Press Releases

Silicon Labs Announces Second Quarter 2014 Results
Broad-based Products Fuel Record Revenue
We are benefitting from our multi-year investment strategy for the IoT and Internet Infrastructure and realizing meaningful revenue growth.

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 second quarter ended June 28, 2014. Revenue in the second quarter exceeded the top end of guidance and established a new record at $154.9 million, which included $5.0 million of patent sale revenue, up from $145.7 million as reported in the first quarter.

Financial Highlights

On a GAAP basis:

  • Gross margin was 63.7 percent
  • R&D expenses were $41.8 million
  • SG&A expenses were $36.0 million
  • Operating income as a percentage of revenue was 13.4 percent
  • Diluted earnings per share were $0.32

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 64.1 percent
  • R&D expenses were $34.4 million
  • SG&A expenses were $31.3 million
  • Operating income was 21.6 percent
  • Diluted earnings per share were $0.58

Business Highlights

  • Broad-based revenue established a new record at $79.7 million, up 10 percent sequentially.
  • Broadcast revenue was $50.5 million for the quarter, which included $5.0 million from a patent sale. The patent sale revenue resulted from the acceleration of a royalty arrangement and was not forecasted.
  • Access revenue also exceeded expectations at $24.7 million.

Product Highlights

  • Introduced a new family of ultra-low-power capacitive sensing MCUs, the C8051F97x MCU family, offering fast and accurate capacitive touch control technology backed by Silicon Labs’ Simplicity Studio® development ecosystem.
  • Launched a new 32-bit hardware and firmware development kit that simplifies the process of developing “Made for iPod/iPhone/iPad” (MFi) accessories and accelerates time to market for MFi accessory developers.
  • Announced a comprehensive Wireless M-Bus software solution that simplifies the process of adding wireless connectivity to smart metering systems while enabling extended battery life.
  • Joined other industry leaders to form the Thread Group, leading the development of the next generation of IP-based wireless mesh networking for the Connected Home.
  • Won an EDN China Innovation Award in the category of “Innovation Excellence: Leading Technologies” for the EFM32™ Gecko family.

Business Outlook

The company expects revenue in the third quarter to be in the range of $153 million to $157 million and expects to establish another record in its Broad-based products. Third quarter diluted earnings per share are expected to be between $0.18 and $0.24 on a GAAP basis and between $0.45 and $0.51 on a non-GAAP basis.

“We are very pleased with our strong second quarter results, including record revenue in our Broad-based products,” said Tyson Tuttle, CEO of Silicon Labs. “We are benefitting from our multi-year investment strategy for the IoT and Internet Infrastructure and realizing meaningful revenue growth.”

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 39717389. The replay will be available through August 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, the Silicon Labs logo and Simplicity Studio 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 28,
2014

 

June 29,
2013

 

June 28,
2014

 

June 29,
2013

Revenues     $ 154,918     $ 141,543     $ 300,609     $ 286,918  
Cost of revenues       56,255       52,770       114,841       110,773  
Gross margin       98,663       88,773       185,768       176,145  
Operating expenses:                  
Research and development       41,844       37,387       84,329       74,969  
Selling, general and administrative       36,017       32,357       70,628       61,510  
Operating expenses       77,861       69,744       154,957       136,479  
Operating income       20,802       19,029       30,811       39,666  
Other income (expense):                  
Interest income       200       152       502       487  
Interest expense       (780 )     (831 )     (1,578 )     (1,673 )
Other income (expense), net       (6 )     114       61       62  
Income before income taxes       20,216       18,464       29,796       38,542  
Provision for income taxes       5,937       5,852       7,407       5,896  
                                   

Net income

    $ 14,279     $ 12,612     $ 22,389     $ 32,646  
                   
Earnings per share:                  
Basic     $ 0.33     $ 0.30     $ 0.52     $ 0.77  
Diluted     $ 0.32     $ 0.29     $ 0.51     $ 0.76  
                   
Weighted-average common shares outstanding:                  
Basic       43,462       42,552       43,271       42,370  
Diluted       44,218       43,269       44,137       43,191  
     
     

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

     

Non-GAAP Income
Statement Items

 

Three Months Ended
June 28, 2014

   

GAAP
Measure

 

GAAP
Percent of
Revenue

 

Stock
Compensation
Expense

 

Intangible
Asset
Amortization

 

Acquisition
Related
Items

 

Non-
GAAP
Measure

 

Non-GAAP
Percent of
Revenue

Revenues   $ 154,918                        
                             
Gross margin     98,663     63.7 %   $ 178   $ 390   $ --     $ 99,231   64.1 %
                             
Research and

development

    41,844     27.0 %     4,327     3,104     --      

34,413

  22.2 %
                             
Selling, general and

administrative

    36,017    

23.3

%

    4,777     729    

(822

)

