Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon
Motion”, the “Company” or “we”) today announced its financial
results for the quarter ended June 30, 2023. For the second quarter
of 2023, net sales (GAAP) increased sequentially to $140.4 million
from $124.1 million in the first quarter of 2023. Net income (GAAP)
increased to $11.0 million, or $0.33 per diluted American
Depositary Share of the Company (“ADS”) (GAAP), from net income
(GAAP) of $10.2 million, or $0.30 per diluted ADS (GAAP), in the
first quarter of 2023.
For the second quarter of 2023, net income
(non-GAAP) increased to $12.6 million, or $0.38 per diluted ADS
(non-GAAP), from net income (non-GAAP) of $11.2 million, or $0.33
per diluted ADS (non-GAAP), in the first quarter of 2023.
Business Review Wallace Kou, President &
CEO of Silicon Motion commented:
“Our business in the second quarter improved as
inventory levels at our customers and at PC and handset OEMs
continue to come down. We are continuing to see improving order
patterns with many of our customers, leading to better visibility
and giving us greater conviction for a market recovery towards the
end of this year. This led us to accelerate and pull-in design
activity this quarter to ensure that we have the right products for
our customers to be better positioned and be more competitive later
this year. While this has reduced our operating profitability in
the second quarter, we believe that these investments will drive
stronger revenue growth later this year and expect our operating
expense growth will moderate in the second half to deliver higher
operating margins throughout the rest of 2023.”
“While the first half of 2023 was challenging,
we are optimistic that the industry is well positioned for recovery
and growth in the second half of this year. We continue to work
closely with our customers to ensure that our roadmaps are aligned
to deliver the best-in-class controllers for their storage
solutions powering PCs and mobile devices. We are optimistic that
inventory levels in the industry will continue to come down as
end-market demand stabilizes and improves. We expect that our third
quarter 2023 sales will grow 15% to 20% QoQ, and our third quarter
2023 gross margin will be similar or slightly improved QoQ. We
believe that we are well positioned to drive long-term growth of
our business and increase our profitability levels.”
Key Financial Results
(in millions, except percentages and per ADS amounts) |
GAAP |
Non-GAAP |
2Q 2023 |
1Q 2023 |
2Q 2022 |
2Q 2023 |
1Q 2023 |
2Q 2022 |
Revenue |
$140.4 |
$124.1 |
$252.4 |
$140.4 |
$124.1 |
$252.4 |
Gross profit |
$56.4 |
$52.3 |
$133.6 |
$59.7 |
$52.5 |
$133.8 |
Percent of revenue |
40.2% |
42.2% |
52.9% |
42.5% |
42.3% |
53.0% |
Operating expenses |
$54.6 |
$46.8 |
$66.5 |
$48.0 |
$39.6 |
$56.8 |
Operating income |
$1.8 |
$5.5 |
$67.1 |
$11.7 |
$12.9 |
$77.0 |
Percent of revenue |
1.3% |
4.4% |
26.6% |
8.3% |
10.4% |
30.5% |
Earnings per diluted ADS |
$0.33 |
$0.30 |
$1.55 |
$0.38 |
$0.33 |
$1.88 |
Other Financial Information
(in millions) |
2Q 2023 |
1Q 2023 |
2Q 2022 |
Cash, cash equivalents, restricted cash and short-term
investments—end of period |
$305.0 |
$280.3 |
$234.9 |
Routine capital expenditures |
$4.3 |
$7.2 |
$2.9 |
Dividend payments |
|
-- |
|
-- |
$16.5 |
Share repurchases |
|
-- |
|
-- |
$30.0 |
During the second quarter of 2023, we had $10.1
million of capital expenditures, including $4.3 million for the
routine purchase of testing equipment, software, design tools and
other items, and $5.8 million for building construction in
Hsinchu.
