Financial
Highlights |
|
|
|
|
4Q 2018 GAAP |
|
4Q 2018 Non-GAAP |
• Net sales |
$123.4
million (-11% Q/Q, -9% Y/Y) |
|
$123.4
million (-11% Q/Q, -9% Y/Y) |
• Gross
margin |
50.3% |
|
50.5% |
• Operating
margin |
14.0% |
|
25.1% |
• Earnings per
diluted ADS |
$0.48 |
|
$0.83 |
|
|
Full Year 2018 GAAP |
|
Full Year 2018 Non-GAAP |
• Net sales |
$530.3
million (+1% Y/Y) |
|
$530.3
million (+1% Y/Y) |
• Gross
margin |
49.2% |
|
49.3% |
• Operating margin |
20.4% |
|
25.0% |
• Earnings per
diluted ADS |
$2.78 |
|
$3.41 |
|
|
|
|
Business Highlights
Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon
Motion” or the “Company”) today announced its financial results for
the quarter ended December 31, 2018. For the fourth quarter, net
sales decreased sequentially to $123.4 million from $138.6 million
in third quarter 2018. Net income (GAAP) decreased to $17.3 million
or $0.48 per diluted ADS (GAAP) from a net income (GAAP) of $29.2
million or $0.81 per diluted ADS (GAAP) in third quarter 2018.
For the fourth quarter, net income (non-GAAP)
decreased to $30.2 million or $0.83 per diluted ADS (non-GAAP) from
a net income (non-GAAP) of $34.5 million or $0.95 per diluted ADS
(non-GAAP) in third quarter 2018.
Fourth Quarter 2018 Review “Our
fourth quarter sales declined as expected, near the midpoint of
guidance,” said Wallace Kou, President and CEO of Silicon Motion.
“Our client SSD controller sales weakened largely due to more
cautious than expected procurement of NAND flash from module makers
that face the transitional risk of operating during a period of
rapidly falling NAND prices. Our eMMC+UFS controller sales declined
because of weak smartphone sales. Sales of our Shannon data center
SSDs declined while our Ferri industrial SSDs increased.”
Sales |
(in millions, except percentages) |
4Q 2018 |
3Q 2018 |
4Q 2017 |
Sales |
Mix |
Sales |
Mix |
Sales |
Mix |
Mobile Storage* |
$113.4 |
92% |
$129.8 |
|
94% |
$125.3 |
92% |
Q/Q |
-13 |
% |
|
+0% |
|
|
+7% |
|
Y/Y |
-10 |
% |
|
+11% |
|
|
-4% |
|
Mobile Communications** |
$7.2 |
6% |
$7.0 |
|
5% |
$9.4 |
7% |
Others |
$2.8 |
2% |
$1.7 |
|
1% |
$1.5 |
1% |
Total revenue |
$123.4 |
100% |
$138.6 |
|
100% |
$136.2 |
100% |
Q/Q |
-11 |
% |
|
+0% |
|
|
+7% |
|
Y/Y |
-9 |
% |
|
+9% |
|
|
-6% |
|
* Mobile Storage products include Embedded Storage
products (eMMC+UFS and SSD controllers and data center and
industrial SSD solutions) and Expandable Storage products (SD
memory cards and USB flash drive controllers) ** Mobile
Communications products include mobile TV SoCs
|
|
|
Key Financial Results |
|
|
(in millions, except percentages and per ADS
amounts) |
GAAP |
Non-GAAP |
4Q 2018 |
3Q 2018 |
4Q 2017 |
4Q 2018 |
3Q 2018 |
4Q 2017 |
Revenue |
$123.4 |
$138.6 |
$136.2 |
$123.4 |
$138.6 |
$136.2 |
Gross profit |
$62.1 |
$70.6 |
$63.3 |
$62.3 |
$70.7 |
$63.5 |
Percent of revenue |
50.3% |
50.9% |
46.5% |
50.5% |
51.0% |
46.6% |
Operating expenses |
$44.9 |
$38.3 |
$49.8 |
$31.4 |
$33.1 |
$30.6 |
Operating income |
$17.2 |
$32.2 |
$13.5 |
$31.0 |
$37.5 |
$32.9 |
Percent of revenue |
14.0% |
23.3% |
9.9% |
25.1% |
27.1% |
24.1% |
Earnings per diluted ADS |
$0.48 |
$0.81 |
$0.27 |
$0.83 |
$0.95 |
$0.79 |
Other Financial Information |
(in millions) |
4Q
2018 |
3Q
2018 |
4Q
2017 |
Cash and cash equivalents, and short-term investments |
$288.6 |
$308.2 |
$366.4 |
Bank loans |
-- |
$3.9 |
$25.0 |
Loan repayments |
$3.9 |
$8.1 |
-- |
Capital expenditures |
$5.0 |
$62.9 |
$3.5 |
Dividend payments |
$10.8 |
$10.8 |
$10.7 |
Share repurchase |
$33.6 |
-- |
-- |
During the fourth quarter, we had $5.0 million of capital
expenditures, primarily for routine purchases of software, design
tools and other items.
