UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
July 30, 2007
Commission File Number: 000-51380
Silicon Motion Technology Corporation
(Exact name of Registrant as specified in its charter)
No. 20-1, Taiyuan St.
Jhubei City, Hsinchu County 302
Taiwan
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| Form 20-F x | Form 40-F ¨ |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
| Yes ¨ | No x |
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
| Yes ¨ | No x |
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
| Yes ¨ | No x |
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
Not applicable
Exhibits
| Exhibit 99.1 | Press Release issued by the Company on July 30, 2007. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SILICON MOTION TECHNOLOGY CORPORATION | ||||
| Date: July 30, 2007 |
By: | /s/ Riyadh Lai | ||
| Name: Riyadh Lai | ||||
| Title: Chief Financial Officer | ||||
Exhibit 99.1
 |
Silicon Motion Announces Second Quarter Results Sales & Net Income Set New Second Quarter Record | |
Second Quarter 2007
Financial Highlights:
| * | Net sales increased 111% year-over-year to US$44.1 million |
| * |
Gross margin excluding FCI was largely flat from 1Q07 at 53.0%(1) |
| * | GAAP gross margin declined slightly to 52.6% |
| * |
Operating margin excluding FCI increased to 28.8% from 27.8% in 1Q07 (1) |
| * | GAAP net income increased 46% year-over-year to US$8.3 million in 2Q07 |
| * |
Diluted earnings per ADS excluding FCI were US$0.37, up 106% from US$0.18 in 2Q06(1) |
| * |
Diluted earnings per ADS excluding in-process R&D expenses and amortization of intangibles were US$0.36, up 100% from US$0.18 in 2Q06(1) |
| * | GAAP diluted earnings per ADS were US$0.25, up 39% from US$0.18 in 2Q06 |
Business Highlights:
| * | Increased total unit shipments 168% year-over-year and 20% sequentially to a record 78.5 million units. Unit shipments of mobile storage products increased 152% year-over-year and 14% sequentially to a record 73.1 million units |
| * | Secured major embedded SSD controller design-win with Asustek for its new ASUS Eee PC, the $199 low-cost Intel processor-powered notebook PC |
| * | Continued to expand breadth of business relationship with Samsung with design-in of new USB flash drive controller and embedded SSD controllers for camcorders |
| * | Secured new design-wins for (i) high performance card reader controllers at SanDisk, Kingston, and Lexar Media and (ii) MP3 SoC controllers at Mattel, Thomson, and Coby |
| * | Regained S-DMB mobile TV tuner business from Samsung with design wins for 3 new handsets |
| 1 |
A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release. |
Taipei, Taiwan, July 30, 2007 – Silicon Motion Technology Corporation (NASDAQ : SIMO; the “Company”) today announced its second quarter 2007 financial results. GAAP net income increased 46% year-over-year to US$8.2 million, or US$0.25 per diluted ADS. Non-GAAP net income excluding in-process R&D expenses and amortization of intangibles, which management believes is an important measure of the ongoing operational performance of the Company, increased 112% year-over-year to a record US$12million, or US$0.36 per diluted ADS.
Commenting on the results, Silicon Motion’s President and CEO, Wallace Kou, said:
“Despite seasonal slowness, we delivered strong 2Q results, setting a new second quarter record for both sales, which increased 111% from the same period last year, and net income, which was up 112%. In addition to successfully completing the acquisition and integration of FCI, our new mobile communications business, we were able to expand our core mobile storage product business a respectable 7% quarter-over-quarter. Our multimedia SOCs grew an impressive 64%, led by a near two-fold increase in shipments of MP3 SoCs. We continued to maintain our track record of balancing strong growth with healthy profitability. The second quarter marks the 8th consecutive quarter that we have maintained our gross margin above 52%.”
“From an operational perspective, we saw a number of major design wins for SSD, card reader, and USB flash drive controllers, as well as MP3 SoCs, and we are very excited to be designing embedded flash controllers for consumer electronic devices, notebook PCs, and mobile handsets. Our design win for the ASUS Eee PC, the $199 joint Asustek-Intel notebook PC development project, is one exciting example. We believe low cost PCs utilizing NAND flash storage are a compelling new trend that could create considerable longer-term momentum in the market.”
Second Quarter 2007 Financial Review(2)
Sales
Net sales in the second quarter totaled US$44.1 million, an increase of 111% from 2Q06 and an increase of
2 Unless otherwise stated, all financial information used in this press release is unaudited, consolidated, prepared in accordance with US GAAP and denominated in New Taiwan dollars. US dollar amounts are translated for convenience only. Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by independent auditors, to which we subject our audited consolidated financial statements, and may vary materially from the audited consolidated financial information for the same period. Any evaluation of the financial information presented in this press release should also take into account our published audited consolidated financial statements and the notes to those statements. In addition, the financial information presented is not necessarily indicative of our results for any future period.
