Actions Semiconductor's (ACTS) CEO Zhenyu Zhou On Q1 2014 Results - Earnings Call Transcript

May. 6.14 | About: Actions Semiconductor (ACTS)

Actions Semiconductor Co., Ltd. (NASDAQ:ACTS)

Q1 2014 Earnings Conference Call

February 6, 2014 08:00 a.m. ET

Executives

Elaine Ketchmere – Compass Investor Relations

Dr. Zhenyu Zhou – Chief Executive Officer

Nigel Liu – Chief Financial Officer

Analysts

Richard Fearon – Accretive Capital Partners

Operator

Ladies and gentlemen, welcome to the Actions Semiconductor First Quarter 2014 Earnings Conference Call held on the 6th of May, 2014. Throughout today’s conference all participants are in a listen-only mode. After the conference, there will be an opportunity to ask questions. (Operator instructions).

I would now like to turn the conference over to your host, Elaine Ketchmere. Please go ahead, ma’am.

Elaine Ketchmere

Thank you, operator. Good morning ladies and gentlemen, and good evening to those of you joining us from Asia. I like to welcome all of you to Actions Semiconductor’s earnings conference call for the first quarter of 2014. This call is being broadcast live over the web and can be accessed on the Investor Room of Actions’ website, www.actions-semi.com for 90 days.

On today’s call are Dr. Zhenyu Zhou, Chief Executive Officer; Nigel Liu, Chief Financial Officer; and Chung Hsu, Director of Investor Relations. Before the market opened in the US today Actions issued a press release discussing the results for its first quarter ended March 31, 2014. The press release is accessible online at the company's website or you can call Compass Investor Relations at 310-528-3031 and we will e-mail you a copy.

We would like to remind you that during the course of this conference call, Actions’ management team may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are simply estimates and actual events or results may differ materially. We refer you to the documents that Actions files from time-to-time with the SEC, specifically the company's most recently filed Forms F-1, 20-F and 6-K. These documents identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

And now, I like to turn the call over to Dr. Zhenyu Zhou.

Dr. Zhenyu Zhou

Thank you for participating in Actions' earnings conference call. We appreciate your continued interest in the company. I will provide an overview of our performance in the first quarter of 2014 along with some operational updates. Later on the call, Nigel Liu, CFO, will discuss financial results for the quarter. I will be available for the Q&A portion for the call along with Nigel and Chung Hsu, Actions' Director of Investor Relations.

Quarter summary. Revenue for the quarter was $11.3 million, down from $16.4 million in the first quarter of 2013. Early timing of the Chinese New Year holiday caused many tablet manufacturers to build up inventory at the end of 2013, which had an indirect effect on overall demand in the first quarter of 2014.

Combined with more intense competition in the whitebox tablet market following the entry of two large players and typical seasonality related to the Chinese New Year holiday, revenue came in below our expectations. Our bottom line was impacted by our ongoing aggressive pricing strategy, an unanticipated inventory write-down which reduced the gross margin by about 4% and a $2.5 million unrealized, non-cash foreign exchange loss associated with the rapid depreciation of the Chinese RMB against the U.S. dollar.

This contributed to a net loss attributable to Actions of $5.5 million or $0.08 per basic and diluted ADS compared to net income attributable to Actions of $0.4 million or $0.006 per basic and diluted share in the first quarter of 2013. While our financial results came in below our expectation this quarter, we are encouraged by our product performance in several areas. Our second generation dual-core solution, ATM7021 and our new Bluetooth boombox solution both made strong gains in market share during the quarter.

We will continue to invest in research and development and expanded our product portfolio to include a wide array of solutions for Cloud connected device and other multimedia products.

Now I will provide some details about our tablet and multimedia business, along with some other corporate developments. Tablet business. In the first quarter of 2014, the whitebox tablet market experienced soft demand, primarily due to the buildup of inventory by tablet manufacturers in late 2013 in advance of the Chinese New Year holiday. Combined with the extended impact of the holiday on production by consumer electronics manufacturers in China, overall whitebox tablet shipments dropped to nearly [13%] from the previous quarter.

In addition, competition intensified with MediaTek and Intel aggressively entering the whitebox tablet market and putting pressure on ASPs. Although these factors add uncertainty to our business and are expected to impact our pricing strategy and gross margin in the near term, we believe the tablet market still holds the strongest potential for Actions.

