-- IoT Grows to More Than 50 Percent of Total Revenue --
AUSTIN, Texas, July 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 second quarter ended July 1, 2017. Revenue in the second quarter exceeded the high end of guidance at $190 million, up from $179 million in the first quarter. Second quarter GAAP and non-GAAP earnings per share (EPS) were $0.38 and $0.79, respectively."Our second quarter 2017 financial results reflect outstanding year-on-year progress, with 12 percent growth in product revenue," said Tyson Tuttle, CEO of Silicon Labs. "Five years ago, we accelerated our focus on the Internet of Things through a combination of organic investment and strategic acquisitions. This quarter, IoT surpassed 50 percent of total revenue, driving target model performance in year-on-year product revenue growth, gross margin and operating income. Our strategy is coming together as we focus on core strategic growth drivers and capture share in target markets."
Second Quarter Financial Highlights
- IoT revenue established a new record, increasing to $98 million, up 11% sequentially and 27% year-on-year.
- Infrastructure revenue increased to $38 million, up 6% sequentially and up 7% year-on-year, exclusive of $5 million of patent sale revenue in the second quarter of 2016.
- Broadcast revenue declined to $37 million, down 2% sequentially and 4% year-on-year.
- Access revenue declined to $17 million, down 2% sequentially and 10% year-on-year.
On a GAAP basis:
- GAAP gross margin was 59.5%.
- GAAP R&D expenses were $52 million.
- GAAP SG&A expenses were $40 million.
- GAAP operating income as a percentage of revenue was 11.0%.
- GAAP diluted earnings per share were $0.38.
On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:
- Non-GAAP gross margin was 59.7%.
- Non-GAAP R&D expenses were $42 million.
- Non-GAAP SG&A expenses were $33 million.
- Non-GAAP operating income as a percentage of revenue was 20.5%.
- Non-GAAP diluted earnings per share were $0.79.
Product Highlights
- Launched the new EFM32GG11 Giant Gecko microcontroller, offering the most advanced capabilities and largest memory footprint in the low-power MCU market.
- Introduced a comprehensive suite of software and hardware that supports the new Bluetooth® mesh specification, addressing smart home, lighting, beacons and asset tracking applications.
- Launched the CP2615 USB-to-I2S bridge chip, providing a simple, turnkey solution for transferring digital audio data.
- Introduced the Si54x Ultra Series™ family of high-performance crystal oscillators, offering the industry's lowest jitter frequency-flexible solution and shortest lead times for a wide range of networking and communications applications.
Business Highlights
- Delivered the keynote at the Design Automation Conference in Austin, Texas, on the topic of "Accelerating the IoT."
- Won Somfy's Supplier Innovation Award for providing groundbreaking Wireless Gecko silicon and software, enabling flexible control and integration of Somfy's motorized window coverings into connected living and building experiences.
Business Outlook
The company expects revenue in the third quarter to be in the range of $193 million to $199 million, and also estimates the following:
On a GAAP basis:
- GAAP gross margin at approximately 58.5%.
- GAAP operating expenses between $92.5 and $93 million.
- GAAP effective tax rate at 11.0%.
- GAAP diluted earnings per share between $0.35 and $0.41.
On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:
- Non-GAAP gross margin at 58.5%.
- Non-GAAP operating expenses between $74.5 and $75.0 million.
- Non-GAAP effective tax rate at 11.0%.
- Non-GAAP diluted earnings per share between $0.78 and $0.84.
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 8461186. The replay will be available through August 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, and Ultra Series 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
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Silicon Laboratories Inc.
