Press Releases

Silicon Labs Announces Third Quarter 2013 Results
Record Revenue for Broadcast Video and Solid Results for Broad-based Products
We achieved record revenue in the third quarter for our industry-leading Broadcast video products, as well as solid results for our Broad-based products

AUSTIN, Texas--(BUSINESS WIRE)--Silicon Labs (NASDAQ: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported financial results for its third quarter ended Sept. 28, 2013. Overall revenue in the third quarter was $146.9 million, an increase of 3.8 percent sequentially and a 1.7 percent decrease compared with the same period a year ago.

Financial Highlights

On a GAAP basis, gross margins were 60.0 percent. GAAP R&D investment increased on a sequential basis and year over year to $40.7 million. GAAP SG&A expenses increased both sequentially and year over year to $37.0 million. Resulting GAAP operating income as a percentage of revenue decreased both sequentially and year over year to 7.1 percent. GAAP diluted earnings per share were $0.15, down 48.3 percent sequentially and down 37.5 percent year over year due primarily to Energy Micro acquisition-related items.

The non-GAAP results exclude the impact of stock compensation, amortization from acquired intangible assets and certain other items as set forth in the reconciliation table below. Non-GAAP gross margins decreased sequentially to 61.1 percent. On a non-GAAP basis, R&D expenses increased to $33.7 million, and SG&A expenses increased to $29.8 million. Non-GAAP operating income in the quarter was 17.9 percent. Non-GAAP diluted earnings per share in the quarter were $0.45, down sequentially and year over year.

Business Highlights

Silicon Labs reported record revenue for Broadcast video products and solid performance for microcontroller (MCU) and timing products. Revenue from Broad-based products, which include MCU, timing, power and sensor products, represented 50 percent of total revenue in the third quarter, up 6.5 percent sequentially.

The company continues to expand its position in the Internet of Things (IoT) market with solid design win activity in home automation, smart energy and smart metering applications. Silicon Labs completed its first quarter with Energy Micro as a key part of the company. The teams and operational systems are fully integrated, and the product development roadmaps are aligned to enable the next generation of energy-friendly microcontrollers and radios. During the quarter, Silicon Labs introduced a new family of 8-bit MCUs optimized for cost-sensitive motor control and industrial applications.

Revenue from Broadcast products, including audio and video tuner product lines, represented 35 percent of total revenue in the third quarter and delivered another growth quarter.

In the third quarter, Silicon Labs introduced a new family of TV tuners offering the industry’s highest performance and integration, as well as lowest system cost. These TV tuners are based on five generations of patented architectural enhancements and a production history of more than 200 million silicon tuners shipped to date, solidifying Silicon Labs’ No. 1 position in the video tuner market. Continuing to diversify its Broadcast video revenue, the company also announced the world’s most advanced digital video broadcast (DVB) demodulators for TVs and set-top boxes.

“We achieved record revenue in the third quarter for our industry-leading Broadcast video products, as well as solid results for our Broad-based products,” said Tyson Tuttle, CEO of Silicon Labs. “The integration of Energy Micro further strengthens our Broad-based portfolio and our leadership position in low-energy MCU solutions for the Internet of Things.”

The company expects revenue for the fourth quarter to be in the range of $140 million to $145 million, with declines in Broadcast video reflecting weak end-customer demand and pronounced seasonality.

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 (404) 537-3406 (international) and by entering 39717386. The replay will be available through Nov. 24.

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   Nine Months Ended
    September 28,

2013

  September 29,

2012

  September 28,

2013

  September 29,

2012

Revenues   $ 146,933     $ 149,461     $ 433,851     $ 410,833  
Cost of revenues     58,772       62,968       169,545       166,442  
Gross margin     88,161       86,493       264,306       244,391  
Operating expenses:                
Research and development     40,662       34,768       115,631       101,943  
Selling, general and administrative     37,009       24,495       98,519       82,075  
Operating expenses     77,671       59,263       214,150       184,018  
Operating income     10,490       27,230       50,156       60,373  
Other income (expense):                
Interest income     129       243       616       1,103  
Interest expense     (813 )     (234 )     (2,486 )     (299 )
Other income (expense), net     (23 )     (161 )     39       807  
Income before income taxes     9,783       27,078       48,325       61,984  
Provision for income taxes     3,252       17,054       9,148       17,131  

Net income

  $ 6,531     $ 10,024     $ 39,177     $ 44,853  
                 
Earnings per share:                
Basic   $ 0.15     $ 0.24     $ 0.92     $ 1.06  
Diluted   $ 0.15     $ 0.24     $ 0.90     $ 1.04  
                 
Weighted-average common shares outstanding:                
Basic     42,684       41,735       42,477       42,279  
Diluted     43,922       42,520       43,437       43,261  
     
     

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

     

Non-GAAP Income
Statement Items

  Three Months Ended

September 28, 2013

   

GAAP
Measure

 

GAAP
Percent of
Revenue

 

Stock
Compensation
Expense

 

Intangible
Asset
Amortization

 

Termination
Costs

 

Acquisition
Related
Items

 

