Report of Foreign Private Issuer

 

 

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

 

November 4, 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 November 4, 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: November 4, 2010     By:   /s/ Riyadh Lai
    Name:   Riyadh Lai
    Title:   Chief Financial Officer

 

2

Press Release

 

Exhibit 99.1

 

LOGO    

Silicon Motion Announces Third Quarter Results for
the Period Ended September 30, 2010

 

 

 

Third Quarter 2010

Financial Highlights

 

 

Net sales increased 5% quarter-over-quarter to US$34.2 million from US$32.5 million in 2Q10

 

 

Gross margin excluding stock-based compensation increased to 48.4% from 47.7% in 2Q10

 

 

Operating expenses excluding stock-based compensation, acquisition-related charges, and other items increased to US$13.2 million from US$13.0 million in 2Q10

 

 

Operating margin excluding stock-based compensation, acquisition-related charges, and other items increased to 9.8% from 7.6% in 2Q10

 

 

Diluted earnings per ADS excluding stock-based compensation, acquisition-related charges, net foreign exchange gain (loss), and other items increased to US$0.16 from US$0.09 in 2Q10

Business Highlights

 

 

Increased total unit shipments 13% sequentially and 57% year-over-year to approximately 106 million units

 

 

Increased storage controller unit shipments 14% sequentially and 62% year-over-year

 

 

Increased our SSD and embedded controller sales by almost 30% sequentially and continue to account for nearly 10% of total corporate revenue

 

 

Increased our sales of 3-bits per cell controllers by about 5% sequentially and continue to account for approximately 25% of our total controller sales

 

 

Began shipping our ISDB-T mobile TV SoC for Samsung’s flagship Galaxy S Android smartphones for Brazil

 

 

More than doubled our mobile TV SoC wins for Android smartphones in Korea

Taipei, Taiwan, November 4, 2010 – Silicon Motion Technology Corporation (NasdaqGS: SIMO; the “Company”) today announced its third quarter of 2010 financial results. For the third quarter of 2010, net sales increased 5% quarter-over-quarter to US$34.2 million from US$32.5 million in the second quarter of 2010. Net income (GAAP) for the third quarter decreased quarter-over-quarter to US$0.3 million or US$0.01 per diluted ADS from a GAAP net income of US$2.2 million or US$0.07 per diluted ADS in the second quarter of 2010.

 

1


 

Net income excluding stock-based compensation, acquisition-related charges, foreign exchange gain, and other items increased in the third quarter to US$5.1 million or US$0.16 per diluted ADS compared with a net income in the second quarter of US$2.9 million or US$0.09 per diluted ADS in the second quarter of 2010.

Third Quarter 2010 Financial Review

Commenting on the results of the third quarter, Silicon Motion’s President and CEO, Wallace Kou, said:

“We are pleased to report another solid quarter for Silicon Motion with revenue growing 5% sequentially and 48% from a year ago. Continuing revenue growth combined with a better gross margin and tight operating expense management resulted in operating margin expanding over 200 basis points to almost 10%.

Our mobile storage continued to perform well as revenue grew 11% sequentially and nearly 75% compared with the third quarter of 2009. Our mobile storage volume increased by nearly 15% in the third quarter while ASPs declined by a modest 3% sequentially because of growing sales of higher value-added controllers, such as advanced 3-bits per cell TLC controllers, leading edge 20nm MLC controllers, together with our unique SSD and embedded flash controllers. During this quarter, our business was constrained by both flash industry supply and consumer demand. Flash vendors limited sales of flash to maintain market price discipline while consumer demand in many end markets was lackluster. However, we saw pockets of strength, especially relating to Android and other smartphones that have card slots. Our card controller sales were exceptionally strong, growing almost 40% quarter-over-quarter, driven by bundled sales, which grew nearly 50% quarter-over-quarter and continued to account for well over half of all our card controller sales. TLC controller sales grew about 5% sequentially, as flash vendors limited their TLC flash sales to maintain price discipline, and our TLC controller sales continued to account for about 25% of our overall controller sales. USB flash drive controller sales were very weak, declining 21% quarter-over-quarter, primarily because of weak retail device sales. We continued robust controller sales for SSD and embedded business solutions used in networking equipment and industrial applications. Sales of these SSD and embedded controllers grew almost 30% sequentially. One of our largest customers started mass production of SSDs using our controllers for several tier 1 Japanese automotive telematics OEMs.

