Tuesday, February 6th 2024
Silicon Motion Announces Results for the Period Ended December 31 2023
Silicon Motion Technology Corporation (NasdaqGS: SIMO) today announced its financial results for the quarter ended December 31, 2023. For the fourth quarter of 2023, net sales (GAAP) increased sequentially to $202.4 million from $172.3 million in the third quarter of 2023. Net income (GAAP) increased to $21.1 million, or $0.63 per diluted American Depositary Share of the Company ("ADS") (GAAP), from net income (GAAP) of $10.6 million, or $0.32 per diluted ADS (GAAP), in the third quarter of 2023. For the fourth quarter of 2023, net income (non-GAAP) increased to $31.3 million, or $0.93 per diluted ADS (non-GAAP), from net income (non-GAAP) of $21.1 million, or $0.63 per diluted ADS (non-GAAP), in the third quarter of 2023.
"Our fourth quarter results exceeded expectations as demand across the majority of our products increased sequentially, driven by holiday season demand and normalizing channel inventory," said Wallace Kou, President and CEO of Silicon Motion. "Both eMMC+UFS and SSD controller demand grew strongly in the quarter. We are confident that our teams' ongoing commitment to deliver controller solutions that enable our customers to service a broader range of markets will continue to drive share gains for us and be the foundation for strong growth in 2024 and beyond."
During the fourth quarter of 2023, we had $9.5 million of capital expenditures, including $3.5 million for the routine purchase of testing equipment, software, design tools and other items, and $6.0 million for building construction in Hsinchu.
Acquisition Update
On May 5, 2022, Silicon Motion and MaxLinear, Inc. ("MaxLinear") entered into a merger agreement (the "Merger Agreement"), pursuant to which Silicon Motion agreed to be acquired by MaxLinear, with (a) holders of Silicon Motion ordinary shares, par value $0.01 (each, a "Share"), to receive $23.385 in cash and 0.097 shares of MaxLinear common stock, par value $0.0001 ("MaxLinear Common Stock") for each Share that they hold (other than certain customary excluded Shares), and (b) ADS holders to receive $93.54 in cash and 0.388 shares of MaxLinear Common Stock for each ADS that they hold (other than ADSs representing certain customary excluded Shares), in each case, with cash in lieu of any fractional shares of MaxLinear Common Stock (collectively, the "Transaction"). On August 31, 2022, shareholders at Silicon Motion's Extraordinary General Meeting of Shareholders approved the Transaction.
On July 26, 2023, Silicon Motion and MaxLinear received antitrust approval from the State Administration for Market Regulation of the People's Republic of China ("SAMR Approval"). Shortly after receiving SAMR Approval, Silicon Motion received notice from MaxLinear of its purported termination of the Merger Agreement. MaxLinear did not provide any factual basis for its purported termination, and Silicon Motion believes its actions constituted a willful and material breach of the Merger Agreement. Silicon Motion has filed a claim in the Singapore International Arbitration Centre, which is the venue for dispute resolution under the Merger Agreement, and is pursuing payment of the termination fee of $160 million, together with further substantial damages, interest and costs.
Business Outlook
"We expect sustained growth across our business in 2024, driven by wins with our module maker customers and significant design wins and share gains with our flash maker customers, as they look to outsource more controllers to effectively address a broader range of end-markets," said Wallace Kou, President and CEO of Silicon Motion. "We are confident that our strong backlog and project ramps will be the foundation for strong growth this year. These new wins for our eMMC+UFS and SSD controllers will grow our relationship with our flash maker partners this year and increase revenue from these customers by approximately 50%."
"Our fourth quarter results exceeded expectations as demand across the majority of our products increased sequentially, driven by holiday season demand and normalizing channel inventory," said Wallace Kou, President and CEO of Silicon Motion. "Both eMMC+UFS and SSD controller demand grew strongly in the quarter. We are confident that our teams' ongoing commitment to deliver controller solutions that enable our customers to service a broader range of markets will continue to drive share gains for us and be the foundation for strong growth in 2024 and beyond."
Acquisition Update
On May 5, 2022, Silicon Motion and MaxLinear, Inc. ("MaxLinear") entered into a merger agreement (the "Merger Agreement"), pursuant to which Silicon Motion agreed to be acquired by MaxLinear, with (a) holders of Silicon Motion ordinary shares, par value $0.01 (each, a "Share"), to receive $23.385 in cash and 0.097 shares of MaxLinear common stock, par value $0.0001 ("MaxLinear Common Stock") for each Share that they hold (other than certain customary excluded Shares), and (b) ADS holders to receive $93.54 in cash and 0.388 shares of MaxLinear Common Stock for each ADS that they hold (other than ADSs representing certain customary excluded Shares), in each case, with cash in lieu of any fractional shares of MaxLinear Common Stock (collectively, the "Transaction"). On August 31, 2022, shareholders at Silicon Motion's Extraordinary General Meeting of Shareholders approved the Transaction.
On July 26, 2023, Silicon Motion and MaxLinear received antitrust approval from the State Administration for Market Regulation of the People's Republic of China ("SAMR Approval"). Shortly after receiving SAMR Approval, Silicon Motion received notice from MaxLinear of its purported termination of the Merger Agreement. MaxLinear did not provide any factual basis for its purported termination, and Silicon Motion believes its actions constituted a willful and material breach of the Merger Agreement. Silicon Motion has filed a claim in the Singapore International Arbitration Centre, which is the venue for dispute resolution under the Merger Agreement, and is pursuing payment of the termination fee of $160 million, together with further substantial damages, interest and costs.
Business Outlook
"We expect sustained growth across our business in 2024, driven by wins with our module maker customers and significant design wins and share gains with our flash maker customers, as they look to outsource more controllers to effectively address a broader range of end-markets," said Wallace Kou, President and CEO of Silicon Motion. "We are confident that our strong backlog and project ramps will be the foundation for strong growth this year. These new wins for our eMMC+UFS and SSD controllers will grow our relationship with our flash maker partners this year and increase revenue from these customers by approximately 50%."
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