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
October 30, 2007
Commission File Number: 000-51380
Silicon Motion Technology Corporation
(Exact name of Registrant as specified in its charter)
8F-1, No. 36, 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
This report on Form 6-K and the exhibit attached hereto shall be deemed to be incorporated by reference into the Registration Statement on Form F-3 (File No. 333-146421) and to be a part thereof from the date on which this report is furnished, to the extent not modified or updated by, or contrary to, information contained in documents or reports subsequently filed or furnished.
Exhibits
| Exhibit 99.1 | Press Release issued by the Company on October 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: October 30, 2007 | By: | /s/ Riyadh Lai | ||||||
| Name: | Riyadh Lai | |||||||
| Title: | Chief Financial Officer | |||||||
Exhibit 99.1
 |
Silicon Motion Announces Third Quarter Results for the Period Ended September 30, 2007: Sales & Net Income Set New Third Quarter Record |
Third Quarter 2007
Financial Highlights:
| • | Net sales increased 44% year-over-year to US$45.8 million, a new record high |
| • | Gross margin excluding stock-based compensation was slightly higher from 2Q07 at 53.2% |
| • | GAAP gross margin rose slightly to 53.0% |
| • |
Operating margin excluding stock-based compensation and acquisition-related charges decreased slightly from 32.0% in 2Q07 to 31.7% |
| • | Net income excluding stock based-compensation and acquisition-related charges increased 45% year-over-year to US$14.0 million in 3Q07, a new record high |
| • |
Diluted earnings per ADS excluding stock-based compensation and acquisition-related charges were US$0.40, up 29% from US$0.31 in 3Q06 |
| • | GAAP diluted earnings per ADS were US$0.30, up 7% from US$0.28 in 3Q06 |
Business Highlights:
| • | Total unit shipments increased 57% year-over-year and were flat sequentially at 78.5 million units |
| • | Microsoft selected the Company’s embedded flash controllers for its recently launched next-generation flash-based Zune portable media player |
| • | SSD controller design wins with Smart Modular for its XCeedUltra SATA SSD targeting server and enterprise applications, as well as with Transcend, A-Data, and PQI for their upcoming SATA SSD products |
| • | Flash card controller design wins for Lexar Media’s Professional UDMA Compact Flash, PNY’s Optima Pro Compact Flash, as well as with Japan’s Hagiwara and Buffalo |
| • | USB flash drive design wins with Lexar Media for its JumpDrive and PNY for its Attaché USB Flash Drive |
| • | PC camera SoCs demonstrated strong initial ramp in 3Q07 with almost a half a million units sold to Asustek, Quanta, FIC, and other ODMs |
| • | A PCS single chip transceiver design win with LG and a CDMA single chip transceiver design win with TCL |
1
Taipei, Taiwan, October 30, 2007 – Silicon Motion Technology Corporation (NASDAQ : SIMO; “the Company”) today announced its third quarter 2007 financial results. Third quarter revenue increased 44% year-over-year to US$45.8 million and GAAP net income increased 13% year-over-year to US$10.0 million, or US$0.30 per diluted ADS, compared to US$0.28 per diluted ADS in the third quarter of 2006. Non-GAAP net income, which excludes stock-based compensation and acquisition-related charges, increased 45% year-over-year to US$14.0 million, or US$0.40 per diluted ADS, compared to US$0.31 per diluted ADS in the third quarter of 2006.
Commenting on the results, Silicon Motion’s President and CEO, Wallace Kou, said:
“As we predicted during our second quarter results announcement, the third quarter was a difficult period for us as well as the overall merchant controller market because customers faced NAND flash shortages. We also noted that shortages were being caused by speculative activities and would be temporary; since early September we have been seeing improving data points such as increasing availability of NAND flash and more realistic prices, which suggest improving business dynamics. During this challenging quarter, we continued to execute well and win important new business, and as a result, we believe we have strengthened our overall market position. Our revenue for the quarter of US$45.8 million, a new 3Q record high, slightly exceeded our initial guidance of US$43 to 45 million.”