Acquisition UpdateOn May 5, 2022, Silicon Motion
agreed to be acquired by MaxLinear, Inc. (“MaxLinear”) with (a)
holders of Silicon Motion ordinary shares, par value $0.01 (each, a
“Share”), to receive $23.385 in cash and 0.097 shares of MaxLinear
common stock, par value $0.0001(“MaxLinear Common Stock”) for each
Share that they hold (other than certain customary excluded
Shares), and (b) ADS holders to receive $93.54 in cash and 0.388
shares of MaxLinear Common Stock for each ADS that they hold (other
than ADSs representing certain customary excluded Shares), in each
case, with cash in lieu of any fractional shares of MaxLinear
Common Stock (collectively, the “Transaction”). On August 31, 2022,
shareholders at Silicon Motion’s Extraordinary General Meeting of
Shareholders approved the Transaction.
On July 26, 2023, Silicon Motion and MaxLinear
received antitrust approval from the State Administration for
Market Regulation in the People’s Republic of China (“SAMR
Approval”). After receiving SAMR Approval, Silicon Motion received
from MaxLinear a notice of purported termination of the
Transaction. Silicon Motion believes that it has complied with its
obligations under the merger agreement and Silicon Motion has not
suffered a material adverse effect, and as a result that the
termination notice is not valid. Silicon Motion expects MaxLinear
to abide by its obligations under the merger agreement and intends
to vigorously enforce its rights thereunder.
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 income (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.
Restructuring charges relate to the restructuring of our
underperforming product lines, principally the write-down of NAND
flash, embedded DRAM and SSD inventory valuation and severance
payments.
M&A transaction expenses consist of legal, financial
advisory and other fees related to the Transaction.
Loss from settlement of litigation relates to an expense accrued
in connection with a settlement of a lawsuit.
Foreign exchange loss (gain) consists 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$. We do not use financial
instruments to manage the impact on our operations from changes in
foreign exchange rates, and because our operations are subject to
fluctuations in foreign exchange rates, we therefore exclude
foreign exchange gains and losses when presenting non-GAAP
financial measures.
Unrealized holding loss (gain) on investments relates to the
difference between market value and cost of long-term
investments.
|
Silicon Motion Technology Corporation |
Consolidated Statements of Income |
(in thousands, except percentages and per ADS data, unaudited) |
|
|
For Three Months Ended |
|
For the Year Ended |
|
Jun. 30, |
|
Mar. 31, |
|
Jun. 30, |
|
Jun. 30, |
|
Jun. 30, |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
Net Sales |
252,373 |
|
124,069 |
|
140,361 |
|
494,351 |
|
264,430 |
Cost of sales |
118,742 |
|
71,766 |
|
83,938 |
|
234,613 |
|
155,704 |
Gross profit |
133,631 |
|
52,303 |
|
56,423 |
|
259,738 |
|
108,726 |
Operating expenses |
|
|
|
|
|
|
|
|
|
Research &
development |
43,256 |
|
34,850 |
|
41,336 |
|
88,879 |
|
76,186 |
Sales & marketing |
8,931 |
|
6,605 |
|
7,248 |
|
16,533 |
|
13,853 |
General &
administrative |
13,629 |
|
5,363 |
|
6,021 |
|
20,149 |
|
11,384 |
Loss from settlement of
litigation |
700 |
|
- |
|
- |
|
700 |
|
- |
Operating income |
67,115 |
|
5,485 |
|
1,818 |
|
133,477 |
|
7,303 |
Non-operating income
(expense) |
|
|
|
|
|
|
|
|
|
Interest income, net |
365 |
|
1,810 |
|
2,736 |
|
625 |
|
4,546 |
Foreign exchange gain (loss),
net |
