2016Q1 Financial Results

MediaTek Inc. Reports First Quarter 2016 Consolidated Results

Consolidated Revenue

MediaTek Inc. today announced financial results of first-quarter ended March 31, 2016. First quarter revenue was NT$55,905 million, down 9.4% sequentially, and up 17.6% year-over-year. The quarter-over-quarter decrease was mainly due to seasonality and year-over-year increase were mainly due to higher mix of high-end consumer electronics and Richtek revenue recognition.

Consolidated Gross Profit and Gross Margin

The first-quarter gross profit was NT$21,307 million, down 10.4% sequentially and 5.3% year-over-year. Gross margin for the quarter was 38.1%, down 0.4 percentage points sequentially and 9.2 percentage points year-over-year. The quarter-over-quarter and the year-over-year decrease were mainly due to smartphone market competition.

Consolidated Operating Expenses

Operating expenses for the quarter was NT$16,904 million (30.2% of revenue), compared with NT$20,033 million (32.5% of revenue) in the previous quarter, and NT$14,827 million (31.2% of revenue) in the same period last year. The quarter-over-quarter decrease was mainly due to lower one-time charges. The year-over-year increase was mainly due to higher expenses associated with talent and technology investments as well as Richtek operating expenses recognition.

Operating expenses for the quarter included:

Consolidated Operating Income and Operating Margin  Operating income for the quarter was NT$4,403 million, up 17.5% sequentially, and down 42.6% year-over-year. Operating margin for the quarter was 7.9%, increased from 6.1% in the previous quarter, and decreased from 16.1% in the year-ago quarter.

Consolidated Non-operating Income (loss) and Income Tax

Non-operating income for the quarter was NT$875 million, or 1.6% of revenue. It was mainly from interest income and investment income recognized under the equity method. Income tax expense for the quarter was NT$805 million.

Consolidated Net Income, Net Profit Margin and EPS

Net income for the quarter was NT$4,473 million, up 7.0% sequentially, and down 38.3% year-over-year. Net profit margin for the quarter was 8.0%, increased from 6.8% in the previous quarter, and decreased from 15.3% in the year-ago quarter. EPS was NT$2.79, compared with NT$2.83 in the prior quarter and NT$4.62 in the year-ago quarter.

Consolidated Cash and Financial Assets-Current

Cash and financial assets-current at the end of the quarter was NT$172,722 million. This represents 48.4% of the company’s total assets. Cash and financial assets-current was NT$166,898 million and NT$204,952 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$15,598 million. The accounts receivable turnover was 26 days based on quarterly average net receivables divided by annualized net revenue. The turnover was slightly higher than 24 days in the last quarter and 25 days in the year-ago quarter.

Consolidated Inventory

Net inventory was NT$27,027 million at the end of the quarter. The inventory turnover was 67 days based on quarterly average inventory divided by annualized cost of goods sold. The turnover was lower than 70 days in the last quarter and 92 days in the year-ago quarter.

Consolidated Cash Flow from Operations

Net cash provided by operating activities during the quarter was NT$7,958 million, compared with NT$18,164 million in the prior quarter and NT$6,000 million in the year-ago quarter.

Earnings Webcast

MediaTek will hold a public webcast today (April 29). 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:

In Mandarin 3:00 – 4:00 p.m. (Taiwan Time)

http://wms.gridow.com/ir/mediatek/tw/mediatek_2016Q1_tw.html

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

http://wms.gridow.com/ir/mediatek/en/mediatek_2016Q1_en.html

Dial-in Number: +886-2-21928016

Password: 881708#

About MediaTek Inc.

Since 1997, MediaTek has been a pioneering fabless semiconductor company and a market leader in cutting-edge systems-on-chip (SoC) for mobile devices, wireless networking, HDTV, DVD and Blu-ray. Our tightly-integrated, innovative chip designs help manufacturers optimize supply chains, reduce the development time of new products, and extend a competitive edge in both developing and mature markets around the world. Through MediaTek Labs, the company is also building a developer hub that will support device creation, application development, and services for the Internet of Things era. By building technologies that help connect individuals to the world around them, MediaTek is enabling people to expand their horizons and more easily achieve their goals. We believe anyone can achieve something amazing. And we believe they can do it every single day. We call this idea Everyday Genius and it drives everything we do. Visit www.mediatek.com for more information.

MediaTek Inc.

Consolidated Income Statement

(In NT$ millions, except earnings per share)

1Q16

4Q15

1Q15

Q-Q

Y-Y

Net Sales

55,905

61,713

47,536

(9.4 %)

17.6%

Operating costs

(34,598)

(37,932)

(25,038)

Gross Profit

21,307

23,780

22,499

(10.4 %)

(5.3 %)

Selling expenses

(1,996)

(3,483)

(2,169)

Administration expenses

(1,491)

(1,925)

(1,807)

R&D expenses

(13,417)

(14,625)

(10,851)

Operating Expenses

(16,904)

(20,033)

(14,827)

Operating Income

4,403

3,748

7,672

17.5%

(42.6 %)

Net Non-operating Income

875

997

470

Net Income Before Income Tax

5,278

4,745

8,142

Income tax expense

(805)

(564)

(891)

Net Income

4,473

4,181

7,251

7.0%

(38.3 %)

EPS Attributable to the Parent(NT$)

2.79

2.83

4.62

Note: Numbers do not add up due to rounding.

Supplemental Information: Percentage of Revenue 

1Q16

4Q15

1Q15

Gross profit

38.1%

38.5%

47.3%

Selling expenses

(3.6 %)

(5.6 %)

(4.6 %)

Administration expenses

(2.7 %)

(3.1 %)

(3.8 %)

R&D expenses

(24.0 %)

(23.7 %)

(22.8 %)

Operating profit

7.9%

6.1%

16.1%

Non-operating income

1.6%

1.6%

1.0%

Income tax expense

(1.4 %)

(0.9 %)

(1.9 %)

Net profit

8.0%

6.8%

15.3%

Note: Numbers do not add up due to rounding.

MediaTek Inc.

Consolidated Balance Sheet

(In NT$ millions)

1Q16

4Q15

1Q15

Cash & Financial assets-current

172,722

166,898

204,952

Accounts receivable

15,598

16,195

13,347

Inventories

27,027

24,130

28,085

Other current assets

7,250

7,650

6,380

Funds and investments

20,433

22,814

17,236

Intangible assets

74,587

75,431

63,007

Other non-current assets

39,388

38,132

30,828

Total assets

357,005

351,250

363,834

Short-term loans

48,026

49,123

50,934

Accounts payable

23,023

16,156

19,650

Other current liabilities

32,994

35,987

37,575

Total non-current liabilities

3,126

2,896

2,055

Total equity

249,837

247,087

253,620

Note: Numbers do not add up due to rounding.

MediaTek Inc.

Consolidated Cash Flow Summary

(In NT$ millions)

1Q16

4Q15

1Q15

Net cash provided by (used in) operating activities

7,958

18,164

6,000

Net cash provided by (used in) investing activities

(3,351)

(15,036)

(6,955)

Net cash provided by (used in) financing activities

107

(8,221)

4,859

Effect of changes in exchange rate on cash and cash equivalents

(2,031)

(743)

(558)

Net increase (decrease) in cash and cash equivalents

2,683

(5,836)

3,346

Cash and cash equivalents at the end of the period

155,963

153,280

196,143

Note: Numbers do not add up due to rounding.