6-K

 

 

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

April 28, 2014

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 April 28, 2014.

 

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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: April 29, 2014      
    By:   LOGO
    Name:   Riyadh Lai
    Title:   Chief Financial Officer

 

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EX-99.1

Exhibit 99.1

 

LOGO

  

Silicon Motion Announces Results for the Period

Ended March 31, 2014

First Quarter 2014

Financial Highlights

 

    Net sales increased 1% quarter-over-quarter to US$52.8 million from US$52.5 million in 4Q13

 

    Gross margin (non-GAAP1) decreased to 48.6% as compared to 48.8% in 4Q13

 

    Operating expenses (non-GAAP) increased to US$16.9 million from US$13.8 million in 4Q13

 

    Operating margin (non-GAAP) decreased to 16.7% from 22.5% in 4Q13

 

    Diluted earnings per ADS (non-GAAP) decreased to US$0.16 from US$0.30 in 4Q13

Business Highlights

 

    Began mass production of our new TLC eMMC 4.5 controller for our third NAND flash partner

 

    Began mass production of our new eMMC 5.0 controller (2-3x better IOPS performance as compared to eMMC 4.5)

 

    Secured over 30 new design-wins for our eMMC controllers for smartphones, tablets, Chromebooks, and gaming consoles

 

    Secured our first major global PC OEM design-win for our SATA 3 client SSD controller

 

    Secured our first SATA 3 client SSD controller design-win at a NAND flash maker

 

    Shipping our SATA 3 client SSD controller to several leading module makers actively retailing $100 256GB SSDs

 

    Secured first LTE-Advanced transceiver design-win with leading Korean handset OEM

Taipei, Taiwan, April 29, 2014 – Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon Motion” or the “Company”) today announced its financial results for the quarter ended March 31, 2014. For the first quarter, net sales increased 1% quarter-over-quarter to US$52.8 million from US$52.5 million in the fourth quarter of 2013. Net income (non-GAAP) of US$5.4 million or US$0.16 per diluted ADS in the first quarter decreased as compared to US$10.2 million or US$0.30 per diluted ADS in the fourth quarter of 2013.

 

1  Non-GAAP measures represent GAAP measures excluding the impact of stock-based compensation, foreign exchange gain (loss), and other non-recurring items. For reconciliation of non-GAAP to GAAP results and further discussion, see accompanying financial tables and the note “Discussion of Non-GAAP Financial Measures” at the end of this press release.

 

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GAAP net income for the first quarter decreased quarter-over-quarter to US$3.8 million or US$0.11 per diluted ADS from a GAAP net income of US$5.4 million or US$0.16 per diluted ADS in the fourth quarter of 2013.

First Quarter 2014 Financial Review

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

“We are off to an excellent start for 2014. I am pleased to report solid first quarter results that reflect strength from across most of our products. Our SSD+embedded sales increased sequentially in the first quarter and grew by over 60% as compared to the same period a year ago. In the first quarter, we began commercial sales of our TLC eMMC 4.5 controllers to our third NAND flash partner, converted the majority of our eMMC controller sales to eMMC 4.5, and began mass production of our next generation eMMC 5.0 controller. I am also pleased with the progress we are making in securing new wins for our SATA 3 client SSD controller which recently began shipping to numerous US, Taiwan, and China module makers for their channel market SSD solutions. Separately, our SSD OEM partner has been making solid progress marketing their SSD solutions with our controllers and has secured an important first design-win with a tier-one PC OEM. In addition, we secured an important design win with one of our flash partners for our SSD controller.

We recently secured our first design-win for our LTE-Advanced transceiver with a leading Korean handset OEM and will begin commercial sales of this new transceiver in the second quarter. We are actively working on securing additional wins.”

Sales

Net sales in the first quarter were US$52.8 million, an increase of 1% compared with the fourth quarter of 2013. For the quarter, mobile storage products accounted for 85% of net sales and mobile communications 10% of net sales.