23% compared with 1Q07. Excluding net sales from our mobile communications business, which comprises our recently acquired FCI business, net sales in the second quarter totaled US$40.0 million, an increase of 91% from 2Q06 and an increase of 12% compared with 1Q07.
Overall unit shipments increased 168% from 2Q06 and 20% from 1Q07, and the blended average selling price (ASP) per unit increased 3% from 1Q07.
Our key products, as percentages of net sales, are as follows:
| As % of Net Sales |
3Q05 | 4Q05 | 1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | 2Q07 | ||||||||||||||||
| Mobile Storage |
87 | % | 84 | % | 72 | % | 85 | % | 92 | % | 90 | % | 90 | % | 79 | % | ||||||||
| Multimedia SoCs |
13 | % | 16 | % | 27 | % | 14 | % | 8 | % | 9 | % | 9 | % | 12 | % | ||||||||
| Mobile Communications |
9 | % | ||||||||||||||||||||||
| Others |
0 | % | 0 | % | 1 | % | 1 | % | 0 | % | 1 | % | 1 | % | 1 | % | ||||||||
| Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Net sales from mobile storage products, which include flash memory card controllers, USB flash drive controllers, and card reader controllers, increased 94% from 2Q06 to US$34.6 million and increased 7% from 1Q07. Unit shipments increased 152% from 2Q06 and 14% from 1Q07 to 73.1 million units. The ASP per unit in 2Q07 declined by 6% from 1Q07.
Net sales from multimedia SoC products, which include embedded graphics processors and MP3 SoCs, increased 78% from 2Q06 and increased 64% from 1Q07 to US$5.2 million. Unit shipments of multimedia SoC products increased over 500% from 2Q06 and increased 88% from 1Q07 to 2.2 million units. ASPs for all three of the Company’s multimedia products increased compared to the first quarter of 2007, but the blended multimedia ASP declined because of a shift in the product mix towards lower ASP products, such as MP3 SoCs which have lower selling prices compared to embedded graphics processors and constituted a growing proportion of the total multimedia SoC product sales in the second quarter.
Net sales from mobile communication products, which include mobile TV tuners, CDMA RF ICs, and electronic toll collection RF ICs, were US$4.1 million in 2Q07. The Company began consolidating mobile communication sales from May 1, 2007 since the acquisition of FCI was completed at the end of April.
| Unit Shipment (thousand units) |
3Q05 | 4Q05 | 1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | 2Q07 | ||||||||
| Mobile Storage |
24,265 | 30,146 | 20,306 | 28,976 | 49,563 | 61,966 | 64,090 | 73,083 | ||||||||
| Multimedia SoCs |
407 | 947 | 496 | 326 | 395 | 581 | 1,179 | 2,215 | ||||||||
| Mobile Communications |
3,197 | |||||||||||||||
| Others |
3 | 7 | 21 | 11 | 23 | 14 | 28 | 33 | ||||||||
| Total |
24,675 | 31,100 | 20,823 | 29,313 | 49,981 | 62,561 | 65,297 | 78,529 |
Margins
Gross margin excluding FCI was largely flat from 1Q07 at 53.0%. GAAP gross margin declined slightly to 52.6% due to lower margins at FCI that were caused by a delayed initial ramp of a significant new higher-margin product. Management believes the delay will be resolved and shipments will start in 3Q07.
The Company’s 2Q operating expense includes a one-time US$2.1 million expense for FCI in-process R&D and a US$1.7 million charge for amortization of intangibles, which comprises amortizations of FCI core technologies, FCI customer relations, and FCI order backlogs. Management 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.
Operating margin excluding FCI increased to 28.8% from 27.8% in 1Q07 due to lower R&D expenditures as a percentage of sales. Operating margin excluding in-process R&D expenses and amortization of intangibles decreased to 26.6% from 27.8% in 1Q07, as a result of an increase in overhead expenses in Korea that were required to support FCI’s growth. GAAP operating margin, which includes in-process R&D expenses and amortization of intangibles, decreased to 18.1%.
Earnings
GAAP net income increased 46% year-over-year to US$8.3 million in 2Q07. Diluted earnings per ADS excluding FCI were US$0.37, up 106% from US$0.18 in 2Q06. Diluted earnings per ADS excluding in-process R&D expenses and amortization of intangibles were US$0.36, up 100% from US$0.18 in 2Q06. GAAP diluted earnings per ADS, which include in-process R&D expenses and amortization of intangibles, were US$0.25, up 39% from US$0.18 in 2Q06.
