Press Releases

Silicon Labs Announces First Quarter 2014 Results
Company Sees Growing Momentum in the Internet of Things
We expect this momentum to drive record Broad-based revenue in the second quarter.

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 first quarter ended March 29, 2014. Revenue in the first quarter was at the top end of guidance at $145.7 million, compared with $146.2 million reported in the fourth quarter. Additionally, the company reported excellent performance on its balance sheet with strong cash flows and effective working capital management.

Q1 Financial Highlights

On a GAAP basis:

  • Gross margin was 59.8 percent
  • R&D expenses were $42.5 million
  • SG&A expenses were $34.6 million
  • Operating income as a percentage of revenue was 6.9 percent
  • Diluted earnings per share were $0.18

On a non-GAAP basis (results exclude the impact of stock compensation, amortization from acquired intangible assets and certain other items as set forth in the reconciliation tables below):

  • Gross margin was 60.2 percent
  • R&D expenses were $35.0 million
  • SG&A expenses were $28.5 million
  • Operating income was 16.6 percent
  • Diluted earnings per share were $0.42

Business Highlights

  • Broad-based revenue was $72.3 million, essentially flat sequentially, as expected.
  • Broadcast exceeded expectations with revenue of $50.7 million, including record revenue in video.
  • Access revenue decreased slightly, as expected, to $22.7 million.

Product Highlights

  • Introduced a new version of the Simplicity Studio™ development ecosystem supporting Silicon Labs’ MCU products in a single, unified platform, making the embedded design process easier, faster and more efficient.
  • Announced the expansion of Silicon Labs’ Ember® ZigBee® portfolio with the introduction of a new ARM®-based system-on-a-chip family that reduces the cost and complexity of deploying ZigBee solutions in smart metering and home automation applications.
  • Launched the industry’s first single-chip digital ultraviolet (UV) index sensor ICs designed to track UV sun exposure, heart rate and blood oxygen levels for wearable products such as smart watches and health and fitness trackers.
  • Acquired the full product portfolio and intellectual property of Silicon Valley-based Touchstone Semiconductor, an early-stage technology company and provider of low-power analog IC products targeting Internet of Things applications.

Business Outlook

The company expects revenue in the second quarter to be in the range of $147 million to $151 million. Second quarter diluted earnings per share are expected to be between $0.15 and $0.19 on a GAAP basis and between $0.43 and $0.47 on a non-GAAP basis. Both GAAP and non-GAAP estimates include an estimated $0.03 per share effect from litigation costs.

“We continue to strengthen our position as a leading supplier of silicon solutions for the Internet of Things,” said Tyson Tuttle, CEO of Silicon Labs. “We expect this momentum to drive record Broad-based revenue in the second quarter.”

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 39717388. The replay will be available through May 29.

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, the Silicon Labs logo, Simplicity Studio and Ember 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
     

March 29,
2014

 

March 30,
2013

Revenues     $ 145,691     $ 145,375  
Cost of revenues       58,586       58,003  
Gross margin       87,105       87,372  
Operating expenses:          
Research and development       42,485       37,582  
Selling, general and administrative       34,611       29,153  
Operating expenses       77,096       66,735  
Operating income       10,009       20,637  
Other income (expense):          
Interest income       302       335  
Interest expense       (798 )     (842 )
Other income (expense), net       67       (52 )
Income before income taxes       9,580       20,078  
Provision for income taxes       1,470       44  
                   

Net income

    $ 8,110     $ 20,034  
           
Earnings per share:          
Basic     $ 0.19     $ 0.47  
Diluted     $ 0.18     $ 0.46  
           
Weighted-average common shares outstanding:          
Basic       43,081       42,186  
Diluted       44,056       43,110  
     
     
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
     

Non-GAAP Income
Statement Items

 

Three Months Ended
March 29, 2014

   

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   $ 145,691                            
                                 
Gross margin     87,105     59.8 %   $ 195   $ 390   $ --     $ --   $ 87,690       60.2 %
                                 
Research and

development

    42,485     29.2 %     4,241     3,247     --       --    

34,997

      24.0 %
                                 
Selling, general and

administrative

    34,611    

23.7

%

    4,841     729     (267 )    

816

   

28,492

      19.6 %
                                 
Operating income     10,009     6.9 %     9,277     4,366     (267 )     816     24,201       16.6 %
                                 
                                 
Non-GAAP Diluted

Earnings Per Share

 

Three Months Ended
March 29, 2014

       

GAAP
Measure

 

Stock
Compensation
Expense

 

