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Silicon Labs Announces First Quarter 2018 Results

-- Company Delivers 15 Percent Q1 Year-on-Year Revenue Growth --

AUSTIN, Texas, April 25, 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 first quarter ended March 31, 2018. Revenue in the first quarter exceeded the high end of guidance at $205 million, up from $201 million in the fourth quarter, and establishing a new all-time record. First quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.60 and $0.87, respectively.

"We are very pleased to report outstanding first quarter 2018 financial performance, including 15 percent Q1 year-on-year revenue growth," said Tyson Tuttle, CEO of Silicon Labs. "We are excited about the acquisition of Z-Wave, and believe we have the right strategy, products and team in place to achieve our growth objectives. Together, we will continue to deliver differentiated solutions to address large, sustainable, high-quality growth markets."

First 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, 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 $211 million to $217 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 88340291. The replay will be available through May 23, 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


March 31,
2018


April 1,
2017

Revenues

$205,384


$179,028

Cost of revenues

81,147


73,867

Gross margin

124,237


105,161

Operating expenses:




   Research and development

54,828


52,324

   Selling, general and administrative

45,694


40,155

Operating expenses

100,522


92,479

Operating income

23,715


12,682

Other income (expense):




   Interest income and other, net

3,202


576

   Interest expense

(4,883)


198

Income before income taxes

22,034


13,456

Provision (benefit) for income taxes

(4,371)


(1,970)

Net income

$  26,405


$  15,426





Earnings per share:




   Basic

$      0.61


$      0.37

   Diluted

$      0.60


$      0.36





Weighted-average common shares outstanding:




   Basic

42,963


42,096

   Diluted

43,918


43,030

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)


Non-GAAP Income
Statement Items


Three Months Ended

March 31, 2018






GAAP
Measure


GAAP

Percent of
Revenue


Stock
Compensation
Expense


Intangible
Asset
Amortization


Acquisition
Related
 
Items


Non-GAAP
Measure


Non-GAAP
Percent of
Revenue




Revenues


$205,384


































Gross margin


124,237


60.5%


$     296


$      --


$  --


$124,533


60.6%






















Research and

   development


54,828


26.7%


5,769


4,787


--


44,272


21.6%






















Selling, general and

   administrative


45,694


22.3%


6,127


1,515


700


37,352


18.1%






















Operating income


23,715


11.5%


12,192


6,302


700


42,909


20.9%












































Non-GAAP
Earnings Per Share


Three Months Ended

March 31, 2018



GAAP
Measure


Stock
Compensation
Expense*


Intangible
Asset
Amortization*


Acquisition
Related
Items*


Termination
Costs,
Impairments
And Fair Value
Adjustments*


Non-cash
Interest
Expense*


Income Tax
Adjustments


Non-GAAP
Measure

Net income


$26,405


$12,192


$6,302


$700


$(985)


$2,754


$(9,045)


$38,323


















Diluted shares

   outstanding


43,918














43,918


















Diluted earnings

   per share


$    0.60














$    0.87


































* Represents pre-tax amounts

































 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)


Business Outlook


Three Months Ending

June 30, 2018



GAAP

Measure


Non-GAAP

Adjustments


Non-GAAP

Measure

Gross margin


58.5%


1.0%


59.5%








Operating expenses


$111


$25


$86








Effective tax rate


0.0%


11.0%


11.0%








Diluted earnings per share - low


$0.23


$0.58


$0.81








Diluted earnings per share - high


$0.29


$0.58


$0.87

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



March 31,
2018


December 30,

 2017

Assets




Current assets:




   Cash and cash equivalents

$   342,272


$   269,366

   Short-term investments

417,867


494,657

   Accounts receivable, net

75,122


71,367

   Inventories

76,505


73,132

   Prepaid expenses and other current assets

64,555


39,120

Total current assets

976,321


947,642

Property and equipment, net

129,894


127,682

Goodwill

288,227


288,227

Other intangible assets, net

76,716


83,144

Other assets, net

94,837


88,387

Total assets

$1,565,995


$1,535,082





Liabilities and Stockholders' Equity




Current liabilities:




   Accounts payable

$     50,068


$     38,851

   Deferred revenue and returns liability

25,426


--

   Deferred income on shipments to distributors

--


50,115

   Other current liabilities

69,310


73,359

Total current liabilities

144,804


162,325

Convertible debt

345,049


341,879

Other non-current liabilities

75,567


77,862

Total liabilities

565,420


582,066

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;  

      43,227 and 42,707 shares issued and outstanding at

      March 31, 2018 and December 30, 2017, respectively

4


4

   Additional paid-in capital

98,396


102,862

   Retained earnings

904,160


851,307

   Accumulated other comprehensive loss

(1,985)


(1,157)

Total stockholders' equity

1,000,575


953,016

Total liabilities and stockholders' equity

$1,565,995


$1,535,082

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended



March 31,
2018


April 1,
2017


Operating Activities





Net income

$  26,405


$  15,426


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





   Depreciation of property and equipment

3,704


3,596


   Amortization of other intangible assets and other assets

6,427


6,752


   Amortization of debt discount and debt issuance costs 

3,169


869


   Stock-based compensation expense

12,192


10,486


   Deferred income taxes

(4,780)


(4,059)


   Changes in operating assets and liabilities:





      Accounts receivable

(3,307)


(1,252)


      Inventories

(3,368)


(1,636)


      Prepaid expenses and other assets

(17,169)


6,708


      Accounts payable

13,030


5,565


      Other current liabilities and income taxes

(9,643)


(2,944)


      Deferred income, deferred revenue and returns liability

(2,599)


4,038


      Other non-current liabilities

(1,849)


(1,536)


Net cash provided by operating activities

22,212


42,013







Investing Activities





Purchases of available-for-sale investments

(52,821)


(267,777)


Sales and maturities of available-for-sale investments

128,975


25,595


Purchases of property and equipment

(4,102)


(4,543)


Purchases of other assets

(4,698)


(1,446)


Acquisition of business, net of cash acquired

--


(13,658)


Net cash provided by (used in) investing activities

67,354


(261,829)







Financing Activities





Proceeds from issuance of long-term debt, net

--


390,000


Payments on debt

--


(72,500)


Payment of taxes withheld for vested stock awards

(17,871)


(13,553)


Proceeds from the issuance of common stock

1,211


162


Net cash provided by (used in) financing activities

(16,660)


304,109







Increase in cash and cash equivalents

72,906


84,293


Cash and cash equivalents at beginning of period

269,366


141,106


Cash and cash equivalents at end of period

$342,272


$225,399


 

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SOURCE Silicon Labs

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