“We continue to believe in the strong secular growth outlook of the NAND flash industry. It remains one of the fastest growing segments in the broader semiconductor market, and one that will likely continue to surprise with new innovative growth drivers. On the demand side, we expect that increasing affordability will continue to boost the sales of flash cards, USB flash drives, as well as new technologies such as solid state drives and embedded flash controllers. The strength of our advanced technology portfolio, first-class engineering talent, economies of scale, and established track record with customers and NAND flash vendors should continue to position us well for growing market opportunities. Last quarter we announced that we will be supplying embedded SSD controllers for Asustek’s eeePC, the world’s first notebook PC developed for high volume production using only a SSD. We were therefore thrilled when the eeePC was launched on October 16 and that Asustek expects to sell three to five million units in 2008. The selection of our SSD controller solution by Asustek is validation of the strength of our flash controller technology, which we believe is among the best in the industry. Another validation of our technological capabilities was the selection by Smart Modular of our SSD controller for its XCeedUltra SATA SSD, which targets server and
2
enterprise applications. We are also thrilled that our embedded flash controller business continues to gain traction with leading global OEMs, and are proud that Microsoft selected our embedded flash controller solution for its recently launched next-generation flash-based Zune portable media player. We therefore remain optimistic about our strong market position and business outlook.”
Third Quarter 2007 Financial Review (1)
Sales
Net sales in the third quarter totaled US$45.8 million, an increase of 44% from 3Q06 and an increase of 4% compared with 2Q07. Overall unit shipments increased 57% from 3Q06 and were flat from 2Q07. The blended average selling price (ASP) per unit increased 4% from 2Q07.
Our key products, as percentages of net sales, are as follows:
| As % of Net Sales |
4Q05 | 1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | 2Q07 | 3Q07 | ||||||||||||||||
| Mobile Storage |
84 | % | 72 | % | 85 | % | 92 | % | 90 | % | 90 | % | 79 | % | 72 | % | ||||||||
| Multimedia SoCs |
16 | % | 27 | % | 14 | % | 8 | % | 9 | % | 9 | % | 12 | % | 11 | % | ||||||||
| Mobile Communications2 |
9 | % | 17 | % | ||||||||||||||||||||
| Others |
0 | % | 1 | % | 1 | % | 0 | % | 1 | % | 1 | % | 1 | % | 0 | % | ||||||||
| Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Our product mix changed with the acquisition of FCI at the end of April 2007. Mobile storage products, which were 92% of net sales in 3Q06 declined to 72% of net sales in 3Q07. Card controllers, which were almost 80% of our revenue in 3Q06 declined to under 60% in 3Q07. FCI, our mobile communications business, now accounts for 17% of net sales.
| 1 |
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. |
| 2 |
Revenues from Mobile Communications did not exist prior to the acquisition of Future Communications IC, Inc. (“FCI”) in the second quarter of 2007. |
3
Net sales from mobile storage products, which include flash memory card controllers, USB flash drive controllers, and card reader controllers, increased 13% from 3Q06 to US$32.8 million and decreased 6% from 2Q07. Unit shipments increased 43% from 3Q06 and decreased 3% from 2Q07 to 70.7 million units as a result of unfavorable NAND flash market conditions for many of the Company’s customers. The ASP per unit in 3Q07 declined by 3% from 2Q07.
Net sales from multimedia SoC products, which include embedded graphics processors, MP3 SoCs, and PC camera SoCs, increased 110% from 3Q06 and were flat from 2Q07 at US$5.2 million. Unit shipments of multimedia SoC products increased over 610% from 3Q06 and increased 27% from 2Q07 to 2.8 million units because of ramping PC camera SoC shipments and continued growth of MP3 SoC volume. The ASP per unit in 3Q07 declined 21% largely because of a shift in product mix towards lower ASP MP3 SoCs and PC camera SoCs from much higher ASP graphics products.
