Press Releases

Silicon Labs Announces Fourth Quarter 2017 Results
-- Q4 Revenue Tops $200 Million --

AUSTIN, Texas, Jan. 31, 2018 /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 fourth quarter ended December 30, 2017. Revenue in the fourth quarter ended at the high end of guidance at $201 million, up from $199 million in the third quarter, and establishing a new all-time record. Fourth quarter GAAP (loss) per share was $(0.11), which includes an approximate $(0.60) per share impact from U.S. corporate tax reform, resulting from a $26 million charge to the GAAP tax provision. Fourth quarter non-GAAP diluted earnings per share were $0.93.

"We are very pleased to report outstanding fourth quarter and full-year 2017 financial performance, including 10 percent year-on-year product revenue growth for Q4 and 11 percent for the year," said Tyson Tuttle, CEO of Silicon Labs. "With the combined effort of our 1,300 employees and the support of our business partners and customers worldwide, we have transformed our business to address large, high-quality, sustainable and growing market trends in IoT, green energy and Internet infrastructure. Becoming a $1 billion company is within our sight."

Fourth Quarter Financial Highlights

  • IoT revenue established a record, increasing to $109 million, up 10% sequentially and 28% year-on-year.
  • Infrastructure revenue increased to $39 million, up 1% sequentially and 5% year-on-year.
  • Broadcast revenue declined to $36 million, down 16% sequentially and 11% year-on-year.
  • Access revenue declined to $16 million, down 3% sequentially and 16% year-on-year.

On a GAAP basis:

  • GAAP gross margin was 59.3%.
  • GAAP R&D expenses were $53 million.
  • GAAP SG&A expenses were $40 million.
  • GAAP operating income as a percentage of revenue was 13.1%.
  • GAAP diluted loss per share was $(0.11).

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, the effect of the Tax Cuts & Jobs Act of 2017, and certain other items as set forth in the reconciliation tables below:

  • Non-GAAP gross margin was 59.5%.
  • Non-GAAP R&D expenses were $42 million.
  • Non-GAAP SG&A expenses were $33 million.
  • Non-GAAP operating income as a percentage of revenue was 22.2%.
  • Non-GAAP diluted earnings per share were $0.93.

Product Highlights

  • Released dynamic multiprotocol software for Silicon Labs' Wireless Gecko portfolio, a first-of-its-kind solution with RTOS scheduling, enabling simultaneous operation of Zigbee and Bluetooth low energy on a single SoC.
  • Introduced the Si54x Ultra Series™ I2C-programmable crystal oscillators, providing superior jitter performance and frequency flexibility for 100/200/400G applications.
  • Enabled Hager Group's building automation module solution based on Silicon Labs' EFR32 Wireless Gecko SoC.
  • Announced new Si117x biosensors, which add electrocardiogram measurement and deliver high heart rate monitoring accuracy, while minimizing power consumption for all-day monitoring in health and fitness devices.

Business Highlights

  • Announced a definitive agreement to acquire Sigma Designs subject to certain closing conditions which, if not met, would revert to an asset sale of Sigma Designs' Z-Wave business. On January 23, 2018, Sigma Designs announced that the parties would revert to the asset sale of the Z-Wave business to Silicon Labs for $240 million, pursuant to the terms of the definitive agreement and contingent upon approval by Sigma Designs' shareholders.
  • Won the Global Semiconductor Alliance's "Most Respected Public Semiconductor Company" award for the third year in a row.

Business Outlook

The company expects revenue in the first quarter to be in the range of $196 million to $202 million, and also estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 59.0%.
  • GAAP operating expenses at approximately $98.0 million.
  • GAAP effective tax rate at (15.0)%.
  • GAAP diluted earnings per share between $0.42 and $0.48.

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 between 59.0% and 59.5%.
  • Non-GAAP operating expenses at approximately $80.0 million.
  • Non-GAAP effective tax rate between 12.0% and 13.0%.
  • Non-GAAP diluted earnings per share between $0.73 and $0.79.

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 88340275. The replay will be available through February 28, 2018.

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

 

Year Ended

 

December 30,
2017

 

December 31,
2016

 

December 30,
2017

 

December 31,
2016

 

Revenues

$201,018

 

$182,610

 

$768,867

 

$697,626

 

Cost of revenues

81,754

 

73,134

 

314,676

 

276,122

 

Gross margin

119,264

 

109,476

 

454,191

 

421,504

 

Operating expenses:

               

   Research and development

52,735

 

50,626

 

209,491

 

199,744

 

   Selling, general and administrative

40,139

 

38,767

 

159,726

 

155,483

 

Operating expenses

92,874

 

89,393

 

369,217

 

355,227

 

Operating income

26,390

 

20,083

 

84,974

 

66,277

 

Other income (expense):

               

   Interest income and other, net

1,963

 

357

 

6,057

 

806

 

   Interest expense

(4,863)

 

(648)

 

(14,128)

 

(2,587)

 

Income before income taxes

23,490

 

19,792

 

76,903

 

64,496

 

Provision (benefit) for income taxes

28,342

 

(317)

 

29,811

 

3,002

 
                 

Net income (loss)

$   (4,852)

 

$  20,109

 

$  47,092

 

$  61,494

 
                 

Earnings (loss) per share:

               

   Basic

$     (0.11)

 

$      0.48

 

$      1.11

 

$      1.47

 

   Diluted

$     (0.11)

 

$      0.47

 

$      1.09

 

