Silicon Motion: Fiscal 2Q19 Financial Results
Q/Q sales of SSD controller increased 15% and SSD solutions decreased 40%
This is a Press Release edited by StorageNewsletter.com on August 1, 2019 at 2:21 pm(in $ million) | 2Q18 | 2Q19 | 6 mo. 18 | 6 mo. 19 |
Revenue | 138.1 | 98.8 | 268.4 | 193.5 |
Growth | -29% | -28% | ||
Net income (loss) | 30.7 | 26.5 | 53.8 | 34.8 |
Business Highlights
• SSD controller sales increased about 15% Q/Q
• eMMC+UFS controller sales increased about 20% Q/Q
• SSD solutions sales decreased about 40% Q/Q
• Introduced SM3282, single chip flash controller for cost effective USB portable SSDs
• Completed sale of FCI to Dialog Semiconductor
Silicon Motion Technology Corporation announced its financial results for the quarter ended June 30, 2019.
For 2Q19, net sales (GAAP) increased to $98.8 million from $94.7 million in 1Q019. Net income (GAAP) increased to $26.5 million or $0.75 per diluted ADS (GAAP) from $8.3 million or $0.23 per diluted ADS (GAAP) in 1Q19.
For 2Q19, net sales (non-GAAP) increased to $94.3 million from $88.9 million in 1Q19. Net income (non-GAAP) increased to $18.6 million or $0.52 per diluted ADS (non-GAAP) from $15.0 million or $0.42 per diluted ADS (non-GAAP) in 1Q19.
Second Quarter 2019 Review
“Our controller sales continued to strengthen,” said Wallace Kou, president and CEO, Silicon Motion. “Sales of both our SSD and eMMC+UFS controllers grew, with SSD controllers to our flash partners growing almost 30% sequentially, while to module makers was weaker than expected. Sales of our eMMC+UFS controllers were stronger than expected, while sales of SSD solutions were worse. Our gross margins, however, were better than expected due to more favorable mix of higher margin controllers.“
During the second quarter, the firm had $2.9 million of capital expenditures for the routine purchase of software, design tools and other items.
Business Outlook
“We expect our revenues to continue growing quarter-after-quarter through the balance of this year. We believe that full-year SSD controller shipments will grow strongly and in-line with market expectations, though revenue will likely be less than shipment growth because of less favorable product mix. We believe our client SSD controller market share has continued to increase and that we are well positioned for continued SSD controller growth next year. eMMC+UFS controller sales should continue growing sequentially through the second half of this year, though full-year sales will likely decline meaningfully. Our Shannon open-channel SSDs are now in commercial deployment at our two B-A-T customers, important milestones, but full-year sales will be down sharply compared to last year. Next year, we are expecting SSD solutions to rebound.”
Management expects for 3Q19:
- Non GAAP revenue between $104 million to $108 million or +10% to 15% Q/Q
- For FY19, non GAAP revenue between $410 million to $418 million or -18% to -16% Y/Y
On May 15, 2019, the company disclosed in its annual report filed on Form 20-F that it reduced its Shannon 2019 sales forecast meaningfully, which is a triggering event that will require to reevaluate its Shannon reporting unit’s goodwill and intangible assets. Further deterioration in Shannon’s operating performance since then has necessitated a $5.0 million inventory write-down in the second quarter, and the manufacturer believes it will more than likely have to write-down a significant portion of the reporting unit’s $33.7 million of goodwill and intangible assets later this year.