Strong Growth from Broad-based Products
AUSTIN, Texas--(BUSINESS WIRE)--
Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance,
analog-intensive, mixed-signal integrated circuits (ICs), today reported
a 5.5 percent sequential increase in second quarter revenue to $126.2
million due to a record quarter in its Broad-based product lines.
Financial Highlights
During the quarter, the company demonstrated sequential improvement
across key financial metrics. On a GAAP basis, which includes
approximately $8.6 million in non-cash stock compensation charges, gross
margin was up slightly at 60.4 percent for the second quarter. R&D
investment was down in the second quarter to $34.2 million, and SG&A
decreased significantly to $26.1 million. This resulted in fully diluted
GAAP earnings per share of 29 cents.
The following non-GAAP results exclude the impact of stock compensation
expense and certain other one-time items. Non-GAAP gross margin
increased to 62.1 percent for the quarter, within the company's target
range. Operating expenses declined to 42 percent of revenue.
Specifically, R&D expense was $30.5 million and SG&A declined to $22.5
million. Operating income improved to 20.1 percent of revenue. Net
income increased to $21.9 million in the second quarter, or 17.3 percent
of revenue. Resulting second quarter diluted earnings per share were 48
cents. The reconciling charges are set forth in the financial measures
table included below.
Business Highlights
The company's performance was driven by growth in all three of its main
product lines, Broad-based, Access and Broadcast. The record quarter in
Broad-based products was driven primarily by MCUs, with particular
strength due to ramps of new products and customer programs. Video and
timing products also delivered record revenue in the quarter. New
mid-year model wins in video support the anticipated increase in the
adoption rate of silicon tuner technology across TV makers, models and
geographies.
CPE modems and FM tuners in handsets combined declined to 12 percent of
company revenue. These maturing products have become a less significant
share of total revenue, contributing to the long-term improvement in the
complexion of the business.
"We've executed well in the first half of the year, achieving record
revenue in many of our product lines while successfully navigating
through the transition in our access and audio products. But, while the
business is ready to sprint ahead on the legs of very strong products
and share gains, we're facing weakening end-user demand in several of
our markets," said Necip Sayiner, president and CEO of Silicon
Laboratories. "While we find this frustrating, we remain focused on
operational discipline to preserve profitability and continued R&D
pipeline development so when the economy improves, we'll be ready to
break out to higher revenue and earnings levels."
The company expects revenue for the third quarter to decline by 5 to 10
percent sequentially.
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 simultaneously on Silicon Laboratories' website under Investor
Relations (www.silabs.com).
A replay will be available after the call at the same website listed
above or by calling 1 (800) 642-1687 or +1 (706) 645-9291
(international) and by entering 79607832. The replay will be available
through August 8, 2011.
About Silicon Laboratories Inc.
Silicon Laboratories Inc. is a leading designer of high-performance,
analog-intensive, mixed-signal integrated circuits (ICs) for a broad
range of applications. Silicon Laboratories' diverse portfolio of highly
integrated, patented solutions is developed by a world-class engineering
team with expertise in cutting-edge mixed-signal design. The company has
design, engineering, marketing, sales and applications offices
throughout North America, Europe and Asia. For more information about
Silicon Laboratories, please visit www.silabs.com.
Forward-Looking Statements
This press release contains forward-looking statements based on Silicon
Laboratories' current expectations. The words "believe," "estimate,"
"expect," "intend," "anticipate," "plan," "project," "will" and similar
phrases as they relate to Silicon Laboratories are intended to identify
such forward-looking statements. These forward-looking statements
reflect the current views and assumptions of Silicon Laboratories 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
Laboratories may not be able to maintain its historical growth;
quarterly fluctuations in revenues and operating results; volatile stock
price; average selling prices of products may decrease significantly and
rapidly; difficulties developing new products that achieve market
acceptance; dependence on a limited number of products and customers;
intellectual property litigation risks; inventory-related risks; risks
associated with acquisitions; difficulties managing international
activities; difficulties managing our manufacturers and subcontractors;
risks that Silicon Laboratories may not be able to manage strains
associated with its growth; credit risks associated with our accounts
receivable; dependence on key personnel; risks associated with
divestitures; geographic concentration of manufacturers, assemblers,
test service providers and customers in Asia that subjects Silicon
Laboratories' business and results of operations to risks of natural
disasters, epidemics, war and political unrest; the competitive and
cyclical nature of the semiconductor industry and other factors that are
detailed in Silicon Laboratories' filings with the SEC. Silicon
Laboratories disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise.