Net sales from mobile communication products, which include mobile TV tuners, CDMA RF ICs, and electronic toll collection (ETC) RF ICs, increased 90% from 2Q07 to US$7.8 million. Unit shipments of communication products increased 57% from 2Q07 to 5.0 million because the Company accounted for three months of revenues in 3Q07 versus two months of revenues in 2Q07 following the completion of the FCI acquisition at the end of April and also because of growth in the mobile TV tuner business and ramping ETC RF IC sales. The ASP per unit in 3Q07 increased 21% largely because of a shift in product mix towards higher ASP mobile TV tuners and ETC RF ICs from lower ASP CDMA RF ICs.
| Unit Shipment (million units) |
4Q05 | 1Q06 | 2Q06 | 3Q06 | 4Q06 | 1Q07 | 2Q07 | 3Q07 | ||||||||
| Mobile Storage |
30.1 | 20.3 | 29.0 | 49.6 | 62.0 | 64.1 | 73.1 | 70.7 | ||||||||
| Multimedia SoCs |
0.9 | 0.5 | 0.3 | 0.4 | 0.6 | 1.2 | 2.2 | 2.8 | ||||||||
| Mobile Communications |
3.2 | 5.0 | ||||||||||||||
| Others |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| Total |
31.1 | 20.8 | 29.3 | 50.0 | 62.6 | 65.3 | 78.5 | 78.5 |
Margins
Gross margin excluding stock-based compensation was 53.2%, which was slightly higher than 52.9% in 2Q07. GAAP gross margin was 53.0%, also slightly higher than 52.6% in 2Q07.
Operating expense excluding stock-based compensation and acquisition-related charges was 21.5% of net sales, which was higher than 20.8% in 2Q07, mainly due to slightly higher general and administrative expenses. Research and development expenses and selling and marketing expenses, both as percentage of net sales, were unchanged compared to the previous quarter. Stock-based compensation as a percent of net sales was 4.8%, which was slightly lower than 5.4% in 2Q07, largely because of one-time expenses in the previous quarter which relate to the Company’s FCI acquisition. Acquisition-related charges declined from $3.8 million in 2Q07 to US$1.7 million because the Company incurred a one-time US$2.1 million in-process research and development expense in 2Q07 that was related to the FCI acquisition.
4
Operating margin excluding stock-based compensation and acquisition-related charges was 31.7%, which was slightly lower than 32.0% in 2Q07. GAAP operating margin was 23.1%, which was higher than 18.1% in 2Q07.
Earnings
Net income excluding stock-based compensation and acquisition-related charges increased 45% year-over-year to US$14.0 million in 3Q07. Diluted earnings per ADS excluding stock-based compensation and acquisition-related charges were US$0.40, up 29% from US$0.31 in 3Q06.
GAAP net income increased 13% year-over-year to US$10.0 million in 3Q07. Diluted GAAP earnings per ADS were US$0.30, an increase of 7% from US$0.28 in 3Q06.
Business Outlook:
Silicon Motion’s President and CEO, Wallace Kou, added:
“We are more optimistic about our current business outlook than compared to three months ago. NAND flash bit growth in the fourth quarter should be much stronger than the third quarter, which should mean improved availability of flash for our customers. Additionally, despite fears that US macro economic issues may affect consumer spending, current indications suggest that handsets and other electronic devices that use our products continue to sell well.”
As a result, for the fourth quarter, Management expects:
| • | Revenue of approximately US$50 –52 million, which represents a quarter-over-quarter increase of 9 – 14% and a 40 - 46% increase year-over-year |
| • |
Non-GAAP gross margin3 to remain in the 52 - 53% range with GAAP gross margin also in the 52-53% range |
| 3 |
Excludes estimated fourth quarter stock based compensation expense of US$0.1 million |
5
| • |
Non-GAAP operating margin4 to be in the 31 - 32% range with GAAP operating margin in the 22 – 23% range |
The Company affirms that it expects full year diluted earnings per ADS in 2007, on a non-GAAP basis excluding estimated full year stock-based compensation expenses of US$7.8 – 8.3 million and estimated full year acquisition-related charges of US$6.8 million, to increase from US$1.01 in 2006 to a range of approximately US$1.60 – 1.70, which represents growth of 58 - 68% over the previous year. On a GAAP basis, we expect full year diluted earnings per ADS in 2007 to be in the range of $1.20 – 1.30.
Conference Call & Webcast:
The Company’s management team will conduct a conference call at 8:00am Eastern Time on October 31.
