Silicon Labs Announces First Quarter 2018 Results


(MENAFNEditorial) AUSTIN, Texas, April 25, 2018 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its first quarter ended March 31, 2018. Revenue in the first quarter exceeded the high end of guidance at $205 million, up from $201 million in the fourth quarter, and establishing a new all-time record. First quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.60 and $0.87, respectively.

"We are very pleased to report outstanding first quarter 2018 financial performance, including 15 percent Q1 year-on-year revenue growth," said Tyson Tuttle, CEO of Silicon Labs. "We are excited about the acquisition of Z-Wave, and believe we have the right strategy, products and team in place to achieve our growth objectives. Together, we will continue to deliver differentiated solutions to address large, sustainable, high-quality growth markets."

First Quarter Financial Highlights

  • Infrastructure revenue increased to $49 million, up 26% sequentially and 37% year-on-year.
  • IoT revenue declined to $103 million, down 6% sequentially and up 17% year-on-year.
  • Broadcast revenue was $36 million, up less than 1% sequentially and down 3% year-on-year.
  • Access revenue increased to $17 million, up 2% sequentially and down 6% year-on-year.
  • On a GAAP basis:

  • GAAP gross margin was 60.5%.
  • GAAP R & D expenses were $55 million.
  • GAAP SG & A expenses were $46 million.
  • GAAP operating income as a percentage of revenue was 11.5%.
  • GAAP diluted earnings per share were $0.60.
  • On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:

  • Non-GAAP gross margin was 60.6%.
  • Non-GAAP R & D expenses were $44 million.
  • Non-GAAP SG & A expenses were $37 million.
  • Non-GAAP operating income as a percentage of revenue was 20.9%.
  • Non-GAAP diluted earnings per share were $0.87.
  • Product Highlights

  • Introduced the first low-power Wi-Fi® portfolio, including WF200 transceivers and WFM200 modules, designed specifically for the IoT.
  • Released the industry's first comprehensive network performance results based on large-scale testing of Zigbee®, Thread and Bluetooth® mesh software.
  • Expanded the EFM32™ Tiny Gecko MCU family to provide a cost-effective, ultra-low-power solution for connected devices requiring long battery life.
  • Launched the Si3406x and Si3404 Power over Ethernet (PoE) Powered Device (PD) families delivering best-in-class integration and power conversion efficiency for a wide range of IoT applications.
  • Introduced new low-power PCI Express® Si532xx clock buffers providing low-jitter clock distribution for data center, industrial, communications and consumer designs.
  • Business Highlights

  • Completed the asset purchase of Sigma Designs' Z-Wave business for $240 million on April 18, 2018, expanding Silicon Labs' leading position in mesh networking for the smart home.
  • Won VDC Research's Embeddy Award for Best of Show in the hardware category for the WFx200 Wi-Fi portfolio at the 2018 Embedded World conference.
  • Business Outlook

    The company expects revenue in the second quarter to be in the range of $211 million to $217million, and also estimates the following:

    On a GAAP basis:

  • GAAP gross margin at approximately 58.5%.
  • GAAP operating expenses at approximately $111.0 million.
  • GAAP effective tax rate at 0.0%.
  • GAAP diluted earnings per share between $0.23 and $0.29.
  • On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:

  • Non-GAAP gross margin at approximately 59.5%.
  • Non-GAAP operating expenses at approximately $86.0 million.
  • Non-GAAP effective tax rate at 11.0%.
  • Non-GAAP diluted earnings per share between $0.81 and $0.87.
  • 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 on Silicon Labs' website ( www.silabs.com ) under Investor Relations . A replay will be available after the call at the same website listed above or by calling 1 (855) 859-2056 or (404) 537-3406 (international) and entering conference 88340291. The replay will be available through May 23, 2018.

