Company Reports 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
second quarter revenue of $135.7 million, an impressive eight percent
sequential increase. GAAP and non-GAAP diluted earnings per share of
$0.47 and $0.51, respectively, also exceeded expectations and
represented significant growth.
Financial Highlights
Second quarter revenue was a company record and resulted from growth
across the company's major product categories. On a GAAP-basis, gross
margin improved to 61.0 percent. R&D investment increased to $34.2
million and SG&A expense was $32.2 million. Resulting GAAP operating
income was 12.1 percent. Diluted GAAP earnings per share increased by 42
percent sequentially to 47 cents, due in part to a tax reserve release.
The following non-GAAP results exclude the impact of stock compensation
and other one-time items. Significant strength in the company's
Broad-based products improved the gross margin mix, resulting in gross
margin of 61.3 percent for the quarter. R&D increased to $31.3 million
due to a record quarter of new product activity, and SG&A increased
slightly to $24.4 million. Operating income, therefore, was better than
expected at 20.2 percent of revenue. Strong revenue growth and margin
expansion provided significant earnings leverage resulting in diluted
earnings per share of 51 cents, a 19 percent sequential increase.
Reconciling charges are set forth in the financial measures table
included below.
The company ended the quarter with $323 million in cash, cash
equivalents and investments due to continued healthy cash flow from
operations.
Business Highlights
All three of the company's major product categories, Access, Broadcast
and Broad-based, grew sequentially in the second quarter.
Within the Broad-based business, the company's timing and MCU products
posted record quarters as the company began shipping into new
applications in storage, security, and test and measurement. Both
product lines also posted record design wins, indicating strength in the
revenue pipeline and supporting the continued market share gains driving
the outperformance versus the end markets.
The company's wireless products increased over 50 percent in the quarter
and are expected to contribute meaningfully to future growth with the
addition of the Ember products acquired early in the third quarter. When
combined with the company's emerging 32-bit MCU portfolio, the company
anticipates having the industry's strongest offering for embedded
wireless devices.
The Broadcast business increased in the second quarter driven by audio
products, which were up meaningfully due to seasonal builds of consumer
radios. The video business was also solid, coming in about flat to the
record high in the first quarter. The Access products saw growth across
voice over IP, modems and Power over Ethernet applications.
"Our business is hitting on all cylinders, underscoring the strength of
our portfolio and ability to gain market share," said Tyson Tuttle,
president and CEO of Silicon Laboratories. "We're focusing on developing
products that address some of the most significant trends impacting the
industry. The global build-out of infrastructure to support growing
bandwidth needs, the emergence of the Internet of Things, and the
increasing importance of energy efficient and green technology all
require analog-intensive, mixed-signal ICs."
The company expects revenue for the third quarter to increase to $140 to