(Speakers)
Wallace Kou, President & CEO
Riyadh Lai, CFO
PRE-REGISTRATION:
https://www.theconferencingservice.com/prereg/key.process?key=P4G87HKXA
CONFERENCE CALL ACCESS NUMBERS:
USA (Toll Free): 1 888 680 0890
USA (Toll): 1 617 213 4857
Taiwan (Toll Free) 0080 144 4360
Participant Passcode: 1849 0629
REPLAY NUMBERS (for 7 days):
USA (Toll Free): 1 888 286 8010
USA (Toll): 1 617 801 6888
Participant Passcode: 6699 1300
A webcast of the call will be available on the Company’s website at www.siliconmotion.com.
| 4 |
Excludes estimated fourth quarter stock-based compensation expense of US$2.0-2.5 million and estimated fourth quarter acquisition-related charges of US$1.3 million |
6
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 acquisition-related charges, including, 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 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.
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 it is 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 or these individual items in our reconciliation of these non-GAAP financial measures:
Stock-based compensation expense consists of non-cash charges incurred as a result of the Company’s adoption of SFAS 123R relating to the fair value of stock options and 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 the application of SFAS 123R has on its operating results.
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.
7
In-process research and development consists of one-time charges incurred in connection with the acquisition of FCI in 2Q 2007 that otherwise would not have been incurred and therefore we have excluded the effects of these charges from our non-GAAP operating income and non-GAAP net income. In-process research and development consists of technology projects which, as of acquisition date, had not yet reached technological feasibility and there are no future alternative uses that exist. We believe it is useful for investors to understand the effect of this expense on our statement of operations. This non-GAAP adjustment is intended to reflect acquisition-related expense incurred that is not directly associated with our continuing operations.
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per share data, unaudited)
| For the Three Months Ended | ||||||||||||||||||||||||
| Sep. 30, 2006 (NT$) |
Jun. 30, 2007 (NT$) |
Sep. 30, 2007 (NT$) |
Sep. 30, 2006 (US$) |
Jun. 30, 2007 (US$) |
Sep. 30, 2007 (US$) |
|||||||||||||||||||
| Net Sales |
1,036,680 | 1,446,207 | 1,497,494 | 31,732 | 44,267 | 45,837 | ||||||||||||||||||
| Cost of sales |
482,295 | 685,693 | 704,289 | 14,763 | 20,988 | 21,558 | ||||||||||||||||||
| Gross profit |
554,385 | 760,514 | 793,205 | 16,969 | 23,279 | 24,279 | ||||||||||||||||||
| Operating expenses |
||||||||||||||||||||||||
| Research & development |
158,046 | 200,818 | 207,997 | 4,838 | 6,146 | 6,367 | ||||||||||||||||||
| Sales & marketing |
48,884 | 78,846 | 75,839 | 1,496 | 2,413 | 2,321 | ||||||||||||||||||
| General & administrative |
56,987 | 95,588 | 107,286 | 1,744 | 2,926 | 3,284 | ||||||||||||||||||
| In-process research and development |
— | 69,189 | — | — | 2,118 | — | ||||||||||||||||||
| Amortization of intangibles assets |
— | 54,472 | 55,994 | — | 1,667 | 1,714 | ||||||||||||||||||
| Operating income |
290,468 | 261,601 | 346,089 | 8,891 | 8,007 | 10,593 | ||||||||||||||||||
| Non-operating income (expense) |
