Silicon Laboratories Reports Exceptional Financial Performance
AUSTIN, Texas--(BUSINESS WIRE)--Jan. 30, 2008--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue from continuing operations of $100 million for the fourth quarter, a 34 percent increase over the same period last year. Earnings per share for the quarter exceeded guidance, and the company surpassed its non-GAAP adjusted operating income target of 25 percent in the quarter, demonstrating the ability of the business to operate at model performance.
During the fourth quarter the company completed share repurchases totaling $112 million, bringing the total amount repurchased to over a third of the $400 million authorization in only five months.
Financial Results
2007 revenue from continuing operations of $337 million was an increase of 17 percent over 2006. Fourth quarter revenue increased sequentially by almost 14 percent, higher than expectations due primarily to stronger than anticipated demand from consumer device makers for the company's microcontrollers and broadcast products. For the fourth quarter, GAAP gross margin increased to 63.5 percent, GAAP operating income was $14.5 million, and GAAP diluted earnings per share from continuing operations was $0.28. For the full year, GAAP diluted earnings per share from continuing operations increased to $0.70. Including discontinued operations, GAAP diluted earnings per share totaled $3.64.
The following non-GAAP results exclude $11.9 million in non-cash charges. Non-GAAP gross margin increased to 63.9 percent, well above expectations due to strong margin performance across the product lines. Operating expenses were slightly lower than forecasted, declining as a percent of revenue to 37.6 percent, resulting in non-GAAP operating income of $26.3 million, or 26.3 percent of revenue. This was significantly above guidance and exceeded the company's target of 25 percent. Non-GAAP diluted earnings per share from continuing operations was a record $0.46 for the quarter and $1.30 for all of 2007, representing a year over year increase of 142 percent and 65 percent, respectively.
"In four quarters, the company has been able to achieve a level of financial performance that very few companies in our sector can deliver," said Bill Bock, chief financial officer. "We were able to reduce operating expenses, accelerate revenue and improve the gross margin profile, more than doubling operating income and earnings per share."
The reconciling charges are set forth in the financial measures table included below.
Business Summary
Fourth quarter revenue growth was driven by the broadcast, microcontrollers and timing businesses. Broadcast products and microcontrollers experienced double-digit sequential growth rates fueled by demand for products shipping into consumer devices such as handsets and portable navigation devices. Design win activity remained strong across the business and particularly in microcontrollers, which recorded over seven thousand development kit shipments.
"The results speak for themselves," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "We have a strong portfolio of differentiated products, we are continuing to diversify to expand our market reach and customer base, and we are investing in R&D to fund future growth. We will continue to focus on R&D execution and operational excellence in our business as we monitor the uncertainties in the macroeconomic environment."
For the first quarter of 2008, the company is guiding revenue in the range of $93 to $97 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 800-839-2341 or +1-203-369-3138 (international). Replays will be available through February 13, 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 (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.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------------- -------------------------
December 29, December 30, December 29, December 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Revenues $ 100,111 $ 74,612 $ 337,461 $ 288,156
Cost of revenues 36,565 29,229 130,225 100,678
------------ ------------ ------------ ------------
Gross profit 63,546 45,383 207,236 187,478
Operating
expenses:
Research and
development 21,524 23,110 89,320 89,804
Selling, general
and
administrative 27,551 21,258 94,819 89,022
In-process
research and
development -- -- -- 2,600
------------ ------------ ------------ ------------
Operating expenses 49,075 44,368 184,139 181,426
------------ ------------ ------------ ------------
Operating income 14,471 1,015 23,097 6,052
Other income
(expense):
Interest income 6,523 3,394 24,525 13,745
Interest expense (101) (236) (628) (872)
Other income
(expense), net (87) 399 (469) 744
------------ ------------ ------------ ------------
Income from
continuing
operations
before income
taxes 20,806 4,572 46,525 19,669
Provision for
income taxes 4,888 222 6,838 4,326
------------ ------------ ------------ ------------
Income from
continuing
operations 15,918 4,350 39,687 15,343
Income from
discontinued
operations, net
of income taxes 5,399 873 165,149 15,815
