Silicon Motion Technology Corporation (SIMO)
Q3 2012 Earnings Call
October 25, 2012, 08:00 am ET
Jason Tsai - Director, IR & Strategy
Wallace Kou - President & CEO
Riyadh Lai - CFO
Anthony Stoss - Craig-Hallum Capital
Monika Garg - Pacific Crest Securities
Daniel Amir - Lazard Capital Markets
Rajvindra Gill - Needham & Company
Tom Sepenzis - Northland Securities
Mike Crawford - B. Riley & Co.
Bob Gujavarty - Deutsche Bank
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Before we begin today’s conference, I have been asked to read the following forward-looking statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 as amended. Such forward-looking statements include, without limitation, statements regarding trends in the semiconductor industry and our future results of operations, financial conditions and business prospects.
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 and our results my different 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 continued competitive pressures in the semiconductor industry and the effect of such pressures on prices, unpredictable changes in technology and consumer demand for multimedia consumer electronics, the state of, and any change in our relationship with our major customers, changes in political, economic, legal and social conditions in Taiwan.
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. We assume no obligation to update any forward-looking statements which apply only as of the date of this press release.
I will now like to hand our presentation over to our host, Mr. Jason Tsai, Director of IR and Strategy. Please proceed.
Thank you, operator and good morning everyone. Welcome to the Silicon Motion third quarter 2012 financial results conference call and webcast. With me here is Wallace Kou, our President and CEO and Riyadh Lai, our Chief Financial Officer.
The agenda for today is as follows: Wallace will start with a review of some of our recent business developments. Riyadh will then discuss our third quarter financial results and provide our outlook. We’ll then conclude with Q&A.
Before we get started, I would like remind you of our Safe Harbor policy, which is read at the start of this call. For a comprehensive overview of the risks involved in investing in our securities, please refer to our filings with the US SEC. For more details on our financial results, please refer to our press release which was filed on Form 6-K after the close of market yesterday. A webcast will be available for replay on our website, www.siliconmotion.com for a limited time.
To enhance investors’ understanding of our ongoing economic performance, we will discuss non-GAAP information during this call. We use non-GAAP financial measures internally to evaluate and manage our operations. We have therefore chosen to provide this information to enable you perform comparisons of our operating results in a manner similar to how we analyze our own operating results. The reconciliation of the GAAP to non-GAAP financial data can be found in our earnings release issued yesterday. We ask that you review it in conjunction with this call.
With that, I would now turn the call over to Wallace.
Thank you Jason and thanks to everyone for joining us on this third quarter earning call. I am happy to report another record setting quarter for Silicon Motion. Revenue in the third quarter of $77.1 million; net income of $18.7 million and diluted earning per ADS of $0.54 are all record quarterly high for Silicon Motion.
Our strong third quarter performance was a result of continuous strengths in our New Growth Products as well as recovery of our card controllers. Overall, I am very pleased with our performance and delighted that we're on track in term of meeting our full-year 2012 revenue growth objectives and building our business to deliver further growth next year. Riyadh will discuss financial result in greater detail later on the call.
The third quarter was another quarter where strong revenue growth was led by the continuous success of our New Growth Products. Revenue from New Growth Products, which are comprised of LTE transceivers embedded in SSD controllers grew 39% sequentially and account for 40% of our total corporate revenue.
Both our LTE and eMMC controllers grew sequentially. Our LTE products grew stronger than expected, as Samsung accelerated its procurement of our LTE transceivers. This accelerated procurement led to revenue originally planned for the fourth quarter being booked in the third quarter. Without Samsung accelerated orders, our New Growth Products revenue will still have increased by only 20% sequentially and our overall revenue would have grown in the rate within our guidance range.
We are extremely pleased with our LTE performance for 2012. We are on-track to increase our LTE revenue about 65% this year and grow rapidly again next year. This year we will have 15 design wins with Samsung LTE smartphones including the Galaxy S III. We are working on building our LTE projects pipeline we set out for next year and believe it is reasonable to expand that if we can grow our LTE revenue 50% to 75% next year.