SILICON LABORATORIES INC. 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
-- Internet of Things (IoT) revenue established a new record, increasing to
$88 million, up 3% sequentially and 24% year-on-year.
-- Infrastructure revenue declined to $36 million, down 3% sequentially and
up 14% year-on-year.
-- Broadcast revenue declined to $37 million, down 8% sequentially and 3%
year-on-year.
-- Access revenue declined to $18 million, down 8% sequentially and 15%
year-on-year.
On a GAAP basis:
-- GAAP gross margin was 58.7%.
-- GAAP R&D expenses were $52 million.
-- GAAP SG&A expenses were $40 million.
-- GAAP operating income as a percentage of revenue was 7.1%.
-- GAAP diluted earnings per share was $0.36.
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:
-- Non-GAAP gross margin was 59.0%.
-- 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 17.3%.
-- Non-GAAP diluted earnings per share was $0.63.
Product Highlights
-- Announced a major expansion of Silicon Labs' EFR32(TM) Wireless Gecko
multiprotocol SoC portfolio, delivering superior RF performance,
enhanced cryptography acceleration, larger memory options, on-chip
capacitive touch control, and additional low-power peripherals and
sensor interfaces.
-- Launched the new EFM32(TM) Jade and Pearl MCUs, offering new security
features, larger memory options, peripheral integration, and ultra-low
active and sleep mode currents.
-- Launched new Micrium® OS and Platform Builder software to help embedded
designers simplify IoT system configuration and accelerate development
and time to market.
Business Highlights
-- Completed a private offering of $400 million of 1.375% convertible
senior notes.
-- Added Gregg Lowe, a veteran of Freescale and Texas Instruments, to
Silicon Labs' board of directors.
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:
-- GAAP gross margin at 58.8%.
-- GAAP operating expenses at approximately $92 million.
-- GAAP effective tax rate at 11%.
-- GAAP diluted earnings per share between $0.27 and $0.33.
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:
-- Non-GAAP gross margin at 59.0%.
-- Non-GAAP operating expenses between $74 million and $75 million.
-- Non-GAAP effective tax rate at 11.5%.
-- Non-GAAP diluted earnings per share between $0.68 and $0.74.
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, April 2,
2017 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
------ ---
$15,426 $5,808
Net income
===
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 Three Months Ended
Statement Items
April 1, 2017
-------------
GAAP GAAP Stock Intangible Acquisition Non-GAAP Non-GAAP
Asset Related
Measure Percent of Compensation Amortization Items Measure Percent of
Revenue Expense Revenue
------- ------- -------
Revenues $179,028
Gross margin 105,161 58.7% $258 $ -- $124 $105,543 59.0%
Research and 52,324 29.2% 5,246 4,897 41,825 23.4%
development 356
Selling, general and 40,155 4,982 1,605 816 32,752
administrative 22.4% 18.3%
Operating income 12,682 7.1% 10,486 6,502 1,296 30,966 17.3%
Non-GAAP Three Months Ended
Earnings Per Share
April 1, 2017
-------------
GAAP Stock Intangible Acquisition Interest Income Tax Non-GAAP
Asset Related Expense* Adjustments
Measure Compensation Amortization* Items* Measure
Expense*
-------
Net income $15,426 $10,486 $6,502 $1,296 $(1,228) $(5,212) $27,270
Diluted shares 43,030
outstanding 43,030
Diluted earnings $0.36
per share $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 Non-GAAP Non-GAAP
Measure Adjustments 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, December 31,
2017 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; 4 4
42,348 and 41,889 shares issued and outstanding at
April 1, 2017 and December 31, 2016, respectively
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, April 2,
2017 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
