Sales & Net Income Set New Second Quarter Record
TAIPEI, Taiwan, July 30 /Xinhua-PRNewswire-FirstCall/ --
Second Quarter 2007
Financial Highlights:
-- Net sales increased 111% year-over-year to US$44.1 million
-- Gross margin excluding FCI was largely flat from 1Q07 at 53.0%(1)
-- GAAP gross margin declined slightly to 52.6%
-- Operating margin excluding FCI increased to 28.8% from 27.8% in 1Q07
(1)
-- GAAP net income increased 46% year-over-year to US$8.3 million in 2Q07
-- Diluted earnings per ADS excluding FCI were US$0.37, up 106% from
US$0.18 in 2Q06(1)
-- Diluted earnings per ADS excluding in-process R&D expenses and
amortization of intangibles were US$0.36, up 100% from US$0.18 in
2Q06(1)
-- GAAP diluted earnings per ADS were US$0.25, up 39% from US$0.18 in
2Q06
Note 1: A reconciliation of non-GAAP financial measures to GAAP
financial measures is provided at the end of this press release.
Business Highlights:
-- Increased total unit shipments 168% year-over-year and 20%
sequentially to a record 78.5 million units. Unit shipments of
mobile storage products increased 152% year-over-year and 14%
sequentially to a record 73.1 million units
-- Secured major embedded SSD controller design-win with Asustek for its
new ASUS Eee PC, the $199 low-cost Intel processor-powered notebook PC
-- Continued to expand breadth of business relationship with Samsung
with design-in of new USB flash drive controller and embedded SSD
controllers for camcorders
-- Secured new design-wins for (i) high performance card reader
controllers at Kingston, and Lexar Media and (ii) MP3 SoC
controllers at Mattel, Thomson, and Coby
-- Regained S-DMB mobile TV tuner business from Samsung with design wins
for 3 new handsets
Silicon Motion Technology Corporation (Nasdaq: SIMO; the "Company") today announced its second quarter 2007 financial results. GAAP net income increased 46% year-over-year to US$8.2 million, or US$0.25 per diluted ADS. Non-GAAP net income excluding in-process R&D expenses and amortization of intangibles, which management believes is an important measure of the ongoing operational performance of the Company, increased 112% year-over-year to a record US$12million, or US$0.36 per diluted ADS.
Commenting on the results, Silicon Motion's President and CEO, Wallace Kou, said:
"Despite seasonal slowness, we delivered strong 2Q results, setting a new second quarter record for both sales, which increased 111% from the same period last year, and net income, which was up 112%. In addition to successfully completing the acquisition and integration of FCI, our new mobile communications business, we were able to expand our core mobile storage product business a respectable 7% quarter-over-quarter. Our multimedia SOCs grew an impressive 64%, led by a near two-fold increase in shipments of MP3 SoCs. We continued to maintain our track record of balancing strong growth with healthy profitability. The second quarter marks the 8th consecutive quarter that we have maintained our gross margin above 52%."
"From an operational perspective, we saw a number of major design wins for SSD, card reader, and USB flash drive controllers, as well as MP3 SoCs, and we are very excited to be designing embedded flash controllers for consumer electronic devices, notebook PCs, and mobile handsets. Our design win for the ASUS Eee PC, the $199 joint Asustek-Intel notebook PC development project, is one exciting example. We believe low cost PCs utilizing NAND flash storage are a compelling new trend that could create considerable longer-term momentum in the market."
Second Quarter 2007 Financial Review (2)
Sales
Net sales in the second quarter totaled US$44.1 million, an increase of 111% from 2Q06 and an increase of 23% compared with 1Q07. Excluding net sales from our mobile communications business, which comprises our recently acquired FCI business, net sales in the second quarter totaled US$40.0 million, an increase of 91% from 2Q06 and an increase of 12% compared with 1Q07.
