UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 28, 2010
SILICON LABORATORIES INC.
(Exact Name of Registrant as Specified in Charter)
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Delaware |
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000-29823 |
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74-2793174 |
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(State or Other Jurisdiction |
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(Commission File Number) |
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(IRS Employer |
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of Incorporation) |
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Identification No.) |
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400 West Cesar Chavez, Austin, TX |
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78701 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (512) 416-8500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
On July 28, 2010, Silicon Laboratories Inc. (“Silicon Laboratories”) issued a press release describing its results of operations for its fiscal quarter ended July 3, 2010. A copy of the press release is attached as Exhibit 99 to this report.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
99 Press Release of Silicon Laboratories Inc. dated July 28, 2010.
Use of Non-GAAP Financial Information
From time to time, Silicon Laboratories provides certain non-GAAP financial measures as additional information relating to its operating results. The non-GAAP financial measurements provided in the press release furnished herewith do not replace the presentation of Silicon Laboratories’ GAAP financial results. These additional measurements merely provide supplemental information to assist investors in analyzing Silicon Laboratories’ financial position and results of operations; however, these measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. Silicon Laboratories has chosen to provide this information to investors because it believes that such supplemental information enables them to perform meaningful comparisons of past, present and future operating results, and as a means to highlight the results of core ongoing operations.
Pursuant to the requirements of Regulation G, we have provided in the press release furnished with this report a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
The information in this report, including the exhibit 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 therein and in the accompanying exhibit 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.
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.
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SILICON LABORATORIES INC. |
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July 28, 2010 |
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/s/ Paul V. Walsh, Jr. |
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Date |
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Paul V. Walsh, Jr. |
Exhibit 99
SILICON LABORATORIES REPORTS RECORD QUARTER
—Company Surpasses $500 Million Revenue Milestone—
AUSTIN, Texas — July 28, 2010 — Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue of $134.6 million for the second quarter and delivered record operating performance enabling better than expected earnings per share. On a trailing twelve month basis, the company crossed $500 million in revenue while achieving record profitability and earnings growth.
Financial Highlights
Second quarter revenue of $134.6 million was a nearly 30 percent increase over the same period in 2009 and a six percent sequential increase. Second quarter GAAP gross margin increased again considerably to 67.5 percent. R&D investment for the second quarter was $30.5 million. SG&A expense was $29.7 million. GAAP operating income exceeded 20 percent for the fourth consecutive quarter, totaling 22.8 percent. The GAAP tax rate was 31 percent and included a one-time charge related to the acquisition of Silicon Clocks announced in April. Fully diluted earnings per share were $0.44, more than double compared to the same period last year.
The following non-GAAP results exclude the impact of stock compensation expense and the one-time Silicon Clocks acquisition tax expense. Non-GAAP gross margin for the quarter was up again to 67.8 percent. Non-GAAP operating expenses decreased as a percent of revenue to 37.1 percent. R&D investment increased to $26.1 million and SG&A expense increased to $23.8 million. Non-GAAP operating income exceeded 30 percent of revenue, a record for the company. Non-GAAP diluted earnings per share for the second quarter were $0.72, well above expectations. The reconciling charges are set forth in the financial measures table included below.
Share repurchases during the quarter totaled approximately $75 million. The Board of Directors replaced the remaining share repurchase authorization with an increased $150 million authorization through the end of 2011. The company ended the quarter with $380 million in cash, cash equivalents and investments due to continued healthy cash flow from operations.
Business Summary
Strong performance for the quarter was led again by the company’s broad-based products. Revenue was up 85 percent compared to the same period last year and represented the largest percentage of the company’s revenue for the first time. Within the broad-based business, the embedded mixed-signal products had a record quarter due primarily to record MCU revenue. MCU strength resulted from strong demand for USB products and new customer ramps in applications like touchscreens and portable medical devices. The timing business also had another record quarter driven by continued demand from networking equipment makers.
The broadcast business grew by more than 20 percent compared to the second quarter of 2009. Consumer audio revenue exceeded handset revenue in the quarter due to strong ramps into new customer programs. The company also achieved key revenue and customer milestones in its video business. The company introduced a number of new products in the second quarter, including a new video demodulator as well as new clock ICs, new low power MCUs, new touch sense controllers, and new isolators and isolated gate drivers. The high level of new product activity is the outcome of the company’s focus on developing a rich R&D pipeline.
“Over the last twelve months we have become a half billion dollar revenue company, delivered above model profitability resulting in some of the best metrics in the business and generated high quality earnings growth,” said Necip Sayiner, President and CEO of Silicon Laboratories. “Putting this in the context of our steady diversification, market share gains and portfolio expansion, we believe the company will continue on its path of sustained top and bottom line growth.”
The company guided revenues for the third quarter in the range of $136 to $141 million.
Webcast and Conference Call
A conference call discussing the results will follow this press release today 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 1 888-484-8258 or +1 203-369-3163 (international). Replays will be available through August 11, 2010.
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 www.silabs.com.
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.