Our current expectation is for modest growth in the overall tablet market in 2014. Though our current tablet shipments consist primarily of whitebox tablets, we have been actively positioning our products to target the branded segment of the market. After several years of strong growth, there has been a slight decline in the portion of whitebox tablet shipments relative to those of branded tablets over the last few months. We believe our OWL series product family puts us in a unique competitive position for success in the future both with whitebox and branded tablet manufacturers.

Led by our second generation dual-core solutions, ATM7021 shipments of our OWL series tablet chipset increased about 20% year-over-year in the quarter, targeting the low end of the market ATM7021 offers advanced performance and multimedia capability for entry level tablets. Because this segment of the market is characterized by manufacturers in emerging markets they are extremely sensitive to price. We adopted an aggressive pricing program to quickly establish our position and build volume. This resulted in lower ASPs and contributed to the decline in revenue for the quarter.

Although this pricing strategy has impacted our financial results for the last two quarters, we continue to believe that sacrificing margin for the sake of volume is an investment in our future that will ultimately lead to better bottom line performance over the longer term. As dual-core CPU solutions are expected to become the mainstream specifications in the coming months, we anticipate strong growth in shipments of ATM7021 throughout 2014.

We do see some room for improvement in margin beginning in the third quarter as we anticipate record adoption of our quad-core solutions by tablet manufacturers in North America and Europe in advance of their peak season. These manufacturers place greater importance on the quality and performance of their mid-to-high end models rather than focusing on price alone. We are working hard to enhance our competitive position by improving the performance of our products.

At the end of 2013, we introduced an improved version of our quad-core SoC ATM7021B, which features a better CPU and performance. We have also tailored our tablet SoC for using other cloud connected device, such as OTT set-top boxes with advanced multimedia features based on our OWL series product. While still in an early stage, the market for OTT capable devices is expanding rapidly, and we see a lot of opportunities here.

We also introduced a new line of products based on our high-performance ATM7039 quad-core SoC for smart monitors, POS machines, Digital Signage and Thin client applications. We continue to invest in R&D to provide our customers with attractively priced high performance turnkey solutions that enhance the user experience. During the quarter, we invested heavily IP related to our new application processor-based on a 64-bit CPU and operating system. We are excited about the industry trend towards 64-bit CPU, operating system, and applications with all the major players, including Apple, pushing smart phones and tablets towards 64-bit architecture.

We plan to introduce our product towards the end of this year, and expect it to make a meaningful contribution to revenue in 2015. We will share more details once it is rolled out.

Multimedia business. In our multimedia business we continue to see strong growth trend in the wireless connectivity enabled multimedia market. Our Bluetooth boombox solutions reached volume shipment in the fourth quarter of 2013, and continued to gain share in the first quarter of 2014. We are leveraging our leading position in non-Apple portable audio products and portable video players to meet this demand most recently with the introduction of our new Bluetooth 4.0 dual-mode boombox solutions.

While we anticipate slower sales of certain traditional PMP and gaming products as consumers migrate to alternative devices such as tablets, we expect our Bluetooth boombox solutions along with other new wireless connectivity enabled media solutions to make a strong contribution to our revenue in 2014. Our current expectation is that revenue from our multimedia business will meet 2013 levels.

Corporate developments. We have initiated a reorganization of our group structure, which will put us in a better position to monetize the vast intellectual property portfolio we have developed over the years, including entering into additional licensing contracts and joint venture agreements. We believe a more streamlined (inaudible) will provide our engineers with greater clarity as to their goals and responsibility as well as for a more collaborative environment for engineers in different departments. We are also mindful of the intense competition for quality engineers in China. We will be rethinking and rolling out better incentive programs for our employees in the coming months, particularly with respect to our talented engineers.

In addition, we are constantly seeking methods to maximize value to our shareholders. We are aware of suggestions to increase the volume of shares repurchased under our buyback program, or even increase the volume (inaudible). While we have no specific plans at this time our board of directors is conscious of these suggestions, and evaluates the cost and benefits from time to time. As a result, we do not rule out the possibility of implementing such programs, but only at the proper time and at a proper price.

Conclusion: Despite some additional uncertainty in the tablet market, we believe it does hold the strongest potential for actions. We are working hard to improve our competitive position and set a path for future success. Because of this lower than anticipated start to 2014 and the changing dynamics in the tablet market, we are now targeting revenue growth for the future – for the full year 2014 to be between 10% and 15%.

