Company Delivers Strong Quarterly Performance and Outlook
AUSTIN, Texas--(BUSINESS WIRE)--
Silicon
Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance,
analog-intensive, mixed-signal integrated circuits (ICs), today reported
record third quarter revenue of $149.5 million, an impressive 25 percent
increase compared to the third quarter of 2011. The company believes
market share gains across the portfolio and record design win activity
are enabling the business to outperform the end markets.
Financial Highlights
Third quarter revenue was up ten percent sequentially due to both
organic growth and the additional revenue from an acquisition completed
during the quarter. On a GAAP-basis, gross margin was 57.9 percent,
which included one-time charges associated with the acquisition. R&D
investment increased to $34.8 million, and SG&A expense decreased to
$24.5 million. SG&A expense declined primarily due to an $8.1 million
gain from the purchase of the company's headquarters. Resulting GAAP
operating income increased to 18.2 percent. Diluted GAAP earnings per
share declined to $0.24 and included other charges related to the
acquisition of Ember and a net gain from the purchase of the
headquarters buildings.
The following non-GAAP results exclude the impact of stock compensation
and other one-time items. Gross margin was 61.0 percent for the quarter.
Operating expenses decreased to 39.1 percent of sales. R&D increased to
$31.7 million, and SG&A increased to $26.7 million due to the
acquisition and increased variable compensation. Operating income,
therefore, was better than expected at 21.9 percent of revenue. Strong
revenue growth and operating performance resulted in significant
earnings leverage. Diluted earnings per share for the quarter was 61
cents, a 20 percent sequential increase. Reconciling charges are set
forth in the financial measures table included below.
The company repurchased $14.9 million of stock and ended the quarter
with $285 million in cash, cash equivalents and investments due to
continued healthy cash flow from operations.
Business Highlights
All of the company's major product categories, Access, Broadcast and
Broad-based, grew sequentially again in the third quarter. The company
believes it is benefiting from growth trends in energy efficiency, the
"Internet of Everything", and the explosion in demand for bandwidth, all
of which drive an increasing need for mixed-signal ICs.
The Broad-based business was up 15 percent as the company's
microcontroller (MCU) products posted record revenue. The increase,
driven by both organic growth and the acquisition of ZigBee®
wireless products, resulted from market share gains in communications
infrastructure, consumer devices, smart energy, home automation and
security. The company's power products benefited from customers' power
system re-designs, growing 20 percent sequentially.
The Broadcast business increased in both audio and video as consumer
equipment makers continued to build ahead of the holidays. Design win
traction remains very strong, with the company's video products closing
on the majority of 2013 TV models, enabling continued share gains into
next year. The Access products also posted sequential growth due to new
ramps in PBX systems, voice over cable and Power over Ethernet
applications.
"Our Broad-based business has achieved critical mass, and with
double-digit annual growth rates, it is on track to be the majority of
our business as we exit the year," said Tyson Tuttle, president and CEO
of Silicon Laboratories. "We've aligned our product focus to capitalize
on the most important trends impacting mixed-signal ICs, and I feel good
about extending the breadth and quality of the growth we're seeing in
the business into 2013."
The company expects revenue for the fourth quarter to be in the range of
$145 to $150 million.
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 39712936. The replay will be available
through November 7.
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.
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Silicon Laboratories Inc.
