Attached files
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| 8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - SILICON LABORATORIES INC. | a11-21092_18k.htm |
Exhibit 99
SILICON LABORATORIES REPORTS SECOND QUARTER RESULTS
—Strong Growth from Broad-based Products—
AUSTIN, Texas — July 25, 2011 — 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.
CONTACT: Silicon Laboratories Inc., Shannon Pleasant, (512) 464 9254, shannon.pleasant@silabs.com
Silicon Laboratories Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
|
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
|
July 2, |
|
July 3, |
|
July 2, |
|
July 3, |
| ||||
|
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)
|
|
|
Three Months Ended |
| |||||||||||||||||
|
Non-GAAP Income |
|
GAAP |
|
GAAP |
|
Stock |
|
Acquisition |
|
Material |
|
Non- |
|
Non- |
| |||||
|
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 |
% | |||||
|
|
|
Three Months Ended |
| |||||||||||||
|
Non-GAAP Diluted |
|
GAAP |
|
Stock |
|
Acquisition |
|
Material |
|
Non- |
| |||||
|
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, |
|
January 1, |
| ||
|
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, |
|
July 3, |
| ||
|
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 |
|
# # #