Silicon Laboratories Reports First Quarter Results

April 27, 2011

Strong Growth from Broadcast and Broad-based Products

AUSTIN, Texas--(BUSINESS WIRE)-- Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported a seven percent sequential increase in first quarter revenue to $119.6 million due to strength in its broadcast and broad-based product lines.

Financial Highlights

Revenue returned to growth in the first quarter, countering typical seasonal weakness in consumer markets with strong new product cycles.

During the quarter, the company completed the acquisition of SpectraLinear, a timing IC provider, and GAAP results include approximately $11.7 million in charges related to the acquisition, as well as typical non-cash stock compensation charges. GAAP gross margin was impacted by product mix as well as $1.1 million in acquisition charges, resulting in 60.3 percent gross margin for the first quarter. Operating expenses included $5.1 million in acquisition-related charges and ended the quarter at $35.4 million in R&D investment and $31.9 million in SG&A expense. This resulted in a fully diluted GAAP loss of four cents per share.

The following non-GAAP results exclude the impact of acquisition-related charges and stock compensation expense. Non-GAAP gross margin was 61.6 percent for the quarter, down sequentially as anticipated due to product mix. Operating expenses increased only modestly, with R&D at $29.7 million and SG&A about flat at $23.2 million. Fully diluted non-GAAP earnings per share were better than expected at $0.40. The reconciling charges are set forth in the financial measures table included below.

Business Highlights

The company's better than seasonal performance was driven by an aggressive ramp of its innovative silicon TV tuner into iDTVs by five top TV makers during the quarter. The company's timing products also achieved record revenue again which, when combined with strong growth in MCU products, enabled high single-digit sequential growth in the broad-based product category. Record design wins and expanding portfolios in both timing and MCUs created market share momentum at both existing and new customers.

"The improving complexion of our revenue base, and the momentum we currently have with our bookings and design wins have so far outweighed the industry-wide concerns that have developed following the tragedy in Japan," said Necip Sayiner, president and CEO of Silicon Laboratories. "We continue to have confidence in the annual growth targets we set in January and view the Q1 results as strong progress towards those goals."

The company guided revenue for the second quarter in the range of $124 to $130 million.

Webcast and Conference Call

A conference call discussing the quarterly results will follow this press release at 7:30 a.m. central time. An audio webcast will be available simultaneously on Silicon Laboratories' website under Investor Relations ( A replay will be available after the call at the same website listed above or by calling 1 (800) 642-1687 or +1 (706) 645-9291 (international) and by entering 59263865. The replay will be available through May 11, 2011.

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

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; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; inventory-related risks; risks associated with acquisitions; difficulties managing international activities; difficulties managing our manufacturers and subcontractors; risks that Silicon Laboratories may not be able to manage strains associated with its growth; credit risks associated with our accounts receivable; dependence on key personnel; risks associated with divestitures; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Laboratories' business and results of operations to risks of natural disasters, epidemics, war and political unrest; 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 Operations
(In thousands, except per share data)
    Three Months Ended
    April 2,


  April 3,


Revenues   $ 119,636     $ 126,719  
Cost of revenues     47,478       43,129  
Gross margin     72,158       83,590  
Operating expenses:        
Research and development     35,359       29,922  
Selling, general and administrative     31,860       28,003  
Operating expenses     67,219       57,925  
Operating income     4,939       25,665  
Other income (expense):        
Interest income     571       666  
Interest expense     (5 )     (23 )
Other income (expense), net     209       (297 )
Income before income taxes     5,714       26,011  
Provision for income taxes     7,674       4,932  

Net income (loss)

  $ (1,960 )   $ 21,079  
Earnings (loss) per share:        
Basic   $ (0.04 )   $ 0.46  
Diluted   $ (0.04 )   $ 0.44  
Weighted-average common shares outstanding:        
Basic     44,269       45,816  
Diluted     44,269       47,926  
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
Non-GAAP Income Statement     Three Months Ended
Items     April 2, 2011



Percent of




Related Costs




Percent of

Revenues     $ 119,636                      
Gross margin       72,158       60.3 %   $ 338   $ 1,149     $ 73,645   61.6 %
Research and development       35,359       29.6 %     3,994     1,618       29,747   24.9 %
Selling, general and