We expect the dual-core CPU to become the mainstream specifications in the low-end of the target tablet market and the use of quad-core SoCs in mid-to-high end models to accelerate in the coming months. Our OWL series product family is well positioned to capitalize on these trends with both whitebox and branded tablet manufacturers. We anticipate returning to a strong growth trajectory in the second half of the year due to seasonality in overseas markets, such as the Christmas season in Western countries.

We have a compelling product portfolio featuring a wide array of solutions for tablets, Cloud connected devices and other multimedia applications. We expect the newer multimedia products such as our Bluetooth 4.0 dual-mode boombox solutions to make a meaningful contribution to revenue. As we reviewed our position in the tablet and adjacent market, we still exercise prudent financial management, and we will organize our group structure to streamline our business, while pursuing methods to maximize shareholder value.

Now, I’d like to turn the call over to Nigel Liu, our CFO, who will review our financial results for the first quarter.

Nigel Liu

Thank you, Dr. Zhou. As a reminder, all financials are reported in accordance with US GAAP. For the first quarter ended March 31, 2014, we recorded revenue of $11.3 million compared to $17.6 million in the fourth quarter of 2013. Our gross margin for the first quarter was 23.1% compared to 22.2% for the prior quarter. As Zhenyu mentioned, we recorded an anticipated inventory write-down, which reduced gross margin by about 4%.

For the first quarter, total stock-based compensation expense was [$600,000] down from $0.1 million in the fourth quarter of 2013.

R&D expense was $6.8 million or 59.9% of revenue for the first quarter compared to $6.1 million in the fourth quarter of 2013. The increase was related to an investment in intellectual property related to 28 nanometer process technology.

G&A expense was $2 million in the first quarter or 18% of revenue compared to $2.5 million in the fourth quarter of 2013. The decrease was related to a normal seasonal recruiting activity and of course for year-end expenditures, which led to high expense in the fourth quarter of 2013.

Sales and marketing expense was $0.4 million in the first quarter or 3.4% of revenue compared to $0.6 million in the fourth quarter of 2013. The decrease was primarily due to seasonality. Operating loss was $6.1 million for the first quarter of 2014 compared to an operating loss of $3.8 million for the prior quarter.

Net other loss for the first quarter was $2.5 million, due to an unrealized non-cash foreign exchange loss associated with the rapid depreciation of the Chinese RMB against the US dollar. This compares to net other income of $0.8 million for the fourth quarter of 2013 related to a foreign exchange benefit. Interest income was $3.1 million for the first quarter, down slightly from $3.2 million in the fourth quarter of 2013.

Loss before tax was [$5.3 million] for the first quarter compared to a loss before tax of $0.6 million in the fourth quarter of 2013.

Net income tax expense was $0.2 million for the first quarter compared to income tax expense of $0.1 million in the fourth quarter of 2013. Net loss attributable to Actions Semiconductor on a US GAAP basis for the first quarter of 2014 was $5.5 million or $0.08 per basic and diluted ADS. This compared to net loss of $0.8 million or $0.012 per basic and diluted ADS for the fourth quarter of 2013.

Now moving to the balance sheet. Cash and cash equivalents together with time deposits, trading securities in both current and non-current marketable securities totaled $219.4 million as of March 31, 2014 compared to $224.6 million as of December 31, 2013. Of the $219.4 million total, $78.7 million was in cash and short-term interest-bearing investments together with time deposits that was generally issued by large domestic banks in China, for terms no more than three months and can be redeemed at any time.

$140.7 million was in trading securities in the current and the non-current marketable securities, which were principal guarantees or pledged investment with higher interest rate and minimal returns of three months less marketable securities, while many issue manage or guaranteed by top ranking state-owned financial institutions in China.

Our short-term borrowing totaled $14.5 million at the end of the first quarter, up from $13.5 million at the end of the fourth quarter of 2013. We continue to utilize agreement we entered into that allowed us to borrow the US dollars at a lower interest rate in Hong Kong currency by all RMB deposits in Mainland, China.

Additionally as they are using our RMB funds in China, we drew down our offshore line of credit for US dollar cash needs. This approach have us take advantage of lower interest rate on US dollar loan, while enabling us to continue earning higher interest rate on all RMB denominated investments even considering the short-term exchange transactions.

