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 21, 2003
SILICON LABORATORIES INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-29823 74-2793174
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
4635 Boston Lane, Austin, TX 78735
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (512) 416-8500
Not Applicable
(Former Name or Former Address, if Changed since Last Report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(c) Exhibits.
99 Press Release of Silicon Laboratories Inc. dated July 21, 2003 entitled
"Silicon Laboratories Reports Record Financial Results." Also see Item
12 below.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 21, 2003, Silicon Laboratories Inc. issued a press release
describing its results of operations for its fiscal quarter ended June 28, 2003.
A copy of the press release is furnished as Exhibit 99 to this report.
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 herein 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.
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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.,
a Delaware corporation
Dated: July 21, 2003 By: /s/ John W. McGovern
------------------------------------
John W. McGovern
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL ACCOUNTING OFFICER)
3
EXHIBIT INDEX
Exhibit No. Description
- ------------------------- ------------------------------------------------
99 Press release dated July 21, 2003 of the Registrant
4
Exhibit 99
Silicon Laboratories Reports Record Financial Results --
Company Announces CEO Succession Plan
AUSTIN, Texas--(BUSINESS WIRE)--July 21, 2003--Silicon
Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance,
analog-intensive, mixed-signal ICs, today reported second quarter
results for the period ended June 28, 2003. The company delivered
record revenue and earnings during the quarter.
Financial Results
Revenues for the second quarter of 2003 increased eight percent
sequentially to $69.1 million from $63.8 million in the first quarter
of 2003. This represents a 68 percent increase over revenues of $41.2
million during the second quarter of 2002.
Under generally accepted accounting principles (GAAP), net income
for the second quarter of 2003 was $10.9 million, resulting in diluted
net income per share of $0.21, compared to second quarter 2002 net
income of $2.7 million, which resulted in diluted net income per share
of $0.05. Excluding non-cash charges for amortization of deferred
stock compensation, adjusted net income for the second quarter of 2003
was $12.1 million, representing 18 percent of revenues. Adjusted
diluted net income per share in the second quarter of 2003 was $0.24.
The reconciling charges are set forth in the reconciliation of GAAP to
non-GAAP financial measures tables included below.
As of June 28, 2003, cash and short-term investments totaled $131
million, essentially even with the cash balance at the end of the
first quarter of 2003. The company had 412 employees at the end of the
second quarter, compared to 383 at the end of the first quarter.
Business Summary
"We are pleased to report another quarter of solid sequential
growth," said Nav Sooch, chairman and chief executive officer of
Silicon Laboratories. "We believe that the compelling nature of our
products and our increasingly diversified product portfolio will
continue to drive revenue growth."
This quarter marks the ninth consecutive quarter of sequential
revenue growth and the fourth consecutive quarter the company achieved
its target operating goal. The strong performance during the quarter
was driven primarily by the silicon DAA, ISOmodem(tm) and Aero(tm)
product families. Rapid acceptance of next generation products and the
addition of new customers were primary factors behind the revenue
growth.
"We are making strong progress on our new product pipeline and
investing in world-class design engineering talent to ensure our
continued technology leadership," said Dan Artusi, president and chief
operating officer of Silicon Laboratories. "We believe our ability to
execute on new product development while expanding the applications
and markets for our existing products positions us strongly to gain
market share and establish the company as a long-term market leader in
mixed-signal ICs."
Business Outlook
For the third quarter of 2003, the company currently anticipates
revenues in the range of $71 to $74 million, and Q3 diluted net income
per share on a GAAP basis is expected to be $0.18 to $0.21. Q3
adjusted diluted net income per share, which excludes a non-cash
charge of approximately $1.2 million for amortization of deferred
stock compensation, is expected to be $0.21 to $0.24.
The company also announced that Dan Artusi will assume the role of
CEO at the end of fiscal 2003 and Nav Sooch will continue in his role
as chairman of the board of directors, focusing on technology and
product selection strategy. Mr. Artusi has 25 years of industry
experience and a track record of successfully building and managing
major business operations. Since Mr. Artusi joined Silicon
Laboratories, the company has achieved record revenues, expanded
globally and exceeded financial targets.
"Dan has been successfully directing day-to-day operations since
he joined Silicon Labs nearly two years ago and this transition is a
natural extension of his role," said Mr. Sooch. "I will continue to
play an active role in the company, working closely with the
management team on corporate strategy."
Conference Call Today
A conference call discussing the second quarter results is
scheduled for 3:15 p.m. Central Time. An audio webcast will be
available simultaneously on Silicon Laboratories' website under
Investor Relations http://www.silabs.com. A replay will be available
after the call at the website listed above or by calling 800-879-6480
(U.S.) or 402-220-4749 (international). These replays will be
available through August 21, 2003.
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,"
"expect," "intend," "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 as follows: risks that Silicon
Laboratories may not be able to maintain its historical growth rate;
quarterly fluctuations in revenues and operating results; risks that
Silicon Labs may not be able to manage strains associated with its
growth; difficulties developing new products that achieve market
acceptance; 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; dependence on a limited number of
products and customers; product development risks; intellectual
property litigation risks; the competitive and cyclical nature of the
semiconductor industry and other factors that are detailed in Silicon
Laboratories filings with the SEC, including the Form 10-K filed
January 22, 2003 and the Form 10-Q that we anticipate will be filed on
or about July 21, 2003.
