Silicon Laboratories Announces Fourth Quarter Results
Fourth Quarter Financial Highlights
Gross margin for the fourth quarter was 53.4 percent, which was above the company's previously stated guidance range of 52 to 53 percent. GAAP operating income was $2.6 million. Non-GAAP operating income was $12.7 million, or 11.4 percent of revenue. GAAP net income for the fourth quarter was $5.2 million, or $0.09 per fully diluted share. Non-GAAP net income, excluding certain charges, was $13.5 million, or $0.24 per fully diluted share. The reconciling charges are set forth in the reconciliation of GAAP to non-GAAP financial measures table included below.
The company's balance sheet continued to be strong with cash, cash equivalents and short-term investments totaling approximately $386 million at December 30, 2006. During the quarter, the company repurchased shares of its common stock under its repurchase program at a cost of approximately $15 million.
"We achieved year-over-year revenue growth while managing through multiple product transitions in our mobile handset business and experiencing an overall industry slowdown in the second half of the year," said Necip Sayiner, President and CEO of Silicon Laboratories. "We continue to create a diverse set of growth drivers within our business and execute on our new product introductions in our effort to drive double digit growth in 2007."
Business Summary
During the fourth quarter, the company experienced strong demand for its Broadcast products, in particular FM tuners and satellite receivers. The broad-based mixed-signal business experienced a slight decline on a sequential basis due to lower modem shipments.
The mobile handset business performed within the company's guidance for the fourth quarter. Silicon Laboratories experienced a decline in the total GSM/GPRS transceiver shipments, which was largely offset by the increase in EDGE transceiver shipments, initial AeroFONE revenue and FM tuner growth.
Business Outlook
For the first quarter of 2007, the company anticipates revenue to be in a range of $106 to $111 million.
Webcast and Conference Call
A conference call discussing the fourth 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 800-801-6154 or +1-402-280-1615 (international). Replays will be available through February 14, 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 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.
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; 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, Silicon Labs, AeroFONE 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.
Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
------------------------- -------------------------
December 30, December 31, December 30, December 31,
2006 2005 2006 2005
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)
Revenues $111,012 $109,856 $464,597 $425,689
Cost of revenues 51,778 49,499 208,217 193,904
------------ ------------ ------------ ------------
Gross profit 59,234 60,357 256,380 231,785
Operating expenses:
Research and
development 32,419 23,692 121,707 101,222
Selling, general
and
administrative 24,185 18,898 102,358 72,553
In-process
research and
development -- -- 3,200 --
------------ ------------ ------------ ------------
Operating expenses 56,604 42,590 227,265 173,775
------------ ------------ ------------ ------------
Operating income 2,630 17,767 29,115 58,010
Other income
(expense):
Interest income 3,394 2,743 13,745 8,285
Interest expense (237) (191) (872) (322)
Other income
(expense), net 400 (91) 744 (332)
------------ ------------ ------------ ------------
Income before
income taxes 6,187 20,228 42,732 65,641
Provision for
income taxes 964 4,965 11,574 18,135
------------ ------------ ------------ ------------
Net income $5,223 $15,263 $31,158 $47,506
============ ============ ============ ============
Net income per
share:
Basic $0.10 $0.28 $0.56 $0.89
Diluted $0.09 $0.27 $0.54 $0.86
Weighted-average
common shares
outstanding:
Basic 54,715 54,210 55,346 53,399
Diluted 56,109 56,206 57,201 55,485
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
Three Months Ended
-------------------------
December 30, December 31,
2006 2005
------------ ------------
GAAP operating income $2,630 $17,767
Stock compensation adjustments:
Cost of revenues 311 58
Research and development 5,157 1,081
Selling, general and administrative 4,610 1,520
------------ ------------
Non-GAAP operating income $12,708 $20,426
------------ ------------
Non-GAAP operating income % 11.4% 18.6%
------------ ------------
Three Months Ended
-------------------------
December 30, December 31,
2006 2005
------------ ------------
GAAP net income $5,223 $15,263
Stock compensation adjustments:
Cost of revenues 311 58
Research and development 5,157 1,081
Selling, general and administrative 4,610 1,520
Provision for income taxes (1,781) (890)
------------ ------------
Non-GAAP net income $13,520 $17,032
------------ ------------
GAAP diluted shares outstanding 56,109 56,206
------------ ------------
Non-GAAP diluted net income per share $0.24 $0.30
------------ ------------
Silicon Laboratories Inc.
Consolidated Balance Sheets
(in thousands, except per share data)
December 30, December 31,
2006 2005
------------ ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $68,188 $100,504
Short-term investments 318,104 263,206
Accounts receivable, net of allowance for
doubtful accounts of $548 at December 30,
2006 and $1,088 at December 31, 2005 49,701 56,883
Inventories 40,282 23,132
Deferred income taxes 13,330 11,505
Prepaid expenses and other 14,102 9,670
------------ ------------
Total current assets 503,707 464,900
Property, equipment and software, net 43,321 32,584
Goodwill 78,224 62,877
Other intangible assets, net 21,970 14,838
Other assets, net 39,773 25,863
------------ ------------
Total assets $686,995 $601,062
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $36,396 $43,846
Accrued expenses 27,929 16,129
Deferred income on shipments to
distributors 22,234 17,273
Income taxes payable 15,063 18,348
------------ ------------
Total current liabilities 101,622 95,596
Long-term obligations and other liabilities 16,691 7,418
------------ ------------
Total liabilities 118,313 103,014
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; 54,802 and 54,530
shares issued and outstanding at December
30, 2006 and December 31, 2005,
respectively 5 5
Additional paid-in capital 373,655 335,284
Deferred stock compensation -- (1,105)
Retained earnings 195,022 163,864
------------ ------------
Total stockholders' equity 568,682 498,048
------------ ------------
Total liabilities and stockholders' equity $686,995 $601,062
============ ============
Certain prior period amounts have been reclassified to conform to the
current period presentation.
CONTACT: Silicon Laboratories Inc.
Kellie Nugent, 972-239-5119 ext. 125
knugent@sheltongroup.com
SOURCE: Silicon Laboratories Inc.