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
| February 1, 2010 |
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
Exhibits
| Exhibit 99.1 | Press Release issued by the Company on February 1, 2010. |
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: February 1, 2010 | By: | /s/ Riyadh Lai | ||||
| Name: | Riyadh Lai | |||||
| Title: | Chief Financial Officer | |||||
2
Exhibit 99.1
|
Silicon Motion Announces Results for the Period Ended December 31, 2009 |
Fourth Quarter 2009
Financial Highlights
| • | Net sales decreased 1% quarter-over-quarter to US$22.8 million from US$23.1 million in 3Q09 |
| • | Gross margin excluding stock-based compensation and reserves for obsolete and end-of-life products was 52.1%. Gross margin excluding only stock-based compensation decreased to 42.2% from 48.5% in 3Q09 |
| • | Operating expenses excluding stock-based compensation, acquisition-related charges, and other items increased from 3Q09 of US$12.0 million to US$14.0 million in the fourth quarter |
| • | Net loss excluding stock-based compensation, acquisition-related charges, foreign exchange gain, and other items of US$7.8 million compares with a net gain US$0.8 million in 3Q09. GAAP net loss increased to US$17.3 million from a loss of US$4.7 million in 3Q09 |
| • | Diluted loss per ADS excluding stock-based compensation, acquisition-related charges, foreign exchange gain (loss), and other items was US$0.28, a decrease from our 3Q09 earnings per ADS of US$0.02. GAAP diluted loss per ADS was US$0.62 |
Business Highlights
| • | Increased total unit shipments 5% sequentially but decreased 23% year-over-year to approximately 70 million units |
| • | Increased storage controller unit shipments 8% sequentially but decreased 26% year-over-year |
| • | Increased our SSD controller shipments over 35% sequentially and over 50% year-over-year and now account for almost 10% of our total corporate revenue |
| • | Secured design wins for our SSD controllers for four ultra-mobile MID and thin-client devices |
| • | Shipments of our 3-bits per cell MLC controllers ramped in the fourth quarter and accounted for nearly 10% of our total card controller sales |
| • | Secured a second design win for the Brazilian ISDB-T mobile TV market as well another design-win for the Japan domestic ISDB-T mobile TV market |
| • | Began shipping our CMMB mobile TV solution for the China market with LG and Lenovo handsets |
| • | Began shipping our previously announced design win for our CDMA transceiver in China with Nokia |
1
Taipei, Taiwan, February 2, 2010 – Silicon Motion Technology Corporation (NasdaqGS: SIMO; the “Company”) today announced its fourth quarter and full year 2009 financial results. For the fourth quarter of 2009, net sales decreased 1% quarter-over-quarter to US$22.8 million. Net loss (GAAP) for the fourth quarter increased quarter-over-quarter to US$17.3 million or US$0.62 per diluted ADS from a GAAP net loss of US$4.7 million or US$0.17 per diluted ADS in the third quarter of 2009.
Net income excluding stock-based compensation, acquisition-related charges, foreign exchange gain, and other items decreased in the fourth quarter to a loss of US$7.8 million or US$0.28 per diluted ADS as compared to a gain of US$0.8 million or US$0.02 per diluted ADS in the third quarter of 2009.
In addition, and as discussed below under “Potential Impairment Charge”, the Company is in the process of assessing potential impairments to goodwill and acquisition-related intangible assets relating to our FCI acquisition in 2007 and anticipates that it will record non-cash impairment charges to GAAP earnings in its 2009 audited financial statements.
Fourth Quarter 2009 Financial Review (1)
Commenting on the results of the fourth quarter, Silicon Motion’s President and CEO, Wallace Kou, said:
“Our mobile storage product line continued to rebound in the fourth quarter. Our mobile communications product line however declined sequentially because of continued product transitions in the Korea market. We are encouraged by the overall momentum of our business as new growth drivers and our pipeline of design wins continue to improve and position us for a strong 2010.
