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Silicon Labs Announces First Quarter 2017 Results

-- IoT Achieves Fifth Consecutive Record Revenue Quarter --

AUSTIN, Texas, April 26, 2017 — (PRNewswire) —   Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its first quarter ended April 1, 2017. Revenue in the first quarter was at the high end of guidance at $179 million, down from $183 million in the fourth quarter. First quarter GAAP and non-GAAP earnings per share (EPS) were $0.36 and $0.63, respectively.

"We are very pleased with our first quarter 2017 financial results, reflecting solid year-on-year growth in revenue and profitability," said Tyson Tuttle, CEO of Silicon Labs. "Our Internet of Things and Infrastructure businesses now represent nearly 70 percent of revenue targeting large, high-quality, sustainable, and growing markets."

First Quarter Financial Highlights

On a GAAP basis:

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

Product Highlights

Business Highlights

Business Outlook

The company expects revenue in the second quarter to be in the range of $184 million to $189 million, and also estimates the following:

On a GAAP basis:

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

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 ( www.silabs.com) under Investor Relations. 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 8459893. The replay will be available through May 26, 2017.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. 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; cyber-attacks against our products and our networks; 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 Labs logo, Micrium, EFM32 and EFR32 are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.

CONTACT: Jalene Hoover, +1 (512) 428-1610, Jalene.Hoover@silabs.com


Silicon Laboratories Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)



Three Months Ended


April 1,
2017


April 2,
2016

Revenues

$179,028


$162,025

Cost of revenues

73,867


66,494

Gross margin

105,161


95,531

Operating expenses:




   Research and development

52,324


49,046

   Selling, general and administrative

40,155


39,637

Operating expenses

92,479


88,683

Operating income

12,682


6,848

Other income (expense):




   Interest income

696


271

   Interest expense

198


(655)

   Other, net

(120)


(391)

Income before income taxes

13,456


6,073

Provision (benefit) for income taxes

(1,970)


265

 

Net income

$  15,426


$    5,808





Earnings per share:




   Basic

$      0.37


$      0.14

   Diluted

$      0.36


$      0.14





Weighted-average common shares outstanding:




   Basic

42,096


41,629

   Diluted

43,030


42,199

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)


Non-GAAP Income
Statement Items


Three Months Ended

April 1, 2017



GAAP

Measure


GAAP

Percent of
Revenue


Stock

Compensation
Expense


Intangible
Asset
Amortization


Acquisition
Related
Items


Non-GAAP

Measure


Non-GAAP

Percent of
Revenue

Revenues


$179,028




























Gross margin


105,161


58.7%


$     258


$      --


$   124


$105,543


59.0%
















Research and

   development


52,324


29.2%


5,246


4,897


 

356


41,825


23.4%
















Selling, general and

   administrative


40,155


 

22.4%


4,982


1,605


816


32,752


 

18.3%
















Operating income


12,682


7.1%


10,486


6,502


1,296


30,966


17.3%































Non-GAAP
Earnings Per Share


Three Months Ended

April 1, 2017



GAAP

Measure


Stock

Compensation
Expense*


Intangible
Asset
Amortization*


Acquisition
Related
Items*


Interest
Expense*


Income Tax
Adjustments


Non-GAAP

Measure

Net income


$15,426


$10,486


$6,502


$1,296


$(1,228)


$(5,212)


$27,270
















Diluted shares

   outstanding


43,030












 

43,030
















Diluted earnings

   per share


$    0.36












 

$    0.63


* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)


Business Outlook


Three Months Ending

July 1, 2017



GAAP

Measure


Non-GAAP

Adjustments


Non-GAAP

Measure

Gross margin


58.8%


0.2%


59.0%








Operating expenses


$92


$18


$74 - $75








Effective tax rate


11.0%


0.5%


11.5%








Diluted earnings per share - low


$0.27


$0.41


$0.68








Diluted earnings per share - high


$0.33


$0.41


$0.74

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



April 1,
2017


December 31,
2016

Assets




Current assets:




   Cash and cash equivalents

$   225,399


$   141,106

   Short-term investments

396,327


153,961

   Accounts receivable, net

75,852


74,401

   Inventories

61,308


59,578

   Prepaid expenses and other current assets

54,360


61,805

Total current assets

813,246


490,851

Long-term investments

5,257


5,196

Property and equipment, net

130,635


129,559

Goodwill

288,629


276,130

Other intangible assets, net

103,638


103,565

Other assets, net

58,021


76,543

Total assets

$1,399,426


$1,081,844





Liabilities and Stockholders' Equity




Current liabilities:




   Accounts payable

$     43,781


$     39,577

   Accrued expenses

47,416


50,100

   Deferred income on shipments to distributors

49,700


45,568

   Income taxes

4,396


4,450

Total current liabilities

145,293


139,695

Long-term debt

--


72,500

Convertible debt

332,502


--

Other non-current liabilities

42,797


42,691

Total liabilities

520,592


254,886

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;  

      42,348 and 41,889  shares issued and outstanding at

      April 1, 2017 and December 31, 2016, respectively

4


4

   Additional paid-in capital

59,714


24,463

   Retained earnings

819,641


801,999

   Accumulated other comprehensive income (loss)

(525)


492

Total stockholders' equity

878,834


826,958

Total liabilities and stockholders' equity

$1,399,426


$1,081,844

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended


April 1,
2017


April 2,
2016

Operating Activities




Net income

$  15,426


$    5,808

Adjustments to reconcile net income to cash provided by operating activities:




   Depreciation of property and equipment

3,596


3,310

   Amortization of other intangible assets and other assets

6,752


7,980

   Amortization of debt discount and debt issuance costs 

869


--

   Stock-based compensation expense

10,486


10,344

   Income tax benefit (shortfall) from stock-based awards

--


(1,025)

   Excess income tax benefit from stock-based awards

--


(6)

   Deferred income taxes

(4,059)


(38)

   Changes in operating assets and liabilities:




      Accounts receivable

(1,252)


(990)

      Inventories

(1,636)


4,580

      Prepaid expenses and other assets

6,708


9,159

      Accounts payable

5,565


1,559

      Accrued expenses

(3,889)


6,260

      Deferred income on shipments to distributors

4,038


5,558

      Income taxes

945


494

      Other non-current liabilities

(1,536)


(10,584)

Net cash provided by operating activities

42,013


42,409





Investing Activities




Purchases of available-for-sale investments

(267,777)


(44,547)

Sales and maturities of available-for-sale investments

25,595


46,654

Purchases of property and equipment

(4,543)


(2,303)

Purchases of other assets

(1,446)


(1,107)

Acquisition of business, net of cash acquired

(13,658)


--

Net cash used in investing activities

(261,829)


(1,303)





Financing Activities




Proceeds from issuance of long-term debt, net

390,000


--

Payments on debt

(72,500)


(2,500)

Repurchases of common stock

--


(18,484)

Payment of taxes withheld for vested stock awards

(13,553)


(7,517)

Proceeds from the issuance of common stock

162


--

Net cash provided by (used in) financing activities

304,109


(28,501)





Increase in cash and cash equivalents

84,293


12,605

Cash and cash equivalents at beginning of period

141,106


114,085

Cash and cash equivalents at end of period

$225,399


$126,690

 

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SOURCE Silicon Labs

Contact:
Silicon Labs
Web: http://www.silabs.com