Silicon Labs Announces Record Revenue

February 4, 2015

Company Acquires Bluegiga and Expands Internet of Things SAM

AUSTIN, Texas--(BUSINESS WIRE)-- Silicon Labs (NASDAQ: SLAB), a leading provider of microcontroller, wireless connectivity, analog and sensor solutions for the Internet of Things (IoT), today reported financial results for its fourth quarter ended January 3, 2015. Revenue in the fourth quarter exceeded the top end of guidance and established a new record at $162.0 million, up from $158.1 million in the third quarter.

This week, the company announced its acquisition of Bluegiga, a leading provider of Bluetooth and Wi-Fi wireless modules and software based in Finland. By joining forces, Silicon Labs and Bluegiga offer customers a "one-stop-shop" source of wireless connectivity solutions and one of the strongest wireless development teams for the IoT. The company expects the acquisition to be accretive to 2015 non-GAAP earnings.

Financial Highlights

On a GAAP basis:

  • Gross margin was 59.7 percent
  • R&D expenses were $46.1 million
  • SG&A expenses were $39.5 million
  • Operating income as a percentage of revenue was 6.8 percent
  • Diluted earnings per share were $0.23

On a non-GAAP basis (results exclude the impact of stock compensation, amortization from acquired intangible assets and certain other items as set forth in the reconciliation tables below):

  • Gross margin was 60.1 percent
  • R&D expenses were $37.2 million
  • SG&A expenses were $32.3 million
  • Operating income as a percentage of revenue was 17.2 percent
  • Diluted earnings per share were $0.57

Business Highlights

  • Broad-based revenue delivered a third consecutive record quarter at $84.9 million, driven by record performance in Silicon Labs' microcontroller, wireless and sensor products.
  • Broadcast revenue exceeded expectations at $50.0 million.
  • Access revenue also exceeded expectations at $27.1 million.

Product Highlights

  • Introduced a new generation of EZRadio® and EZRadioPRO® radios, offering the highest levels of RF performance and single-chip integration in the sub-GHz wireless IC market while operating on a single coin-cell battery.
  • Added the new Si705x family of digital temperature sensors, providing the industry's most power-efficient temperature sensing option while maintaining accuracy across the entire operating voltage and temperature range.
  • Introduced the Si2151/41 TV tuner family, our sixth-generation solution for the digital TV market offering the smallest footprint and bill-of-materials cost, the lowest power and the best RF performance.
  • Launched our Si218x demodulator family supporting the latest satellite standards for global markets and terrestrial standards for Latin America and helping TV and set-top box manufacturers future-proof their designs and expand into new markets.

Business Outlook

The company expects revenue in the first quarter to be in the range of $156 million to $162 million and anticipates another record in its Broad-based products. First quarter diluted earnings per share are expected to be between $0.08 and $0.14 on a GAAP basis and between $0.42 and $0.48 on a non-GAAP basis. First quarter guidance reflects the acquisition of Bluegiga.

"We are pleased to have ended 2014 with record revenue for the quarter and our Broad-based products delivering a third consecutive record led by our MCU, wireless and sensor products," said Tyson Tuttle, CEO of Silicon Labs. "The acquisition of Bluegiga rounds out Silicon Labs' wireless portfolio, significantly expands our wireless connectivity solutions for the IoT and enables us to address a broader range of market opportunities and customer needs."

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 on Silicon Labs' website under Investor Relations ( A replay will be available after the call at the same website listed above or by calling 1 (855) 859-2056 or (404) 537-3406 (international) and entering conference ID 39717391. The replay will be available through March 4, 2015.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and system solutions for the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. We solve the electronics industry's toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity. Backed by our world-class engineering teams with strong software and mixed-signal design expertise, Silicon Labs empowers developers with the tools and technologies they need to advance quickly and easily from initial idea to final product.

Forward-Looking Statements

This press release contains forward-looking statements based on Silicon Labs' current expectations. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will" and similar phrases as they relate to Silicon Labs are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silicon Labs 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 Labs may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; risks related to the successful completion of the development and implementation of Bluegiga's technology; risks associated with the development of modules and the Company's limited operating history with modules; risks that the acquisition may not yield the expected benefits due to the failure to properly integrate the acquired business and employees; risks that our competitors that supply products incorporated in Bluegiga's modules may disrupt such supply; risks that the acquired business' products and processes under development may fail to achieve market acceptance; risks of disputes regarding the acquired business and intellectual property; product liability risks; difficulties managing our distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with our accounts receivable; dependence on key personnel; stock price volatility; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Labs' business and results of operations to risks of natural disasters, epidemics, war and political unrest; debt-related risks; capital-raising risks; the competitive and cyclical nature of the semiconductor industry; average selling prices of products may decrease significantly and rapidly; information technology risks; conflict mineral risks and other factors that are detailed in the SEC filings of Silicon Laboratories Inc.Silicon Labs disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. References in this press release to Silicon Labs shall mean Silicon Laboratories Inc.

