Press Releases

Silicon Labs Announces Third Quarter 2017 Results
-- Achieves All-Time Record Revenue --

AUSTIN, Texas, Oct. 25, 2017 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its third quarter ended September 30, 2017. Revenue in the third quarter ended at the high end of guidance at $199 million, up from $190 million in the second quarter, and establishing a new all-time record. Third quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.46 and $0.90, respectively.

"We are very pleased with our third quarter results, achieving record revenue in IoT and Infrastructure, and in total," said Tyson Tuttle, CEO of Silicon Labs. "Our portfolio is well positioned in high-quality growth markets, including IoT, infrastructure, green energy, and data communications, where we generate more than 70 percent of our total revenue, offering a long runway for growth and share gains."

Third Quarter Financial Highlights

  • IoT revenue established a record, increasing to $100 million, up 2% sequentially and 23% year-on-year.
  • Infrastructure revenue increased to $39 million, up 2% sequentially and 1% year-on-year.
  • Broadcast revenue increased to $43 million, up 17% sequentially and 6% year-on-year.
  • Access revenue declined to $17 million, down 3% sequentially and year-on-year.

On a GAAP basis:

  • GAAP gross margin was 58.7%.
  • GAAP R&D expenses were $52 million.
  • GAAP SG&A expenses were $40 million.
  • GAAP operating income as a percentage of revenue was 12.6%.
  • GAAP diluted earnings per share were $0.46.

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:

  • Non-GAAP gross margin was 58.8%.
  • Non-GAAP R&D expenses were $41 million.
  • Non-GAAP SG&A expenses were $32 million.
  • Non-GAAP operating income as a percentage of revenue was 21.8%.
  • Non-GAAP diluted earnings per share were $0.90.

Product Highlights

  • Launched the Si72xx magnetic sensor portfolio, featuring the industry's most flexible, configurable and feature-rich Hall-effect magnetic sensors.
  • Introduced a comprehensive USB Type-C™ reference design, simplifying the development of rechargeable battery packs used to power portable devices.
  • Launched the Si5381/82/86 wireless clock family, leveraging Silicon Labs' DSPLL technology to deliver an advanced timing solution that combines 4G/LTE and Ethernet clocking in a single IC.
  • Introduced the high-performance Si5332 clock family, offering the industry's most integrated timing solution for 10/25/100G networking and storage applications.
  • Launched the Si522xx PCIe clock family, providing ultra-low jitter, high integration and very low power for applications using PCI Express® (PCIe®) Gen 1/2/3/4.
  • Introduced a new portfolio of Global and Dual Eagle AM/FM receivers and digital radio tuners, and Digital Falcon coprocessors, enabling automakers and Tier 1 suppliers to address all automotive infotainment market segments.

Business Outlook

The company expects revenue in the fourth quarter to be in the range of $195 million to $201 million, and also estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 58.5%.
  • GAAP operating expenses at approximately $91.0 million.
  • GAAP effective tax rate at 11.0%.
  • GAAP diluted earnings per share between $0.40 and $0.46.

On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:

  • Non-GAAP gross margin at 58.5%.
  • Non-GAAP operating expenses at approximately $73.5 million.
  • Non-GAAP effective tax rate at 11.0%.
  • Non-GAAP diluted earnings per share between $0.83 and $0.89.

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 8462249. The replay will be available through November 25, 2017.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. 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.

CONTACT: Jalene Hoover, +1 (512) 428-1610, Jalene.Hoover@silabs.com

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,
2017

 

October 1,
2016

 

September 30,
2017

 

October 1,
2016

Revenues

$198,723

 

$178,083

 

$567,849

 

$515,016

Cost of revenues

82,149

 

69,880

 

232,922

 

202,988

Gross margin

116,574

 

108,203

 

334,927

 

312,028

Operating expenses:

             

   Research and development

52,000

 

48,437

 

156,756

 

149,118

   Selling, general and administrative

39,606

 

38,034

 

119,587

 

116,716

Operating expenses

91,606

 

86,471

 

276,343

 

265,834

Operating income

24,968

 

21,732

 

58,584

 

46,194

Other income (expense):

             

   Interest income and other, net

1,923

 

273

 

4,094

 

449

   Interest expense

(4,764)

 

(643)

 

(9,265)

 

(1,939)

Income before income taxes

22,127

 

21,362

 

53,413

 

44,704

Provision for income taxes

2,178

 

1,344

 

1,469

 

3,319

 

Net income

$  19,949

 

$  20,018

 

$  51,944

 

$  41,385

               

Earnings per share:

             

   Basic

$      0.47

 

$      0.48

 

$      1.23

 

$      0.99

   Diluted

$      0.46

 

$      0.47

 

$      1.20

 

$      0.98

               

Weighted-average common shares outstanding:

             

   Basic

42,553

 

41,614

 

42,376

 

41,673

   Diluted

43,374

 

42,307

 

43,194

 

42,263

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

 

Non-GAAP Income
Statement Items

 

Three Months Ended

September 30, 2017

   

GAAP

Measure

 

GAAP

Percent of
Revenue

 

Stock

Compensation
Expense

 

Intangible
Asset
Amortization

 

Acquisition
Related
Items

 

Non-GAAP

Measure

 

Non-GAAP

Percent of
Revenue

Revenues

 

$198,723

                       
                             

Gross margin

 

116,574

 

58.7%

 

$     281

 

$      --

 

$   --

 

$116,855

 

58.8%

                             

Research and

   development

 

52,000

 

26.2%

 

5,411

 

5,187

 

 

--

 

41,402

 

20.8%

                             

Selling, general and

   administrative

 

39,606

 

 

19.9%

 

5,663

 