    About Silicon Labs

    Silicon Labs (NASDAQ: SLAB ) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. 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; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing our distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; 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; stock price volatility; 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; the competitive and cyclical nature of the semiconductor industry; average selling prices of products may decrease significantly and rapidly; information technology risks; cyber-attacks against our products and our networks; conflict mineral risks 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, the "S" symbol, and the Silicon Labs logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.

    CONTACT: Jalene Hoover, +1 (512) 428-1610,

    Silicon Laboratories Inc.

    Condensed Consolidated Statements of Income

    (In thousands, except per share data)

    (Unaudited)



    Three Months Ended


    March 31,
    2018


    April 1,
    2017

    Revenues

    $205,384


    $179,028

    Cost of revenues

    81,147


    73,867

    Gross margin

    124,237


    105,161

    Operating expenses:




    Research and development

    54,828


    52,324

    Selling, general and administrative

    45,694


    40,155

    Operating expenses

    100,522


    92,479

    Operating income

    23,715


    12,682

    Other income (expense):




    Interest income and other, net

    3,202


    576

    Interest expense

    (4,883)


    198

    Income before income taxes

    22,034


    13,456

    Provision (benefit) for income taxes

    (4,371)


    (1,970)

    Net income

    $ 26,405


    $ 15,426





    Earnings per share:




    Basic

    $ 0.61


    $ 0.37

    Diluted

    $ 0.60


    $ 0.36





    Weighted-average common shares outstanding:




    Basic

    42,963


    42,096

    Diluted

    43,918


    43,030

    Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

    (In thousands, except per share data)


    Non-GAAP Income
    Statement Items


    Three Months Ended

    March 31, 2018






    GAAP
    Measure


    GAAP

    Percent of
    Revenue


    Stock
    Compensation
    Expense


    Intangible
    Asset
    Amortization


    Acquisition
    Related
    Items


    Non-GAAP
    Measure


    Non-GAAP
    Percent of
    Revenue




    Revenues


    $205,384


































    Gross margin


    124,237


    60.5%


    $ 296


    $ --


    $ --


    $124,533


    60.6%






















    Research and

    development


    54,828


    26.7%


    5,769


    4,787


    --


    44,272


    21.6%






















    Selling, general and

    administrative


    45,694


    22.3%


    6,127


    1,515


    700


    37,352


    18.1%






















    Operating income


    23,715


    11.5%


    12,192


    6,302


    700


    42,909


    20.9%












































    Non-GAAP
    Earnings Per Share


    Three Months Ended

    March 31, 2018



    GAAP
    Measure


    Stock
    Compensation
    Expense*


    Intangible
    Asset
    Amortization*


    Acquisition
    Related
    Items*


    Termination
    Costs,
    Impairments
    And Fair Value
    Adjustments*


    Non-cash
    Interest
    Expense*


    Income Tax
    Adjustments


    Non-GAAP
    Measure

    Net income


    $26,405


    $12,192


    $6,302


    $700


    $(985)


    $2,754


    $(9,045)


    $38,323


















    Diluted shares

    outstanding


    43,918














    43,918


















    Diluted earnings

    per share


    $ 0.60














    $ 0.87


































    * Represents pre-tax amounts

































    Unaudited Forward-Looking Statements Regarding Business Outlook

    (In millions, except per share data)


    Business Outlook


    Three Months Ending

    June 30, 2018



    GAAP

    Measure


    Non-GAAP

    Adjustments


    Non-GAAP

    Measure

    Gross margin


    58.5%


    1.0%


    59.5%








    Operating expenses


    $111


    $25


    $86








    Effective tax rate


    0.0%


    11.0%


    11.0%








    Diluted earnings per share - low


    $0.23


    $0.58


    $0.81








    Diluted earnings per share - high


    $0.29


    $0.58


    $0.87

    Silicon Laboratories Inc.

