Press Releases

Silicon Labs Reports Record Revenue
Company Delivers 15 Percent Revenue Growth in 2012
We had an excellent year in 2012, achieving record revenue levels and increasing our market share

AUSTIN, Texas--(BUSINESS WIRE)--Silicon Labs (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue for the fourth quarter and the full year. Revenue of $563.3 million for 2012 was an impressive 15 percent increase compared to 2011.

Financial Highlights

Fourth quarter revenue of $152.5 million was up 20 percent compared to the same period last year. On a GAAP-basis, gross margin improved meaningfully to 61.4 percent. R&D investment increased to $36.0 million, and SG&A expense increased to $32.3 million. Resulting GAAP operating income decreased to 16.6 percent. Diluted GAAP earnings per share increased to $0.44. For all of 2012, GAAP gross margin was 60 percent and operating expenses increased only slightly by two percent to $252.3 million, resulting in a five hundred basis point improvement in operating margin to 15.2 percent. GAAP earnings increased therefore by 86 percent to $1.47.

The following non-GAAP results exclude the impact of stock compensation and other one-time items. Gross margin improved to 61.6 percent for the quarter. Operating expenses increased to 39.5 percent of revenue. R&D increased to $32.7 million, and SG&A increased to $27.5 million due to increasing product and sales activity as well as higher variable compensation driven by the outperformance for the quarter. Operating income for the quarter was a record for the year at 22.1 percent. Diluted earnings per share for the quarter were 61 cents, a 24 percent year-over-year increase.

For all of 2012, Silicon Labs reduced operating expenses to 40.3 percent of revenue and improved operating income to 20.7 percent of revenue. Diluted earnings per share increased by 20 percent to $2.16. Reconciling charges are set forth in the financial measures table included below.

The company repurchased 245 thousand shares of stock and ended the quarter with $293 million in cash, cash equivalents and investments due to continued healthy cash flow from operations.

Business Highlights

The company’s strong performance in 2012 was driven by high growth in the Broadcast and Broad-based products. Broadcast growth was driven by the rapid adoption of the company’s TV tuner products, which represented one third of the TV market in 2012. The Broad-based products, which grew more than 30 percent in 2012, significantly outgrew their end markets as the company added customers and expanded its sales channel.

In the fourth quarter, the Broad-based business was up as expected driven by a record quarter for the Timing products. Timing strength came from new business in consumer and embedded applications, a direct result of the company’s investments to broaden the portfolio. The MCU products were up more than 45 percent year over year due to growth from strong organic execution and from a recent acquisition. The Broadcast business exceeded expectations due to record revenue for the company’s video products. The Access business also grew sequentially in the fourth quarter.

“We had an excellent year in 2012, achieving record revenue levels and increasing our market share,” said Tyson Tuttle, president and CEO of Silicon Laboratories. “We are addressing very large markets with a growing portfolio of differentiated products, we have a record backlog of design wins, and we believe that as we continue to execute, this will enable growth in 2013 and beyond.”

The company expects revenue for the first quarter to be down sequentially four to eight percent.

Webcast and Conference Call

A conference call discussing the quarterly results will follow this press release at 7:30 a.m. Central time. An audio webcast will be available simultaneously on Silicon Labs’ website under Investor Relations (www.silabs.com). A replay will be available after the call at the same website listed above or by calling 1 (855) 859-2056 or +1 (404) 537-3406 (international) and by entering 39714732. The replay will be available through February 13.

About Silicon Labs

Silicon Labs is a leading designer of high-performance, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Silicon Labs’ diverse portfolio of highly integrated, patented solutions is developed by a world-class engineering team with expertise in cutting-edge mixed-signal design. The company has design, engineering, marketing, sales and applications offices throughout North America, Europe and Asia. For more information about Silicon Labs, please visit www.silabs.com.

Forward-Looking Statements

This press release contains forward-looking statements based on Silicon Labs’ current expectations. The words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “plan,” “project,” “will” and similar phrases as they relate to Silicon Laboratories are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silicon Labs and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: risks that Silicon Labs may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; volatile stock price; average selling prices of products may decrease significantly and rapidly; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; inventory-related risks; risks associated with acquisitions; difficulties managing international activities; difficulties managing our manufacturers and subcontractors; risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with our accounts receivable; dependence on key personnel; risks associated with divestitures; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Labs’ business and results of operations to risks of natural disasters, epidemics, war and political unrest; the competitive and cyclical nature of the semiconductor industry and other factors that are detailed in Silicon Labs’ filings with the SEC. Silicon Labs disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note to editors: Silicon Laboratories, Silicon Labs and the Silicon Labs logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.

