %)

(1.3 %)

Net profit

23.2%

22.0%

20.2%

Note: Numbers do not add up due to rounding.

MediaTek Inc.

Consolidated Balance Sheet

(In NT$ millions)

2Q14

1Q14

2Q13

Cash & Financial assets-current

196,431

173,917

112,749

Accounts receivable

12,983

13,572

10,389

Inventories

19,326

16,649

10,956

Funds and investments

9,918

10,122

67,469

Intangible assets

59,488

60,584

15,481

Total assets

323,857

298,543

237,353

Short-term loans

34,046

22,101

16,114

Accounts payable

18,439

17,421

10,873

Other current liabilities

55,266

29,008

29,871

Long-term liabilities & Other liabilities

1,789

1,615

2,143

Stockholders’ equity

214,317

228,398

178,353

MediaTek Inc.

Consolidated Cash Flow Summary

(In NT$ millions)

2Q14

1Q14

2Q13

Cash flow from operations

13,044

9,140

9,921

Cash flow from investing

22

31,182

(751)

Cash flow from financing

12,228

(7,745)

3,305

Effect of exchange rate changes

(2,155)

1,424

659

Net increase in cash & equivalents

23,139

34,001

13,134

Cash & equivalents at quarter end

190,138

166,999

107,225

Note: Numbers do not add up due to rounding.