2016 Q3 Financial Results
MediaTek Inc. Reports Third Quarter 2016 Consolidated Results
-3Q16 consolidated revenue of NT$78,403 million, up 8.1% from previous quarter
-3Q16 consolidated gross margin of 35.2%, unchanged from previous quarter
-3Q16 consolidated operating income of NT$7,622 million, up 7.8% from previous quarter
-3Q16 consolidated net income of NT$7,830 million; EPS of NT$4.98
Consolidated Revenue
MediaTek Inc. today announced financial results of third-quarter ended September 30, 2016. Third quarter revenue was NT$78,403 million, up 8.1% sequentially, and up 37.6% year-over-year. The quarter-over-quarter growth was mainly due to higher seasonal demand in consumer electronics. The year-over-year growth was mainly due to higher mix of high-end consumer electronics and revenue recognition from acquired companies.
Consolidated Gross Profit and Gross Margin
The third-quarter gross profit was NT$27,617 million, up 8.1% sequentially and 13.6% year-over-year. Gross margin for the quarter was 35.2%, unchanged from previous quarter and down 7.5 percentage points year-over-year. The year-over-year decrease were mainly due to product mix and smartphone market competition.
Consolidated Operating Expenses
Operating expenses for the quarter was NT$19,995 million (25.5% of revenue), compared with NT$18,484 million (25.5% of revenue) in the previous quarter, and NT$16,682 million (29.3% of revenue) in the same period last year. The quarter-over-quarter and year-over-year increase was mainly due to higher talent and technology investments as well as operating expenses recognition from acquired companies.
Operating expenses for the quarter included:
- R&D expenses of NT$14,592 million (18.6% of revenue), increased from NT$13,641 million in 2Q16, and increased from NT$12,343 million in 3Q15.
- Selling expenses of NT$3,532 million (4.5% of revenue), increased from NT$3,211 million in 2Q16, and increased from NT$1,904 million in 3Q15.
- Administration expenses of NT$1,871 million (2.4% of revenue), increased from NT$1,632 million in 2Q16, and decreased from NT$2,436 million in 3Q15.
Consolidated Operating Income and Operating Margin Operating income for the quarter was NT$7,622 million, up 7.8% sequentially, essentially flat compared to the year-ago quarter. Operating margin for the quarter was 9.7%, unchanged sequentially and decreased from 13.4% in the year-ago quarter.
Consolidated Non-operating Income (loss) and Income Tax
Non-operating income for the quarter was NT$993 million, or 1.3% of revenue. It was mainly from interest income and investment income recognized under the equity method. Income tax expense for the quarter was NT$785 million.
Consolidated Net Income, Net Profit Margin and EPS
Net income for the quarter was NT$7,830 million, up 18.8% sequentially, and down 1.6% year-over-year. Net profit margin for the quarter was 10.0%, increased from 9.1% in the previous quarter, and decreased from 14.0% in the year-ago quarter. EPS was NT$4.98, compared with NT$4.16 in the prior quarter and NT$5.09 in the year-ago quarter.
Consolidated Cash and Financial Assets-Current
Cash and financial assets-current at the end of the quarter was NT$155,684 million. This represents 42.3% of the company’s total assets. Cash and financial assets-current was NT$172,084 million and NT$168,968 million at the end of previous quarter and the year-ago quarter, respectively. Financial assets-current portfolio includes mutual funds, bonds and derivatives.
Consolidated Accounts Receivable
Accounts receivable (net) at the end of the quarter was NT$24,331 million. The accounts receivable turnover was 26 days based on quarterly average net receivables divided by annualized net revenue. The turnover was higher than 23 days in the last quarter and the year-ago quarter.
Consolidated Inventory
Net inventory was NT$36,630 million at the end of the quarter. The inventory turnover was 63 days based on quarterly average inventory divided by annualized cost of goods sold. The turnover was higher than 59 days in the last quarter and lower than 94 days in the year-ago quarter.
Consolidated Cash Flow from Operations
Net cash provided by operating activities during the quarter was NT$3,170 million, compared with NT$12,210 million in the prior quarter and NT$658 million in the year-ago quarter.
Earnings Webcast
MediaTek will hold a public webcast today (October 28). A live webcast of the conference call will be available through the Investor Relations section of the MediaTek website. Investors who want to raise questions may use the toll number attached below.
Schedule and Webcast Links:
In Mandarin 2:00 – 3:00 p.m. (Taiwan Time)
http://wms.gridow.com/ir/mediatek/tw/mediatek_2016Q3_tw.html
In English 4:00 – 5:00 p.m. (Taiwan Time)
http://wms.gridow.com/ir/mediatek/en/mediatek_2016Q3_en.html
Dial-in Number: +886-2-21928016
Password: 694251#
About MediaTek Inc.