Business Outlook:
Silicon Motion’s President and CEO, Wallace Kou, added:
“Looking forward, although the third quarter has typically been a strong period for us, we believe revenue will remain flat due to continued tight NAND flash supply conditions. We believe this has largely been caused by yield problems at a number of flash manufactures moving to more advanced process technologies and speculative inventory stockpiling by flash distributors. We view the current industry situation as short-term in nature and are optimistic about the outlook of our business beyond the near-term.”
As a result, for the third quarter, Management expects:
| • | A 36% to 42% year-over-year increase in revenue, including FCI, to approximately US$43—45 million, though largely flat on a sequential basis |
| • | Gross Margin to remain in the 52—53% range |
| • | Operating Margin, excluding in-process R&D and amortization of intangibles, to be 27—28% |
The company expects full year diluted earnings per ADS in 2007, excluding intangible amortization and in-process R&D expenses, to increase from $0.93 in 2006 to a range of approximately $1.40 – 1.50, which represents growth of 51%—61% over the previous year. At the end of the first quarter, Management raised its full year earnings per ADS guidance from US$1.20 – 1.30 to $1.40 – 1.50. This earnings target excluded the FCI acquisition and did not anticipate the effects on the business of tight NAND flash supply conditions that the Company is currently experiencing. As a result, although Management is currently maintaining its annual guidance, it is currently expected that the range will be met with FCI’s earnings included.
Conference Call & Webcast:
The Company’s management team will conduct a conference call at 8:00 am Eastern Time on July 31.
(Speakers)
Wallace Kou, President & CEO
Riyadh Lai, CFO
CONFERENCE CALL ACCESS NUMBERS:
USA (Toll Free): 1 888 680 0892
USA (Toll): 1 617 213 4858
Taiwan (Toll Free) 0080 114 8420
Participant Passcode: 4315 0409
REPLAY NUMBERS (for 7 days):
USA (Toll Free): 1 888 286 8010
USA (Toll): 1 617 801 6888
Participant Passcode: 9213 1868
A 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 certain charges and the financial results of FCI, including non-GAAP net sales, non-GAAP cost of sales, non-GAAP gross profit, non-GAAP selling, general, and administrative expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted ADS. These supplemental measures exclude, among other things, FCI net sales, FCI cost of sales, FCI gross profit, FCI selling, general, and administrative expenses, FCI operating income, and FCI net income, as well as intangible amortization and in-process R&D expenses relating to the FCI acquisition. These non-GAAP measures are not in accordance with or an alternative for 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.
In calculating our non-GAAP financial measures, we exclude certain items to facilitate our review of the comparability of the Company’s operating performance on a period-to-period basis because items such as FCI financial results affect comparison with previous periods that are without FCI financial results and other items are not, in our view, related to the Company’s ongoing operational performance. 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 or these individual items in our reconciliation of these non-GAAP financial measures:
FCI financial results consist of revenue, costs, and earnings of Future Communications IC, Inc. (“FCI”), a company in South Korea that we acquired. This acquisition was completed at the end of April 2007 and we began consolidating FCI from May 1, 2007. We present our operating results without FCI in order to facilitate a period-to-period comparison of the Company’s mobile storage and multimedia businesses.
Intangible amortization 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.