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Condensed Consolidated Statements of Income
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(In thousands, except per share data)
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(Unaudited)
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Three Months Ended
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Nine Months Ended
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September 29,
2012
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October 1,
2011
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September 29,
2012
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October 1,
2011
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Revenues
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$
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149,461
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$
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119,100
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$
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410,833
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$
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364,933
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Cost of revenues
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62,968
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46,203
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166,442
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143,666
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Gross margin
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86,493
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72,897
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244,391
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221,267
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Operating expenses:
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Research and development
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34,768
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31,715
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101,943
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101,248
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Selling, general and administrative
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24,495
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27,254
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82,075
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85,168
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Operating expenses
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59,263
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58,969
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|
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|
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184,018
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186,416
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Operating income
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27,230
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13,928
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60,373
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34,851
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Other income (expense):
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Interest income
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243
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388
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1,103
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1,432
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Interest expense
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(234
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)
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(4
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)
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(299
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)
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(14
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)
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Other income (expense), net
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(161
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)
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(81
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)
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807
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292
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Income before income taxes
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27,078
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14,231
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61,984
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36,561
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Provision for income taxes
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17,054
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2,976
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17,131
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13,894
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Net income
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$
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10,024
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$
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11,255
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|
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$
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44,853
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$
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22,667
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Earnings per share:
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Basic
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$
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0.24
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$
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0.26
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$
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1.06
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$
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0.52
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Diluted
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$
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0.24
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$
|
0.26
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|
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$
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1.04
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$
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0.50
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Weighted-average common shares outstanding:
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Basic
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41,735
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42,834
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42,279
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43,902
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Diluted
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42,520
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43,919
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43,261
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45,305
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Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
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(In thousands, except per share data)
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Non-GAAP Income Statement Items
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Three Months Ended
September 29, 2012
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GAAP
Measure
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GAAP
Percent of Revenue
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Stock
Compensation Expense *
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Termination Costs
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Acquisition Related
Items
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Headquarters Purchase
Items
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Non-GAAP
Measure
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Non-GAAP
Percent of Revenue
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Revenues
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$
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149,461
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Gross margin
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86,493
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57.9
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%
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$
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261
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$
|
--
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$
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4,466
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$
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--
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$
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91,220
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61.0
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%
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Research and
development
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34,768
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23.3
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%
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3,039
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|
--
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--
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--
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31,729
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21.2
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%
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Selling, general and
administrative
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24,495
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16.4
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%
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|
4,096
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|
|
1,428
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|
|
358
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(8,113
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)
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26,726
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17.9
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%
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|
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Operating expenses
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59,263
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|
|
39.7
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%
|
|
|
|
7,135
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|
|
1,428
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|
|
|
358
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(8,113
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)
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|
|
58,455
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39.1
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%
