Silicon Laboratories Announces First Quarter Results
AUSTIN, Texas--(BUSINESS WIRE)--April 25, 2007--Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported strong first quarter results that exceeded the company's guidance on the top and bottom line.
First Quarter Financial Highlights
First quarter results have almost a full quarter of operations inclusive of the Aero® products sold on March 23rd, which are now classified as discontinued operations. During the first quarter of 2007 (on a non-GAAP basis and including the results from discontinued operations), total revenue increased sequentially to $111.8 million, gross margin was 52 percent, and operating income was $11.4 million, or 10 percent of revenue. Net income on a non-GAAP basis, excluding the gain on the sale of the Aero products, was $10.8 million, or $0.19 per fully diluted share, exceeding the high-end of the guidance range by two cents.
The company's continuing operations made up of its core, mixed-signal business delivered 11 percent year over year revenue growth and totaled $73.8 million. GAAP gross margin for the mixed-signal business increased to 61.5 percent. GAAP operating loss was $3.7 million. Excluding an $11.8 million charge for stock compensation expense, non-GAAP operating income was $8 million or 11 percent of revenue. The GAAP income statement includes income from discontinued operations of $156.3 million, which includes the after-tax gain on the sale of the business, resulting in GAAP net income of $155.6 million and GAAP diluted earnings per share of $2.84. The reconciling charges are set forth in the financial measures table included below.
The company ended the quarter with approximately $666 million in cash, cash equivalents and short-term investments. The company repurchased $13 million of its common stock under its repurchase program during the quarter.
"We executed well this quarter on several strategic objectives, and I believe the progress we made to improve efficiencies and scale our infrastructure appropriately demonstrates our commitment to our target operating model," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "As a company, we are at a positive inflection point strategically, and we have a business with a profile that is now in sync with the growth and profitability targets we have established."
Mixed-Signal Business Summary
Silicon Laboratories' continuing operations are made up of the mixed-signal business which includes a diverse set of innovative products addressing broadcast, embedded modems, voice over broadband, microcontrollers (MCUs), and timing. During the first quarter, the broadcast, microcontroller, embedded modems and timing product lines increased revenue sequentially while voice products declined.
The company announced several strategic MCU and broadcast products in the first quarter. Silicon Laboratories' new additions to the small form factor MCU family enable the company to address cost sensitive applications such as white goods and toys. New broadcast products, including a fully integrated AM/FM receiver, offer additional features and further differentiation in the company's tuner family, improving average selling prices and boosting the company's penetration into portable audio applications.
Business Outlook
For the second quarter of 2007, the company anticipates revenue from continuing operations to be in the range of $74 to $77 million. GAAP net income per fully diluted share is expected to be in the range of $0.10 to $0.13. Non-GAAP net income per fully diluted share, excluding a non-cash charge for stock compensation, is expected to be in the range of $0.22 to $0.25.
Webcast and Conference Call
A conference call discussing the first quarter results will follow this press release today at 7:30 a.m. Central Time. An audio webcast will be available simultaneously on Silicon Laboratories' website under Investor Relations (www.silabs.com). A replay will be available after the call at the same website listed above or by calling 800-677-5199 or +1 203-369-3133 (international). Replays will be available through May 9, 2007.
About Silicon Laboratories Inc.
Silicon Laboratories Inc. is a leading designer of high-performance, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Silicon Laboratories' diverse portfolio of highly integrated, patented solutions is developed by a world-class engineering team with expertise in cutting-edge mixed-signal design. The company has design, engineering, marketing, sales and applications offices throughout North America, Europe and Asia. For more information about Silicon Laboratories, please visit www.silabs.com.