Our fourth quarter cash flows were as follows:
|
3 months ended Dec. 31, 2018 |
|
|
(In $
millions) |
Net
income (GAAP) |
|
17.3 |
Depreciation & amortization |
|
3.8 |
Impairment loss of goodwill |
|
0.6 |
Impairment loss of long term investment |
|
1.2 |
Changes in operating assets and liabilities |
|
1.3 |
Others |
|
10.6 |
Net cash
provided by operating activities |
|
34.8 |
Acquisition of property and equipment |
|
(5.0) |
Net cash
used in investing activities |
|
(5.0) |
Dividend |
|
(10.8) |
Share
repurchase |
|
(33.6) |
Loans |
|
(3.9) |
Net cash
used in financing activities |
|
(48.3) |
Effects of changes in foreign currency exchange rates on cash |
|
- |
Net
decrease in cash, cash equivalents and restricted cash |
|
(18.5) |
|
|
|
Returning Value to ShareholdersOn October 29,
2018, the Board of Directors of the Company declared a $1.20 per
ADS annual dividend to be paid in quarterly installments of $0.30
per ADS. On November 23, 2018, we paid $10.8 million to
shareholders as the first installment of our annual dividend.
On November 21, 2018, the Company announced that
its Board of Directors had authorized a new program for the Company
to repurchase up to $200 million of its ADS over a 24 month period.
In the fourth quarter, the Company repurchased $34.8 million of its
ADS at an average price of $34.52 per ADS.
Business Outlook“We expect NAND
prices to continue falling through 2019, which will drive
meaningful increase in client SSD adoption in PCs starting in the
middle of this year,” said Wallace Kou, President and CEO of
Silicon Motion. “As one would expect, benefits from this price
elasticity of demand does not happen immediately. Also, during the
current transitional period of rapidly falling NAND prices, our
module maker customers may be more cautious than usual in their
NAND and controller procurements. NAND flash vendors have also been
temporarily limiting sales and building inventory. Finally, our OEM
customers are operating with worse than usual business visibility
due to weakening economic conditions, compounded by the US-China
tariff situation and other uncertainties.”
|
For the
first quarter of 2019, management expects: |
|
GAAP |
Non-GAAP
Adjustment |
Non-GAAP |
Revenue |
$97.5m to $103.6m -21% to -16% Q/Q |
-- |
$97.5m to $103.6m -21% to -16% Q/Q |
Gross margin |
46.9% to 49.9% |
Approximately $0.1m* |
47.0% to 50.0% |
Operating margin |
6.8% to 11.2% |
Approximately $5.0m to $5.1m** |
12.0% to 16.0% |
* Projected gross margin (non-GAAP) excludes $0.1 million of
stock-based compensation.** Projected operating margin (non-GAAP)
excludes $0.5 million of amortization of intangible assets and $4.5
million to $4.6 million of stock-based compensation.
For full-year 2019, management expects GAAP and
Non-GAAP Revenue to be approximately similar to 2018 and Gross
Margin and Operating Margin to be approximately similar to the
prior year if product mix remains unchanged.