Our mobile communications business improved in the third quarter driven by revenue growth in both our transceiver and our mobile TV segments. Our Korea T-DMB mobile TV SoC sales grew over 40% quarter-over-quarter as our second generation SoC began initial sales ramp. Shipments of mobile TV IC solutions to China, Brazil, and other non-Korea markets grew over 10% quarter-over-quarter and continued to exceed our IC shipments in Korea, which demonstrated our success in expanding our mobile TV sales beyond our home market.”

 

2


 

Sales

Net sales in the third quarter were US$34.2 million, an increase of 5% compared with the previous quarter. For the quarter, mobile storage products accounted for 71% of net sales, mobile communications 17% of net sales, multimedia SoCs 11% of net sales, and others 1% of net sales.

Net sales of mobile storage products, which primarily include flash memory card, USB flash drive, SSD and embedded flash controllers, increased 11% from the second quarter of 2010 to US$24.4 million this quarter.

Net sales of mobile communication products, which primarily include mobile TV IC solutions and handset transceivers, increased 11% from the second quarter of 2010 to US$5.9 million this quarter.

Net sales of multimedia SoC products, which are primarily embedded graphics processors, decreased 10% from the second quarter of 2010 to US$3.6 million this quarter.

Gross and Operating Margins

Gross margin excluding stock-based compensation increased to 48.4% from 47.7% in the second quarter. GAAP gross margin increased to 48.3% from 47.5% in the second quarter.

Operating expenses excluding stock-based compensation, acquisition-related charges, and other items were US$13.2 million, which was higher than the US$13.0 million expended in the second quarter. Research and development expenditures, excluding stock-based compensation, were US$7.9 million, which was lower than the US$8.0 million in the previous quarter. Selling and marketing expenses excluding stock-based compensation were US$2.9 million, which was unchanged compared to the previous quarter. General and administrative expenses excluding stock-based compensation and litigation expenses were US$2.3 million, an increase from the US$2.1 million reported in the previous quarter. Stock-based compensation was US$1.8 million in the third quarter, which is higher than the US$1.5 million in the second quarter. Acquisition-related charges were US$0.5 million, unchanged from the second quarter. Litigation expenses were less than US$0.1 million in the third quarter, similar to the previous quarter.

Operating margin excluding stock-based compensation, acquisition-related charges, and other items was 9.8%, an increase from 7.6% in the previous quarter. GAAP operating margin was 2.9%, a decrease from the 5.3% in the second quarter.

 

3


 

Other Income and Expenses

Net total other income excluding net foreign exchange gain or loss, and other items was US$0.1 million, similar to the second quarter. GAAP net total other income was a loss of US$2.4 million compared with a net total other income of US$0.2 million in the second quarter due primarily to a foreign exchange loss of US$2.4 million in the third quarter.

Earnings

Net income excluding stock-based compensation, acquisition-related charges, net foreign exchange gain or loss, and other items was US$5.1 million this quarter, an increase from US$2.9 million in the second quarter. Diluted earnings per ADS excluding stock-based compensation, acquisition-related charges, net foreign exchange gain or loss, and other items was US$0.16, an increase from US$0.09 in the previous quarter.

GAAP net income was US$0.3 million, a decrease from the net income of US$2.2 million in the second quarter of 2010. Diluted GAAP earnings per ADS were US$0.01, a decrease from US$0.07 in the previous quarter.

Balance Sheet

Cash, cash equivalents, and short-term investments decreased to US$58.4 million from US$64.5 million at the end of the second quarter of 2010 due primarily to an increase in inventory to more normalized levels.

