Press Releases

Silicon Labs Announces First Quarter 2019 Results
- Earnings Exceed Expectations -

AUSTIN, Texas, April 24, 2019 /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 first quarter ended March 30, 2019. Revenue was at the midpoint of guidance at $188.1 million, down from $215.5 million in the fourth quarter, with gross margin, opex and earnings per share (EPS) exceeding expectations. First quarter GAAP and non-GAAP diluted EPS were $0.12 and $0.59, respectively.

(PRNewsfoto/Silicon Labs)

"We exited 2018 with strong design win momentum and leading positions in key secular growth markets," said Tyson Tuttle, CEO of Silicon Labs. "Despite macro turbulence, Q1 bookings were robust, signaling a Q2 rebound. We believe we are well-positioned to outperform the market."

First Quarter Financial Highlights

  • IoT revenue declined to $106 million, down 11% sequentially and up 3% year-on-year.
  • Infrastructure revenue was about flat sequentially at $46 million, down 7% year-on-year.
  • Broadcast revenue declined to $26 million, down 25% sequentially and 27% year-on-year.
  • Access revenue declined to $10 million, down 36% sequentially and 43% year-on-year.

On a GAAP basis:                                                                                         

  • GAAP gross margin was 61.6%.
  • GAAP R&D expenses were $62 million.
  • GAAP SG&A expenses were $49 million.
  • GAAP operating income as a percentage of revenue was 2.7%.
  • GAAP diluted earnings per share were $0.12.

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 61.8%.
  • Non-GAAP R&D expenses were $48 million.
  • Non-GAAP SG&A expenses were $40 million.
  • Non-GAAP operating income as a percentage of revenue was 14.9%.
  • Non-GAAP diluted earnings per share were $0.59.

Product Results

  • Launched the new Si89xx family of isolated ICs delivering precise current and voltage measurement with ultra-low temperature drift for industrial, green energy and EV/HEV applications.
  • Introduced a comprehensive portfolio of clock and buffer timing solutions providing best-in-class jitter performance to meet the new PCI Express Gen 5 specification.
  • Released the first SoC products in the next-generation Wireless Gecko Series 2 portfolio, delivering the industry's most versatile and scalable IoT connectivity platform designed to make IoT products more powerful, efficient and reliable.

Business Outlook

The company expects second quarter revenue to be in the range of $202 to $212 million, reflecting sequential growth in IoT, Broadcast and Access, with Infrastructure flat, and estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 60.0%.
  • GAAP operating expenses at approximately $112.5 million.
  • GAAP effective tax rate of 5.0%.
  • GAAP diluted earnings per share between $0.16 and $0.26.

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 approximately 60.5%.
  • Non-GAAP operating expenses at approximately $89.0 million.
  • Non-GAAP effective tax rate at 12.0%.
  • Non-GAAP diluted earnings per share between $0.70 and $0.80.

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 (877) 344-7529 (US) or (412) 317-0088 (International) and entering access code 10130132. The replay will be available through May 24, 2019.

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. 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 Silicon Labs' distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks associated with international activities (including trade barriers); risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with its 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 Silicon Labs' products and its 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

 

March 30,
2019

 

March 31,
2018

Revenues

$188,113

 

$205,384

Cost of revenues

72,239

 

81,147

Gross profit

115,874

 

124,237

Operating expenses:

     

   Research and development

61,566

 

54,828

   Selling, general and administrative

49,216

 

45,694

Operating expenses

110,782

 

100,522

Operating income

5,092

 

23,715

Other income (expense):

     

   Interest income and other, net

2,823

 

3,202

   Interest expense

(4,997)

 

(4,883)

Income before income taxes

2,918

 

22,034

Provision (benefit) for income taxes

(2,480)

 

(4,371)

Net income

$    5,398

 

$  26,405

       

Earnings per share:

     

   Basic

$      0.12

 

$      0.61

   Diluted

$      0.12

 

$      0.60

       

Weighted-average common shares outstanding:

     

   Basic

43,189

 

42,963

   Diluted

43,716

 

43,918

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

 

Non-GAAP Income
Statement Items

 

Three Months Ended

March 30, 2019

   

GAAP

Measure

 

GAAP

Percent of
Revenue

 

Stock

Compensation
Expense

 

Intangible Asset
Amortization

 

Non-GAAP

Measure

 

Non-GAAP

Percent of
Revenue

Revenues

 

$188,113

                   
                         

Gross profit

 

115,874

 

61.6%

 

$    318

 

$        --

 

$116,192

 

61.8%

                         

Research and
  
development

 

61,566

 

32.7%

 

6,097

 

7,711

 

47,758

 

25.4%

                         

Selling, general and
  
administrative

 

49,216

 

26.2%

 

6,169

 

2,608

 

40,439

 

