Silicon Labs Announces Fourth Quarter and Full Year 2015 Results

February 3, 2016
PDF Version

Earnings Exceed Guidance

AUSTIN, Texas--(BUSINESS WIRE)-- Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its fourth quarter ended January 2, 2016. Revenue in the fourth quarter was at the high end of guidance at $160.1 million, up from $156.2 million in the third quarter. Fourth quarter non-GAAP earnings per share exceeded the high end of guidance at $0.63.

Fourth Quarter Financial Highlights

  • IoT revenue exceeded expectations, increasing to $67.2 million, or 2.8% sequentially
  • Infrastructure revenue declined slightly to $30.6 million, or 1.5% sequentially
  • Broadcast revenue increased to $39.7 million, or 8.7% sequentially
  • Access revenue declined to $22.6 million, or 3.0% sequentially

On a GAAP basis:

  • Gross margin was 58.4 percent
  • R&D expenses were $47.2 million
  • SG&A expenses were $41.5 million
  • Operating income as a percentage of revenue was 3.0 percent
  • Diluted earnings per share were $0.13

On a non-GAAP basis (results exclude the impact of stock compensation, amortization of acquired intangible assets and certain other items as set forth in the reconciliation tables below):

  • Gross margin was 59.0 percent
  • R&D expenses were $36.4 million
  • SG&A expenses were $31.4 million
  • Operating income as a percentage of revenue was 16.6 percent
  • Diluted earnings per share were $0.63

Product Highlights

  • Announced broad support for ARM® mbed OS within the EFM32™ Gecko MCU portfolio, providing best-in-class energy efficiency and design simplicity for embedded developers.
  • Introduced next-generation EFM32 Pearl and Jade Gecko MCU families, providing advancements in security and energy management technologies.
  • Announced the EFM8™ Laser Bee family, delivering the highest analog performance and peripheral integration in the 8-bit market.
  • Introduced turnkey connected home reference designs that reduce the complexity of linking devices such as lights, dimmer switches, and door or window contact sensors.
  • Released the industry's most cost-effective reference design solution for voice-enabled ZigBee® remote controls for home entertainment systems.
  • Announced the TouchXpress™ family of fixed-function controllers, providing the fastest, easiest way to add low-power capacitive touch interfaces to embedded designs.
  • Introduced a free software tool that enables engineers to quickly and easily measure PCI Express® clock jitter to verify PCIe® specification compliance.
  • Launched the Si86xxxT family of multi-channel digital isolators, providing robust protection against lightning strikes and exceptional reliability for demanding industrial systems.

Business Highlights

Business Outlook

The company expects revenue in the first quarter to be in the range of $157 million to $162 million. First quarter diluted earnings (loss) per share are expected to be between $(0.08) and $(0.02) on a GAAP basis and between $0.42 and $0.48 on a non-GAAP basis.

"Strong top line performance combined with favorable opex drove a solid beat in fourth quarter EPS," said Tyson Tuttle, CEO of Silicon Labs. "During 2015, we made significant progress in laying the foundation for our continued success as a leading supplier of silicon, software and solutions for a more connected world. Our strategic growth products, including IoT, Infrastructure and Broadcast automotive, all delivered record revenue in 2015."

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 under Investor Relations (www.silabs.com). 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 83469958. The replay will be available through March 3, 2016.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for the Internet of Things, Infrastructure, industrial automation, consumer and automotive markets. We solve the electronics industry's toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity. Backed by our world-class engineering teams with strong software and mixed-signal design expertise, Silicon Labs empowers developers with the tools and technologies they need to advance quickly and easily from initial idea to final product. 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; 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 Laboratories logo, and EFM32, EFM8, Simplicity Studio and TouchXpress 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   Year Ended
      January 2,   January 3,   January 2,   January 3,
      2016   2015   2016   2015
Revenues     $ 160,071     $ 161,951     $ 644,826     $ 620,704  
Cost of revenues       66,533       65,279       264,056       242,153  
Gross margin       93,538       96,672       380,770       378,551  
Operating expenses:                  
Research and development       47,245       46,139       188,050       172,985  
Selling, general and administrative       41,497       39,527       160,486       154,145  
Operating expenses       88,742       85,666       348,536       327,130  
Operating income       4,796       11,006       32,234       51,421  
Other income (expense):                  
Interest income       186       274       730       1,007  
Interest expense       (668 )     (808 )     (2,828 )     (3,154 )
Other income (expense), net       (91 )     (337 )     127       (234 )
Income before income taxes       4,223       10,135       30,263       49,040  
Provision (benefit) for income taxes       (1,435 )     111       677       11,019  
                                   

Net income

     $ 5,658     $ 10,024     $ 29,586     $ 38,021  
                   
Earnings per share:                  
Basic     $ 0.14     $ 0.24     $ 0.70     $ 0.88  
Diluted     $ 0.13     $ 0.23     $ 0.69     $ 0.87  
                   
Weighted-average common shares outstanding:                  
Basic       41,670       42,279       42,309       42,970  
Diluted       42,374       43,137       42,945       43,793  
     
     
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
     

Non-GAAP Income
Statement Items

  

Three Months Ended
January 2, 2016
        GAAP   Stock   Intangible   Acquisition          

Non-GAAP
    GAAP   Percent of   Compensation   Asset   Related   Termination   Non-GAAP  

Percent of
    Measure   Revenue   Expense   Amortization   Items   Costs   Measure   Revenue
Revenues   $ 160,071                            
                                 
