Press Releases

Silicon Labs Announces First Quarter 2016 Results
Record Revenue in IoT and Infrastructure Drives Solid Beat
Over the past 20 years, we’ve established ourselves as a leading innovator of silicon, software and solutions for a more connected world. The launch of our multiprotocol Wireless Gecko portfolio enables game-changing functionality for our customers and will drive our growth and success in the broad IoT market.

AUSTIN, Texas--(BUSINESS WIRE)--Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its first quarter ended April 2, 2016. Revenue in the first quarter slightly exceeded the high end of guidance at $162.0 million, up from $160.1 million in the fourth quarter. First quarter non-GAAP earnings per share (EPS) exceeded the high end of guidance at $0.51.

First Quarter Financial Highlights

  • IoT revenue exceeded expectations and established a new record, increasing to $70.9 million, or 5.5% sequentially
  • Infrastructure revenue established a new record, increasing to $31.6 million, or 3.3% sequentially
  • Broadcast revenue declined to $38.4 million, or 3.1% sequentially
  • Access revenue declined to $21.1 million, or 6.7% sequentially

On a GAAP basis:

  • Gross margin was 59.0%
  • R&D expenses were $49.0 million
  • SG&A expenses were $39.6 million
  • Operating income as a percentage of revenue was 4.2%
  • Diluted earnings per share were $0.14

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 59.6%
  • R&D expenses were $38.5 million
  • SG&A expenses were $33.0 million
  • Operating income as a percentage of revenue was 15.5%
  • Diluted earnings per share were $0.51

Product Highlights

  • Introduced the pre-certified BGM113 Blue Gecko Bluetooth® module offering an optimal combination of small footprint, ease of use and low-energy wireless technology.
  • Launched the Wizard Gecko WGM110 Wi-Fi® module for applications where strong RF performance, low power consumption and fast time to market are key requirements.
  • Introduced the multiprotocol Wireless Gecko SoC portfolio supporting ZigBee®, Thread, Bluetooth low energy and proprietary protocols for IoT applications.
  • Launched the Si827x isolated gate driver family providing the industry’s highest noise immunity for power supplies, solar inverters, and electric and hybrid electric vehicles.
  • Announced the high-performance jitter-attenuating Si534xH clock family that reduces the cost and complexity of high-speed 100G/400G coherent optical networking applications.

Business Outlook

Including $5 million in patent sale revenue, the company expects revenue in the second quarter to be in the range of $168 million to $173 million. Second quarter diluted earnings per share are expected to be between $0.23 and $0.29 on a GAAP basis, and between $0.61 and $0.67 on a non-GAAP basis, which reflects an expected $0.09 after-tax benefit from the patent sale transaction.

“Strong top line performance, fueled by record revenue in IoT and Infrastructure, combined with good gross margin results and favorable opex, drove a solid beat in first quarter non-GAAP EPS,” said Tyson Tuttle, CEO of Silicon Labs. “Over the past 20 years, we’ve established ourselves as a leading innovator of silicon, software and solutions for a more connected world. The launch of our multiprotocol Wireless Gecko portfolio enables game-changing functionality for our customers and will drive our growth and success in the broad IoT market.”

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 (www.silabs.com) under Investor Relations. 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 83470730. The replay will be available through May 27, 2016.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and 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; cyber-attacks against our products and our networks; 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, 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
       

April 2,
2016

   

April 4,
2015

Revenues       $ 162,025       $ 163,705  
Cost of revenues         66,494         67,336  
Gross margin         95,531         96,369  
Operating expenses:              
Research and development         49,046         46,857  
Selling, general and administrative         39,637         42,300  
Operating expenses         88,683         89,157  
Operating income         6,848         7,212  
Other income (expense):              
Interest income         271         192  
Interest expense         (655 )       (745 )
Other income (expense), net         (391 )       408  
Income before income taxes         6,073         7,067  
Provision for income taxes         265         689  
                       

Net income

      $ 5,808       $ 6,378  
               
Earnings per share:              
Basic       $ 0.14       $ 0.15  
Diluted       $ 0.14       $ 0.15  
               
Weighted-average common shares outstanding:              
Basic         41,629         42,412  
Diluted         42,199         43,149  
               
         
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
         

Non-GAAP Income
Statement Items

     

Three Months Ended
April 2, 2016

       

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       $ 162,025                                          
                                                   
Gross margin         95,531       59.0 %     $ 266     $ 390     $ 426       $ --       $ 96,613     59.6 %
                                                   

Research and development

        49,046       30.3 %       4,910       5,616       --         --        

38,520

    23.8 %
                                                   

Selling, general and administrative

        39,637      

24.5

%

      5,168       1,419       (24 )      

104

       

32,970

    20.3 %
                                                   
Operating income         6,848       4.2 %       10,344       7,425       402         104         25,123     15.5 %
                                                   
