Press Releases

Silicon Labs Announces Second Quarter 2019 Results
- IoT Powering Ahead on Wireless Strength -

AUSTIN, Texas, July 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 second quarter ended June 29, 2019. Revenue was at the midpoint of guidance at $206.7 million, up 10 percent from $188.1 million in the first quarter. Second quarter GAAP loss per share was $(0.37), which includes an approximate $(0.64) per share impact from a $28.1 million discrete tax charge to the GAAP tax provision related to a tax ruling on intercompany cost sharing arrangements. Second quarter non-GAAP diluted earnings per share were $0.83

(PRNewsfoto/Silicon Labs)

"We grew second quarter revenue 10 percent sequentially despite macro headwinds impacting the semiconductor industry," said Tyson Tuttle, CEO of Silicon Labs. "We are gaining traction in our target markets, with total estimated design win lifetime revenue establishing a new record, up 25 percent year-on-year. Wireless products achieved more than one billion units shipped to date and established record revenue in the second quarter."

Second Quarter Financial Highlights

  • IoT revenue increased to $125 million, up 17% sequentially and 7% year-on-year.
  • Infrastructure revenue declined to $44 million, down 4% sequentially and 15% year-on-year.
  • Broadcast revenue was flat sequentially at $26 million, and down 23% year-on-year.
  • Access revenue increased to $12 million, up 24% sequentially and down 23% year-on-year.

On a GAAP basis:                                                                                         

  • GAAP gross margin was 61.5%.
  • GAAP R&D expenses were $64 million.
  • GAAP SG&A expenses were $49 million.
  • GAAP operating income as a percentage of revenue was 7.0%.
  • GAAP diluted loss per share was $(0.37).

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 61.6%.
  • Non-GAAP R&D expenses were $50 million.
  • Non-GAAP SG&A expenses were $38 million.
  • Non-GAAP operating income as a percentage of revenue was 19.2%.
  • Non-GAAP diluted earnings per share were $0.83.

Product Results

  • Announced a collaboration with Signify, the world leader in lighting, to help ecosystem partners develop smart light switches for Philips Hue systems based on Silicon Labs' Zigbee technology.  
  • Announced the adoption of Silicon Labs' microcontrollers in the latest smart lock products from Yunding, an innovative smart device and cloud-based service provider in China and a key member of the Xiaomi Mi Ecosystem.
  • Announced a collaboration with Notion, a home monitoring solution provider, on a battery-powered smart home sensor built on Silicon Labs' Wireless Gecko platform.
  • Launched Si539x jitter attenuating clocks with a fully integrated crystal, improving system reliability and performance while simplifying PCB layout in high-speed networking designs.
  • Introduced high-performance Si5388 clocks combining Silicon Labs' DSPLL technology with standards-compliant software to provide a complete timing solution and simplifying the adoption of the IEEE 1588 standard.

Business Outlook

The company expects third quarter revenue to be in the range of  $213 to $223 million, with sequential growth in IoT and Broadcast, Access flat, and a decline in Infrastructure, and estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 60.0%.
  • GAAP operating expenses at approximately $112 million.
  • GAAP effective tax rate of 10.5%.
  • GAAP diluted earnings per share between $0.29 and $0.39.

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 60.0%.  
  • Non-GAAP operating expenses at approximately $89 million.
  • Non-GAAP effective tax rate at 12.5%.
  • Non-GAAP diluted earnings per share between $0.79 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 (877) 344-7529 (US) or (412) 317-0088 (International) and entering access code 10133130. The replay will be available through August 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 Operations

 (In thousands, except per share data)

(Unaudited)

       
 

Three Months Ended

 

Six Months Ended

 

June 29,
2019

 

June 30,
2018

 

June 29,
2019

 

June 30,
2018

Revenues

$206,709

 

$217,106

 

$394,822

 

$422,490

Cost of revenues

79,660

 

85,814

 

151,899

 

166,961

Gross profit

127,049

 

131,292

 

242,923

 

255,529

Operating expenses:

             

   Research and development

63,856

 

59,495

 

125,422

 

114,323

   Selling, general and administrative

48,637

 

53,796

 

97,853

 

99,490

Operating expenses

112,493

 

113,291

 

223,275

 

213,813

Operating income

14,556

 

18,001

 

19,648

 

41,716

Other income (expense):

             

   Interest income and other, net

3,696

 

1,609

 

6,519

 

4,811

   Interest expense

(5,005)

 

(4,888)

 

(10,002)

 

(9,771)

Income before income taxes

13,247

 

14,722

 

16,165

 

36,756

Provision (benefit) for income taxes

29,276

 

442

 

26,796

 

(3,929)

               

Net income (loss)

$ (16,029)

 

$  14,280

 

$ (10,631)

 

$  40,685

               

Earnings (loss) per share:

             

   Basic

$     (0.37)

 

$      0.33

 

$     (0.25)

 

$      0.94

   Diluted

$     (0.37)

 

$      0.32

 

$     (0.25)

 

$      0.92

               

Weighted-average common shares outstanding:

             

   Basic

43,386

 

43,312

 

43,287

 

43,138

   Diluted

43,386

 

44,294

 

43,287

 

44,106

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

 

Non-GAAP Income
Statement Items

 

Three Months Ended

June 29, 2019

   

GAAP

Measure

 

GAAP

Percent of
Revenue

 

Stock

Compensation
Expense

 

Intangible
Asset
Amortization

 

Acquisition
Related Items

 

Non-GAAP

Measure

 

Non-GAAP

Percent of
Revenue

Revenues

 

$206,709

                       
                             