    5,141     3,526      


  19.4 %
Operating income       4,939       4.1 %     9,473     6,293       20,705   17.3 %
Provision for income taxes       7,674           1,027     (5,425 )     3,276    
Non-GAAP Diluted Earnings     Three Months Ended        
Per Share     April 2, 2011        





Related Costs



Net income (loss)     $ (1,960 )   $ 8,446     $ 11,718   $ 18,204          



Dilutive Securities Excluded
Due to Net Loss



Diluted shares outstanding       44,269     1,776     46,045          
Diluted earnings (loss) per share     $ (0.04 )           $ 0.40          
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
      April 2,


  January 1,


Current assets:          
Cash and cash equivalents     $ 118,496     $ 138,567  
Short-term investments       203,785       227,295  
Accounts receivable, net of allowance for doubtful accounts of

$724 at April 2, 2011 and $772 at January 1, 2011

      58,493       45,030  
Inventories       41,057       39,450  
Deferred income taxes       9,461       9,140  
Prepaid expenses and other current assets       39,922       34,447  
Total current assets       471,214       493,929  
Long-term investments       16,965       17,500  
Property and equipment, net       29,464       29,945  
Goodwill       117,215       112,296  
Other intangible assets, net       68,836       53,242  
Other assets, net       29,816       20,746  
Total assets     $ 733,510     $ 727,658  
Liabilities and Stockholders' Equity          
Current liabilities:          
Accounts payable     $ 20,371     $ 24,433  
Accrued expenses       26,492       25,604  
Deferred income on shipments to distributors       28,896       26,127  
Income taxes       3,922       3,692  
Total current liabilities       79,681       79,856  
Long-term obligations and other liabilities       23,540       22,372  
Total liabilities       103,221       102,228  
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;

44,513 and 43,933 shares issued and outstanding at

April 2, 2011 and January 1, 2011, respectively

      4       4  
Additional paid-in capital       56,534       49,947  
Retained earnings       577,167       579,127  
Accumulated other comprehensive loss       (3,416 )     (3,648 )
Total stockholders' equity       630,289       625,430  
Total liabilities and stockholders' equity     $ 733,510     $ 727,658  
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
      Three Months Ended
      April 2,


  April 3,


Operating Activities          
Net income (loss)     $ (1,960 )   $ 21,079  
Adjustments to reconcile net income (loss) to cash provided by (used in) operating


Depreciation of property and equipment       3,253       2,879  
Amortization of other intangible assets and other assets       3,057       1,849  
Stock-based compensation expense       9,473       10,256  
Income tax benefit from employee stock-based awards       1,184       1,286  
Excess income tax benefit from employee stock-based awards       (1,142 )     (800 )
Deferred income taxes       1,366       616  
Changes in operating assets and liabilities:          
Accounts receivable       (11,704 )     (804 )
Inventories       (759 )     3,832  
Prepaid expenses and other assets       (4,499 )     (973 )
Accounts payable       (4,787 )     1,046  
Accrued expenses       (1,634 )     (1,110 )
Deferred income on shipments to distributors       2,293       (50 )
Income taxes       3,233       (7,991 )
Net cash provided by (used in) operating activities       (2,626 )     31,115  
Investing Activities          
Purchases of available-for-sale investments       (31,492 )     (121,357 )
Proceeds from sales and maturities of marketable securities       55,092       67,697  
Purchases of property and equipment       (2,697 )     (1,747 )
Purchases of other assets       (584 )     (3,436 )
Acquisition of business, net of cash acquired       (27,546 )     --  
Net cash used in investing activities       (7,227 )     (58,843 )
Financing Activities          
Proceeds from issuance of common stock, net of shares withheld for taxes       (3,580 )     7,483  
Excess income tax benefit from employee stock-based awards       1,142       800  
Repurchases of common stock       (606 )     (24,092 )
Payments on debt       (7,174 )     --  
Net cash used in financing activities       (10,218 )     (15,809 )
Decrease in cash and cash equivalents       (20,071 )     (43,537 )
Cash and cash equivalents at beginning of period       138,567       195,737  
Cash and cash equivalents at end of period     $ 118,496     $ 152,200  


Silicon Laboratories Inc.
Shannon Pleasant, 512-464-9254

Source: Silicon Laboratories Inc.

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