Note 2: Unless otherwise stated, all financial information used in this
press release is unaudited, consolidated, prepared in accordance
with US GAAP and denominated in New Taiwan dollars. US dollar
amounts are translated for convenience only. Such financial
information is generated internally and has not been subjected
to the same review and scrutiny, including internal auditing
procedures and audit by independent auditors, to which we
subject our audited consolidated financial statements, and may
vary materially from the audited consolidated financial
information for the same period. Any evaluation of the
financial information presented in this press release should
also take into account our published audited consolidated
financial statements and the notes to those statements. In
addition, the financial information presented is not necessarily
indicative of our results for any future period.
Overall unit shipments increased 168% from 2Q06 and 20% from 1Q07, and the blended average selling price (ASP) per unit increased 3% from 1Q07.
Our key products, as percentages of net sales, are as follows:
As % of Net Sales 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07
Mobile Storage 87% 84% 72% 85% 92% 90% 90% 79%
Multimedia SoCs 13% 16% 27% 14% 8% 9% 9% 12%
Mobile Communications -- -- -- -- -- -- -- 9%
Others 0% 0% 1% 1% 0% 1% 1% 1%
Total 100% 100% 100% 100% 100% 100% 100% 100%
Net sales from mobile storage products, which include flash memory card controllers, USB flash drive controllers, and card reader controllers, increased 94% from 2Q06 to US$34.6 million and increased 7% from 1Q07. Unit shipments increased 152% from 2Q06 and 14% from 1Q07 to 73.1 million units. The ASP per unit in 2Q07 declined by 6% from 1Q07.
Net sales from multimedia SoC products, which include embedded graphics processors and MP3 SoCs, increased 78% from 2Q06 and increased 64% from 1Q07 to US$5.2 million. Unit shipments of multimedia SoC products increased over 500% from 2Q06 and increased 88% from 1Q07 to 2.2 million units. ASPs for all three of the Company's multimedia products increased compared to the first quarter of 2007, but the blended multimedia ASP declined because of a shift in the product mix towards lower ASP products, such as MP3 SoCs which have lower selling prices compared to embedded graphics processors and constituted a growing proportion of the total multimedia SoC product sales in the second quarter.
Net sales from mobile communication products, which include mobile TV tuners, CDMA RF ICs, and electronic toll collection RF ICs, were US$4.1 million in 2Q07. The Company began consolidating mobile communication sales from May 1, 2007 since the acquisition of FCI was completed at the end of April.
Unit Shipment 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07
(thousand units)
Mobile Storage 24,265 30,146 20,306 28,976 49,563 61,966 64,090 73,083
Multimedia SoCs 407 947 496 326 395 581 1,179 2,215
Mobile
Communications -- -- -- -- -- -- -- 3,197
Others 3 7 21 11 23 14 28 33
Total 24,675 31,100 20,823 29,313 49,981 62,561 65,297 78,529
Margins
Gross margin excluding FCI was largely flat from 1Q07 at 53.0%. GAAP gross margin declined slightly to 52.6% due to lower margins at FCI that were caused by a delayed initial ramp of a significant new higher-margin product. Management believes the delay will be resolved and shipments will start in 3Q07.
The Company's 2Q operating expense includes a one-time US$2.1 million expense for FCI in-process R&D and a US$1.7 million charge for amortization of intangibles, which comprises amortizations of FCI core technologies, FCI customer relations, and FCI order backlogs. Management considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.
Operating margin excluding FCI increased to 28.8% from 27.8% in 1Q07 due to lower R&D expenditures as a percentage of sales. Operating margin excluding in-process R&D expenses and amortization of intangibles decreased to 26.6% from 27.8% in 1Q07, as a result of an increase in overhead expenses in Korea that were required to support FCI's growth. GAAP operating margin, which includes in-process R&D expenses and amortization of intangibles, decreased to 18.1%.
Earnings
GAAP net income increased 46% year-over-year to US$8.3 million in 2Q07. Diluted earnings per ADS excluding FCI were US$0.37, up 106% from US$0.18 in 2Q06. Diluted earnings per ADS excluding in-process R&D expenses and amortization of intangibles were US$0.36, up 100% from US$0.18 in 2Q06. GAAP diluted earnings per ADS, which include in-process R&D expenses and amortization of intangibles, were US$0.25, up 39% from US$0.18 in 2Q06.
