Press Releases

Silicon Labs Announces Fourth Quarter 2019 Results
-- Continued Industry Leadership in a Challenging Macro Environment --

AUSTIN, Texas, Jan. 29, 2020 /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 28, 2019. Revenue was within the guidance range at $219.4 million, down from $223.3 million in the third quarter. Fourth quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.22 and $0.84, respectively.

(PRNewsfoto/Silicon Labs)

"Despite a challenging macro environment, we are pleased to have outperformed the market with secular growth drivers in IoT and Infrastructure providing some offset to macro weakness," said Tyson Tuttle, CEO of Silicon Labs. "IoT and Infrastructure now represent 80 percent of our total revenue mix, with each offering a double-digit growth opportunity backed by our large pipeline and strong market traction."

Fourth Quarter Financial Highlights

  • IoT revenue declined to $128 million, down 1% sequentially and up 7% year-on-year.
  • Infrastructure revenue increased to $48 million, up 7% sequentially and 5% year-on-year.
  • Broadcast revenue declined to $28 million, down 17% sequentially and 20% year-on-year.
  • Access revenue increased to $15 million, up 4% sequentially and 1% year-on-year.

On a GAAP basis:                                                                                         

  • GAAP gross margin was 60.7%.
  • GAAP R&D expenses were $69 million.
  • GAAP SG&A expenses were $51 million.
  • GAAP operating income as a percentage of revenue was 6.0%.
  • GAAP diluted earnings per share were $0.22.

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

  • Non-GAAP gross margin was 60.9%.
  • Non-GAAP R&D expenses were $52 million.
  • Non-GAAP SG&A expenses were $39 million.
  • Non-GAAP operating income as a percentage of revenue was 19.3%.
  • Non-GAAP diluted earnings per share were $0.84.

Product Results

  • Collaborated with the Z-Wave® Alliance to open the Z-Wave Specification as a ratified, multi-source wireless smart home standard available to all silicon and stack vendors for development.
  • Launched the Bluetooth® EFR32BG22 system-on-chip solution delivering a market-leading combination of security features, wireless performance, energy efficiency, and software tools and stacks to meet the demand for high-volume, battery-powered IoT products.
  • Partnered with Quuppa, a world leader in advanced location systems, to deliver a highly accurate indoor asset tracking solution combining Quuppa's Intelligent Location System with asset tags based on Silicon Labs' Bluetooth products.
  • Announced a collaboration with MicroEJ, a leader in trusted embedded environments, to provide an integrated Wi-Fi® solution to securely and cost effectively connect a wide range of IoT devices.
  • Collaborated with Keysight, a test and measurement solutions provider, to streamline the validation of timing solutions critical to system-level designs.

Business Highlights

  • Won the Global Semiconductor Alliance's (GSA) "Most Respected Public Semiconductor Company" award for the fifth year in a row.
  • Joined the Connected Home over IP project launched by Amazon, Apple, Google and the Zigbee® Alliance to develop and promote standardization of the smart home ecosystem to increase compatibility among smart home products, driving adoption and growth in the industry.
  • To further accelerate smart home market growth, unveiled plans to host Silicon Labs' "Works With" Smart Home Conference in Austin, a premier, one-of-a-kind event to be held in September 2020 exclusively for smart home designers and developers interested in creating products that work with the world's largest smart home ecosystems.

Business Outlook

The company expects first quarter revenue to be in the range of $209 to $219 million, with Infrastructure up, Broadcast flat, and declines in IoT and Access, and estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 59.5%.
  • GAAP operating expenses at approximately $127 million.
  • GAAP effective tax rate of 0.0%.
  • GAAP diluted (loss)/earnings per share between $(0.03) and $0.07.

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

  • Non-GAAP gross margin between 59.5% and 60.0%.
  • Non-GAAP operating expenses at approximately $97.5 million.
  • Non-GAAP effective tax rate at 11.5%.
  • Non-GAAP diluted earnings per share between $0.57 and $0.67.