Since 1997, MediaTek has been a pioneering fabless semiconductor company and a market leader in cutting-edge systems-on-chip (SoC) for mobile devices, wireless networking, HDTV, DVD and Blu-ray. Our tightly-integrated, innovative chip designs help manufacturers optimize supply chains, reduce the development time of new products, and extend a competitive edge in both developing and mature markets around the world. Through MediaTek Labs, the company is also building a developer hub that will support device creation, application development, and services for the Internet of Things era. By building technologies that help connect individuals to the world around them, MediaTek is enabling people to expand their horizons and more easily achieve their goals. We believe anyone can achieve something amazing. And we believe they can do it every single day. We call this idea Everyday Genius and it drives everything we do. Visit www.mediatek.com for more information.
MediaTek Inc.
Consolidated Income Statement
(In NT$ millions, except earnings per share)
| 3Q16 | 2Q16 | 3Q15 | Q-Q | Y-Y |
Net Sales | 78,403 | 72,527 | 56,962 | 8.1% | 37.6% |
Operating costs | (50,787) | (46,974) | (32,658) | ||
Gross Profit | 27,617 | 25,553 | 24,304 | 8.1% | 13.6% |
Selling expenses | (3,532) | (3,211) | (1,904) | ||
Administration expenses | (1,871) | (1,632) | (2,436) | ||
R&D expenses | (14,592) | (13,641) | (12,343) | ||
Operating Expenses | (19,995) | (18,484) | (16,682) | ||
Operating Income | 7,622 | 7,069 | 7,622 | 7.8% | 0.0% |
Net Non-operating Income | 993 | 682 | 1,452 | ||
Net Income Before Income Tax | 8,615 | 7,751 | 9,074 | ||
Income tax expense | (785) | (1,162) | (1,114) | ||
Net Income | 7,830 | 6,590 | 7,960 | 18.8% | (1.6 %) |
EPS Attributable to the Parent(NT$) | 4.98 | 4.16 | 5.09 |
Note: Numbers do not add up due to rounding.
Supplemental Information: Percentage of Revenue
| 3Q16 | 2Q16 | 3Q15 |
Gross profit | 35.2% | 35.2% | 42.7% |
Selling expenses | (4.5 %) | (4.4 %) | (3.3 %) |
Administration expenses | (2.4 %) | (2.3 %) | (4.3 %) |
R&D expenses | (18.6 %) | (18.8 %) | (21.7 %) |
Operating profit | 9.7% | 9.7% | 13.4% |
Non-operating income | 1.3% | 0.9% | 2.5% |
Income tax expense | (1.0 %) | (1.6 %) | (2.0 %) |
Net profit | 10.0% | 9.1% | 14.0% |
Note: Numbers do not add up due to rounding.
MediaTek Inc.
Consolidated Balance Sheet
(In NT$ millions)
| 3Q16 | 2Q16 | 3Q15 |
Cash & Financial assets-current | 155,684 | 172,084 | 168,968 |
Accounts receivable | 24,331 | 21,014 | 16,117 |
Inventories | 36,630 | 34,014 | 33,981 |
Other current assets | 12,472 | 11,342 | 7,330 |
Funds and investments | 25,461 | 22,953 | 22,904 |
Intangible assets | 72,848 | 73,806 | 64,072 |
Other non-current assets | 40,768 | 41,146 | 34,044 |
Total assets | 368,194 | 376,360 | 347,415 |
Short-term loans | 64,555 | 60,849 | 57,033 |
Accounts payable | 30,219 | 30,106 | 18,667 |
Other current liabilities | 39,381 | 58,099 | 31,719 |
Total non-current liabilities | 3,921 | 3,723 | 2,922 |
Total equity | 230,118 | 223,583 | 237,075 |
Note: Numbers do not add up due to rounding.
MediaTek Inc.
Consolidated Cash Flow Summary
(In NT$ millions)
| 3Q16 | 2Q16 | 3Q15 |
Net cash provided by (used in) operating activities | 3,170 | 12,210 | 658 |
Net cash provided by (used in) investing activities | (4,864) | (6,229) | (5,609) |
Net cash provided by (used in) financing activities | (11,629) | (2,649) | (35,280) |
Effect of changes in exchange rate on cash and cash equivalents | (2,663) | 635 | 3,523 |
Net increase (decrease) in cash and cash equivalents | (15,985) | 3,967 | (36,708) |
Cash and cash equivalents at the end of the period | 143,944 | 159,929 | 159,116 |
Note: Numbers do not add up due to rounding.