 

4


 

Cash Flow

Our cash flows were as follows:

 

3 months ended September 30, 2010

  

   (In US$  millions

Net income

     0.3   

Depreciation & amortization

     1.7   

Changes in operating assets and liabilities

     (9.0

Others

     0.4   
        

Net cash provided by (used in) operating activities

     (6.6
        

Acquisition of property and equipment

     (1.0

Others

     (2.7
        

Net cash provided by (used in) investing activities

     (3.7
        

Others

     —     
        

Net cash provided by (used in) financing activities

     —     
        

Effects of changes in foreign currency exchange rates on cash

     1.3   
        

Net decrease in cash and cash equivalents

     (9.0
        

Pro-forma adjustment for foreign exchange translation

     1.2   
        

Pro-forma net decrease in cash and cash equivalents

     (7.8
        

During the third quarter of 2010, we spent US$1.0 million in capital expenditures primarily relating to the purchase of software and design tools.

Business Outlook:

Silicon Motion’s President and CEO, Wallace Kou, added:

“We’ve increased our revenue sequentially every quarter this year and while we would like this recovery momentum to continue in the fourth quarter, we must highlight that leading flash vendors are in the short-term tightening their sales of flash components to the market and this may affect some of our customers. The strength of our TLC, 20nm MLC, and other advanced controller technologies, as well as strong bundled card sales, especially relating to smartphones, and robust sales to the China domestic market may partially mitigate this risk. Furthermore, we expect continued recovery from our mobile TV and transceiver products in the fourth quarter.”

For the fourth 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$12 to US$14 million

 

5


 

Conference Call & Webcast:

The Company’s management team will conduct a conference call at 8:00am Eastern Time on November 4, 2010.

(Speakers)

Wallace Kou, President & CEO

Riyadh Lai, CFO

Jason Tsai, Director of Investor Relations and Strategy

PRE-REGISTRATION:

https://cossprereg.btci.com/prereg/key.process?key=PUBDPYMPN

CONFERENCE CALL ACCESS NUMBERS:

USA (Toll Free): 1 888 713 4215

USA (Toll): 1 617 213 4867

Taiwan (Toll Free): 0080 144 4360

Participant Passcode: 3465 5614

REPLAY NUMBERS (for 7 days):

USA (Toll Free): 1 888 286 8010

USA (Toll): 1 617 801 6888

Participant Passcode: 6266 4136

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.

 

6


 

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 related 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 of share-based compensation on its operating results.

Acquisition-related charges consist of non-cash charges that can be impacted by the timing and magnitude of our acquisitions. We consider our operating results without these charges when evaluating our ongoing performance and forecasting our earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. We believe that the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of our competitors. Acquisition-related charges include the following:

 

  Amortization of intangible assets relates to the amortization of core technology, customer relationship, and other intangibles acquired as part of an acquisition.

Litigation expenses consist of legal expenses relating to intellectual property disputes, commercial claims and other types of litigation. We consider litigation to be an unusual, non-recurring activity that does not occur regularly in the normal course of our business and therefore exclude these types of charges when presenting non-GAAP financial measures.

Gain from settlement of litigation relates to the one-time payment in connection with a favorable settlement of certain litigation with ASE.

 

7


 

Impairment of long-term investments relates to the other-than-temporary, non-operating write down of the Company’s minority stake investments. We do not consider these investments which were made before 2007 to be strategic and exclude the performance of these investments when evaluating our ongoing performance and forecasting our earnings trends, and therefore excludes losses (and gains) from the investments when presenting non-GAAP financial measures.

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$. We do not use financial instruments to manage the impact on our operations from changes in foreign exchange rates, and because our operations are subject to fluctuations in foreign exchange rates, we therefore exclude foreign exchange gains and losses when presenting non-GAAP financial measures.