Net sales of our mobile storage products, which primarily include flash memory card, USB flash drive, SSD and embedded flash controllers, decreased 4% sequentially in the first quarter to US$45.1 million.

Net sales of mobile communications products, which primarily include handset transceivers and mobile TV IC solutions, increased 47% from the fourth quarter of 2013 to US$5.5 million in the first quarter.

Gross and Operating Margins

Gross margin (non-GAAP) decreased slightly to 48.6% in the first quarter as compared to the fourth quarter of 2013. GAAP gross margin remained unchanged at 48.5% in the first quarter as compared to the fourth quarter of 2013.

 

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Operating expenses (non-GAAP) in the first quarter were US$16.9 million, an increase from the US$13.8 million expended in the fourth quarter of 2013. Operating margin (non-GAAP) was 16.7%, a decrease from 22.5% in the previous quarter. GAAP operating margin was 14.2% for the first quarter, an increase from 13.2% in the fourth quarter of 2013.

Other Income and Expenses

Net total other income (non-GAAP) was US$0.5 million, unchanged from the fourth quarter of 2013. GAAP net total other income was US$0.2 million, a decrease from the US$0.6 million in the fourth quarter of 2013.

Earnings

Net income (non-GAAP) was US$5.4 million for the first quarter, a decrease from US$10.2 million in the fourth quarter of 2013. Diluted earnings per ADS (non-GAAP) were US$0.16 in the first quarter, a decrease from US$0.30 per ADS in the fourth quarter of 2013.

GAAP net income was US$3.8 million for the first quarter, a decrease from a net income of US$5.4 million in the fourth quarter of 2013. Diluted GAAP earnings per ADS in the first quarter were US$0.11, a decrease from US$0.16 per ADS in the previous quarter.

Balance Sheet

Cash and cash equivalents, and short-term investments of US$158.6 million at the end of the first quarter were a decrease from US$162.5 million at the end of the fourth quarter of 2013.

 

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Cash Flow

Our cash flows were as follows:

3 months ended March 31, 2014

 

     (In US$ millions)  

Net income

     3.8   

Depreciation & amortization

     1.6   

Stock-based compensation

     1.5   

Changes in operating assets and liabilities

     (5.2

Others

     1.2   
  

 

 

 

Net cash provided by (used in) operating activities

     2.9   
  

 

 

 

Acquisition of property and equipment

     (1.7

Others

     —     
  

 

 

 

Net cash provided by (used in) investing activities

     (1.7
  

 

 

 

Dividend

     (5.0

Others

     0.1   
  

 

 

 

Net cash provided by (used in) financing activities

     (4.9
  

 

 

 

Effects of changes in foreign currency exchange rates on cash

     (0.2
  

 

 

 

Net increase (decrease) in cash and cash equivalents

     (3.9
  

 

 

 

During the first quarter, we had US$1.7 million of capital expenditures primarily relating to the purchase of testing equipment, software and design tools.

Returning Value to Shareholders

In January 2013, the Company announced a US$40 million share repurchase program. We did not repurchase any shares in the first quarter of 2014. On January 28, 2014 the Board of Directors of the Company declared a US$0.15 per ADS quarterly dividend. On February 25, we paid $5.0 million as dividend payments to our shareholders.

Business Outlook:

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

“We are off to a solid start and are confident about growing our business this year as we have already met the milestones that we had set: begin commercial sales of our eMMC controllers to our third NAND flash partner, secure our first SATA 3 client SSD controller design-win with a tier-1 global PC OEM, and win our first LTE-Advanced transceiver project with our Korean handset OEM partner. These are important achievements for us, and we believe we are well positioned for growth this year and next as we build on these milestones and further expand our business.”

 

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For the second quarter of 2014, management expects:

 

    Revenue to increase 10% to 15% sequentially

 

    Gross margin (non-GAAP) to be in the 48% to 50% range

 

    Operating expenses (non-GAAP) of approximately US$18 to US$20 million

For the full year 2014, management expects:

 

    Revenue to increase 5% to 15% year-over-year

 

    Gross margin (non-GAAP) to be in the 48% to 50% range

 

    Operating expenses (non-GAAP) of approximately US$74 to US$79 million

Conference Call & Webcast:

The Company’s management team will conduct a conference call at 8:00 am Eastern Time on April 29, 2014.