Accounts receivable was $6.6 million at the end of the first quarter of 2014 compared to $7.1 million at the end of the fourth quarter of 2013. Accounts receivable includes amount due from a related party and equity method investees. Inventory was $25.3 million at the end of the first quarter, up from $20.3 million at the end of the prior quarter.

We continue to buy back shares, spending approximately $1.1 million on the shares repurchase program during the first quarter compared with $1.8 million in the fourth quarter of 2013. Our repurchase activity remains constrained by shrinking volume and blackout periods for our 10B-18 program, as well as limited activity in block trading. As of March 31, 2014, the company had investment approximately a total of $51.5 million in the program representing approximately 22.5 million ADS shares. Today, our board of directors authorized an increase to 50 million ADS from 30 million ADS for the share repurchase program. In addition, at the Company's 2014 annual general meeting held today, shareholders approved the Company's future repurchases from time to time of its Ordinary Shares and ADSs at such time, at such price, and in such manner and on such other terms as determined by the Company's Board of Directors.

And now turning to our outlook. Based on our current market trends, we expect revenue in the second quarter of 2014 to be in the range of $15 million to $17 million. We expect revenue in the second half of 2014 to return to a strong growth trajectory, driven by growth in shipments of its OWL Series product family of chipsets.

And now, we like to open the lines for questions. Operator?

Question-and-Answer Session

Operator

Thank you. And the first question comes from Richard Fearon from Accretive Capital Partners. Please go ahead.

Richard Fearon - Accretive Capital Partners

Hello Zhenyu and Nigel, how are you?

Dr. Zhenyu Zhou

Hi Richard.

Nigel Liu

Hello.

Richard Fearon - Accretive Capital Partners

I am not sure if I understood correctly, but then you sounded like you thought for 2014 that the latter half of the year would result in overall growth versus 2013, did I hear you correctly that you thought it might be 10% to 15% this year?

Dr. Zhenyu Zhou

Yes, 10% to 15% overall growth against 2013.

Richard Fearon - Accretive Capital Partners

Okay. So that would imply that two months from now, we are going to start ramping up again by the third quarter and start seeing some pretty dramatic growth and obviously we have some shortfall to make up here with the first quarter that we saw, are April sales tracking above April 2013 or how did sales look last month?

Dr. Zhenyu Zhou

At this moment, we only discuss the first quarter results. I cannot release the second quarter result yet, but we are confident that based on our current expectation the second half of this year, you know, we look back to the gross again.

Richard Fearon - Accretive Capital Partners

The 15 million to 17 million in revenue expected for the second quarter, I don’t have last year’s, the 2013 second quarter, how does that compare to 2014?

Dr. Zhenyu Zhou

The projection of the second quarter is more the action of the same quarter last year. I believe the same quarter last year is 18 or something like that.

Nigel Liu

Yes, 18.

Dr. Zhenyu Zhou

So, the growth primarily account for the second half of the year’s performance.

Richard Fearon - Accretive Capital Partners

So the second quarter of this year will be flat to slightly down versus second quarter last year?

Dr. Zhenyu Zhou

That is true.

Richard Fearon - Accretive Capital Partners

And that would imply that you are really expecting strong growth in the second half, and what gives you that confidence right now?

Dr. Zhenyu Zhou

Okay. That basically comes from the product mix. The first half is primarily shipping the dual-core, which is the lower priced, lower ASP products, and majority of the quad-core will happen in the second half in preparation of the Western countries Christmas seasons. So the overall revenue growth will be more in the second half.

Richard Fearon - Accretive Capital Partners

Do you have some visibility Zhenyu into that because, you know, again it is sort of two months from now we are into the second half, presumably you have some visibility into orders increasing?

Dr. Zhenyu Zhou

No, we had some larger order (inaudible). I cannot say we have, you know, visibility, but as you know, most of the Christmas season’s sales will be shipped in the third quarter. So at this moment it is already in discussion for the third quarter’s quarter.

Richard Fearon - Accretive Capital Partners

Okay, and do you have some new OEMs that are part of the customer mix that weren’t part of it last year?

Dr. Zhenyu Zhou

Yes.

Richard Fearon - Accretive Capital Partners

Okay. Are there any names that you are able to share at this point or any expectation in sharing some new customer relationships with investments?

Dr. Zhenyu Zhou

Not at this moment. You know, we may share some after some time, yes.