Although NAND flash industry component supply remains tight, we are encouraged by the improving outlook for supply and demand. This quarter, our mobile storage controller shipments increased 8% as compared to the third quarter. Our mobile storage business benefited from both increasing unit shipments of our controllers to cards and USB flash drives as well as increasing adoption of SSDs in industrial, networking, and consumer applications. Our shipment of controllers for SSD applications increased over 35% sequentially after growing over 100% the previous quarter. We believe that the continuing migration of NAND flash to finer process geometry, ramp of 3-bits per cell MLC flash, and accelerating NAND flash fab wafer capacity investments will improve NAND supply in 2010 and the following years.
| 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
The vast majority of controllers that we are shipping are for 40nm and 30nm NAND flash and we are on track to deliver controllers for 20nm NAND flash that is expected to be available in the second half 2010. In the fourth quarter, we also began shipping 3-bits per cell MLC controllers and these products accounted for nearly 10% of our card controller sales. We continue to lead the industry in developing next generation NAND flash controllers, whether for cutting edge process geometries, 3-bits per cell MLC, or differentiated quality NAND flash, and believe that the performance of our controllers is significantly better than those of our competitors.
During the fourth quarter, our mobile communications business decreased due to the impact of continued product transitions in the Korea domestic market. We will be rolling out a more advanced T-DMB mobile TV SoC in mid-2010. We are excited by our increasing pipeline of mobile TV design wins in new mobile TV markets and are delighted to announce that new LG and Lenovo TD-SCDMA handsets in China are using our CMMB mobile TV solutions. For the Brazil market, in addition to our first ISDB-T mobile TV solution that we started shipping in the third quarter with a Samsung handset, we have received another important ISBD-T design win. We have also received another ISDB-T design win for the Japan market.”
Sales
Net sales in the fourth quarter were US$22.8 million, a decrease of 1% compared with the previous quarter. This quarter, mobile storage products accounted for 66% of net sales, mobile communications 16% of net sales, multimedia SoCs 14% of net sales, and others 4% of net sales.
Net sales of mobile storage products, which include primarily flash memory card controllers, USB flash drive controllers, SSD controllers, and embedded flash controllers, increased 7% from the third quarter of 2009 to US$15 million this quarter.
Net sales of mobile communication products, which include primarily mobile TV IC solutions and CDMA RF ICs, decreased 41% from the third quarter of 2009 to US$3.6 million in the fourth quarter.
Net sales of multimedia SoC products, which include primarily embedded graphics processors and PC camera SoCs, increased 13.2% from the third quarter of 2009 to US$3.3 million this quarter.
Gross and Operating Margins
Gross margin excluding stock-based compensation and reserves for obsolete and end-of-life products was 52.1%. Gross margin excluding only stock-based compensation decreased to 42.2% compared with the third quarter. GAAP gross margin decreased to 40.1% from 48.1% in the third quarter.
3
Operating expenses excluding stock-based compensation, acquisition-related charges, and other items were US$14.0 million, which was higher than the US$12.0 million reported for the third quarter. Research and development expenditures, excluding stock-based compensation, were US$7.5 million, which were higher than the US$7.3 million in the previous quarter. Selling and marketing expenses excluding stock-based compensation were US$2.9 million, which was higher than the US$2.4 million from the previous quarter. General and administrative expenses excluding stock-based compensation and litigation expenses were US$3.7 million, an increase from the US$2.2 million reported in the previous quarter. The increase in our G&A expenses was primarily due to a US$1.1 million bad debt reserve, largely attributed to accounts receivable relating to our ETC business. Stock-based compensation was US$7.6 million in the fourth quarter, which is higher than the US$2.2 million in the third quarter. Acquisition-related charges were US$1.5 million, unchanged compared with the previous quarter. Litigation expenses were less than US$0.1 million in the fourth quarter, similar to the previous quarter.
In the fourth quarter, we accelerated the vesting of certain soon-to-vest restricted stock units (RSUs) granted to our employees and cancelled a small portion of outstanding RSUs previously granted to our employees. Together, these two actions resulted in a one-time stock-based compensation charge of US$5.1 million. We are currently planning a new and more effective long-term employee incentive program and will implement this shortly.