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per share data)
(unaudited)
| For the 3 Months Ended | Change From | |||||||||||||||||
| Jun. 30, 2006 (NT $) |
Mar. 31, 2007 (NT$) |
Jun. 30, 2007 (NT$) |
2Q06 (%) |
1Q07 (%) |
||||||||||||||
| Net Sales |
686,963 | 1,171,513 | 1,446,207 | 111 | % | 23 | % | |||||||||||
| Cost of sales |
319,492 | 544,496 | 685,693 | 115 | % | 26 | % | |||||||||||
| Gross profit |
367,471 | 627,017 | 760,514 | 107 | % | 21 | % | |||||||||||
| Operating expenses |
||||||||||||||||||
| Research & development |
109,223 | 173,944 | 200,818 | 84 | % | 15 | % | |||||||||||
| Sales & marketing |
43,266 | 61,148 | 78,846 | 82 | % | 29 | % | |||||||||||
| General & administrative |
46,125 | 66,549 | 95,588 | 107 | % | 44 | % | |||||||||||
| In-process research and development |
— | — | 69,189 | N/A | N/A | |||||||||||||
| Amortization of intangibles assets |
— | — | 54,472 | N/A | N/A | |||||||||||||
| Subtotal |
198,614 | 301,642 | 498,913 | 151 | % | 65 | % | |||||||||||
| Operating income |
168,857 | 325,374 | 261,601 | 55 | % | -20 | % | |||||||||||
| Non-operating income (expense) |
||||||||||||||||||
| Gain on sale of investments |
4,362 | 5,346 | 4,886 | 12 | % | -9 | % | |||||||||||
| Interest income (net) |
14,897 | 20,544 | 12,366 | -17 | % | -40 | % | |||||||||||
| Foreign exchange gain (loss) |
666 | (1,960 | ) | (4,384 | ) | -758 | % | 124 | % | |||||||||
| Investment income |
— | — | 772 | N/A | N/A | |||||||||||||
| Others |
596 | (1 | ) | 18 | -97 | % | 1900 | % | ||||||||||
| Subtotal |
20,521 | 23,929 | 13,658 | -33 | % | -43 | % | |||||||||||
| Income before tax |
189,378 | 349,303 | 275,259 | 45 | % | -21 | % | |||||||||||
| Income tax expense |
2,591 | 23,536 | 2,915 | 13 | % | -88 | % | |||||||||||
| Net income |
186,787 | 325,767 | 272,344 | 46 | % | -16 | % | |||||||||||
| Basic earnings per ADS |
NT$ | 6.07 | NT$ | 10.52 | NT$ | 8.43 | 39 | % | -20 | % | ||||||||
| Diluted earnings per ADS |
NT$ | 5.96 | NT$ | 10.19 | NT$ | 8.14 | 37 | % | -20 | % | ||||||||
| Margin Analysis: |
||||||||||||||||||
| Gross margin |
53.5 | % | 53.5 | % | 52.6 | % | ||||||||||||
| Operating margin |
24.6 | % | 27.8 | % | 18.1 | % | ||||||||||||
| Net margin |
27.2 | % | 27.8 | % | 18.8 | % | ||||||||||||
| Additional Data: |
||||||||||||||||||
| Weighted avg. ADS equivalents3 |
30,783 | 30,980 | 32,312 | |||||||||||||||
| Diluted ADS equivalents |
31,353 | 31,969 | 33,453 | |||||||||||||||
| 3 |
Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares. |
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per share data)
(unaudited)
| For the 3 Months Ended | Change From | |||||||||||||||||
| Jun. 30, 2006 (NT $) |
Mar. 31, 2007 (NT$) |
Jun. 30, 2007 (NT$) |
2Q06 (%) |
1Q07 (%) |
||||||||||||||
| Net Sales |
20,925 | 35,684 | 44,051 | 111 | % | 23 | % | |||||||||||
| Cost of sales |
9,732 | 16,585 | 20,886 | 115 | % | 26 | % | |||||||||||
| Gross profit |
11,193 | 19,099 | 23,165 | 107 | % | 21 | % | |||||||||||
| Operating expenses |
||||||||||||||||||
| Research & development |
3,326 | 5,298 | 6,117 | 84 | % | 15 | % | |||||||||||
| Sales & marketing |
1,318 | 1,863 | 2,402 | 82 | % | 29 | % | |||||||||||
| General & administrative |
1,405 | 2,027 | 2,912 | 107 | % | 44 | % | |||||||||||
| In-process research and development |
— | — | 2,107 | N/A | N/A | |||||||||||||
| Amortization of intangibles assets |
— | — | 1,659 | N/A | N/A | |||||||||||||
| Subtotal |
6,049 | 9,188 | 15,197 | 151 | % | 65 | % | |||||||||||
| Operating income |
5,144 | 9,911 | 7,968 | 55 | % | -20 | % | |||||||||||
| Non-operating income (expense) |
||||||||||||||||||
| Gain on sale of investments |
133 | 163 | 149 | 12 | % | -9 | % | |||||||||||
| Interest income (net) |
454 | 626 | 377 | -17 | % | -40 | % | |||||||||||
| Foreign exchange gain (loss) |
20 | (60 | ) | (134 | ) | -758 | % | 124 | % | |||||||||