    Condensed Consolidated Balance Sheets

    (In thousands, except per share data)

    (Unaudited)



    March 31,
    2018


    December 30,

    2017

    Assets




    Current assets:




    Cash and cash equivalents

    $ 342,272


    $ 269,366

    Short-term investments

    417,867


    494,657

    Accounts receivable, net

    75,122


    71,367

    Inventories

    76,505


    73,132

    Prepaid expenses and other current assets

    64,555


    39,120

    Total current assets

    976,321


    947,642

    Property and equipment, net

    129,894


    127,682

    Goodwill

    288,227


    288,227

    Other intangible assets, net

    76,716


    83,144

    Other assets, net

    94,837


    88,387

    Total assets

    $1,565,995


    $1,535,082





    Liabilities and Stockholders' Equity




    Current liabilities:




    Accounts payable

    $ 50,068


    $ 38,851

    Deferred revenue and returns liability

    25,426


    --

    Deferred income on shipments to distributors

    --


    50,115

    Other current liabilities

    69,310


    73,359

    Total current liabilities

    144,804


    162,325

    Convertible debt

    345,049


    341,879

    Other non-current liabilities

    75,567


    77,862

    Total liabilities

    565,420


    582,066

    Commitments and contingencies




    Stockholders' equity:




    Preferred stock – $0.0001 par value; 10,000 shares authorized; no

    shares issued

    --


    --

    Common stock – $0.0001 par value; 250,000 shares authorized;

    43,227 and 42,707 shares issued and outstanding at

    March 31, 2018 and December 30, 2017, respectively

    4


    4

    Additional paid-in capital

    98,396


    102,862

    Retained earnings

    904,160


    851,307

    Accumulated other comprehensive loss

    (1,985)


    (1,157)

    Total stockholders' equity

    1,000,575


    953,016

    Total liabilities and stockholders' equity

    $1,565,995


    $1,535,082

    Silicon Laboratories Inc.

    Condensed Consolidated Statements of Cash Flows

    (In thousands)

    (Unaudited)



    Three Months Ended



    March 31,
    2018


    April 1,
    2017


    Operating Activities





    Net income

    $ 26,405


    $ 15,426


    Adjustments to reconcile net income to cash provided by operating activities:





    Depreciation of property and equipment

    3,704


    3,596


    Amortization of other intangible assets and other assets

    6,427


    6,752


    Amortization of debt discount and debt issuance costs

    3,169


    869


    Stock-based compensation expense

    12,192


    10,486


    Deferred income taxes

    (4,780)


    (4,059)


    Changes in operating assets and liabilities:





    Accounts receivable

    (3,307)


    (1,252)


    Inventories

    (3,368)


    (1,636)


    Prepaid expenses and other assets

    (17,169)


    6,708


    Accounts payable

    13,030


    5,565


    Other current liabilities and income taxes

    (9,643)


    (2,944)


    Deferred income, deferred revenue and returns liability

    (2,599)


    4,038


    Other non-current liabilities

    (1,849)


    (1,536)


    Net cash provided by operating activities

    22,212


    42,013







    Investing Activities





    Purchases of available-for-sale investments

    (52,821)


    (267,777)


    Sales and maturities of available-for-sale investments

    128,975


    25,595


    Purchases of property and equipment

    (4,102)


    (4,543)


    Purchases of other assets

    (4,698)


    (1,446)


    Acquisition of business, net of cash acquired

    --


    (13,658)


    Net cash provided by (used in) investing activities

    67,354


    (261,829)







    Financing Activities





    Proceeds from issuance of long-term debt, net

    --


    390,000


    Payments on debt

    --


    (72,500)


    Payment of taxes withheld for vested stock awards

    (17,871)


    (13,553)


    Proceeds from the issuance of common stock

    1,211


    162


    Net cash provided by (used in) financing activities

    (16,660)


    304,109







    Increase in cash and cash equivalents

    72,906


    84,293


    Cash and cash equivalents at beginning of period

    269,366


    141,106


    Cash and cash equivalents at end of period

    $342,272


    $225,399


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    SOURCE Silicon Labs

    Related Links

    http://www.silabs.com

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