UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 7.01. Regulation FD Disclosure.
On July 26, 2021, Silicon Laboratories Inc., a Delaware corporation (“Silicon Laboratories”) completed the sale of its infrastructure and automotive business. Pro forma condensed consolidated financial statements are included as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 7.01 of this Current Report on Form 8-K, including exhibit 99.1 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. The information contained in this Item 7.01 and in the accompanying exhibit 99.1 shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Silicon Laboratories, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Forward-Looking Statements
This Current Report on Form 8-K 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: the effect of the Skyworks transaction on the ability of Silicon Laboratories to retain and hire key personnel and maintain relationships with its customers, suppliers, advertisers, partners and others with whom it does business, or on its operating results and businesses generally; risks associated with the disruption of management’s attention from ongoing business operations due to such transaction; the timing and scope of anticipated share repurchases and/or dividends; the impact of COVID-19 on the U.S. and global economy, including the restrictions on travel and transportation and other actions taken by governmental authorities and disruptions to the business of Silicon Laboratories’ customers or Silicon Laboratories’ global supply chain that have occurred or may occur in the future, the ongoing impact of COVID-19 on Silicon Laboratories’ employees and Silicon Laboratories’ ability to provide services to Silicon Laboratories’ customers and respond to their needs; risks that Silicon Laboratories may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; difficulties developing new products that achieve market acceptance; risks associated with international activities (including trade barriers, particularly with respect to China); intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing Silicon Laboratories’ distributors, manufacturers and subcontractors; dependence on a limited number of products; absence of long-term commitments from customers; inventory-related risks; difficulties managing international activities; risks that Silicon Laboratories may not be able to manage strains associated with its growth; credit risks associated with its accounts receivable; dependence on key personnel; stock price volatility; 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 or pandemics, 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; cyber-attacks against Silicon Laboratories’ products and its networks and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. The level of share repurchases and/or dividends depends on market conditions and the level of other uses of cash. 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.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| 99.1 | Unaudited Pro Forma Condensed Consolidated Financial Statements | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SILICON LABORATORIES INC. | ||
| July 26, 2021 | /s/ John C. Hollister | |
| Date |
John C. Hollister Senior Vice President and (Principal Financial Officer) |
Exhibit 99.1
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of April 3, 2021
(in thousands, except per share data)
| Historical | Disposition Adjustments | Pro Forma | |||||||||||
| Assets | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 205,224 | $ | 2,750,000 | (A) | $ | 2,955,224 | ||||||
| Short-term investments | 367,708 | -- | 367,708 | ||||||||||
| Accounts receivable, net | 103,699 | -- | 103,699 | ||||||||||
| Inventories | 79,244 | (26,519 | ) | (B) | 52,725 | ||||||||
| Prepaid expenses and other current assets | 105,056 | (1,827 | ) | (B) | 103,229 | ||||||||
| Total current assets | 860,931 | 2,721,654 | 3,582,585 | ||||||||||
| Property and equipment, net | 141,000 | (3,697 | ) | (B) | 137,303 | ||||||||
| Goodwill | 631,932 | (255,543 | ) | (B) | 376,389 | ||||||||
| Other intangible assets, net | 154,379 | (2,346 | ) | (B) | 152,033 | ||||||||
| Other assets, net | 82,381 | (3,072 | ) | (B) | 79,309 | ||||||||
| Total assets | $ | 1,870,623 | $ | 2,456,996 | $ | 4,327,619 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable | $ | 68,998 | $ | -- | $ | 68,998 | |||||||
| Deferred revenue and returns liability | 13,450 | -- | 13,450 | ||||||||||
| Other current liabilities | 68,351 | (436 | ) | (B) | |||||||||
| 35,067 | (C) | ||||||||||||
| 344,000 | (D) | 446,982 | |||||||||||
| Total current liabilities | 150,799 | 378,631 | 529,430 | ||||||||||
| Convertible debt, net | 434,288 | -- | 434,288 | ||||||||||
| Other non-current liabilities | 78,557 | (357 | ) | (B) | 78,200 | ||||||||
| Total liabilities | 663,644 | 378,274 | 1,041,918 | ||||||||||
| Commitments and contingencies | |||||||||||||
| Stockholders' equity: | |||||||||||||