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 10137937. The replay will be available through February 29, 2020.

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; risks associated with international activities (including trade barriers); intellectual property litigation risks; risks associated with acquisitions and divestitures;  product liability risks; difficulties managing Silicon Labs' distributors, manufacturers and subcontractors; dependence on a limited number of products and customers; 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 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

 

Year Ended

 

December 28,
2019

 

December 29,
2018

 

December 28,
2019

 

December 29,
2018

Revenues

$219,438

 

$215,534

 

$837,554

 

$868,267

Cost of revenues

86,167

 

85,291

 

327,270

 

346,868

Gross profit

133,271

 

130,243

 

510,284

 

521,399

Operating expenses:

             

   Research and development

69,176

 

62,933

 

257,150

 

238,347

   Selling, general and administrative

50,866

 

48,948

 

196,437

 

197,844

Operating expenses

120,042

 

111,881

 

453,587

 

436,191

Operating income

13,229

 

18,362

 

56,697

 

85,208

Other income (expense):

             

   Interest income and other, net

3,494

 

(273)

 

13,185

 

6,647

   Interest expense

(5,105)

 

(4,991)

 

(20,233)

 

(19,694)

Income before income taxes

11,618

 

13,098

 

49,649

 

72,161

Provision (benefit) for income taxes

1,903

 

(2,047)

 

30,384

 

(11,430)

 

Net income

$    9,715

 

$  15,145

 

$  19,265

 

$  83,591

               

Earnings per share:

             

   Basic

$      0.22

 

$      0.35

 

$      0.44

 

$      1.94

   Diluted

$      0.22

 

$      0.35

 

$      0.43

 

$      1.90

               

Weighted-average common shares outstanding:

             

   Basic

43,450

 

43,109

 

43,346

 

43,159

   Diluted

44,801

 

43,774

 

44,290

 

44,044

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

 

(In thousands, except per share data)

 

Non-GAAP Income Statement Items

 

Three Months Ended

December 28, 2019

   

GAAP

Measure

 

GAAP

Percent of
Revenue

 

Stock

Compensation
Expense

 

Intangible
Asset
Amortization

 

Acquisition
Related
Items

 

Restructuring
Charges

 

Non-GAAP

Measure

 

Non-GAAP

Percent of
Revenue

Revenues

 

$219,438

                           
                                 

Gross margin

 

133,271

 

60.7%

 

$     328

 

$      --

 

$     55

 

$      --

 

$133,654

 

60.9%

                                 

Research and
 
development

 

69,176

 

31.5%

 

7,157

 

7,145

 

 

--

 

 

2,847

 

52,027

 

23.7%

                                 

Selling, general and
  
administrative

 

50,866

 

 

23.2%

 

7,273

 

2,494

 

950

 

791

 

39,358

 

 

17.9%

                                 

Operating income

 

13,229

 

6.0%

 

14,758

 

9,639

 

1,005

 

3,638

 

42,269

 

19.3%

                                 

Non-GAAP Earnings Per Share

 

Three Months Ended
December 28, 2019

   

GAAP

Measure

 

Stock

Compensation
Expense*

 

Intangible
Asset
Amortization*

 

Acquisition
Related
Items*

 

Restructuring
Charges*

 

Non-cash
Interest
Expense*

 

Income

Tax

Adjustments

 

Non-
GAAP
Measure

Net income

 

$  9,715

 

$14,758

 

$9,639

 

$1,005

 

$3,638

 

$3,001

 

$(3,918)

 

$37,838

                                 

Diluted shares
  
outstanding

 

44,801

                         

 

44,801

                                 

Diluted earnings
  
per share

 

$    0.22

                         

 

$    0.84

                                 
 

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

 

Business Outlook

 

Three Months Ending

April 4, 2020

   

GAAP

Measure

 

Non-GAAP

Adjustments

 

Non-GAAP

Measure

Gross margin

 

59.50%

 

0.25%

 