Note to editors: Silicon Laboratories, Silicon Labs and the Silicon
Labs logo are trademarks of Silicon Laboratories Inc. All other product
names noted herein may be trademarks of their respective holders.
|
Silicon Laboratories Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
July 2,
2011
|
|
|
July 3,
2010
|
|
|
|
July 2,
2011
|
|
|
July 3,
2010
|
|
Revenues
|
|
$
|
126,197
|
|
|
|
$
|
134,577
|
|
|
|
|
$
|
245,833
|
|
|
|
$
|
261,296
|
|
|
Cost of revenues
|
|
|
49,985
|
|
|
|
|
43,684
|
|
|
|
|
|
97,463
|
|
|
|
|
86,813
|
|
|
Gross margin
|
|
|
76,212
|
|
|
|
|
90,893
|
|
|
|
|
|
148,370
|
|
|
|
|
174,483
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
34,173
|
|
|
|
|
30,509
|
|
|
|
|
|
69,533
|
|
|
|
|
60,431
|
|
|
Selling, general and administrative
|
|
|
26,055
|
|
|
|
|
29,737
|
|
|
|
|
|
57,914
|
|
|
|
|
57,740
|
|
|
Operating expenses
|
|
|
60,228
|
|
|
|
|
60,246
|
|
|
|
|
|
127,447
|
|
|
|
|
118,171
|
|
|
Operating income
|
|
|
15,984
|
|
|
|
|
30,647
|
|
|
|
|
|
20,923
|
|
|
|
|
56,312
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
473
|
|
|
|
|
633
|
|
|
|
|
|
1,044
|
|
|
|
|
1,299
|
|
|
Interest expense
|
|
|
(5
|
)
|
|
|
|
(22
|
)
|
|
|
|
|
(10
|
)
|
|
|
|
(45
|
)
|
|
Other income (expense), net
|
|
|
164
|
|
|
|
|
(586
|
)
|
|
|
|
|
373
|
|
|
|
|
(883
|
)
|
|
Income before income taxes
|
|
|
16,616
|
|
|
|
|
30,672
|
|
|
|
|
|
22,330
|
|
|
|
|
56,683
|
|
|
Provision for income taxes
|
|
|
3,244
|
|
|
|
|
9,625
|
|
|
|
|
|
10,918
|
|
|
|
|
14,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
13,372
|
|
|
|
$
|
21,047
|
|
|
|
|
$
|
11,412
|
|
|
|
$
|
42,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.30
|
|
|
|
$
|
0.46
|
|
|
|
|
$
|
0.26
|
|
|
|
$
|
0.92
|
|
|
Diluted
|
|
$
|
0.29
|
|
|
|
$
|
0.44
|
|
|
|
|
$
|
0.25
|
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
44,602
|
|
|
|
|
45,387
|
|
|
|
|
|
44,435
|
|
|
|
|
45,602
|
|
|
Diluted
|
|
|
45,951
|
|
|
|
|
47,371
|
|
|
|
|
|
45,998
|
|
|
|
|
47,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
|
|
|
|
|
|
Non-GAAP Income Statement Items
|
|
Three Months Ended
July 2, 2011
|
|
|
|
GAAP
Measure
|
|
GAAP
Percent of
Revenue
|
|
Stock
Compensation
Expense
|
|
Acquisition
Related
Items
|
|
Material
Cancellation
Charge
|
|
Non-GAAP
Measure
|
|
Non-GAAP
Percent of
Revenue
|
|
Revenues
|
|
$
|
126,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
76,212
|
|
|
60.4
|
%
|
|
$
|
342
|
|
$
|
464
|
|
|
$
|
1,316
|
|
$
|
78,334
|
|
62.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
34,173
|
|
|
27.1
|
%
|
|
|
3,709
|
|
|
--
|
|
|
|
--
|
|
|
30,464
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
26,055
|
|
|
20.6
|
%
|
|
|
4,550
|
|
|
(1,035
|
)
|
|
|
--
|
|
|
22,540
|
|