Operating margin excluding stock-based compensation, acquisition-related charges, and other items was a negative 19.1%, a decrease from 3.2% in the previous quarter. GAAP operating margin was also lower at negative 59.1% compared with the negative 19.3% reported for the third quarter.
Other Income and Expenses
Net total other income excluding net foreign exchange gain or loss, and other items was US$0.1 million, which was unchanged from the previous quarter. GAAP net total other expense was US$0.3 million, which was significantly lower than US$1.6 million in the previous quarter due primarily to lower foreign exchange loss in the fourth quarter.
Earnings
Net loss excluding stock-based compensation, acquisition-related charges, net foreign exchange loss, and other items was US$7.8 million in this quarter, a decrease from the income of US$0.8 million in the third quarter. Diluted loss per ADS excluding stock-based compensation, acquisition-related charges, net foreign exchange gain (loss), and other items was US$0.28, a decrease from earnings per ADS of US$0.02 in the previous quarter.
4
GAAP net loss was US$17.3 million, an increase from the net loss of US$4.7 million in the third quarter. Diluted GAAP loss per ADS was US$0.62, an increase from loss per ADS of US$0.17 in the previous quarter.
Balance Sheet
Cash, cash equivalents, and short-term investments increased slightly from US$60.6 million at the end of the third quarter of 2009 to US$61.2 million at the end of this quarter.
Potential Impairment Charge
Because of weaker than expected performance of our mobile communications product line and push outs of market opportunities, we are currently assessing potential impairments to goodwill and acquisition-related intangible assets relating to our FCI acquisition and anticipate impairment charges to our 2009 financial statements. We acquired FCI in April 2007 for US$102 million. The net carrying cost of FCI at the end of 2009 and before potential impairment charges was US$71.7 million. We will be appointing an appraiser to assist the Company in determining the extent of the non-cash impairment charge to GAAP earnings and will disclose this as soon as practicable either in the Company’s 20-F filing for the 2009 fiscal year or through an earlier, supplemental press release.
5
Cash Flow
Our cash flows were as follows:
3 months ended December 31, 2009
| (In US$ millions) | |||
| Net income (loss) |
(17.3 | ) | |
| Depreciation & amortization |
2.8 | ||
| Changes in operating assets and liabilities |
3.3 | ||
| Stock-based compensation |
7.6 | ||
| Others |
4.8 | ||
| Net cash provided by (used in) operating activities |
1.2 | ||
| Acquisition of property and equipment |
(1.0 | ) | |
| Others |
0.4 | ||
| Net cash provided by (used in) investing activities |
(0.6 | ) | |
| Others |
(0.1 | ) | |
| Net cash provided by (used in) financing activities |
(0.1 | ) | |
| Effects of changes in foreign currency exchange rates on cash |
0.2 | ||
| Net increase in cash and cash equivalents |
0.7 | ||
| Pro-forma adjustment for foreign exchange translation |
0.2 | ||
| Pro-forma net increase in cash and cash equivalents |
0.9 | ||
During the fourth quarter of 2009, we spent US$1.0 million in capital expenditures primarily relating to the purchase of software and equipment. There were no shares repurchased in the fourth quarter.
Business Outlook:
Silicon Motion’s President and CEO, Wallace Kou, added:
“Although we are entering the seasonally slow part of the year especially relating to our mobile storage business, we are seeing continued signs of improvement in our business and design pipeline and are confident that our business will improve as the year progresses.”
For the first quarter of 2010, management expects:
| • | Revenue to be down 5% to up 5% sequentially |
| • | Gross margin excluding stock-based compensation to be in the 46% to 48% range |
| • | Operating expenses excluding stock-based compensation, acquisition-related charges, and other items of approximately US$13 to US$14 million |
6
Conference Call & Webcast:
The Company’s management team will conduct a conference call at 8:00am Eastern Time on February 2, 2010.
