Silicon Laboratories Announces Record Revenue
AUSTIN, Texas--(BUSINESS WIRE)--Oct. 24, 2007--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue from continuing operations of $87.9 million, a 21 percent increase over the same period last year. Earnings per share exceeded expectations, increasing significantly over prior quarters. The company's improved profitability increased non-GAAP operating income percent to double that of first quarter levels, primarily due to accelerating revenues and continued cost controls.
Third Quarter Financial Results
Revenue grew by 16 percent sequentially driven by growth across the company's major product lines. GAAP gross margin was 60.2 percent. GAAP operating income was $10.4 million and GAAP diluted earnings per share from continuing operations increased to $0.31, inclusive of a seven cent favorable impact from a tax benefit credited in the quarter.
Excluding $8.5 million in stock compensation expense, non-GAAP gross margin increased slightly to 60.7 percent. Operating expenses declined to less than 40 percent of revenue resulting in non-GAAP operating income of $19.0 million, or 21.6 percent of revenue, representing significant progress towards the company's target model. Non-GAAP diluted earnings per share from continuing operations was $0.43, which also includes the seven cent tax benefit credited in the quarter. The reconciling charges are set forth in the financial measures table included below.
The company ended the quarter with approximately $638 million in cash, cash equivalents and short-term investments.
Business Summary
Third quarter revenue was fueled broadly by a number of growing product lines. The voice and embedded modem businesses benefited from growth at key customers during the quarter. The broad-based businesses, which include timing and microcontrollers, achieved double-digit sequential growth. Design wins accelerated for these products throughout the quarter. New product introductions, including the first programmable XOs and VCXOs and a new family of small form factor MCUs, are expected to contribute to design win momentum and sustained high growth for the broad-based products.
The broadcast business grew significantly again during the quarter driven by strength across both the handset and portable markets. The demand for the company's new FM transmitter in portable navigation devices and MP3 accessories was very healthy, and unit volume for FM tuners in handsets continued to expand. The company also anticipates first revenue from the AM/FM receiver in the fourth quarter, further diversifying the broadcast revenue base and market reach.
"We are realizing the leverage of our mixed-signal business model as strong demand combined with lower operating expenses drove better than anticipated results," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "With this foundation in place, we are prepared to further invest in our R&D efforts to continue to accelerate our growth in order to optimize the business for the future."
For the fourth quarter of 2007, the company is guiding revenue in the range of $93 to $97 million.
Webcast and Conference Call
A conference call discussing the third 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 866-347-5805 or +1 203-369-0021 (international). Replays will be available through November 7, 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 (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.
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 Nine Months Ended
----------------------- -----------------------
September September September September
29, 2007 30, 2006 29, 2007 30, 2006
------------ ---------- ----------- -----------
Revenues $87,938 $72,956 $237,349 $213,544
Cost of revenues 34,986 25,880 93,658 71,449
------------ ---------- ----------- -----------
Gross profit 52,952 47,076 143,691 142,095
Operating expenses:
Research and
development 20,844 23,007 67,796 66,695
Selling, general
and administrative 21,693 24,210 67,267 67,763
In-process research
and development -- -- -- 2,600
------------ ---------- ----------- -----------
Operating expenses 42,537 47,217 135,063 137,058
------------ ---------- ----------- -----------
Operating income
(loss) 10,415 (141) 8,628 5,037
Other income
(expense):
Interest income 7,136 3,525 18,003 10,352
Interest expense (129) (236) (527) (636)
Other income
(expense), net (214) 53 (384) 344
------------ ---------- ----------- -----------
Income from continuing
operations before
income taxes 17,208 3,201 25,720 15,097
Provision (benefit)
for income taxes (416) 412 1,950 4,105
------------ ---------- ----------- -----------
Income from continuing
operations 17,624 2,789 23,770 10,992
Income from
discontinued
operations, net of
income taxes 2,810 1,945 159,750 14,943
------------ ---------- ----------- -----------
Net income $20,434 $4,734 $183,520 $25,935
============ ========== =========== ===========
Basic earnings per
share:
Income from
continuing
operations $0.32 $0.05 $0.43 $0.20
Net income $0.37 $0.08 $3.34 $0.47
Diluted earnings per
share:
Income from
continuing
operations $0.31 $0.05 $0.42 $0.19
Net income $0.36 $0.08 $3.25 $0.45
Weighted-average
common shares
outstanding:
Basic 55,215 55,725 54,996 55,557
Diluted 56,767 57,151 56,481 57,566
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
Three Months Ended
Non-GAAP Income Statement Items September 29, 2007
-------------------------------- -------------------------------------
Non-GAAP
Stock Non- Percent
GAAP Compensation GAAP of
Measure Expense Measure Revenue
------- ------------ ------- --------
Revenues $87,938
Gross profit 52,952 $414 $53,366 60.7%
Operating expenses 42,537 8,537 34,413 38.7%
Operating income 10,415 8,537 18,952 21.6%
-------------------------------- -------------------------------------
Three Months Ended
Non-GAAP Operating Income March 31, 2007
-------------------------------- -------------------------------------
Non-GAAP
Stock Non- Percent
GAAP Compensation GAAP of
Measure Expense Measure Revenue
------- ------------ ------- --------
Revenues $73,814
Operating income (loss) (3,724) 11,770 8,046 10.9%
-------------------------------- --------------------
Non-GAAP Diluted Earnings Per Three Months Ended
Share September 29, 2007
-------------------------------- --------------------
GAAP income from continuing
operations $17,624
Stock compensation adjustments:
Cost of revenues 414
Research and development 3,472
Selling, general and
administrative 4,651
Provision for income taxes (1,524)
--------------------
Non-GAAP income from continuing
operations $24,637
GAAP diluted shares outstanding 56,767
Non-GAAP diluted earnings per
share $0.43
--------------------
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
September 29, December 30,
2007 2006
------------- ------------
Assets
Current assets:
Cash and cash equivalents $151,554 $68,188
Short-term investments 486,023 318,104
Accounts receivable, net of allowance
for doubtful accounts of $573 at
September 29, 2007 and $421 at December
30, 2006
56,693 36,657
Inventories 24,182 22,016
Deferred income taxes 6,642 12,118
Prepaid expenses and other current
assets 27,149 12,944
Current assets of discontinued
operations -- 33,680
------------- ------------
Total current assets 752,243 503,707
Property, equipment and software, net 28,700 34,070
Goodwill 65,519 65,680
Other intangible assets, net 17,089 20,271
Other assets, net 28,420 24,528
Non-current assets of discontinued
operations -- 38,739
------------- ------------
Total assets $891,971 $686,995
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $35,227 $26,438
Accrued expenses 15,836 23,051
Deferred income on shipments to
distributors 24,288 20,568
Income taxes 957 15,063
Current liabilities of discontinued
operations 2,479 16,502
------------- ------------
Total current liabilities 78,787 101,622
Long-term obligations and other liabilities 44,676 15,641
Non-current liabilities of discontinued
operations -- 1,050
------------- ------------
Total liabilities 123,463 118,313
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; 55,129 and 54,802
shares issued and outstanding at
September 29, 2007 and December 30,
2006, respectively
6 5
Additional paid-in capital 389,960 373,655
Retained earnings 378,542 195,022
------------- ------------
Total stockholders' equity 768,508 568,682
------------- ------------
Total liabilities and stockholders' equity $891,971 $686,995
============= ============
CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464 9254
shannon.pleasant@silabs.com
SOURCE: Silicon Laboratories Inc.