GAAP operating income for the fourth quarter was $17.8 million or
16.2 percent of revenue. Excluding stock compensation expense,
adjusted operating income for the fourth quarter was $20.2 million, or
18.4 percent of revenue, and adjusted diluted net income per share was
$0.31. The reconciling charges are set forth in the reconciliation of
GAAP to non-GAAP financial measures table included below. The company
increased cash and investments by approximately $28 million to $364
million at year end.
Business Summary
Revenue growth in the fourth quarter was due to robust wireless
demand across the customer base. Driven primarily by the Aero®
transceiver products, mobile handset revenue increased by 14 percent
sequentially and represented approximately 47 percent of revenue.
There continued to be strong momentum for new products including the
EDGE transceiver, tri-band PA, the FM tuner and the AeroFONE®
single-chip phone.
The broad-based mixed-signal business declined slightly and
represented a little more than half of the revenue in the fourth
quarter and for the year. Key growth areas for the business in 2005
included the ProSLIC® telephony interface for VoIP, which grew by
greater than 60 percent year over year, and microcontrollers, which
grew by more than 30 percent year over year. The company also sampled
hundreds of new customers who are evaluating recently introduced
broad-based mixed-signal products including the new VCXO family, the
SiRX set-top box receiver and the ISOmodem® fax modem.
"The business performed very well in the fourth quarter and we
anticipate continued strength in our wireless business due to strong
market demand," said Necip Sayiner, president and CEO of Silicon
Laboratories. "Customer feedback has validated that our new products
are highly differentiated, and we are building momentum to put our
business on a solid growth trajectory."
In 2005, Silicon Laboratories expanded design, sales and support
offices to more than 20 locations around the world. Cumulative patents
either filed or issued increased to more than 600 and the number of
employees worldwide increased to 651. The product portfolio doubled
including the addition of broadcast, timing, digital power and new
wireless products.
For the first quarter of 2006, the company anticipates revenue of
$110 to $114 million.
Conference Call Today
A conference call discussing the fourth quarter results will
follow the release 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 1-800-295-0889
(U.S.) or +1 402-220-3774 (international). These replays will be
available through February 15, 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, ProSLIC, Aero, AeroFONE,
ISOmodem, SiRX and the Silicon Laboratories 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)
Three Months Ended Twelve Months Ended
------------------------ -----------------------
December 31, January 1, December 31, January 1,
2005 2005 2005 2005
------------ ----------- ------------ ----------
(Unaudited) (Unaudited) (Unaudited)
Revenues $109,856 $95,462 $425,689 $456,225
Cost of revenues 49,499 43,121 193,904 206,320
------------ ----------- ------------ ----------
Gross profit 60,357 52,341 231,785 249,905
Operating expenses:
Research and
development 23,692 20,711 101,222 78,056
Selling, general
and administrative 18,898 15,426 72,553 65,164
------------ ----------- ------------ ----------
Operating expenses 42,590 36,137 173,775 143,220
------------ ----------- ------------ ----------
Operating income 17,767 16,204 58,010 106,685
Other income
(expense):
Interest income 2,743 1,194 8,285 3,054
Interest expense (191) (68) (322) (311)
Other income
(expense), net (91) 169 (332) 2,148
------------ ----------- ------------ ----------
Income
before income taxes 20,228 17,499 65,641 111,576
Provision
for income taxes 4,965 4,570 18,135 34,883
------------ ----------- ------------ ----------
Net income $15,263 $12,929 $47,506 $76,693
============ =========== ============ ==========
Net income
per share:
Basic $0.28 $0.25 $0.89 $1.49
Diluted $0.27 $0.24 $0.86 $1.39
Weighted-average
common shares
outstanding:
Basic 54,210 52,008 53,399 51,471
Diluted 56,206 54,632 55,485 54,983
Certain prior period amounts of the amortization of stock compensation
expense have been reclassified to conform to the current period
presentation.
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
Three Months Ended
-----------------------
December 31, January 1,
2005 2005
------------ ----------
GAAP operating income $17,767 $16,204
Stock compensation amortization:
Cost of revenues 58 13
Research and development 1,081 659
Selling, general and administrative 1,274 182
------------ ----------
Adjusted operating income $20,180 $17,058
============ ==========
Adjusted operating income % 18.4% 17.9%
------------ ----------
Three Months Ended
-----------------------
December 31, January 1,
2005 2005
------------ ----------
GAAP net income $15,263 $12,929
Stock compensation amortization:
Cost of revenues 58 13
Research and development 1,081 659
Selling, general and administrative 1,274 182
------------ ----------
Adjusted net income $17,676 $13,783
============ ==========
GAAP diluted shares outstanding 56,206 54,632
Adjusted diluted net income per share $0.31 $0.25
------------ ----------
Estimated Stock Compensation Expense Under SFAS 123R
(in thousands)
Three Months Ended
April 1, 2006
------------------
Cost of revenues $382
Research and development 4,431
Selling, general and administrative 5,391
------------------
Impact on operating income 10,204
Provision for income taxes (1,907)
------------------
Impact on net income $8,297
==================
Silicon Laboratories Inc.
Consolidated Balance Sheets
(in thousands, except per share data)
December 31, January 1,
2005 2005
------------ ----------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $255,369 $48,636
Short-term investments 108,341 228,470
Accounts receivable, net of allowance
for doubtful accounts of $1,088
at December 31, 2005 and January 1, 2005 68,824 46,272
Inventories 23,132 38,405
Deferred income taxes 11,505 9,878
Prepaid expenses and other 9,670 5,244
------------ ----------
Total current assets 476,841 376,905
Property, equipment and software, net 32,584 34,559
Goodwill 62,877 46,766
Other intangible assets, net 14,838 15,384
Other assets, net 25,863 10,788
------------ ----------
Total assets $613,003 $484,402
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $43,846 $37,001
Accrued expenses 11,307 11,913
Deferred income on shipments to distributors 34,036 25,227
Income taxes payable 18,348 8,207
------------ ----------
Total current liabilities 107,537 82,348
Long-term obligations and other liabilities 7,418 2,570
------------ ----------
Total liabilities 114,955 84,918
Commitments and contingencies
Stockholders' equity:
Preferred stock -- $.0001 par value;
10,000 shares authorized; no shares
issued and outstanding -- --
Common stock -- $.0001 par value;
250,000 shares authorized; 54,530 and
52,508 shares issued and outstanding at
December 31, 2005 and January 1, 2005,
respectively 5 5
Additional paid-in capital 335,284 287,908
Deferred stock compensation (1,105) (4,787)
Retained earnings 163,864 116,358
------------ ----------
Total stockholders' equity 498,048 399,484
------------ ----------
Total liabilities and stockholders' equity $613,003 $484,402
============ ==========
CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464-9254
investor.relations@silabs.com
SOURCE: Silicon Laboratories Inc.