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Apr 24, 2006
Silicon Laboratories Reports Strong First Quarter Performance
Silicon Laboratories Reports Strong First Quarter PerformanceAUSTIN, Texas--(BUSINESS WIRE)--April 24, 2006--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal ICs, today reported four percent sequential growth to $114.5 million for the first quarter of 2006.

Both the broad-based mixed-signal and mobile handset businesses grew sequentially in the first quarter. The broad-based mixed-signal business grew five percent sequentially due in part to solid demand for the ProSLIC® subscriber line interface products and mixed-signal microcontrollers (MCUs). ProSLIC revenue increased by 60 percent compared to the first quarter of 2005, benefiting from strength in the VoIP market. The mixed-signal MCU business revenue increased sequentially, and the portfolio expanded to include new, major product families in USB and Embedded Ethernet.

The ramp of the company's FM tuner and continued strong demand in the GSM/GPRS market were responsible for mobile handset revenue growth. The company shipped a record number of RF transceivers and continued to add FM tuner design wins and customers.

The company also reported progress on design activity for the Aero® IIe EDGE transceiver, the SiRX® satellite set-top box receiver and the oscillator products.

"We are pleased with the healthy demand for our products and the progress we have made preparing our recently launched products for mass production," said Necip Sayiner, president and CEO of Silicon Laboratories. "We are focused on product execution and on winning new market and customer opportunities to establish a solid foundation for continued growth."

Financial Highlights

GAAP operating income for the first quarter was $11.0 million. Non-GAAP operating income for the first quarter was $20.8 million or 18.2 percent of revenue. GAAP net income for the first quarter was $11.1 million, or 19 cents per fully diluted share. Non-GAAP net income per fully diluted share, excluding pro-forma charges was 33 cents. The reconciling charges are set forth in the reconciliation of GAAP to non-GAAP financial measures table included below. The company increased cash and short-term investments by approximately $43 million to $407 million at quarter end.

For the second quarter of 2006, the company anticipates revenue of $116 to $120 million.

Conference Call Today

A conference call discussing the first quarter results will follow the release at 7:30 a.m. Central Time. An audio webcast will be available simultaneously on Silicon Laboratories' website under Investor Relations ( A replay will be available after the call at the same website listed above or by calling 866-501-8774 or +1 203-369-1854 (international). These replays will be available through May 9th, 2006.

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 decades of cumulative 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

Cautionary Language

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, especially for mobile handset products; dependence on a limited number of products and customers; risks associated with shifting market demand from GSM/GPRS to EDGE and WCDMA; 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, ProSLIC, Aero, AeroFONE, ISOmodem, SiRX and the Silicon Laboratories logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.

Silicon Laboratories Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)

                                                  Three Months Ended
                                                  April 1,   April 2,
                                                    2006       2005
                                                 ---------- ----------
Revenues                                          $114,540   $104,764
Cost of revenues                                    51,300     48,560
                                                 ---------- ----------
Gross profit                                        63,240     56,204
Operating expenses:
 Research and development                           27,557     19,553
 Selling, general and administrative                24,702     16,878
                                                 ---------- ----------
Operating expenses                                  52,259     36,431
                                                 ---------- ----------
Operating income                                    10,981     19,773
Other income (expense):
 Interest income                                     3,202      1,412
 Interest expense                                     (175)       (56)
 Other income (expense), net                           247        (15)
                                                 ---------- ----------
Income before income taxes                          14,255     21,114
Provision for income taxes                           3,191      3,741
                                                 ---------- ----------
Net income                                         $11,064    $17,373
                                                 ========== ==========
Net income per share:
 Basic                                               $0.20      $0.33
 Diluted                                             $0.19      $0.31
Weighted-average common shares outstanding:
 Basic                                              55,066     52,468
 Diluted                                            57,656     55,365

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)

                                                  Three Months Ended
                                                  April 1,   April 2,
                                                    2006       2005
                                                 ---------- ----------
GAAP net income                                    $11,064    $17,373
Stock compensation adjustments:
  Cost of revenues                                     144         10
  Research and development                           4,302        586
  Selling, general and administrative                5,376        157
  Provision for income taxes                        (1,733)      (272)
Research and development grant                          --     (1,439)
                                                 ---------- ----------
Non-GAAP net income                                $19,153    $16,415
                                                 ========== ==========

Diluted shares outstanding                          57,656     55,365
Non-GAAP diluted net income per share                $0.33      $0.30
                                                 ---------- ----------

                                                  Three Months Ended
                                                  April 1,   April 2,
                                                    2006       2005
                                                 ---------- ----------
GAAP operating income                              $10,981    $19,773
Stock compensation adjustments:
 Cost of revenues                                      144         10
 Research and development                            4,302        586
 Selling, general and administrative                 5,376        157
Research and development grant                          --     (1,439)
                                                 ---------- ----------
Non-GAAP operating income                          $20,803    $19,087
                                                 ========== ==========

Non-GAAP operating income %                             18%        18%
                                                 ---------- ----------

Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)

                                               April 1,   December 31,
                                                 2006         2005
                                             ------------ ------------
                   ASSETS                    (Unaudited)
Current assets:
 Cash and cash equivalents                      $105,595     $100,504
 Short-term investments                          301,494      263,206
 Accounts receivable, net of allowance
  for doubtful accounts of $1,088 at
  April 1, 2006 and December 31, 2005             76,057       68,824
 Inventories                                      24,053       23,132
 Deferred income taxes                            13,114       11,505
 Prepaid expenses and other                       16,442        9,670
                                             ------------ ------------
Total current assets                             536,755      476,841
Property, equipment and software, net             28,507       32,584
Goodwill                                          62,877       62,877
Other intangible assets, net                      14,044       14,838
Other assets, net                                 31,091       25,863
                                             ------------ ------------
Total assets                                    $673,274     $613,003
                                             ============ ============

Current liabilities:
 Accounts payable                                $42,304      $43,846
 Accrued expenses                                 13,063       11,307
 Deferred income on shipments
  to distributors                                 42,115       34,036
 Income taxes payable                             15,860       18,348
                                             ------------ ------------
Total current liabilities                        113,342      107,537
Long-term obligations and other liabilities       11,666        7,418
                                             ------------ ------------
Total liabilities                                125,008      114,955

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; 55,491 and 54,530
   shares issued and outstanding at
   April 1, 2006 and December 31, 2005,
   respectively                                        6            5
 Additional paid-in capital                      373,332      335,284
 Deferred stock compensation                          --       (1,105)
 Retained earnings                               174,928      163,864
                                             ------------ ------------
Total stockholders' equity                       548,266      498,048
                                             ------------ ------------
Total liabilities and stockholders' equity      $673,274     $613,003
                                             ============ ============

Certain prior period amounts have been reclassified to conform to the
current period presentation.

CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464-9254

SOURCE: Silicon Laboratories Inc.