| Investment income |
— | — | 24 | N/A | N/A | |||||||||||||
| Others |
18 | — | 1 | -97 | % | 1900 | % | |||||||||||
| Subtotal |
625 | 729 | 417 | -33 | % | -43 | % | |||||||||||
| Income before tax |
5,769 | 10,640 | 8,385 | 45 | % | -21 | % | |||||||||||
| Income tax expense |
79 | 717 | 89 | 13 | % | -88 | % | |||||||||||
| Net income |
5,690 | 9,923 | 8,296 | 46 | % | -16 | % | |||||||||||
| Basic earnings per ADS |
US$ | 0.18 | US$ | 0.32 | US$ | 0.26 | 44 | % | -20 | % | ||||||||
| Diluted earnings per ADS |
US$ | 0.18 | US$ | 0.31 | US$ | 0.25 | 39 | % | -20 | % | ||||||||
| Margin Analysis: |
||||||||||||||||||
| Gross margin |
53.5 | % | 53.5 | % | 52.6 | % | ||||||||||||
| Operating margin |
24.6 | % | 27.8 | % | 18.1 | % | ||||||||||||
| Net margin |
27.2 | % | 27.8 | % | 18.8 | % | ||||||||||||
| Additional Data: |
||||||||||||||||||
| Weighted avg. ADS equivalents4 |
30,783 | 30,980 | 32,312 | |||||||||||||||
| Diluted ADS equivalents |
31,353 | 31,969 | 33,453 | |||||||||||||||
Note: The Company maintains its accounts and expresses its financial statements in New Taiwan dollars. For convenience only, U.S. dollar amounts presented in the income statement have been translated from New Taiwan dollars, using an average exchange rate of NT$ 32.83 to US$1 on June 30, 2007,
| 4 |
Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares. |
Silicon Motion Technology Corporation
Consolidated Statements of Income
(Reconciliation of GAAP to Non-GAAP-Excluding FCI)
For the 3 Months Ended on June 30, 2007
(in thousands, except percentages and per share data)
(unaudited)
| GAAP (NT$) |
FCI (NT$) |
Non-GAAP (NT $) |
Non-GAAP (US $) |
||||||||||||
| Net Sales |
1,446,207 | 134,121 | 1,312,086 | 39,966 | |||||||||||
| Cost of sales |
685,693 | 68,597 | 617,096 | 18,797 | |||||||||||
| Gross profit |
760,514 | 65,524 | 694,990 | 21,169 | |||||||||||
| Operating expenses |
|||||||||||||||
| Research & development |
200,818 | 27,139 | 173,679 | 5,289 | |||||||||||
| Sales & marketing |
78,846 | 10,342 | 68,504 | 2,087 | |||||||||||
| General & administrative |
95,588 | 20,226 | 75,362 | 2,296 | |||||||||||
| In-process research and development |
69,189 | 69,189 | — | — | |||||||||||
| Amortization of intangibles assets |
54,472 | 54,472 | — | — | |||||||||||
| Subtotal |
498,913 | 181,368 | 317,545 | 9,672 | |||||||||||
| Operating income |
261,601 | (115,844 | ) | 377,445 | 11,497 | ||||||||||
| Non-operating income (expense) |
|||||||||||||||
| Gain on sale of investments |
4,886 | — | 4,886 | 149 | |||||||||||
| Interest income (net) |
12,366 | 219 | 12,147 | 370 | |||||||||||
| Foreign exchange gain (loss) |
(4,384 | ) | 467 | (4,851 | ) | (148 | ) | ||||||||
| Investment income |
772 | — | 772 | 24 | |||||||||||
| Others |
18 | — | 18 | — | |||||||||||
| Subtotal |
13,658 | 686 | 12,972 | 395 | |||||||||||
| Income before tax |
275,259 | (115,158 | ) | 390,417 | 11,892 | ||||||||||
| Income tax expense (benefit) |
2,915 | 4,683 | (1,768 | ) | (54 | ) | |||||||||
| Net income |
272,344 | (119,841 | ) | 392,185 | 11,946 | ||||||||||
| Basic earnings per ADS |
NT$ | 8.43 | NT$ | 12.69 | US$ | 0.38 | |||||||||
| Diluted earnings per ADS |
NT$ | 8.14 | NT$ | 12.25 | US$ | 0.37 | |||||||||
| Margin Analysis: |
|||||||||||||||
| Gross margin |
52.6 | % | 53.0 | % | |||||||||||
| Operating margin |
18.1 | % | 28.8 | % | |||||||||||
| Net margin |
18.8 | % | 29.9 | % | |||||||||||
| Additional Data: |
|||||||||||||||
| Weighted avg. ADS equivalents5 |
32,312 | 31,169 | |||||||||||||
| Diluted ADS equivalents |
33,453 | 32,282 | |||||||||||||
Note: The Company maintains its accounts and expresses its financial statements in New Taiwan dollars. For convenience only, U.S. dollar amounts presented in the income statement have been translated from New Taiwan dollars, using an average exchange rate of NT$ 32.83 to US$1 on June 30, 2007.
