| (in millions) | 2Q 2018 | 1Q 2018 | 2Q 2017 | |||
| Cash and cash equivalents, and short-term investments | $364.2 | $346.1 | $306.0 | |||
| Bank loans | $12.0 | $20.7 | $25.0 | |||
| Capital expenditures | $3.2 | $3.6 | $2.1 | |||
| Dividend payments | $10.8 | $10.8 | $7.1 | |||
| Loan repayments | $8.7 | $4.3 | -- | |||
During the second quarter, we had $3.2 million of capital expenditures for the routine purchase of software, design tools and other items.
Our second quarter cash flows were as follows:
| 3 months ended Jun. 30, 2018 | |||||
| (In $ millions) | |||||
| Net income (GAAP) | 30.7 | ||||
| Depreciation & amortization | 2.8 | ||||
| Changes in operating assets and liabilities | 5.7 | ||||
| Others | 2.0 | ||||
| Net cash provided by operating activities | 41.2 | ||||
| Acquisition of property and equipment | (3.2) | ||||
| Long-term investment | (3.0) | ||||
| Net cash used in investing activities | (6.2) | ||||
| Dividend | (10.8) | ||||
| Loans | (8.7) | ||||
| Net cash used in financing activities | (19.5) | ||||
| Effects of changes in foreign currency exchange rates on cash | (1.2) | ||||
| Net increase in cash, cash equivalents and restricted cash | 14.3 | ||||
Returning Value to Shareholders
On October 24, 2017, the Board of Directors of the Company declared a $1.20 per ADS annual dividend to be paid in quarterly installments of $0.30 per ADS. On May 23, 2018, we paid $10.8 million to shareholders as the third installment of our annual dividend.
On August 1, 2017, the Company announced that its Board of Directors had authorized a 12 month program for the Company to repurchase up to $200 million. In the second quarter, the Company did not repurchase any of its ADS and this program has now expired.
Business Outlook
“As NAND prices continue to decline and SSD affordability and adoption are improving, we are now increasing our full-year SSD controller growth expectation to at least 30%, with strong third quarter sequential growth,” said Wallace Kou, President and CEO of Silicon Motion. “However, due to a one quarter delay of large SSD solutions sales to a hyperscaler customer, we are now expecting our third quarter net sales to be stable sequentially despite strong SSD controller growth with revenue growth expected to improve in the fourth quarter. We expect that our gross and operating margins will benefit from the more favorable sales mix.”
For the third quarter of 2018, management expects:
| GAAP | Non-GAAP Adjustment | Non-GAAP | |
| Revenue | $136.0m to $142.9m
-1.5% to +3.5% Q/Q +7% to +12% Y/Y | -- | $136.0m to $142.9m
-1.5% to +3.5% Q/Q +7% to +12% Y/Y |
| Gross margin | 48.4% to 50.4% | Approximately $0.1m* | 48.5% to 50.5% |
| Operating margin | 19.8% to 22.7% | Approximately $6.1m to $7.1m** | 25.0% to 27.0% |
| * | Projected gross margin (non-GAAP) excludes $0.1 million of stock-based compensation. |
| ** | Projected operating margin (non-GAAP) excludes $0.7 million of amortization of intangible assets and $5.4 million to $6.4 million of stock-based compensation. |
For the full-year 2018, management reiterates:
| GAAP | Non-GAAP Adjustment | Non-GAAP | |
| Revenue | $550m to $576m
+5% to +10% Y/Y | -- | $550m to $576m
+5% to +10% Y/Y |
| Gross margin | 47.4% to 49.4% | Approximately $0.5m* | 47.5% to 49.5% |
| Operating margin | 20.1% to 22.6% | Approximately $19.6m to $21.6m** | 24.0% to 26.0% |
