Business Outlook

The company expects revenue in the first quarter to be in the range of $157 million to $162 million. First quarter diluted earnings (loss) per share are expected to be between $(0.08) and $(0.02) on a GAAP basis and between $0.42 and $0.48 on a non-GAAP basis.

“Strong top line performance combined with favorable opex drove a solid beat in fourth quarter EPS,” said Tyson Tuttle, CEO of Silicon Labs. “During 2015, we made significant progress in laying the foundation for our continued success as a leading supplier of silicon, software and solutions for a more connected world. Our strategic growth products, including IoT, Infrastructure and Broadcast automotive, all delivered record revenue in 2015.”

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 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 entering conference ID 83469958. The replay will be available through March 3, 2016.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for the Internet of Things, Infrastructure, industrial automation, consumer and automotive markets. We solve the electronics industry’s toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity. Backed by our world-class engineering teams with strong software and mixed-signal design expertise, Silicon Labs empowers developers with the tools and technologies they need to advance quickly and easily from initial idea to final product. www.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: 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; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing our distributors, manufacturers and subcontractors; 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 our 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, war and political unrest; 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; conflict mineral risks and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. 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, the Silicon Laboratories logo, and EFM32, EFM8, Simplicity Studio and TouchXpress 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								Year Ended
			January 2,				January 3,				January 2,				January 3,
			2016				2015				2016				2015
Revenues			$	160,071			$	161,951			$	644,826			$	620,704
Cost of revenues				66,533				65,279				264,056				242,153
Gross margin				93,538				96,672				380,770				378,551
Operating expenses:
Research and development				47,245				46,139				188,050				172,985
Selling, general and administrative				41,497				39,527				160,486				154,145
Operating expenses				88,742				85,666				348,536				327,130
Operating income				4,796				11,006				32,234				51,421
Other income (expense):
Interest income				186				274				730				1,007
Interest expense				(668	)			(808	)			(2,828	)			(3,154	)
Other income (expense), net				(91	)			(337	)			127				(234	)
Income before income taxes				4,223				10,135				30,263				49,040
Provision (benefit) for income taxes				(1,435	)			111				677				11,019
Net income			$	5,658			$	10,024			$	29,586			$	38,021
Earnings per share:
Basic			$	0.14			$	0.24			$	0.70			$	0.88
Diluted			$	0.13			$	0.23			$	0.69			$	0.87
Weighted-average common shares outstanding:
Basic				41,670				42,279				42,309				42,970
Diluted				42,374				43,137				42,945				43,793

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
Non-GAAP Income Statement Items		Three Months Ended January 2, 2016
					GAAP				Stock			Intangible			Acquisition										Non-GAAP
		GAAP			Percent of				Compensation			Asset			Related			Termination				Non-GAAP			Percent of
		Measure			Revenue				Expense			Amortization			Items			Costs				Measure			Revenue
Revenues		$	160,071
Gross margin			93,538			58.4	%		$	251		$	390		$	201		$	--			$	94,380		59.0	%
Research and development			47,245			29.5	%			5,073			5,441			--			336				36,395		22.7	%
Selling, general and administrative			41,497			25.9	%			6,669			1,286			1,752			380				31,410		19.7	%
Operating income			4,796			3.0	%			11,993			7,117			1,953			716				26,575		16.6	%
Non-GAAP Earnings Per Share		Three Months Ended January 2, 2016
					Stock				Intangible			Acquisition
		GAAP			Compensation				Asset			Related			Termination			Income Tax				Non-GAAP
		Measure			Expense*				Amortization*			Items*			Costs*			Adjustments				Measure
Net income		$	5,658		$	11,993			$	7,117		$	1,953		$	716		$	(889	)		$	26,548
Diluted shares outstanding			42,374																				42,374
Diluted earnings per share		$	0.13																			$	0.63
* Represents pre-tax amounts

Unaudited Forward-Looking Statements Regarding Business Outlook
Business Outlook		Three Months Ending April 2, 2016
		High				Low
Estimated GAAP diluted earnings (loss) per share		$	(0.02	)		$	(0.08	)
Estimated non-GAAP charges			0.50				0.50
Estimated non-GAAP diluted earnings per share		$	0.48			$	0.42

Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
			January 2,				January 3,
			2016				2015
Assets
Current assets:
Cash and cash equivalents			$	114,085			$	141,706
Short-term investments				128,901				193,489
Accounts receivable, net of allowances for doubtful accounts of $671 at January 2, 2016 and $786 at January 3, 2015				73,601				70,367
Inventories				53,895				52,631
Deferred income taxes				--				21,173
Prepaid expenses and other current assets				52,658				49,171
Total current assets				423,140				528,537
Long-term investments				7,126				7,419
Property and equipment, net				131,132				132,820
Goodwill				272,722				228,781
Other intangible assets, net				121,354				115,021
Other assets, net				55,989				29,983
Total assets			$	1,011,463			$	1,042,561
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable			$	42,127			$	38,922
Current portion of long-term debt				10,000				10,000
Accrued expenses				52,131				73,646
Deferred income on shipments to distributors				35,448				38,662
Income taxes				2,615				2,084
Total current liabilities				142,321				163,314
Long-term debt				67,500				77,500
Other non-current liabilities				40,528				43,691
Total liabilities				250,349				284,505
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; 41,727 and 42,225 shares issued and outstanding at January 2, 2016 and January 3, 2015, respectively				4				4
Additional paid-in capital				13,868				29,501
Retained earnings				747,749				728,633
Accumulated other comprehensive loss				(507	)			(82	)
Total stockholders' equity				761,114				758,056
Total liabilities and stockholders' equity			$	1,011,463			$	1,042,561

Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
			Year Ended
			January 2,				January 3,
			2016				2015
Operating Activities
Net income			$	29,586			$	38,021
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment				12,517				12,561
Amortization of other intangible assets and other assets				29,131				17,923
Stock-based compensation expense				42,791				39,067
Income tax benefit (shortfall) from stock-based awards				469				489
Excess income tax benefit from stock-based awards				(2,497	)			(632	)
Deferred income taxes				(2,136	)			3,054
Changes in operating assets and liabilities:
Accounts receivable				1,702				1,757
Inventories				2,093				(7,170	)
Prepaid expenses and other assets				(870	)			9,332
Accounts payable				6,662				11,475
Accrued expenses				1,682				27,671
Deferred income on shipments to distributors				(5,298	)			7,809
Income taxes				776				(3,371	)
Other non-current liabilities				(11,161	)			(20,543	)
Net cash provided by operating activities				105,447				137,443
Investing Activities
Purchases of available-for-sale investments				(107,366	)			(166,094	)
Proceeds from sales and maturities of available-for-sale investments				171,831				156,520
Purchases of property and equipment				(11,268	)			(11,225	)
Purchases of other assets				(6,399	)			(5,514	)
Acquisitions of businesses, net of cash acquired				(96,112	)			--
Net cash used in investing activities				(49,314	)			(26,313	)
Financing Activities
Proceeds from issuance of common stock, net of cash paid for withheld taxes				3,129				13,320
Excess income tax benefit from stock-based awards				2,497				632
Repurchases of common stock				(71,448	)			(71,676	)
Payment of acquisition-related contingent consideration				(4,464	)			--
Proceeds from issuance of long-term debt, net				81,238				--
Payments on debt				(94,706	)			(7,500	)
Net cash used in financing activities				(83,754	)			(65,224	)
Increase (decrease) in cash and cash equivalents				(27,621	)			45,906
Cash and cash equivalents at beginning of period				141,706				95,800
Cash and cash equivalents at end of period			$	114,085			$	141,706

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