Silicon Laboratories Inc.
Apr 30, 2008

Silicon Laboratories Reports Strong First Quarter Results

-- Company Grows Revenue by 33 Percent and Expands Earnings and Operating Income --AUSTIN, Texas, Apr 30, 2008 (BUSINESS WIRE) -- Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported better than expected first quarter revenue of $98.2 million, a 33 percent increase over the same period last year. Earnings per share for the quarter exceeded guidance, and the company nearly tripled operating income compared to the same period last year.

Financial Results

The company delivered favorable results across the board during the first quarter. Revenue of $98.2 million exceeded guidance. GAAP gross margin was 61.5 percent, GAAP operating income increased year-over-year to $11 million, and GAAP diluted earnings per share from continuing operations increased significantly compared to the same period last year to $0.21.

The following non-GAAP results exclude certain non-cash charges. Non-GAAP gross margin of 61.8 percent was at the high end of the corporate range of 60 to 62 percent. Operating expenses were slightly lower than expected, resulting in non-GAAP operating income of $21.3 million, or 21.7 percent of revenue, representing very strong operating performance relative to seasonal market trends. It also marks a near tripling of non-GAAP operating income from the same period last year. Non-GAAP diluted earnings per share from continuing operations was $0.38, representing a year-over-year increase of more than 100 percent. The reconciling charges are set forth in the financial measures table included below.

During the first quarter the company continued aggressive execution of its share repurchase program, completing repurchases totaling $137 million. The company ended the quarter with $467 million in cash, cash equivalents and investments.

Business Summary

Strong operating performance in the first quarter was coupled with a number of positive business drivers. A doubling of channel design wins for the broad-based products year-over-year, a strong quarter of new product announcements and the addition of new tier-one customers and design wins all offer strong indications of solid momentum in the business.

Broadcast revenue to handset customers increased sequentially in what is typically a seasonally weak quarter, demonstrating the strong competitive position of the company's broadcast audio solutions. The company announced new products in both audio and video broadcast that further differentiate Silicon Labs from the competition. The continued adoption of the current portfolio, increasing attach rates and a record number of design wins, clearly demonstrated the strength and long-term potential of the business.

The MCU business was up almost 40 percent over the same quarter last year and down sequentially due to seasonal weakness primarily in the portable navigation market. Record development kit shipments, a high rate of design win activity and new product introductions continued throughout the quarter, including the introduction of the industry's first 8-bit MCUs capable of operating with only a single cell battery. Healthy business trends are expected to drive the MCU product line to sequential revenue growth in the second quarter.

Demand for timing products and stable performance of the company's foundation businesses also supported the strong results.

"We have a global business, a number of new product cycles and new tier-one customers beginning to ramp. We're introducing products at an accelerated pace and continuing to fortify our leadership position in key markets," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "Together with strong operational performance and conservative financial management, we are delivering a combination of growth and profitability virtually unmatched in our sector."

For the second quarter of 2008, the company is guiding revenue in the range of $98 to $101 million.

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 866-446-5477 or +1 203-369-1151 (international). Replays will be available through May, 14 2008.

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 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
                                                  --------------------
                                                  April 5,  March 31,
                                                    2008       2007
                                                  --------- ----------
Revenues                                            $98,179    $73,814
Cost of revenues                                     37,832     28,439
                                                  --------- ----------
Gross profit                                         60,347     45,375
Operating expenses:
   Research and development                          24,673     24,807
   Selling, general and administrative               24,609     24,292
                                                  --------- ----------
Operating expenses                                   49,282     49,099
                                                  --------- ----------
Operating income (loss)                              11,065    (3,724)
Other income (expense):
   Interest income                                    4,798      3,835
   Interest expense                                   (145)      (231)
   Other income (expense), net                        (142)      (119)
                                                  --------- ----------
Income (loss) from continuing operations before
income taxes                                         15,576      (239)
Provision for income taxes                            4,762        507
                                                  --------- ----------
Income (loss) from continuing operations             10,814      (746)
Income from discontinued operations, net of
income taxes                                             --    156,359
                                                  --------- ----------
Net income                                          $10,814   $155,613
                                                  ========= ==========
Basic earnings per share:
   Income (loss) from continuing operations           $0.21    $(0.01)
   Net income                                         $0.21      $2.84