$      1.45

 
                 

Weighted-average common shares outstanding:

               

   Basic

42,656

 

41,850

 

42,446

 

41,713

 

   Diluted

42,656

 

42,728

 

43,332

 

42,376

 

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

 

Non-GAAP Income
Statement Items

 

Three Months Ended

December 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

 

$201,018

                       
                             

Gross margin

 

119,264

 

59.3%

 

$     287

 

$      --

 

$  --

 

$119,551

 

59.5%

                             

Research and

   development

 

52,735

 

26.2%

 

5,611

 

4,943

 

--

 

42,181

 

21.0%

                             

Selling, general and

   administrative

 

40,139

 

20.0%

 

5,847

 

1,647

 

(110)

 

32,755

 

16.3%

                             

Operating income

 

26,390

 

13.1%

 

11,745

 

6,590

 

(110)

 

44,615

 

22.2%

                             
                             

Non-GAAP
Earnings Per Share

 

Three Months Ended

December 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 (loss)

 

$ (4,852)

 

$11,745

 

$6,590

 

$(110)

 

$2,748

$24,631

 

$40,752

                           
   

GAAP

Measure

 

Dilutive Securities Excluded From GAAP Measure Due to Net Loss

 

Non-GAAP

Measure

Diluted shares

   outstanding

 

42,656

 

1,088

 

43,744

                           

Diluted earnings

   (loss) per share

 

$   (0.11)

                   

$    0.93

                             

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

 

Business Outlook

 

Three Months Ending

March 31, 2018

   

GAAP

Measure

 

Non-GAAP

Adjustments

 

Non-GAAP

Measure

Gross margin

 

59.0%

 

0.25%

 

59.25%

             

Operating expenses

 

$98

 

$18

 

$80

             

Effective tax rate

 

(15.0)%

 

27.5%

 

12.5%

             

Diluted earnings per share - low

 

$0.42

 

$0.31

 

$0.73

             

Diluted earnings per share - high

 

$0.48

 

$0.31

 

$0.79

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 
 

December 30,

 2017

 

December 31,
2016

Assets

     

Current assets:

     

   Cash and cash equivalents

$   269,366

 

$   141,106

   Short-term investments

494,657

 

153,961

   Accounts receivable, net

71,367

 

74,401

   Inventories

73,132

 

59,578

   Prepaid expenses and other current assets

39,120

 

61,805

Total current assets

947,642

 

490,851

Property and equipment, net

127,682

 

129,559

Goodwill

288,227

 

276,130

Other intangible assets, net

83,144

 

103,565

Other assets, net

88,387

 

81,739

Total assets

$1,535,082

 

$1,081,844

       

Liabilities and Stockholders' Equity

     

Current liabilities:

     

   Accounts payable

$     38,851

 

$     39,577

   Deferred income on shipments to distributors

50,115

 

45,568

   Other current liabilities

73,359

 

54,550

Total current liabilities

162,325

 

139,695

Long-term debt

--

 

72,500

Convertible debt

341,879

 

--

Other non-current liabilities

77,862

 

42,691

Total liabilities

582,066

 

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;  

      42,707 and 41,889 shares issued and outstanding at

      December 30, 2017 and December 31, 2016, respectively

4

 

4

   Additional paid-in capital

102,862

 

24,463

   Retained earnings

851,307

 

801,999

   Accumulated other comprehensive income (loss)

(1,157)

 

492

Total stockholders' equity

953,016

 

826,958

Total liabilities and stockholders' equity

$1,535,082

 

$1,081,844

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Year Ended

 

December 30,
2017

 

December 31,
2016

Operating Activities

     

Net income

$  47,092

 

$  61,494

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

     

   Depreciation of property and equipment

14,766

 

13,216

   Amortization of other intangible assets and other assets

27,246

 

27,715

   Amortization of debt discount and debt issuance costs 

10,146

 

--

   Stock-based compensation expense

44,752

 

39,628

   Income tax shortfall from stock-based awards

--

 

(1,671)

   Deferred income taxes

(26,452)

 

(4,087)

   Changes in operating assets and liabilities:

     

      Accounts receivable

3,234

 

46

      Inventories

(13,416)

 

(6,093)

      Prepaid expenses and other assets

25,266

 

(3,568)

      Accounts payable

(468)

 

263

      Other current liabilities and income taxes

61,924

 

2,879

      Deferred income on shipments to distributors

4,453

 

9,713

      Other non-current liabilities

(9,022)

 

(10,625)

Net cash provided by operating activities

189,521

 

128,910

       

Investing Activities

     

Purchases of available-for-sale investments

(636,363)

 

(185,231)

Sales and maturities of available-for-sale investments

294,452

 

161,921

Purchases of property and equipment

(12,252)

 

(10,927)

Purchases of other assets

(4,960)

 

(8,801)

Acquisitions of businesses, net of cash acquired

(15,168)

 

(6,546)

Net cash used in investing activities

(374,291)

 

(49,584)

       

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

(15,753)

 

(10,561)

Proceeds from the issuance of common stock

11,815

 

13,299

Payment of acquisition-related contingent consideration

--

 

(9,500)

Net cash provided by (used in) financing activities

313,030

 

(52,305)

       

Increase in cash and cash equivalents

128,260

 

27,021

Cash and cash equivalents at beginning of period

141,106

 

114,085

Cash and cash equivalents at end of period

$269,366

 

$141,106

 

 

SOURCE Silicon Labs