Silicon Laboratories Inc.
Apr 25, 2007

Silicon Laboratories Announces First Quarter Results

--Company Delivers Revenue and EPS Upside--

AUSTIN, Texas--(BUSINESS WIRE)--April 25, 2007--Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported strong first quarter results that exceeded the company's guidance on the top and bottom line.

First Quarter Financial Highlights

First quarter results have almost a full quarter of operations inclusive of the Aero® products sold on March 23rd, which are now classified as discontinued operations. During the first quarter of 2007 (on a non-GAAP basis and including the results from discontinued operations), total revenue increased sequentially to $111.8 million, gross margin was 52 percent, and operating income was $11.4 million, or 10 percent of revenue. Net income on a non-GAAP basis, excluding the gain on the sale of the Aero products, was $10.8 million, or $0.19 per fully diluted share, exceeding the high-end of the guidance range by two cents.

The company's continuing operations made up of its core, mixed-signal business delivered 11 percent year over year revenue growth and totaled $73.8 million. GAAP gross margin for the mixed-signal business increased to 61.5 percent. GAAP operating loss was $3.7 million. Excluding an $11.8 million charge for stock compensation expense, non-GAAP operating income was $8 million or 11 percent of revenue. The GAAP income statement includes income from discontinued operations of $156.3 million, which includes the after-tax gain on the sale of the business, resulting in GAAP net income of $155.6 million and GAAP diluted earnings per share of $2.84. The reconciling charges are set forth in the financial measures table included below.

The company ended the quarter with approximately $666 million in cash, cash equivalents and short-term investments. The company repurchased $13 million of its common stock under its repurchase program during the quarter.

"We executed well this quarter on several strategic objectives, and I believe the progress we made to improve efficiencies and scale our infrastructure appropriately demonstrates our commitment to our target operating model," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "As a company, we are at a positive inflection point strategically, and we have a business with a profile that is now in sync with the growth and profitability targets we have established."

Mixed-Signal Business Summary

Silicon Laboratories' continuing operations are made up of the mixed-signal business which includes a diverse set of innovative products addressing broadcast, embedded modems, voice over broadband, microcontrollers (MCUs), and timing. During the first quarter, the broadcast, microcontroller, embedded modems and timing product lines increased revenue sequentially while voice products declined.

The company announced several strategic MCU and broadcast products in the first quarter. Silicon Laboratories' new additions to the small form factor MCU family enable the company to address cost sensitive applications such as white goods and toys. New broadcast products, including a fully integrated AM/FM receiver, offer additional features and further differentiation in the company's tuner family, improving average selling prices and boosting the company's penetration into portable audio applications.

Business Outlook

For the second quarter of 2007, the company anticipates revenue from continuing operations to be in the range of $74 to $77 million. GAAP net income per fully diluted share is expected to be in the range of $0.10 to $0.13. Non-GAAP net income per fully diluted share, excluding a non-cash charge for stock compensation, is expected to be in the range of $0.22 to $0.25.

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 800-677-5199 or +1 203-369-3133 (international). Replays will be available through May 9, 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; 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, 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
                                               -----------------------
                                                March 31,   April 1,
                                                  2007        2006
                                               ----------- -----------
Revenues                                          $73,814     $66,652
Cost of revenues                                   28,439      21,127
                                               ----------- -----------
Gross profit                                       45,375      45,525
Operating expenses:
  Research and development                         24,807      21,069
  Selling, general and administrative              24,292      20,731
                                               ----------- -----------
Operating expenses                                 49,099      41,800
                                               ----------- -----------
Operating income (loss)                            (3,724)      3,725
Other income (expense):
  Interest income                                   3,835       3,202
  Interest expense                                   (231)       (175)
  Other income (expense), net                        (119)        247
                                               ----------- -----------
Income (loss) from continuing operations
 before income taxes                                 (239)      6,999
Provision for income taxes                            507       1,801
                                               ----------- -----------
Income (loss) from continuing operations             (746)      5,198
Income from discontinued operations, net of
 income taxes                                     156,359       5,866
                                               ----------- -----------
Net income                                       $155,613     $11,064
                                               =========== ===========

Basic earnings per share:
  Income (loss) from continuing operations         $(0.01)      $0.09
  Net income                                        $2.84       $0.20

Diluted earnings per share:
  Income (loss) from continuing operations         $(0.01)      $0.09
  Net income                                        $2.84       $0.19

Weighted-average common shares
outstanding:
  Basic                                            54,806      55,066
  Diluted                                          54,806      57,656
   Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
                (In thousands, except per share data)


------------ ---------------------------------------------------------
Total                           Three Months Ended
 Operations                       March 31, 2007
------------ ---------------------------------------------------------
                                                              Non-GAAP
                                       Stock                   Percent
               GAAP    Discontinued Compensation   Non-GAAP      of
              Measure   Operations     Expense     Measure     Revenue
             --------- ------------ ------------ ------------ --------
Revenues      $73,814      $37,988          $--     $111,802      100%