Diluted earnings per share:
   Income (loss) from continuing operations           $0.21    $(0.01)
   Net income                                         $0.21      $2.84

Weighted-average common shares outstanding:
   Basic                                             51,109     54,806
   Diluted                                           52,000     54,806



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

Non-GAAP Income                    Three Months Ended
Statement Items                       April 5, 2008
------------------ ---------------------------------------------------
                                                              Non-GAAP
                               GAAP        Stock       Non-   Percent
                    GAAP    Percent of  Compensation    GAAP     of
                   Measure   Revenue       Expense    Measure Revenue
                   ------- ------------ ------------  ------- --------
Revenues           $98,179

Gross profit        60,347        61.5%         $370  $60,717    61.8%

Operating income    11,065        11.3%       10,221   21,286    21.7%


------------------ ---------------------------------------------------
Non-GAAP Income                    Three Months Ended
Statement Items                      March 31, 2007
------------------ ---------------------------------------------------
                                                              Non-GAAP
                               GAAP        Stock       Non-   Percent
                    GAAP    Percent of  Compensation    GAAP     of
                   Measure   Revenue       Expense    Measure Revenue
                   ------- ------------ ------------  ------- --------
Revenues           $73,814

Operating income
 (loss)            (3,724)       (5.0)%       11,770    8,046    10.9%


------------------ ----------------------------------
Non-GAAP Diluted          Three Months Ended
Earnings Per Share           April 5, 2008
------------------ ----------------------------------
                              Stock
                    GAAP   Compensation   Non-GAAP
                   Measure    Expense     Measure
                   ------- ------------ ------------
Income from
 continuing
 operations        $10,814       $8,974      $19,788

Diluted shares
 outstanding        52,000           --       52,000

Diluted earnings
 per share from
 continuing
 operations          $0.21                     $0.38


------------------ ----------------------------------
Non-GAAP Diluted          Three Months Ended
Earnings Per Share          March 31, 2007
------------------ ----------------------------------
                              Stock
                    GAAP   Compensation   Non-GAAP
                   Measure    Expense     Measure
                   ------- ------------ ------------
Income (loss) from
 continuing
 operations         $(746)       $9,702       $8,956

Diluted shares
 outstanding        54,806           --       54,806

Diluted earnings
 (loss) per share
 from continuing
 operations        $(0.01)                     $0.16



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

                                               April 5,   December 29,
                                                 2008         2007
                                              ----------- ------------
                                              (Unaudited)
                   Assets
Current assets:
   Cash and cash equivalents                     $330,871     $264,408
   Short-term investments                          70,185      308,566
   Accounts receivable, net of allowance for
    doubtful accounts of $515 at April 5,
    2008 and $517 at December 29, 2007             46,355       51,211
   Inventories                                     26,918       28,587
   Deferred income taxes                            6,261        6,025
   Prepaid expenses and other current assets       20,026       33,895
                                              ----------- ------------
Total current assets                              500,616      692,692
Long-term investments                              65,950           --
Property, equipment and software, net              26,814       28,157
Goodwill                                           73,096       73,199
Other intangible assets, net                       17,045       18,077
Other assets, net                                  30,028       28,121
                                              ----------- ------------
Total assets                                     $713,549     $840,246
                                              =========== ============

    Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                               $23,583      $33,321
   Accrued expenses                                21,846       26,397
   Deferred income on shipments to
    distributors                                   27,606       28,448
   Income taxes                                     5,302        5,226
                                              ----------- ------------
Total current liabilities                          78,337       93,392
Long-term obligations and other liabilities        46,264       43,309
                                              ----------- ------------
Total liabilities                                 124,601      136,701
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; 48,700 and 52,810
    shares issued and outstanding at April 5,
    2008 and December 29, 2007, respectively            5            5
   Additional paid-in capital                     180,124      303,682
   Retained earnings                              410,672      399,858
   Accumulated other comprehensive loss           (1,853)           --
                                              ----------- ------------
Total stockholders' equity                        588,948      703,545
                                              ----------- ------------
Total liabilities and stockholders' equity       $713,549     $840,246
                                              =========== ============



SOURCE: Silicon Laboratories Inc.

Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464 9254
shannon.pleasant@silabs.com