17.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
60,228
|
|
|
47.7
|
%
|
|
|
8,259
|
|
|
(1,035
|
)
|
|
|
--
|
|
|
53,004
|
|
42.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
15,984
|
|
|
12.7
|
%
|
|
|
8,601
|
|
|
(571
|
)
|
|
|
1,316
|
|
|
25,330
|
|
20.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
13,372
|
|
|
10.6
|
%
|
|
|
7,813
|
|
|
(571
|
)
|
|
|
1,251
|
|
|
21,865
|
|
17.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted Earnings Per Share
|
|
|
|
Three Months Ended
July 2, 2011
|
|
|
|
|
|
|
|
GAAP
Measure
|
|
Stock
Compensation
Expense
|
|
Acquisition
Related
Items
|
|
Material
Cancellation
Charge
|
|
Non-GAAP
Measure
|
|
|
|
Net income
|
|
$
|
13,372
|
|
|
$
|
7,813
|
|
$
|
(571
|
)
|
|
$
|
1,251
|
|
$
|
21,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding
|
|
|
45,951
|
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
45,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
July 2,
2011
|
|
|
January 1,
2011
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
134,824
|
|
|
|
$
|
138,567
|
|
|
Short-term investments
|
|
|
198,766
|
|
|
|
|
227,295
|
|
|
Accounts receivable, net of allowance for doubtful accounts of
$727 at July 2, 2011 and $772 at January 1, 2011
|
|
|
70,351
|
|
|
|
|
45,030
|
|
|
Inventories
|
|
|
38,097
|
|
|
|
|
39,450
|
|
|
Deferred income taxes
|
|
|
10,271
|
|
|
|
|
9,140
|
|
|
Prepaid expenses and other current assets
|
|
|
34,499
|
|
|
|
|
34,447
|
|
|
Total current assets
|
|
|
486,808
|
|
|
|
|
493,929
|
|
|
Long-term investments
|
|
|
17,196
|
|
|
|
|
17,500
|
|
|
Property and equipment, net
|
|
|
28,399
|
|
|
|
|
29,945
|
|
|
Goodwill
|
|
|
117,215
|
|
|
|
|
112,296
|
|
|
Other intangible assets, net
|
|
|
66,280
|
|
|
|
|
53,242
|
|
|
Other assets, net
|
|
|
28,359
|
|
|
|
|
20,746
|
|
|
Total assets
|
|
$
|
744,257
|
|
|
|
$
|
727,658
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
26,064
|
|
|
|
$
|
24,433
|
|
|
Accrued expenses
|
|
|
26,944
|
|
|
|
|
25,604
|
|
|
Deferred income on shipments to distributors
|
|
|
32,034
|
|
|
|
|
26,127
|
|
|
Income taxes
|
|
|
1,102
|
|
|
|
|
3,692
|
|
|
Total current liabilities
|
|
|
86,144
|
|
|
|
|
79,856
|
|
|
Long-term obligations and other liabilities
|
|
|
21,521
|
|
|
|
|
22,372
|
|
|
Total liabilities
|
|
|
107,665
|
|
|
|
|
102,228
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Preferred stock--$0.0001 par value; 10,000 shares authorized; no
shares issued and outstanding
|
|
|
--
|
|
|
|
|
--
|
|
|
Common stock--$0.0001 par value; 250,000 shares authorized; 44,292
and 43,933 shares issued and outstanding at July 2, 2011 and
January 1, 2011, respectively
|
|
|
4
|
|
|
|
|
4
|
|
|
Additional paid-in capital
|
|
|
49,041
|
|
|
|
|
49,947
|
|
|
Retained earnings
|
|
|
590,539
|
|
|
|
|