(2,190) |
|
238 |
|
1,223 |
|
(2,025) |
|
1,461 |
Unrealized holding gain(loss)
on investments |
- |
|
4,746 |
|
6,135 |
|
- |
|
10,881 |
Others, net |
- |
|
- |
|
- |
|
1 |
|
- |
Subtotal |
(1,825) |
|
6,794 |
|
10,094 |
|
(1,399) |
|
16,888 |
Income before income tax |
65,290 |
|
12,279 |
|
11,912 |
|
132,078 |
|
24,191 |
Income tax expense |
13,707 |
|
2,129 |
|
868 |
|
25,993 |
|
2,997 |
Net income |
51,583 |
|
10,150 |
|
11,044 |
|
106,085 |
|
21,194 |
|
|
|
|
|
|
|
|
|
|
Earnings per basic ADS |
1.56 |
|
0.31 |
|
0.33 |
|
3.17 |
|
0.64 |
Earnings per diluted ADS |
1.55 |
|
0.30 |
|
0.33 |
|
3.16 |
|
0.63 |
|
|
|
|
|
|
|
|
|
|
Margin
Analysis: |
|
|
|
|
|
|
|
|
|
Gross margin |
52.9% |
|
42.2% |
|
40.2% |
|
52.5% |
|
41.1% |
Operating margin |
26.6% |
|
4.4% |
|
1.3% |
|
27.0% |
|
2.8% |
Net margin |
20.4% |
|
8.2% |
|
7.9% |
|
21.5% |
|
8.0% |
|
|
|
|
|
|
|
|
|
|
Additional
Data: |
|
|
|
|
|
|
|
|
|
Weighted avg. ADS
equivalents |
33,117 |
|
33,176 |
|
33,409 |
|
33,462 |
|
33,292 |
Diluted ADS equivalents |
33,194 |
|
33,381 |
|
33,438 |
|
33,602 |
|
33,410 |
|
|
|
|
|
|
|
|
|
|
Silicon Motion Technology Corporation |
Reconciliation of GAAP to Non-GAAP Operating Results |
(in thousands, except percentages and per ADS data, unaudited) |
|
|
For Three Months Ended |
|
For the Year Ended |
|
Jun. 30, |
|
Mar. 31, |
|
Jun. 30, |
|
Jun. 30, |
|
Jun. 30, |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
Gross profit
(GAAP) |
133,631 |
|
52,303 |
|
56,423 |
|
259,738 |
|
108,726 |
Gross margin
(GAAP) |
52.9% |
|
42.2% |
|
40.2% |
|
52.5% |
|
41.1% |
Stock-based compensation (A) |
89 |
|
135 |
|
71 |
|
227 |
|
206 |
Restructuring charges |
34 |
|
37 |
|
3,222 |
|
136 |
|
3,259 |
Gross profit
(non-GAAP) |
133,754 |
|
52,475 |
|
59,716 |
|
260,101 |
|
112,191 |
Gross margin
(non-GAAP) |
53.0% |
|
42.3% |
|
42.5% |
|
52.6% |
|
42.4% |
|
|
|
|
|
|
|
|
|
|
Operating expenses
(GAAP) |
66,516 |
|
46,818 |
|
54,605 |
|
126,261 |
|
101,423 |
Stock-based compensation (A) |
(2,341) |
|
(5,350) |
|
(2,359) |
|
(7,771) |
|
(7,709) |
M&A transaction expenses |
(6,678) |
|
(637) |
|
(1,548) |
|
(6,678) |
|
(2,185) |
Restructuring charges |
- |
|
(1,256) |
|
(2,664) |
|
- |
|
(3,920) |
Loss from settlement of litigation |
(700) |
|
- |
|
- |
|
(700) |
|
- |
Operating expenses
(non-GAAP) |
56,797 |
|
39,575 |
|
48,034 |
|
111,112 |
|
87,609 |
|
|
|
|
|
|
|
|
|
|
Operating profit
(GAAP) |
67,115 |
|
5,485 |
|
1,818 |
|
133,477 |
|
7,303 |
Operating margin
(GAAP) |
26.6% |
|
4.4% |
|
1.3% |
|
27.0% |
|
2.8% |
Total adjustments to operating profit |
9,842 |
|
7,415 |
|
9,864 |
|
15,512 |
|
17,279 |
Operating profit
(non-GAAP) |
76,957 |
|
12,900 |
|
11,682 |
|
148,989 |
|
24,582 |
Operating margin
(non-GAAP) |
30.5% |
|
10.4% |
|
8.3% |
|
30.1% |
|
9.3% |
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expense) (GAAP) |
(1,825) |
|
6,794 |
|
10,094 |
|
(1,399) |
|
16,888 |
Foreign exchange loss (gain), net |
2,190 |
|
(238) |
|
(1,223) |
|
2,025 |
|
(1,461) |
Unrealized holding gain(loss)
on investments |
- |
|
(4,746) |
|
(6,135) |
|
- |
|
(10,881) |
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expense) (non-GAAP) |
365 |
|
1,810 |
|
2,736 |
|
626 |
|
4,546 |
|
|
|
|
|
|
|
|
|
|
Net income
(GAAP) |
51,583 |
|
10,150 |
|
11,044 |
|
106,085 |
|
21,194 |
Total pre-tax impact of non-GAAP adjustments |
12,032 |
|
2,431 |
|
2,506 |
|
17,537 |
|
4,937 |
Income tax impact of non-GAAP adjustments |
(861) |
|
(1,418) |
|
(965) |
|
(1,923) |
|
(2,383) |
Net income
(non-GAAP) |
62,754 |
|
11,163 |
|
12,585 |
|
121,699 |
|
23,748 |
|
|
|
|
|
|
|
|
|
|
Earnings per diluted