Gross margin     93,538     58.4 %   $ 251   $ 390   $ 201   $ --     $ 94,380   59.0 %
                                 

Research and development

     47,245     29.5 %     5,073     5,441     --     336      

36,395

   22.7 %
                                 

Selling, general and administrative

     41,497    

25.9

%

     6,669     1,286     1,752    

380

      

31,410

   19.7 %
                                 
Operating income     4,796     3.0 %     11,993     7,117     1,953     716       26,575   16.6 %
                                 
                                 

Non-GAAP
Earnings Per Share

  

Three Months Ended
January 2, 2016

    
        Stock   Intangible   Acquisition                
    GAAP   Compensation   Asset   Related   Termination   Income Tax   Non-GAAP    
    Measure   Expense*   Amortization*   Items*   Costs*   Adjustments   Measure    
Net income   $ 5,658   $ 11,993     $ 7,117   $ 1,953   $ 716   $ (889 )   $ 26,548    
                                 

Diluted shares outstanding

     42,374                        

42,374

    
                                 

Diluted earnings per share

   $ 0.13                      

$

0.63

    
                                     

* Represents pre-tax amounts
     
     

Unaudited Forward-Looking Statements Regarding Business Outlook
     
Business Outlook  

Three Months Ending
April 2, 2016
    High   Low
Estimated GAAP diluted earnings (loss) per share   $ (0.02 )   $ (0.08 )
         
Estimated non-GAAP charges     0.50       0.50  
         
Estimated non-GAAP diluted earnings per share   $ 0.48     $ 0.42  
           
           
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
           
      January 2,   January 3,
      2016   2015
Assets          
Current assets:          
Cash and cash equivalents     $ 114,085     $ 141,706  
Short-term investments       128,901       193,489  

Accounts receivable, net of allowances for doubtful accounts of $671 at January 2, 2016 and $786 at January 3, 2015

       73,601       70,367  
Inventories       53,895       52,631  
Deferred income taxes       --       21,173  
Prepaid expenses and other current assets       52,658       49,171  
Total current assets       423,140       528,537  
Long-term investments       7,126       7,419  
Property and equipment, net       131,132       132,820  
Goodwill       272,722       228,781  
Other intangible assets, net       121,354       115,021  
Other assets, net       55,989       29,983  
Total assets     $ 1,011,463     $ 1,042,561  
           
Liabilities and Stockholders' Equity          
Current liabilities:          
Accounts payable     $ 42,127     $ 38,922  
Current portion of long-term debt       10,000       10,000  
Accrued expenses       52,131       73,646  
Deferred income on shipments to distributors       35,448       38,662  
Income taxes       2,615       2,084  
Total current liabilities       142,321       163,314  
Long-term debt       67,500       77,500  
Other non-current liabilities       40,528       43,691  
Total liabilities       250,349       284,505  
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; 41,727 and 42,225 shares issued and outstanding at January 2, 2016 and January 3, 2015, respectively

       4       4  
Additional paid-in capital       13,868       29,501  
Retained earnings       747,749       728,633  
Accumulated other comprehensive loss       (507 )     (82 )
Total stockholders' equity       761,114       758,056  
Total liabilities and stockholders' equity     $ 1,011,463     $ 1,042,561  
       
       
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
       
      Year Ended
      January 2,  

January 3,
      2016  

2015
Operating Activities          
Net income     $ 29,586     $ 38,021  
Adjustments to reconcile net income to cash provided by operating activities:          
Depreciation of property and equipment       12,517       12,561  
Amortization of other intangible assets and other assets       29,131       17,923  
Stock-based compensation expense       42,791       39,067  
Income tax benefit (shortfall) from stock-based awards       469       489  
Excess income tax benefit from stock-based awards       (2,497 )     (632 )
Deferred income taxes       (2,136 )     3,054  
Changes in operating assets and liabilities:          
Accounts receivable       1,702       1,757  
Inventories       2,093       (7,170 )
Prepaid expenses and other assets       (870 )     9,332  
Accounts payable       6,662       11,475  
Accrued expenses       1,682       27,671  
Deferred income on shipments to distributors       (5,298 )     7,809  
Income taxes       776       (3,371 )
Other non-current liabilities       (11,161 )     (20,543 )
Net cash provided by operating activities       105,447       137,443  
           
Investing Activities          
Purchases of available-for-sale investments       (107,366 )     (166,094 )
Proceeds from sales and maturities of available-for-sale investments       171,831       156,520  
Purchases of property and equipment       (11,268 )     (11,225 )
Purchases of other assets       (6,399 )     (5,514 )
Acquisitions of businesses, net of cash acquired       (96,112 )     --  
Net cash used in investing activities       (49,314 )     (26,313 )
           
Financing Activities          
Proceeds from issuance of common stock, net of cash paid for withheld taxes       3,129       13,320  
Excess income tax benefit from stock-based awards       2,497       632  
Repurchases of common stock       (71,448 )     (71,676 )
Payment of acquisition-related contingent consideration       (4,464 )     --  
Proceeds from issuance of long-term debt, net       81,238       --  
Payments on debt       (94,706 )     (7,500 )
Net cash used in financing activities       (83,754 )     (65,224 )
           
Increase (decrease) in cash and cash equivalents       (27,621 )     45,906  
Cash and cash equivalents at beginning of period       141,706       95,800  
Cash and cash equivalents at end of period     $ 114,085     $ 141,706  

 

Silicon Labs
Jalene Hoover, +1-512-428-1610
Jalene.Hoover@silabs.com

 

Source: Silicon Labs

News Provided by Acquire Media