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): October 20, 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 October 20, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On October 20, 2003, Silicon Laboratories Inc. issued a press release describing its results of operations for its fiscal quarter ended September 27, 2003. A copy of the press release is attached 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. 2
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: October 20 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 October 20, 2003 of the Registrant 4
Exhibit 99 Silicon Laboratories Reports Record Financial Results AUSTIN, Texas--(BUSINESS WIRE)--Oct. 20, 2003--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal ICs, today reported record third quarter results for the period ended September 27, 2003. The company delivered its tenth consecutive quarter of revenue growth. Financial Results Revenues for the third quarter of 2003 increased twenty percent sequentially to $82.9 million from $69.1 million in the second quarter of 2003. This represents a 60 percent increase over revenues of $51.8 million during the third quarter of 2002. Under generally accepted accounting principles (GAAP), net income for the third quarter of 2003 was $13.9 million, resulting in diluted net income per share of $0.26, compared to second quarter 2003 net income of $10.9 million, which resulted in diluted net income per share of $0.21. Excluding non-cash charges for amortization of deferred stock compensation, adjusted net income for the third quarter of 2003 was $15.1 million, representing 18 percent of revenues. Adjusted diluted net income per share was $0.29. The reconciling charges are set forth in the reconciliation of GAAP to non-GAAP financial measures tables included below. Operating income for the third quarter was $20.7 million or 25 percent of revenues. The company ended the quarter with a highly liquid balance sheet with cash and short-term investments totaling $143 million, an increase from $131 million at the end of the second quarter of 2003. Business Summary "Business in the third quarter was strong across all of our product areas. We believe that we are successfully gaining market share in existing markets while simultaneously expanding to new markets and applications," said Nav Sooch, chairman and chief executive officer of Silicon Laboratories. "In addition, we met our adjusted operating income goal for the fifth consecutive quarter which demonstrates that we are effectively managing our rapidly growing business." The strong performance during the quarter was the result of dramatic growth in the GSM/GPRS handset, notebook and set-top box markets. Next generation products added new design wins, which will also drive growth. For example, the ADSL AFE shipped in volume and contributed to revenue for the first time in the third quarter. "The rapid growth in the quarter gave us an opportunity to leverage our very efficient supply chain to quickly meet accelerated demand. As a result of close relationships with our key partners TSMC, ASE and Amkor, we have proven our ability to meet rapidly changing customer needs," said Dan Artusi, president and chief operating officer of Silicon Laboratories. "We see very exciting opportunities ahead of us as we continue to execute and deliver on new product developments currently underway." Business Outlook For the fourth quarter of 2003, before taking into account any revenues or charges related to the acquisition of Cygnal Integrated Products, which is expected to close during Q4, the company currently anticipates revenues in the range of $92 to $95 million, and Q4 diluted net income per share on a GAAP basis is expected to be $0.27 to $0.29. Q4 adjusted diluted net income per share, which excludes a non-cash charge for amortization of deferred stock compensation and before taking into account any changes related to the acquisition of Cygnal, is expected to be $0.30 to $0.32. If the Cygnal acquisition closes during Q4 as expected, the company will incur additional acquisition-related charges, such as the write off of in-process research and development and amortization of acquired intangible assets. Conference Call Today A conference call discussing the third 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 at http://www.silabs.com. A replay will be available after the call at the website listed above or by calling 800-638-8815 (U.S.) or +1 402-220-0241 (international). These replays will be available through November 20, 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; risks