Conference Call & Webcast:The Company’s
management team will conduct a conference call at 8:00 am Eastern
Time on January 30, 2019. Speakers: Wallace Kou,
President & CEO Riyadh Lai, CFO Jason Tsai, Senior
Director of Investor Relations and Strategy
CONFERENCE CALL ACCESS NUMBERS: USA (Toll Free): 1
866 519 4004 USA (Toll): 1 845 675 0437 Taiwan (Toll
Free): 080 909 1568 Participant Passcode: 4485756
REPLAY NUMBERS (for 7 days): USA (Toll Free): 1 855
452 5696 USA (Toll): 1 646 254 3697 Participant
Passcode: 4485756A webcast of the call will be available on the
Company's website at www.siliconmotion.com.
Discussion of Non-GAAP Financial Measures
To supplement the Company’s unaudited selected
financial results calculated in accordance with U.S. Generally
Accepted Accounting Principles (“GAAP”), the Company discloses
certain non-GAAP financial measures that exclude stock-based
compensation and other items, including gross profit (non-GAAP),
operating expenses (non-GAAP), operating profit (non-GAAP), net
income (non-GAAP), and earnings per diluted ADS (non-GAAP). These
non-GAAP measures are not in accordance with or an alternative to
GAAP, and may be different from non-GAAP measures used by other
companies. We believe that these non-GAAP measures have limitations
in that they do not reflect all the amounts associated with the
Company’s results of operations as determined in accordance with
GAAP and that these measures should only be used to evaluate the
Company’s results of operations in conjunction with the
corresponding GAAP measures. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for the most directly comparable GAAP measure. We
compensate for the limitations of our non-GAAP financial measures
by relying upon GAAP results to gain a complete picture of our
performance.
Our non-GAAP financial measures are provided to
enhance the user’s overall understanding of our current financial
performance and our prospects for the future. Specifically, we
believe the non-GAAP results provide useful information to both
management and investors as these non-GAAP results exclude certain
expenses, gains and losses that we believe are not indicative of
our core operating results and because they are consistent with the
financial models and estimates published by many analysts who
follow the Company. We use non-GAAP measures to evaluate the
operating performance of our business, for comparison with our
forecasts, and for benchmarking our performance externally against
our competitors. Also, when evaluating potential acquisitions, we
exclude the items described below from our consideration of the
target’s performance and valuation. Since we find these measures to
be useful, we believe that our investors benefit from seeing the
results from management’s perspective in addition to seeing our
GAAP results. We believe that these non-GAAP measures, when read in
conjunction with the Company’s GAAP financials, provide useful
information to investors by offering:
- the ability to make more meaningful period-to-period
comparisons of the Company’s on-going operating results;
- the ability to better identify trends in the Company’s
underlying business and perform related trend analysis;
- a better understanding of how management plans and measures the
Company’s underlying business; and
- an easier way to compare the Company’s operating results
against analyst financial models and operating results of our
competitors that supplement their GAAP results with non-GAAP
financial measures.
The following are explanations of each of the
adjustments that we incorporate into our non-GAAP measures, as well
as the reasons for excluding each of these individual items in our
reconciliation of these non-GAAP financial measures:
Stock-based compensation expense consists of
non-cash charges related to the fair value of restricted stock
units awarded to employees. The Company believes that the exclusion
of these non-cash charges provides for more accurate comparisons of
our operating results to our peer companies due to the varying
available valuation methodologies, subjective assumptions and the
variety of award types. In addition, the Company believes it is
useful to investors to understand the specific impact of
share-based compensation on its operating results.
Amortization of intangibles assets consists of
non-cash charges that can be impacted by the timing and magnitude
of our acquisitions. The Company considers its operating results
without these charges when evaluating its ongoing performance and
forecasting its earnings trends, and therefore excludes such
charges when presenting non-GAAP financial measures. The Company
believes that the assessment of its operations excluding these
costs is relevant to its assessment of internal operations and
comparisons to the performance of its competitors.
Litigation expenses consist of legal expenses
relating to intellectual property disputes, commercial claims and
other types of litigation. While litigation may arise in the
ordinary course of our business, we nevertheless consider
litigation to be an unusual and unplanned activity and therefore
exclude this charge when presenting non-GAAP financial
measures.
Impairment of goodwill evaluates the
recoverability of goodwill annually, or sooner if events or changes
in circumstances indicate that the carrying amount may not be
recoverable.
