Silicon Laboratories Announces Record Revenue
AUSTIN, Texas--(BUSINESS WIRE)--July 25, 2007--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue in continuing operations of $75.6 million and earnings per share results that exceeded the company's guidance. The company also announced a significant increase in the share repurchase program.
Share Repurchase Program
Silicon Laboratories' Board of Directors approved a new $400 million share repurchase plan, quadrupling the previous authorization. The program will be executed on the open market or in private transactions, including structured or accelerated transactions, depending on market conditions.
"It is our intention to be active in the execution of this program, effectively returning capital to shareholders and significantly reducing our outstanding share base," said Bill Bock, chief financial officer of Silicon Laboratories. "We also believe this is a responsible action relative to our cash position in that it returns value to shareholders while retaining our financial flexibility for either the operation of the business or for strategic opportunities."
Second Quarter Financial Results
Revenue increased by two percent year over year to record levels in the second quarter. GAAP gross margin totaled 60 percent. GAAP operating income was $1.9 million. GAAP diluted earnings per share from continuing operations of $0.12 represented more than a 100 percent improvement over the same period last year.
Excluding an $8.6 million charge for stock compensation expense, non-GAAP operating income was $10.6 million or 14 percent of revenue, representing significant progress towards the company's target model. Non-GAAP diluted earnings per share from continuing operations totaled $0.26, an increase of 60 percent sequentially. The reconciling charges are set forth in the financial measures table included below.
The company ended the quarter with approximately $644 million in cash, cash equivalents and short-term investments.
Business Summary
During the second quarter, growth was driven by strength in the broadcast and microcontroller product lines. Strong demand from certain handset customers and increasing diversification in non-handset applications resulted in a double-digit broadcast revenue increase. The company also began to ship its new FM transmitter in the second quarter as planned.
The MCU business continued to grow across consumer, industrial and networking applications. The company believes that recent new product introductions and future products under development as part of the MCU roadmap will significantly expand the company's served available market over time.
"We believe that improved visibility into the next two quarters and current business trends support the company's annual growth targets," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "The margin leverage in our new business model will really become impactful as we grow our revenue in the second half of the year."
For the third quarter of 2007, the company believes revenue in all of its core product lines will experience growth and is guiding revenue in the range of $81 to $84 million.
Webcast and Conference Call
A conference call discussing the second 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 888-568-0091 or +1 402-530-7778 (international). Replays will be available through August 8, 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 (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.
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 Six Months Ended
------------------- --------------------
June 30, July 1, June 30, July 1,
2007 2006 2007 2006
--------- --------- ---------- ---------
Revenues $75,597 $73,936 $149,411 $140,588
Cost of revenues 30,233 24,442 58,672 45,569
--------- --------- ---------- ---------
Gross profit 45,364 49,494 90,739 95,019
Operating expenses:
Research and development 22,145 22,619 46,952 43,688
Selling, general and
administrative 21,282 22,822 45,574 43,552
In-process research and
development -- 2,600 -- 2,600
--------- --------- ---------- ---------
Operating expenses 43,427 48,041 92,526 89,840
--------- --------- ---------- ---------
Operating income (loss) 1,937 1,453 (1,787) 5,179
Other income (expense):
Interest income 7,032 3,624 10,867 6,826
Interest expense (167) (225) (398) (400)
Other income (expense),
net (51) 45 (170) 291
--------- --------- ---------- ---------
Income from continuing
operations
before income taxes 8,751 4,897 8,512 11,896
Provision for income taxes 1,859 1,892 2,366 3,693
--------- --------- ---------- ---------
Income from continuing
operations 6,892 3,005 6,146 8,203
Income from discontinued
operations, net of
income taxes 581 7,132 156,940 12,998
--------- --------- ---------- ---------
Net income $7,473 $10,137 $163,086 $21,201
========= ========= ========== =========
Basic earnings per share:
Income from continuing
operations $0.13 $0.05 $0.11 $0.15
Net income $0.14 $0.18 $2.97 $0.38
Diluted earnings per share:
Income from continuing
operations $0.12 $0.05 $0.11 $0.14
Net income $0.13 $0.18 $2.90 $0.37
Weighted-average common
shares
outstanding:
Basic 54,901 55,842 54,856 55,460
Diluted 56,312 57,858 56,308 57,761
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
Three Months
Ended
------------
June 30,
2007
------------
GAAP operating income $1,937
Stock compensation adjustments:
Cost of revenues 379
Research and development 4,078
Selling, general and administrative 4,164
------------
Non-GAAP operating income $10,558
------------
Non-GAAP operating income % 14.0%
------------
Three Months Ended
----------------------------
June 30, March 31,
2007 2007
------------ ------------
GAAP income (loss) from continuing
operations $6,892 $(746)
Stock compensation adjustments:
Cost of revenues 379 307
Research and development 4,078 5,371
Selling, general and administrative 4,164 6,092
Provision for income taxes (1,137) (2,068)
------------ ------------
Non-GAAP income from continuing
operations $14,376 $8,956
GAAP diluted shares outstanding 56,312 54,806
Stock options and awards -- 1,505
------------ ------------
Non-GAAP diluted shares outstanding 56,312 56,311
Non-GAAP diluted earnings per share from
continuing operations $0.26 $0.16
------------ ------------
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
June 30, December 30,
2007 2006
------------ -------------
Assets
Current assets:
Cash and cash equivalents $162,066 $68,188
Short-term investments 481,930 318,104
Accounts receivable, net of allowance
for doubtful accounts of $501 at June
30, 2007 and $421 at December 30, 2006
42,171 36,657
Inventories 18,982 22,016
Deferred income taxes 5,229 12,118
Prepaid expenses and other 31,989 12,944
Current assets of discontinued
operations -- 33,680
------------ -------------
Total current assets 742,367 503,707
Property, equipment and software, net 29,824 34,070
Goodwill 65,519 65,680
Other intangible assets, net 18,109 20,271
Other assets, net 24,070 24,528
Non-current assets of discontinued
operations -- 38,739
------------ -------------
Total assets $879,889 $686,995
============ =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $30,051 $26,438
Accrued expenses 18,148 23,051
Deferred income on shipments to
distributors 18,341 20,568
Income taxes -- 15,063
Current liabilities of discontinued
operations 10,099 16,502
------------ -------------
Total current liabilities 76,639 101,622
Long-term obligations and other liabilities 49,641 15,641
Non-current liabilities of discontinued
operations -- 1,050
------------ -------------
Total liabilities 126,280 118,313
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; 55,114 and 54,802
shares issued and outstanding at June
30, 2007 and December 30, 2006,
respectively
6 5
Additional paid-in capital 395,495 373,655
Retained earnings 358,108 195,022
------------ -------------
Total stockholders' equity 753,609 568,682
------------ -------------
Total liabilities and stockholders' equity $879,889 $686,995
============ =============
CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464 9254
shannon.pleasant@silabs.com
SOURCE: Silicon Laboratories Inc.