• Silicon Motion Announces Results for the Period Ended March 31, 2021

    Source: Nasdaq GlobeNewswire / 05 May 2021 17:00:00   America/Chicago

    Financial Highlights
      1Q 2021 GAAP1Q 2021 Non-GAAP
    •Net sales$182.4 million (+27% Q/Q, +37% Y/Y)$182.4 million (+27% Q/Q, +37% Y/Y)
    •Gross margin50.0%50.7%
    •Operating margin24.3%26.6%
    •Earnings per diluted ADS$0.98$1.11

    Business Highlights

    • Achieved all-time record quarterly revenue and EPS
    • Sales of SSD and eMMC+UFS controllers both reached record quarterly highs
    • SSD controller sales increased 25% to 30% Q/Q and increased 45% to 50% Y/Y
    • eMMC+UFS controller sales increased 30% to 35% Q/Q and increased 50% to 55% Y/Y
    • SSD solutions sales increased 0% to 5% Q/Q and declined 40% to 45% Y/Y

    TAIPEI, Taiwan and MILPITAS, Calif., May 06, 2021 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon Motion” or the “Company”) today announced its financial results for the quarter ended March 31, 2021. For the first quarter, net sales (GAAP) increased sequentially to $182.4 million from $143.9 million in fourth quarter 2020. Net income (GAAP) increased to $34.4 million or $0.98 per diluted ADS (GAAP) from net income (GAAP) of $1.4 million or $0.04 per diluted ADS (GAAP) in fourth quarter 2020.

    For the first quarter, net income (non-GAAP) increased to $38.7 million or $1.11 per diluted ADS (non-GAAP) from a net income (non-GAAP) of $29.9 million or $0.86 per diluted ADS (non-GAAP) in fourth quarter 2020.

    First Quarter 2021 Review
    “As we had previously communicated, we are seeing very strong demand for our SSD and eMMC+UFS controllers,” said Wallace Kou, President and CEO of Silicon Motion. “Customer demand was well in excess of our ability to supply as both our foundry supply and inventory on hand are limited.”

    Key Financial Results

    (in millions, except percentages and per ADS
    amounts)

    		GAAPNon-GAAP
    1Q 20214Q 20201Q 20201Q 20214Q 20201Q 2020
    Revenue$182.4 $143.9 $132.8 $182.4 $143.9 $132.8 
    Gross profit$91.3 $66.0 $63.9 $92.4 $71.0 $63.9 
    Percent of revenue50.0%45.9%48.1%50.7%49.3%48.2%
    Operating expenses$46.9 $65.6 $39.8 $43.9 $39.5 $37.4 
    Operating income$44.4 $0.4 $24.1 $48.5 $31.5 $26.6 
    Percent of revenue24.3%0.3%18.1%26.6%21.9%20.0%
    Earnings per diluted ADS$0.98 $0.04 $0.74 $1.11 $0.86 $0.80 

    Other Financial Information

    (in millions)1Q 2021
    		4Q 2020
    		1Q 2020
    Cash, cash equivalents, restricted cash and
    short-term investments—end of period    		$371.0 $369.2 $371.7 
    Routine capital expenditures$3.3 $6.4 $6.4 
    Dividend payments$12.2 $12.1 $12.3 

    During the first quarter, we had $3.3 million of capital expenditures for the routine purchase of software, design tools and other items.

    Returning Value to Shareholders
    On October 26, 2020, our Board of Directors declared a $1.40 per ADS annual dividend to be paid in quarterly installments of $0.35 per ADS. On February 26, 2021, we paid $12.2 million to shareholders as the second installment of our annual dividend.

    On November 21, 2018, we announced that our Board of Directors had authorized a new program for the Company to repurchase up to $200 million of our ADS over a 24-month period. On October 26, 2020, the Board of Directors of the Company authorized the extension of the expiration of this program to November 21, 2021. Since the start of this program, we have repurchased $84.8 million of our ADSs and $115.2 million remains available for repurchase under the program.   There were no share repurchases in the first quarter.

