Silicon Labs Announces Second Quarter 2014 Results

Broad-based Products Fuel Record Revenue

AUSTIN, Texas — (BUSINESS WIRE) — July 25, 2014 — Silicon Labs (NASDAQ: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported financial results for its second quarter ended June 28, 2014. Revenue in the second quarter exceeded the top end of guidance and established a new record at $154.9 million, which included $5.0 million of patent sale revenue, up from $145.7 million as reported in the first quarter.

Financial Highlights

On a GAAP basis:

Gross margin was 63.7 percent
R&D expenses were $41.8 million
SG&A expenses were $36.0 million
Operating income as a percentage of revenue was 13.4 percent
Diluted earnings per share were $0.32

On a non-GAAP basis (results exclude the impact of stock compensation, amortization from acquired intangible assets and certain other items as set forth in the reconciliation tables below):

Gross margin was 64.1 percent
R&D expenses were $34.4 million
SG&A expenses were $31.3 million
Operating income was 21.6 percent
Diluted earnings per share were $0.58

Business Highlights

Broad-based revenue established a new record at $79.7 million, up 10 percent sequentially.
Broadcast revenue was $50.5 million for the quarter, which included $5.0 million from a patent sale. The patent sale revenue resulted from the acceleration of a royalty arrangement and was not forecasted.
Access revenue also exceeded expectations at $24.7 million.

Product Highlights

Introduced a new family of ultra-low-power capacitive sensing MCUs, the C8051F97x MCU family, offering fast and accurate capacitive touch control technology backed by Silicon Labs’ Simplicity Studio® development ecosystem.
Launched a new 32-bit hardware and firmware development kit that simplifies the process of developing “Made for iPod/iPhone/iPad” (MFi) accessories and accelerates time to market for MFi accessory developers.
Announced a comprehensive Wireless M-Bus software solution that simplifies the process of adding wireless connectivity to smart metering systems while enabling extended battery life.
Joined other industry leaders to form the Thread Group, leading the development of the next generation of IP-based wireless mesh networking for the Connected Home.
Won an EDN China Innovation Award in the category of “Innovation Excellence: Leading Technologies” for the EFM32™ Gecko family.

Business Outlook

The company expects revenue in the third quarter to be in the range of $153 million to $157 million and expects to establish another record in its Broad-based products. Third quarter diluted earnings per share are expected to be between $0.18 and $0.24 on a GAAP basis and between $0.45 and $0.51 on a non-GAAP basis.

“We are very pleased with our strong second quarter results, including record revenue in our Broad-based products,” said Tyson Tuttle, CEO of Silicon Labs. “We are benefitting from our multi-year investment strategy for the IoT and Internet Infrastructure and realizing meaningful revenue growth.”

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 Labs' 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 (404) 537-3406 (international) and by entering 39717389. The replay will be available through August 25.

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