Gain and loss on equity-method investment consists of gain and/or loss related to our investment in a privately-held company, which varies depending on the operational and financial performance of the company in which we invested. We believe that providing non-GAAP measures excluding these charges, as well as the GAAP measures, assists our investors because such charges are not reflective of our ongoing operations.
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 to be strategic and exclude the performance of these investments when evaluating our ongoing performance and forecasting our earnings trends, and therefore excluding losses (and gains) from the investments when presenting non-GAAP financial measures.
Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per ADS data, unaudited)
| For the Three Months Ended | |||||||||||
|
Dec. 31,
2017
|
Sep. 30, 2018
|
Dec. 31, 2018
| |||||||||
|
($)
|
($)
|
($)
| |||||||||
| Net Sales | 136,165 | 138,562 | 123,386 | ||||||||
| Cost of sales | 72,878 | 67,988 | 61,288 | ||||||||
| Gross profit | 63,287 | 70,574 | 62,098 | ||||||||
| Operating expenses | |||||||||||
| Research & development | 27,946 | 25,506 | 30,675 | ||||||||
| Sales & marketing | 7,364 | 7,735 | 7,435 | ||||||||
| General & administrative | 5,046 | 4,355 | 5,397 | ||||||||
| Amortization of intangibles assets | 956 | 741 | 741 | ||||||||
| Impairment loss of goodwill | 10,337 | - | 625 | ||||||||
| Gain from disposal of other assets | (1,880 | ) | - | - | |||||||
| Operating income | 13,518 | 32,237 | 17,225 | ||||||||
| Non-operating income (expense) | |||||||||||
| Interest income, net | 1,135 | 1,597 | 1,718 | ||||||||
| Foreign exchange gain (loss), net | (447 | ) | (749 | ) | (9 | ) | |||||
| Gain (loss) on equity-method investment | - | (98 | ) | (169 | ) | ||||||
| Impairment of long-term investments | (120 | ) | - | (1,242 | ) | ||||||
| Others, net | 70 | 55 | 38 | ||||||||
| Subtotal | 638 | 805 | 336 | ||||||||
| Income before income tax | 14,156 | 33,042 | 17,561 | ||||||||
| Income tax expense | 4,338 | 3,858 | 260 | ||||||||
| Net income | 9,818 | 29,184 | 17,301 | ||||||||
| Earnings per basic ADS | $0.27 | $0.81 | $0.48 | ||||||||
| Earnings per diluted ADS | $0.27 | $0.81 | $0.48 | ||||||||
| Margin Analysis: | |||||||||||
| Gross margin | 46.5 | % | 50.9 | % | 50.3 | % | |||||
| Operating margin | 9.9 | % | 23.3 | % | 14.0 | % | |||||
| Net margin | 7.2 | % | 21.1 | % | 14.0 | % | |||||
| Additional Data: | |||||||||||
| Weighted avg. ADS equivalents 2 | 35,785 | 36,136 | 35,974 | ||||||||
| Diluted ADS equivalents | 36,005 | 36,171 | 36,070 | ||||||||
Silicon Motion Technology Corporation