Forward Looking Statements
This press release contains forward-looking statements based on Silicon Laboratories' current expectations. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will" and similar phrases as they relate to Silicon Laboratories are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silicon Laboratories 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 Laboratories may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; volatile stock price; average selling prices of products may decrease significantly and rapidly, dependence on a limited number of products and customers; difficulties developing new products that achieve market acceptance; risks that Silicon Laboratories may not be able to manage strains associated with its growth; dependence on key personnel; difficulties managing our manufacturers and subcontractors; difficulties managing international activities; credit risks associated with our accounts receivable; geographic concentration of manufacturers, assemblers, test service providers and customers in the Pacific Rim that subjects Silicon Laboratories' business and results of operations to risks of natural disasters, epidemics, war and political unrest; product development risks; inventory-related risks; intellectual property litigation risks; risks associated with acquisitions; the competitive and cyclical nature of the semiconductor industry and other factors that are detailed in Silicon Laboratories' filings with the SEC. Silicon Laboratories disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Note to editors: Silicon Laboratories, Silicon Labs and the Silicon Labs logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.
Silicon Laboratories Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended
-----------------------
March 31, April 1,
2007 2006
----------- -----------
Revenues $73,814 $66,652
Cost of revenues 28,439 21,127
----------- -----------
Gross profit 45,375 45,525
Operating expenses:
Research and development 24,807 21,069
Selling, general and administrative 24,292 20,731
----------- -----------
Operating expenses 49,099 41,800
----------- -----------
Operating income (loss) (3,724) 3,725
Other income (expense):
Interest income 3,835 3,202
Interest expense (231) (175)
Other income (expense), net (119) 247
----------- -----------
Income (loss) from continuing operations
before income taxes (239) 6,999
Provision for income taxes 507 1,801
----------- -----------
Income (loss) from continuing operations (746) 5,198
Income from discontinued operations, net of
income taxes 156,359 5,866
----------- -----------
Net income $155,613 $11,064
=========== ===========
Basic earnings per share:
Income (loss) from continuing operations $(0.01) $0.09
Net income $2.84 $0.20
Diluted earnings per share:
Income (loss) from continuing operations $(0.01) $0.09
Net income $2.84 $0.19
Weighted-average common shares
outstanding:
Basic 54,806 55,066
Diluted 54,806 57,656
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
------------ ---------------------------------------------------------
Total Three Months Ended
Operations March 31, 2007
------------ ---------------------------------------------------------
Non-GAAP
Stock Percent
GAAP Discontinued Compensation Non-GAAP of
Measure Operations Expense Measure Revenue
--------- ------------ ------------ ------------ --------
Revenues $73,814 $37,988 $-- $111,802 100%
Gross profit 45,375 12,592 307 58,274 52%
Operating
income
(loss) (3,724) 3,376 (1) 11,770 (2) 11,422 10%
------------ ---------------------------------------------------------
Net Income
Per Share -
Total Three Months Ended
Operations March 31, 2007
------------ ---------------------------------------------------------
Discontinued Operations
-------------------------
Aero Stock
GAAP Products Compensation Non-GAAP
Measure Income Operations Expense Measure
--------- ------------ ------------ ------------ --------
Net income
(expense) $155,613 $156,359 $(1,893) (1) $(9,702) (2) $10,849
GAAP Stock Options Non-GAAP
Measure and Awards Measure
--------- -------------------------------------- --------
Diluted
shares
outstanding 54,806 1,505 56,301
Diluted net
income per
share $2.84 $0.19
------------ -------------------------------------------------
Continuing Three Months Ended
Operations March 31, 2007
------------ -------------------------------------------------
Stock Non-GAAP
GAAP Compensation Non-GAAP Percent of
Measure Expense Measure Revenue
--------- ------------ ------------ ------------
Revenues $73,814 $-- $73,814 100%
Operating
income
(loss) (3,724) 11,770 8,046 11%
(1) Represents the operating income of the discontinued operations,
excluding $2.1 million of stock compensation expense for employees in
the discontinued operations. The net income adjustment is net of
estimated tax. The charges were not associated with the sale of our
Aero product lines.
(2) Includes $3.3 million of stock compensation expense for equity
awards to employees retained in our continuing operations after the
sale of our Aero product lines. The net income adjustment is net of
estimated tax.