 

8


 

Silicon Motion Technology Corporation

Consolidated Statements of Income

(in thousands, except percentages and per share data, unaudited)

 

     For the Three Months Ended  
     Sep. 30,
2009
(NT$)
    Jun. 30,
2010
(NT$)
    Sep. 30,
2010
(NT$)
    Sep. 30,
2009
(US$)
    Jun. 30,
2010
(US$)
    Sep. 30,
2010
(US$)
 

Net Sales

     759,427        1,035,398        1,092,485        23,132        32,488        34,204   

Cost of sales

     394,448        543,452        565,147        12,015        17,052        17,694   
                                                

Gross profit

     364,979        491,946        527,338        11,117        15,436        16,510   

Operating expenses

            

Research & development

     279,293        280,579        285,238        8,507        8,804        8,930   

Sales & marketing

     94,200        103,705        106,210        2,869        3,254        3,325   

General & administrative

     89,926        79,219        87,205        2,739        2,486        2,730   

Amortization of intangibles assets

     48,151        17,316        17,316        1,467        543        542   

Gain from settlement of litigation

     —          (43,500     100        —          (1,365     3   
                                                

Operating income (loss)

     (146,591     54,627        31,269        (4,465     1,714        980   

Non-operating income (expense)

            

Gain on sale of investments

     22        5        25        1        —          1   

Interest income, net

     4,328        2,264        1,704        132        71        53   

Impairment of long-term investments

     (6,472     (4,100     —          (197     (129     —     

Foreign exchange gain (loss), net

     (49,402     7,077        (77,862     (1,506     222        (2,438

Others, net

     6        967        (32     —          31        (1
                                                

Subtotal

     (51,518     6,213        (76,165     (1,570     195        (2,385
                                                

Income (loss) before income tax

     (198,109     60,840        (44,896     (6,035     1,909        (1,405

Income tax expense (benefit)

     (44,971     (10,835     (55,495     (1,370     (340     (1,737
                                                

Net income (loss)

     (153,138     71,675        10,599        (4,665     2,249        332   
                                                

Basic earnings (loss) per ADS

     $(5.51     $2.45        $0.36        $(0.17     $0.08        $0.01   
                                                

Diluted earnings (loss) per ADS

     $(5.51     $2.36        $0.35        $(0.17     $0.07        $0.01   
                                                

Margin Analysis:

            

Gross margin

     48.1     47.5     48.3     48.1     47.5     48.3

Operating margin

     (19.3 %)      5.3     2.9     (19.3 %)      5.3     2.9

Net margin

     (20.2 %)      6.9     1.0     (20.2 %)      6.9     1.0

Additional Data:

            

Weighted avg. ADS equivalents(1)

     27,775        29,224        29,226        27,775        29,224        29,226   

Diluted ADS equivalents

     27,775        30,313        30,446        27,775        30,313        30,446   

 

(1)

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,
2009
(NT$)
    Jun. 30,
2010
(NT$)
    Sep. 30,
2010
(NT$)
    Sep. 30,
2009
(US$)
    Jun. 30,
2010
(US$)
    Sep. 30,
2010
(US$)
 

GAAP net income (loss)

     (153,138     71,675        10,599        (4,665     2,249        332   

Stock-based compensation:

            

Cost of sales

     3,223        1,551        1,870        98        49        59   

Research and development

     39,265        26,651        31,909        1,196        836        999   

Sales and marketing

     15,066        10,014        12,024        459        314        376   

General and administrative

     15,700        9,388        11,140        478        295        349   
                                                

Total stock-based compensation

     73,254        47,604        56,943        2,231        1,494        1,783   
                                                

Acquisition related charges:

            

Amortization of intangible assets

     48,151        17,316        17,316        1,467        543        542   

Litigation expenses

     1,073        2,543        1,544        32        80        48   

Gain from settlement of litigation

     —          (43,500     100        —          (1,365     3   

Foreign exchange loss (gain), net

     49,402        (7,077     77,862        1,506        (222     2,438   

Impairment of long-term investments

     6,472        4,100        —          197        129        —     
                                                

Non-GAAP net income (loss)

