Silicon Laboratories Announces Third Quarter Results
AUSTIN, Texas, Oct 23, 2006 (BUSINESS WIRE) -- Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal ICs, today reported third quarter revenues of $115.5 million, an eleven percent increase over the same period in 2005.
Quarterly Business Highlights
Silicon Laboratories' diversifying product portfolio has multiple growth areas that performed well in the third quarter including microcontrollers, timing products and broadcast products. The broad-based mixed-signal business was up slightly in the third quarter despite weakness in the company's DAA business. New product introductions, including FM transmitters and automotive MCUs, further expanded the portfolio and are expected to be important growth areas in the future.
The mobile handset business declined as expected, however the company added significant design wins in both FM tuners and EDGE transceivers among large, top tier customers. The company's Aero® IIed transceiver announced during the third quarter is expected to increase Silicon Laboratories' total addressable market for EDGE in 2007. The company also plans to ship first revenue for its AeroFONE single-chip phone in the fourth quarter of 2006 as planned.
"We're at the beginning of several strong potential product cycles in both our mobile handset and broad-based mixed-signal businesses," said Necip Sayiner, president and CEO of Silicon Laboratories. "So while the near-term outlook remains relatively muted, we feel very good about the long-term growth potential and health of the business."
Financial Highlights
Gross margin for the third quarter was within the company's target range at 55 percent. GAAP operating income was $4.2 million. Non-GAAP operating income was $17.4 million or 15 percent of revenue. GAAP net income for the third quarter was $4.7 million, or eight cents per fully diluted share. Non-GAAP net income per fully diluted share, excluding certain charges, was 26 cents. 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 very healthy with cash and short-term investments totaling approximately $392 million at quarter end, including the impact of $35 million in stock repurchases during the quarter.
For the fourth quarter of 2006, the company anticipates revenue of $108 to $113 million.
Conference Call Today
A conference call discussing the third quarter results will follow the 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 1 866-415-3312 or +1 203-369-0691 (international). These replays will be available through November 6th, 2006.
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.
Cautionary Language
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, especially for mobile handset products; 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, Aero 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.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Nine Months Ended
------------------------ ------------------------
September 30, October 1, September 30, October 1,
2006 2005 2006 2005
------------- ---------- ------------- ----------
Revenues $115,540 $103,913 $353,585 $315,833
Cost of revenues 52,142 47,269 156,439 144,405
------------- ---------- ------------- ----------
Gross profit 63,398 56,644 197,146 171,428
Operating expenses:
Research and
development 31,264 36,604 89,288 77,531
Selling, general
and
administrative 27,308 17,480 78,173 53,655
In-process
research and
development 600 -- 3,200 --
------------- ---------- ------------- ----------
Operating expenses 59,172 54,084 170,661 131,186
------------- ---------- ------------- ----------
Operating income 4,226 2,560 26,485 40,242
Other income
(expense):
Interest income 3,525 2,138 10,351 5,542
Interest expense (236) (30) (635) (131)
Other income
(expense), net 53 (48) 344 (241)
------------- ---------- ------------- ----------
Income before income
taxes 7,568 4,620 36,545 45,412
Provision for income
taxes 2,834 5,365 10,610 13,170
------------- ---------- ------------- ----------
Net income (loss) $4,734 $(745) $25,935 $32,242
============= ========== ============= ==========
Net income (loss)
per share:
Basic $0.08 $(0.01) $0.47 $0.61
Diluted $0.08 $(0.01) $0.45 $0.58
Weighted-average
common shares
outstanding:
Basic 55,725 53,770 55,557 53,129
Diluted 57,151 53,770 57,566 55,244
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
Three Months Ended
------------------------
September 30, October 1,
2006 2005
------------- ----------
GAAP operating income $4,226 $2,560
Stock compensation adjustments:
Cost of revenues 243 20
Research and development 5,071 657
Selling, general and administrative 4,270 618
Headquarters relocation costs 2,956 --
In-process research and development 600 --
Acquired research and development -- 13,687
------------- ----------
Non-GAAP operating income $17,366 $17,542
------------- ----------
Non-GAAP operating income % 15.0 % 16.9%
------------- ----------
Three Months Ended
------------------------
September 30, October 1,
2006 2005
------------- ----------
GAAP net income (loss) $4,734 $(745)
Stock compensation adjustments:
Cost of revenues 243 20
Research and development 5,071 657
Selling, general and administrative 4,270 618
Provision for income taxes (2,066) (487)
Headquarters relocation costs 2,956 --
In-process research and development 600 --
Acquired research and development -- 13,687
Taxes (1,035) 588
------------- ----------
Non-GAAP net income $14,773 $14,338
------------- ----------
GAAP diluted shares outstanding 57,151 53,770
Adjustments
Weighted-average shares of common stock
subject to repurchase -- 72
Stock options -- 1,500
------------- ----------
Non-GAAP diluted shares outstanding 57,151 55,342
------------- ----------
Non-GAAP diluted net income per share $0.26 $0.26
------------- ----------
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
September 30, December 31,
2006 2005
------------- ------------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $84,744 $100,504
Short-term investments 307,195 263,206
Accounts receivable, net of allowance
for doubtful accounts of $423 at
September 30, 2006 and $1,088 at
December 31, 2005 49,436 68,824
Inventories 45,332 23,132
Deferred income taxes 15,214 11,505
Prepaid expenses and other 14,479 9,670
------------- ------------
Total current assets 516,400 476,841
Property, equipment and software, net 41,902 32,584
Goodwill 77,324 62,877
Other intangible assets, net 23,253 14,838
Other assets, net 37,602 25,863
------------- ------------
Total assets $696,481 $613,003
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $46,215 $43,846
Accrued expenses 16,381 11,307
Deferred income on shipments to
distributors 44,460 34,036
Income taxes payable 10,945 18,348
------------- ------------
Total current liabilities 118,001 107,537
Long-term obligations and other liabilities 18,281 7,418
------------- ------------
Total liabilities 136,282 114,955
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; 54,919 and
54,530 shares issued and outstanding at
September 30, 2006 and December 31,
2005, respectively 5 5
Additional paid-in capital 370,395 335,284
Deferred stock compensation -- (1,105)
Retained earnings 189,799 163,864
------------- ------------
Total stockholders' equity 560,199 498,048
------------- ------------
Total liabilities and stockholders' equity $696,481 $613,003
============= ============
Certain prior period amounts have been reclassified to conform to the
current period presentation.
SOURCE: Silicon Laboratories Inc.
Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464-9254
investor.relations@silabs.com