| 5 |
Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares. |
Silicon Motion Technology Corporation
Consolidated Statements of Income
(Reconciliation of GAAP to Non-GAAP-Excluding amortization of intangibles and In-process R&D expense)
For the 3 Months Ended on June 30, 2007
(in thousands, except percentages and per share data)
(unaudited)
| GAAP (NT$) |
Amortization of intangibles and In-process R&D expense (NT$) |
Non-GAAP (NT $) |
Non-GAAP (US $) |
|||||||||||
| Net Sales |
1,446,207 | — | 1,446,207 | 44,051 | ||||||||||
| Cost of sales |
685,693 | — | 685,693 | 20,886 | ||||||||||
| Gross profit |
760,514 | — | 760,514 | 23,165 | ||||||||||
| Operating expenses |
||||||||||||||
| Research & development |
200,818 | — | 200,818 | 6,117 | ||||||||||
| Sales & marketing |
78,846 | — | 78,846 | 2,402 | ||||||||||
| General & administrative |
95,588 | — | 95,588 | 2,912 | ||||||||||
| In-process research and development |
69,189 | 69,189 | — | — | ||||||||||
| Amortization of intangibles assets |
54,472 | 54,472 | — | — | ||||||||||
| Subtotal |
498,913 | 123,661 | 375,252 | 11,431 | ||||||||||
| Operating income |
261,601 | 123,661 | 385,262 | 11,734 | ||||||||||
| Non-operating income (expense) |
||||||||||||||
| Gain on sale of investments |
4,886 | — | 4,886 | 149 | ||||||||||
| Interest income (net) |
12,366 | — | 12,366 | 377 | ||||||||||
| Foreign exchange gain (loss) |
(4,384 | ) | — | (4,384 | ) | (134 | ) | |||||||
| Investment income |
772 | — | 772 | 24 | ||||||||||
| Others |
18 | — | 18 | 1 | ||||||||||
| Subtotal |
13,658 | — | 13,658 | 417 | ||||||||||
| Income before tax |
275,259 | 123,661 | 398,920 | 12,151 | ||||||||||
| Income tax expense (benefit) |
2,915 | — | 2,915 | 89 | ||||||||||
| Net income |
272,344 | 123,661 | 396,005 | 12,062 | ||||||||||
| Basic earnings per ADS |
NT$ | 8.43 | NT$ | 12.26 | US$ | 0.37 | ||||||||
| Diluted earnings per ADS |
NT$ | 8.14 | NT$ | 11.84 | US$ | 0.36 | ||||||||
| Margin Analysis: |
||||||||||||||
| Gross margin |
52.6 | % | 52.6 | % | ||||||||||
| Operating margin |
18.1 | % | 26.6 | % | ||||||||||
| Net margin |
18.8 | % | 27.4 | % | ||||||||||
| Additional Data: |
||||||||||||||
| Weighted avg. ADS equivalents6 |
32,312 | 32,312 | ||||||||||||
| Diluted ADS equivalents |
33,453 | 33,453 | ||||||||||||
| 6 |
Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares. |
Silicon Motion Technology Corporation
Reconciliations of GAAP to Non-GAAP Results
(US$ thousands, except per-share amount and percentages)
(unaudited)
| Three Months Ended | ||||||||||||
| Jun. 30, 2006 |
Mar. 31, 2007 |
Jun. 30, 2007 |
||||||||||
| GAAP cost of sales |
9,732 | 16,585 | 20,886 | |||||||||
| Adjustment for share-based compensation |
(31 | ) | (51 | ) | (121 | ) | ||||||
| Cost of sales excluding share-based compensation |
9,701 | 16,534 | 20,765 | |||||||||
| GAAP operating income |
||||||||||||
| Adjustment for share-based compensation within: |
5,143 | 9,910 | 7,968 | |||||||||
| Cost of sales |
31 | 51 | 121 | |||||||||
| Research and development |
211 | 588 | 1,216 | |||||||||
| Sales and marketing |
80 | 225 | 433 | |||||||||
| General and administrative |
258 | 338 | 609 | |||||||||
| Operating income excluding share-based compensation |
5,723 | 11,112 | 10,347 | |||||||||
| GAAP net income |
5,690 | 9,923 | 8,296 | |||||||||
| Adjustment for share-based compensation within: |
||||||||||||
| Cost of sales |
31 | 51 | 121 | |||||||||
| Research and development |
211 | 588 | 1,216 | |||||||||
| Sales and marketing |
80 | 225 | 433 | |||||||||
| General and administrative |
258 | 338 | 609 | |||||||||
| Net income excluding share-based compensation |
6,270 | 11,125 | 10,675 | |||||||||
| GAAP diluted earnings per ADS |
0.18 | 0.31 | 0.25 | |||||||||
| Adjustment for share-based compensation |
0.02 | 0.03 | 0.06 | |||||||||
| Diluted earnings per ADS excluding share-based compensation |
US$ | 0.20 | US$ | 0.34 | US$ | 0.31 | ||||||
| GAAP gross margin percentage |
53.5 | % | 53.5 | % | 52.6 | % | ||||||
| Adjustment for share-based compensation |
0.1 | % | 0.1 | % | — | % | ||||||
| Gross margin percentage excluding share-based compensation |
53.6 | % | 53.6 | % | 52.6 | % | ||||||
| GAAP operating margin percentage |
24.6 | % | 27.8 | % | 18.1 | % | ||||||