(Speakers)
Wallace Kou, President & CEO
Riyadh Lai, CFO
Jason Tsai, Director of Investor Relations and Strategy
PRE-REGISTRATION:
https://www.theconferencingservice.com/prereg/key.process?key=PWVRHUM6X
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: 5086 0045
REPLAY NUMBERS (for 7 days):
USA (Toll Free): 1 888 286 8010
USA (Toll): 1 617 801 6888
Participant Passcode: 8454 4786
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 stock-based compensation, acquisition-related charges and other items, 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.
7
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 of 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 (acquisition-related charges) consists of non-cash charges that can be impacted by the timing and magnitude of our acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.
Litigation expenses consist of the legal expenses relating to complaints SanDisk filed in the US International Trade Commission and the US District Court for the Western District of Wisconsin.
Impairment losses on long-term investment relates to the other-than-temporary, non-operating write down of the Company’s minority stake investments in Vastview Technology Corp. The investment was written down after the Company determined that these shares have been other-than-temporarily impaired.
Foreign exchange gains and losses consists of translation gains and/or losses of non-NT$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-NT$ currencies against the NT$.
8
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per ADS data, unaudited)
| For the Three Months Ended | ||||||||||||||||||
| Dec. 31, 2008 (NT$) |
Sep. 30, 2009 (NT$) |
Dec. 31, 2009 (NT$) |
Dec. 31, 2008 (US$) |
Sep. 30, 2009 (US$) |
Dec. 31, 2009 (US$) |
|||||||||||||
| Net Sales |
1,063,687 | 759,427 | 737,751 | 32,272 | 23,132 | 22,826 | ||||||||||||
| Cost of sales |
655,820 | 394,448 | 442,285 | 19,897 | 12,015 | 13,684 | ||||||||||||
| Gross profit |
407,867 | 364,979 | 295,466 | 12,375 | 11,117 | 9,142 | ||||||||||||
| Operating expenses |
||||||||||||||||||
| Research & development |
272,067 | 279,293 | 359,490 | 8,254 | 8,507 | 11,123 | ||||||||||||
| Sales & marketing |
97,842 | 94,200 | 134,060 | 2,969 | 2,869 | 4,148 | ||||||||||||
| General & administrative |
260,811 | 89,926 | 189,490 | 7,913 | 2,739 | 5,863 | ||||||||||||
| Amortization of intangibles assets |
47,901 | 48,151 | 48,282 | 1,453 | 1,467 | 1,494 | ||||||||||||
| Operating income (loss) |
(270,754 | ) | (146,591 | ) | (435,856 | ) | (8,214 | ) | (4,465 | ) | (13,486 | ) | ||||||
| Non-operating income (expense) |
||||||||||||||||||
| Gain on sale of investments |
738 | 22 | 10 | 22 | 1 | — | ||||||||||||
| Unrealized holding gain (loss) on marketable securities |
(673 | ) | — | — | (20 | ) | — | — | ||||||||||
| Interest income (net) |
8,698 | 4,328 | 3,536 | 264 | 132 | 109 | ||||||||||||
| Impairment on long-term investment |
(69,253 | ) | (6,472 | ) | (2,158 | ) | (2,101 | ) | (197 | ) | (67 | ) | ||||||
| Foreign exchange gain (loss) |
65,464 | (49,402 | ) | (11,070 | ) | 1,986 | (1,506 | ) | (342 | ) | ||||||||
| Others |
279 | 6 | 142 | 8 | — | 5 | ||||||||||||
