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Silicon Labs Announces Fourth Quarter 2017 Results

-- Q4 Revenue Tops $200 Million --

AUSTIN, Texas, Jan. 31, 2018 — (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 fourth quarter ended December 30, 2017. Revenue in the fourth quarter ended at the high end of guidance at $201 million, up from $199 million in the third quarter, and establishing a new all-time record. Fourth quarter GAAP (loss) per share was $(0.11), which includes an approximate $(0.60) per share impact from U.S. corporate tax reform, resulting from a $26 million charge to the GAAP tax provision. Fourth quarter non-GAAP diluted earnings per share were $0.93.

"We are very pleased to report outstanding fourth quarter and full-year 2017 financial performance, including 10 percent year-on-year product revenue growth for Q4 and 11 percent for the year," said Tyson Tuttle, CEO of Silicon Labs. "With the combined effort of our 1,300 employees and the support of our business partners and customers worldwide, we have transformed our business to address large, high-quality, sustainable and growing market trends in IoT, green energy and Internet infrastructure. Becoming a $1 billion company is within our sight."

Fourth Quarter Financial Highlights

On a GAAP basis:

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, the effect of the Tax Cuts & Jobs Act of 2017, and certain other items as set forth in the reconciliation tables below:

Product Highlights

Business Highlights

Business Outlook

The company expects revenue in the first quarter to be in the range of $196 million to $202 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, non-cash interest expense on 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 88340275. The replay will be available through February 28, 2018.

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, and the Silicon Labs logo 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


Year Ended


December 30,
2017


December 31,
2016


December 30,
2017


December 31,
2016


Revenues

$201,018


$182,610


$768,867


$697,626


Cost of revenues

81,754


73,134


314,676


276,122


Gross margin

119,264


109,476


454,191


421,504


Operating expenses:









   Research and development

52,735


50,626


209,491


199,744


   Selling, general and administrative

40,139


38,767


159,726


155,483


Operating expenses

92,874


89,393


369,217


355,227


Operating income

26,390


20,083


84,974


66,277


Other income (expense):









   Interest income and other, net

1,963


357


6,057


806


   Interest expense

(4,863)


(648)


(14,128)


(2,587)


Income before income taxes

23,490


19,792


76,903


64,496


Provision (benefit) for income taxes

28,342


(317)


29,811


3,002











Net income (loss)

$   (4,852)


$  20,109


$  47,092


$  61,494











Earnings (loss) per share:









   Basic

$     (0.11)


$      0.48


$      1.11


$      1.47


   Diluted

$     (0.11)


$      0.47


$      1.09


$      1.45











Weighted-average common shares outstanding:









   Basic

42,656


41,850


42,446


41,713


   Diluted

42,656


42,728


43,332


42,376


 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)


Non-GAAP Income
Statement Items


Three Months Ended

December 30, 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


$201,018




























Gross margin


119,264


59.3%


$     287


$      --


$  --


$119,551


59.5%
















Research and

   development


52,735


26.2%


5,611


4,943


--


42,181


21.0%
















Selling, general and

   administrative


40,139


20.0%


5,847


1,647


(110)


32,755


16.3%
















Operating income


26,390


13.1%


11,745


6,590


(110)


44,615


22.2%































Non-GAAP
Earnings Per Share


Three Months Ended

December 30, 2017



GAAP

Measure


Stock

Compensation
Expense*


Intangible
Asset
Amortization*


Acquisition
Related
Items*


Non-cash
Interest
Expense*

Income Tax
Adjustments


Non-GAAP

Measure

Net income (loss)


$ (4,852)


$11,745


$6,590


$(110)


$2,748

$24,631


$40,752

















GAAP

Measure


Dilutive Securities Excluded From GAAP Measure Due to Net Loss


Non-GAAP

Measure

Diluted shares

   outstanding


42,656


1,088


43,744















Diluted earnings

   (loss) per share


$   (0.11)