     25,214        92,661        164,364        768        2,908        5,146   
                                                

Shares used in computing non-GAAP basic earnings per ADS

     27,775        29,224        29,226        27,775        29,224        29,226   
                                                

Shares used in computing non-GAAP diluted earnings per ADS

     31,641        32,027        32,237        31,641        32,027        32,237   
                                                

Non-GAAP basic earnings (loss) per ADS

     $0.91        $3.17        $5.62        $0.03        0.10        0.18   
                                                

Non-GAAP diluted earnings (loss) per ADS

     $0.80        $2.89        $5.10        $0.02        0.09        0.16   
                                                

Non-GAAP gross margin

     48.5     47.7     48.4     48.5     47.7     48.4

Non-GAAP operating margin

     (3.2 %)      7.6     9.8     (3.2 %)      7.6     9.8

 

10


 

Silicon Motion Technology Corporation

Consolidated Statements of Income

(in thousands, except percentages, and per ADS data)

(unaudited)

 

     For the Nine Months Ended  
     Sep. 30,
2009
(NT$)
    Sep. 30,
2010
(NT$)
    Sep. 30,
2009
(US$)
    Sep. 30,
2010
(US$)
 

Net Sales

     2,165,076        2,958,655        64,972        92,690   

Cost of sales

     1,155,769        1,548,871        34,683        48,524   
                                

Gross profit

     1,009,307        1,409,784        30,289        44,166   

Operating expenses

        

Research & development

     762,968        805,525        22,896        25,236   

Sales & marketing

     261,924        308,849        7,860        9,676   

General & administrative

     275,401        248,404        8,265        7,782   

Amortization of intangible assets

     144,109        51,928        4,325        1,627   

Gain from settlement of litigation

     —          (43,400     —          (1,360
                                

Operating income (loss)

     (435,095     38,478        (13,057     1,205   

Non-operating expense (income)

        

Gain on sale of investments

     223        40        7        1   

Interest income, net

     15,066        6,482        452        203   

Foreign exchange gain (loss), net

     (78,365     (77,265     (2,352     (2,421

Impairment of long-term investments

     (6,472     (6,401     (194     (201

Others, net

     (2,132     (3,119     (64     (98
                                

Subtotal

     (71,680     (80,263     (2,151     (2,516
                                

Income (loss) before income tax

     (506,775     (41,785     (15,208     (1,311

Income tax expense (benefit)

     (101,259     (54,208     (3,039     (1,700
                                

Net income (loss)

     (405,516     12,423        (12,169     389   
                                

Basic earnings (loss) per ADS

     $(14.68     $0.43        $(0.44     $0.01   
                                

Diluted earnings (loss) per ADS

     $(14.68     $0.42        $(0.44     $0.01   
                                

Margin Analysis:

        

Gross margin

     46.6     47.7     46.6     47.7

Operating margin

     (20.1 %)      1.3     (20.1 %)      1.3

Weighted average ADS:

        

Basic

     27,619        28,969        27,619        28,969   

Diluted

     27,619        29,738        27,619        29,738   

 

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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 Nine Months Ended  
     Sep. 30,
2009
(NT$)
    Sep. 30,
2010
(NT$)
    Sep. 30,
2009
(US$)
    Sep. 30,
2010
(US$)
 

GAAP net income (loss)

     (405,516     12,423        (12,169     389   

Stock-based compensation:

        

Cost of sales

     8,746        4,211        262        132   

Research and development

     106,271        73,157        3,189        2,292   

Sales and marketing

     36,242        34,856        1,088        1,092   

General and administrative

     49,940        27,880        1,499        873   
                                

Total stock-based compensation

     201,199        140,104        6,038        4,389   
                                

Acquisition related charges:

        

Amortization of intangible assets

     144,109        51,928        4,325        1,627   

Litigation expenses

     3,902        6,249        117        196   

Gain from settlement of litigation

     —          (43,400     —          (1,360

Impairment of long-term investments

     6,472        6,401        194        201   

Foreign exchange loss (gain), net

     78,365        77,265        2,352        2,421   
                                

Non-GAAP net income

     28,531        250,970        857        7,863   
                                

Weighted avg. ADS (non-GAAP):