Business Outlook:
Silicon Motion's President and CEO, Wallace Kou, added:
"Looking forward, although the third quarter has typically been a strong period for us, we believe revenue will remain flat due to continued tight NAND flash supply conditions. We believe this has largely been caused by yield problems at a number of flash manufactures moving to more advanced process technologies and speculative inventory stockpiling by flash distributors. We view the current industry situation as short-term in nature and are optimistic about the outlook of our business beyond the near-term."
As a result, for the third quarter, Management expects:
-- A 36% to 42% year-over-year increase in revenue, including FCI, to
approximately US$43 - 45 million, though largely flat on a sequential
basis
-- Gross Margin to remain in the 52 - 53% range
-- Operating Margin, excluding in-process R&D and amortization of
intangibles, to be 27 - 28%
The company expects full year diluted earnings per ADS in 2007, excluding intangible amortization and in-process R&D expenses, to increase from $0.93 in 2006 to a range of approximately $1.40 - 1.50, which represents growth of 51% - 61% over the previous year. At the end of the first quarter, Management raised its full year earnings per ADS guidance from US$1.20 - 1.30 to $1.40 - 1.50. This earnings target excluded the FCI acquisition and did not anticipate the effects on the business of tight NAND flash supply conditions that the Company is currently experiencing. As a result, although Management is currently maintaining its annual guidance, it is currently expected that the range will be met with FCI's earnings included.
Conference Call & Webcast:
The Company's management team will conduct a conference call at 8:00 am Eastern Time on July 31.
(Speakers)
Wallace Kou, President & CEO
Riyadh Lai, CFO
CONFERENCE CALL ACCESS NUMBERS:
USA (Toll Free): 1 888 680 0892
USA (Toll): 1 617 213 4858
Taiwan (Toll Free) 0080 114 8420
Participant Passcode: 4315 0409
REPLAY NUMBERS (for 7 days):
USA (Toll Free): 1 888 286 8010
USA (Toll): 1 617 801 6888
Participant Passcode: 9213 1868
A webcast of the call will be available on the Company's website at www.siliconmotion.com .
Discussion of Non-GAAP Financial Measures
To supplement the Company's unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company discloses certain non-GAAP financial measures that exclude certain charges and the financial results of FCI, including non-GAAP net sales, non-GAAP cost of sales, non-GAAP gross profit, non-GAAP selling, general, and administrative expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted ADS. These supplemental measures exclude, among other things, FCI net sales, FCI cost of sales, FCI gross profit, FCI selling, general, and administrative expenses, FCI operating income, and FCI net income, as well as intangible amortization and in-process R&D expenses relating to the FCI acquisition. These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measure. We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.
In calculating our non-GAAP financial measures, we exclude certain items to facilitate our review of the comparability of the Company's operating performance on a period-to-period basis because items such as FCI financial results affect comparison with previous periods that are without FCI financial results and other items are not, in our view, related to the Company's ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with our forecasts, and for benchmarking our performance externally against our competitors. Also, when evaluating potential acquisitions, we exclude the items described below from our consideration of the target's performance and valuation. Since we find these measures to be useful, we believe that our investors benefit from seeing the results from management's perspective in addition to seeing our GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company's GAAP financials, provide useful information to investors by offering:
-- the ability to make more meaningful period-to-period comparisons of
the Company's on-going operating results;
-- the ability to better identify trends in the Company's underlying
business and perform related trend analysis;
-- a better understanding of how management plans and measures the
Company's underlying business; and
-- an easier way to compare the Company's operating results against
analyst financial models and operating results of our competitors
that supplement their GAAP results with non-GAAP financial measures.