Non-GAAP Financial Measurements
In addition to the GAAP results provided throughout this document,
the Company has provided non-GAAP financial measurements that present
net income, operating income and net income per share on a basis
excluding non-cash and other one-time charges. Details of these
excluded items are presented in the table below, which reconciles the
GAAP results to non-GAAP financial measurements described in this
press release. Also, this press release and the reconciliation from
GAAP results to these and other additional non-GAAP financial
measurements that may be discussed in the Q2 2003 earnings conference
call can be found on the Company's website at
http://investor.silabs.com/ireye/ir_site.zhtml?ticker=SLAB&script=950.
The non-GAAP financial measurements provided in this press release
do not replace the presentation of Silicon Laboratories' GAAP
financial results. These 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 it may enable them to perform meaningful
comparisons of past, present and future operating results, and as a
means to more clearly highlight the results of core ongoing
operations.
Note to editors: Silicon Laboratories 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.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------- ---------------------
JUNE 28, JUNE 29, JUNE 28, JUNE 29,
2003 2002 2003 2002
---------- -------- --------- --------
Revenues $69,086 $41,185 $132,839 $70,034
Cost of revenues 30,267 19,304 73,845(a) 31,398
---------- -------- --------- --------
Gross profit 38,819 21,881 58,994 38,636
Operating expenses:
Research and development 11,635 8,211 21,165 16,258
Selling, general and
administrative 9,539 8,299 19,537 14,975
Amortization of deferred
stock compensation 1,223 1,308 2,489 2,613
---------- -------- --------- --------
Operating expenses 22,397 17,818 43,191 33,846
---------- -------- --------- --------
Operating income 16,422 4,063 15,803 4,790
Other income (expense):
Interest income 308 367 653 826
Interest expense -- (148) -- (299)
Other income (expense),
net (119) (9) (783) (10)
---------- -------- --------- --------
Income before income taxes 16,611 4,273 15,673 5,307
Provision for income taxes 5,707 1,618 5,812 2,297
---------- -------- --------- --------
Net income $10,904 $2,655 $9,861 $3,010
========== ======== ========= ========
Net income per share:
Basic $0.22 $0.06 $0.20 $0.06
Diluted $0.21 $0.05 $0.19 $0.06
Weighted-average common
shares outstanding:
Basic 48,480 47,482 48,291 47,158
Diluted 51,392 50,901 51,173 50,982
(a) Includes $15.3 million charge for patent infringement litigation
settlement
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
GAAP net income $10,904 $2,655 $9,861 $3,010
Tax-effected adjustments:
Settlement of patent
infringement lawsuit -- -- 10,377 --
Amortization of deferred
stock compensation 1,223 1,308 2,489 2,613
---------- -------- ------------ --------
Adjusted net income $12,127 $3,963 $22,727 $5,623
========== ======== ============ ========
GAAP diluted shares
outstanding 51,392 50,901 51,173 50,982
Adjusted diluted net income
per share $0.24 $0.08 $0.44 $0.11
THREE MONTHS ENDED
----------------------------------------------
JUNE 28, MARCH 29, DECEMBER 28, SEPTEMBER 28,
2003 2003 2002 2002
-------- --------- ------------- -------------
GAAP revenues $69,086 $63,753 $60,196 $51,786
GAAP operating income 16,422 (619) 14,485 11,714
GAAP operating income % 23.8% (1.0)% 24.1% 22.6%
Adjustments:
Settlement of patent
infringement lawsuit -- 15,260 -- --
Impairment of goodwill
and other intangible
assets -- -- 37 --
Amortization of
deferred stock
compensation 1,223 1,266 1,267 1,293
-------- --------- ------------- -------------
Adjusted operating
income $17,645 $15,907 $15,789 $13,007
======== ========= ============= =============
Adjusted operating
income % 25.5% 25.0% 26.2% 25.1%
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
JUNE 28, DECEMBER 28,
2003 2002
----------- ------------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents $78,325 $73,950
Short-term investments 52,924 41,216
Accounts receivable, net of allowance for
doubtful accounts of $923 at June 28,
2003 and $945 at December 28, 2002 32,268 27,501
Inventories 13,575 13,319
Deferred income taxes 4,921 4,921
Prepaid expenses and other 2,367 1,841
----------- ------------
Total current assets 184,380 162,748
Property, equipment and software, net 31,933 29,781
Goodwill and other intangible assets 2,056 450
Other assets 6,938 4,086
----------- ------------
Total assets $225,307 $197,065
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $26,210 $13,272
Accrued expenses 8,234 8,505
Deferred income on shipments to distributors 5,901 10,147
Income taxes payable 9,180 8,470
----------- ------------
Total current liabilities 49,525 40,394
Other long-term obligations 2,249 949
----------- ------------
Total liabilities 51,774 41,343
Commitments and contingencies
Stockholders' equity:
Common stock--$.0001 par value; 250,000
shares authorized; 49,252 and 48,904
shares issued and outstanding at
June 28, 2003 and December 28, 2002,
respectively 5 5
Additional paid-in capital 178,936 174,088
Stockholder notes receivable (31) (228)
Deferred stock compensation (10,188) (13,092)
Retained earnings (deficit) 4,811 (5,051)
----------- ------------
Total stockholders' equity 173,533 155,722
----------- ------------
Total liabilities and stockholders' equity $225,307 $197,065
=========== ============
CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512/464-9254
investor.relations@silabs.com