(Speakers)

Wallace Kou, President & CEO

Riyadh Lai, CFO

Jason Tsai, Director of Investor Relations and Strategy

CONFERENCE CALL ACCESS NUMBERS:

USA (Toll Free): 1 866 519 4004

USA (Toll): 1 845 675 0437

Taiwan (Toll Free): 0080 112 6920

Participant Passcode: 2423 8648

REPLAY NUMBERS (for 7 days):

USA (Toll Free):1 855 452 5696

USA (Toll): 1 646 254 3697

Participant Passcode: 2423 8648

A webcast of the call will be available on the Company’s website at www.siliconmotion.com.

 

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Discussion of Non-GAAP Financial Measures

To supplement the Company’s unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude stock-based compensation and other items, including 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 to GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measure. We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

Our non-GAAP financial measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because 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.

 

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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.

Foreign exchange gains and losses consist of translation gains and/or losses of non-US$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-US$ currencies against the US$. We do not use financial instruments to manage the impact on our operations from changes in foreign exchange rates, and because our operations are subject to fluctuations in foreign exchange rates, we therefore exclude foreign exchange gains and losses when presenting non-GAAP financial measures.

Other non-recurring items:

 

    Litigation expenses consist of legal expenses relating to intellectual property disputes, commercial claims and other types of litigation. While litigation may arise in the ordinary course of our business, we nevertheless consider litigation to be an unusual, non-recurring and unplanned activity and therefore exclude this charge when presenting non-GAAP financial measures.

 

    Vendor dispute charges relate to the write down of certain unsalable inventory due to defects in the components provided by our vendor. These parts were supplied to us at a quality below levels previously specified and agreed. All parts known to be defective have been identified and are within our control. We have resolved this matter with our vendor and recovered in 1Q 2013 the full value of the inventory being written off. This charge (as well as the amount recovered) has been excluded from our non-GAAP results as we believe this is an unusual, non-recurring and unplanned activity.

 

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Silicon Motion Technology Corporation

Consolidated Statements of Income

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

 

     For the Three Months Ended  
     Mar. 31, 2013
(US$)
    Dec. 31, 2013
(US$)
    Mar. 31, 2014
(US$)
 

Net Sales

     57,365        52,489        52,848   

Cost of sales

     32,219        27,045        27,224   
  

 

 

   

 

 

   

 

 

 

Gross profit

     25,146        25,444        25,624   

Operating expenses

      

Research & development

     11,640        12,339        11,907   

Sales & marketing

     3,382        3,578        3,591   

General & administrative

     3,126        2,592        2,630   
  

 

 

   

 

 

   

 

 

 

Operating income

     6,998        6,935        7,496   

Non-operating income (expense)

      

Gain on sale of investments

     —          1        1   

Interest income, net

     453        483        474   

Foreign exchange gain (loss),net

     (311     73        (230

Others, net

     112        7        2   
  

 

 

   

 

 

   

 

 

 

Subtotal

     254        564        247   
  

 

 

   

 

 

   

 

 

 

Income before income tax

     7,252        7,499        7,743   

Income tax expense

     2,415        2,083        3,915   
  

 

 

   

 

 

   

 

 

 

Net income

     4,837        5,416        3,828   
  

 

 

   

 

 

   

 

 

 

Basic earnings per ADS

   $ 0.15      $ 0.16      $ 0.12   

Diluted earnings per ADS

   $ 0.14      $ 0.16      $ 0.11   

Margin Analysis:

      

Gross margin

     43.8     48.5     48.5

Operating margin

     12.2     13.2     14.2

Net margin

     8.4     10.3     7.2

Additional Data:

      

Weighted avg. ADS equivalents2

     33,283        32,899        33,184   

Diluted ADS equivalents

     34,051        33,670        33,963   

 

2  Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares.