Gross profit   45,375       12,592          307       58,274       52%

Operating
 income
 (loss)        (3,724)    3,376 (1)   11,770 (2)      11,422       10%




------------ ---------------------------------------------------------
Net Income
 Per Share -
Total                           Three Months Ended
 Operations                       March 31, 2007
------------ ---------------------------------------------------------
                        Discontinued Operations
                       -------------------------
                                       Aero         Stock
               GAAP                   Products   Compensation Non-GAAP
              Measure     Income     Operations     Expense   Measure
             --------- ------------ ------------ ------------ --------
Net income
 (expense)   $155,613     $156,359  $(1,893) (1) $(9,702) (2) $10,849


               GAAP                Stock Options              Non-GAAP
              Measure                and Awards               Measure
             --------- -------------------------------------- --------
Diluted
 shares
 outstanding   54,806                  1,505                   56,301

Diluted net
 income per
 share          $2.84                                           $0.19




------------ -------------------------------------------------
Continuing                  Three Months Ended
 Operations                   March 31, 2007
------------ -------------------------------------------------
                          Stock                   Non-GAAP
               GAAP    Compensation   Non-GAAP    Percent of
              Measure     Expense     Measure       Revenue
             --------- ------------ ------------ ------------
 Revenues     $73,814          $--      $73,814          100%

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

(1) Represents the operating income of the discontinued operations,
 excluding $2.1 million of stock compensation expense for employees in
 the discontinued operations. The net income adjustment is net of
 estimated tax. The charges were not associated with the sale of our
 Aero product lines.

(2) Includes $3.3 million of stock compensation expense for equity
 awards to employees retained in our continuing operations after the
 sale of our Aero product lines. The net income adjustment is net of
 estimated tax.


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


-------------------------- -------------------------------------------
Net Income Per Share -                 Three Months Ended
Continuing Operations                    March 31, 2007
-------------------------- -------------------------------------------
                                                     Stock      Non-
                             GAAP    Discontinued Compensation   GAAP
                            Measure   Operations     Expense   Measure
                           --------- ------------ ------------ -------
Net income (expense)       $155,613     $156,359  $(9,702) (3) $8,956

                                                                Non-
                             GAAP          Stock Options         GAAP
                            Measure         and Awards         Measure
                           --------- ------------------------- -------
Diluted shares outstanding   54,806           1,505            56,301

Diluted net income per
 share                        $2.84                             $0.16


(3) Includes $3.3 million of stock compensation expense for equity
 awards to employees retained in our continuing operations after the
 sale of our Aero product lines. The net income adjustment is net of
 estimated tax.
 Unaudited Forward-Looking Statements Regarding Business Outlook (1)
             (In thousands, except per share information)

Business Outlook                                   Three Months Ending
                                                      June 30, 2007
-------------------------------------------------- -------------------

                                                     High       Low
                                                   --------- ---------
Estimated GAAP diluted net income per share           $0.13     $0.10
Estimated non-cash charges for stock compensation      0.12      0.12
                                                   --------- ---------
Estimated non-GAAP diluted net income per share       $0.25     $0.22
                                                   --------- ---------

(1) These financial schedules contain 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.


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

                                              March 31,   December 30,
                                                  2007        2006
                                              ----------- ------------
                   Assets
Current assets:
   Cash and cash equivalents                    $213,594      $68,188
   Short-term investments                        452,686      318,104
   Accounts receivable, net of allowance for
    doubtful accounts of $617 at March 31,
    2007 and $421 at December 30, 2006            33,311       36,657
   Inventories                                    21,465       22,016
   Deferred income taxes                           8,263       12,118
   Prepaid expenses and other                     27,552       12,944
   Current assets of discontinued operations      21,346       33,680
                                              ----------- ------------
Total current assets                             778,217      503,707
Property, equipment and software, net             32,669       34,070
Goodwill                                          65,840       65,680
Other intangible assets, net                      19,206       20,271
Other assets, net                                 25,929       24,528
Non-current assets of discontinued operations         --       38,739
                                              ----------- ------------
Total assets                                    $921,861     $686,995
                                              =========== ============

    Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                              $29,997      $26,438
   Accrued expenses                               20,716       23,051
   Deferred income on shipments to
    distributors                                  23,825       20,568
   Income taxes                                   42,907       15,063
   Current liabilities of discontinued
    operations                                    21,611       16,502
                                              ----------- ------------
Total current liabilities                        139,056      101,622
Long-term obligations and other liabilities       53,045       15,641
Non-current liabilities of discontinued
 operations                                           --        1,050
                                              ----------- ------------
Total liabilities                                192,101      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; 54,716 and 54,802
    shares issued and outstanding at March
    31, 2007 and December 30, 2006,
    respectively                                       5            5
   Additional paid-in capital                    379,120      373,655
   Retained earnings                             350,635      195,022
                                              ----------- ------------
Total stockholders' equity                       729,760      568,682
                                              ----------- ------------
Total liabilities and stockholders' equity      $921,861     $686,995
                                              =========== ============

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

SOURCE: Silicon Laboratories Inc.