Press Releases

Silicon Labs Announces Third Quarter Results
Revenue and Earnings Exceed Guidance
We delivered another record revenue quarter in Infrastructure, with continued strength in IoT and Broadcast automotive, and a less than expected decline in Broadcast consumer.

AUSTIN, Texas--(BUSINESS WIRE)--Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and system solutions for a smarter, more connected world, today reported financial results for its third quarter ended October 3, 2015. Revenue in the third quarter was just above the high end of guidance at $156.2 million, down from $164.9 million in the second quarter. Non-GAAP earnings per share for the third quarter were $0.51 versus the Company’s third quarter guidance range of $0.39 to $0.45.

Third Quarter Financial Highlights

On a GAAP basis:

  • Gross margin was 59.8 percent
  • R&D expenses were $46.5 million
  • SG&A expenses were $35.7 million
  • Operating income as a percentage of revenue was 7.2 percent
  • Diluted earnings per share were $0.23

On a non-GAAP basis (results exclude the impact of stock compensation, amortization of 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 $36.6 million
  • SG&A expenses were $31.4 million
  • Operating income as a percentage of revenue was 16.7 percent
  • Diluted earnings per share were $0.51

Business Highlights

  • IoT product revenue declined slightly to $65.3 million, delivering 25% year-on-year growth
  • Infrastructure product revenue established a new record at $31.1 million
  • Broadcast revenue declined less than expected to $36.5 million
  • Access revenue declined to $23.3 million, as expected

Product Highlights

Business Outlook

The company expects revenue in the fourth quarter to be in the range of $156 million to $161 million. Fourth quarter diluted earnings per share are expected to be between $0.05 and $0.11 on a GAAP basis and between $0.45 and $0.51 on a non-GAAP basis.

“Strong top line performance combined with favorable opex drove a solid beat in third quarter EPS,” said Tyson Tuttle, CEO of Silicon Labs. “We delivered another record revenue quarter in Infrastructure, with continued strength in IoT and Broadcast automotive, and a less than expected decline in Broadcast consumer.

“Despite the challenging macro environment, we are confident in our strategy and proud of our accomplishments. We have a rich product pipeline and see strong demand for our silicon and software. We are engaging with top industry leaders who are rapidly adopting our IoT solutions and propelling our design win activity to record levels. We are executing on our vision and strategy and excited about what lies ahead.”

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 39717394. The replay will be available through November 26, 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; 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 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     Nine Months Ended
     

October 3,
2015

 

September 27,
2014

   

October 3,
2015

 

September 27,
2014

Revenues     $ 156,194     $ 158,144       $ 484,755     $ 458,753  
Cost of revenues       62,759       62,033         197,523       176,874  
Gross margin       93,435       96,111         287,232       281,879  
Operating expenses:                    
Research and development       46,483       42,517         140,805       126,846  
Selling, general and administrative       35,729       43,990         118,989       114,618  
Operating expenses       82,212       86,507         259,794       241,464  
Operating income       11,223       9,604         27,438       40,415  
Other income (expense):                    
Interest income       186       231         544       733  
Interest expense       (687 )     (768 )       (2,160 )     (2,346 )
Other income (expense), net       (280 )     42         218       103  
Income before income taxes       10,442       9,109         26,040       38,905  
Provision for income taxes       467       3,501         2,112       10,908  
                                     

Net income

    $ 9,975     $ 5,608       $ 23,928     $ 27,997  
                     
Earnings per share:                    
Basic     $ 0.24     $ 0.13       $ 0.56     $ 0.65  
Diluted     $ 0.23     $ 0.13       $ 0.55     $ 0.64  
                     
Weighted-average common shares outstanding:                    
Basic       42,331       43,112         42,522       43,218  
Diluted       42,795       43,815         43,135       44,030  
     
     
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
     
Non-GAAP Income Statement Items  

Three Months Ended
October 3, 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   $ 156,194                                          
                                               
Gross margin     93,435       59.8 %     $ 249     $ 390       $ --       $ --       $ 94,074     60.2 %
                                               

Research and development

    46,483       29.8 %       4,623       5,250         --         --        

36,610

    23.4 %
                                               

Selling, general and administrative

    35,729      

22.8

%

      4,350       1,219         (1,351 )      

118

       

31,393

    20.1 %
                                               
Operating income     11,223       7.2 %       9,222       6,859         (1,351 )       118         26,071     16.7 %
                                               
                                               
Non-GAAP

Earnings Per Share

 

Three Months Ended
October 3, 2015

     
   

GAAP
Measure

   

Stock
Compensation
Expense*

   

Intangible
Asset
Amortization*

   

