Silicon Labs Beats Expectations

  Silicon Labs Beats Expectations

          Company Reports Solid Top Line Results and Strong Earnings

Business Wire

AUSTIN, Texas -- April 24, 2013

Silicon Labs (Nasdaq: SLAB), a leader in high-performance, analog-intensive,
mixed-signal integrated circuits (ICs), today reported first quarter revenue
of $145.4 million, a sequential decline of five percent and an increase of 16
percent compared to the same period a year ago. GAAP diluted earnings per
share were up five percent sequentially and an impressive 39 percent year over
year. Non-GAAP diluted earnings per share also increased by 37 percent
compared to the first quarter of 2012.

Financial Highlights

First quarter revenue declined seasonally, but market share gains enabled
significant year over year growth in all major product lines. Gross margin
declined sequentially due to product mix and on a GAAP-basis was 60.1 percent.
GAAP R&D investment increased to $37.6 million while GAAP SG&A expense
decreased to $29.2 million. Resulting GAAP operating income declined to 14.2
percent. GAAP diluted earnings per share increased again to $0.46.

The following non-GAAP results exclude the impact of stock compensation and
certain other items as set forth in the reconciliation table below. Gross
margin declined sequentially to 60.3 percent for the quarter. Operating
expenses increased modestly to 41.7 percent of revenue. R&D and SG&A remained
relatively flat at $32.5 million and $28.0 million, respectively, due to
disciplined spending. Operating income for the quarter was 18.6 percent.
Diluted earnings per share for the quarter were 59 cents.

Business Highlights

The company was able to grow all of its major product lines year over year
through increased market share and expansion into new markets. The Broadcast
products were up 7 percent sequentially, due to strong growth in both the
video and audio products. The company secured record design wins with its
market leading video products and grew sequentially as customers ramped up for
the new model year.

In the first quarter, the broad-based products were up 15 percent year over
year. A 10 percent sequential decline was due primarily to the decline of the
touch controller business in handsets. Microcontrollers were down seasonally,
and along with the timing and power products were impacted by softness in
industrial markets. However, the company secured a record number of
broad-based design wins driving confidence in the long-term prospects for
continued market share gains.

“Our strategic products are all growing,” said Tyson Tuttle, president and CEO
of Silicon Labs. “We expect our historical headwinds will be a much smaller
percent of our revenue as we exit the second quarter. We’re also demonstrating
good operating expense control and have a very active R&D pipeline – the right
ingredients for another growth year.”

Allowing for accelerated declines in legacy handset-related products, the
company expects revenue for the second quarter to be $140 to $146 million.

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 39714733. The replay will be available through
May 8.

About Silicon Labs

Silicon Labs is an industry leader in the innovation of high-performance,
analog-intensive, mixed-signal ICs. Developed by a world-class engineering
team with unsurpassed expertise in mixed-signal design, Silicon Labs’ diverse
portfolio of patented semiconductor solutions offers customers significant
advantages in performance, size and power consumption. 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 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; stock price volatility; 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; product
liability risks; inventory-related risks; risks associated with acquisitions
and divestitures; difficulties managing international activities; difficulties
managing our distributors, 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; 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; information
technology risks; conflict mineral risks; the competitive and cyclical nature
of the semiconductor industry 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 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
                                                March 30,     March 31,
                                                2013            2012
Revenues                                        $ 145,375       $ 125,702
Cost of revenues                                 58,003        50,606  
Gross margin                                      87,372          75,096
Operating expenses:
Research and development                          37,582          32,930
Selling, general and administrative              29,153        25,402  
Operating expenses                               66,735        58,332  
Operating income                                  20,637          16,764
Other income (expense):
Interest income                                   335             497
Interest expense                                  (842    )       (33     )
Other income (expense), net                      (52     )      (111    )
Income before income taxes                        20,078          17,117
Provision for income taxes                       44            2,797   
Net income                                      $ 20,034       $ 14,320  
                                                                
Earnings per share:
Basic                                           $ 0.47          $ 0.34
Diluted                                         $ 0.46          $ 0.33
                                                                
Weighted-average common shares outstanding:
Basic                                             42,186          42,458
Diluted                                           43,110          43,850



Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)

Non-GAAP           Three Months Ended
Income          
Statement          March 30, 2013
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           $ 145,375
                                                                                                              
Gross margin         87,372        60.1   %     $    253         $   --          $  --           $ 87,625     60.3  %
                                                                                                              
Research and
                     37,582        25.9   %          3,339           1,700          --             32,543     22.4  %
development
                                                                                                              
