Silicon Laboratories Reports Strong Fourth Quarter Performance
GAAP operating income for the fourth quarter was $17.8 million or 16.2 percent of revenue. Excluding stock compensation expense, adjusted operating income for the fourth quarter was $20.2 million, or 18.4 percent of revenue, and adjusted diluted net income per share was $0.31. The reconciling charges are set forth in the reconciliation of GAAP to non-GAAP financial measures table included below. The company increased cash and investments by approximately $28 million to $364 million at year end.
Business Summary
Revenue growth in the fourth quarter was due to robust wireless demand across the customer base. Driven primarily by the Aero® transceiver products, mobile handset revenue increased by 14 percent sequentially and represented approximately 47 percent of revenue. There continued to be strong momentum for new products including the EDGE transceiver, tri-band PA, the FM tuner and the AeroFONE® single-chip phone.
The broad-based mixed-signal business declined slightly and represented a little more than half of the revenue in the fourth quarter and for the year. Key growth areas for the business in 2005 included the ProSLIC® telephony interface for VoIP, which grew by greater than 60 percent year over year, and microcontrollers, which grew by more than 30 percent year over year. The company also sampled hundreds of new customers who are evaluating recently introduced broad-based mixed-signal products including the new VCXO family, the SiRX set-top box receiver and the ISOmodem® fax modem.
"The business performed very well in the fourth quarter and we anticipate continued strength in our wireless business due to strong market demand," said Necip Sayiner, president and CEO of Silicon Laboratories. "Customer feedback has validated that our new products are highly differentiated, and we are building momentum to put our business on a solid growth trajectory."
In 2005, Silicon Laboratories expanded design, sales and support offices to more than 20 locations around the world. Cumulative patents either filed or issued increased to more than 600 and the number of employees worldwide increased to 651. The product portfolio doubled including the addition of broadcast, timing, digital power and new wireless products.
For the first quarter of 2006, the company anticipates revenue of $110 to $114 million.
Conference Call Today
A conference call discussing the fourth 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 (www.silabs.com). A replay will be available after the call at the same website listed above or by calling 1-800-295-0889 (U.S.) or +1 402-220-3774 (international). These replays will be available through February 15, 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 www.silabs.com.
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. Consolidated Statements of Income (in thousands, except per share data) Three Months Ended Twelve Months Ended ------------------------ ----------------------- December 31, January 1, December 31, January 1, 2005 2005 2005 2005 ------------ ----------- ------------ ---------- (Unaudited) (Unaudited) (Unaudited) Revenues $109,856 $95,462 $425,689 $456,225 Cost of revenues 49,499 43,121 193,904 206,320 ------------ ----------- ------------ ---------- Gross profit 60,357 52,341 231,785 249,905 Operating expenses: Research and development 23,692 20,711 101,222 78,056 Selling, general and administrative 18,898 15,426 72,553 65,164 ------------ ----------- ------------ ---------- Operating expenses 42,590 36,137 173,775 143,220 ------------ ----------- ------------ ---------- Operating income 17,767 16,204 58,010 106,685 Other income (expense): Interest income 2,743 1,194 8,285 3,054 Interest expense (191) (68) (322) (311) Other income (expense), net (91) 169 (332) 2,148 ------------ ----------- ------------ ---------- Income before income taxes 20,228 17,499 65,641 111,576 Provision for income taxes 4,965 4,570 18,135 34,883 ------------ ----------- ------------ ---------- Net income $15,263 $12,929 $47,506 $76,693 ============ =========== ============ ========== Net income per share: Basic $0.28 $0.25 $0.89 $1.49 Diluted $0.27 $0.24 $0.86 $1.39 Weighted-average common shares outstanding: Basic 54,210 52,008 53,399 51,471 Diluted 56,206 54,632 55,485 54,983 Certain prior period amounts of the amortization of stock compensation expense have been reclassified to conform to the current period presentation. Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) Three Months Ended ----------------------- December 31, January 1, 2005 2005 ------------ ---------- GAAP operating income $17,767 $16,204 Stock compensation amortization: Cost of revenues 58 13 Research and development 1,081 659 Selling, general and administrative 1,274 182 ------------ ---------- Adjusted operating income $20,180 $17,058 ============ ========== Adjusted operating income % 18.4% 17.9% ------------ ---------- Three Months Ended ----------------------- December 31, January 1, 2005 2005 ------------ ---------- GAAP net income $15,263 $12,929 Stock compensation amortization: Cost of revenues 58 13 Research and development 1,081 659 Selling, general and administrative 1,274 182 ------------ ---------- Adjusted net income $17,676 $13,783 ============ ========== GAAP diluted shares outstanding 56,206 54,632 Adjusted diluted net income per share $0.31 $0.25 ------------ ---------- Estimated Stock Compensation Expense Under SFAS 123R (in thousands) Three Months Ended April 1, 2006 ------------------ Cost of revenues $382 Research and development 4,431 Selling, general and administrative 5,391 ------------------ Impact on operating income 10,204 Provision for income taxes (1,907) ------------------ Impact on net income $8,297 ================== Silicon Laboratories Inc. Consolidated Balance Sheets (in thousands, except per share data) December 31, January 1, 2005 2005 ------------ ---------- ASSETS (Unaudited) Current assets: Cash and cash equivalents $255,369 $48,636 Short-term investments 108,341 228,470 Accounts receivable, net of allowance for doubtful accounts of $1,088 at December 31, 2005 and January 1, 2005 68,824 46,272 Inventories 23,132 38,405 Deferred income taxes 11,505 9,878 Prepaid expenses and other 9,670 5,244 ------------ ---------- Total current assets 476,841 376,905 Property, equipment and software, net 32,584 34,559 Goodwill 62,877 46,766 Other intangible assets, net 14,838 15,384 Other assets, net 25,863 10,788 ------------ ---------- Total assets $613,003 $484,402 ============ ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $43,846 $37,001 Accrued expenses 11,307 11,913 Deferred income on shipments to distributors 34,036 25,227 Income taxes payable 18,348 8,207 ------------ ---------- Total current liabilities 107,537 82,348 Long-term obligations and other liabilities 7,418 2,570 ------------ ---------- Total liabilities 114,955 84,918 Commitments and contingencies Stockholders' equity: Preferred stock -- $.0001 par value; 10,000 shares authorized; no shares issued and outstanding -- -- Common stock -- $.0001 par value; 250,000 shares authorized; 54,530 and 52,508 shares issued and outstanding at December 31, 2005 and January 1, 2005, respectively 5 5 Additional paid-in capital 335,284 287,908 Deferred stock compensation (1,105) (4,787) Retained earnings 163,864 116,358 ------------ ---------- Total stockholders' equity 498,048 399,484 ------------ ---------- Total liabilities and stockholders' equity $613,003 $484,402 ============ ==========
CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464-9254
investor.relations@silabs.com
SOURCE: Silicon Laboratories Inc.