| Subtotal |
5,253 | (51,518 | ) | (9,540 | ) | 159 | (1,570 | ) | (295 | ) | ||||||||
| Income (loss) before tax |
(265,501 | ) | (198,109 | ) | (445,396 | ) | (8,055 | ) | (6,035 | ) | (13,781 | ) | ||||||
| Income tax expense (benefit) |
5,251 | (44,971 | ) | 113,803 | 159 | (1,370 | ) | 3,521 | ||||||||||
| Net income (loss) |
(270,752 | ) | (153,138 | ) | (559,199 | ) | (8,214 | ) | (4,665 | ) | (17,302 | ) | ||||||
| Basic earnings (loss) per ADS |
($9.83 | ) | ($5.51 | ) | ($20.09 | ) | ($0.30 | ) | ($0.17 | ) | ($0.62 | ) | ||||||
| Diluted earnings (loss) per ADS |
($9.83 | ) | ($5.51 | ) | ($20.09 | ) | ($0.30 | ) | ($0.17 | ) | ($0.62 | ) | ||||||
| Margin Analysis: |
||||||||||||||||||
| Gross margin |
38.3 | % | 48.1 | % | 40.1 | % | 38.3 | % | 48.1 | % | 40.1 | % | ||||||
| Operating margin |
(25.5 | %) | (19.3 | %) | (59.1 | %) | (25.5 | %) | (19.3 | %) | (59.1 | %) | ||||||
| Net margin |
(25.5 | %) | (20.2 | %) | (75.8 | %) | (25.5 | %) | (20.2 | %) | (75.8 | %) | ||||||
| Weighted avg. ADS2: |
||||||||||||||||||
| Basic |
27,531 | 27,775 | 27,836 | 27,531 | 27,775 | 27,836 | ||||||||||||
| Diluted |
27,531 | 27,775 | 27,836 | 27,531 | 27,775 | 27,836 | ||||||||||||
| 2 | Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares. |
9
Silicon Motion Technology Corporation
Reconciliation of GAAP to Non-GAAP Operating Results
(in thousands, except percentages and per ADS data, unaudited)
| For the Three Months Ended | ||||||||||||||||||
| Dec. 31, 2008 (NT$) |
Sep. 30, 2009 (NT$) |
Dec. 31, 2009 (NT$) |
Dec. 31, 2008 (US$) |
Sep. 30, 2009 (US$) |
Dec. 31, 2009 (US$) |
|||||||||||||
| GAAP net income (loss) |
(270,752 | ) | (153,138 | ) | (559,199 | ) | (8,214 | ) | (4,665 | ) | (17,302 | ) | ||||||
| Stock-based compensation: |
||||||||||||||||||
| Cost of sales |
1,552 | 3,223 | 15,699 | 47 | 98 | 486 | ||||||||||||
| Research and development |
31,321 | 39,265 | 117,949 | 950 | 1,196 | 3,649 | ||||||||||||
| Sales and marketing |
14,536 | 15,066 | 41,257 | 441 | 459 | 1,277 | ||||||||||||
| General and administrative |
20,544 | 15,700 | 70,358 | 624 | 478 | 2,177 | ||||||||||||
| Total stock-based compensation |
67,953 | 73,254 | 245,263 | 2,062 | 2,231 | 7,589 | ||||||||||||
| Acquisition related charges: |
||||||||||||||||||
| Amortization of intangible assets |
47,901 | 48,151 | 48,282 | 1,453 | 1,467 | 1,494 | ||||||||||||
| Litigation expenses |
16,882 | 1,073 | 1,210 | 512 | 32 | 37 | ||||||||||||
| Foreign exchange loss (gain) |
(65,464 | ) | 49,402 | 11,070 | (1,986 | ) | 1,506 | 343 | ||||||||||
| Impairment on long-term investment |
69,253 | 6,472 | 2,158 | 2,101 | 197 | 67 | ||||||||||||
| Non-GAAP net income |
(134,227 | ) | 25,214 | (251,216 | ) | (4,072 | ) | 768 | (7,772 | ) | ||||||||
| Weighted avg. ADS (non-GAAP): |
||||||||||||||||||
| Basic |
27,531 | 27,775 | 27,836 | 27,531 | 27,775 | 27,836 | ||||||||||||
| Diluted |
27,531 | 31,641 | 27,836 | 27,531 | 31,641 | 27,836 | ||||||||||||
| Non-GAAP basic earnings (loss) per ADS |
($4.88 | ) | $0.91 | ($9.02 | ) | ($0.15 | ) | $0.03 | ($0.28 | ) | ||||||||
| Non-GAAP diluted earnings (loss) per ADS |
($4.88 | ) | $0.80 | ($9.02 | ) | ($0.15 | ) | $0.02 | ($0.28 | ) | ||||||||