Selling,
general and          29,153        20.0   %          2,668           1,187          (2,750 )       28,048     19.3  %

administrative
                                                                                                              
Operating            66,735        45.9   %          6,007           2,887          (2,750 )       60,591     41.7  %
expenses
                                                                                                              
Operating            20,637        14.2   %          6,260           2,887          (2,750 )       27,034     18.6  %
income
                                 
                
Non-GAAP                         Three Months Ended
Diluted          
Earnings Per                     March 30, 2013
Share
                                 GAAP           Stock            Termination     Acquisition     Non-GAAP
                                                                 Costs and       Related
                                 Measure        Compensation     Impairments     Items           Measure
                                                Expense
Net income                       $ 20,034       $    5,512       $   2,598       $  (2,750 )     $ 25,394
                                                                                                              
Diluted shares outstanding         43,110            --              --             --             43,110
                                                                                                              
Diluted earnings per share       $ 0.46                                                          $ 0.59



Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)

                                                March 30,     December 29,
                                                  2013            2012
Assets
Current assets:
Cash and cash equivalents                         $ 79,263        $  105,426
Short-term investments                              229,808          176,565
Accounts receivable, net of allowances for
doubtful accounts of
                                                    72,766           78,023
$673 at March 30, 2013 and $670 at December
29, 2012
Inventories                                         56,949           49,579
Deferred income taxes                               15,411           16,652
Prepaid expenses and other current assets          48,514         41,437  
Total current assets                                502,711          467,682
Long-term investments                               11,189           11,369
Property and equipment, net                         135,761          135,271
Goodwill                                            130,265          130,265
Other intangible assets, net                        87,910           90,750
Other assets, net                                  28,797         36,629  
Total assets                                      $ 896,633      $  871,966 
                                                                  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable                                  $ 31,279        $  29,622
Current portion of long-term debt                   5,000            5,000
Accrued expenses                                    36,886           40,410
Deferred income on shipments to distributors        29,661           30,259
Income taxes                                       978            1,087   
Total current liabilities                           103,804          106,378
Long-term debt                                      92,500           95,000
Other non-current liabilities                      19,419         20,615  
Total liabilities                                   215,723          221,993
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;

42,401 and 41,879 shares issued and                 4                4
outstanding at

March 30, 2013 and December 29, 2012,
respectively
Additional paid-in capital                          20,954           10,122
Retained earnings                                   660,827          640,793
Accumulated other comprehensive loss               (875    )       (946    )
Total stockholders' equity                         680,910        649,973 
Total liabilities and stockholders' equity        $ 896,633      $  871,966 



Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

                                                 Three Months Ended
                                                   March 30,     March 31,
                                                   2013            2012
Operating Activities
Net income                                         $ 20,034        $ 14,320
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation of property and equipment               3,297           3,543
Amortization of other intangible assets and          2,840           2,280
other assets
Stock-based compensation expense                     6,260           6,693
Income tax benefit (detriment) from employee         (363    )       2,656
stock-based awards
Excess income tax benefit from employee              (217    )       (2,426  )
stock-based awards
Deferred income taxes                                7,521           3,101
Changes in operating assets and liabilities:
Accounts receivable                                  5,256           (6,074  )
Inventories                                          (7,350  )       447
Prepaid expenses and other assets                    4,620           4,581
Accounts payable                                     2,356           4,209
Accrued expenses                                     (4,330  )       (5,087  )
Deferred income on shipments to distributors         (598    )       3,307
Income taxes                                        (9,818  )      (5,403  )
Net cash provided by operating activities            29,508          26,147
                                                                   
Investing Activities
Purchases of available-for-sale investments          (78,851 )       (82,845 )
Proceeds from sales and maturities of                25,674          60,518
available-for-sale investments
Purchases of property and equipment                  (3,898  )       (2,428  )
Purchases of other assets                           (1,228  )      (850    )
Net cash used in investing activities                (58,303 )       (25,605 )
                                                                   
Financing Activities
Proceeds from issuance of common stock, net of       4,915           106
shares withheld for taxes
Excess income tax benefit from employee              217             2,426
stock-based awards
Payments on debt                                    (2,500  )      --      
Net cash provided by financing activities           2,632         2,532   
                                                                   
Increase (decrease) in cash and cash                 (26,163 )       3,074
equivalents
Cash and cash equivalents at beginning of           105,426       94,964  
period
Cash and cash equivalents at end of period         $ 79,263       $ 98,038  

Contact:

Silicon Labs
Shannon Pleasant, 512-464-9254
shannon.pleasant@silabs.com
 
Press spacebar to pause and continue. Press esc to stop.