Foreign exchange gains and losses consist of
translation gains and/or losses of non-US$ denominated current
assets and current liabilities, as well as certain other balance
sheet items which result from the appreciation or depreciation of
non-US$ currencies against the US$. We do not use financial
instruments to manage the impact on our operations from changes in
foreign exchange rates, and because our operations are subject to
fluctuations in foreign exchange rates, we therefore exclude
foreign exchange gains and losses when presenting non-GAAP
financial measures.
Gain and loss on equity-method investment
consists of gain and/or loss related to our investment in a
privately-held company, which varies depending on the operational
and financial performance of the company in which we invested. We
believe that providing non-GAAP measures excluding these charges,
as well as the GAAP measures, assists our investors because such
charges are not reflective of our ongoing operations.
Impairment of long-term investments relates to
the other-than-temporary, non-operating write down of the Company's
minority stake investments. We do not consider these investments to
be strategic and exclude the performance of these investments when
evaluating our ongoing performance and forecasting our earnings
trends, and therefore excluding losses (and gains) from the
investments when presenting non-GAAP financial measures.
Silicon Motion Technology CorporationConsolidated
Statements of Income(in thousands, except percentages and per ADS
data, unaudited)
|
For the Three Months Ended |
|
Dec. 31,
2017 |
|
Sep. 30, 2018 |
|
Dec. 31, 2018 |
($) |
|
($) |
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
136,165 |
|
|
|
138,562 |
|
|
|
123,386 |
|
Cost of sales |
|
72,878 |
|
|
|
67,988 |
|
|
|
61,288 |
|
Gross profit |
|
63,287 |
|
|
|
70,574 |
|
|
|
62,098 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Research
& development |
|
27,946 |
|
|
|
25,506 |
|
|
|
30,675 |
|
Sales
& marketing |
|
7,364 |
|
|
|
7,735 |
|
|
|
7,435 |
|
General
& administrative |
|
5,046 |
|
|
|
4,355 |
|
|
|
5,397 |
|
Amortization of intangibles assets |
|
956 |
|
|
|
741 |
|
|
|
741 |
|
Impairment loss of goodwill |
|
10,337 |
|
|
|
- |
|
|
|
625 |
|
Gain from
disposal of other assets |
|
(1,880 |
) |
|
|
- |
|
|
|
- |
|
Operating income |
|
13,518 |
|
|
|
32,237 |
|
|
|
17,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
Interest
income, net |
|
1,135 |
|
|
|
1,597 |
|
|
|
1,718 |
|
Foreign
exchange gain (loss), net |
|
(447 |
) |
|
|
(749 |
) |
|
|
(9 |
) |
Gain
(loss) on equity-method investment |
|
- |
|
|
|
(98 |
) |
|
|
(169 |
) |
Impairment of long-term investments |
|
(120 |
) |
|
|
- |
|
|
|
(1,242 |
) |
Others,
net |
|
70 |
|
|
|
55 |
|
|
|
38 |
|
Subtotal |
|
638 |
|
|
|
805 |
|
|
|
336 |
|
Income before income
tax |
|
14,156 |
|
|
|
33,042 |
|
|
|
17,561 |
|
Income tax expense |
|
4,338 |
|
|
|
3,858 |
|
|
|
260 |
|
Net income |
|
9,818 |
|
|
|
29,184 |
|
|
|
17,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per basic
ADS |
$0.27 |
|
|
$0.81 |
|
|
$0.48 |
|
Earnings per diluted
ADS |
$0.27 |
|
|
$0.81 |
|
|
$0.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin
Analysis: |
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
46.5 |
% |
|
|
50.9 |
% |
|
|
50.3 |
% |
Operating margin |
|
9.9 |
% |
|
|
23.3 |
% |
|
|
14.0 |
