Press Releases

Silicon Labs Announces Record Revenue in Q2
Broadcast Products to Drive Sequential Revenue Decline in Q3
We delivered another record quarter, and are encouraged by the traction we are seeing in our strategic growth businesses including our Internet of Things, Infrastructure and Broadcast automotive products

AUSTIN, Texas--(BUSINESS WIRE)--Silicon Labs (NASDAQ: SLAB), a leading provider of microcontroller, wireless connectivity, analog and sensor solutions for the Internet of Things (IoT), today reported financial results for its second quarter ended July 4, 2015. Revenue in the second quarter was within guidance and established a new record at $164.9 million, up from $163.7 million in the first quarter.

Second Quarter Financial Highlights

On a GAAP basis:

  • Gross margin was 59.1 percent
  • R&D expenses were $47.5 million
  • SG&A expenses were $41.0 million
  • Operating income as a percentage of revenue was 5.5 percent
  • Diluted earnings per share were $0.17

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 60.3 percent
  • R&D expenses were $37.4 million
  • SG&A expenses were $32.7 million
  • Operating income as a percentage of revenue was 17.8 percent
  • Diluted earnings per share were $0.56

Business Highlights

  • IoT products delivered an all-time high revenue quarter at $68.9 million
  • Infrastructure products established record revenue at $30.3 million
  • Broadcast revenue was down, at $39.4 million, with weakness in consumer partially offset by a record in automotive
  • Access revenue was consistent with expectations at $26.3 million

Product Highlights

  • Announced our highly anticipated Thread networking solution, delivering a wireless software stack built upon our many years of expertise and the industry’s most advanced mesh networking software development tools.
  • Introduced the easy-to-use Bluetooth Smart Ready® BT121 module, offering a dual-mode solution for applications requiring Bluetooth Smart and Bluetooth Classic connectivity.
  • Announced EFM32™ Happy Gecko microcontrollers, providing an energy-friendly, plug-and-play solution for adding USB connectivity to battery-powered IoT applications.
  • Released the next generation of the Simplicity Studio™ development environment, enabling concurrent MCU and wireless design for IoT applications.
  • Introduced the Si5380 clock IC, the industry’s most highly integrated timing solution for wireless infrastructure applications including small and macro cell base stations.
  • Announced the Si88xx family of high-speed, multi-channel digital isolators designed to provide a highly integrated solution for signal and power isolation.
  • Introduced the industry’s first complete Wireless M-Bus platform solution designed to simplify the development of wirelessly connected smart meters in the European market.

Business Outlook

The company expects revenue in the third quarter to be in the range of $151 million to $156 million. Third quarter diluted earnings per share are expected to be between $0.04 and $0.10 on a GAAP basis and between $0.39 and $0.45 on a non-GAAP basis.

“We delivered another record quarter, and are encouraged by the traction we are seeing in our strategic growth businesses including our Internet of Things, Infrastructure and Broadcast automotive products,” said Tyson Tuttle, CEO of Silicon Labs. “However, we believe macro trends continue to stifle the global demand for TVs, with the latest market estimates calling for a reduction in unit demand for 2015. Accordingly, we expect third quarter Broadcast revenue to decline again by approximately 15 percent, counter to typical 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 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 entering conference ID 39717393. The replay will be available through August 28, 2015.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and system solutions for the Internet of Things, Infrastructure, industrial automation, consumer and automotive markets. We solve the electronics industry’s toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity. Backed by our world-class engineering teams with strong software and mixed-signal design expertise, Silicon Labs empowers developers with the tools and technologies they need to advance quickly and easily from initial idea to final product. 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; risks related to the successful completion of the development and implementation of Bluegiga’s technology; risks associated with the development of modules and the Company’s limited operating history with modules; risks that the acquisition may not yield the expected benefits due to the failure to properly integrate the acquired business and employees; risks that our competitors that supply products incorporated in Bluegiga’s modules may disrupt such supply; risks that the acquired business’ products and processes under development may fail to achieve market acceptance; risks of disputes regarding the acquired business and intellectual property; 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 “S” symbol, the Silicon Laboratories logo, the Silicon Labs logo, EFM32 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
     

July 4,
2015

   

June 28,
2014

     

July 4,
2015

   

June 28,
2014

Revenues     $ 164,856       $ 154,918         $ 328,561       $ 300,609  
Cost of revenues       67,428         56,255           134,764         114,841  
Gross margin       97,428         98,663           193,797         185,768  
Operating expenses:                          
Research and development       47,465         41,844           94,322         84,329  
Selling, general and administrative       40,960         36,017           83,260         70,628  
Operating expenses       88,425         77,861           177,582         154,957  
Operating income       9,003         20,802           16,215         30,811  
Other income (expense):                          
Interest income       166         200           358         502  
Interest expense       (728 )       (780 )         (1,473 )       (1,578 )
Other income (expense), net       90         (6 )         498         61  
Income before income taxes       8,531         20,216           15,598         29,796  
Provision for income taxes       956         5,937           1,645         7,407  
                                           

Net income

    $ 7,575       $ 14,279         $ 13,953       $ 22,389  
                           
Earnings per share:                          
Basic     $ 0.18       $ 0.33         $ 0.33       $ 0.52  
Diluted     $ 0.17       $ 0.32         $ 0.32       $ 0.51  
                           
Weighted-average common shares outstanding:                          
Basic       42,823         43,462           42,617         43,271  
Diluted       43,461         44,218           43,305         44,137  
                                           
       
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
       

Non-GAAP Income
Statement Items

   

Three Months Ended
July 4, 2015

     

GAAP
Measure

   

GAAP
Percent of
Revenue

   

Stock
Compensation
Expense

   