||||||||||||||||||||||||
| Gain on sale of investments |
4,271 | 4,886 | 10,545 | 131 | 150 | 323 | ||||||||||||||||||
| Interest income (net) |
17,744 | 12,366 | 9,076 | 543 | 378 | 278 | ||||||||||||||||||
| Foreign exchange gain (loss) |
(2,627 | ) | (4,384 | ) | (7,194 | ) | (80 | ) | (134 | ) | (220 | ) | ||||||||||||
| Investment income |
— | 772 | — | — | 23 | — | ||||||||||||||||||
| Others |
3,189 | 18 | 10 | 97 | 1 | — | ||||||||||||||||||
| Subtotal |
22,577 | 13,658 | 12,437 | 691 | 418 | 381 | ||||||||||||||||||
| Income before tax |
313,045 | 275,259 | 358,256 | 9582 | 8,425 | 10,974 | ||||||||||||||||||
| Income tax expense |
23,740 | 2,915 | 30,523 | 727 | 89 | 934 | ||||||||||||||||||
| Net income |
289,305 | 272,344 | 328,003 | 8,855 | 8,336 | 10,040 | ||||||||||||||||||
| Basic earnings per ADS |
$ | 9.38 | $ | 8.43 | $ | 10.00 | $ | 0.29 | $ | 0.26 | $ | 0.31 | ||||||||||||
| Diluted earnings per ADS |
$ | 9.23 | $ | 8.14 | $ | 9.66 | $ | 0.28 | $ | 0.25 | $ | 0.30 | ||||||||||||
8
| For the Three Months Ended | ||||||||||||||||||
| Sep. 30, 2006 (NT$) |
Jun. 30, 2007 (NT$) |
Sep. 30, 2007 (NT$) |
Sep. 30, 2006 (US$) |
Jun. 30, 2007 (US$) |
Sep. 30, 2007 (US$) |
|||||||||||||
| Margin Analysis: |
||||||||||||||||||
| Gross margin |
53.5 | % | 52.6 | % | 53.0 | % | 53.5 | % | 52.6 | % | 53.0 | % | ||||||
| Operating margin |
28.0 | % | 18.1 | % | 23.1 | % | 28.0 | % | 18.1 | % | 23.1 | % | ||||||
| Net margin |
27.9 | % | 18.8 | % | 21.9 | % | 27.9 | % | 18.8 | % | 21.9 | % | ||||||
| Additional Data: |
||||||||||||||||||
| Weighted avg. ADS equivalents5 |
30,832 | 32,312 | 32,815 | 30,832 | 32,312 | 32,815 | ||||||||||||
| Diluted ADS equivalents |
31,336 | 33,453 | 33,942 | 31,336 | 33,453 | 33,942 | ||||||||||||
| 5 |
Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares. |
9
Silicon Motion Technology Corporation
Reconciliation of GAAP to Non-GAAP Operating Results
(in thousands, except percentages and per share data, unaudited)
| For the Three Months Ended | ||||||||||||||||||||||||
| Sep. 30, 2006 (NT$) |
Jun. 30, 2007 (NT$) |
Sep. 30, 2007 (NT$) |
Sep. 30, 2006 (US$) |
Jun. 30, 2007 (US$) |
Sep. 30, 2007 (US$) |
|||||||||||||||||||
| GAAP cost of sales |
482,295 | 685,693 | 704,289 | 14,763 | 20,988 | 21,558 | ||||||||||||||||||
| Adjustment for share-based compensation |
(454 | ) | (3,972 | ) | (3,693 | ) | (14 | ) | (121 | ) | (113 | ) | ||||||||||||
| Non GAAP cost of sales |
481,841 | 681,721 | 700,596 | 14,749 | 20,867 | 21,445 | ||||||||||||||||||
| GAAP operating income |
290,468 | 261,601 | 346,089 | 8,891 | 8,007 | 10,593 | ||||||||||||||||||
| Adjustment for share-based compensation within: |
||||||||||||||||||||||||
| Cost of sales |
454 | 3,972 | 3,693 | 14 | 121 | 113 | ||||||||||||||||||
| Research & development |
14,483 | 39,915 | 35,646 | 443 | 1,222 | 1,092 | ||||||||||||||||||
| Sales & marketing |
4,254 | 14,199 | 13,584 | 130 | 435 | 416 | ||||||||||||||||||
| General & administrative |
6,711 | 19,985 | 19,642 | 205 | 612 | 601 | ||||||||||||||||||
| In-process research and development |
— | 69,189 | — | — | 2,118 | — | ||||||||||||||||||
| Amortization of intangibles assets |
— | 54,472 | 55,994 | — | 1,667 | 1,714 | ||||||||||||||||||
| Non-GAAP operating income |
316,370 | 463,333 | 474,648 | 9,683 | 14,182 | 14,529 | ||||||||||||||||||
| GAAP Net income |
289,305 | 272,344 | 328,003 | 8,855 | 8,336 | 10,040 | ||||||||||||||||||
