News Releases & Briefs

Silicon Labs Announces Second Quarter 2013 Results

Record Revenue in Timing and Broadcast Video Product Lines

During the quarter, we achieved two important milestones—the strategic acquisition of Energy Micro and the groundbreaking introduction of our new CMEMS technology platform and oscillator product line

AUSTIN, Texas--(BUSINESS WIRE)--Silicon Labs (NASDAQ: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported results for its second quarter ended June 29, 2013. Overall revenue in the second quarter was $141.5 million, an increase of 4.3 percent compared with the same period a year ago and down 2.6 percent sequentially.

Financial Highlights

On a GAAP basis, gross margins were 62.7 percent, a sequential improvement resulting from a shift in the product mix favoring timing devices. GAAP R&D investment was stable on a sequential basis and increased year over year to $37.4 million. GAAP SG&A expenses increased both sequentially and year over year to $32.4 million. Resulting GAAP operating income as a percentage of revenue decreased sequentially and increased year over year to 13.4 percent. GAAP diluted earnings per share were $0.29, down 37 percent sequentially due primarily to acquisition-related items and income taxes and also down 38 percent year over year.

The non-GAAP results exclude the impact of stock compensation and certain other items as set forth in the reconciliation table below. Non-GAAP gross margins increased sequentially to 62.9 percent. On a non-GAAP basis, R&D increased slightly to $33.6 million, and SG&A decreased to $27.3 million. Non-GAAP operating income in the quarter was 19.9 percent. Non-GAAP diluted earnings per share in the quarter were $0.50, down slightly compared with the second quarter of 2012.

Business Highlights

On July 1, the company closed its acquisition of Energy Micro, a leader in energy-friendly ARM® Cortex™-M based microcontrollers (MCUs) and radios. Adding to Silicon Labs’ already strong MCU, radio and software solutions, this strategic acquisition accelerates growth opportunities and positions the company as the foremost innovator in embedded solutions for the growing Internet of Things and green energy markets.

In the Broad-based business, revenue and gross margin results were particularly strong from timing devices. The recently introduced Si50x CMEMS® oscillator product family, featuring the industry’s first single-die MEMS oscillator solution and designed to replace crystal oscillators in high-volume applications, is expected to begin generating significant revenue in 2014.

Although revenue from Broadcast products overall was slightly down sequentially, the company achieved record revenue in video products during the second quarter, marking the fourth consecutive quarter of video revenue growth.

“During the quarter, we achieved two important milestones—the strategic acquisition of Energy Micro and the groundbreaking introduction of our new CMEMS technology platform and oscillator product line,” said Tyson Tuttle, CEO of Silicon Labs. “We believe these accomplishments will help drive Silicon Labs’ growth in our Broad-based products, which represent our fastest growing and largest market opportunity.”

The company expects revenue for the third quarter to be in the range of $144 to $149 million.

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 39717385. The replay will be available through Aug. 25.

About Silicon Labs

Silicon Labs is an industry leader in the innovation of high-performance, analog-intensive, mixed-signal ICs. Developed by a world-class engineering team with unsurpassed expertise in mixed-signal design, Silicon Labs' diverse portfolio of patented semiconductor solutions offers customers significant advantages in performance, size and power consumption. 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 Labs 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; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing our distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; 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; stock price volatility; 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; debt-related risks; capital-raising risks; the competitive and cyclical nature of the semiconductor industry; average selling prices of products may decrease significantly and rapidly; information technology risks; conflict mineral risks and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. 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. References in this press release to Silicon Labs shall mean Silicon Laboratories Inc.

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						Six Months Ended
	June 29, 2013			June 30, 2012			June 29, 2013			June 30, 2012
Revenues	$	141,543		$	135,670		$	286,918		$	261,372
Cost of revenues		52,770			52,868			110,773			103,474
Gross margin		88,773			82,802			176,145			157,898
Operating expenses:
Research and development		37,387			34,245			74,969			67,175
Selling, general and administrative		32,357			32,178			61,510			57,580
Operating expenses		69,744			66,423			136,479			124,755
Operating income		19,029			16,379			39,666			33,143
Other income (expense):
Interest income		152			363			487			860
Interest expense		(831	)		(32	)		(1,673	)		(65	)
Other income (expense), net		114			1,079			62			968
Income before income taxes		18,464			17,789			38,542			34,906
Provision (benefit) for income taxes		5,852			(2,720	)		5,896			77
Net income	$	12,612		$	20,509		$	32,646		$	34,829

Earnings per share:
Basic	$	0.30		$	0.48		$	0.77		$	0.82
Diluted	$	0.29		$	0.47		$	0.76		$	0.80