ADS (GAAP) |
$1.55 |
|
$0.30 |
|
$0.33 |
|
$3.16 |
|
$0.63 |
Earnings per diluted
ADS (non-GAAP) |
$1.88 |
|
$0.33 |
|
$0.38 |
|
$3.60 |
|
$0.71 |
|
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per diluted ADS (GAAP) |
33,194 |
|
33,381 |
|
33,438 |
|
33,602 |
|
33,410 |
Non-GAAP adjustments |
210 |
|
167 |
|
115 |
|
241 |
|
141 |
Shares used in
computing earnings per diluted ADS (non-GAAP) |
33,404 |
|
33,548 |
|
33,553 |
|
33,843 |
|
33,551 |
|
|
|
|
|
|
|
|
|
|
(A) Excludes
stock-based compensation as follows: |
|
|
|
|
|
|
|
|
|
Cost of sales |
89 |
|
135 |
|
71 |
|
227 |
|
206 |
Research & development |
1,271 |
|
3,868 |
|
1,315 |
|
4,978 |
|
5,183 |
Sales & marketing |
438 |
|
541 |
|
435 |
|
1,068 |
|
976 |
General & administrative |
632 |
|
941 |
|
609 |
|
1,725 |
|
1,550 |
|
|
|
|
|
|
|
|
|
|
Silicon Motion Technology Corporation |
Consolidated Balance Sheet |
(In thousands, unaudited) |
|
|
Jun. 30 |
|
Mar. 31, |
|
Jun. 30, |
|
2022 |
|
2023 |
|
2023 |
|
($) |
|
($) |
|
($) |
Cash and cash equivalents |
179,858 |
|
225,382 |
|
249,830 |
Accounts receivable (net) |
243,546 |
|
145,772 |
|
166,020 |
Inventories |
265,518 |
|
307,662 |
|
250,524 |
Refundable deposits –
current |
48,532 |
|
49,492 |
|
49,480 |
Prepaid expenses and other current assets |
37,234 |
|
14,115 |
|
15,916 |
Total current assets |
774,688 |
|
742,423 |
|
731,770 |
Long-term investments |
8,439 |
|
14,068 |
|
19,767 |
Property and equipment
(net) |
131,368 |
|
147,115 |
|
156,962 |
Other assets |
22,507 |
|
24,592 |
|
38,077 |
Total assets |
937,002 |
|
928,198 |
|
946,576 |
|
|
|
|
|
|
Accounts payable |
87,272 |
|
35,373 |
|
12,529 |
Income tax payable |
46,434 |
|
43,685 |
|
31,272 |
Accrued expenses and other
current liabilities |
114,392 |
|
55,644 |
|
78,771 |
Total current liabilities |
248,098 |
|
134,702 |
|
122,572 |
Other liabilities |
44,007 |
|
45,223 |
|
64,562 |
Total liabilities |
292,105 |
|
179,925 |
|
187,134 |
Shareholders’ equity |
644,897 |
|
748,273 |
|
759,442 |
Total liabilities &
shareholders’ equity |
937,002 |
|
928,198 |
|
946,576 |
|
|
|
|
|
|
Silicon Motion Technology Corporation |
Condensed Consolidated Statements of Cash Flows |
(in thousands, unaudited) |
|
|
For Three Months Ended |
|
For the Year Ended |
|
Jun. 30 |
|
Mar. 31, |
|
Jun. 30, |
|
Jun. 30, |
|
Jun. 30, |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
Net income |
51,583 |
|
10,150 |
|
11,044 |
|
106,085 |
|
21,194 |
Depreciation &
amortization |
4,677 |
|
5,608 |
|
5,381 |
|
9,131 |
|
10,989 |
Stock-based compensation |
2,430 |
|
5,485 |
|
2,430 |
|
7,998 |
|
7,915 |
Investment losses (gain) &
disposals |
- |
|
(4,746) |
|
(5,945) |
|
1 |
|
(10,691) |
Changes in operating assets
and liabilities |
(55,320) |
|
(9,525) |
|
23,134 |
|
(121,972) |
|
13,609 |
Net cash provided by
operating activities |
3,370 |
|
6,972 |
|
36,044 |
|
1,243 |
|
43,016 |
|
|
|
|
|
|
|
|
|
|
Purchase of property &
equipment |
(4,918) |
|
(13,550) |
|
(10,085) |
|
(16,580) |
|
(23,635) |
Net cash used in
investing activities |
(4,918) |
|
(13,550) |
|
(10,085) |
|
(16,580) |
|
(23,635) |
|
|
|
|
|
|
|
|
|
|
Dividend payments |
(16,489) |
|
- |
|
(15) |
|
(33,442) |
|
(15) |
Share repurchases |
(30,001) |
|
- |
|
- |
|
(133,046) |
|
- |
Net cash used in
financing activities |
(46,490) |
|
- |
|
(15) |
|
(166,488) |
|
(15) |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash, cash equivalents & restricted cash |
(48,038) |
|
(6,578) |
|
25,944 |
|
(181,825) |
|
19,366 |
Effect of foreign exchange
changes |
1,325 |
|
(177) |
|
(1,273) |
|
1,241 |
|
(1,450) |