| Preferred stock--$0.0001 par value | -- | -- | -- | ||||||||||
| Common stock--$0.0001 par value | 4 | -- | 4 | ||||||||||
| Additional paid-in capital | 199,576 | -- | 199,576 | ||||||||||
| Retained earnings | 1,007,173 | 2,078,722 | (E) | 3,085,895 | |||||||||
| Accumulated other comprehensive income | 226 | -- | 226 | ||||||||||
| Total stockholders' equity | 1,206,979 | 2,078,722 | 3,285,701 | ||||||||||
| Total liabilities and stockholders' equity | $ | 1,870,623 | $ | 2,456,996 | $ | 4,327,619 | |||||||
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Three Months Ended April 3, 2021
(in thousands, except per share data)
| Historical | Disposition Adjustments (F) | Pro Forma | |||||||||||
| Revenues | $ | 255,505 | $ | (97,648 | ) | $ | 157,857 | ||||||
| Cost of revenues | 104,922 | (38,819 | ) | 66,103 | |||||||||
| Gross profit | 150,583 | (58,829 | ) | 91,754 | |||||||||
| Operating expenses: | |||||||||||||
| Research and development | 76,474 | (12,459 | ) | 64,015 | |||||||||
| Selling, general and administrative | 51,950 | (9,496 | ) | 42,454 | |||||||||
| Operating expenses | 128,424 | (21,955 | ) | 106,469 | |||||||||
| Operating income (loss) | 22,159 | (36,874 | ) | (14,715 | ) | ||||||||
| Other income (expense): | |||||||||||||
| Interest income and other, net | 2,875 | -- | 2,875 | ||||||||||
| Interest expense | (11,324 | ) | -- | (11,324 | ) | ||||||||
| Income (loss) before income taxes | 13,710 | (36,874 | ) | (23,164 | ) | ||||||||
| Provision (benefit) for income taxes | 201 | 1,791 | (G) | 1,992 | |||||||||
| Net income (loss) | $ | 13,509 | $ | (38,665 | ) | $ | (25,156 | ) | |||||
| Earnings (loss) per share: | |||||||||||||
| Basic | $ | 0.31 | $ | (0.57 | ) | ||||||||
| Diluted | $ | 0.29 | $ | (0.57 | ) | ||||||||
| Weighted-average common shares outstanding: | |||||||||||||
| Basic | 44,160 | -- | 44,160 | ||||||||||
| Diluted | 45,832 | (1,672 | ) | (H) | 44,160 | ||||||||
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended January 2, 2021
(in thousands, except per share data)
| Historical | Disposition Adjustments (F) | Pro Forma | |||||||||||
| Revenues | $ | 886,677 | $ | (375,749 | ) | $ | 510,928 | ||||||
| Cost of revenues | 359,151 | (143,068 | ) | 216,083 | |||||||||
| Gross profit | 527,526 | (232,681 | ) | 294,845 | |||||||||
| Operating expenses: | |||||||||||||
| Research and development | 287,887 | (52,702 | ) | 235,185 | |||||||||
| Selling, general and administrative | 201,339 | (34,591 | ) | 166,748 | |||||||||
| Operating expenses | 489,226 | (87,293 | ) | 401,933 | |||||||||
| Operating income (loss) | 38,300 | (145,388 | ) | (107,088 | ) | ||||||||
| Other income (expense): | |||||||||||||
| Interest income and other, net | 11,143 | -- | 11,143 | ||||||||||
| Interest expense | (34,142 | ) | -- | (34,142 | ) | ||||||||
| Income (loss) before income taxes | 15,301 | (145,388 | ) | (130,087 | ) | ||||||||
| Provision (benefit) for income taxes | 2,770 | (17,372 | ) | (G) | (14,602 | ) | |||||||
| Net income (loss) | $ | 12,531 | $ | (128,016 | ) | $ | (115,485 | ) | |||||
| Earnings (loss) per share: | |||||||||||||
| Basic | $ | 0.29 | $ | (2.64 | ) | ||||||||
| Diluted | $ | 0.28 | $ | (2.64 | ) | ||||||||
| Weighted-average common shares outstanding: | |||||||||||||
| Basic | 43,775 | -- | 43,775 | ||||||||||
| Diluted | 44,372 | (597 | ) | (H) | 43,775 | ||||||||
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 28, 2019
(in thousands, except per share data)
| Historical | Disposition Adjustments (F) | Pro Forma | |||||||||||
| Revenues | $ | 837,554 | $ | (363,769 | ) | $ | 473,785 | ||||||
| Cost of revenues | 327,270 | (133,699 | ) | 193,571 | |||||||||
| Gross profit | 510,284 | (230,070 | ) | 280,214 | |||||||||
| Operating expenses: | |||||||||||||
| Research and development | 257,150 | (51,460 | ) | 205,690 | |||||||||
| Selling, general and administrative | 196,437 | (33,270 | ) | 163,167 | |||||||||
| Operating expenses | 453,587 | (84,730 | ) | 368,857 | |||||||||
| Operating income (loss) | 56,697 | (145,340 | ) | (88,643 | ) | ||||||||
| Other income (expense): | |||||||||||||
| Interest income and other, net | 13,185 | -- | 13,185 | ||||||||||
| Interest expense | (20,233 | ) | -- | (20,233 | ) | ||||||||
| Income (loss) before income taxes | 49,649 | (145,340 | ) | (95,691 | ) | ||||||||
| Provision (benefit) for income taxes | 30,384 | (23,400 | ) | (G) | 6,984 | ||||||||
| Net income (loss) | $ | 19,265 | $ | (121,940 | ) | $ | (102,675 | ) | |||||
| Earnings (loss) per share: | |||||||||||||
| Basic | $ | 0.44 | $ | (2.37 | ) | ||||||||
| Diluted | $ | 0.43 | $ | (2.37 | ) | ||||||||
| Weighted-average common shares outstanding: | |||||||||||||
| Basic | 43,346 | -- | 43,346 | ||||||||||
| Diluted | 44,290 | (944 | ) | (H) | 43,346 | ||||||||
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 29, 2018
(in thousands, except per share data)
| Historical | Disposition Adjustments (F) | Pro Forma | |||||||||||