------------ ------------ ------------ ------------
Net income $ 21,317 $ 5,223 $ 204,836 $ 31,158
============ ============ ============ ============
Basic earnings per
share:
Income from
continuing
operations $ 0.29 $ 0.08 $ 0.72 $ 0.28
Net income $ 0.39 $ 0.10 $ 3.74 $ 0.56
Diluted earnings
per share:
Income from
continuing
operations $ 0.28 $ 0.08 $ 0.70 $ 0.27
Net income $ 0.38 $ 0.09 $ 3.64 $ 0.54
Weighted-average
common shares
outstanding:
Basic 54,377 54,715 54,826 55,346
Diluted 55,901 56,109 56,321 57,201
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
----------- ----------------------------------------------------------
Non-GAAP
Income
Statement Three Months Ended
Items December 29, 2007
----------- ----------------------------------------------------------
GAAP Non-GAAP
Percent Stock Non- Percent
GAAP of Compensation Relocation GAAP of
Measure Revenue Expense Charges Measure Revenue
-------- -------- ------------ ---------- ------- --------
Revenues $100,111
Gross
profit 63,546 63.5% $ 440 $ -- $63,986 63.9%
Operating
expenses 49,075 49.0% 10,610 804 37,661 37.6%
Operating
income 14,471 14.5% 11,050 804 26,325 26.3%
-------------------------- ---------------------------------------
Non-GAAP Diluted Earnings Three Months Ended
Per Share December 29, 2007
-------------------------- ---------------------------------------
Stock Non-
GAAP Compensation Relocation GAAP
Measure Expense Charges Measure
------- ------------ ---------- -------
Income from continuing
operations $15,918 $ 9,025 $ 523 $25,466
Diluted shares outstanding 55,901 -- -- 55,901
Diluted earnings per share
from continuing
operations $ 0.28 $ 0.46
-------------------------- ---------------------------------------
Non-GAAP Diluted Earnings Twelve Months Ended
Per Share December 29, 2007
-------------------------- ---------------------------------------
Stock Non-
GAAP Compensation Relocation GAAP
Measure Expense Charges Measure
------- ------------ ---------- -------
Income from continuing
operations $39,687 $ 33,223 $ 523 $73,433
Diluted shares outstanding 56,321 -- -- 56,321
Diluted earnings per share
from continuing
operations $ 0.70 $ 1.30
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Continued)
--------------------------------------- ----------------------------
Non-GAAP Diluted Earnings Three Months Ended
Per Share December 30, 2006
--------------------------------------- ----------------------------
Stock Non-
GAAP Compensation GAAP
Measure Expense Measure
------- ------------ -------
Income from continuing operations $ 4,350 $ 6,307 $10,657
Diluted shares outstanding 56,109 -- 56,109
Diluted earnings per share from
continuing operations $ 0.08 $ 0.19
--------------------- ------------------------------------------------
Non-GAAP Diluted
Earnings Twelve Months Ended
Per Share December 30, 2006
--------------------- ------------------------------------------------
Stock In-
GAAP Compensation Relocation Process Non-GAAP
Measure Expense Charges R&D Measure
------- ------------ ---------------------------
Income from
continuing
operations $15,343 $ 25,336 $ 1,921 $ 2,600 $45,200
Diluted shares
outstanding 57,201 -- -- -- 57,201
Diluted earnings per
share from
continuing operations $ 0.27 $ 0.79
Silicon Laboratories Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
December 29, December 30,
2007 2006
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 264,408 $ 68,188
Short-term investments 308,566 318,104
Accounts receivable, net of allowance for
doubtful accounts of $517 at December
29, 2007 and $421 at December 30, 2006 51,211 36,657
Inventories 28,587 22,016
Deferred income taxes 6,025 12,118
Prepaid expenses and other current assets 33,895 12,944
Current assets of discontinued operations -- 33,680
------------ ------------
Total current assets 692,692 503,707
Property, equipment and software, net 28,157 34,070
Goodwill 73,199 65,680
Other intangible assets, net 18,077 20,271
Other assets, net 28,121 24,528
Non-current assets of discontinued
operations -- 38,739
------------ ------------
Total assets $ 840,246 $ 686,995
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 33,321 $ 26,438
Accrued expenses 26,397 23,051
Deferred income on shipments to
distributors 28,448 20,568
Income taxes 5,226 15,063
Current liabilities of discontinued
operations -- 16,502
------------ ------------
Total current liabilities 93,392 101,622
Long-term obligations and other liabilities 43,309 15,641
Non-current liabilities of discontinued
operations -- 1,050
------------ ------------
Total liabilities 136,701 118,313
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; 52,810 and
54,802 shares issued and outstanding at
December 29, 2007 and December 30, 2006,
respectively 5 5
Additional paid-in capital 303,682 373,655
Retained earnings 399,858 195,022
------------ ------------
Total stockholders' equity 703,545 568,682
------------ ------------
Total liabilities and stockholders' equity $ 840,246 $ 686,995
============ ============
CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464-9254
shannon.pleasant@silabs.com
SOURCE: Silicon Laboratories Inc.