Silicon Labs Reports Record Revenue Company Delivers 15 Percent Revenue Growth in 2012 Business Wire AUSTIN, Texas -- January 30, 2013 Silicon Labs (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue for the fourth quarter and the full year. Revenue of $563.3 million for 2012 was an impressive 15 percent increase compared to 2011. Financial Highlights Fourth quarter revenue of $152.5 million was up 20 percent compared to the same period last year. On a GAAP-basis, gross margin improved meaningfully to 61.4 percent. R&D investment increased to $36.0 million, and SG&A expense increased to $32.3 million. Resulting GAAP operating income decreased to 16.6 percent. Diluted GAAP earnings per share increased to $0.44. For all of 2012, GAAP gross margin was 60 percent and operating expenses increased only slightly by two percent to $252.3 million, resulting in a five hundred basis point improvement in operating margin to 15.2 percent. GAAP earnings increased therefore by 86 percent to $1.47. The following non-GAAP results exclude the impact of stock compensation and other one-time items. Gross margin improved to 61.6 percent for the quarter. Operating expenses increased to 39.5 percent of revenue. R&D increased to $32.7 million, and SG&A increased to $27.5 million due to increasing product and sales activity as well as higher variable compensation driven by the outperformance for the quarter. Operating income for the quarter was a record for the year at 22.1 percent. Diluted earnings per share for the quarter were 61 cents, a 24 percent year-over-year increase. For all of 2012, Silicon Labs reduced operating expenses to 40.3 percent of revenue and improved operating income to 20.7 percent of revenue. Diluted earnings per share increased by 20 percent to $2.16. Reconciling charges are set forth in the financial measures table included below. The company repurchased 245 thousand shares of stock and ended the quarter with $293 million in cash, cash equivalents and investments due to continued healthy cash flow from operations. Business Highlights The company’s strong performance in 2012 was driven by high growth in the Broadcast and Broad-based products. Broadcast growth was driven by the rapid adoption of the company’s TV tuner products, which represented one third of the TV market in 2012. The Broad-based products, which grew more than 30 percent in 2012, significantly outgrew their end markets as the company added customers and expanded its sales channel. In the fourth quarter, the Broad-based business was up as expected driven by a record quarter for the Timing products. Timing strength came from new business in consumer and embedded applications, a direct result of the company’s investments to broaden the portfolio. The MCU products were up more than 45 percent year over year due to growth from strong organic execution and from a recent acquisition. The Broadcast business exceeded expectations due to record revenue for the company’s video products. The Access business also grew sequentially in the fourth quarter. “We had an excellent year in 2012, achieving record revenue levels and increasing our market share,” said Tyson Tuttle, president and CEO of Silicon Laboratories. “We are addressing very large markets with a growing portfolio of differentiated products, we have a record backlog of design wins, and we believe that as we continue to execute, this will enable growth in 2013 and beyond.” The company expects revenue for the first quarter to be down sequentially four to eight percent. Webcast and Conference Call A conference call discussing the quarterly results will follow this press release at 7:30 a.m. Central time. An audio webcast will be available simultaneously on Silicon Labs’ 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 (855) 859-2056 or +1 (404) 537-3406 (international) and by entering 39714732. The replay will be available through February 13. About Silicon Labs Silicon Labs is a leading designer of high-performance, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Silicon Labs’ 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 Labs, please visit www.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 Laboratories 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; 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 Labs 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 Labs’ 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 Labs’ filings with the SEC. 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. 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. Silicon Laboratories Inc. Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended Year Ended December December December December 29, 31, 29, 31, 2012 2011 2012 2011 Revenues $ 152,461 $ 126,692 $ 563,294 $ 491,625 Cost of revenues 58,835 49,513 225,277 193,179 Gross margin 93,626 77,179 338,017 298,446 Operating expenses: Research and 36,009 34,705 137,952 135,953 development Selling, general and 32,315 27,251 114,390 112,419 administrative Operating 68,324 61,956 252,342 248,372 expenses Operating income 25,302 15,223 85,675 50,074 Other income (expense): Interest income 235 427 1,338 1,859 Interest expense (850 ) (23 ) (1,149 ) (37 ) Other income (323 ) 152 484 444 (expense), net Income before 24,364 15,779 86,348 52,340 income taxes Provision for 5,669 2,974 22,800 16,868 income taxes Net income $ 18,695 $ 12,805 $ 63,548 $ 35,472 Earnings per share: Basic $ 0.45 $ 0.31 $ 1.51 $ 0.82 Diluted $ 0.44 $ 0.29 $ 1.47 $ 0.79 Weighted-average common shares outstanding: Basic 41,705 41,979 42,136 43,421 Diluted 42,641 43,410 43,106 44,832 Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share data) Non-GAAP Three Months Ended Income Statement December 