Acquisition
Related
Items*

   

Termination
Costs*

   

Tax
Impact of
Adjustments

   

Non-GAAP
Measure

     
Net income   $ 9,975     $ 9,222       $ 6,859     $ (1,351 )     $ 118       $ (2,996 )     $ 21,827      
                                               

Diluted shares outstanding

    42,795                                    

42,795

     
                                               

Diluted earnings per share

  $ 0.23                                   $ 0.51      
                                                   

* Represents pre-tax amounts

       

Unaudited Forward-Looking Statements Regarding Business Outlook

       
Business Outlook    

Three Months Ending
January 2, 2016

      High     Low
Estimated GAAP diluted earnings per share     $ 0.11     $ 0.05
             
Estimated non-GAAP charges       0.40       0.40
             
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)
             
     

October 3,
2015

   

January 3,
2015

Assets            
Current assets:            
Cash and cash equivalents     $ 135,640       $ 141,706  
Short-term investments       112,670         193,489  

Accounts receivable, net of allowances for doubtful accounts of $695 at October 3, 2015 and $786 at January 3, 2015

      61,030         70,367  
Inventories       51,957         52,631  
Deferred income taxes       19,155         21,173  
Prepaid expenses and other current assets       48,903         49,171  
Total current assets       429,355         528,537  
Long-term investments       7,240         7,419  
Property and equipment, net       130,283         132,820  
Goodwill       263,925         228,781  
Other intangible assets, net       121,208         115,021  
Other assets, net       26,040         29,983  
Total assets     $ 978,051       $ 1,042,561  
             
Liabilities and Stockholders’ Equity            
Current liabilities:            
Accounts payable     $ 30,306       $ 38,922  
Current portion of long-term debt       10,000         10,000  
Accrued expenses       50,080         73,646  
Deferred income on shipments to distributors       37,881         38,662  
Income taxes       1,074         2,084  
Total current liabilities       129,341         163,314  
Long-term debt       70,000         77,500  
Other non-current liabilities       37,234         43,691  
Total liabilities       236,575         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; 41,570 and 42,225 shares issued and outstanding at October 3, 2015 and January 3, 2015, respectively

      4         4  
Additional paid-in capital       --         29,501  
Retained earnings       742,091         728,633  
Accumulated other comprehensive loss       (619 )       (82 )
Total stockholders' equity       741,476         758,056  
Total liabilities and stockholders' equity     $ 978,051       $ 1,042,561  
       
       
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
       
      Nine Months Ended
     

October 3,
2015

   

September 27,
2014

Operating Activities            
Net income     $ 23,928       $ 27,997  
Adjustments to reconcile net income to cash provided by operating activities:            
Depreciation of property and equipment       9,293         9,512  
Amortization of other intangible assets and other assets       21,686         13,090  
Stock-based compensation expense       30,798         28,173  
Income tax benefit from stock-based awards       1,727         413  
Excess income tax benefit from stock-based awards       (2,118 )       (654 )
Deferred income taxes       1,571         3,894  
Changes in operating assets and liabilities:            
Accounts receivable       12,097         769  
Inventories       2,259         (1,591 )
Prepaid expenses and other assets       8,409         12,627  
Accounts payable       (5,686 )       5,074  
Accrued expenses       (280 )       28,756  
Deferred income on shipments to distributors       (2,825 )       6,215  
Income taxes       (3,413 )       (4,898 )
Other non-current liabilities       (10,031 )       (21,790 )
Net cash provided by operating activities       87,415         107,587  
             
Investing Activities            
Purchases of available-for-sale investments       (55,433 )       (137,373 )
Proceeds from sales and maturities of available-for-sale investments       136,262         100,009  
Purchases of property and equipment       (7,281 )       (5,500 )
Purchases of other assets       (5,291 )       (3,339 )
Acquisition of business, net of cash acquired       (76,899 )       --  
Net cash used in investing activities       (8,642 )       (46,203 )
             
Financing Activities            
Proceeds from issuance of common stock, net of cash paid for withheld taxes       (77 )       8,559  
Excess income tax benefit from stock-based awards       2,118         654  
Repurchases of common stock       (71,448 )       (50,942 )
Payment of acquisition-related contingent consideration       (4,464 )       --  
Proceeds from issuance of long-term debt, net       81,238         --  
Payments on debt       (92,206 )       (3,750 )
Net cash used in financing activities       (84,839 )       (45,479 )
             
Increase (decrease) in cash and cash equivalents       (6,066 )       15,905  
Cash and cash equivalents at beginning of period       141,706         95,800  
Cash and cash equivalents at end of period     $ 135,640       $ 111,705  

 

Contact:

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