Reconciliation of GAAP to Non-GAAP Operating Results
(in thousands, except percentages and per ADS data, unaudited)

 

 

	For the Year Ended
		Dec. 31, 2017				Dec. 31, 2018
		($)				( $)
Gross profit (GAAP)			251,194				260,807
Gross margin (GAAP)			48.0	%			49.2	%
Stock-based compensation expense(A)			293				390
Gross profit (non-GAAP)			251,487				261,197
Gross margin (non-GAAP)			48.0	%			49.3	%
Operating expenses (GAAP)			155,845				152,529
Stock-based compensation expense (A)			(15,200	)			(20,388	)
Amortization of intangible assets			(2,534	)			(2,964	)
Impairment loss of goodwill			(10,337	)			(625	)
Litigation expense			-				(37	)
Operating expenses (non-GAAP)			127,774				128,515
Operating profit (GAAP)			95,349				108,278
Operating margin (GAAP)			18.2	%			20.4	%
Total adjustments to operating profit			28,364				24,404
Operating profit (non-GAAP)			123,713				132,682
Operating margin (non-GAAP)			23.6	%			25.0	%
Non-operating income (expense) (GAAP)			3,652				3,786
Foreign exchange loss (gain), net			157				615
Loss (gain) on equity-method investment			120				1,242
Investment loss-equity method			-				473
Non-operating income (expense) (non-GAAP)			3,929				6,116
Net income (GAAP)			74,955				100,273
Total pre-tax impact of non-GAAP adjustments			28,641				26,734
Income tax impact of non-GAAP adjustments			(2,306	)			(3,480	)
Net income (non-GAAP)			101,290				123,527
Earnings per diluted ADS (GAAP)		$2.09				$2.78
Earnings per diluted ADS (non-GAAP)		$2.81				$3.41
Shares used in computing earnings per diluted ADS (GAAP)			35,902				36,128
Non-GAAP Adjustments			107				133
Shares used in computing earnings per diluted ADS (non-GAAP)			36,009				36,261
(A)   Excludes stock-based compensation as follows:
Cost of Sales			293				390
Research & development			9,255				13,277
Sales & marketing			3,166				3,407
General & administrative			2,779				3,704

Silicon Motion Technology Corporation