 
 
Silicon Laboratories Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
 
        Three Months Ended       Year Ended
        December 29,     December 31,       December 29,     December 31,
          2012         2011           2012         2011  
Revenues       $ 152,461       $ 126,692         $ 563,294       $ 491,625  
Cost of revenues         58,835         49,513           225,277         193,179  
Gross margin         93,626         77,179           338,017         298,446  
Operating expenses:                            
Research and development         36,009         34,705           137,952         135,953  
Selling, general and administrative         32,315         27,251           114,390         112,419  
Operating expenses         68,324         61,956           252,342         248,372  
Operating income         25,302         15,223           85,675         50,074  
Other income (expense):                            
Interest income         235         427           1,338         1,859  
Interest expense         (850 )       (23 )         (1,149 )       (37 )
Other income (expense), net         (323 )       152           484         444  
Income before income taxes         24,364         15,779           86,348         52,340  
Provision for income taxes         5,669         2,974           22,800         16,868  

Net income

      $ 18,695       $ 12,805         $ 63,548       $ 35,472  
                             
Earnings per share:                            
Basic       $ 0.45       $ 0.31         $ 1.51       $ 0.82  
Diluted       $ 0.44       $ 0.29         $ 1.47       $ 0.79  
                             
Weighted-average common shares outstanding:                            
Basic         41,705         41,979           42,136         43,421  
Diluted         42,641         43,410           43,106         44,832  
 
 
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
 
       
Non-GAAP Income     Three Months Ended
Statement Items     December 29, 2012
      GAAP

Measure

    GAAP

Percent of Revenue

    Stock

Compensation Expense

    Termination Costs and Impairments     Acquisition Related Items     Non-GAAP

Measure

    Non-GAAP

Percent of Revenue

Revenues     $ 152,461                                    
                                           
Gross margin       93,626       61.4 %     $ 268     $ --     $ --       $ 93,894     61.6 %
                                           
Research and

development

      36,009       23.6 %       3,006       262       --        

32,741

    21.5 %
                                           

Selling, general and administrative

      32,315      

21.2

%

      4,106       1,967      

(1,253

)

     

27,495

    18.0 %
                                           
Operating expenses       68,324       44.8 %       7,112       2,229       (1,253 )       60,236     39.5 %
                                           
Operating income       25,302       16.6 %       7,380       2,229       (1,253 )       33,658     22.1 %
               
               
Non-GAAP Diluted           Three Months Ended      
Earnings Per Share           December 29, 2012      
            GAAP

Measure

    Stock

Compensation Expense

    Termination Costs and Impairments     Acquisition Related Items     Non-GAAP

Measure

     
Net income           $ 18,695       $ 6,667     $ 1,829     $ (1,253 )     $ 25,938      
                                           
Diluted shares outstanding       42,641         --       --       --         42,641      
                                           
Diluted earnings per share     $ 0.44                         $ 0.61      
 
 
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Continued)
 
       

Non-GAAP Income

    Year Ended
Statement Items     December 29, 2012
      GAAP

Measure

    GAAP

Percent of Revenue

    Stock

Compensation Expense*

    Termination Costs and Impairments     Acquisition Related Items     Headquarters Purchase     Non-GAAP

Measure

    Non-GAAP

Percent of Revenue

Revenues     $ 563,294                                          
                                                 
Operating expenses       252,342       44.8 %     $ 28,038     $ 6,735     $ (1,361 )     $ (8,113 )     $ 227,043         40.3 %
                                                 
Operating income       85,675       15.2 %       29,244       6,735       3,105         (8,113 )       116,646         20.7 %
                                                 
                                                 
             
Non-GAAP Diluted     Year Ended
Earnings Per Share     December 29, 2012
            GAAP

Measure

    Stock

Compensation Expense*

    Termination Costs and Impairments     Acquisition Related Items     Headquarters Purchase     Release of Unrecognized Tax Benefits     Non-GAAP

Measure

Net income           $ 63,548       $ 25,578     $ 4,561     $ 11,932       $ (5,274 )     $ (7,265 )     $ 93,080  
                                                 
Diluted shares outstanding       43,106         --       --       --         --         --         43,106  
                                                 
Diluted earnings per share     $ 1.47                                     $ 2.16  

* Excludes stock compensation recognized in connection with terminations costs for our former CEO.