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|
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|
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|
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|
|
|
|
|
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|
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Operating income
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27,230
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|
|
18.2
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%
|
|
|
|
7,396
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|
|
1,428
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|
|
|
4,824
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|
(8,113
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)
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32,765
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21.9
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%
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|
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Non-GAAP Diluted Earnings Per Share
|
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|
Three Months Ended
September 29, 2012
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|
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GAAP
Measure
|
|
|
Stock
Compensation Expense *
|
|
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Termination Costs
|
|
|
Acquisition Related
Items
|
|
|
Headquarters Purchase
Items
|
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Non-GAAP
Measure
|
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|
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Net income
|
|
|
$
|
10,024
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|
|
|
$
|
6,595
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|
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$
|
1,136
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|
|
$
|
13,651
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|
|
$
|
(5,274
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)
|
|
|
$
|
26,132
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|
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|
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|
|
|
|
|
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|
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|
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Diluted shares outstanding
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|
|
42,520
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|
|
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|
|
|
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|
|
42,520
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|
|
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|
|
|
|
|
|
|
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Diluted earnings per share
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$
|
0.24
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|
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|
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$
|
0.61
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* Excludes stock compensation recognized in connection with terminations
costs for our former CEO.
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Silicon Laboratories Inc.
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Condensed Consolidated Balance Sheets
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(In thousands, except per share data)
|
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(Unaudited)
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|
|
|
|
|
|
|
|
|
September 29,
2012
|
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|
December 31,
2011
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Assets
|
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Current assets:
|
|
|
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|
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Cash and cash equivalents
|
|
$
|
125,505
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|
|
|
$
|
94,964
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|
|
Short-term investments
|
|
|
148,573
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|
|
|
|
212,526
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|
|
Accounts receivable, net of allowances for doubtful accounts of
$789 at September 29, 2012 and $725 at December 31, 2011
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|
|
75,749
|
|
|
|
|
55,351
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|
|
Inventories
|
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|
42,523
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|
|
|
|
34,778
|
|
|
Deferred income taxes
|
|
|
15,870
|
|
|
|
|
11,563
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|
|
Prepaid expenses and other current assets
|
|
|
36,735
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|
|
|
|
43,867
|
|
|
Total current assets
|
|
|
444,955
|
|
|
|
|
453,049
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|
|
Long-term investments
|
|
|
11,418
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|
|
|
|
17,477
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|
|
Property and equipment, net
|
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|
136,321
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|
|
|
|
25,141
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|
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Goodwill
|
|
|
130,069
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|
|
|
|
115,489
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|
|
Other intangible assets, net
|
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|
94,611
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|
|
|
|
60,005
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|
|
Other assets, net
|
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|
37,669
|
|
|
|
|
34,830
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|
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Total assets
|
|
$
|
855,043
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|
|
|
$
|
705,991
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|
|
|
|
|
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|
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Liabilities and Stockholders' Equity
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Current liabilities:
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|
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Accounts payable
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|
$
|
35,476
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|
|
|
$
|
26,354
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|
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Current portion of long-term debt
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|
5,000
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|
|
|
|
--
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|
Accrued expenses
|
|
|
41,441
|
|
|
|
|
30,857
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|
|
Deferred income on shipments to distributors
|
|
|
30,903
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|
|
|
|
24,962
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|
|
Income taxes
|
|
|
3,339
|
|
|
|
|
665
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|
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Total current liabilities
|
|
|
116,159
|
|
|
|
|
82,838
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|
|
Long-term debt
|
|
|
95,000
|
|
|
|
|
--
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|
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Other non-current liabilities
|
|
|
22,663
|
|
|
|
|
24,214
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|
|
Total liabilities
|
|
|
233,822
|
|
|
|
|
107,052
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|
|
Commitments and contingencies
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|
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Stockholders' equity:
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Preferred stock--$0.0001 par value; 10,000 shares authorized; no
shares issued and outstanding
|
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|
--
|
|
|
|
|
--
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Common stock--$0.0001 par value; 250,000 shares authorized; 41,706
and 42,068 shares issued and outstanding at September 29, 2012 and
December 31, 2011, respectively
|
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|
4
|
|
|
|
|
4
|
|
|
Additional paid-in capital
|
|
|
--
|
|
|
|
|
14,749
|
|
|
Retained earnings
|
|
|
622,098
|
|
|
|
|
586,653
|
|
|
Accumulated other comprehensive loss
|
|
|
(881
|
)
|
|
|
|
(2,467
|
)
|
|
Total stockholders' equity
|
|
|
621,221
|
|
|
|
|
598,939
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
855,043
|
|
|
|
$
|
705,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Laboratories Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 29,
2012
|
|
|
October 1,
2011
|
|
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
44,853
|
|
|
|
$
|
22,667
|
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation of property and equipment
|
|
|
10,247
|
|
|
|
|
10,119
|
|
|
Net gain on the purchase of property and equipment
|
|
|
(8,457
|
)
|
|
|
|
--
|
|
|
Amortization of other intangible assets and other assets
|
|
|
11,001
|
|
|
|
|
8,570
|
|
|
Stock-based compensation expense
|
|
|
23,796
|
|
|
|
|
27,224
|
|
|
Income tax benefit from employee stock-based awards
|
|
|
2,301
|
|
|
|
|
2,301
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
(2,470
|
)
|
|
|
|
(2,111
|
)
|
|
Deferred income taxes
|
|
|
5,024
|
|
|
|
|
2,011
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(18,470
|
)
|
|
|
|
(11,581
|
)
|
|
Inventories
|
|
|
(5,994
|
)
|
|
|
|
1,670
|
|
|
Prepaid expenses and other assets
|
|
|
13,283
|
|
|
|
|
227
|
|
|
Accounts payable
|
|
|
9,113
|
|
|
|
|
871
|
|
|
Accrued expenses
|
|
|
(797
|
)
|
|
|
|
819
|
|
|
Deferred income on shipments to distributors
|
|
|
5,267
|
|
|
|
|
1,495
|
|
|
Income taxes
|
|
|
(4,378
|
)
|
|
|
|
1,287
|
|
|
Net cash provided by operating activities
|
|
|
84,319
|
|
|
|
|
65,569
|
|
|
Investing Activities
|
|
|
|
|
|
|
Purchases of available-for-sale investments
|
|
|
(138,822
|
)
|
|
|
|
(113,784
|
)
|
|
Proceeds from sales and maturities of marketable securities
|
|
|
209,972
|
|
|
|
|
166,262
|
|
|
Purchases of property and equipment
|
|
|
(99,720
|
)
|
|
|
|
(7,472
|
)
|
|
Purchases of other assets
|
|
|
(6,146
|
)
|
|
|
|
(891
|
)
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(71,852
|
)
|
|
|
|
(27,262
|
)
|
|
Net cash provided by (used in) investing activities
|
|
|
(106,568
|
)
|
|
|
|
16,853
|
|
|
Financing Activities
|
|
|
|
|
|
|
Proceeds from issuance of common stock, net of shares withheld for
taxes
|
|
|
3,035
|
|
|
|
|
2,320
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
2,470
|
|
|
|
|
2,111
|
|
|
Repurchases of common stock
|
|
|
(51,040
|
)
|
|
|
|
(110,063
|
)
|
|
Proceeds from issuance of long-term debt, net
|
|
|
98,325
|
|
|
|
|
--
|
|
|
Payments on debt
|
|
|
--
|
|
|
|
|
(7,174
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
52,790
|
|
|
|
|
(112,806
|
)
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
30,541
|
|
|
|
|
(30,384
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
94,964
|
|
|
|
|
138,567
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
125,505
|
|
|
|
$
|
108,183
|
|
Silicon Laboratories Inc.
Shannon Pleasant, 512-464 9254
shannon.pleasant@silabs.com
Source: Silicon Laboratories Inc.
News Provided by Acquire Media