--Strong Operational Performance Drives Earnings Leverage--
AUSTIN, Texas--(BUSINESS WIRE)--
Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance,
analog-intensive, mixed-signal integrated circuits (ICs), today reported
third quarter revenue of $119.1 million and GAAP and non-GAAP earnings
per share of $0.26 and $0.44, respectively.
Financial Highlights
The company detected and communicated market weakness early in the
quarter and delivered solid top-line performance relative to the
guidance and good operational controls, enabling better than anticipated
earnings results.
On a GAAP basis, which includes approximately $9.1 million in non-cash
stock compensation charges, gross margin improved to 61.2 percent for
the third quarter. R&D investment was down in the third quarter to $31.7
million, and SG&A was $27.3 million, resulting in operating income of 12
percent. This resulted in fully diluted GAAP earnings per share of $0.26.
The following non-GAAP results exclude the impact of stock compensation
expense and certain other one-time items. Non-GAAP gross margin was 61.5
percent as a result of product mix changes including better than
anticipated results in the company's Broadcast products and
macro-related declines in the Broad-based and Access products. Operating
expenses declined meaningfully. Specifically, R&D expense was $28.1
million and SG&A was $22.4 million resulting in operating income of 19
percent. Resulting third quarter non-GAAP diluted earnings per share
were $0.44. The reconciling charges are set forth in the financial
measures table included below.
The company ended the quarter with $301 million in cash, cash
equivalents and investments due to continued healthy cash flow from
operations partially offset by share repurchases. Share repurchases
during the quarter totaled $86 million, completing the current
repurchase authorization and bringing the total shares repurchased to
date to 22.4 million. The company's board of directors approved a new
authorization for $50 million that will run through April 2012.
Business Highlights
The company's third quarter performance reflected weakening demand
across end markets. Visibility remained limited as customers continued
to be cautious about building inventory in light of an uncertain demand
environment. However, the Timing products had another record revenue
quarter, with new products driving wins in a broad set of applications,
supporting further diversification. The company also reported record
design wins in both MCU and Timing, two of its leading product lines.
The Broadcast products benefited from some seasonal lift during the
quarter, resulting in growth in audio products. The video products also
fared better than expected and TV inventory issues that tempered growth
appeared to have been largely resolved during the quarter.
"While the macro-economic headwinds are still weighing heavily on the
industry, we do expect our new product cycles to help us start
outperforming our peers in the fourth quarter," said Necip Sayiner,
president and CEO of Silicon Laboratories. "I'm optimistic about the
traction we're getting with new products and believe that with the
improved complexion of our business and continued focus on market share
gains, we'll benefit disproportionately when the market environment
improves."
The company expects revenue for the fourth quarter to be in the range of
up 3 percent to down 3 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 (855) 859-2056 or +1 (404) 537-3406
(international) and by entering 18864586. The replay will be available
through November 9th.
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
|
|
|
Nine Months Ended
|
|
|
|
|
October 1,
2011
|
|
October 2,
2010
|
|
|
October 1,
2011
|
|
October 2,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
119,100
|
|
|
