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 March 12, 2020, Silicon Laboratories Inc. (“Silicon Laboratories”) issued a press release revising its revenue, operating expenses, effective tax rate and earnings per share guidance for its fiscal quarter ending April 4, 2020. 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 March 12, 2020 entitled “Silicon Labs Revises First Quarter 2020 Outlook to Reflect Estimated Impact from the Novel Coronavirus” |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
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.
Non-GAAP financial measures used by Silicon Laboratories include non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling, general and administrative expense, non-GAAP operating income, non-GAAP interest expense, non-GAAP tax expense, non-GAAP net income and non-GAAP diluted earnings per share. 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.
Non-GAAP financial measures are adjusted by the following items:
| · | Stock compensation expense – represents charges for employee stock awards issued under Silicon Laboratories’ stock-based compensation plans. Stock compensation expense is excluded from non-GAAP financial measures because it is a non-cash expense, and excluding such expense provides meaningful supplemental information regarding core ongoing operations. |
| · | Intangible asset amortization – primarily represents charges for the amortization of intangibles assets, such as core and developed technology, customer relationships and trademarks, acquired in connection with business combinations. Intangible asset amortization is excluded from non-GAAP financial measures because it is a non-cash expense, and excluding such expense provides meaningful supplemental information regarding core ongoing operations. |
| · | Acquisition related items – primarily including the following: charges for the fair value write-up associated with inventory acquired; adjustments to the fair value of acquisition-related contingent consideration; and acquisition-related costs of a business combination, such as costs for attorneys, investment bankers, accountants and other third party service providers. Acquisition related items are excluded from non-GAAP financial measures because excluding such amounts provides meaningful supplemental information regarding core ongoing operations. |
| · | Restructuring Charges – primarily include costs associated with certain employee terminations, asset impairments and fair value adjustments resulting from observable price changes. Termination costs and fair value adjustments are excluded from non-GAAP financial measures because excluding such amounts provides meaningful supplemental information regarding core ongoing operations. |
| · | Non-cash interest expense – represents charges for the amortization of the debt discount on Silicon Laboratories’ convertible senior notes. Such interest expense is excluded from non-GAAP financial measures because it is a non-cash expense, and excluding such expense provides meaningful supplemental information regarding core ongoing operations. |
| · | Income tax adjustments – primarily include the following: the effect of the Tax Cuts & Jobs Act of 2017; the current and deferred income tax effects of the above non-GAAP adjustments; other indirect impacts of excluding stock-based compensation; and the income tax impact of certain intercompany license arrangements for technology acquired in business combinations. Income tax adjustments are excluded from non-GAAP financial measures because excluding such amounts provides meaningful supplemental information regarding 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.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99 | Press release of Silicon Laboratories Inc. dated March 12, 2020 entitled “Silicon Labs Revises First Quarter 2020 Outlook to Reflect Estimated Impact from the Novel Coronavirus” | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
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. | ||
| March 12, 2020 | /s/ John C. Hollister | |
| Date | John C. Hollister Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
Exhibit 99
Silicon Labs Revises First Quarter 2020 Outlook to Reflect Estimated Impact from the Novel Coronavirus
AUSTIN, Texas – March 12, 2020 – Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today provided updated financial guidance for the company’s fiscal first quarter 2020, ending April 4, 2020, due to estimated impacts from the novel coronavirus (“COVID-19”).
“Due to the uncertain and evolving public health outlook resulting from COVID-19, we are seeing an impact on first quarter demand and are updating our guidance accordingly,” said Tyson Tuttle, CEO. “While all of our Asia-Pacific-based suppliers have resumed operations, there are some minor ongoing impacts on our supply chain. Additionally, we have customers worldwide who are unable to operate at full capacity. Internally, we have taken steps to limit travel to protect the health and safety of our employees.”
Updated Business Outlook
The company now expects first quarter revenue to be in the range of $200 to $205 million, down from prior guidance of $209 to $219 million provided on January 29, 2020, and estimates the following:
On a GAAP basis:
| · | GAAP gross margin at approximately 59.5%, in line with prior guidance of 59.5%. |
| · | GAAP operating expenses at approximately $124.0 million, down from prior guidance of $127.0 million. |
| · | GAAP effective tax rate of 0.0%, consistent with prior guidance. |
| · | GAAP diluted earnings (loss) per share between $(0.16) and $(0.12), down from prior guidance between $(0.03) and $0.07. |
On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, restructuring charges, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:
| · | Non-GAAP gross margin between 59.5% and 60.0%, in line with prior guidance between 59.5% and 60.0%. |
| · | Non-GAAP operating expenses at approximately $96.0 million, down from prior guidance of approximately $97.5 million. |
| · | Non-GAAP effective tax rate at 11.0%, down from prior guidance of 11.5%. |
| · | Non-GAAP diluted earnings per share between $0.49 and $0.53, down from prior guidance between $0.57 and $0.67. |
About Silicon Labs
Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. silabs.com
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; uncertain and evolving public health outlook due to COVID-19 with the resulting business impact difficult to forecast; difficulties developing new products that achieve market acceptance; risks associated with international activities (including trade barriers); intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing Silicon Labs’ distributors, manufacturers and subcontractors; dependence on a limited number of products and customers; 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 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 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; cyber-attacks against Silicon Labs’ products and its networks; 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, 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: Jalene Hoover, +1 (512) 428-1610, Jalene.Hoover@silabs.com
Unaudited Forward-Looking Statements Regarding Business Outlook
(In millions, except per share data)
| Business Outlook | Three Months Ending April 4, 2020 | |||||||||||
GAAP Measure | Non-GAAP Adjustments | Non-GAAP Measure | ||||||||||
| Gross margin | 59.50 | % | 0.25 | % | 59.75 | % | ||||||
| Operating expenses | $ | 124.0 | $ | 28.0 | $ | 96.0 | ||||||
| Effective tax rate | 0 | % | 11.0 | % | 11.0 | % | ||||||
| Diluted earnings (loss) per share - low | $ | (0.16 | ) | $ | 0.65 | $ | 0.49 | |||||
| Diluted earnings (loss) per share - high | $ | (0.12 | ) | $ | 0.65 | $ | 0.53 | |||||