    Business Outlook
    “With strong support from our business partners, we have secured more foundry supply and are now able to deliver a larger portion of the SSD and eMMC+UFS controllers previously ordered by our customers,” said Wallace Kou, President and CEO of Silicon Motion. “While we now expect to deliver much stronger full-year sales, our ability to fulfill customer demand remains capped by very tight foundry supply availability.”

    For the second quarter of 2021, management expects:

     GAAPNon-GAAP AdjustmentNon-GAAP
    Revenue$192m to $201m
    +5% to 10% Q/Q    		--$192m to $201m
    +5% to 10% Q/Q
    Gross margin48.0% to 50.0%Approximately $0.1m*48.0% to 50.0%
    Operating margin24.4% to 27.0%Approximately $2.0m to $3.0m**26.0% to 28.0%

    * Projected gross margin (non-GAAP) excludes $0.1 million of stock-based compensation
    ** Projected operating margin (non-GAAP) excludes $2.0 million to $3.0 million of stock-based compensation.

    For the full year 2021, management expects:

     GAAPNon-GAAP AdjustmentNon-GAAP
    Revenue$782m to $836m
    +45% to 55% Y/Y    		--$782m to $836m
    +45% to 55% Y/Y
    Gross margin46.8% to 48.8%Approximately $1.5m to 1.7m*47.0% to 49.0%
    Operating margin23.6% to 26.0%Approximately $17.1m to $19.1m**26.0% to 28.0%

    * Projected gross margin (non-GAAP) excludes $0.4 million to $0.6 million of stock-based compensation and SSD solutions restructuring $1.1 million.
    ** Projected operating margin (non-GAAP) excludes $16.0 million to $18.0 million of stock-based compensation and SSD solutions restructuring $1.1 million.

    Conference Call & Webcast:

    The Company’s management team will conduct a conference call at 8:00 am Eastern Time on May 6, 2021.

    Speakers:
    Wallace Kou, President & CEO
    Riyadh Lai, CFO
    Chris Chaney, Director of Investor Relations & Strategy

    Conference Call Details
    Participants must register in advance to join the conference using the link provided below and should dial in 10 minutes prior to the call start time. Conference access information (including dial-in numbers, the passcode, and a unique access pin) will be provided in the email received upon registration.

    Participant Online Registration: http://apac.directeventreg.com/registration/event/4397728

    Replay Numbers (for 7 days):
    USA (Toll Free):1 855 452 5696
    USA (Toll):1 646 254 3697
    Participant Passcode:4397728
      
    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 and other items, including gross profit (non-GAAP), operating expenses (non-GAAP), operating profit (non-GAAP), net income (non-GAAP), and earnings per diluted ADS (non-GAAP). 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 they are 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 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.

    SSD solutions restructuring are charges relate to the restructuring of our underperforming Shannon product lines and include goodwill impairment expenses, and the write-down of NAND flash and SSD inventory valuation.

    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.

    Loss on disposal of long-term investments relate to loss from our sale of FCI, our specialty RF IC product line.

     
     
    Silicon Motion Technology Corporation
    Consolidated Statements of Income
    (in thousands, except percentages and per ADS data, unaudited)
     
      For Three Months Ended
      Mar. 31,  Dec. 31,  Mar. 31,
      2020
    		 2020
    		 2021
       ($)  ($)  ($)
    Net Sales 132,769  143,897  182,399 
    Cost of sales 68,877  77,853  91,140 
    Gross profit 63,892  66,044  91,259 
    Operating expenses      
    Research & development 29,346  37,160  35,982 
    Sales & marketing 6,493  6,411  6,446 
    General & administrative 3,959  4,585  4,439 
    Impairment of goodwill and intangible assets -  17,489  -
    Operating income 24,094  399  44,392 
    Non-operating income (expense)      
    Interest income, net 1,732  729  361 
    Loss on disposal of long-term investments -  (293) - 
    Foreign exchange gain (loss), net (481) 692  (808)
    Others, net 16  117  3 
    Subtotal 1,267  1,245  (444)
    Income before income tax 25,361  1,644  43,948 
    Income tax expense (554) 290  9,548 
    Net income 25,915  1,354  34,400 
           