579,127
|
|
|
Accumulated other comprehensive loss
|
|
|
(2,992
|
)
|
|
|
|
(3,648
|
)
|
|
Total stockholders' equity
|
|
|
636,592
|
|
|
|
|
625,430
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
744,257
|
|
|
|
$
|
727,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
July 2,
2011
|
|
|
July 3,
2010
|
|
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
11,412
|
|
|
|
$
|
42,126
|
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation of property and equipment
|
|
|
6,680
|
|
|
|
|
5,821
|
|
|
Amortization of other intangible assets and other assets
|
|
|
6,077
|
|
|
|
|
3,651
|
|
|
Stock-based compensation expense
|
|
|
18,074
|
|
|
|
|
20,931
|
|
|
Income tax benefit from employee stock-based awards
|
|
|
2,083
|
|
|
|
|
2,523
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
(1,963
|
)
|
|
|
|
(1,784
|
)
|
|
Deferred income taxes
|
|
|
181
|
|
|
|
|
(319
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(23,562
|
)
|
|
|
|
(19,946
|
)
|
|
Inventories
|
|
|
2,022
|
|
|
|
|
2,537
|
|
|
Prepaid expenses and other assets
|
|
|
(1,021
|
)
|
|
|
|
3,208
|
|
|
Accounts payable
|
|
|
259
|
|
|
|
|
3,015
|
|
|
Accrued expenses
|
|
|
(2,841
|
)
|
|
|
|
(4,445
|
)
|
|
Deferred income on shipments to distributors
|
|
|
5,157
|
|
|
|
|
483
|
|
|
Income taxes
|
|
|
3,672
|
|
|
|
|
(5,268
|
)
|
|
Net cash provided by operating activities
|
|
|
26,230
|
|
|
|
|
52,533
|
|
|
Investing Activities
|
|
|
|
|
|
|
Purchases of available-for-sale investments
|
|
|
(75,856
|
)
|
|
|
|
(216,385
|
)
|
|
Proceeds from sales and maturities of marketable securities
|
|
|
104,831
|
|
|
|
|
158,944
|
|
|
Purchases of property and equipment
|
|
|
(5,058
|
)
|
|
|
|
(3,311
|
)
|
|
Purchases of other assets
|
|
|
(665
|
)
|
|
|
|
(6,917
|
)
|
|
Acquisitions of businesses, net of cash acquired
|
|
|
(27,262
|
)
|
|
|
|
(18,351
|
)
|
|
Net cash used in investing activities
|
|
|
(4,010
|
)
|
|
|
|
(86,020
|
)
|
|
Financing Activities
|
|
|
|
|
|
|
Proceeds from issuance of common stock, net of shares withheld for
taxes
|
|
|
2,489
|
|
|
|
|
17,244
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
1,963
|
|
|
|
|
1,784
|
|
|
Repurchases of common stock
|
|
|
(23,241
|
)
|
|
|
|
(100,309
|
)
|
|
Payments on debt
|
|
|
(7,174
|
)
|
|
|
|
--
|
|
|
Net cash used in financing activities
|
|
|
(25,963
|
)
|
|
|
|
(81,281
|
)
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(3,743
|
)
|
|
|
|
(114,768
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
138,567
|
|
|
|
|
195,737
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
134,824
|
|
|
|
$
|
80,969
|
|
Silicon Laboratories Inc.
Shannon Pleasant, 512-464 9254
shannon.pleasant@silabs.com
Source: Silicon Laboratories Inc.
News Provided by Acquire Media