$
|
120,154
|
|
|
|
$
|
364,933
|
|
|
$
|
381,450
|
|
|
Cost of revenues
|
|
|
|
46,203
|
|
|
|
41,484
|
|
|
|
|
143,666
|
|
|
|
128,297
|
|
|
Gross margin
|
|
|
|
72,897
|
|
|
|
78,670
|
|
|
|
|
221,267
|
|
|
|
253,153
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
31,715
|
|
|
|
30,769
|
|
|
|
|
101,248
|
|
|
|
91,200
|
|
|
Selling, general and administrative
|
|
|
|
27,254
|
|
|
|
28,556
|
|
|
|
|
85,168
|
|
|
|
86,296
|
|
|
Operating expenses
|
|
|
|
58,969
|
|
|
|
59,325
|
|
|
|
|
186,416
|
|
|
|
177,496
|
|
|
Operating income
|
|
|
|
13,928
|
|
|
|
19,345
|
|
|
|
|
34,851
|
|
|
|
75,657
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
388
|
|
|
|
540
|
|
|
|
|
1,432
|
|
|
|
1,839
|
|
|
Interest expense
|
|
|
|
(4
|
)
|
|
|
(21
|
)
|
|
|
|
(14
|
)
|
|
|
(66
|
)
|
|
Other income (expense), net
|
|
|
|
(81
|
)
|
|
|
(394
|
)
|
|
|
|
292
|
|
|
|
(1,277
|
)
|
|
Income before income taxes
|
|
|
|
14,231
|
|
|
|
19,470
|
|
|
|
|
36,561
|
|
|
|
76,153
|
|
|
Provision for income taxes
|
|
|
|
2,976
|
|
|
|
1,237
|
|
|
|
|
13,894
|
|
|
|
15,794
|
|
|
Net income
|
|
|
$
|
11,255
|
|
|
$
|
18,233
|
|
|
|
$
|
22,667
|
|
|
$
|
60,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.26
|
|
|
$
|
0.41
|
|
|
|
$
|
0.52
|
|
|
$
|
1.34
|
|
|
Diluted
|
|
|
$
|
0.26
|
|
|
$
|
0.40
|
|
|
|
$
|
0.50
|
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
42,834
|
|
|
|
44,341
|
|
|
|
|
43,902
|
|
|
|
45,182
|
|
|
Diluted
|
|
|
|
43,919
|
|
|
|
46,009
|
|
|
|
|
45,305
|
|
|
|
47,103
|
|
|
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In
thousands, except per share data)
|
|
|
|
|
|
|
Non-GAAP Income Statement Items
|
|
|
Three Months Ended
October 1, 2011
|
|
|
|
|
GAAP
Measure
|
|
|
GAAP
Percent of
Revenue
|
|
|
Stock
Compensation
Expense
|
|
|
Acquisition
Related
Items
|
|
|
Non-GAAP
Measure
|
|
|
Non-
GAAP
Percent of
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
119,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
72,897
|
|
|
|
61.2
|
%
|
|
|
$
|
335
|
|
|
$
|
--
|
|
|
|
$
|
73,232
|
|
|
61.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
31,715
|
|
|
|
26.6
|
%
|
|
|
|
3,581
|
|
|
|
--
|
|
|
|
|
28,134
|
|
|
23.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
27,254
|
|
|
|
22.9
|
%
|
|
|
|
5,234
|
|
|
|
(414
|
)
|
|
|
|
22,434
|
|
|
18.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
13,928
|
|
|
|
11.7
|
%
|
|
|
|
9,150
|
|
|
|
(414
|
)
|
|
|
|
22,664
|
|
|
19.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted Earnings Per Share
|
|
|
|
|
|
Three Months Ended
October 1, 2011
|
|
|
|
|
|
|
|
|
|
|
GAAP
Measure
|
|
|
Stock
Compensation
Expense
|
|
|
Acquisition
Related
Items
|
|
|
Non-GAAP
Measure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
11,255
|
|
|
|
$
|
8,270
|
|
|
$
|
(414
|
)
|
|
|
$
|
19,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding
|
|
|
|
43,919
|
|
|
|
|
--
|
|
|
|
--
|
|
|
|
|
43,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
$
|
0.44
|
|
|
|
|
Silicon Laboratories Inc.
Condensed Consolidated
Balance Sheets
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
October 1,
2011
|
|
|
January 1,
2011
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
108,183
|
|
|
|
$
|
138,567
|
|
|
Short-term investments
|
|
|
|
174,915
|
|
|
|
|
227,295
|
|
|
Accounts receivable, net of allowance for doubtful accounts of
$733 at October 1, 2011 and $772 at January 1, 2011
|
|
|
|
58,370
|
|
|
|
|
45,030
|
|
|
Inventories
|
|
|
|
38,403
|
|
|
|
|
39,450
|
|
|
Deferred income taxes
|
|
|
|
10,617
|
|
|
|
|
9,140
|
|
|
Prepaid expenses and other current assets
|
|
|
|
36,280
|
|
|
|
|
34,447
|
|
|
Total current assets
|
|
|
|
426,768
|
|
|
|
|
493,929
|
|
|
Long-term investments
|
|
|
|
17,840
|
|
|
|
|
17,500
|
|
|
Property and equipment, net
|
|
|
|
27,373
|
|
|
|
|
29,945
|
|
|
Goodwill
|
|
|
|