$145 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 99916472. The replay will be available
through August 8th.
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
|
|
|
|
June 30,
2012
|
|
July 2,
2011
|
|
June 30,
2012
|
|
July 2,
2011
|
|
Revenues
|
|
$
|
135,670
|
|
|
$
|
126,197
|
|
|
$
|
261,372
|
|
|
$
|
245,833
|
|
|
Cost of revenues
|
|
|
52,868
|
|
|
|
49,985
|
|
|
|
103,474
|
|
|
|
97,463
|
|
|
Gross margin
|
|
|
82,802
|
|
|
|
76,212
|
|
|
|
157,898
|
|
|
|
148,370
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
34,245
|
|
|
|
34,173
|
|
|
|
67,175
|
|
|
|
69,533
|
|
|
Selling, general and administrative
|
|
|
32,178
|
|
|
|
26,055
|
|
|
|
57,580
|
|
|
|
57,914
|
|
|
Operating expenses
|
|
|
66,423
|
|
|
|
60,228
|
|
|
|
124,755
|
|
|
|
127,447
|
|
|
Operating income
|
|
|
16,379
|
|
|
|
15,984
|
|
|
|
33,143
|
|
|
|
20,923
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
363
|
|
|
|
473
|
|
|
|
860
|
|
|
|
1,044
|
|
|
Interest expense
|
|
|
(32
|
)
|
|
|
(5
|
)
|
|
|
(65
|
)
|
|
|
(10
|
)
|
|
Other income (expense), net
|
|
|
1,079
|
|
|
|
164
|
|
|
|
968
|
|
|
|
373
|
|
|
Income before income taxes
|
|
|
17,789
|
|
|
|
16,616
|
|
|
|
34,906
|
|
|
|
22,330
|
|
|
Provision (benefit) for income taxes
|
|
|
(2,720
|
)
|
|
|
3,244
|
|
|
|
77
|
|
|
|
10,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
20,509
|
|
|
$
|
13,372
|
|
|
$
|
34,829
|
|
|
$
|
11,412
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.48
|
|
|
$
|
0.30
|
|
|
$
|
0.82
|
|
|
$
|
0.26
|
|
|
Diluted
|
|
$
|
0.47
|
|
|
$
|
0.29
|
|
|
$
|
0.80
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
42,655
|
|
|
|
44,602
|
|
|
|
42,556
|
|
|
|
44,435
|
|
|
Diluted
|
|
|
43,423
|
|
|
|
45,951
|
|
|
|
43,637
|
|
|
|
45,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
(In thousands, except per share data)
|
|
|
|
|
|
Non-GAAP Income
Statement Items
|
|
Three Months Ended
June 30, 2012
|
|
|
|
|
|
GAAP
|
|
Stock
|
|
|
|
Acquisition
|
|
|
|
Non-GAAP
|
|
|
|
GAAP
|
|
Percent of
|
|
Compensation
|
|
Termination
|
|
Related
|
|
Non-GAAP
|
|
Percent of
|
|
|
|
Measure
|
|
Revenue
|
|
Expense *
|
|
Costs
|
|
Items
|
|
Measure
|
|
Revenue
|
|
Revenues
|
|
$
|
135,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
82,802
|
|
|
61.0
|
%
|
|
$
|
317
|
|
$
|
--
|
|
$
|
--
|
|
$
|
83,119
|
|
|
|
61.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
34,245
|
|
|
25.2
|
%
|
|
|
2,954
|
|
|
--
|
|
|
--
|
|
|
31,291
|
|
|
|
23.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
32,178
|
|
|
23.7
|
%
|
|
|
3,340
|
|
|
3,946
|
|
|
483
|
|
|
24,409
|
|
|
|
18.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
16,379
|
|
|
12.1
|
%
|
|
|
6,611
|
|
|
3,946
|
|
|
483
|
|
|
27,419
|
|
|
|
20.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted
Earnings Per Share
|
|
|
|
Three Months Ended
June 30, 2012
|
|
|
|
|
|
|
|
Stock
|
|
|
|
Acquisition
|
|
Release of
|
|
|
|
|
|
|
|
GAAP
|
|
Compensation
|
|
Termination
|
|
Related
|
|
Unrecognized
|
|
Non-GAAP
|
|
|
|
|
|
Measure
|
|
Expense *
|
|
Costs
|
|
Items
|
|
Tax Benefits
|
|
Measure
|
|
Net income
|
|
|
|
$
|
20,509
|
|
|
$
|
5,846
|
|
$
|
2,729
|
|
$
|
483
|
|
$
|
(7,265
|
)
|
|
$
|
22,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding
|
|
|
43,423
|
|
|
|
|
|
|
|
|
|
|
|
43,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
$
|
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Excludes stock compensation recognized in connection with terminations
costs for our former CEO.