| Non-GAAP gross margin |
38.5 | % | 48.5 | % | 42.2 | % | 38.5 | % | 48.5 | % | 42.2 | % | ||||||
| Non-GAAP operating margin |
(13.0 | %) | (3.2 | %) | (19.1 | %) | (13.0 | %) | (3.2 | %) | (19.1 | %) | ||||||
10
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages, and per ADS data)
(unaudited)
| For the Year Ended | ||||||||||||||
| Dec. 31, 2008 (NT$) |
Dec. 31, 2009 (NT$) |
Dec. 31, 2008 (US$) |
Dec. 31, 2009 (US$) |
|||||||||||
| Net Sales |
5,528,051 | 2,902,828 | 175,382 | 87,772 | ||||||||||
| Cost of sales |
2,914,587 | 1,598,054 | 92,468 | 48,320 | ||||||||||
| Gross profit |
2,613,464 | 1,304,774 | 82,914 | 39,452 | ||||||||||
| Operating expenses |
||||||||||||||
| Research & development |
1,080,918 | 1,122,459 | 34,293 | 33,939 | ||||||||||
| Sales & marketing |
368,863 | 395,985 | 11,702 | 11,973 | ||||||||||
| General & administrative |
675,285 | 464,892 | 21,424 | 14,057 | ||||||||||
| Amortization of intangible assets |
193,800 | 192,391 | 6,148 | 5,817 | ||||||||||
| Operating income (loss) |
294,598 | (870,953 | ) | 9,347 | (26,334 | ) | ||||||||
| Non-operating income (expense) |
||||||||||||||
| Gain on sale of investments |
17,577 | 233 | 558 | 7 | ||||||||||
| Unrealized holding gain (loss) on marketable securities |
(1,122 | ) | — | (36 | ) | — | ||||||||
| Interest income (net) |
39,147 | 18,602 | 1,242 | 563 | ||||||||||
| Dividend income |
2,480 | — | 79 | — | ||||||||||
| Impairment losses on long-term investment |
(69,253 | ) | (8,630 | ) | (2,197 | ) | (261 | ) | ||||||
| Foreign exchange gain (loss) |
96,380 | (89,435 | ) | 3,058 | (2,704 | ) | ||||||||
| Others |
222 | (1,988 | ) | 6 | (61 | ) | ||||||||
| Subtotal |
85,431 | (81,218 | ) | 2,710 | (2,456 | ) | ||||||||
| Income (loss) before tax |
380,029 | (952,171 | ) | 12,057 | (28,790 | ) | ||||||||
| Income tax expense (benefit) |
86,608 | 12,544 | 2,748 | 380 | ||||||||||
| Net income (loss) |
293,421 | (964,715 | ) | 9,309 | (29,170 | ) | ||||||||
| Basic earnings (loss) per ADS |
$ | 9.46 | ($34.86 | ) | $ | 0.30 | ($1.05 | ) | ||||||
| Diluted earnings (loss) per ADS |
$ | 9.37 | ($34.86 | ) | $ | 0.30 | ($1.05 | ) | ||||||
| Margin Analysis: |
||||||||||||||
| Gross margin |
47.3 | % | 45.0 | % | 47.3 | % | 45.0 | % | ||||||
| Operating margin |
5.3 | % | (30.0 | %) | 5.3 | % | (30.0 | %) | ||||||
| Weighted average ADS: |
||||||||||||||
| Basic |
31,020 | 27,673 | 31,020 | 27,673 | ||||||||||
| Diluted |
31,326 | 27,673 | 31,326 | 27,673 | ||||||||||
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Silicon Motion Technology Corporation
Reconciliation of GAAP to Non-GAAP Operating Results
(in thousands, except percentages and per ADS data, unaudited)
| For the Year Ended | ||||||||||||||
| Dec. 31, 2008 (NT$) |
Dec. 31, 2009 (NT$) |
Dec. 31, 2008 (US$) |
Dec. 31, 2009 (US$) |
|||||||||||
| GAAP net income (loss) |
293,421 | (964,715 | ) | 9,309 | (29,170 | ) | ||||||||
| Stock-based compensation: |
||||||||||||||
| Cost of sales |
11,481 | 24,445 | 364 | 739 | ||||||||||
| Research and development |
138,907 | 224,220 | 4,407 | 6,780 | ||||||||||
| Sales and marketing |
55,334 | 77,500 | 1,756 | 2,344 | ||||||||||
| General and administrative |