Note to editors: Silicon Laboratories, Silicon Labs, the "S" symbol, the Silicon Laboratories logo 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)


        Three Months Ended     Year Ended

January 3,


December 28,


January 3,


December 28,

Revenues       $ 161,951       $ 146,236       $ 620,704       $ 580,087  
Cost of revenues         65,279         57,638         242,153         227,183  
Gross margin         96,672         88,598         378,551         352,904  
Operating expenses:                          
Research and development         46,139         42,168         172,985         157,799  
Selling, general and administrative         39,527         32,276         154,145         130,795  
Operating expenses         85,666         74,444         327,130         288,594  
Operating income         11,006         14,154         51,421         64,310  
Other income (expense):                          
Interest income         274         237         1,007         853  
Interest expense         (808 )       (807 )       (3,154 )       (3,293 )
Other income (expense), net         (337 )       118         (234 )       157  
Income before income taxes         10,135         13,702         49,040         62,027  
Provision for income taxes         111         3,060         11,019         12,208  

Net income

      $ 10,024       $ 10,642       $ 38,021       $ 49,819  
Earnings per share:                          
Basic       $ 0.24       $ 0.25       $ 0.88       $ 1.17  
Diluted       $ 0.23       $ 0.24       $ 0.87       $ 1.14  
Weighted-average common shares outstanding:                          
Basic         42,279         42,972         42,970         42,715  
Diluted         43,137         43,847         43,793         43,537  

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)


Non-GAAP Income
Statement Items


Three Months Ended
January 3, 2015




Percent of












Percent of

Revenues       $ 161,951                                          
Gross margin         96,672       59.7 %     $ 200     $ 390     $ --     $ 37     $ 97,299     60.1 %

Research and development

        46,139       28.5 %       5,240       3,589       --      




    23.0 %

Selling, general and administrative




      5,454       729      






    19.9 %
Operating income         11,006       6.8 %       10,894       4,708       1,047       125       27,780     17.2 %

Non-GAAP Diluted
Earnings Per Share


Three Months Ended
January 3, 2015













Net income             $ 10,024       $ 9,927     $ 3,335     $ 1,047     $ 125     $ 24,458      
Diluted shares outstanding               43,137         --       --       --       --       43,137      
Diluted earnings per share             $ 0.23                               $ 0.57      

Unaudited Forward-Looking Statements Regarding Business Outlook

Business Outlook      

Three Months Ending
April 4, 2015

        High     Low
Estimated GAAP diluted earnings per share       $ 0.14     $ 0.08
Estimated non-GAAP charges         0.34       0.34
Estimated non-GAAP diluted earnings per share       $ 0.48     $ 0.42
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)

January 3,


December 28,

Current assets:              
Cash and cash equivalents       $ 141,706       $ 95,800  
Short-term investments         193,489         179,593  

Accounts receivable, net of allowances for doubtful accounts of $786 at January 3, 2015 and $797 at December 28, 2013

        70,367         72,124  
Inventories         52,631         45,271  
Deferred income taxes         21,173         18,878  
Prepaid expenses and other current assets         49,171         47,651  
Total current assets         528,537         459,317  
Long-term investments         7,419         10,632  
Property and equipment, net         132,820         132,445  
Goodwill         228,781         228,781  
Other intangible assets, net         115,021         131,593  
Other assets, net         29,983         28,382  
Total assets       $ 1,042,561       $ 991,150  
Liabilities and Stockholders' Equity              
Current liabilities:              
Accounts payable       $ 38,922       $ 22,126  
Current portion of long-term debt         10,000         7,500  
Accrued expenses         73,646         45,975  
Deferred income on shipments to distributors         38,662         30,853  
Income taxes         2,084         2,693  
Total current liabilities         163,314         109,147  
Long-term debt         77,500         87,500  
Other non-current liabilities         43,691         55,941  
Total liabilities         284,505         252,588  
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; 42,225 and 42,779 shares issued and outstanding at January 3, 2015 and December 28, 2013, respectively

        4         4  
Additional paid-in capital         29,501         48,630  
Retained earnings         728,633         690,612  
Accumulated other comprehensive loss         (82 )       (684 )
Total stockholders' equity         758,056         738,562  
Total liabilities and stockholders' equity       $ 1,042,561       $ 991,150  
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
        Year Ended

January 3,


December 28,

Operating Activities              
Net income       $ 38,021     $ 49,819
Adjustments to reconcile net income to cash provided by operating activities:              
Depreciation of property and equipment       12,561     13,491
Amortization of other intangible assets and other assets       17,923     15,911
Stock-based compensation expense       39,067     30,800
Income tax benefit (shortfall) from stock-based awards       489     (606)
Excess income tax benefit from stock-based awards       (632)     (290)
Deferred income taxes       3,054     3,319
Changes in operating assets and liabilities:              
Accounts receivable       1,757     8,972
Inventories       (7,170)     5,588
Prepaid expenses and other assets       9,332     (2,514)
Accounts payable       11,475     (3,979)
Accrued expenses       27,671     463
Deferred income on shipments to distributors       7,809     (2,381)
Income taxes       (3,371)     5,189
Other non-current liabilities       (20,543)     (3,632)
Net cash provided by operating activities       137,443     120,150
Investing Activities              
Purchases of available-for-sale investments       (166,094)     (213,883)
Proceeds from sales and maturities of available-for-sale investments       156,520     210,824
Purchases of property and equipment       (11,225)     (10,472)
Purchases of other assets       (5,514)     (5,939)
Acquisitions of businesses, net of cash acquired       --     (86,441)
Net cash used in investing activities       (26,313)     (105,911)
Financing Activities              
Proceeds from issuance of common stock, net of shares withheld for taxes       13,320     15,301
Excess income tax benefit from stock-based awards       632     290
Repurchases of common stock       (71,676)     (26,022)
Payments on debt       (7,500)     (13,434)
Net cash used in financing activities       (65,224)     (23,865)
Increase (decrease) in cash and cash equivalents       45,906     (9,626)
Cash and cash equivalents at beginning of period       95,800     105,426
Cash and cash equivalents at end of period       $141,706     $ 95,800


Silicon Labs
Jalene Hoover, +1-512-428-1610

Source: Silicon Labs

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