 
 
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
 
        December 29,       December 31,
          2012           2011  
Assets                
Current assets:                
Cash and cash equivalents       $ 105,426         $ 94,964  
Short-term investments         176,565           212,526  
Accounts receivable, net of allowances for doubtful accounts of

$670 at December 29, 2012 and $725 at December 31, 2011

        78,023           55,351  
Inventories         49,579           34,778  
Deferred income taxes         16,652           11,563  
Prepaid expenses and other current assets         41,437           43,867  
Total current assets         467,682           453,049  
Long-term investments         11,369           17,477  
Property and equipment, net         135,271           25,141  
Goodwill         130,265           115,489  
Other intangible assets, net         90,750           60,005  
Other assets, net         36,629           34,830  
Total assets       $ 871,966         $ 705,991  
                 
Liabilities and Stockholders’ Equity                
Current liabilities:                
Accounts payable       $ 29,622         $ 26,354  
Current portion of long-term debt         5,000           --  
Accrued expenses         40,410           30,857  
Deferred income on shipments to distributors         30,259           24,962  
Income taxes         1,087           665  
Total current liabilities         106,378           82,838  
Long-term debt         95,000           --  
Other non-current liabilities         20,615           24,214  
Total liabilities         221,993           107,052  
Commitments and contingencies                
Stockholders' equity:                
Preferred stock--$0.0001 par value; 10,000 shares authorized; no

shares issued and outstanding

        --           --  
Common stock--$0.0001 par value; 250,000 shares authorized;

41,879 and 42,068 shares issued and outstanding at

December 29, 2012 and December 31, 2011, respectively

        4           4  
Additional paid-in capital         10,122           14,749  
Retained earnings         640,793           586,653  
Accumulated other comprehensive loss         (946 )         (2,467 )
Total stockholders' equity         649,973           598,939  
Total liabilities and stockholders' equity       $ 871,966         $ 705,991  
 
 
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
        Year Ended
        December 29,       December 31,
        2012       2011
Operating Activities                
Net income       $ 63,548         $ 35,472  
Adjustments to reconcile net income to cash provided by operating activities:                
Depreciation of property and equipment         13,621           13,570  
Net gain on the purchase of property and equipment         (8,457 )         --  
Amortization of other intangible assets and other assets         14,154           11,030  
Impairment of long-lived assets         708           1,322  
Stock-based compensation expense         31,176           36,115  
Income tax benefit from employee stock-based awards         1,827           2,814  
Excess income tax benefit from employee stock-based awards         (1,294 )         (2,404 )
Deferred income taxes         4,725           (445 )
Changes in operating assets and liabilities:                
Accounts receivable         (20,743 )         (8,562 )
Inventories         (13,056 )         5,334  
Prepaid expenses and other assets         10,629           (5,948 )
Accounts payable         7,217           (2,176 )
Accrued expenses         (3,812 )         (1,320 )
Deferred income on shipments to distributors         4,623           (1,915 )
Income taxes         (7,816 )         5,855  
Net cash provided by operating activities         97,050           88,742  
                 
Investing Activities                
Purchases of available-for-sale investments         (192,450 )         (178,676 )
Proceeds from sales and maturities of marketable securities         235,517           193,474  
Purchases of property and equipment         (102,043 )         (8,690 )
Purchases of other assets         (8,508 )         (4,018 )
Acquisitions of businesses, net of cash acquired         (71,852 )         (27,262 )
Net cash used in investing activities         (139,336 )         (25,172 )
                 
Financing Activities                
Proceeds from issuance of common stock, net of shares withheld for taxes         15,148           7,660  
Excess income tax benefit from employee stock-based awards         1,294           2,404  
Repurchases of common stock         (62,019 )         (110,063 )
Proceeds from issuance of long-term debt, net         98,325           --  
Payments on debt         --           (7,174 )
Net cash provided by (used in) financing activities         52,748           (107,173 )
                 
Increase (decrease) in cash and cash equivalents         10,462           (43,603 )
Cash and cash equivalents at beginning of period         94,964           138,567  
Cash and cash equivalents at end of period       $ 105,426         $ 94,964  

 

Contact:

Silicon Labs
Shannon Pleasant, 512-464 9254
shannon.pleasant@silabs.com