Cash, cash equivalents &
restricted cash—beginning of period |
281,652 |
|
287,055 |
|
280,300 |
|
415,523 |
|
287,055 |
Cash, cash equivalents &
restricted cash—end of period |
234,939 |
|
280,300 |
|
304,971 |
|
234,939 |
|
304,971 |
|
|
|
|
|
|
|
|
|
|
About Silicon Motion:
We are the global leader in supplying NAND flash
controllers for solid state storage devices. We supply more
SSD controllers than any other company in the world for servers,
PCs and other client devices and are the leading merchant supplier
of eMMC and UFS embedded storage controllers used in smartphones,
IoT devices and other applications. We also supply customized
high-performance hyperscale data center and specialized industrial
and automotive 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 communication 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. These forward-looking statements are based on
Silicon Motion’s current expectations, estimates and projections
about the expected date of closing of the Merger and the potential
benefits thereof, its business and industry, management’s beliefs
and certain assumptions made by Silicon Motion, all of which are
subject to change. The forward-looking statements include, but are
not limited to, statements about the expected timing of the Merger,
the satisfaction or waiver of any conditions to the proposed Merger
and other events relating to the proposed Merger, and statements
about financial results guidance for the third fiscal quarter of
2023, and, in some cases, you can identify forward-looking
statements by terminology such as “may,” “will,” “should,”
“expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,”
“predict,” “potential,” “potentially,” “continue,” “could,” “seek,”
“see,” “would,” “might,” “continue,” “target” or the negatives of
these terms or other comparable terminology that convey uncertainty
of future events or outcomes. All forward-looking statements by
their nature address matters that involve risks and uncertainties,
many of which are beyond our control, and are not guarantees of
future results. These and other forward-looking statements are not
guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking
statements. Although such statements are based on Silicon Motion’s
own information and information from other sources Silicon Motion
believes to be reliable, you should not place undue reliance on
them and caution must be exercised in relying on forward-looking
statements. These statements involve risks and uncertainties, and
actual results 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 risk that the Merger may not be completed on the
anticipated terms and timing, in a timely manner or at all, which
may adversely affect Silicon Motion’s business and the value of the
ordinary shares, par value $0.01 per share, of Silicon Motion, and
Silicon Motion’s ADSs; uncertainties as to the timing of the
consummation of the Merger and the potential failure to satisfy the
conditions to the consummation of the Merger, including anticipated
tax treatment, unforeseen liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, economic performance,
indebtedness, financial condition, losses, future prospects,
business and management strategies for the management, expansion
and growth of the parties’ businesses and other conditions to the
completion of the Merger; the occurrence of any event, change or
other circumstances that could give rise to the termination of the
Merger Agreement; the effect of the announcement, pendency or
potential termination of the Merger on Silicon Motion’s business