115,489
|
|
|
|
|
112,296
|
|
|
Other intangible assets, net
|
|
|
|
63,787
|
|
|
|
|
53,242
|
|
|
Other assets, net
|
|
|
|
26,088
|
|
|
|
|
20,746
|
|
|
Total assets
|
|
|
$
|
677,345
|
|
|
|
$
|
727,658
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
25,720
|
|
|
|
$
|
24,433
|
|
|
Accrued expenses
|
|
|
|
31,842
|
|
|
|
|
25,604
|
|
|
Deferred income on shipments to distributors
|
|
|
|
28,372
|
|
|
|
|
26,127
|
|
|
Income taxes
|
|
|
|
809
|
|
|
|
|
3,692
|
|
|
Total current liabilities
|
|
|
|
86,743
|
|
|
|
|
79,856
|
|
|
Long-term obligations and other liabilities
|
|
|
|
19,280
|
|
|
|
|
22,372
|
|
|
Total liabilities
|
|
|
|
106,023
|
|
|
|
|
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; 41,839
and 43,933 shares issued and outstanding at October 1, 2011 and
January 1, 2011, respectively
|
|
|
|
4
|
|
|
|
|
4
|
|
|
Additional paid-in capital
|
|
|
|
--
|
|
|
|
|
49,947
|
|
|
Retained earnings
|
|
|
|
573,848
|
|
|
|
|
579,127
|
|
|
Accumulated other comprehensive loss
|
|
|
|
(2,530
|
)
|
|
|
|
(3,648
|
)
|
|
Total stockholders' equity
|
|
|
|
571,322
|
|
|
|
|
625,430
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
677,345
|
|
|
|
$
|
727,658
|
|
|
Silicon Laboratories Inc.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
October 1,
2011
|
|
|
October 2,
2010
|
|
Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
22,667
|
|
|
|
$
|
60,359
|
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation of property and equipment
|
|
|
|
10,119
|
|
|
|
|
8,736
|
|
|
Amortization of other intangible assets and other assets
|
|
|
|
8,570
|
|
|
|
|
5,461
|
|
|
Stock-based compensation expense
|
|
|
|
27,224
|
|
|
|
|
31,261
|
|
|
Income tax benefit from employee stock-based awards
|
|
|
|
2,301
|
|
|
|
|
2,855
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
|
(2,111
|
)
|
|
|
|
(2,008
|
)
|
|
Deferred income taxes
|
|
|
|
2,011
|
|
|
|
|
(1,649
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(11,581
|
)
|
|
|
|
(7,429
|
)
|
|
Inventories
|
|
|
|
1,670
|
|
|
|
|
(6,487
|
)
|
|
Prepaid expenses and other assets
|
|
|
|
227
|
|
|
|
|
(5,527
|
)
|
|
Accounts payable
|
|
|
|
871
|
|
|
|
|
607
|
|
|
Accrued expenses
|
|
|
|
819
|
|
|
|
|
(145
|
)
|
|
Deferred income on shipments to distributors
|
|
|
|
1,495
|
|
|
|
|
4,723
|
|
|
Income taxes
|
|
|
|
1,287
|
|
|
|
|
(7,275
|
)
|
|
Net cash provided by operating activities
|
|
|
|
65,569
|
|
|
|
|
83,482
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
Purchases of available-for-sale investments
|
|
|
|
(113,784
|
)
|
|
|
|
(293,502
|
)
|
|
Proceeds from sales and maturities of marketable securities
|
|
|
|
166,262
|
|
|
|
|
277,541
|
|
|
Purchases of property and equipment
|
|
|
|
(7,472
|
)
|
|
|
|
(6,792
|
)
|
|
Purchases of other assets
|
|
|
|
(891
|
)
|
|
|
|
(7,147
|
)
|
|
Acquisitions of businesses, net of cash acquired
|
|
|
|
(27,262
|
)
|
|
|
|
(18,351
|
)
|
|
Net cash provided by (used in) investing activities
|
|
|
|
16,853
|
|
|
|
|
(48,251
|
)
|
|
Financing Activities
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock, net of shares withheld for
taxes
|
|
|
|
2,320
|
|
|
|
|
15,006
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
|
2,111
|
|
|
|
|
2,008
|
|
|
Repurchases of common stock
|
|
|
|
(110,063
|
)
|
|
|
|
(140,331
|
)
|
|
Payments on debt
|
|
|
|
(7,174
|
)
|
|
|
|
--
|
|
|
Net cash used in financing activities
|
|
|
|
(112,806
|
)
|
|
|
|
(123,317
|
)
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
|
(30,384
|
)
|
|
|
|
(88,086
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
138,567
|
|
|
|
|
195,737
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
108,183
|
|
|
|
$
|
107,651
|
|
Silicon Laboratories Inc.
Shannon Pleasant, 512-464-9254
shannon.pleasant@silabs.com
Source: Silicon Laboratories Inc.
News Provided by Acquire Media