% |
Net margin |
|
7.2 |
% |
|
|
21.1 |
% |
|
|
14.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Data: |
|
|
|
|
|
|
|
|
|
|
|
Weighted avg. ADS
equivalents2 |
|
35,785 |
|
|
|
36,136 |
|
|
|
35,974 |
|
Diluted ADS
equivalents |
|
36,005 |
|
|
|
36,171 |
|
|
|
36,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Motion Technology
CorporationReconciliation of GAAP to Non-GAAP Operating Results(in
thousands, except percentages and per ADS data, unaudited)
|
For the Three Months Ended |
|
|
Dec. 31,
2017 |
|
Sep. 30, 2018 |
|
Dec. 31, 2018 |
|
($) |
|
($) |
|
($) |
Gross
profit (GAAP) |
|
|
63,287 |
|
|
|
70,574 |
|
|
|
62,098 |
|
Gross margin (GAAP) |
|
|
46.5 |
% |
|
|
50.9 |
% |
|
|
50.3 |
% |
Stock-based compensation expense (A) |
|
|
167 |
|
|
|
80 |
|
|
|
246 |
|
Gross profit
(non-GAAP) |
|
|
63,454 |
|
|
|
70,654 |
|
|
|
62,344 |
|
Gross margin (non-GAAP) |
|
|
46.6 |
% |
|
|
51.0 |
% |
|
|
50.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (GAAP) |
|
|
49,769 |
|
|
|
38,337 |
|
|
|
44,873 |
|
Stock-based compensation expense (A) |
|
|
(7,887 |
) |
|
|
(4,468 |
) |
|
|
(12,132 |
) |
Amortization of intangible assets |
|
|
(956 |
) |
|
|
(741 |
) |
|
|
(741 |
) |
Impairment loss of goodwill |
|
|
(10,337 |
) |
|
|
- |
|
|
|
(625 |
) |
Litigation expense |
|
|
- |
|
|
|
(8 |
) |
|
|
(7 |
) |
Operating expenses (non-GAAP) |
|
|
30,589 |
|
|
|
33,121 |
|
|
|
31,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (GAAP) |
|
|
13,518 |
|
|
|
32,237 |
|
|
|
17,225 |
|
Operating margin (GAAP) |
|
|
9.9 |
% |
|
|
23.3 |
% |
|
|
14.0 |
% |
Total
adjustments to operating profit |
|
|
19,347 |
|
|
|
5,297 |
|
|
|
13,751 |
|
Operating
profit (non-GAAP) |
|
|
32,865 |
|
|
|
37,534 |
|
|
|
30,976 |
|
Operating margin (non-GAAP) |
|
|
24.1 |
% |
|
|
27.1 |
% |
|
|
25.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income (expense) (GAAP) |
|
|
638 |
|
|
|
805 |
|
|
|
336 |
|
Foreign
exchange loss (gain), net |
|
|
447 |
|
|
|
749 |
|
|
|
9 |
|
Loss
(gain) on equity-method investment |
|
|
- |
|
|
|
98 |
|
|
|
169 |
|
Impairment loss of long-term investment |
|
|
120 |
|
|
|
- |
|
|
|
1,242 |
|
Non-operating
income (expense) (non-GAAP) |
|
|
1,205 |
|
|
|
1,652 |
|
|
|
1,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
|
|
9,818 |
|
|
|
29,184 |
|
|
|
17,301 |
|
Total
pre-tax impact of non-GAAP adjustments |
|
|
19,914 |
|
|
|
6,144 |
|
|
|
15,171 |
|
Income
tax impact of non-GAAP adjustments |
|
|
(1,320 |
) |
|
|
(825 |
) |
|
|
(2,273 |
) |
Net income (non-GAAP) |
|
|
28,412 |
|
|
|
34,503 |
|
|
|
30,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted ADS (GAAP) |
|
$0.27 |
|
|
$0.81 |
|
|
$0.48 |
|
Earnings per diluted ADS (non-GAAP) |
|
$0.79 |
|
|
$0.95 |
|
|
$0.83 |
|
|
|
|
|
|
|
|
Shares used in
computing earnings per diluted ADS (GAAP) |
|
|
36,005 |
|
|
|
36,171 |
|
|
|
36,070 |
|
Non-GAAP
Adjustments |
|
|
169 |
|
|
|
147 |
|
|
|
293 |
|
Shares used in computing earnings per diluted ADS
(non-GAAP) |
|
|
36,174 |
|
|
|
36,318 |
|
|
|
36,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
Excludes stock-based compensation as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales |
|
|
167 |
|
|
|
80 |
|
|
|
246 |
|
Research
& development |
|
|
5,131 |
|
|
|
2,804 |
|
|
|
8,380 |
|
Sales
& marketing |
|
|
1,194 |
|
|
|
897 |
|
|
|
1,418 |
|
General & administrative |
|
|
1,562 |