|
|
|
|
|
Silicon Laboratories Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
June 30,
2012
|
|
December 31,
2011
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
173,753
|
|
|
$
|
94,964
|
|
|
Short-term investments
|
|
|
138,147
|
|
|
|
212,526
|
|
|
Accounts receivable, net of allowances for doubtful accounts of
$669 at June 30, 2012 and $725 at December 31, 2011
|
|
|
72,666
|
|
|
|
55,351
|
|
|
Inventories
|
|
|
35,977
|
|
|
|
34,778
|
|
|
Deferred income taxes
|
|
|
6,170
|
|
|
|
11,563
|
|
|
Prepaid expenses and other current assets
|
|
|
48,152
|
|
|
|
43,867
|
|
|
Total current assets
|
|
|
474,865
|
|
|
|
453,049
|
|
|
Long-term investments
|
|
|
11,028
|
|
|
|
17,477
|
|
|
Property and equipment, net
|
|
|
23,468
|
|
|
|
25,141
|
|
|
Goodwill
|
|
|
115,489
|
|
|
|
115,489
|
|
|
Other intangible assets, net
|
|
|
55,447
|
|
|
|
60,005
|
|
|
Other assets, net
|
|
|
40,977
|
|
|
|
34,830
|
|
|
Total assets
|
|
$
|
721,274
|
|
|
$
|
705,991
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
36,383
|
|
|
$
|
26,354
|
|
|
Accrued expenses
|
|
|
30,955
|
|
|
|
30,857
|
|
|
Deferred income on shipments to distributors
|
|
|
26,334
|
|
|
|
24,962
|
|
|
Income taxes
|
|
|
707
|
|
|
|
665
|
|
|
Total current liabilities
|
|
|
94,379
|
|
|
|
82,838
|
|
|
Long-term obligations and other liabilities
|
|
|
9,700
|
|
|
|
24,214
|
|
|
Total liabilities
|
|
|
104,079
|
|
|
|
107,052
|
|
|
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;
41,941 and 42,068 shares issued and outstanding at
June 30, 2012 and December 31, 2011, respectively
|
|
|
4
|
|
|
|
4
|
|
|
Additional paid-in capital
|
|
|
--
|
|
|
|
14,749
|
|
|
Retained earnings
|
|
|
618,839
|
|
|
|
586,653
|
|
|
Accumulated other comprehensive loss
|
|
|
(1,648
|
)
|
|
|
(2,467
|
)
|
|
Total stockholders' equity
|
|
|
617,195
|
|
|
|
598,939
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
721,274
|
|
|
$
|
705,991
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Laboratories Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
2012
|
|
July 2,
2011
|
|
Operating Activities
|
|
|
|
|
|
Net income
|
|
$
|
34,829
|
|
|
$
|
11,412
|
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
Depreciation of property and equipment
|
|
|
6,749
|
|
|
|
6,680
|
|
|
Amortization of other intangible assets and other assets
|
|
|
4,559
|
|
|
|
6,077
|
|
|
Stock-based compensation expense
|
|
|
15,865
|
|
|
|
18,074
|
|
|
Income tax benefit from employee stock-based awards
|
|
|
2,627
|
|
|
|
2,083
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
(2,450
|
)
|
|
|
(1,963
|
)
|
|
Deferred income taxes
|
|
|
1,625
|
|
|
|
181
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
|
(17,315
|
)
|
|
|
(23,562
|
)
|
|
Inventories
|
|
|
(1,299
|
)
|
|
|
2,022
|
|
|
Prepaid expenses and other assets
|
|
|
4,806
|
|
|
|
(1,021
|
)
|
|
Accounts payable
|
|
|
8,766
|
|
|
|
259
|
|
|
Accrued expenses
|
|
|
(5,203
|
)
|
|
|
(2,841
|
)
|
|
Deferred income on shipments to distributors
|
|
|
1,372
|
|
|
|
5,157
|
|
|
Income taxes
|
|
|
(13,672
|
)
|
|
|
3,672
|
|
|
Net cash provided by operating activities
|
|
|
41,259
|
|
|
|
26,230
|
|
|
Investing Activities
|
|
|
|
|
|
Purchases of available-for-sale investments
|
|
|
(105,169
|
)
|
|
|
(75,856
|
)
|
|
Proceeds from sales and maturities of marketable securities
|
|
|
186,514
|
|
|
|
104,831
|
|
|
Purchases of property and equipment
|
|
|
(5,095
|
)
|
|
|
(5,058
|
)
|
|
Purchases of other assets
|
|
|
(7,919
|
)
|
|
|
(665
|
)
|
|
Acquisition of businesses, net of cash acquired
|
|
|
--
|
|
|
|
(27,262
|
)
|
|
Net cash provided by (used in) investing activities
|
|
|
68,331
|
|
|
|
(4,010
|
)
|
|
Financing Activities
|
|
|
|
|
|
Proceeds from issuance of common stock, net of shares withheld for
taxes
|
|
|
2,922
|
|
|
|
2,489
|
|
|
Excess income tax benefit from employee stock-based awards
|
|
|
2,450
|
|
|
|
1,963
|
|
|
Repurchases of common stock
|
|
|
(36,173
|
)
|
|
|
(23,241
|
)
|
|
Payments on debt
|
|
|
--
|
|
|
|
(7,174
|
)
|
|
Net cash used in financing activities
|
|
|
(30,801
|
)
|
|
|
(25,963
|
)
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
78,789
|
|
|
|
(3,743
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
94,964
|
|
|
|
138,567
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
173,753
|
|
|
$
|
134,824
|
|
Silicon Laboratories Inc.
Shannon Pleasant, 512-464 9254
shannon.pleasant@silabs.com
Source: Silicon Laboratories Inc.
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