        

Basic

     27,619        28,969        27,619        28,969   
                                

Diluted

     30,401        30,907        30,401        30,907   
                                

Non-GAAP basic earnings per ADS

     $1.03        $8.66        $0.03        $0.27   
                                

Non-GAAP diluted earnings per ADS

     $0.94        $8.12        $0.03        $0.25   
                                

Non-GAAP gross margin

     47.0     47.8     47.0     47.8

Non-GAAP operating margin

     (4.0 %)      6.5     (4.0 %)      6.5

 

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Silicon Motion Technology Corporation

Consolidated Balance Sheet

(In thousands)

(unaudited)

 

     Sep. 30,
2009
(NT$)
     Jun. 30,
2010
(NT$)
     Sep. 30,
2010
(NT$)
     Sep. 30,
2009
(US$)
     Jun. 30,
2010
(US$)
     Sep. 30,
2010
(US$)
 

Cash and cash equivalents

     1,932,867         2,058,362         1,770,267         59,601         64,183         56,414   

Short-term investments

     33,143         11,175         61,193         1,022         348         1,950   

Accounts receivable (net)

     610,342         625,707         693,236         18,820         19,511         22,092   

Inventories

     517,689         377,340         701,416         15,963         11,766         22,352   

Refundable deposits—current

     66,167         138,800         214,355         2,040         4,328         6,831   

Deferred income tax assets (net)

     80,298         4,417         18,081         2,476         138         576   

Prepaid expenses and other current assets

     102,925         132,503         134,057         3,175         4,132         4,272   
                                                     

Total current assets

     3,343,431         3,348,304         3,592,605         103,097         104,406         114,487   

Long-term investments

     17,908         6,271         6,271         552         196         200   

Property and equipment (net)

     858,085         760,698         754,247         26,460         23,720         24,036   

Goodwill and intangible assets (net)

     2,499,051         1,226,527         1,209,211         77,061         38,245         38,535   

Other assets

     312,997         249,776         303,755         9,650         7,788         9,679   
                                                     

Total assets

     7,031,472         5,591,576         5,866,089         216,820         174,355         186,937   
                                                     

Accounts payable

     299,688         443,066         580,686         9,241         13,816         18,505   

Income tax payable

     38,713         22,925         24,277         1,194         715         774   

Accrued expenses and other current liabilities

     426,336         419,659         449,007         13,146         13,085         14,308   
                                                     

Total current liabilities

     764,737         885,650         1,053,970         23,581         27,616         33,587   

Other liabilities

     106,859         100,324         101,094         3,295         3,128         3,222   
                                                     

Total liabilities

     871,596         985,974         1,155,064         26,876         30,744         36,809   

Shareholders’ equity

     6,159,876         4,605,602         4,711,025         189,944         143,611         150,128   
                                                     

Total liabilities & shareholders’ equity

     7,031,472         5,591,576         5,866,089         216,820         174,355         186,937   
                                                     

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 for 3Q09, NT$31.87 to US$1 for 2Q10, and NT$31.94 to US$1 for 3Q10 based on the average of the historical exchange rates reported by the Oanda Corporation. Amounts from the balance sheet have been translated using the ending exchange rate for the period. The exchange rate was NT$32.43 to US$1 at the end of 3Q09, NT$32.07 to US$1 at the end of 2Q10 and NT$31.38 to US$1 at the end of 3Q10.

 

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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 handset transceivers. Our multimedia SoCs business is composed primarily of embedded graphics processors.

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 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 the unpredictable volume and timing of customer orders, which are not fixed by contract but vary on a purchase order basis; the loss of one or more key customers or the significant reduction, postponement, rescheduling or cancellation of orders from these customers; general economic conditions or conditions in the semiconductor or consumer electronics markets; 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 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

 

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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 June 25, 2010. 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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