| Revenues | $ | 868,267 | $ | (412,201 | ) | $ | 456,066 | ||||||
| Cost of revenues | 346,868 | (145,334 | ) | 201,534 | |||||||||
| Gross profit | 521,399 | (266,867 | ) | 254,532 | |||||||||
| Operating expenses: | |||||||||||||
| Research and development | 238,347 | (48,269 | ) | 190,078 | |||||||||
| Selling, general and administrative | 197,844 | (34,305 | ) | 163,539 | |||||||||
| Operating expenses | 436,191 | (82,574 | ) | 353,617 | |||||||||
| Operating income (loss) | 85,208 | (184,293 | ) | (99,085 | ) | ||||||||
| Other income (expense): | |||||||||||||
| Interest income and other, net | 6,647 | -- | 6,647 | ||||||||||
| Interest expense | (19,694 | ) | -- | (19,694 | ) | ||||||||
| Income (loss) before income taxes | 72,161 | (184,293 | ) | (112,132 | ) | ||||||||
| Provision (benefit) for income taxes | (11,430 | ) | (8,207 | ) | (G) | (19,637 | ) | ||||||
| Net income (loss) | $ | 83,591 | $ | (176,086 | ) | $ | (92,495 | ) | |||||
| Earnings (loss) per share: | |||||||||||||
| Basic | $ | 1.94 | $ | (2.14 | ) | ||||||||
| Diluted | $ | 1.90 | $ | (2.14 | ) | ||||||||
| Weighted-average common shares outstanding: | |||||||||||||
| Basic | 43,159 | -- | 43,159 | ||||||||||
| Diluted | 44,044 | (885 | ) | (H) | 43,159 | ||||||||
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
1. Basis of Presentation
As disclosed in Item 7.01 of this Form 8-K, Silicon Laboratories Inc. (the “Company”) completed the sale of its infrastructure and automotive business to Skyworks Solutions, Inc. for $2.75 billion in cash on July 26, 2021 (the “Sale”). The unaudited pro forma condensed consolidated financial statements included herein have been prepared based on the Company’s historical consolidated balance sheet as of April 3, 2021, condensed consolidated statement of operations for the three months ended April 3, 2021 and consolidated statements of operations for the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018, after giving effect to the disposition of the net assets and operations related to the sold business. The accompanying pro forma adjustments give effect to the pro forma events that are 1) directly attributable to the Sale, 2) factually supportable, and 3) with respect to the pro forma condensed consolidated statements of operations, have a continuing impact on the consolidated results of operations. This disposition will be accounted for as discontinued operations in accordance with Financial Accounting Standards Board Accounting Standards Codification 205-20, Presentation of Financial Statements — Discontinued Operations.
The pro forma condensed consolidated balance sheet gives effect to the Sale as if it had occurred on April 3, 2021. The pro forma balance sheet also reflects the effects of nonrecurring items attributed directly to the Sale, including the gain on sale, net of taxes, and direct transaction costs as though the Sale occurred on April 3, 2021. The pro forma gain as of April 3, 2021 is expected to differ from the actual gain that ultimately will be recognized as of the closing date of July 26, 2021.
The pro forma condensed consolidated statements of operations give effect to the Sale as if it had occurred on December 31, 2017, the first day of our fiscal year ended December 29, 2018. The disposition adjustments reflect the elimination of revenues and direct expenses of the discontinued operations. The pro forma statements of operations do not include adjustments for nonrecurring items attributed directly to the Sale. Such items will be recorded in the consolidated financial statements for the three months ended October 2, 2021.
This pro forma financial information is presented for illustrative purposes only, and is not necessarily indicative of the operating results and financial position that might have been achieved had the Sale occurred on the dates indicated, nor are they necessarily indicative of the operating results and financial position that may occur in the future. The accompanying unaudited pro forma condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the three fiscal years in the period ended January 2, 2021, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on February 3, 2021.
2. Pro Forma Adjustments
The unaudited pro forma condensed consolidated financial statements reflect the following adjustments:
| (A) | Consideration received on the Sale consisting of $2.75 billion in cash. |
| (B) | Removal of balances related to assets and liabilities that transferred in the Sale. |
| (C) | Accrual of estimated direct transaction costs. |
| (D) | Represents the estimated tax effect of the pro forma adjustments, including the estimated gain on sale. |
| (E) | Represents the retained earnings impact of the pro forma adjustments. |
| (F) | Represents revenues and direct expenses incurred by the discontinued component. |
| (G) | Represents the estimated tax effect of the pro forma adjustments. |
| (H) | Removal of dilutive shares due to pro forma net loss. |