Intangible
Asset
Amortization

 

Termination
Costs

 

Acquisition
Related
Items

 

Release of
Unrecognized
Tax Benefits

 

Non-
GAAP
Measure

Net income       $ 8,110     $ 7,966   $ 3,019   $ (199 )   $ 816   $ (1,292 )   $ 18,420  
 

 

 

 

                         
Diluted shares outstanding

 

  44,056       --     --     --       --     --       44,056  
                                 
Diluted earnings per share   $ 0.18                         $ 0.42  
                                     
                                     

Unaudited Forward-Looking Statements Regarding Business Outlook
(In thousands, except per share information)

     
Business Outlook  

Three Months Ending
June 28, 2014

    High   Low
Estimated GAAP diluted earnings per share   $ 0.19   $ 0.15
         
Estimated non-GAAP charges     0.28     0.28
         
Estimated non-GAAP diluted earnings per share   $ 0.47   $ 0.43
           
           
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
           
     

March 29,
2014

 

December 28,
2013

Assets          
Current assets:          
Cash and cash equivalents     $ 128,323     $ 95,800  
Short-term investments       194,765       179,593  
Accounts receivable, net of allowances for doubtful accounts of

$767 at March 29, 2014 and $797 at December 28, 2013

      64,672       72,124  
Inventories       44,334       45,271  
Deferred income taxes       15,203       18,878  
Prepaid expenses and other current assets       40,214       47,651  
Total current assets       487,511       459,317  
Long-term investments       10,997       10,632  
Property and equipment, net       130,829       132,445  
Goodwill       228,781       228,781  
Other intangible assets, net       128,453       131,593  
Other assets, net       23,482       28,382  
Total assets     $ 1,010,053     $ 991,150  
           
Liabilities and Stockholders’ Equity          
Current liabilities:          
Accounts payable     $ 22,707     $ 22,126  
Current portion of long-term debt       8,750       7,500  
Accrued expenses       67,745       45,975  
Deferred income on shipments to distributors       32,589       30,853  
Income taxes       1,330       2,693  
Total current liabilities       133,121       109,147  
Long-term debt       85,000       87,500  
Other non-current liabilities       30,737       55,941  
Total liabilities       248,858       252,588  
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;

43,433 and 42,779 shares issued and outstanding at

March 29, 2014 and December 28, 2013, respectively

      4       4  
Additional paid-in capital       62,883       48,630  
Retained earnings       698,722       690,612  
Accumulated other comprehensive loss       (414 )     (684 )
Total stockholders' equity       761,195       738,562  
Total liabilities and stockholders' equity     $ 1,010,053     $ 991,150  
       
       
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
       
      Three Months Ended
     

March 29,
2014

 

March 30,
2013

Operating Activities          
Net income     $ 8,110     $ 20,034  
Adjustments to reconcile net income to cash provided by operating activities:          
Depreciation of property and equipment       3,290       3,297  
Amortization of other intangible assets and other assets       4,491       2,840  
Stock-based compensation expense       9,277       6,260  
Income tax benefit (shortfall) from stock-based awards       45       (363 )
Excess income tax benefit from stock-based awards       (235 )     (217 )
Deferred income taxes       6,784       7,521  
Changes in operating assets and liabilities:          
Accounts receivable       7,452       5,256  
Inventories       1,083       (7,350 )
Prepaid expenses and other assets       14,266       4,620  
Accounts payable       1,195       2,356  
Accrued expenses       (2,218 )     (4,330 )
Deferred income on shipments to distributors       1,736       (598 )
Income taxes       (8,324 )     (9,818 )
Net cash provided by operating activities       46,952       29,508  
           
Investing Activities          
Purchases of available-for-sale investments       (43,366 )     (78,851 )
Proceeds from sales and maturities of available-for-sale investments       28,242       25,674  
Purchases of property and equipment       (1,673 )     (3,898 )
Purchases of other assets       (2,113 )     (1,228 )
Net cash used in investing activities       (18,910 )     (58,303 )
           
Financing Activities          
Proceeds from issuance of common stock, net of shares withheld for taxes       5,496       4,915  
Excess income tax benefit from stock-based awards       235       217  
Payments on debt       (1,250 )     (2,500 )
Net cash provided by financing activities       4,481       2,632  
           
Increase (decrease) in cash and cash equivalents       32,523       (26,163 )
Cash and cash equivalents at beginning of period       95,800       105,426  
Cash and cash equivalents at end of period     $ 128,323     $ 79,263  

 

Contact:

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