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Three Months Ended |
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Six Months Ended | ||||
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July 1,
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July 2,
|
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July 1,
|
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July 2,
|
|
Revenues |
$190,098 |
|
$174,908 |
|
$369,126 |
|
$336,933 |
|
Cost of revenues |
76,906 |
|
66,614 |
|
150,773 |
|
133,108 |
|
Gross margin |
113,192 |
|
108,294 |
|
218,353 |
|
203,825 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
52,432 |
|
51,635 |
|
104,756 |
|
100,681 |
|
Selling, general and administrative |
39,826 |
|
39,045 |
|
79,981 |
|
78,682 |
|
Operating expenses |
92,258 |
|
90,680 |
|
184,737 |
|
179,363 |
|
Operating income |
20,934 |
|
17,614 |
|
33,616 |
|
24,462 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income and other, net |
1,595 |
|
296 |
|
2,171 |
|
176 |
|
Interest expense |
(4,699) |
|
(641) |
|
(4,501) |
|
(1,296) |
|
Income before income taxes |
17,830 |
|
17,269 |
|
31,286 |
|
23,342 |
|
Provision (benefit) for income taxes |
1,261 |
|
1,710 |
|
(709) |
|
1,975 |
|
Net income |
$ 16,569 |
|
$ 15,559 |
|
$ 31,995 |
|
$ 21,367 |
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|
|
|
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|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
$ 0.39 |
|
$ 0.37 |
|
$ 0.76 |
|
$ 0.51 |
|
Diluted |
$ 0.38 |
|
$ 0.37 |
|
$ 0.74 |
|
$ 0.51 |
|
|
|
|
|
|
|
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|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
42,478 |
|
41,775 |
|
42,287 |
|
41,702 |
|
Diluted |
43,178 |
|
42,284 |
|
43,104 |
|
42,242 |
|
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
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Non-GAAP Income Statement Items |
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Three Months Ended
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GAAP
|
|
GAAP
|
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Stock
|
|
Intangible
|
|
Acquisition
|
|
Non-GAAP
|
|
Non-GAAP
| ||||||||||||
|
Revenues |
|
$190,098 |
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|
Gross margin |
|
113,192 |
|
59.5% |
|
$ 264 |
|
$ -- |
|
$ -- |
|
$113,456 |
|
59.7% | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Research and development |
|
52,432 |
|
27.6% |
|
5,503 |
|
5,048 |
|
-- |
|
41,881 |
|
22.1% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
Selling, general and administrative |
|
39,826 |
|
20.9% |
|
5,399 |
|
1,647 |
|
234 |
|
32,546 |
|
17.1% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
Operating income |
|
20,934 |
|
11.0% |
|
11,166 |
|
6,695 |
|
234 |
|
39,029 |
|
20.5% | ||||||||||||
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Non-GAAP Earnings Per Share |
|
Three Months Ended
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|
|
GAAP Measure |
|
Stock Compensation
|
|
Intangible
|
|
Acquisition
|
|
Non-cash
|
|
Income Tax
|
|
Non-GAAP
| ||||||||||||
|
Net income |
|
$16,569 |
|
$11,166 |
|
$6,695 |
|
$234 |
|
$2,640 |
|
$(3,319) |
|
$33,985 | ||||||||||||
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|
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|
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Diluted shares outstanding |
|
43,178 |
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|
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|
|
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|
|
|
43,178 | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
Diluted earnings per share |
|
$ 0.38 |
|
|
|
|
|
|
|
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|
|
$ 0.79 | ||||||||||||
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* Represents pre-tax amounts |
|
Unaudited Forward-Looking Statements Regarding Business Outlook
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|
Business Outlook |
|
Three Months Ending September 30, 2017 | ||||
|
|
|
GAAP Measure |
|
Non-GAAP Adjustments |
|
Non-GAAP Measure |
|
Gross margin |
|
58.5% |
|
0.0% |
|
58.5% |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
$92.5 - $93 |
|
$18 |
|
$74.5 - $75 |
|
|
|
|
|
|
|
|
|
Effective tax rate |
|
11.0% |
|
0.0% |
|
11.0% |
|
|
|
|
|
|
|
|
|
Diluted earnings per share - low |
|
$0.35 |
|
$0.43 |
|
$0.78 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share - high |
|
$0.41 |
|
$0.43 |
|
$0.84 |
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Silicon Laboratories Inc.