$    0.93
















* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)


Business Outlook


Three Months Ending

March 31, 2018



GAAP

Measure


Non-GAAP

Adjustments


Non-GAAP

Measure

Gross margin


59.0%


0.25%


59.25%








Operating expenses


$98


$18


$80








Effective tax rate


(15.0)%


27.5%


12.5%








Diluted earnings per share - low


$0.42


$0.31


$0.73








Diluted earnings per share - high


$0.48


$0.31


$0.79

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



December 30,

 2017


December 31,
2016

Assets




Current assets:




   Cash and cash equivalents

$   269,366


$   141,106

   Short-term investments

494,657


153,961

   Accounts receivable, net

71,367


74,401

   Inventories

73,132


59,578

   Prepaid expenses and other current assets

39,120


61,805

Total current assets

947,642


490,851

Property and equipment, net

127,682


129,559

Goodwill

288,227


276,130

Other intangible assets, net

83,144


103,565

Other assets, net

88,387


81,739

Total assets

$1,535,082


$1,081,844





Liabilities and Stockholders' Equity




Current liabilities:




   Accounts payable

$     38,851


$     39,577

   Deferred income on shipments to distributors

50,115


45,568

   Other current liabilities

73,359


54,550

Total current liabilities

162,325


139,695

Long-term debt

--


72,500

Convertible debt

341,879


--

Other non-current liabilities

77,862


42,691

Total liabilities

582,066


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;  

      42,707 and 41,889 shares issued and outstanding at

      December 30, 2017 and December 31, 2016, respectively

4


4

   Additional paid-in capital

102,862


24,463

   Retained earnings

851,307


801,999

   Accumulated other comprehensive income (loss)

(1,157)


492

Total stockholders' equity

953,016


826,958

Total liabilities and stockholders' equity

$1,535,082


$1,081,844

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Year Ended


December 30,
2017


December 31,
2016

Operating Activities




Net income

$  47,092


$  61,494

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




   Depreciation of property and equipment

14,766


13,216

   Amortization of other intangible assets and other assets

27,246


27,715

   Amortization of debt discount and debt issuance costs 

10,146


--

   Stock-based compensation expense

44,752


39,628

   Income tax shortfall from stock-based awards

--


(1,671)

   Deferred income taxes

(26,452)


(4,087)

   Changes in operating assets and liabilities:




      Accounts receivable

3,234


46

      Inventories

(13,416)


(6,093)

      Prepaid expenses and other assets

25,266


(3,568)

      Accounts payable

(468)


263

      Other current liabilities and income taxes

61,924


2,879

      Deferred income on shipments to distributors

4,453


9,713

      Other non-current liabilities

(9,022)


(10,625)

Net cash provided by operating activities

189,521


128,910





Investing Activities




Purchases of available-for-sale investments

(636,363)


(185,231)

Sales and maturities of available-for-sale investments

294,452


161,921

Purchases of property and equipment

(12,252)


(10,927)

Purchases of other assets

(4,960)


(8,801)

Acquisitions of businesses, net of cash acquired

(15,168)


(6,546)

Net cash used in investing activities

(374,291)


(49,584)





Financing Activities




Proceeds from issuance of long-term debt, net

389,468


--

Payments on debt

(72,500)


(5,000)

Repurchases of common stock

--


(40,543)

Payment of taxes withheld for vested stock awards

(15,753)


(10,561)

Proceeds from the issuance of common stock

11,815


13,299

Payment of acquisition-related contingent consideration

--


(9,500)

Net cash provided by (used in) financing activities

313,030


(52,305)





Increase in cash and cash equivalents

128,260


27,021

Cash and cash equivalents at beginning of period

141,106


114,085

Cash and cash equivalents at end of period

$269,366


$141,106

 

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SOURCE Silicon Labs

Contact:
Company Name: Silicon Labs
Web: http://www.silabs.com
Financial data for Silicon Labs