|
|
|
767 |
|
|
|
2,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Motion Technology CorporationConsolidated
Statements of Income(in thousands, except percentages, and per ADS
data, unaudited)
|
For the Year Ended |
|
Dec. 31, 2017 |
|
Dec. 31,2018 |
|
($) |
|
($) |
Net Sales |
|
523,404 |
|
|
|
530,348 |
|
Cost
of sales |
|
272,210 |
|
|
|
269,541 |
|
Gross
profit |
|
251,194 |
|
|
|
260,807 |
|
Operating expenses |
|
|
|
|
|
|
|
Research
& development |
|
102,053 |
|
|
|
102,028 |
|
Sales
& marketing |
|
25,868 |
|
|
|
29,279 |
|
General
& administrative |
|
16,933 |
|
|
|
17,633 |
|
Amortization of intangibles assets |
|
2,534 |
|
|
|
2,964 |
|
Impairment loss of goodwill |
|
10,337 |
|
|
|
625 |
|
Gain from
disposal of other assets |
|
(1,880 |
) |
|
|
- |
|
Operating income |
|
95,349 |
|
|
|
108,278 |
|
|
|
|
|
|
|
|
|
Non-operating expense
(income) |
|
|
|
|
|
|
|
Interest
income, net |
|
3,845 |
|
|
|
5,923 |
|
Foreign
exchange gain (loss), net |
|
(157 |
) |
|
|
(615 |
) |
Gain
(loss) on equity-method investment |
|
- |
|
|
|
(473 |
) |
Impairment of long-term investments |
|
(120 |
) |
|
|
(1,242 |
) |
Others,
net |
|
84 |
|
|
|
193 |
|
Subtotal |
|
3,652 |
|
|
|
3,786 |
|
Income before income tax |
|
99,001 |
|
|
|
112,064 |
|
Income tax expense |
|
24,046 |
|
|
|
11,791 |
|
Net
income |
|
74,955 |
|
|
|
100,273 |
|
|
|
|
|
|
|
|
|
Earnings per basic ADS |
$2.10 |
|
|
$2.78 |
|
Earnings per diluted ADS |
$2.09 |
|
|
$2.78 |
|
|
|
|
|
|
|
|
|
Margin Analysis: |
|
|
|
|
|
|
|
Gross
margin |
|
48.0 |
% |
|
|
49.2 |
% |
Operating margin |
|
18.2 |
% |
|
|
20.4 |
% |
Net
margin |
|
14.3 |
% |
|
|
18.9 |
% |
|
|
|
|
|
|
|
|
Additional Data: |
|
|
|
|
|
|
|
Weighted avg. ADS
equivalents |
|
35,684 |
|
|
|
36,031 |
|
Diluted ADS equivalents |
|
35,902 |
|
|
|
36,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Motion Technology
CorporationReconciliation of GAAP to Non-GAAP Operating Results(in
thousands, except percentages and per ADS data, unaudited)
|
For the Year Ended |
|
|
Dec. 31, 2017 |
|
Dec. 31, 2018 |
|
($) |
|
($) |
Gross
profit (GAAP) |
|
|
251,194 |
|
|
|
260,807 |
|
Gross margin (GAAP) |
|
|
48.0 |
% |
|
|
49.2 |
% |
Stock-based compensation expense(A) |
|
|
293 |
|
|
|
390 |
|
Gross profit (non-GAAP) |
|
|
251,487 |
|
|
|
261,197 |
|
Gross margin (non-GAAP) |
|
|
48.0 |
% |
|
|
49.3 |
% |
|
|
|
|
|
|
|
|
|
Operating expenses (GAAP) |
|
|
155,845 |
|
|
|
152,529 |
|
Stock-based compensation expense (A) |
|
|
(15,200 |
) |
|
|
(20,388 |
) |
Amortization of intangible assets |
|
|
(2,534 |
) |
|
|
(2,964 |
) |
Impairment loss of goodwill |
|
|
(10,337 |
) |
|
|
(625 |
) |
Litigation expense |
|
|
- |
|
|
|
(37 |
) |
Operating expenses (non-GAAP) |
|
|
127,774 |
|
|
|
128,515 |
|
|
|
|
|
|
|
|
|
|
Operating profit (GAAP) |
|
|
95,349 |
|
|
|
108,278 |
|
Operating margin (GAAP) |
|
|
18.2 |
% |
|
|
20.4 |
% |
Total
adjustments to operating profit |
|
|
28,364 |
|
|
|
24,404 |
|
Operating
profit (non-GAAP) |
|
|
123,713 |
|
|
|
132,682 |
|
Operating margin (non-GAAP) |
|
|
23.6 |
% |
|
|
25.0 |
% |
|
|
|
|
|
|
|
|
|
Non-operating
income (expense) (GAAP) |
|
|
3,652 |
|
|
|
3,786 |
|
Foreign
exchange loss (gain), net |
|
|
157 |
|
|
|
615 |
|
Loss
(gain) on equity-method investment |
|
|
120 |
|
|
|
1,242 |
|
Investment loss-equity method |
|
|
- |
|
|
|
473 |
|
Non-operating