 

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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 Three Months Ended  
     Mar. 31,
2013
(US$)
    Dec. 31,
2013

(US$)
    Mar. 31,
2014

(US$)
 

GAAP net income

     4,837        5,416        3,828   

Stock-based compensation:

      

Cost of sales

     77        160        58   

Research and development

     1,525        3,152        1,068   

Sales and marketing

     521        891        214   

General and administrative

     355        656        205   
  

 

 

   

 

 

   

 

 

 

Total stock-based compensation

     2,478        4,859        1,545   
  

 

 

   

 

 

   

 

 

 

Non-recurring items:

      

Vendor dispute

     (1,717     —          —     

Litigation expenses

     104        (5     (239

Foreign exchange loss (gain),net

     311        (73     230   
  

 

 

   

 

 

   

 

 

 

Non-GAAP net income

     6,013        10,197        5,364   
  

 

 

   

 

 

   

 

 

 

Shares used in computing non-GAAP diluted earnings per ADS

     34,502        34,065        34,104   

Non-GAAP diluted earnings per ADS

   $ 0.17      $ 0.30      $ 0.16   

Non-GAAP gross margin

     41.0     48.8     48.6

Non-GAAP operating margin

     13.7     22.5     16.7

 

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Silicon Motion Technology Corporation

Consolidated Balance Sheet

(In thousands, unaudited)

 

     Mar. 31,
2013
(US$)
     Dec. 31,
2013
(US$)
     Mar. 31,
2014
(US$)
 

Cash and cash equivalents

     151,001         161,720         157,841   

Short-term investments

     14,993         742         727   

Accounts receivable (net)

     32,269         30,963         37,441   

Inventories

     29,060         33,666         30,982   

Refundable deposits - current

     15,241         15,299         15,310   

Deferred income tax assets (net)

     739         1,278         —     

Prepaid expenses and other current assets

     4,156         2,870         2,586   
  

 

 

    

 

 

    

 

 

 

Total current assets

     247,459         246,538         244,887   

Long-term investments

     178         133         133   

Property and equipment (net)

     23,604         30,195         30,211   

Goodwill and intangible assets(net)

     35,465         35,474         35,471   

Other assets

     4,341         4,423         4,513   
  

 

 

    

 

 

    

 

 

 

Total assets

     311,047         316,763         315,215   
  

 

 

    

 

 

    

 

 

 

Accounts payable

     19,313         14,661         14,199   

Income tax payable

     5,171         8,189         10,766   

Accrued expenses and other current liabilities

     19,020         17,826         13,651   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     43,504         40,676         38,616   

Other liabilities

     3,379         5,390         5,671   
  

 

 

    

 

 

    

 

 

 

Total liabilities

     46,883         46,066         44,287   

Shareholders’ equity

     264,164         270,697         270,928   
  

 

 

    

 

 

    

 

 

 

Total liabilities & shareholders’ equity

     311,047         316,763         315,215   
  

 

 

    

 

 

    

 

 

 

 

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About Silicon Motion:

We are a fabless semiconductor company that designs, develops and markets high performance, low-power semiconductor solutions to OEMs and other customers in the mobile storage and mobile communications markets. For the mobile storage market, our key products are microcontrollers used in solid state storage devices such as SSDs, eMMCs and other embedded flash applications, as well as removable storage products. For the mobile communications market, our key products are handset transceivers and mobile TV IC solutions. Our products are widely used in smartphones, tablets, and industrial and commercial applications. For further information on Silicon Motion, visit www.siliconmotion.com.

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 second quarter of 2014 and full year 2014 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 first quarter of 2014. 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; the payment, or non-payment, of cash dividends in the future at the discretion of our board of directors; the effect, if any, on the price of our ADS as a result of the implementation of the announced share repurchase program; 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

 

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customers’ sales outlook, purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions, 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 April 30, 2013, as amended on May 29, 2013. 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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