Intangible
Asset
Amortization

   

Acquisition
Related
Items

   

Termination
Costs

   

Non-
GAAP
Measure

   

Non-GAAP
Percent of
Revenue

Revenues     $ 164,856                                          
                                                 
Gross margin       97,428       59.1 %     $ 229     $ 390     $ 1,324     $ --       $ 99,371     60.3 %
                                                 

Research and development

      47,465       28.8 %       4,960       5,116       --       --        

37,389

    22.7 %
                                                 

Selling, general and administrative

      40,960      

24.8

%

      5,868       1,219       767      

392

       

32,714

    19.8 %
                                                 
Operating income       9,003       5.5 %       11,057       6,725       2,091       392         29,268     17.8 %
                                                 
                                                 

Non-GAAP
Earnings Per Share

   

Three Months Ended
July 4, 2015

     
     

GAAP
Measure

   

Stock
Compensation
Expense*

   

Intangible
Asset
Amortization*

   

Acquisition
Related
Items*

   

Termination
Costs*

   

Tax
Impact of
Adjustments

   

Non-
GAAP
Measure

     
Net income     $ 7,575     $ 11,057       $ 6,725     $ 2,091     $ 392     $ (3,379 )     $ 24,461      
                                                 

Diluted shares outstanding

      43,461                                    

43,461

     
                                                 

Diluted earnings per share

    $ 0.17                                   $ 0.56      
                                                     

* Represents pre-tax amounts

                                                     
       

Unaudited Forward-Looking Statements Regarding Business Outlook

       
Business Outlook    

Three Months Ending
October 3, 2015

      High     Low
Estimated GAAP diluted earnings per share     $ 0.10     $ 0.04
             
Estimated non-GAAP charges       0.35       0.35
             
Estimated non-GAAP diluted earnings per share     $ 0.45     $ 0.39
                 
             
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
             
     

July 4,
2015

   

January 3,
2015

Assets            
Current assets:            
Cash and cash equivalents     $ 125,051       $ 141,706  
Short-term investments       147,556         193,489  

Accounts receivable, net of allowances for doubtful accounts of $624 at July 4, 2015 and $786 at January 3, 2015

      71,403         70,367  
Inventories       60,746         52,631  
Deferred income taxes       17,815         21,173  
Prepaid expenses and other current assets       59,025         49,171  
Total current assets       481,596         528,537  
Long-term investments       7,179         7,419  
Property and equipment, net       130,994         132,820  
Goodwill       263,925         228,781  
Other intangible assets, net       128,196         115,021  
Other assets, net       24,041         29,983  
Total assets     $ 1,035,931       $ 1,042,561  
             
Liabilities and Stockholders’ Equity            
Current liabilities:            
Accounts payable     $ 34,553       $ 38,922  
Current portion of long-term debt       10,000         10,000  
Accrued expenses       49,327         73,646  
Deferred income on shipments to distributors       38,573         38,662  
Income taxes       942         2,084  
Total current liabilities       133,395         163,314  
Long-term debt       74,562         77,500  
Other non-current liabilities       41,761         43,691  
Total liabilities       249,718         284,505  
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; 42,908 and 42,225 shares issued and outstanding at July 4, 2015 and January 3, 2015, respectively

      4         4  
Additional paid-in capital       44,152         29,501  
Retained earnings       742,586         728,633  
Accumulated other comprehensive loss       (529 )       (82 )
Total stockholders' equity       786,213         758,056  
Total liabilities and stockholders' equity     $ 1,035,931       $ 1,042,561  
                     
       
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
       
      Six Months Ended
     

July 4,
2015

   

June 28,
2014

Operating Activities            
Net income     $ 13,953       $ 22,389  
Adjustments to reconcile net income to cash provided by operating activities:            
Depreciation of property and equipment       6,029         6,427  
Amortization of other intangible assets and other assets       14,697         8,839  
Stock-based compensation expense       21,576         18,559  
Income tax benefit from stock-based awards       2,781         377  
Excess income tax benefit from stock-based awards       (2,056 )       (589 )
Deferred income taxes       3,892         4,665  
Changes in operating assets and liabilities:            
Accounts receivable       1,724         3,082  
Inventories       (6,534 )       (123 )
Prepaid expenses and other assets       452         3,394  
Accounts payable       (3,359 )       3,846  
Accrued expenses       (1,027 )       19,697  
Deferred income on shipments to distributors       (2,132 )       2,584  
Income taxes       (7,171 )       (5,130 )
Other non-current liabilities       (5,622 )       (24,599 )
Net cash provided by operating activities       37,203         63,418  
             
Investing Activities            
Purchases of available-for-sale investments       (46,908 )       (117,744 )
Proceeds from sales and maturities of available-for-sale investments       92,759         61,803  
Purchases of property and equipment       (4,714 )       (3,339 )
Purchases of other assets       (1,871 )       (2,726 )
Acquisition of business, net of cash acquired       (76,899 )       --  
Net cash used in investing activities       (37,633 )       (62,006 )
             
Financing Activities            
Proceeds from issuance of common stock, net of cash paid for withheld taxes       1,684         8,943  
Excess income tax benefit from stock-based awards       2,056         589  
Repurchases of common stock       (10,418 )       (10,954 )
Payment of acquisition-related contingent consideration       (4,464 )       --  
Payments on debt       (5,083 )       (2,500 )
Net cash used in financing activities       (16,225 )       (3,922 )
             
Decrease in cash and cash equivalents       (16,655 )       (2,510 )
Cash and cash equivalents at beginning of period       141,706         95,800  
Cash and cash equivalents at end of period     $ 125,051       $ 93,290  

 

Contact:

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