Richard Fearon - Accretive Capital Partners

Okay. That will be something that will be of interest to us to hear about some of the new OEM relationships that are being built in terms of what is giving you confidence in terms of growth this year?

Dr. Zhenyu Zhou

Sure.

Richard Fearon - Accretive Capital Partners

It looks like gross margin actually improved quarter-over-quarter from 22% in the fourth quarter to 23% and then there was a 4% hit from these write-downs. So does that (inaudible) of revenues, so that would imply that the gross margin would have been 27%.

Dr. Zhenyu Zhou

Yeah, correct. It should be around 28%.

Richard Fearon - Accretive Capital Partners

Okay. So are we expecting to return to 30% to 35% gross margin earnings which is sort of the historically what the company has enjoyed, I know that there is this near term impact to gross margin based on the pricing strategy that was adopted by the company and is that something that we can reverse with some of the new product introductions?

Dr. Zhenyu Zhou

Well, we certainly, we will do our best to profile gross margin and at this moment we (inaudible) practice the aggressive pricing strategy so we do – we will expect margin has a positive way to improve (inaudible) our revenue. We will do our best to go back to the normal margin.

Richard Fearon - Accretive Capital Partners

And the impact that you are expecting when you say near-term gross margin impact, how do you define near-term? Are we expecting some improvement in the later half of the year or is 2014 gross margin going to be on a continuing at this high 20% range?

Dr. Zhenyu Zhou

In general, I think with—in terms of market competitive position, I don't expect that we have very high margin that's, its as per our expectation but as we indicating the swift we expect there is a room to improve margin in the third quarter of the year.

Richard Fearon - Accretive Capital Partners

Okay and R&D level has increased and in your letter you talked about streamlining R&D spending. Can you share some of the goals in this regard?

Nigel Liu

Okay. Richard, this is Nigel. So regarding the R&D spending, we still increase in first quarter due to the way as you know, we invest more IT, so that kind of a modernization to our expense. Also, you mentioned about this July – our duties so let me assure you that we would work out the overall company structure to separate our multimedia product and also the tablet product, that means we have (inaudible) two kinds products separated and to show the (inaudible) and the responsibility is clearly to the engineer. So let’s say, its kind of efficiency improvement, not cost saving.

Richard Fearon - Accretive Capital Partners

Obviously with declining revenue, you have less gross profit to cover R&D spending which has continue to decline and if gross margins can’t improve and even if you are growing sale with lower margins, our gross profits is still going to be less than last year and it's hard to cover this R&D expense which will begin to burn cash and we given the (inaudible) in the first quarter of this year, I know that's not anyone's objective here is to be going through our cash assets to just to cover operating expenses. Can you share some of the -- what’s function of this?

Dr. Zhenyu Zhou

Unfortunately, this moment yes. If the gross margins don't go to a high level, yes the gross profit level will be flat or lower but this is a very competitive market, we have to invest into the future like 64 bit is a trend of the industry and for a high-tech company, and for high-tech industry sometimes we have to invest our cash into our for future to R&D that is also part of the reason we want to preserve enough cash for this kind of purpose.

Richard Fearon - Accretive Capital Partners

The problem has been historically is that our return on an investment has been very poor. Our R&D spending is very high but the high increase in profits has not resulted from that. So at some point, a right size in the company it got streamlining the R&D cost need a lot of sense which is something that you articulated in the letter, as you think about the infinitive programs for engineers in the coming months, does that mean further increase in R&D cost?

Dr. Zhenyu Zhou

No, when we talk about incentive program, usually it could mean like stock option or (inaudible)

Richard Fearon - Accretive Capital Partners

The R&D engineers right now are receiving stock options but do they really have –do the R&D engineers really have the control over what the stock price does and wouldn't rewarding better engineers with cash make more sense and perhaps limiting the stock option distribution, because engineers presumably, they think they cannot control the price of the stock but the better engineers presumably want to be rewarded over the ones one performing as well.

Dr. Zhenyu Zhou

Yes, I hear your point. I think this is a reasonable point to go (inaudible) with that possibilities.

Richard Fearon - Accretive Capital Partners

Okay. Great. And then you mentioned that there were no specific plans regarding increasing the pace at which we buy back stock then why are there no plan to do that when we talked about this for a number of years in fact.