Gross profit

 

127,049

 

61.5%

 

$    326

 

$        --

 

$      --

 

$127,375

 

61.6%

                             

Research and

   development

 

63,856

 

30.9%

 

6,459

 

7,687

 

--

 

49,710

 

24.0%

                             

Selling, general and

   administrative

 

48,637

 

23.6%

 

6,884

 

2,469

 

1,248

 

38,036

 

18.4%

                             

Operating income

 

14,556

 

7.0%

 

13,669

 

10,156

 

1,248

 

39,629

 

19.2%

                             
                             

Non-GAAP

Earnings Per Share

 

Three Months Ended

June 29, 2019

   

GAAP

Measure

 

Stock

Compensation
Expense*

 

Intangible
Asset
Amortization*

 

Acquisition
Related
Items*

 

Non-cash Interest Expense*

 

Income Tax
Adjustments

 

Non-GAAP

Measure

Net income (loss)

 

$(16,029)

 

$13,669

 

$10,156

 

$1,248

 

$2,900

 

$24,476

 

$36,420

                             
   

GAAP

Measure

 

Dilutive Securities Excluded From GAAP Measure Due to Net Loss

 

Non-GAAP

Measure

Diluted shares

   outstanding

 

43,386

         

624

         

44,010

                             

Diluted earnings

   (loss) per share

 

$    (0.37)

                     

$    0.83

 

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

 

Business Outlook

 

Three Months Ending

September 28, 2019

   

GAAP

Measure

 

Non-GAAP

Adjustments

 

Non-GAAP

Measure

Gross margin

 

60.0%

 

0.0%

 

60.0%

             

Operating expenses

 

$112.0

 

$23.0

 

$89.0

             

Effective tax rate

 

10.5%

 

2.0%

 

12.5%

             

Diluted earnings per share - low

 

$0.29

 

$0.50

 

$0.79

             

Diluted earnings  per share - high

 

$0.39

 

$0.50

 

$0.89

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 
 

June 29,
2019

 

December 29,
2018

Assets

     

Current assets:

     

   Cash and cash equivalents

$   189,549

 

$   197,043

   Short-term investments

452,265

 

416,779

   Accounts receivable, net

72,301

 

73,194

   Inventories

73,865

 

74,972

   Prepaid expenses and other current assets

59,662

 

64,650

Total current assets

847,642

 

826,638

Property and equipment, net

137,644

 

139,049

Goodwill

397,344

 

397,344

Other intangible assets, net

150,356

 

170,832

Other assets, net

69,954

 

90,491

Total assets

$1,602,940

 

$1,624,354

       

Liabilities and Stockholders' Equity

     

Current liabilities:

     

   Accounts payable

$     41,585

 

$     41,171

   Deferred revenue and returns liability

21,266

 

22,494

   Other current liabilities

68,186

 

81,180

Total current liabilities

131,037

 

144,845

Convertible debt

361,430

 

354,771

Other non-current liabilities

59,202

 

57,448

Total liabilities

551,669

 

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;  

      43,344 and 43,088 shares issued and outstanding at

      June 29, 2019 and December 29, 2018, respectively

4

 

4

   Additional paid-in capital

99,665

 

107,517

   Retained earnings

950,712

 

961,343

   Accumulated other comprehensive income (loss)

890

 

(1,574)

Total stockholders' equity

1,051,271

 

1,067,290

Total liabilities and stockholders' equity

$1,602,940

 

$1,624,354

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Six Months Ended

 

June 29,
2019

 

June 30,
2018

 

Operating Activities

       

Net income (loss)

$ (10,631)

 

$  40,685

 

Adjustments to reconcile net income (loss) to cash provided by operating activities:

       

   Depreciation of property and equipment

8,447

 

7,643

 

   Amortization of other intangible assets and other assets

20,476

 

18,366

 

   Amortization of debt discount and debt issuance costs 

6,659

 

6,354

 

   Stock-based compensation expense

26,253

 

24,311

 

   Deferred income taxes

24,043

 

(5,830)

 

   Changes in operating assets and liabilities:

       

      Accounts receivable

893

 

(16,705)

 

      Inventories

1,118

 

(565)

 

      Prepaid expenses and other assets

11,326

 

(1,759)

 

      Accounts payable

5,321

 

2,980

 

      Other current liabilities and income taxes

(18,101)

 

(17,249)

 

      Deferred income, deferred revenue and returns liability

(1,228)

 

(4,193)

 

      Other non-current liabilities

(3,222)

 

(3,260)

 

Net cash provided by operating activities

71,354

 

50,778

 
         

Investing Activities

       

Purchases of available-for-sale investments

(184,170)

 

(148,437)

 

Sales and maturities of available-for-sale investments

151,428

 

295,405

 

Purchases of property and equipment

(9,402)

 

(11,406)

 

Purchases of other assets

(2,588)

 

(5,893)

 

Acquisition of business, net of cash acquired

--

 

(239,729)

 

Net cash used in investing activities

(44,732)

 

(110,060)

 
         

Financing Activities

       

Repurchases of common stock

(26,716)

 

(3,397)

 

Payment of taxes withheld for vested stock awards

(14,509)

 

(18,408)

 

Proceeds from the issuance of common stock

7,109

 

6,585

 

Net cash used in financing activities

(34,116)

 

(15,220)

 
         

Decrease in cash and cash equivalents

(7,494)

 

(74,502)

 

Cash and cash equivalents at beginning of period

197,043

 

269,366

 

Cash and cash equivalents at end of period

$189,549

 

$194,864

 

 

 

SOURCE Silicon Labs