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Silicon Labs Announces Record Revenue

February 04, 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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