relationships, operating results, and business generally; expected
benefits, including financial benefits, of the Merger may not be
realized; integration of the acquisition post-closing may not occur
as anticipated, and the combined company’s ability to achieve the
growth prospects and synergies expected from the Merger, as well as
delays, challenges and expenses associated with integrating the
combined company’s existing businesses, may occur; litigation
related to the Merger or otherwise; unanticipated restructuring
costs may be incurred or undisclosed liabilities assumed; attempts
to retain key personnel and customers may not succeed; risks
related to diverting attention from the parties’ ongoing business,
including current plans and operations; changes in tax regimes,
legislation or government regulations affecting the acquisition or
the parties or their businesses; economic, social or political
conditions that could adversely affect the Merger or the parties,
including trade and national security policies and export controls
and executive orders relating thereto, and worldwide government
economic policies, including trade relations between the United
States and China and the military conflict in Ukraine and related
sanctions against Russia and Belarus; unpredictability and severity
of catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as the
parties’ response to any of the aforementioned factors; exposure to
inflation, currency rate and interest rate fluctuations and risks
associated with doing business locally and internationally, as well
as fluctuations in the market prices of the parties’ traded
securities; potential business uncertainty or adverse reactions or
changes to business relationships resulting from the announcement
or completion of the Merger; potential negative changes in general
economic conditions and market developments in the regions or the
industries in which the parties operate; the loss of one or more
key customers or the significant reduction, postponement,
rescheduling or cancellation of orders from one or more customers
as a result or in anticipation of the Merger or otherwise; the
parties’ respective customers’ sales outlook, purchasing patterns,
and inventory adjustments based on consumer demands and general
economic conditions; risks associated with COVID-19 and any public
health crises; Silicon Motion’s ability to provide a safe working
environment for employees during any public health crises,
including pandemics or epidemics; Silicon Motion’s ability to
implement its business strategies; pricing trends, including
Silicon Motion’s ability to achieve economies of scale;
restrictions during the pendency of the proposed Merger that may
impact Silicon Motion’s ability to pursue certain business
opportunities or strategic transactions; and the other risk factors
discussed from time to time by Silicon Motion in the most recent
Annual Report on Form 20-F and in any subsequent reports on Form
6-K, each of which is on file with or furnished to the Securities
and Exchange Commission (the “SEC”) and available at the SEC’s
website at www.sec.gov. SEC filings for Silicon Motion are
available on Silicon Motion’s website at
https://www.siliconmotion.com/investor. We assume no obligation to
update any forward-looking statements, which apply only as of the
date of this communication.
Silicon Motion Investor Contacts: |
|
Jason Tsai |
Selina Hsieh |
jason.tsai@siliconmotion.com |
ir@siliconmotion.com |
|
|
Media Contact: |
|
Dan Scorpio, H/Advisors Abernathy |
Dan.scorpio@h-advisors.global |
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