                                                   
Non-GAAP

Earnings Per Share

     

Three Months Ended
April 2, 2016

     
       

GAAP
Measure

   

Stock
Compensation
Expense*

   

Intangible
Asset
Amortization*

   

Acquisition
Related
Items*

   

Termination
Costs*

   

Income Tax
Adjustments

   

Non-
GAAP
Measure

     
Net income       $ 5,808     $ 10,344       $ 7,425     $ 402     $ 104       $ (2,618 )     $ 21,465      
                                                   

Diluted shares outstanding

        42,199                                    

42,199

     
                                                   

Diluted earnings per share

      $ 0.14                                  

$

0.51

     
                                                   

* Represents pre-tax amounts

                                                   
         

Unaudited Forward-Looking Statements Regarding Business Outlook

         
Business Outlook      

Three Months Ending
July 2, 2016

        High     Low
Estimated GAAP diluted earnings per share       $ 0.29     $ 0.23
               
Estimated non-GAAP charges         0.38       0.38
               
Estimated non-GAAP diluted earnings per share       $ 0.67     $ 0.61
               
               
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
               
       

April 2,
2016

   

January 2,
2016

Assets              
Current assets:              
Cash and cash equivalents       $ 126,690       $ 114,085  
Short-term investments         126,824         128,901  

Accounts receivable, net of allowances for doubtful accounts of $657 at April 2, 2016 and $671 at January 2, 2016

        74,591         73,601  
Inventories         48,923         53,895  
Prepaid expenses and other current assets         44,222         52,658  
Total current assets         421,250         423,140  
Long-term investments         6,845         7,126  
Property and equipment, net         130,099         131,132  
Goodwill         272,722         272,722  
Other intangible assets, net         113,800         121,354  
Other assets, net         53,566         55,989  
Total assets       $ 998,282       $ 1,011,463  
               
Liabilities and Stockholders’ Equity              
Current liabilities:              
Accounts payable       $ 42,579       $ 42,127  
Current portion of long-term debt         10,000         10,000  
Accrued expenses         58,391         52,131  
Deferred income on shipments to distributors         41,042         35,448  
Income taxes         3,084         2,615  
Total current liabilities         155,096         142,321  
Long-term debt         65,000         67,500  
Other non-current liabilities         28,739         40,528  
Total liabilities         248,835         250,349  
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; 41,743 and 41,727 shares issued and outstanding at April 2, 2016 and January 2, 2016, respectively

        4         4  
Additional paid-in capital         --         13,868  
Retained earnings         750,256         747,749  
Accumulated other comprehensive loss         (813 )       (507 )
Total stockholders' equity         749,447         761,114  
Total liabilities and stockholders' equity       $ 998,282       $ 1,011,463  
               
         
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
         
        Three Months Ended
       

April 2,
2016

   

April 4,
2015

Operating Activities              
Net income       $ 5,808       $ 6,378  
Adjustments to reconcile net income to cash provided by operating activities:              
Depreciation of property and equipment         3,310         2,987  
Amortization of other intangible assets and other assets         7,980         6,521  
Stock-based compensation expense         10,344         10,519  
Income tax benefit (shortfall) from stock-based awards         (1,025 )       1,773  
Excess income tax benefit from stock-based awards         (6 )       (1,785 )
Deferred income taxes         (38 )       6,844  
Changes in operating assets and liabilities:              
Accounts receivable         (990 )       6,564  
Inventories         4,580         (6,424 )
Prepaid expenses and other assets         9,159         8,584  
Accounts payable         1,559         447  
Accrued expenses         6,260         (5,046 )
Deferred income on shipments to distributors         5,558         (1,049 )
Income taxes         494         (8,409 )
Other non-current liabilities         (10,584 )       (3,816 )
Net cash provided by operating activities         42,409         24,088  
               
Investing Activities              
Purchases of available-for-sale investments         (44,547 )       (13,037 )
Proceeds from sales and maturities of available-for-sale investments         46,654         57,739  
Purchases of property and equipment         (2,303 )       (1,991 )
Purchases of other assets         (1,107 )       (935 )
Acquisition of business, net of cash acquired         --         (76,899 )
Net cash used in investing activities         (1,303 )       (35,123 )
               
Financing Activities              

Payment of taxes withheld for vested stock awards, net of proceeds from the issuance of common stock

        (7,523 )       (2,561 )
Excess income tax benefit from stock-based awards         6         1,785  
Repurchases of common stock         (18,484 )       (10,138 )
Payment of acquisition-related contingent consideration         --         (4,464 )
Payments on debt         (2,500 )       (2,583 )
Net cash used in financing activities         (28,501 )       (17,961 )
               
Increase (decrease) in cash and cash equivalents         12,605         (28,996 )
Cash and cash equivalents at beginning of period         114,085         141,706  
Cash and cash equivalents at end of period       $ 126,690       $ 112,710  

 

Contact:

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