The following are explanations of each of the adjustments that we incorporate into our non-GAAP measures, as well as the reasons for excluding each or these individual items in our reconciliation of these non-GAAP financial measures:
FCI financial results consist of revenue, costs, and earnings of Future Communications IC, Inc. ("FCI"), a company in South Korea that we acquired. This acquisition was completed at the end of April 2007 and we began consolidating FCI from May 1, 2007. We present our operating results without FCI in order to facilitate a period-to-period comparison of the Company's mobile storage and multimedia businesses.
Intangible amortization consists of non-cash charges that can be impacted by the timing and magnitude of our acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per share data)
(unaudited)
For the 3 Months Ended Change From
Jun. 30, Mar. 31, Jun. 30, 2Q06 1Q07
2006 2007 2007 (%) (%)
(NT $) (NT$) (NT$)
Net Sales 686,963 1,171,513 1,446,207 111% 23%
Cost of sales 319,492 544,496 685,693 115% 26%
Gross profit 367,471 627,017 760,514 107% 21%
Operating expenses
Research & development 109,223 173,944 200,818 84% 15%
Sales & marketing 43,266 61,148 78,846 82% 29%
General &
administrative 46,125 66,549 95,588 107% 44%
In-process research
and development -- -- 69,189 N/A N/A
Amortization of
intangibles assets -- -- 54,472 N/A N/A
Subtotal 198,614 301,642 498,913 151% 65%
Operating income 168,857 325,374 261,601 55% -20%
Non-operating income(expense)
Gain on sale of
investments 4,362 5,346 4,886 12% -9%
Interest income (net) 14,897 20,544 12,366 -17% -40%
Foreign exchange gain
(loss) 666 (1,960) (4,384) -758% 124%
Investment income -- -- 772 N/A N/A
Others 596 (1) 18 -97% 1900%
Subtotal 20,521 23,929 13,658 -33% -43%
Income before tax 189,378 349,303 275,259 45% -21%
Income tax expense 2,591 23,536 2,915 13% -88%
Net income 186,787 325,767 272,344 46% -16%
Basic earnings per ADS NT$6.07 NT$10.52 NT$8.43 39% -20%
Diluted earnings per ADS NT$5.96 NT$10.19 NT$8.14 37% -20%
Margin Analysis:
Gross margin 53.5% 53.5% 52.6% -- --
Operating margin 24.6% 27.8% 18.1% -- --
Net margin 27.2% 27.8% 18.8% -- --
Additional Data:
Weighted avg. ADS
equivalents(3) 30,783 30,980 32,312 -- --
Diluted ADS equivalents 31,353 31,969 33,453 -- --
Note 3: Assumes all outstanding ordinary shares are represented by ADSs.
Each ADS represents four ordinary shares.
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per share data)
(unaudited)
For the 3 Months Ended Change From
Jun. 30, Mar. 31, Jun. 30, 2Q06 (%)1Q07 (%)
2006 2007 2007
(US $) (US $) (US$)
Net Sales 20,925 35,684 44,051 111% 23%
Cost of sales 9,732 16,585 20,886 115% 26%
Gross profit 11,193 19,099 23,165 107% 21%
Operating expenses
Research &
development 3,326 5,298 6,117 84% 15%
Sales & marketing 1,318 1,863 2,402 82% 29%
General &
administrative 1,405 2,027 2,912 107% 44%
In-process research
and development -- -- 2,107 N/A N/A
Amortization of
intangibles assets -- -- 1,659 N/A N/A
Subtotal 6,049 9,188 15,197 151% 65%
Operating income 5,144 9,911 7,968 55% -20%
Non-operating income (expense)
Gain on sale of
investments 133 163 149 12% -9%
Interest income (net) 454 626 377 -17% -40%
Foreign exchange gain
(loss) 20 (60) (134) -758% 124%
Investment income -- -- 24 N/A N/A
Others 18 -- 1 -97% 1900%
Subtotal 625 729 417 -33% -43%
Income before tax 5,769 10,640 8,385 45% -21%
Income tax expense 79 717 89 13% -88%
Net income 5,690 9,923 8,296 46% -16%
Basic earnings
per ADS US $0.18 US $0.32 US$0.26 44% -20%
Diluted earnings
per ADS US $0.18 US $0.31 US$0.25 39% -20%
Margin Analysis:
Gross margin 53.5% 53.5% 52.6% -- --
Operating margin 24.6% 27.8% 18.1% -- --
Net margin 27.2% 27.8% 18.8% -- --
Additional Data:
Weighted avg. ADS 30,783 30,980 32,312 -- --
equivalents(4)
Diluted ADS
Equivalents 31,353 31,969 33,453 -- --
Note: The Company maintains its accounts and expresses its financial
statements in New Taiwan dollars. For convenience only, U.S.