   

31,333

  20.3 %
                             
Operating income     20,802     13.4 %     9,282     4,223     (822 )     33,485   21.6 %
                             
                             

Non-GAAP Diluted
Earnings Per Share

 

Three Months Ended
June 28, 2014

   
     
       

GAAP
Measure

 

Stock
Compensation
Expense

 

Intangible
Asset
Amortization

 

Acquisition
Related
Items

 

Non-
GAAP
Measure

   
Net income       $ 14,279     $ 8,695   $ 3,388   $ (822 )   $ 25,540    
                             
Diluted shares outstanding     44,218       --     --     --       44,218    
                             
Diluted earnings per share   $ 0.32                 $ 0.58    
                               
                               

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

     
Business Outlook  

Three Months Ending
September 27, 2014

    High   Low
Estimated GAAP diluted earnings per share   $ 0.24   $ 0.18
         
Estimated non-GAAP charges     0.27     0.27
         
Estimated non-GAAP diluted earnings per share   $ 0.51   $ 0.45
           
           

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

           
     

June 28,
2014

 

December 28,
2013

Assets          
Current assets:          
Cash and cash equivalents     $ 93,290     $ 95,800  
Short-term investments       235,645       179,593  
Accounts receivable, net of allowances for doubtful accounts of

$788 at June 28, 2014 and $797 at December 28, 2013

      69,042       72,124  
Inventories       45,557       45,271  
Deferred income taxes       17,658       18,878  
Prepaid expenses and other current assets       47,785       47,651  
Total current assets       508,977       459,317  
Long-term investments       10,993       10,632  
Property and equipment, net       129,357       132,445  
Goodwill       228,781       228,781  
Other intangible assets, net       124,106       131,593  
Other assets, net       22,251       28,382  
Total assets     $ 1,024,465     $ 991,150  
           
Liabilities and Stockholders’ Equity          
Current liabilities:          
Accounts payable     $ 24,745     $ 22,126  
Current portion of long-term debt       10,000       7,500  
Accrued expenses       65,672       45,975  
Deferred income on shipments to distributors       33,437       30,853  
Income taxes       896       2,693  
Total current liabilities       134,750       109,147  
Long-term debt       82,500       87,500  
Other non-current liabilities       29,610       55,941  
Total liabilities       246,860       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;

43,406 and 42,779 shares issued and outstanding at

June 28, 2014 and December 28, 2013, respectively

      4       4  
Additional paid-in capital       65,199       48,630  
Retained earnings       713,001       690,612  
Accumulated other comprehensive loss       (599 )     (684 )
Total stockholders' equity       777,605       738,562  
Total liabilities and stockholders' equity     $ 1,024,465     $ 991,150  
       
       

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

       
      Six Months Ended
     

June 28,
2014

 

June 29,
2013

Operating Activities          
Net income     $ 22,389     $ 32,646  
Adjustments to reconcile net income to cash provided by operating activities:          
Depreciation of property and equipment       6,427       6,634  
Amortization of other intangible assets and other assets       8,839       5,635  
Stock-based compensation expense       18,559       13,684  
Income tax benefit (shortfall) from stock-based awards       377       (489 )
Excess income tax benefit from stock-based awards       (589 )     (243 )
Deferred income taxes       4,665       9,277  
Changes in operating assets and liabilities:          
Accounts receivable       3,082       9,388  
Inventories       (123 )     (1,028 )
Prepaid expenses and other assets       3,394       5,023  
Accounts payable       3,846       (2,271 )
Accrued expenses       (4,902 )     (6,013 )
Deferred income on shipments to distributors       2,584       293  
Income taxes       (5,130 )     (6,439 )
Net cash provided by operating activities       63,418       66,097  
           
Investing Activities          
Purchases of available-for-sale investments       (117,744 )     (121,994 )
Proceeds from sales and maturities of available-for-sale investments       61,803       146,870  
Purchases of property and equipment       (3,339 )     (6,498 )
Purchases of other assets       (2,726 )     (2,438 )
Net cash provided by (used in) investing activities       (62,006 )     15,940  
           
Financing Activities          
Proceeds from issuance of common stock, net of shares withheld for taxes       8,943       9,512  
Excess income tax benefit from stock-based awards       589       243  
Repurchases of common stock       (10,954 )     --  
Payments on debt       (2,500 )     (3,750 )
Net cash provided by (used in) financing activities       (3,922 )     6,005  
           
Increase (decrease) in cash and cash equivalents       (2,510 )     88,042  
Cash and cash equivalents at beginning of period       95,800       105,426  
Cash and cash equivalents at end of period     $ 93,290     $ 193,468  

 

Contact:

Silicon Labs
Jalene Hoover, +1-512-428-1610
Jalene.Hoover@silabs.com