70,333 | 120,298 | 2,231 | 3,638 | ||||||||||
| Total stock-based compensation |
276,055 | 446,463 | 8,758 | 13,501 | ||||||||||
| Acquisition related charges: |
||||||||||||||
| Amortization of intangible assets |
193,800 | 192,391 | 6,148 | 5,817 | ||||||||||
| Litigation expenses |
72,982 | 5,112 | 2,315 | 155 | ||||||||||
| Foreign exchange loss (gain) |
(96,380 | ) | 89,435 | (3,058 | ) | 2,704 | ||||||||
| Impairment on long-term investment |
69,253 | 8,630 | 2,197 | 261 | ||||||||||
| FIN48 tax charges |
64,328 | — | 2,041 | — | ||||||||||
| Non-GAAP net income |
873,459 | (222,684 | ) | 27,710 | (6,732 | ) | ||||||||
| Weighted avg. ADS (non-GAAP): |
||||||||||||||
| Basic |
31,020 | 27,673 | 31,020 | 27,673 | ||||||||||
| Diluted |
32,354 | 27,673 | 32,354 | 27,673 | ||||||||||
| Non-GAAP basic earnings per ADS |
$ | 28.16 | ($8.05 | ) | $ | 0.90 | ($0.24 | ) | ||||||
| Non-GAAP diluted earnings per ADS |
$ | 27.00 | ($8.05 | ) | $ | 0.86 | ($0.24 | ) | ||||||
| Non-GAAP gross margin |
47.5 | % | 45.8 | % | 47.5 | % | 45.8 | % | ||||||
| Non-GAAP operating margin |
15.2 | % | (7.8 | %) | 15.2 | % | (7.8 | %) | ||||||
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Silicon Motion Technology Corporation
Consolidated Balance Sheet
(In thousands)
(unaudited)
| Dec. 31, 2008 (NT$) |
Sep. 30, 2009 (NT$) |
Dec. 31, 2009 (NT$) |
Dec. 31, 2008 (US$) |
Sep. 30, 2009 (US$) |
Dec. 31, 2009 (US$) | |||||||||||||
| Cash and cash equivalents |
1,586,941 | 1,932,867 | 1,951,584 | 48,441 | 59,601 | 60,533 | ||||||||||||
| Short-term investments |
112,505 | 33,143 | 21,153 | 3,434 | 1,022 | 656 | ||||||||||||
| Accounts receivable (net) |
923,717 | 610,342 | 476,548 | 28,196 | 18,820 | 14,781 | ||||||||||||
| Inventories |
638,566 | 517,689 | 560,311 | 19,492 | 15,963 | 17,379 | ||||||||||||
| Refundable deposits - current |
85,368 | 66,167 | 50,689 | 2,606 | 2,040 | 1,572 | ||||||||||||
| Deferred income tax assets (net) |
55,276 | 80,298 | 49,765 | 1,688 | 2,476 | 1,544 | ||||||||||||
| Prepaid expenses and other current assets |
155,527 | 102,925 | 140,324 | 4,748 | 3,175 | 4,353 | ||||||||||||
| Total current assets |
3,557,900 | 3,343,431 | 3,250,374 | 108,605 | 103,097 | 100,818 | ||||||||||||
| Long-term investments |
50,369 | 17,908 | 15,709 | 1,538 | 552 | 487 | ||||||||||||
| Property and equipment (net) |
911,885 | 858,085 | 800,958 | 27,835 | 26,460 | 24,844 | ||||||||||||
| Goodwill and intangible assets(net) |
2,641,504 | 2,499,051 | 2,451,548 | 80,632 | 77,061 | 76,041 | ||||||||||||
| Other assets |
282,994 | 312,997 | 245,396 | 8,638 | 9,650 | 7,611 | ||||||||||||
| Total assets |
$ | 7,444,652 | $ | 7,031,472 | $ | 6,763,985 | $ | 227,248 | $ | 216,820 | $ | 209,801 | ||||||
| Accounts payable |
378,624 | 299,688 | 325,519 | 11,558 | 9,241 | 10,097 | ||||||||||||
| Income tax payable |
212,513 | 38,713 | 38,655 | 6,487 | 1,194 | 1,199 | ||||||||||||
| Accrued expenses and other current liabilities |
456,710 | 426,336 | 420,846 | 13,940 | 13,146 | 13,053 | ||||||||||||
| Total current liabilities |
1,047,847 | 764,737 | 785,020 | 31,985 | 23,581 | 24,349 | ||||||||||||
| Long-term liabilities |