dollar amounts presented in the income statement have been
translated from New Taiwan dollars, using an average exchange rate
of NT$ 32.83 to US$1 on June 30, 2007,
Note 4: Assumes all outstanding ordinary shares are represented by ADSs.
Each ADS represents four ordinary shares.
Silicon Motion Technology Corporation
Consolidated Statements of Income
(Reconciliation of GAAP to Non-GAAP-Excluding FCI)
For the 3 Months Ended on June 30,2007
(in thousands, except percentages and per share data)
(unaudited)
GAAP FCI Non-GAAP Non-GAAP
(NT$) (NT$) (NT $) (US $)
Net Sales 1,446,207 134,121 1,312,086 39,966
Cost of sales 685,693 68,597 617,096 18,797
Gross profit 760,514 65,524 694,990 21,169
Operating expenses
Research &
development 200,818 27,139 173,679 5,289
Sales &
marketing 78,846 10,342 68,504 2,087
General &
administrative 95,588 20,226 75,362 2,296
In-process
research
and development 69,189 69,189 -- --
Amortization of
intangibles assets 54,472 54,472 -- --
Subtotal 498,913 181,368 317,545 9,672
Operating income 261,601 (115,844) 377,445 11,497
Non-operating income (expense)
Gain on sale of
investments 4,886 -- 4,886 149
Interest income
(net) 12,366 219 12,147 370
Foreign
exchange (4,384) 467 (4,851) (148)
gain (loss)
Investment income 772 -- 772 24
Others 18 -- 18 --
Subtotal 13,658 686 12,972 395
Income before tax 275,259 (115,158) 390,417 11,892
Income tax expense
(benefit) 2,915 4,683 (1,768) (54)
Net income 272,344 (119,841) 392,185 11,946
Basic earnings per
ADS NT$8.43 -- NT $12.69 US $0.38
Diluted earnings
per ADS NT$8.14 -- NT $12.25 US $0.37
Margin Analysis:
Gross margin 52.6% -- 53.0% --
Operating margin 18.1% -- 28.8% --
Net margin 18.8% -- 29.9% --
Additional Data:
Weighted avg. ADS 32,312 -- 31,169 --
equivalents(5)
Diluted ADS
equivalents 33,453 -- 32,282 --
Note: The Company maintains its accounts and expresses its financial
statements in New Taiwan dollars. For convenience only, U.S.
dollar amounts presented in the income statement have been
translated from New Taiwan dollars, using an average exchange rate
of NT$ 32.83 to US$1 on June 30, 2007,
Note 5: Assumes all outstanding ordinary shares are represented by ADSs.
Each ADS represents four ordinary shares.