| Adjustment for share-based compensation within: |
||||||||||||||||||||||||
| Cost of sales |
454 | 3,972 | 3,693 | 14 | 121 | 113 | ||||||||||||||||||
| Research & development |
14,483 | 39,915 | 35,646 | 443 | 1,222 | 1,092 | ||||||||||||||||||
| Sales & marketing |
4,254 | 14,199 | 13,584 | 130 | 435 | 416 | ||||||||||||||||||
| General & administrative |
6,711 | 19,985 | 19,642 | 205 | 612 | 601 | ||||||||||||||||||
| In-process research and development |
— | 69,189 | — | — | 2,118 | — | ||||||||||||||||||
| Amortization of intangibles assets |
— | 54,472 | 55,994 | — | 1,667 | 1,714 | ||||||||||||||||||
| Non-GAAP Net income |
315,207 | 474,076 | 456,562 | 9,647 | 14,511 | 13,976 | ||||||||||||||||||
| Diluted earnings per ADS: |
||||||||||||||||||||||||
| GAAP |
$ | 9.23 | $ | 8.14 | $ | 9.66 | $ | 0.28 | $ | 0.25 | $ | 0.30 | ||||||||||||
| Non-GAAP |
$ | 9.97 | $ | 13.72 | $ | 13.03 | $ | 0.31 | $ | 0.42 | $ | 0.40 | ||||||||||||
10
| For the Three Months Ended | ||||||||||||||||||
| Sep. 30, 2006 (NT$) |
Jun. 30, 2007 (NT$) |
Sep. 30, 2007 (NT$) |
Sep. 30, 2006 (US$) |
Jun. 30, 2007 (US$) |
Sep. 30, 2007 (US$) |
|||||||||||||
| Shares used in computing diluted net income per share: |
||||||||||||||||||
| GAAP |
31,336 | 33,453 | 33,942 | 31,336 | 33,453 | 33,942 | ||||||||||||
| Non-GAAP |
31,619 | 34,558 | 35,028 | 31,619 | 34,558 | 35,028 | ||||||||||||
| Gross margin |
||||||||||||||||||
| GAAP |
53.5 | % | 52.6 | % | 53.0 | % | 53.5 | % | 52.6 | % | 53.0 | % | ||||||
| Non-GAAP |
53.5 | % | 52.9 | % | 53.2 | % | 53.5 | % | 52.9 | % | 53.2 | % | ||||||
| Operating margin |
||||||||||||||||||
| GAAP |
28.0 | % | 18.1 | % | 23.1 | % | 28.0 | % | 18.1 | % | 23.1 | % | ||||||
| Non-GAAP |
30.5 | % | 32.0 | % | 31.7 | % | 30.5 | % | 32.0 | % | 31.7 | % | ||||||
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Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages, and per share data, unaudited)
| For the Nine Months Ended | ||||||||||||||||
| Sep. 30, 2006 (NT$) |
Sep. 30, 2007 (NT$) |
Sep. 30, 2006 (US$) |
Sep. 30, (US$) |
|||||||||||||
| Net Sales |
2,289,780 | 4,115,214 | 70,088 | 125,963 | ||||||||||||
| Cost of sales |
1,067,683 | 1,934,478 | 32,681 | 59,213 | ||||||||||||
| Gross profit |
1,222,097 | 2,180,736 | 37,407 | 66,750 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Research & development |
349,413 | 582,757 | 10,695 | 17,838 | ||||||||||||
| Sales & marketing |
139,081 | 215,834 | 4,257 | 6,606 | ||||||||||||
| General & administrative |
147,939 | 269,424 | 4,528 | 8,247 | ||||||||||||
| In-process research and development |
— | 69,189 | — | 2,118 | ||||||||||||
| Amortization of intangible assets |
— | 110,467 | — | 3,381 | ||||||||||||
| Subtotal |
636,433 | 1,247,671 | 19,480 | 38,190 | ||||||||||||
| Operating income |
585,664 | 933,065 | 17,927 | 28,560 | ||||||||||||
| Non-operating expense (income) |
||||||||||||||||
| Gain on sale of investments |
12,590 | 20,778 | 385 | 636 | ||||||||||||
| Interest income (net) |
46,337 | 41,987 | 1,417 | 1,285 | ||||||||||||
| Investments income |
— | 772 | — | 24 | ||||||||||||
| Foreign exchange gain (loss) |
(1,910 | ) | (13,539 | ) | (58 | ) | (414 | ) | ||||||||
| Others |
4,493 | 27 | 138 | 1 | ||||||||||||
| Subtotal |
61,510 | 50,025 | 1,882 | 1,532 | ||||||||||||
| Income before tax |
647,174 | 983,090 | 19,809 | 30,092 | ||||||||||||
| Income tax expense |
