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Silicon Labs Accelerates Revenue Growth in First Quarter 2022

AUSTIN, Texas, April 27, 2022 — (PRNewswire) — Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported strong financial results for the first quarter, which ended April 2, 2022. Revenue exceeded the top end of the guidance range at $234 million, up 12% sequentially and 48% year-on-year.

"We are off to an outstanding start in our first full year as the largest pure-play IoT wireless company. We delivered record revenue in the quarter and great operating results," said Matt Johnson, President and Chief Executive Officer, Silicon Labs. "Demand for our solutions remains strong, and our design win momentum is accelerating across our wireless portfolio and in both our Industrial & Commercial and Home & Life end markets." 

First Quarter Financial Highlights

Results on a GAAP basis:

Results on a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, and certain other items as set forth in the reconciliation tables were as follows:

Business Highlights

"The xG24 family is just the latest in an impressive line-up of solutions built on our Series 2 platform," said Johnson. "With Series 2, we've been able to increase our R&D efficiency and deliver new products faster, and the market response has been fantastic. Sales of Series 1-based products have been strong. Series 2 sales have taken off even faster, and we have several more Series 2-based products on the horizon."

Business Outlook

The company expects second quarter revenue to be in the range of $245 to $255 million. The company also estimates the following results:

On a GAAP basis:

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, and certain other items as set forth in the reconciliation tables:

Earnings Webcast and Conference Call    

Silicon Labs will host an earnings conference call to discuss the quarterly results and answer questions at 7:30 am CDT today. An audio webcast will be available on Silicon Labs' website ( www.silabs.com) under Investor Relations. In addition, the company will post an audio recording of the event at silabs.com/investors and make a replay available through May 4, 2022, online or by calling (877) 344-7529 (US) or (412) 317-0088 (international) and entering access code 1597850.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leader in secure, intelligent wireless technology for a more connected world. Our integrated hardware and software platform, intuitive development tools, thriving ecosystem, and robust support make us an ideal long-term partner in building advanced industrial, commercial, home and life applications. We make it easy for developers to solve complex wireless challenges throughout the product lifecycle and get to market quickly with innovative solutions that transform industries, grow economies, and improve lives. silabs.com

Forward-Looking Statements

This press release contains forward-looking statements based on Silicon Labs' current expectations. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will," and similar phrases as they relate to Silicon Labs are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silicon Labs 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: the timing and scope of anticipated share repurchases, and/or dividends; the impact of COVID-19 on the U.S. and global economy, including the restrictions on travel and transportation and other actions taken by governmental authorities and disruptions to the business of our customers or our global supply chain that have occurred or may occur in the future, the ongoing impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs; risks that Silicon Labs may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; difficulties developing new products that achieve market acceptance; risks associated with international activities (including trade barriers, particularly with respect to China); intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing and/or obtaining sufficient supply from Silicon Labs' distributors, manufacturers and subcontractors; dependence on a limited number of products; absence of long-term commitments from customers; inventory-related risks; difficulties managing international activities; risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with its accounts receivable; dependence on key personnel; stock price volatility; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Labs' business and results of operations to risks of natural disasters, epidemics or pandemics, war and political unrest, including risks that demand and the supply chain may be adversely affected by military conflict (including between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally; debt-related risks; capital-raising risks; the competitive and cyclical nature of the semiconductor industry; average selling prices of products may decrease significantly and rapidly; information technology risks; cyber-attacks against Silicon Labs' products and its networks and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. The level of share repurchases and/or dividends depends on market conditions and the level of other uses of cash. Silicon Labs disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. References in this press release to Silicon Labs shall mean Silicon Laboratories Inc.

Note to editors: Silicon Laboratories, Silicon Labs, the "S" symbol, 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


April 2,
2022


April 3,
2021

Revenues

$233,814


$157,857

Cost of revenues

78,042


66,103

Gross profit

155,772


91,754

Operating expenses:




   Research and development

77,542


64,015

   Selling, general and administrative

44,647


42,454

Operating expenses

122,189


106,469

Operating income (loss)

33,583


(14,715)

Other income (expense):




   Interest income and other, net

1,499


1,149

   Interest expense

(1,680)


(11,324)

Income (loss) from continuing operations before income taxes

33,402


(24,890)

Provision for income taxes

11,689


1,992

Equity-method earnings

1,194


1,726

Income (loss) from continuing operations

22,907


(25,156)

Income from discontinued operations, net of income taxes

--


38,665





Net income

$  22,907


$  13,509





Basic earnings (loss) per share:




   Continuing operations

$      0.60


$     (0.57)

   Net income

$      0.60


$      0.31





Diluted earnings (loss) per share:




   Continuing operations

$      0.58


$     (0.57)

   Net income

$      0.58


$      0.29





Weighted-average common shares outstanding:




   Basic

38,003


44,160

   Diluted

39,523


45,832

 

Non-GAAP Financial Measurements


In addition to the GAAP results provided throughout this document, Silicon Labs has provided non-GAAP financial measurements on a basis excluding non-cash and other charges and benefits.  Details of these excluded items are presented in the tables below, which reconcile the GAAP results to non-GAAP financial measurements.


The non-GAAP financial measurements do not replace the presentation of Silicon Labs' GAAP financial results.  These measurements provide supplemental information to assist management and investors in analyzing Silicon Labs' financial position and results of operations. Silicon Labs has chosen to provide this information to investors to enable them to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of core on-going operations.


Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)




Three Months Ended

April 2, 2022

Non-GAAP Income Statement Items


GAAP

Measure


GAAP

Percent of
Revenue


Stock
Compensation
Expense


Intangible Asset
Amortization


Non-GAAP

Measure


Non-GAAP

Percent of
Revenue

Revenues


$233,814
























Gross profit


155,772


66.6%


$272


$        --


$156,044


66.7%














Research and development


77,542


33.2%


6,991


7,570


62,981


26.9%














Selling, general and administrative


44,647


19.0%


5,613


2,781


36,253


15.5%














Operating income


33,583


14.4%


12,876


10,351


56,810


24.3%
















Three Months Ended

April 2, 2022

Non-GAAP Earnings Per Share


GAAP

Measure


Stock

Compensation
Expense*


Intangible Asset
Amortization*


Equity-Method

Investment
Adjustments*


Income

Tax

Adjustments


Non-

GAAP

Measure

Net income


$22,907


$12,876


$10,351


$(1,194)


$(3,410)


$41,530














Diluted shares outstanding


39,523










39,523














Diluted earnings per share


0.58










1.05


* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)


Business Outlook


Three Months Ending

July 2, 2022



GAAP

Measure


Non-GAAP

Adjustments*


Non-GAAP

Measure

Gross margin


60.9%


0.1%


61%








Operating expenses


$129


$(22)


$107








Effective tax rate


33%


(7)%


26%








Diluted earnings per share - low


$0.37


$0.48


$0.85








Diluted earnings per share - high


$0.47


$0.48


$0.95


* Non-GAAP adjustments include the following estimates: stock compensation expense of $13.9 million, intangible asset amortization of $8.8 million and the associated tax impact from the aforementioned items.  

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



April 2,
2022


January 1,
2022

Assets




Current assets:




   Cash and cash equivalents

$   765,911


$1,074,623

   Short-term investments

1,167,807


964,582

   Accounts receivable, net

79,233


98,313

   Inventories

55,515


49,307

   Prepaid expenses and other current assets

54,932


51,748

Total current assets

2,123,398


2,238,573

Property and equipment, net

147,940


146,516

Goodwill

376,389


376,389

Other intangible assets, net

108,627


118,978

Other assets, net

87,408


77,839

Total assets

$2,843,762


$2,958,295





Liabilities and Stockholders' Equity




Current liabilities:




   Accounts payable

$     64,388


$     47,327

   Current portion of convertible debt, net

--


450,599

   Deferred revenue and returns liability

21,640


13,849

   Other current liabilities

160,180


157,052

Total current liabilities

246,208


668,827

Convertible debt, net

528,086


--

Other non-current liabilities

61,813


77,044

Total liabilities

836,107


745,871

Commitments and contingencies




Stockholders' equity:




   Preferred stock – $0.0001 par value; 10,000 shares authorized; no

      shares issued

--


--

   Common stock – $0.0001 par value; 250,000 shares authorized;  

      37,204 and 38,481 shares issued and outstanding at

      April 2, 2022 and January 1, 2022, respectively

4


4

   Retained earnings

2,018,117


2,214,839

   Accumulated other comprehensive loss

(10,466)


(2,419)

Total stockholders' equity

2,007,655


2,212,424

Total liabilities and stockholders' equity

$2,843,762


$2,958,295

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended


April 2,
2022


April 3,
2021

Operating Activities




Net income

$    22,907


$  13,509

Adjustments to reconcile net income to cash provided by (used in)

   operating activities of continuing operations:




   Income from discontinued operations, net of income taxes

--


(38,665)

   Depreciation of property and equipment

5,156


4,108

   Amortization of other intangible assets

10,351


11,451

   Amortization of debt discount and debt issuance costs 

496


6,456

   Loss on extinguishment of convertible debt

--


3,370

   Stock-based compensation expense

12,875


11,368

   Equity-method earnings

(1,194)


(1,726)

   Deferred income taxes

(4,202)


(3,197)

   Changes in operating assets and liabilities:




      Accounts receivable

19,080


(8,530)

      Inventories

(6,215)


(4,908)

      Prepaid expenses and other assets

1,704


(12,735)

      Accounts payable

8,932


14,116

      Other current liabilities and income taxes

8,345


(13,432)

      Deferred revenue and returns liability

7,791


463

      Other non-current liabilities

(817)


(1,972)

Net cash provided by (used in) operating activities of continuing operations

85,209


(20,324)





Investing Activities




Purchases of marketable securities

(435,690)


(8,251)

Sales of marketable securities

9,106


121,557

Maturities of marketable securities

213,750


39,835

Purchases of property and equipment

(4,554)


(5,705)

Purchases of other assets

--


(578)

Net cash provided by (used in) investing activities of continuing operations

(217,388)


146,858





Financing Activities




Payments on debt

--


(140,572)

Repurchases of common stock

(157,778)


--

Payment of taxes withheld for vested stock awards

(8,755)


(17,817)

Net cash used in financing activities of continuing operations

(166,533)


(158,389)





Discontinued Operations




Operating activities

(10,000)


34,827

Investing activities

--


(468)

Net cash provided by (used in) discontinued operations

(10,000)


34,359





Increase (decrease) in cash and cash equivalents

(308,712)


2,504

Cash and cash equivalents at beginning of period

1,074,623


202,720

Cash and cash equivalents at end of period

$  765,911


$205,224

 

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SOURCE Silicon Labs

Contact:
Company Name: Silicon Labs
Giovanni Pacelli, Senior Director of Finance, (512) 815-2119
Email Contact
Financial data for Silicon Labs