| Adjustment for share-based compensation |
2.8 | % | 3.4 | % | 5.4 | % | ||||||
| Operating margin percentage excluding share-based compensation |
27.4 | % | 31.2 | % | 23.5 | % | ||||||
Note: The Company maintains its accounts and expresses its financial statements in New Taiwan dollars. For convenience only, U.S. dollar amounts presented in the income statement have been translated from New Taiwan dollars, using an average exchange rate of NT$ 32.83 to US$1 on June 30, 2007,
Silicon Motion Technology Corporation
Stock Based Compensation
(in NT$ thousands and US$ thousands)
(unaudited)
| Three Months Ended | ||||||
| Jun. 30, 2006 (NT$) |
Mar. 31, 2007 (NT$) |
Jun. 30, 2007 (NT$) | ||||
| (1) Cost of sales: |
||||||
| Stock-based compensation |
1,032 | 1,663 | 3,972 | |||
| (2) Research and development expense: |
||||||
| Stock-based compensation |
6,911 | 19,289 | 39,915 | |||
| (3) Sales and marketing expense: |
||||||
| Stock-based compensation |
2,621 | 7,381 | 14,199 | |||
| (4) General and administrative expense: |
||||||
| Stock-based compensation |
8,469 | 11,098 | 19,985 | |||
| Three Months Ended | ||||||
| Jun. 30, 2006 (US$) |
Mar. 31, 2007 (US$) |
Jun. 30, 2007 (US$) | ||||
| (1) Cost of sales: |
||||||
| Stock-based compensation |
31 | 51 | 121 | |||
| (2) Research and development expense: |
||||||
| Stock-based compensation |
211 | 588 | 1,216 | |||
| (3) Sales and marketing expense: |
||||||
| Stock-based compensation |
80 | 225 | 433 | |||
| (4) General and administrative expense: |
||||||
| Stock-based compensation |
258 | 338 | 609 | |||
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages, and per share data)
(unaudited)
| For the Six NT$ |
For the Six NT$ |
For the Six Months Ended Jun. 30, 2006 US$ |
For the Six Months Ended Jun. 30, 2007 US$ |
Change (%) |
|||||||||||||||
| Net Sales |
1,253,100 | 2,617,720 | 38,169 | 79,735 | 109 | % | |||||||||||||
| Cost of sales |
585,389 | 1,230,189 | 17,831 | 37,471 | 110 | % | |||||||||||||
| Gross profit |
667,711 | 1,387,531 | 20,338 | 42,264 | 108 | % | |||||||||||||
| Operating expenses |
|||||||||||||||||||
| Research & development |
191,368 | 374,762 | 5,829 | 11,415 | 96 | % | |||||||||||||
| Sales & marketing |
90,197 | 139,994 | 2,747 | 4,264 | 55 | % | |||||||||||||
| General & administrative |
90,952 | 162,138 | 2,770 | 4,939 | 78 | % | |||||||||||||
| In-process research and development |
— | 69,189 | — | 2,107 | NA | ||||||||||||||
| Amortization of intangible assets |
— | 54,472 | — | 1,659 | NA | ||||||||||||||
| Subtotal |
372,517 | 800,555 | 11,346 | 24,385 | 115 | % | |||||||||||||
| Operating income |
295,194 | 586,976 | 8,992 | 17,879 | 99 | % | |||||||||||||
| Non-operating expense (income) |
|||||||||||||||||||
| Gain on sale of investments |
8,319 | 10,233 | 253 | 312 | 23 | % | |||||||||||||
| Interest income (net) |
28,593 | 32,909 | 870 | 1,002 | 15 | % | |||||||||||||
| Investments income |
— | 772 | — | 24 | NA | ||||||||||||||
| Foreign exchange gain (loss) |
717 | (6,344 | ) | 22 | (193 | ) | -985 | % | |||||||||||
| Others |
1,304 | 17 | 41 | 1 | -99 | % | |||||||||||||
| Subtotal |
38,933 | 37,587 | 1,186 | 1,145 | -4 | % | |||||||||||||
| Income before tax |
334,127 | 624,563 | 10,178 | 19,024 | 87 | % | |||||||||||||
| Income tax expense |
10,663 | 26,452 | 325 | 806 | 148 | % | |||||||||||||
| Net income |
323,464 | 598,111 | 9,853 | 18,218 | 85 | % | |||||||||||||
| Basic earnings per ADS |
NT$ | 10.52 | NT$ | 18.94 | US$ | 0.32 | US$ | 0.58 | |||||||||||
| Diluted earnings per ADS |
NT$ | 10.34 | NT$ | 18.33 | US$ | 0.32 | US$ | 0.56 | |||||||||||
| Margin Analysis: |
|||||||||||||||||||
| Gross margin |
53.3 | % | 53.0 | % | 53.3 | % | 53.0 | % | |||||||||||
| Operating margin |
23.6 | % | 22.4 | % | 23.6 | % | 22.4 | % | |||||||||||
| Net margin |
25.8 | % | 22.9 | % | 25.8 | % | 22.9 | % | |||||||||||
| Additional Data: |
|||||||||||||||||||
| Weighted average ADS equivalents |
30,738 | 31,579 | 30,738 | 31,579 | |||||||||||||||
| Diluted ADS equivalents |
31,287 | 32,630 | 31,287 | 32,630 | |||||||||||||||
Note: The Company maintains its accounts and expresses its financial statements in New Taiwan dollars. For convenience only, U.S. dollar amounts presented in the income statement have been translated from New Taiwan dollars, using an average exchange rate of NT$ 32.83 to US$1 on June 30, 2007,