34,403 | 56,975 | 1,053 | 1,744 | ||||||||||||
| Net income |
612,771 | 926,115 | 18,756 | 28,348 | ||||||||||||
| Basic earnings per ADS |
NT$ | 19.90 | NT$ | 28.94 | US$ | 0.61 | US$ | 0.89 | ||||||||
| Diluted earnings per ADS |
NT$ | 19.57 | NT$ | 27.99 | US$ | 0.60 | US$ | 0.86 | ||||||||
| Margin Analysis: |
||||||||||||||||
| Gross margin |
53.4 | % | 53.0 | % | 53.4 | % | 53.0 | % | ||||||||
| Operating margin |
25.6 | % | 22.7 | % | 25.6 | % | 22.7 | % | ||||||||
| Net margin |
26.8 | % | 22.5 | % | 26.8 | % | 22.5 | % | ||||||||
| Additional Data: |
||||||||||||||||
| Weighted average ADS equivalents |
30,769 | 32,036 | 30,769 | 32,036 | ||||||||||||
| Diluted ADS equivalents |
31,305 | 33,121 | 31,305 | 33,121 | ||||||||||||
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$32.67 to US$1 on Sep. 30, 2007.
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Silicon Motion Technology Corporation
Consolidated Balance Sheet
(In thousands)
(unaudited)
| Dec. 31, 2006 (NT$) |
Sep. 30, 2007 (NT$) |
Dec. 31, 2006 (US$) |
Sep. 30, 2007 (US$) | |||||||||
| Cash and cash equivalents |
1,808,042 | 1,585,464 | 55,343 | 48,530 | ||||||||
| Short-term investments |
1,458,847 | 1,400,438 | 44,654 | 42,866 | ||||||||
| Accounts receivable, net |
841,764 | 778,803 | 25,766 | 23,838 | ||||||||
| Inventories |
427,116 | 679,057 | 13,074 | 20,785 | ||||||||
| Refundable deposits - current |
65,000 | 107,442 | 1,990 | 3,289 | ||||||||
| Deferred income tax assets, net |
103,603 | 88,256 | 3,171 | 2,701 | ||||||||
| Prepaid expenses and other current assets |
244,832 | 242,127 | 7,493 | 7,412 | ||||||||
| Total current assets |
4,949,204 | 4,881,587 | 151,491 | 149,421 | ||||||||
| Long-term investments |
170,942 | 134,111 | 5,232 | 4,105 | ||||||||
| Property and equipment (net) |
319,356 | 499,870 | 9,775 | 15,301 | ||||||||
| Goodwill and intangible assets (net) |
— | 2,440,963 | — | 74,716 | ||||||||
| Other assets |
89,182 | 232,622 | 2,730 | 7,120 | ||||||||
| Total assets |
$ | 5,528,684 | $ | 8,189,153 | $ | 169,228 | $ | 250,663 | ||||
| Accounts payable |
525,173 | 362,240 | 16,075 | 11,088 | ||||||||
| Income tax payable |
139,268 | 200,092 | 4,262 | 6,125 | ||||||||
| Accrued expenses and other current liabilities |
294,061 | 461,100 | 9,002 | 14,113 | ||||||||
| Total current liabilities |
958,502 | 1,023,432 | 29,339 | 31,326 | ||||||||
| Accrued pension cost |
1,018 | 1,783 | 31 | 55 | ||||||||
| Other long-term liabilities |
1,040 | 49,647 | 32 | 1,520 | ||||||||
| Total liabilities |
960,560 | 1,074,862 | 29,402 | 32,901 | ||||||||
| Shareholders’ equity |
4,568,124 | 7,114,291 | 139,826 | 217,762 | ||||||||
| Total liabilities & shareholders’ equity |
$ | 5,528,684 | $ | 8,189,153 | $ | 169,228 | $ | 250,663 | ||||
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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, including without limitation, statements about Silicon Motion’s expected fourth quarter 2007 revenue, gross margin and operating margin and full fiscal year 2007 diluted earnings per ADS, 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 fourth quarter and the full fiscal year. Forward-looking statements also 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
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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 |
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