Non-GAAP
Measure

 

Non-GAAP
Percent of
Revenue

Revenues   $ 146,933                            
                                 
Gross margin     88,161     60.0 %   $ 269   $ 390   $ --   $ 955   $ 89,775   61.1 %
                                 
Research and

development

    40,662     27.7 %     3,729     3,217     --     --    

33,716

  22.9 %
                                 

Selling, general and

administrative

    37,009    

25.2

%

    4,622     729     291    

1,604

   

29,763

  20.3 %
                                 
Operating income     10,490     7.1 %     8,620     4,336     291     2,559     26,296   17.9 %
                                 
                                 
Non-GAAP Diluted Earnings Per Share       Three Months Ended

September 28, 2013

   
       

GAAP
Measure

 

Stock
Compensation
Expense

 

Intangible
Asset
Amortization

 

Termination
Costs

 

Acquisition
Related
Items

 

Non-GAAP
Measure

   
Net income       $ 6,531     $ 7,716   $ 2,986   $ 291   $ 2,292   $ 19,816    
                                 
Diluted shares outstanding

 

  43,922       --     --     --     --     43,922    
                                 
Diluted earnings per share   $ 0.15                     $ 0.45    
         
         

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

         
    September 28,

2013

  December 29,

2012

Assets        
Current assets:        
Cash and cash equivalents   $ 116,539     $ 105,426  
Short-term investments     153,857       176,565  
Accounts receivable, net of allowances for doubtful accounts of

$717 at September 28, 2013 and $670 at December 29, 2012

    68,499       78,023  
Inventories     44,817       49,579  
Deferred income taxes     17,356       16,652  
Prepaid expenses and other current assets     51,097       41,437  
Total current assets     452,165       467,682  
Long-term investments     10,671       11,369  
Property and equipment, net     134,398       135,271  
Goodwill     227,289       130,265  
Other intangible assets, net     136,054       90,750  
Other assets, net     39,150       36,629  
Total assets   $ 999,727     $ 871,966  
         
Liabilities and Stockholders’ Equity        
Current liabilities:        
Accounts payable   $ 24,885     $ 29,622  
Current portion of long-term debt     5,000       5,000  
Accrued expenses     42,639       40,410  
Deferred income on shipments to distributors     29,876       30,259  
Income taxes     1,457       1,087  
Total current liabilities     103,857       106,378  
Long-term debt     91,250       95,000  
Other non-current liabilities     70,342       20,615  
Total liabilities     265,449       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;

43,093 and 41,879 shares issued and outstanding at

September 28, 2013 and December 29, 2012, respectively

    4       4  
Additional paid-in capital     55,085       10,122  
Retained earnings     679,970       640,793  
Accumulated other comprehensive loss     (781 )     (946 )
Total stockholders' equity     734,278       649,973  
Total liabilities and stockholders' equity   $ 999,727     $ 871,966  
     
     

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

     
    Nine Months Ended
    September 28,

2013

  September 29,

2012

Operating Activities        
Net income   $ 39,177     $ 44,853  
Adjustments to reconcile net income to cash provided by operating activities:        
Depreciation of property and equipment     10,050       10,247  
Net gain on the purchase of property and equipment     --       (8,457 )
Amortization of other intangible assets and other assets     11,051       11,001  
Stock-based compensation expense     22,304       23,796  
Income tax benefit (detriment) from employee stock-based awards     (621 )     2,301  
Excess income tax benefit from employee stock-based awards     (284 )     (2,470 )
Deferred income taxes     6,790       5,024  
Changes in operating assets and liabilities:        
Accounts receivable     12,599       (18,470 )
Inventories     6,213       (5,994 )
Prepaid expenses and other assets     (1,606 )     13,283  
Accounts payable     (3,017 )     9,113  
Accrued expenses     (2,864 )     (797 )
Deferred income on shipments to distributors     (3,169 )     5,267  
Income taxes     (1,429 )     (4,378 )
Net cash provided by operating activities     95,194       84,319  
         
Investing Activities        
Purchases of available-for-sale investments     (164,317 )     (138,822 )
Proceeds from sales and maturities of available-for-sale investments     186,936       209,972  
Purchases of property and equipment     (8,984 )     (99,720 )
Purchases of other assets     (3,499 )     (6,146 )
Acquisition of businesses, net of cash acquired     (86,441 )     (71,852 )
Net cash used in investing activities     (76,305 )     (106,568 )
         
Financing Activities        
Proceeds from issuance of common stock, net of shares withheld for taxes     11,900       3,035  
Excess income tax benefit from employee stock-based awards     284       2,470  
Repurchases of common stock     (7,776 )     (51,040 )
Proceeds from issuance of long-term debt, net     --       98,325  
Payments on debt     (12,184 )     --  
Net cash provided by (used) in financing activities     (7,776 )     52,790  
         
Increase in cash and cash equivalents     11,113       30,541  
Cash and cash equivalents at beginning of period     105,426       94,964  
Cash and cash equivalents at end of period   $ 116,539     $ 125,505  

 

Contact:

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