Silicon Motion Technology Corporation
Consolidated Statements of Income
(Reconciliation of GAAP to Non-GAAP-Excluding amortization
of intangibles and In-process R&D expense)
For the 3 Months Ended on June 30,2007
(in thousands, except percentages and per share data)
(unaudited)
Amortization of
intangibles and
In-process R&D
GAAP expense Non-GAAP Non-GAAP
(NT$) (NT$) (NT $) (US $)
Net Sales 1,446,207 -- 1,446,207 44,051
Cost of sales 685,693 -- 685,693 20,886
Gross profit 760,514 -- 760,514 23,165
Operating expenses
Research &
development 200,818 -- 200,818 6,117
Sales & marketing 78,846 -- 78,846 2,402
General &
administrative 95,588 -- 95,588 2,912
In-process research
and development 69,189 69,189 -- --
Amortization of
intangibles assets 54,472 54,472 -- --
Subtotal 498,913 123,661 375,252 11,431
Operating income 261,601 123,661 385,262 11,734
Non-operating income(expense)
Gain on sale of
investments 4,886 -- 4,886 149
Interest income (net) 12,366 -- 12,366 377
Foreign exchange gain
(loss) (4,384) -- (4,384) (134)
Investment income 772 -- 772 24
Others 18 -- 18 1
Subtotal 13,658 -- 13,658 417
Income before tax 275,259 123,661 398,920 12,151
Income tax expense
(benefit) 2,915 -- 2,915 89
Net income 272,344 123,661 396,005 12,062
Basic earnings per ADS NT$8.43 -- NT$12.26 US $0.37
Diluted earnings per ADS NT$8.14 -- NT$11.84 US $0.36
Margin Analysis:
Gross margin 52.6% -- 52.6% --
Operating margin 18.1% -- 26.6% --
Net margin 18.8% -- 27.4% --
Additional Data:
Weighted avg. ADS
Equivalents(6) 32,312 -- 32,312 --
Diluted ADS equivalents 33,453 -- 33,453 --
Note 6: Assumes all outstanding ordinary shares are represented by ADSs.
Each ADS represents four ordinary shares.
Silicon Motion Technology Corporation
Reconciliations of GAAP to Non-GAAP Results
(US$ thousands, except per-share amount and percentages)
(unaudited)
Three Months Ended
Jun. 30, Mar. 31, Jun. 30,
2006 2007 2007
GAAP cost of sales 9,732 16,585 20,886
Adjustment for share-based
compensation (31) (51) (121)
Cost of sales excluding share-based
compensation 9,701 16,534 20,765
GAAP operating income
Adjustment for share-based
compensation within: 5,143 9,910 7,968
Cost of sales 31 51 121
Research and development 211 588 1,216
Sales and marketing 80 225 433
General and administrative 258 338 609
Operating income excluding share-based
compensation 5,723 11,112 10,347
GAAP net income 5,690 9,923 8,296
Adjustment for share-based
compensation within:
Cost of sales 31 51 121
Research and development 211 588 1,216
Sales and marketing 80 225 433
General and administrative 258 338 609
Net income excluding share-based
compensation 6,270 11,125 10,675
GAAP diluted earnings per ADS 0.18 0.31 0.25
Adjustment for share-based
compensation 0.02 0.03 0.06
Diluted earnings per ADS excluding
share-based compensation US$0.20 US$0.34 US$0.31
GAAP gross margin percentage 53.5% 53.5% 52.6%
Adjustment for share-based --%
compensation 0.1% 0.1%
Gross margin percentage excluding
share-based compensation 53.6% 53.6% 52.6%
GAAP operating margin percentage 24.6% 27.8% 18.1%
Adjustment for share-based
compensation 2.8% 3.4% 5.4%
Operating margin percentage excluding
share-based compensation 27.4% 31.2% 23.5%
Note: The Company maintains its accounts and expresses its financial
statements in New Taiwan dollars. For convenience only, U.S.