60,702 | 61,287 | 76,894 | 1,853 | 1,890 | 2,385 | ||||||||||||
| Other liabilities |
46,511 | 45,572 | 43,881 | 1,420 | 1,405 | 1,361 | ||||||||||||
| Total liabilities |
1,155,060 | 871,596 | 905,795 | 35,258 | 26,876 | 28,095 | ||||||||||||
| Shareholders’ equity |
6,289,592 | 6,159,876 | 5,858,190 | 191,990 | 189,944 | 181,706 | ||||||||||||
| Total liabilities & shareholders’ equity |
$ | 7,444,652 | $ | 7,031,472 | $ | 6,763,985 | $ | 227,248 | $ | 216,820 | $ | 209,801 | ||||||
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$32.96 to US$1 for 4Q08, NT$32.83 to US$1 for 3Q09, and NT$32.32 to US$1 for 4Q09 based on the average of the historical exchange rate of the Oanda Corporation. Amounts from the balance sheet have been translated using the ending exchange rate for the period. The exchange rate was NT$32.76 to US$1 at the end of 4Q08, NT$32.43 to US$1 at the end of 3Q09, and NT$32.24 to US$1 at the end of 4Q09.
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About Silicon Motion:
We are a fabless semiconductor company that designs, develops and markets high performance, low-power semiconductor solutions for the multimedia consumer electronics market. We have three major product lines: mobile storage, mobile communications, and multimedia SoCs. Our mobile storage business is composed of microcontrollers used in NAND flash memory storage products such as flash memory cards, USB flash drives, SSDs, and embedded flash applications. Our mobile communications business is composed primarily of mobile TV IC solutions and CDMA RF ICs. Our multimedia SoCs business is composed primarily of embedded graphics processors and PC cameras image SoCs.
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 first quarter 2010 revenue, gross margin and operating expenses, all of which reflect management’s estimates based on information available at this time of this press release. While Silicon Motion believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts for the fourth quarter. 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; the determination of the Company of the need to record a charge to earnings relating to certain impairments of assets in 2009, and the amounts of such impairments; 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; integration of our recently announced acquisitions; general economic conditions or conditions in the semiconductor or 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, including the general global economic slowdown as it effects the
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Company, its customers and consumers; 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 14, 2009. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.
| Investor Contact: | Investor Contact: | |
| Jason Tsai | Selina Hsieh | |
| Director of IR and Strategy | Investor Relations | |
| Tel: +1 408 519 7259 | Tel: +886 3 552 6888 x2311 | |
| Fax: +1 408 519 7101 | Fax: +886 3 560 0336 | |
| E-mail: jtsai@siliconmotion.com | E-mail: ir@siliconmotion.com |
Media Contact:
Sara Hsu
Project Manager
Tel: +886 2 2219 6688 x3509
Fax: +886 2 2219 6868
E-mail: sara.hsu@siliconmotion.com
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