income (expense) (non-GAAP) |
|
|
3,929 |
|
|
|
6,116 |
|
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
|
|
74,955 |
|
|
|
100,273 |
|
Total
pre-tax impact of non-GAAP adjustments |
|
|
28,641 |
|
|
|
26,734 |
|
Income
tax impact of non-GAAP adjustments |
|
|
(2,306 |
) |
|
|
(3,480 |
) |
Net income (non-GAAP) |
|
|
101,290 |
|
|
|
123,527 |
|
|
|
|
|
|
|
|
|
|
Earnings per diluted ADS (GAAP) |
|
$2.09 |
|
|
$2.78 |
|
Earnings per diluted ADS (non-GAAP) |
|
$2.81 |
|
|
$3.41 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing earnings per diluted ADS
(GAAP) |
|
|
35,902 |
|
|
|
36,128 |
|
Non-GAAP
Adjustments |
|
|
107 |
|
|
|
133 |
|
Shares used in computing earnings per diluted ADS
(non-GAAP) |
|
|
36,009 |
|
|
|
36,261 |
|
|
|
|
|
|
|
|
|
|
(A) Excludes
stock-based compensation as follows: |
|
|
|
|
|
|
|
|
Cost of
Sales |
|
|
293 |
|
|
|
390 |
|
Research
& development |
|
|
9,255 |
|
|
|
13,277 |
|
Sales
& marketing |
|
|
3,166 |
|
|
|
3,407 |
|
General
& administrative |
|
|
2,779 |
|
|
|
3,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Motion Technology CorporationConsolidated
Balance Sheet (In thousands, unaudited)
|
|
Dec.
31, |
|
Sep.
30, |
|
Dec.
31, |
|
|
2017 |
|
2018 |
|
2018 |
|
|
($) |
|
($) |
|
($) |
Cash and cash
equivalents |
|
359,453 |
|
303,329 |
|
284,989 |
Short-term
investments |
|
6,941 |
|
4,919 |
|
3,609 |
Accounts receivable (net) |
|
79,135 |
|
84,273 |
|
89,670 |
Inventories |
|
94,186 |
|
91,117 |
|
81,518 |
Refundable deposits –
current |
|
19,515 |
|
19,341 |
|
19,157 |
Prepaid expenses and other current |
|
|
|
|
|
|
assets |
|
9,567 |
|
7,588 |
|
17,454 |
Total
current assets |
|
568,797 |
|
510,567 |
|
496,397 |
Long-term investments |
|
- |
|
4,412 |
|
3,000 |
Property and equipment
(net) |
|
51,370 |
|
110,953 |
|
101,410 |
Goodwill and intangible
assets (net) |
|
66,393 |
|
64,163 |
|
62,796 |
Other
assets |
|
7,172 |
|
7,023 |
|
9,120 |
Total
assets |
|
693,732 |
|
697,118 |
|
672,723 |
|
|
|
|
|
|
|
Accounts payable |
|
56,423 |
|
30,986 |
|
27,657 |
Loans |
|
25,000 |
|
3,900 |
|
- |
Income tax payable |
|
11,492 |
|
6,808 |
|
4,162 |
Accrued expenses and
other current liabilities |
|
84,329 |
|
44,728 |
|
79,739 |
Total
current liabilities |
|
177,244 |
|
86,422 |
|
111,558 |
Other
liabilities |
|
22,437 |
|
27,635 |
|
26,686 |
Total
liabilities |
|
199,681 |
|
114,057 |
|
138,244 |
Shareholders’ equity |
|
494,051 |
|
583,061 |
|
534,479 |
Total liabilities &
shareholders’ equity |
|
693,732 |
|
697,118 |
|
672,723 |
|
|
|
|
|
|
|
About Silicon
Motion: We are the global leader in supplying
NAND flash controllers for solid state storage devices and the
merchant leader in supplying SSD controllers. We have the broadest
portfolio of controller technologies and our controllers are widely
used in embedded storage products such as SSDs and eMMCs+UFS, which
are found in smartphones, PCs, commercial and industrial
applications. We ship over 750 million NAND controllers annually
and have shipped over five billion NAND controllers in the last ten
years, more than any other company in the world. We also supply
specialized high-performance hyperscale data center and industrial
SSD solutions. Our customers include most of the NAND flash
vendors, storage device module makers, and leading OEMs. For
further information on Silicon Motion, visit us at
www.siliconmotion.com.