dollar amounts presented in the income statement have been
translated from New Taiwan dollars, using an average exchange rate
of NT$ 32.83 to US$1 on June 30, 2007,
Silicon Motion Technology Corporation
Stock Based Compensation
(in NT$ thousands and US$ thousands)
(unaudited)
Three Months Ended
Jun. 30, Mar. 31, Jun. 30,
2006 2007 2007
(NT$) (NT$) (NT$)
(1) Cost of sales:
Stock-based compensation 1,032 1,663 3,972
(2) Research and development expense:
Stock-based compensation 6,911 19,289 39,915
(3) Sales and marketing expense:
Stock-based compensation 2,621 7,381 14,199
(4) General and administrative expense:
Stock-based compensation 8,469 11,098 19,985
Three Months Ended
Jun. 30, Mar. 31, Jun. 30,
2006 2007 2007
(US$) (US$) (US$)
(1) Cost of sales:
Stock-based compensation 31 51 121
(2) Research and development expense:
Stock-based compensation 211 588 1,216
(3) Sales and marketing expense:
Stock-based compensation 80 225 433
(4) General and administrative expense:
Stock-based compensation 258 338 609
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages, and per share data)
(unaudited)
For the Six For the Six For the Six For the Six
Months Ended Months Ended Months Ended Months Ended
Jun. 30, Jun. 30, Jun. 30, Jun. 30,
2006 2007 2006 2007 Change
NT$ NT$ US$ US$ (%)
Net Sales 1,253,100 2,617,720 38,169 79,735 109%
Cost of sales 585,389 1,230,189 17,831 37,471 110%
Gross profit 667,711 1,387,531 20,338 42,264 108%
Operating expenses
Research &
development 191,368 374,762 5,829 11,415 96%
Sales & marketing 90,197 139,994 2,747 4,264 55%
General &
administrative 90,952 162,138 2,770 4,939 78%
In-process
research and
development -- 69,189 -- 2,107 NA
Amortization of
intangible
assets -- 54,472 -- 1,659 NA
Subtotal 372,517 800,555 11,346 24,385 115%
Operating income 295,194 586,976 8,992 17,879 99%
Non-operating expense (income)
Gain on sale of
investments 8,319 10,233 253 312 23%
Interest income
(net) 28,593 32,909 870 1,002 15%
Investments income -- 772 -- 24 NA
Foreign exchange
gain (loss) 717 (6,344) 22 (193) -985%
Others 1,304 17 41 1 -99%
Subtotal 38,933 37,587 1,186 1,145 -4%
Income before tax 334,127 624,563 10,178 19,024 87%
Income tax expense 10,663 26,452 325 806 148%
Net income 323,464 598,111 9,853 18,218 85%
Basic earnings per
ADS NT$10.52 NT$18.94 US$0.32 US$0.58 --
Diluted earnings per
ADS NT$10.34 NT$18.33 US$0.32 US$0.56 --
Margin Analysis:
Gross margin 53.3% 53.0% 53.3% 53.0% --
Operating margin 23.6% 22.4% 23.6% 22.4% --
Net margin 25.8% 22.9% 25.8% 22.9% --
Additional Data:
Weighted average ADS
equivalents 30,738 31,579 30,738 31,579 --
Diluted ADS
equivalents 31,287 32,630 31,287 32,630 --
Note: The Company maintains its accounts and expresses its financial
statements in New Taiwan dollars. For convenience only, U.S.
dollar amounts presented in the income statement have been
translated from New Taiwan dollars, using an average exchange rate
of NT$ 32.83 to US$1 on June 30, 2007,
Silicon Motion Technology Corporation
Consolidated Balance Sheet
(In thousands)
(unaudited)
Dec. 31, Jun. 30, Dec. 31, Jun. 30,
2006 2007 2006 2007
NT$ NT$ US$ US$
Cash and cash equivalents 1,808,042 1,336,091 55,073 40,697
Short-term investments 1,458,847 1,322,354 44,436 40,279
Accounts receivable, net 841,764 773,457 25,640 23,559
Inventories 427,116 734,810 13,010 22,382
Refundable deposits -
current 65,000 65,043 1,980 1,981
Deferred income tax assets,
net 103,603 64,508 3,156 1,965
Prepaid expenses and other
current assets 244,832 201,217 7,457 6,130
Total current assets 4,949,204 4,497,480 150,752 136,993
Long-term investments 170,942 190,346 5,207 5,798
Property and equipment (net) 319,356 441,101 9,728 13,436
Goodwill and intangible
assets(net) -- 2,485,619 -- 75,712
Other assets 89,182 261,979 2,716 7,980
Total assets NT$5,528,684 NT$7,876,525 US$168,403 US$239,919
Accounts payable 525,173 590,985 15,997 18,001
Income tax payable 139,268 145,522 4,242 4,433
Accrued expenses and other
current liabilities 294,061 423,215 8,957 12,891
Total current liabilities 958,502 1,159,722 29,196 35,325
Accrued pension cost 1,018 109 31 3
Other long-term liabilities 1,040 41,395 32 1,261
Total liabilities 960,560 1,201,226 29,259 36,589
Minority interest -- 4,970 -- 151
Shareholders' equity 4,568,124 6,670,329 139,144 203,179
Total liabilities &
shareholders' equity NT$5,528,684 NT$7,876,525 US$168,403 US$239,919
About Silicon Motion:
We are a fabless semiconductor company that designs, develops and markets universally compatible, high performance, low-power semiconductor solutions for the multimedia consumer electronics market. We have three major product lines: our mobile storage business, multimedia SoC business, and mobile communications business. Our mobile storage business is our significantly larger business and is composed of microcontrollers, also commonly known as controllers, used in NAND flash memory storage products such as flash memory cards, USB flash drives and card readers. These flash memory storage products are widely used by consumers to store data on multimedia consumer electronics devices such as mobile phones, digital still cameras, personal digital assistants, personal navigation devices and personal multimedia players, and notebook and desktop personal computers. Our multimedia SoC business is composed of products that support MP3 and personal multimedia players, PC cameras and embedded graphics applications. Our mobile communications business is composed of mobile TV tuners, CDMA RF ICs and electronics toll collection RF ICs, which became our new product line as a result of our recent acquisition of FCI.
Forward-Looking Statements:
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding trends in the multimedia consumer electronics market and our future results of operations, financial condition and business prospects. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and
About Silicon Motion:
We are a fabless semiconductor company that designs, develops and markets universally compatible, high performance, low-power semiconductor solutions for the multimedia consumer electronics market. We have three major product lines: our mobile storage business, multimedia SoC business, and mobile communications business. Our mobile storage business is our significantly larger business and is composed of microcontrollers, also commonly known as controllers, used in NAND flash memory storage products such as flash memory cards, USB flash drives and card readers. These flash memory storage products are widely used by consumers to store data on multimedia consumer electronics devices such as mobile phones, digital still cameras, personal digital assistants, personal navigation devices and personal multimedia players, and notebook and desktop personal computers. Our multimedia SoC business is composed of products that support MP3 and personal multimedia players, PC cameras and embedded graphics applications. Our mobile communications business is composed of mobile TV tuners, CDMA RF ICs and electronics toll collection RF ICs, which became our new product line as a result of our recent acquisition of FCI.
Forward-Looking Statements:
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding trends in the multimedia consumer electronics market and our future results of operations, financial condition and business prospects. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends or our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, our belief in the outcome of any claim or lawsuit, including our claim against one of our subcontractors for the inventory loss that we sustained during a fire at the subcontractor's factory; unpredictable volume and timing of customer orders, which are not fixed by contract but vary on a purchase order basis; the loss of one or more key customers or the significant reduction, postponement, rescheduling or cancellation of orders from these customers; general economic conditions or conditions in the semiconductor or multimedia consumer electronics markets; decreases in the overall average selling prices of our products; changes in the relative sales mix of our products; changes in our cost of finished goods; the availability, pricing, and timeliness of delivery of other components and raw materials used in our customers' products; our customers' sales outlook, purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions; our ability to successfully develop, introduce, and sell new or enhanced products in a timely manner; and the timing of new product announcements or introductions by us or by our competitors. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed on July 2, 2007. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.
Investor Contact:
Selina Hsieh
Investor Relations
Tel: +886-3-552-6888 x2311
Email: ir@siliconmotion.com
Media Contact:
Sara Hsu
Project Manager
Tel: +886-2-2219-6688 x3509
Email: sara.hsu@siliconmotion.com.tw