1,647

 

161

 

32,135

 

 

16.2%

                             

Operating income

 

24,968

 

12.6%

 

11,355

 

6,834

 

161

 

43,318

 

21.8%

                           
                           

Non-GAAP
Earnings Per Share

 

Three Months Ended

September 30, 2017

   

GAAP

Measure

 

Stock

Compensation
Expense*

 

Intangible
Asset
Amortization*

 

Acquisition
Related
Items*

 

Non-cash
Interest
Expense*

 

Income Tax
Adjustments

 

Non-GAAP

Measure

Net income

 

$19,949

 

$11,355

 

$6,834

 

$161

 

$2,674

 

$(1,796)

 

$39,177

                             

Diluted shares

   outstanding

 

43,374

                     

 

43,374

                             

Diluted earnings

   per share

 

$    0.46

                     

 

$    0.90

                                     

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

 

Business Outlook

 

Three Months Ending

December 30, 2017

   

GAAP

Measure

 

Non-GAAP

Adjustments

 

Non-GAAP

Measure

Gross margin

 

58.5%

 

0.0%

 

58.5%

             

Operating expenses

 

$91.0

 

$17.5

 

$73.5

             

Effective tax rate

 

11.0%

 

0.0%

 

11.0%

             

Diluted earnings per share - low

 

$0.40

 

$0.43

 

$0.83

             

Diluted earnings per share - high

 

$0.46

 

$0.43

 

$0.89

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 
 

September 30,

 2017

 

December 31,
2016

Assets

     

Current assets:

     

   Cash and cash equivalents

$   236,459

 

$   141,106

   Short-term investments

482,396

 

153,961

   Accounts receivable, net

76,188

 

74,401

   Inventories

72,895

 

59,578

   Prepaid expenses and other current assets

37,563

 

61,805

Total current assets

905,501

 

490,851

Long-term investments

5,471

 

5,196

Property and equipment, net

129,075

 

129,559

Goodwill

288,629

 

276,130

Other intangible assets, net

89,859

 

103,565

Other assets, net

59,251

 

76,543

Total assets

$1,477,786

 

$1,081,844

       

Liabilities and Stockholders' Equity

     

Current liabilities:

     

   Accounts payable

$     38,857

 

$     39,577

   Accrued expenses

60,376

 

50,100

   Deferred income on shipments to distributors

56,701

 

45,568

   Income taxes

4,057

 

4,450

Total current liabilities

159,991

 

139,695

Long-term debt

--

 

72,500

Convertible debt

338,717

 

--

Other non-current liabilities

36,246

 

42,691

Total liabilities

534,954

 

254,886

Commitments and contingencies

     

Stockholders' equity:

     

   Preferred stock – $0.0001 par value; 10,000 shares authorized; no

      shares issued

--

 

--

   Common stock – $0.0001 par value; 250,000 shares authorized;  

      42,562 and 41,889 shares issued and outstanding at

      September 30, 2017 and December 31, 2016, respectively

4

 

4

   Additional paid-in capital

87,004

 

24,463

   Retained earnings

856,159

 

801,999

   Accumulated other comprehensive income (loss)

(335)

 

492

Total stockholders' equity

942,832

 

826,958

Total liabilities and stockholders' equity

$1,477,786

 

$1,081,844

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Nine Months Ended

 

September 30,
2017

 

October 1,
2016

 

Operating Activities

       

Net income

$  51,944

 

$  41,385

 

Adjustments to reconcile net income to cash provided by operating activities:

       

   Depreciation of property and equipment

11,068

 

9,912

 

   Amortization of other intangible assets and other assets

20,531

 

21,461

 

   Amortization of debt discount and debt issuance costs 

6,984

 

--

 

   Stock-based compensation expense

33,007

 

30,057

 

   Income tax shortfall from stock-based awards

--

 

(1,611)

 

   Deferred income taxes

(5,703)

 

(1,460)

 

   Changes in operating assets and liabilities:

       

      Accounts receivable

(1,587)

 

(11,322)

 

      Inventories

(13,196)

 

(1,558)

 

      Prepaid expenses and other assets

23,506

 

7,404

 

      Accounts payable

1,746

 

1,280

 

      Accrued expenses

9,720

 

8,930

 

      Deferred income on shipments to distributors

11,039

 

11,573

 

      Income taxes

(424)

 

1,459

 

      Other non-current liabilities

(7,269)

 

(10,891)

 

Net cash provided by operating activities

141,366

 

106,619

 
         

Investing Activities

       

Purchases of available-for-sale investments

(471,938)

 

(131,741)

 

Sales and maturities of available-for-sale investments

143,765

 

129,511

 

Purchases of property and equipment

(10,494)

 

(8,545)

 

Purchases of other assets

(2,622)

 

(4,994)

 

Acquisition of business, net of cash acquired

(13,658)

 

--

 

Net cash used in investing activities

(354,947)

 

(15,769)

 
         

Financing Activities

       

Proceeds from issuance of long-term debt, net

389,468

 

--

 

Payments on debt

(72,500)

 

(5,000)

 

Repurchases of common stock

--

 

(40,543)

 

Payment of taxes withheld for vested stock awards

(14,870)

 

(10,148)

 

Proceeds from the issuance of common stock

6,836

 

8,451

 

Payment of acquisition-related contingent consideration

--

 

(9,500)

 

Net cash provided by (used in) financing activities

308,934

 

(56,740)

 
         

Increase in cash and cash equivalents

95,353

 

34,110

 

Cash and cash equivalents at beginning of period

141,106

 

114,085

 

Cash and cash equivalents at end of period

$236,459

 

$148,195

 

 

 

SOURCE Silicon Labs