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Continued)
-------------------------- -------------------------------------------
Net Income Per Share - Three Months Ended
Continuing Operations March 31, 2007
-------------------------- -------------------------------------------
Stock Non-
GAAP Discontinued Compensation GAAP
Measure Operations Expense Measure
--------- ------------ ------------ -------
Net income (expense) $155,613 $156,359 $(9,702) (3) $8,956
Non-
GAAP Stock Options GAAP
Measure and Awards Measure
--------- ------------------------- -------
Diluted shares outstanding 54,806 1,505 56,301
Diluted net income per
share $2.84 $0.16
(3) Includes $3.3 million of stock compensation expense for equity
awards to employees retained in our continuing operations after the
sale of our Aero product lines. The net income adjustment is net of
estimated tax.
Unaudited Forward-Looking Statements Regarding Business Outlook (1)
(In thousands, except per share information)
Business Outlook Three Months Ending
June 30, 2007
-------------------------------------------------- -------------------
High Low
--------- ---------
Estimated GAAP diluted net income per share $0.13 $0.10
Estimated non-cash charges for stock compensation 0.12 0.12
--------- ---------
Estimated non-GAAP diluted net income per share $0.25 $0.22
--------- ---------
(1) These financial schedules contain forward-looking statements
based on Silicon Laboratories' current expectations. The words
"believe," "estimate," "expect," "intend," "anticipate," "plan,"
"project," "will" and similar phrases as they relate to Silicon
Laboratories are intended to identify such forward-looking statements.
These forward-looking statements reflect the current views and
assumptions of Silicon Laboratories 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 Laboratories may not be able to
maintain its historical growth; quarterly fluctuations in revenues and
operating results; volatile stock price; average selling prices of
products may decrease significantly and rapidly, dependence on a
limited number of products and customers; difficulties developing new
products that achieve market acceptance; risks that Silicon
Laboratories may not be able to manage strains associated with its
growth (including risks associated with the implementation of its
enterprise resource planning system); dependence on key personnel;
difficulties managing our manufacturers and subcontractors;
difficulties managing international activities; credit risks
associated with our accounts receivable; geographic concentration of
manufacturers, assemblers, test service providers and customers in the
Pacific Rim that subjects Silicon Laboratories' business and results
of operations to risks of natural disasters, epidemics, war and
political unrest; product development risks; inventory-related risks;
intellectual property litigation risks; risks associated with
acquisitions and divestitures; the competitive and cyclical nature of
the semiconductor industry and other factors that are detailed in
Silicon Laboratories' filings with the SEC. Silicon Laboratories
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
March 31, December 30,
2007 2006
----------- ------------
Assets
Current assets:
Cash and cash equivalents $213,594 $68,188
Short-term investments 452,686 318,104
Accounts receivable, net of allowance for
doubtful accounts of $617 at March 31,
2007 and $421 at December 30, 2006 33,311 36,657
Inventories 21,465 22,016
Deferred income taxes 8,263 12,118
Prepaid expenses and other 27,552 12,944
Current assets of discontinued operations 21,346 33,680
----------- ------------
Total current assets 778,217 503,707
Property, equipment and software, net 32,669 34,070
Goodwill 65,840 65,680
Other intangible assets, net 19,206 20,271
Other assets, net 25,929 24,528
Non-current assets of discontinued operations -- 38,739
----------- ------------
Total assets $921,861 $686,995
=========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $29,997 $26,438
Accrued expenses 20,716 23,051
Deferred income on shipments to
distributors 23,825 20,568
Income taxes 42,907 15,063
Current liabilities of discontinued
operations 21,611 16,502
----------- ------------
Total current liabilities 139,056 101,622
Long-term obligations and other liabilities 53,045 15,641
Non-current liabilities of discontinued
operations -- 1,050
----------- ------------
Total liabilities 192,101 118,313
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; 54,716 and 54,802
shares issued and outstanding at March
31, 2007 and December 30, 2006,
respectively 5 5
Additional paid-in capital 379,120 373,655
Retained earnings 350,635 195,022
----------- ------------
Total stockholders' equity 729,760 568,682
----------- ------------
Total liabilities and stockholders' equity $921,861 $686,995
=========== ============
CONTACT: Silicon Laboratories Inc.
Shannon Pleasant, 512-464-9254
shannon.pleasant@silabs.com
SOURCE: Silicon Laboratories Inc.