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Silicon Labs Reports Record Revenue



  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
shannon.pleasant@silabs.com
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