Weighted-average common shares outstanding:
Basic		42,552			42,655			42,370			42,556
Diluted		43,269			43,423			43,191			43,637



Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)


Non-GAAP Income	Three Months Ended
Statement Items	June 29, 2013
	GAAP Measure		GAAP Percent of Revenue			Stock Compensation Expense		Termination Costs		Acquisition Related Items		Non-GAAP Measure		Non-GAAP Percent of Revenue
Revenues	$	141,543

Gross margin		88,773		62.7	%	$	263	$	--	$	--	$	89,036	62.9	%

Research and development		37,387		26.4	%		3,483		315		--		33,589	23.7	%

Selling, general and administrative		32,357		22.9	%		3,678		480		920		27,279	19.3	%

Operating income		19,029		13.4	%		7,424		795		920		28,168	19.9	%


Non-GAAP Diluted			Three Months Ended
Earnings Per Share			June 29, 2013
			GAAP Measure			Stock Compensation Expense		Termination Costs		Acquisition Related Items		Non-GAAP Measure
Net income			$	12,612		$	7,254	$	715	$	920	$	21,501

Diluted shares outstanding				43,269			--		--		--		43,269

Diluted earnings per share			$	0.29								$	0.50



Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)

	June 29, 2013			December 29, 2012
Assets
Current assets:
Cash and cash equivalents	$	193,468		$	105,426
Short-term investments		151,423			176,565
Accounts receivable, net of allowances for doubtful accounts of $720 at June 29, 2013 and $670 at December 29, 2012		68,635			78,023
Inventories		50,659			49,579
Deferred income taxes		16,387			16,652
Prepaid expenses and other current assets		46,356			41,437
Total current assets		526,928			467,682
Long-term investments		10,197			11,369
Property and equipment, net		135,006			135,271
Goodwill		130,265			130,265
Other intangible assets, net		85,115			90,750
Other assets, net		25,510			36,629
Total assets	$	913,021		$	871,966

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	25,952		$	29,622
Current portion of long-term debt		5,000			5,000
Accrued expenses		36,012			40,410
Deferred income on shipments to distributors		30,552			30,259
Income taxes		926			1,087
Total current liabilities		98,442			106,378
Long-term debt		91,250			95,000
Other non-current liabilities		17,978			20,615
Total liabilities		207,670			221,993
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; 42,668 and 41,879 shares issued and outstanding at June 29, 2013 and December 29, 2012, respectively		4			4
Additional paid-in capital		32,837			10,122
Retained earnings		673,439			640,793
Accumulated other comprehensive loss		(929	)		(946	)
Total stockholders' equity		705,351			649,973
Total liabilities and stockholders' equity	$	913,021		$	871,966



Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Six Months Ended
	June 29, 2013			June 30, 2012
Operating Activities
Net income	$	32,646		$	34,829
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment		6,634			6,749
Amortization of other intangible assets and other assets		5,635			4,559
Stock-based compensation expense		13,684			15,865
Income tax benefit (detriment) from employee stock-based awards		(489	)		2,627
Excess income tax benefit from employee stock-based awards		(243	)		(2,450	)
Deferred income taxes		9,277			1,625
Changes in operating assets and liabilities:
Accounts receivable		9,388			(17,315	)
Inventories		(1,028	)		(1,299	)
Prepaid expenses and other assets		5,023			4,806
Accounts payable		(2,271	)		8,766
Accrued expenses		(6,013	)		(5,203	)
Deferred income on shipments to distributors		293			1,372
Income taxes		(6,439	)		(13,672	)
Net cash provided by operating activities		66,097			41,259

Investing Activities
Purchases of available-for-sale investments		(121,994	)		(105,169	)
Proceeds from sales and maturities of available-for-sale investments		146,870			186,514
Purchases of property and equipment		(6,498	)		(5,095	)
Purchases of other assets		(2,438	)		(7,919	)
Net cash provided by investing activities		15,940			68,331

Financing Activities
Proceeds from issuance of common stock, net of shares withheld for taxes		9,512			2,922
Excess income tax benefit from employee stock-based awards		243			2,450
Repurchases of common stock		--			(36,173	)
Payments on debt		(3,750	)		--
Net cash provided by (used) in financing activities		6,005			(30,801	)

Increase in cash and cash equivalents		88,042			78,789
Cash and cash equivalents at beginning of period		105,426			94,964
Cash and cash equivalents at end of period	$	193,468		$	173,753

Contact:

Silicon Labs
Deborah Stapleton, +1-650-470-4200
Deborah.Stapleton@silabs.com