29, 2012 Items GAAP Stock Non-GAAP GAAP Termination Acquisition Non-GAAP Percent of Compensation Costs and Related Percent Measure Revenue Expense Impairments Items Measure of Revenue Revenues $ 152,461 Gross margin 93,626 61.4 % $ 268 $ -- $ -- $ 93,894 61.6 % Research and 36,009 23.6 % 3,006 262 -- 32,741 21.5 % development Selling, general and 32,315 21.2 % 4,106 1,967 (1,253 ) 27,495 18.0 % administrative Operating 68,324 44.8 % 7,112 2,229 (1,253 ) 60,236 39.5 % expenses Operating 25,302 16.6 % 7,380 2,229 (1,253 ) 33,658 22.1 % income Non-GAAP Three Months Ended Diluted Earnings Per December 29, 2012 Share GAAP Stock Termination Acquisition Non-GAAP Costs and Related Measure Compensation Impairments Items Measure Expense Net income $ 18,695 $ 6,667 $ 1,829 $ (1,253 ) $ 25,938 Diluted shares outstanding 42,641 -- -- -- 42,641 Diluted earnings per share $ 0.44 $ 0.61 Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share data) (Continued) Non-GAAP Year Ended Income Statement December 29, 2012 Items GAAP GAAP Stock Termination Acquisition Non-GAAP Non-GAAP Costs and Related Headquarters Measure Percent of Compensation Impairments Items Purchase Measure Percent of Revenue Expense* Revenue Revenues $ 563,294 Operating 252,342 44.8 % $ 28,038 $ 6,735 $ (1,361 ) $ (8,113 ) $ 227,043 40.3 % expenses Operating 85,675 15.2 % 29,244 6,735 3,105 (8,113 ) 116,646 20.7 % income Non-GAAP Diluted Year Ended Earnings Per Share December 29, 2012 GAAP Stock Termination Acquisition Release of Non-GAAP Costs and Related Headquarters Unrecognized Measure Compensation Impairments Items Purchase Tax Benefits Measure Expense* Net $ 63,548 $ 25,578 $ 4,561 $ 11,932 $ (5,274 ) $ (7,265 ) $ 93,080 income Diluted shares 43,106 -- -- -- -- -- 43,106 outstanding Diluted earnings per $ 1.47 $ 2.16 share * Excludes stock compensation recognized in connection with terminations costs for our former CEO. Silicon Laboratories Inc. Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) December 29, December 31, 2012 2011 Assets Current assets: Cash and cash equivalents $ 105,426 $ 94,964 Short-term investments 176,565 212,526 Accounts receivable, net of allowances for doubtful accounts of 78,023 55,351 $670 at December 29, 2012 and $725 at December 31, 2011 Inventories 49,579 34,778 Deferred income taxes 16,652 11,563 Prepaid expenses and other current 41,437 43,867 assets Total current assets 467,682 453,049 Long-term investments 11,369 17,477 Property and equipment, net 135,271 25,141 Goodwill 130,265 115,489 Other intangible assets, net 90,750 60,005 Other assets, net 36,629 34,830 Total assets $ 871,966 $ 705,991 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 29,622 $ 26,354 Current portion of long-term debt 5,000 -- Accrued expenses 40,410 30,857 Deferred income on shipments to 30,259 24,962 distributors Income taxes 1,087 665 Total current liabilities 106,378 82,838 Long-term debt 95,000 -- Other non-current liabilities 20,615 24,214 Total liabilities 221,993 107,052 Commitments and contingencies Stockholders' equity: Preferred stock--$0.0001 par value; 10,000 shares authorized; no -- -- shares issued and outstanding Common stock--$0.0001 par value; 250,000 shares authorized; 41,879 and 42,068 shares issued and 4 4 outstanding at December 29, 2012 and December 31, 2011, respectively Additional paid-in capital 10,122 14,749 Retained earnings 640,793 586,653 Accumulated other comprehensive loss (946 ) (2,467 ) Total stockholders' equity 649,973 598,939 Total liabilities and stockholders' $ 871,966 $ 705,991 equity Silicon Laboratories Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended December 29, December 31, 2012 2011 Operating Activities Net income $ 63,548 $ 35,472 Adjustments to reconcile net income to cash provided by operating activities: Depreciation of property and equipment 13,621 13,570 Net gain on the purchase of property and (8,457 ) -- equipment Amortization of other intangible assets 14,154 11,030 and other assets Impairment of long-lived assets 708 1,322 Stock-based compensation expense 31,176 36,115 Income tax benefit from employee 1,827 2,814 stock-based awards Excess income tax benefit from employee (1,294 ) (2,404 ) stock-based awards Deferred income taxes 4,725 (445 ) Changes in operating assets and liabilities: Accounts receivable (20,743 ) (8,562 ) Inventories (13,056 ) 5,334 Prepaid expenses and other assets 10,629 (5,948 ) Accounts payable 7,217 (2,176 ) Accrued expenses (3,812 ) (1,320 ) Deferred income on shipments to 4,623 (1,915 ) distributors Income taxes (7,816 ) 5,855 Net cash provided by operating 97,050 88,742 activities Investing Activities Purchases of available-for-sale (192,450 ) (178,676 ) investments Proceeds from sales and maturities of 235,517 193,474 marketable securities Purchases of property and equipment (102,043 ) (8,690 ) Purchases of other assets (8,508 ) (4,018 ) Acquisitions of businesses, net of cash (71,852 ) (27,262 ) acquired Net cash used in investing activities (139,336 ) (25,172 ) Financing Activities Proceeds from issuance of common stock, 15,148 7,660 net of shares withheld for taxes Excess income tax benefit from employee 1,294 2,404 stock-based awards Repurchases of common stock (62,019 ) (110,063 ) Proceeds from issuance of long-term 98,325 -- debt, net Payments on debt -- (7,174 ) Net cash provided by (used in) financing 52,748 (107,173 ) activities Increase (decrease) in cash and cash 10,462 (43,603 ) equivalents Cash and cash equivalents at beginning 94,964 138,567 of period Cash and cash equivalents at end of $ 105,426 $ 94,964 period Contact: Silicon Labs Shannon Pleasant, 512-464 9254 email@example.com
Silicon Labs Reports Record Revenue
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