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Silicon Motion Technology Corporation (SIMO)
Q1 2017 Earnings Conference Call
April 28, 2017 08:00 AM ET
Jason Tsai - Senior Director, IR and Strategy
Wallace Kou - President, CEO
Riyadh Lai - CFO
Mike Burton - Longbow Research
Suji Desilva - ROTH Capital
Rajvindra Gill - Needham & Co
Anthony Stoss - Craig-Hallum
Mehdi Hosseini - SIG
Charley Chen - Morgan Stanley
Tom Sepenzis - Northland
Mike Crawford - B. Riley
Rajvindra Gill - Needham & Co
Previous Statements by SIMO
» Silicon Motion Technology's (SIMO) CEO Wallace Kou on Q4 2016 Results - Earnings Call Transcript
» Silicon Motion Technology's (SIMO) CEO Wallace Kou on Q3 2016 Results - Earnings Call Transcript
» Silicon Motion Technology's (SIMO) CEO Wallace Kou on Q2 2016 Results - Earnings Call Transcript
» Silicon Motion Technology's (SIMO) CEO Wallace Kou on Q1 2016 Results - Earnings Call Transcript
Before we begin today's conference I have been asked to read the following forward looking statements.
This conference call 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 limitations, 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 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, continued competitive pressure in the semiconductor industry and the effect of such pressure on prices, unpredictable changes in technology and consumer demand for multimedia consumer electronics, the state of and any changes in our relationship with our major customers, and 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 conference call.
I would now like to hand the presentation over to our host Mr. Jason Tsai, Senior Director of Investor Relations and Strategy. Please proceed.
Thank you and good morning, everyone. Welcome to Silicon Motion’s first quarter 2017 financial results conference call and webcast. My name is Jason Tsai. 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 first quarter financial results and provide our outlook. We will then conclude with Q&A.
Before we get started, I’d like to remind you of the Safe Harbor policy, which was 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. This 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 to 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 will turn the call over to Wallace.
Thank you, Jason. Hello, everyone and thank you for joining our earnings call. I am pleased to speaking with you again this quarter. Our first quarter result was high end of our expectation. Our net revenue of $127 million and $0.70 in earning represent a strong execution by our team in spite of very tight NAND supply environment. Riyadh will discuss our financial performance in greater detail later on the call.
As we had previously communicated NAND supply becomes very tight and this has been effecting our sales growth. In the second half last year our model maker customers were affected by NAND supply availability issues. More recently our NAND flash partners have also been affected by lack of sufficient incremental flash capacity from their own flash, this flash maker do not have sufficient NAND capacity to meet the need of their own product and need for their OEM customers.
Until large amount of new NAND capacity come online NAND flash makers are all actually rushing the limited supply to partially fulfill greater demand. As we had previously discussed continued NAND flash tightness were attributed growth rate of our rapidly growing sales this year. And separately our sales SSD solutions will decline this year. We do not spend more significant amount of new NAND supply to come online until the second half of this year. In our first quarter sale declined due to seasonal factors and NAND flash tightness.
Both our SSD controllers and SSD solution sale declined while our EMC sales were unchanged quarter-over-quarter. We believe that beginning in the second quarters our sale will start picking up as our large pipeline of design wings will benefit from gradually increasing NAND supply and stronger seasonal demand.