Silicon Labs Announces First Quarter 2018 Results

Silicon Labs Announces First Quarter 2018 Results

-- Company Delivers 15 Percent Q1 Year-on-Year Revenue Growth --

PR Newswire

AUSTIN, Texas, April 25, 2018 /PRNewswire/ -- Silicon Labs 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 $217 million, 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 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, Jalene.Hoover@silabs.com

 

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



 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/silicon-labs-announces-first-quarter-2018-results-300635908.html

SOURCE Silicon Labs

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