    Earnings per basic ADS 0.74  0.04  0.99 
    Earnings per diluted ADS 0.74  0.04  0.98 
           
    Margin Analysis:      
    Gross margin 48.1% 45.9% 50.0%
    Operating margin 18.1% 0.3% 24.3%
    Net margin 19.5% 0.9% 18.9%
    　      
    Additional Data:      
    Weighted avg. ADS equivalents 35,020  34,540  34,674 
    Diluted ADS equivalents 35,246  34,761  34,924 
              


    Silicon Motion Technology Corporation
    Reconciliation of GAAP to Non-GAAP Operating Results
    (in thousands, except percentages and per ADS data, unaudited)
     
      For Three Months Ended
      Mar. 31,  Dec. 31,  Mar. 31,
      2020
    		 2020
    		 2021
       ($)  ($)  ($)
    Gross profit (GAAP)  63,892   66,044   91,259 
    Gross margin (GAAP)  48.1%  45.9%  50.0%
    Stock-based compensation (A)  38   157   54 
    SSD solutions restructuring  -   4,772   1,131 
    Gross profit (non-GAAP)   63,930   70,973   92,444 
    Gross margin (non-GAAP)  48.2%  49.3%  50.7%
           
    Operating expenses (GAAP)  39,798   65,645   46,867 
    Stock-based compensation (A)  (2,444)  (8,572)  (2,961)
    SSD solutions restructuring  -   (17,613)  - 
    Operating expenses (non-GAAP)   37,354   39,460   43,906 
           
    Operating profit (GAAP)  24,094   399   44,392 
    Operating margin (GAAP)  18.1%  0.3%  24.3%
    Total adjustments to operating profit  2,482   31,114   4,146 
    Operating profit (non-GAAP)   26,576   31,513   48,538 
    Operating margin (non-GAAP)   20.0%  21.9%  26.6%
           
    Non-operating income (expense) (GAAP)  1,267   1,245   (444)
    Foreign exchange loss (gain), net  481   (692)  808 
    Loss on disposal of long-term investments  -   293   - 
    Non-operating income (expense) (non-GAAP)   1,748   846   364 
           
    Net income (GAAP)  25,915   1,354   34,400 
    Total pre-tax impact of non-GAAP adjustments  2,963   30,715   4,954 
    Income tax impact of non-GAAP adjustments  (524)  (2,152)  (695)
    Net income (non-GAAP)   28,354   29,917   38,659 
           
    Earnings per diluted ADS (GAAP) $0.74  $0.04  $0.98 
    Earnings per diluted ADS (non-GAAP)  $0.80  $0.86  $1.11 
           
    Shares used in computing earnings per diluted ADS (GAAP)  35,246   34,761   34,924 
    Non-GAAP Adjustments  63   219   45 
    Shares used in computing earnings per diluted ADS (non-GAAP)  35,309   34,980   34,969 
           
    (A) Excludes stock-based compensation as follows:      
    Cost of Sales  38   157   54 
    Research & development  1,655   6,196   2,056 
    Sales & marketing  335   933   406 
    General & administrative  454   1,443   499 


    Silicon Motion Technology Corporation
    Consolidated Balance Sheet
    (In thousands, unaudited)
           
      Mar. 31,  Dec. 31,  Mar. 31,
      2020 2020 2021
       ($)  ($)  ($)
    Cash and cash equivalents 344,012 342,961 350,125
    Short-term investments 2,673 - -
    Accounts receivable (net) 89,662 115,800 136,244
    Inventories 104,133 110,162 113,432
    Refundable deposits – current 24,084 24,098 18,693
    Prepaid expenses and other current assets 21,939 25,072 25,140
    Total current assets 586,503 618,093 643,634
    Long-term investments 3,000 5,000 5,000
    Property and equipment (net) 100,822 105,496 103,948
    Goodwill and intangible assets (net) 17,489 - -
    Other assets 12,110 13,471 10,832
    Total assets 719,924 742,060 763,414
           