21.5%

                         

Operating income

 

5,092

 

2.7%

 

12,584

 

10,319

 

27,995

 

14.9%

                         
     

Non-GAAP
Earnings Per Share

 

Three Months Ended

March 30, 2019

   

GAAP

Measure

 

Stock

Compensation
Expense*

 

Intangible
Asset
Amortization*

 

Non-cash
Interest
Expense*

 

Income Tax
Adjustments

 

Non-GAAP

Measure

Net income

 

$  5,398

 

$12,584

 

$10,319

 

$2,886

 

$(5,340)

 

$25,847

                         

Diluted shares
   
outstanding

 

43,716

                 

43,716

                         

Diluted earnings
   
per share

 

$    0.12

                 

$    0.59

 

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

 

Business Outlook

 

Three Months Ending

June 29, 2019

   

GAAP

Measure

 

Non-GAAP

Adjustments

 

Non-GAAP

Measure

Gross margin

 

60.0%

 

0.50%

 

60.5%

             

Operating expenses

 

$112.5

 

$23.5

 

$89.0

             

Effective tax rate

 

5.0%

 

7.0%

 

12.0%

             

Diluted earnings per share - low

 

$0.16

 

$0.54

 

$0.70

             

Diluted earnings  per share - high

 

$0.26

 

$0.54

 

$0.80

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 
 

March 30,
2019

 

December 29,
2018

Assets

     

Current assets:

     

   Cash and cash equivalents

$   231,144

 

$   197,043

   Short-term investments

382,710

 

416,779

   Accounts receivable, net

69,871

 

73,194

   Inventories

70,489

 

74,972

   Prepaid expenses and other current assets

60,274

 

64,650

Total current assets

814,488

 

826,638

Property and equipment, net

138,819

 

139,049

Goodwill

397,344

 

397,344

Other intangible assets, net

160,512

 

170,832

Other assets, net

110,764

 

90,491

Total assets

$1,621,927

 

$1,624,354

       

Liabilities and Stockholders' Equity

     

Current liabilities:

     

   Accounts payable

$     41,544

 

$     41,171

   Deferred revenue and returns liability

23,971

 

22,494

   Other current liabilities

69,240

 

81,180

Total current liabilities

134,755

 

144,845

Convertible debt

358,093

 

354,771

Other non-current liabilities

71,597

 

57,448

Total liabilities

564,445

 

557,064

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; 
    
43,341 and 43,088 shares issued and outstanding at
    
March 30, 2019 and December 29, 2018, respectively

4

 

4

   Additional paid-in capital

90,988

 

107,517

   Retained earnings

966,741

 

961,343

   Accumulated other comprehensive loss

(251)

 

(1,574)

Total stockholders' equity

1,057,482

 

1,067,290

Total liabilities and stockholders' equity

$1,621,927

 

$1,624,354

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Three Months Ended

 

March 30,
2019

 

March 31,
2018

 

Operating Activities

       

Net income

$    5,398

 

$  26,405

 

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

       

   Depreciation of property and equipment

4,137

 

3,704

 

   Amortization of other intangible assets and other assets

10,320

 

6,427

 

   Amortization of debt discount and debt issuance costs 

3,321

 

3,169

 

   Stock-based compensation expense

12,584

 

12,192

 

   Deferred income taxes

(3,530)

 

(4,780)

 

   Changes in operating assets and liabilities:

       

      Accounts receivable

3,323

 

(3,307)

 

      Inventories

4,488

 

(3,368)

 

      Prepaid expenses and other assets

6,410

 

(17,169)

 

      Accounts payable

714

 

13,030

 

      Other current liabilities and income taxes

(15,996)

 

(9,643)

 

      Deferred income, deferred revenue and returns liability

1,477

 

(2,599)

 

      Other non-current liabilities

(631)

 

(1,849)

 

Net cash provided by operating activities

32,015

 

22,212

 
         

Investing Activities

       

Purchases of available-for-sale investments

(63,577)

 

(52,821)

 

Sales and maturities of available-for-sale investments

99,068

 

128,975

 

Purchases of property and equipment

(3,874)

 

(4,102)

 

Purchases of other assets

(414)

 

(4,698)

 

Net cash provided by investing activities

31,203

 

67,354

 
         

Financing Activities

       

Repurchases of common stock

(15,004)

 

--

 

Payment of taxes withheld for vested stock awards

(14,113)

 

(17,871)

 

Proceeds from the issuance of common stock

--

 

1,211

 

Net cash used in financing activities

(29,117)

 

(16,660)

 
         

Increase in cash and cash equivalents

34,101

 

72,906

 

Cash and cash equivalents at beginning of period

197,043

 

269,366

 

Cash and cash equivalents at end of period

$231,144

 

$342,272

 

 

 

SOURCE Silicon Labs