CONTACT: Silicon Laboratories Inc., Shannon Pleasant, (512) 464 9254, shannon.pleasant@silabs.com
Silicon Laboratories Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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July 3, |
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July 4, |
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July 3, |
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July 4, |
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Revenues |
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$ |
134,577 |
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$ |
104,216 |
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$ |
261,296 |
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$ |
187,917 |
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Cost of revenues |
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43,684 |
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39,435 |
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86,813 |
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72,458 |
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Gross margin |
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90,893 |
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64,781 |
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174,483 |
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115,459 |
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Operating expenses: |
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Research and development |
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30,509 |
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25,868 |
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60,431 |
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51,937 |
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Selling, general and administrative |
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29,737 |
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26,187 |
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57,740 |
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49,629 |
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Operating expenses |
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60,246 |
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52,055 |
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118,171 |
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101,566 |
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Operating income |
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30,647 |
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12,726 |
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56,312 |
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13,893 |
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Other income (expense): |
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Interest income |
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633 |
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655 |
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1,299 |
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1,537 |
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Interest expense |
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(22 |
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(51 |
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(45 |
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(103 |
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Other income (expense), net |
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(586 |
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342 |
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(883 |
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290 |
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Income before income taxes |
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30,672 |
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13,672 |
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56,683 |
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15,617 |
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Provision for income taxes |
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9,625 |
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3,942 |
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14,557 |
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5,216 |
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Net income |
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$ |
21,047 |
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$ |
9,730 |
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$ |
42,126 |
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$ |
10,401 |
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Earnings per share: |
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Basic |
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$ |
0.46 |
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$ |
0.22 |
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$ |
0.92 |
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$ |
0.23 |
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Diluted |
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$ |
0.44 |
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$ |
0.21 |
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$ |
0.88 |
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$ |
0.23 |
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Weighted-average common shares outstanding: |
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Basic |
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45,387 |
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44,640 |
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45,602 |
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44,336 |
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Diluted |
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47,371 |
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45,975 |
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47,649 |
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45,229 |
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Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
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Three Months Ended |
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Non-GAAP
Income |
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GAAP |
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GAAP |
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Stock |
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Non-GAAP |
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Non-GAAP |
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Revenues |
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$ |
134,577 |
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Gross margin |
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90,893 |
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67.5 |
% |
$ |
351 |
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$ |
91,244 |
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67.8 |
% |
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Research and development |
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30,509 |
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22.7 |
% |
4,386 |
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26,123 |
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19.4 |
% |
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Selling, general and administrative |
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29,737 |
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22.0 |
% |
5,938 |
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23,799 |
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17.7 |
% |
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Operating expenses |
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60,246 |
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44.7 |
% |
10,324 |
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49,922 |
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37.1 |
% |
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Operating income |
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30,647 |
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22.8 |
% |
10,675 |
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41,322 |
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30.7 |
% |
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Three Months Ended |
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Non-GAAP
Diluted |
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GAAP |
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Stock |
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Acquisition |
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Non-GAAP |
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Net income |
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$ |
21,047 |
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$ |
9,156 |
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$ |
3,850 |
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$ |
34,053 |
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Diluted shares outstanding |
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47,371 |
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— |
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— |
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47,371 |
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Diluted earnings per share |
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$ |
0.44 |
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$ |
0.72 |
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Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
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July 3, |
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January 2, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
80,969 |
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$ |
195,737 |
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Short-term investments |
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272,408 |
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214,486 |
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Accounts receivable, net of allowance for doubtful accounts of $771 at July 3, 2010 and $567 at January 2, 2010 |
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76,318 |
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56,128 |
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Inventories |
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29,100 |
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31,512 |
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Deferred income taxes |
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9,068 |
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7,620 |
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Prepaid expenses and other current assets |
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20,448 |
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18,515 |
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Total current assets |
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488,311 |
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523,998 |
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Long-term investments |
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26,170 |
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24,676 |
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Property and equipment, net |
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25,365 |
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27,785 |
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Goodwill |
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109,222 |
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105,109 |
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Other intangible assets, net |
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47,965 |
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41,886 |
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Other assets, net |
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23,465 |
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19,384 |
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Total assets |
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$ |
720,498 |
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$ |
742,838 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
29,475 |
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$ |
28,759 |
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Accrued expenses |
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23,531 |
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25,399 |
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Deferred income on shipments to distributors |
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28,953 |
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28,470 |
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Income taxes |
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1,230 |
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6,011 |
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Total current liabilities |
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83,189 |
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88,639 |
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Long-term obligations and other liabilities |
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23,832 |
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24,403 |
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Total liabilities |
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107,021 |
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113,042 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock—$0.0001 par value; 10,000 shares authorized; no shares issued and outstanding |
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— |
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— |
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Common stock—$0.0001 par value; 250,000 shares authorized; 44,621 and 45,772 shares issued and outstanding at July 3, 2010 and January 2, 2010, respectively |
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4 |
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5 |
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Additional paid-in capital |
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68,660 |
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128,262 |
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Retained earnings |
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548,011 |
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505,885 |
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Accumulated other comprehensive loss |
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(3,198 |
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(4,356 |
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Total stockholders’ equity |
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613,477 |
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629,796 |
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Total liabilities and stockholders’ equity |
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$ |
720,498 |
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$ |
742,838 |
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