Forward-Looking Statements:This
press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including without limitation, statements about Silicon Motion’s
currently expected first quarter of 2019 and full year 2019
expectations of revenue, gross margin and operating expenses, all
of which reflect management’s estimates based on information
available at this time of this press release. While Silicon Motion
believes these estimates to be meaningful, these amounts could
differ materially from actual reported amounts for the first
quarter of 2019 and full year 2019. Forward-looking statements also
include, without limitation, statements regarding trends in the
semiconductor or consumer electronics markets and our future
results of operations, financial condition and business prospects.
In some cases, you can identify forward-looking statements by
terminology such as “may,” “will,” “should,” “expect,” “intend,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” “continue,” or the negative of these terms or other
comparable terminology. Although such statements are based on our
own information and information from other sources we believe to be
reliable, you should not place undue reliance on them. These
statements involve risks and uncertainties, and actual market
trends or our actual results of operations, financial condition or
business prospects may differ materially from those expressed or
implied in these forward looking statements for a variety of
reasons. Potential risks and uncertainties include, but are not
limited to the unpredictable volume and timing of customer orders,
which are not fixed by contract but vary on a purchase order basis;
the loss of one or more key customers or the significant reduction,
postponement, rescheduling or cancellation of orders from these
customers; general economic conditions or conditions in the
semiconductor or consumer electronics markets; the effects on our
business and our customer’s business taking into account the
ongoing US-China tariffs and trade disputes; decreases in the
overall average selling prices of our products; changes in the
relative sales mix of our products; changes in our cost of finished
goods; the payment, or non-payment, of cash dividends in the future
at the discretion of our board of directors and any announced
planned increases in such dividends; changes in our cost of
finished goods; the availability, pricing, and timeliness of
delivery of other components and raw materials used in our
customers’ products; our customers’ sales outlook, purchasing
patterns, and inventory adjustments based on consumer demands and
general economic conditions; any potential impairment charges that
may be incurred related to businesses previously acquired or
divested in the future; our ability to successfully develop,
introduce, and sell new or enhanced products in a timely manner;
and the timing of new product announcements or introductions by us
or by our competitors. For additional discussion of these risks and
uncertainties and other factors, please see the documents we file
from time to time with the Securities and Exchange Commission,
including our Annual Report on Form 20-F filed on April 30, 2018.
We assume no obligation to update any forward-looking statements,
which apply only as of the date of this press release.
Investor Contact:Jason
Tsai Senior Director of IR and
StrategyE-mail: jtsai@siliconmotion.com |
Investor Contact:Selina
HsiehInvestor RelationsE-mail: ir@siliconmotion.com |
|
|
Media Contact:Sara
HsuProject ManagerE-mail: sara.hsu@siliconmotion.com |
|
______________________________________________________1 Embedded
Storage comprises primarily eMMC+UFS and SSD controllers and data
center and industrial SSD solutions.2 Assumes all outstanding
ordinary shares are represented by ADSs. Each ADS represents four
ordinary shares.
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