    Accounts payable 45,778 44,535 44,112
    Income tax payable 1,340 6,886 12,817
    Accrued expenses and other current liabilities 82,306 107,323 85,533
    Total current liabilities 129,424 158,744 142,462
    Other liabilities 25,870 25,574 26,193
    Total liabilities 155,294 184,318 168,655
    Shareholders’ equity 564,630 557,742 594,759
    Total liabilities & shareholders’ equity 719,924 742,060 763,414
           


    Silicon Motion Technology Corporation
    Condensed Consolidated Statements of Cash Flows
    (in thousands, unaudited)
     
      For Three Months Ended
      Mar. 31,  Dec. 31,  Mar. 31,
      2020
    		 2020
    		 2021
       ($)  ($)  ($)
    Net income 25,915  1,354  34,400 
    Depreciation & amortization 3,237  3,640  3,886 
    Stock-based compensation 2,482  8,729  3,015 
    Goodwill & intangible assets impairment -  17,489  - 
    Investment impairment, losses & disposals (14) 260  203 
    Changes in operating assets and liabilities 7,990  (9,823) (24,132)
    Others -  79  - 
    Net cash provided by operating activities 39,610  21,728  17,372 
           
    Purchase of property & equipment (6,396) (6,397) (3,330)
    Net cash used in investing activities (6,396) (6,397) (3,330)
           
    Dividend payments (12,278) (12,065) (12,199)
    Net cash used in financing activities (12,278) (12,065) (12,199)
           
    Net increase in cash, cash equivalents & restricted cash 20,936  3,266  1,843 
    Effect of foreign exchange changes (114) (472) (86)
    Cash, cash equivalents & restricted cash—beginning of period 348,253  366,417  369,211 
    Cash, cash equivalents & restricted cash—end of period 369,075  369,211  370,968 
              

    About Silicon Motion:
    We are the global leader in supplying NAND flash controllers for solid state storage devices.  We supply more SSD controllers than any other company in the world for servers, PCs and other client devices and are the leading merchant supplier of eMMC and UFS embedded storage controllers used in smartphones, IoT devices and other applications.  We also supply customized high-performance hyperscale data center and specialized industrial and automotive SSD solutions.  Our customers include most of the NAND flash vendors, storage device module makers and leading OEMs.  For further information on Silicon Motion, visit us at 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 currently expected second quarter of 2021 and full year 2021 expectations of revenue, gross margin and operating expenses, all of which reflect management’s estimates based on information available at the 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 second quarter of 2021 and full year 2021. Forward-looking statements also include, without limitation, statements regarding trends in the semiconductor or consumer electronics markets 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 one or more customers; general economic conditions or conditions in the semiconductor or consumer electronics markets; the effects on our business and our customer’s business taking into account the ongoing US-China tariffs and trade disputes together with the uncertainties associated with the ongoing global outbreak of COVID-19; 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 payment, or non-payment, of cash dividends in the future at the discretion of our board of directors and any announced planned increases in such dividends; changes in our cost of finished goods; the availability, pricing, and timeliness of delivery of other components and raw materials used in the products we sell given the current raw material supply shortages being experienced in our industry; our customers’ sales outlook, purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions; any potential impairment charges that may be incurred related to businesses previously acquired or divested in the future; 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 June 12, 2020, and our Annual Report on 20-F for fiscal year 2020, which we expect to file no later than May 15, 2021. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.

    Investor Contact:
    Christopher Chaney
    Director, Investor Relations & Strategy
    E-mail: CChaney@siliconmotion.com     		Investor Contact:
    Selina Hsieh
    Investor Relations
    E-mail: ir@siliconmotion.com 
      
    Media Contact:
    Sara Hsu
    Project Manager
    E-mail: sara.hsu@siliconmotion.com     		 

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