| |||
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| |||
|
|
July 1,
|
|
December 31,
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ 210,615 |
|
$ 141,106 |
|
Short-term investments |
451,114 |
|
153,961 |
|
Accounts receivable, net |
75,488 |
|
74,401 |
|
Inventories |
67,427 |
|
59,578 |
|
Prepaid expenses and other current assets |
46,862 |
|
61,805 |
|
Total current assets |
851,506 |
|
490,851 |
|
Long-term investments |
5,379 |
|
5,196 |
|
Property and equipment, net |
130,909 |
|
129,559 |
|
Goodwill |
288,629 |
|
276,130 |
|
Other intangible assets, net |
96,819 |
|
103,565 |
|
Other assets, net |
61,085 |
|
76,543 |
|
Total assets |
$1,434,327 |
|
$1,081,844 |
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ 39,989 |
|
$ 39,577 |
|
Accrued expenses |
50,797 |
|
50,100 |
|
Deferred income on shipments to distributors |
48,914 |
|
45,568 |
|
Income taxes |
3,543 |
|
4,450 |
|
Total current liabilities |
143,243 |
|
139,695 |
|
Long-term debt |
-- |
|
72,500 |
|
Convertible debt |
335,639 |
|
-- |
|
Other non-current liabilities |
43,240 |
|
42,691 |
|
Total liabilities |
522,122 |
|
254,886 |
|
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; 42,539 and 41,889 shares issued and outstanding at July 1, 2017 and December 31, 2016, respectively |
4 |
|
4 |
|
Additional paid-in capital |
76,409 |
|
24,463 |
|
Retained earnings |
836,210 |
|
801,999 |
|
Accumulated other comprehensive income (loss) |
(418) |
|
492 |
|
Total stockholders' equity |
912,205 |
|
826,958 |
|
Total liabilities and stockholders' equity |
$1,434,327 |
|
$1,081,844 |
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Silicon Laboratories Inc.
| ||||
|
| ||||
|
|
Six Months Ended | |||
|
|
July 1,
|
|
July 2,
|
|
|
Operating Activities |
|
|
|
|
|
Net income |
$ 31,995 |
|
$ 21,367 |
|
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
|
Depreciation of property and equipment |
7,308 |
|
6,675 |
|
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Amortization of other intangible assets and other assets |
13,571 |
|
15,534 |
|
|
Amortization of debt discount and debt issuance costs |
3,907 |
|
-- |
|
|
Stock-based compensation expense |
21,652 |
|
20,861 |
|
|
Income tax benefit (shortfall) from stock-based awards |
-- |
|
(1,218) |
|
|
Deferred income taxes |
(6,242) |
|
817 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
(887) |
|
1,611 |
|
|
Inventories |
(7,737) |
|
(2,888) |
|
|
Prepaid expenses and other assets |
12,539 |
|
3,282 |
|
|
Accounts payable |
2,363 |
|
(1,680) |
|
|
Accrued expenses |
141 |
|
4,372 |
|
|
Deferred income on shipments to distributors |
3,251 |
|
3,773 |
|
|
Income taxes |
(127) |
|
(1,338) |
|
|
Other non-current liabilities |
(1,169) |
|
(10,737) |
|
|
Net cash provided by operating activities |
80,565 |
|
60,431 |
|
|
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
Purchases of available-for-sale investments |
(389,234) |
|
(92,222) |
|
|
Sales and maturities of available-for-sale investments |
92,307 |
|
78,950 |
|
|
Purchases of property and equipment |
(8,390) |
|
(5,146) |
|
|
Purchases of other assets |
(1,784) |
|
(2,215) |
|
|
Acquisition of business, net of cash acquired |
(13,658) |
|
-- |
|
|
Net cash used in investing activities |
(320,759) |
|
(20,633) |
|
|
|
|
|
|
|
|
Financing Activities |
|
|
|
|
|
Proceeds from issuance of long-term debt, net |
389,468 |
|
-- |
|
|
Payments on debt |
(72,500) |
|
(5,000) |
|
|
Repurchases of common stock |
-- |
|
(36,103) |
|
|
Payment of taxes withheld for vested stock awards |
(14,101) |
|
(9,308) |
|
|
Proceeds from the issuance of common stock |
6,836 |
|
7,362 |
|
|
Payment of acquisition-related contingent consideration |
-- |
|
(9,500) |
|
|
Net cash provided by (used in) financing activities |
309,703 |
|
(52,549) |
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
69,509 |
|
(12,751) |
|
|
Cash and cash equivalents at beginning of period |
141,106 |
|
114,085 |
|
|
Cash and cash equivalents at end of period |
$210,615 |
|
$101,334 |
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View original content with multimedia: http://www.prnewswire.com/news-releases/silicon-labs-announces-record-revenue-in-second-quarter-2017-300494103.html
SOURCE Silicon Laboratories, Inc.
| Contact: |
| Silicon Laboratories, Inc.
Web: http://www.silabs.com |