associated with acquisitions, including the acquisition of Cygnal Integrated Products; 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 October 20, 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 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 NINE MONTHS ENDED ---------------------- ----------------------- SEPT. 27, SEPT. 28, SEPT. 27, SEPT. 28, 2003 2002 2003 2002 ----------- ---------- --------- ---------- Revenues $82,907 $51,786 $215,746 $121,819 Cost of revenues 38,061 22,747 111,906(a) 54,144 ----------- ---------- --------- ---------- Gross profit 44,846 29,039 103,840 67,675 Operating expenses: Research and development 12,267 7,379 33,433 23,637 Selling, general and administrative 10,688 8,653 30,223 23,627 Amortization of deferred stock compensation 1,196 1,293 3,686 3,906 ----------- ---------- --------- ---------- Operating expenses 24,151 17,325 67,342 51,170 ----------- ---------- --------- ---------- Operating income 20,695 11,714 36,498 16,505 Other income (expense): Interest income 281 351 933 1,177 Interest expense -- (150) -- (450) Other income (expense), net 75 (286) (707) (296) ----------- ---------- --------- ---------- Income before income taxes 21,051 11,629 36,724 16,936 Provision for income taxes 7,119 3,747 12,931 6,044 ----------- ---------- --------- ---------- Net income $13,932 $7,882 $23,793 $10,892 =========== ========== ========= ========== Net income per share: Basic $0.28 $0.17 $0.49 $0.23 Diluted $0.26 $0.16 $0.46 $0.21 Weighted-average common shares outstanding: Basic 48,939 47,703 48,545 47,288 Diluted 52,816 50,519 51,709 50,902 (a) Includes a $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 $13,932 $7,882 $23,793 $10,892 Tax-effected adjustments: Settlement of patent infringement lawsuit -- -- 10,377 -- Amortization of deferred stock compensation 1,196 1,293 3,686 3,906 ---------- ---------- ---------- -------- Adjusted net income $15,128 $9,175 $37,856 $14,798 ========== ========== ========== ======== GAAP diluted shares outstanding 52,816 50,519 51,709 50,902 Adjusted diluted net income per share $0.29 $0.18 $0.73 $0.29 THREE MONTHS ENDED --------------------------------------------------- SEPT. 27, JUNE 28, MARCH 29, DEC. 28, SEPT. 28, 2003 2003 2003 2002 2002 --------- --------- ---------- --------- ---------- GAAP revenues $82,907 $69,086 $63,753 $60,196 $51,786 GAAP operating income (loss) 20,695 16,422 (619) 14,485 11,714 GAAP operating income (loss) % 25.0% 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 1,196 1,223 1,266 1,267 1,293 --------- --------- ---------- --------- ---------- Adjusted operating income $21,891 $17,645 $15,907 $15,789 $13,007 ========= ========= ========== ========= ========== Adjusted operating income % 26.4% 25.5% 25.0% 26.2% 25.1% Condensed Consolidated Balance Sheets (in thousands, except per share data) SEPTEMBER 27, DECEMBER 28, 2003 2002 -------------- ------------- ASSETS (UNAUDITED) Current assets: Cash and cash equivalents $110,383 $73,950 Short-term investments 32,776 41,216 Accounts receivable, net of allowance for doubtful accounts of $923 at September 27, 2003 and $945 at December 28, 2002 49,100 27,501 Inventories 18,572 13,319 Deferred income taxes 4,921 4,921 Prepaid expenses and other 3,846 1,841 -------------- ------------- Total current assets 219,598 162,748 Property, equipment and software, net 35,568 29,781 Goodwill and other intangible assets, net 1,969 450 Other assets, net 8,085 4,086 -------------- ------------- Total assets $265,220 $197,065 ============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $32,297 $13,272 Accrued expenses 10,971 8,505 Deferred income on shipments to distributors 5,389 10,147 Income taxes payable 11,590 8,470 -------------- ------------- Total current liabilities 60,247 40,394 Other long-term obligations 5,589 949 -------------- ------------- Total liabilities 65,836 41,343 Commitments and contingencies Stockholders' equity: Common stock--$.0001 par value; 250,000 shares authorized; 49,743 and 48,904 shares issued and outstanding at September 27, 2003 and December 28, 2002, respectively 5 5 Additional paid-in capital 189,576 174,088 Stockholder notes receivable -- (228) Deferred stock compensation (8,939) (13,092) Retained earnings (deficit) 18,742 (5,051) -------------- ------------- Total stockholders' equity 199,384 155,722 -------------- ------------- Total liabilities and stockholders' equity $265,220 $197,065 ============== ============= CONTACT: Silicon Laboratories Inc., Austin Shannon Pleasant, 512-464-9254 investor.relations@silabs.com