Chung Hsu

Richard this is Chung. Actually to the buyback side, actually -- first of all, the company actually mean to have a plan and first of all we, the board of directors have approved increase of the share buyback for 30 million share to 50 million shares and that shows our confidence and our determination to buy more share back. Okay and the other thing is actually Nigel still have to undergo talking with banks, U.S. bank, a banker to discuss the potential, how to restructure of good share buyback to pen the offer, it’s undergoing as well and however due to the recent (inaudible) share plan is change so we have made our plan, perfect plan to put right in strategy and the time we get. However, we still keeping to share buyback.

Richard Fearon - Accretive Capital Partners

Okay. So is it – if I am trying to just understand that if there is more to this increase in $50 million ADS shares from $30 million, I mean clearly we haven’t been buying back stock, we just can't underpin the 18 buyback stock to fill that kind of program in any reasonable amount of time, will take us years. So presumably am I interpreting it correctly to say that this concept of Dutch auction tender is still being considered at some point in time that could be announced by the company?

Chung Hsu

We cannot rule out any possibility but we do have conversation with the banks, any other banks.

Chung Hsu

Okay.

Richard Fearon - Accretive Capital Partners

And to add more something that we advocated for quite some time and certainly hope that those conversations with the banks result in taking action on this, now that the board has approved 50 million ADS share buyback program so you are strong proponent to that and once again encourage the company to take action on that plan to put the money to work because it cannot be done in any reasonable period of time under the constraint of 10B-18.

Chung Hsu

So, Rick, point I am trying to make it please believe as we try our best otherwise the board of directors will not approve from 30 million to 50 million share buyback.

Richard Fearon - Accretive Capital Partners

I understand. Okay. Well we certainly would like to see our cash put to use in that way when you can buy dollars for $0.50 that’s usually a pretty good thing. Are we expecting any further inventory write down because that certainly is the you know I am sure that not something that you anticipated and certainly not something we anticipated.

Nigel Liu

Rick, This is Nigel. So as you would understand, for the inventory write-off, we actually like (inaudible) mention to the relation of all utilities dividend especially considering the market trend, our product feature and also the (inaudible) factors. So what we believe certainly we have fully made the necessary reverse for our utilities. But for the coming quarters we do not comment whether there is any additional reserve we should made.

Richard Fearon - Accretive Capital Partners

Okay. So you are not – you don't foresee for your write-down?

Nigel Liu

(Inaudible)

Richard Fearon - Accretive Capital Partners

Okay and then I get the last question I have got is just – can you share some details about the trust financial products that we own maybe the duration of those products, how long those are outstanding typically, who the issuers are if there is any concentration and sort of what yield we are receiving on those investments?

Dr. Zhenyu Zhou

Actually the truest issuer is China. The duration is probably maybe six months to 24 months and actually all the investment we did, will lead you to you know to trust issued by top bank and financial institution and also guarantee and the year, the annual year ranges from 7% to 8.5%. So that’s our (inaudible).

Richard Fearon - Accretive Capital Partners

Okay. I mean that is an attractive yield but obviously that does not come without additional risk and it sounds like historically if there is six months, did you say six months to 24 months?

Dr. Zhenyu Zhou

Three months to 24 months.

Richard Fearon - Accretive Capital Partners

Three months to 24 months, so historically those have been repaid but obviously there is some concern about the trust investments in China that the underlying issuers may – there maybe some issues that are unforeseen. It would seem to me that the strategy of leveraging in US dollars and then investing our R&D in this trust is taking up more risk than perhaps is worth the time. There is other investment that we could certainly make with our cash like buying back our stock. So I hope that we don't continue our borrowing money in US dollars and then investing our R&D in these trusts. I think that you should, if we have additional need for cash, we should go using our cash so we are not taking undue risk here. Is that a fair comment?

Dr. Zhenyu Zhou

Yes, we will consider your suggestion. Thank you. Thank you Rick.

Richard Fearon - Accretive Capital Partners

Well thank you guys and we will look forward to hearing how second quarter does and hope that we see growth that we are all expecting.

Dr. Zhenyu Zhou

Okay. Thank you Rick.

Operator

Thank you. There seem to be no further questions at present time. Please go ahead with any concluding remarks.

Dr. Zhenyu Zhou

Thanks again for joining us on today’s earnings call. We appreciate your interest in and continuing support of Actions. Thank you.

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