59.75%

             

Operating expenses

 

$127.0

 

$29.5

 

$97.5

             

Effective tax rate

 

0%

 

11.5%

 

11.5%

             

Diluted earnings (loss) per share - low

 

$(0.03)

 

$0.60

 

$0.57

             

Diluted earnings per share - high

 

$0.07

 

$0.60

 

$0.67

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 
 

December 28,
2019

 

December 29,
2018

Assets

     

Current assets:

     

   Cash and cash equivalents

$   227,146

 

$   197,043

   Short-term investments

498,825

 

416,779

   Accounts receivable, net

75,639

 

73,194

   Inventories

73,057

 

74,972

   Prepaid expenses and other current assets

69,192

 

64,650

Total current assets

943,859

 

826,638

Property and equipment, net

135,939

 

139,049

Goodwill

398,402

 

397,344

Other intangible assets, net

134,279

 

170,832

Other assets, net

62,374

 

90,491

Total assets

$1,674,853

 

$1,624,354

       

Liabilities and Stockholders' Equity

     

Current liabilities:

     

   Accounts payable

$     38,899

 

$     41,171

   Deferred revenue and returns liability

19,251

 

22,494

   Other current liabilities

79,551

 

81,180

Total current liabilities

137,701

 

144,845

Convertible debt

368,257

 

354,771

Other non-current liabilities

53,844

 

57,448

Total liabilities

559,802

 

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;  

      43,496 and 43,088 shares issued and outstanding at

      December 28, 2019 and December 29, 2018, respectively

4

 

4

   Additional paid-in capital

133,793

 

107,517

   Retained earnings

980,608

 

961,343

   Accumulated other comprehensive income (loss)

646

 

(1,574)

Total stockholders' equity

1,115,051

 

1,067,290

Total liabilities and stockholders' equity

$1,674,853

 

$1,624,354

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Year Ended

 

December 28,
2019

 

December 29,
2018

Operating Activities

     

Net income

$  19,265

 

$  83,591

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

     

   Depreciation of property and equipment

16,883

 

15,912

   Amortization of other intangible assets and other assets

39,584

 

44,102

   Amortization of debt discount and debt issuance costs

13,485

 

12,892

   Stock-based compensation expense

54,799

 

50,077

   Deferred income taxes

23,048

 

(8,210)

   Changes in operating assets and liabilities:

     

      Accounts receivable

(2,401)

 

3,931

      Inventories

2,171

 

7,660

      Prepaid expenses and other assets

8,965

 

(4,960)

      Accounts payable

7,830

 

5,952

      Other current liabilities and income taxes

(6,826)

 

(21,828)

      Deferred income, deferred revenue and returns liability

(3,243)

 

(6,202)

      Other non-current liabilities

(7,038)

 

(9,375)

Net cash provided by operating activities

166,522

 

173,542

       

Investing Activities

     

Purchases of available-for-sale investments

(424,524)

 

(395,904)

Sales and maturities of available-for-sale investments

344,937

 

474,129

Purchases of property and equipment

(16,279)

 

(24,462)

Purchases of other assets

(8,396)

 

(11,063)

Acquisitions of businesses, net of cash acquired

(2,510)

 

(239,729)

Net cash used in investing activities

(106,772)

 

(197,029)

       

Financing Activities

     

Payment of debt issuance costs

(1,132)

 

--

Repurchases of common stock

(26,716)

 

(39,276)

Payment of taxes withheld for vested stock awards

(16,295)

 

(19,483)

Proceeds from the issuance of common stock

14,496

 

13,303

Payment of acquisition-related contingent consideration

--

 

(3,380)

Net cash used in financing activities

(29,647)

 

(48,836)

       

Increase (decrease) in cash and cash equivalents

30,103

 

(72,323)

Cash and cash equivalents at beginning of period

197,043

 

269,366

Cash and cash equivalents at end of period

$227,146

 

$197,043

 

 

SOURCE Silicon Labs