Silicon Motion Technology Corporation
Consolidated Balance Sheet
(In thousands)
(unaudited)
| Dec. 31, 2006 NT$ |
Jun. 30, 2007 NT$ |
Dec. 31, 2006 US$ |
Jun. 30, 2007 US$ | |||||||||
| Cash and cash equivalents |
1,808,042 | 1,336,091 | 55,073 | 40,697 | ||||||||
| Short-term investments |
1,458,847 | 1,322,354 | 44,436 | 40,279 | ||||||||
| Accounts receivable, net |
841,764 | 773,457 | 25,640 | 23,559 | ||||||||
| Inventories |
427,116 | 734,810 | 13,010 | 22,382 | ||||||||
| Refundable deposits—current |
65,000 | 65,043 | 1,980 | 1,981 | ||||||||
| Deferred income tax assets, net |
103,603 | 64,508 | 3,156 | 1,965 | ||||||||
| Prepaid expenses and other current assets |
244,832 | 201,217 | 7,457 | 6,130 | ||||||||
| Total current assets |
4,949,204 | 4,497,480 | 150,752 | 136,993 | ||||||||
| Long-term investments |
170,942 | 190,346 | 5,207 | 5,798 | ||||||||
| Property and equipment (net) |
319,356 | 441,101 | 9,728 | 13,436 | ||||||||
| Goodwill and intangible assets(net) |
— | 2,485,619 | — | 75,712 | ||||||||
| Other assets |
89,182 | 261,979 | 2,716 | 7,980 | ||||||||
| Total assets |
NT$ | 5,528,684 | NT$ | 7,876,525 | US$ | 168,403 | US$ | 239,919 | ||||
| Accounts payable |
525,173 | 590,985 | 15,997 | 18,001 | ||||||||
| Income tax payable |
139,268 | 145,522 | 4,242 | 4,433 | ||||||||
| Accrued expenses and other current liabilities |
294,061 | 423,215 | 8,957 | 12,891 | ||||||||
| Total current liabilities |
958,502 | 1,159,722 | 29,196 | 35,325 | ||||||||
| Accrued pension cost |
1,018 | 109 | 31 | 3 | ||||||||
| Other long-term liabilities |
1,040 | 41,395 | 32 | 1,261 | ||||||||
| Total liabilities |
960,560 | 1,201,226 | 29,259 | 36,589 | ||||||||
| Minority interest |
— | 4,970 | — | 151 | ||||||||
| Shareholders’ equity |
4,568,124 | 6,670,329 | 139,144 | 203,179 | ||||||||
| Total liabilities & shareholders’ equity |
NT$ | 5,528,684 | NT$ | 7,876,525 | US$ | 168,403 | US$ | 239,919 | ||||
About Silicon Motion:
We are a fabless semiconductor company that designs, develops and markets universally compatible, high performance, low-power semiconductor solutions for the multimedia consumer electronics market. We have three major product lines: our mobile storage business, multimedia SoC business, and mobile communications business. Our mobile storage business is our significantly larger business and is composed of microcontrollers, also commonly known as controllers, used in NAND flash memory storage products such as flash memory cards, USB flash drives and card readers. These flash memory storage products are widely used by consumers to store data on multimedia consumer electronics devices such as mobile phones, digital still cameras, personal digital assistants, personal navigation devices and personal multimedia players, and notebook and desktop personal computers. Our multimedia SoC business is composed of products that support MP3 and personal multimedia players, PC cameras and embedded graphics applications. Our mobile communications business is composed of mobile TV tuners, CDMA RF ICs and electronics toll collection RF ICs, which became our new product line as a result of our recent acquisition of FCI.
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. Such forward-looking statements include, without limitation, statements regarding trends in the multimedia consumer electronics market 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, our belief in the outcome of any claim or lawsuit, including our claim against one of our subcontractors for the inventory loss that we sustained during a fire at the subcontractor’s factory; 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 multimedia consumer electronics markets; 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 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; 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 July 2, 2007. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.
| Investor Contact: | Media Contact: | |
| Selina Hsieh | Sara Hsu | |
| Investor Relations | Project Manager | |
| Tel: +886 3 552 6888 x2311 | Tel: +886 2 2219 6688 x3509 | |
| E-mail: ir@siliconmotion.com | E-mail: sara.hsu@siliconmotion.com.tw |