EX-99 2 a08-4033_1ex99.htm EX-99

Exhibit 99

 

SILICON LABORATORIES REPORTS EXCEPTIONAL FINANCIAL PERFORMANCE

 

—Company Completes a Third of the Share Repurchase Authorization —

 

AUSTIN, Texas — Jan. 30, 2008 — Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue from continuing operations of $100 million for the fourth quarter, a 34 percent increase over the same period last year. Earnings per share for the quarter exceeded guidance, and the company surpassed its non-GAAP adjusted operating income target of 25 percent in the quarter, demonstrating the ability of the business to operate at model performance.

 

During the fourth quarter the company completed share repurchases totaling $112 million, bringing the total amount repurchased to over a third of the $400 million authorization in only five months.

 

Financial Results

 

2007 revenue from continuing operations of $337 million was an increase of 17 percent over 2006. Fourth quarter revenue increased sequentially by almost 14 percent, higher than expectations due primarily to stronger than anticipated demand from consumer device makers for the company’s microcontrollers and broadcast products. For the fourth quarter, GAAP gross margin increased to 63.5 percent, GAAP operating income was $14.5 million, and GAAP diluted earnings per share from continuing operations was $0.28. For the full year, GAAP diluted earnings per share from continuing operations increased to $0.70. Including discontinued operations, GAAP diluted earnings per share totaled $3.64.

 

The following non-GAAP results exclude $11.9 million in non-cash charges. Non-GAAP gross margin increased to 63.9 percent, well above expectations due to strong margin performance

 

 


across the product lines. Operating expenses were slightly lower than forecasted, declining as a percent of revenue to 37.6 percent, resulting in non-GAAP operating income of $26.3 million, or 26.3 percent of revenue. This was significantly above guidance and exceeded the company’s target of 25 percent. Non-GAAP diluted earnings per share from continuing operations was a record $0.46 for the quarter and $1.30 for all of 2007, representing a year over year increase of 142 percent and 65 percent, respectively.

 

 “In four quarters, the company has been able to achieve a level of financial performance that very few companies in our sector can deliver,” said Bill Bock, chief financial officer. “We were able to reduce operating expenses, accelerate revenue and improve the gross margin profile, more than doubling operating income and earnings per share.”

 

The reconciling charges are set forth in the financial measures table included below.

 

Business Summary

 

Fourth quarter revenue growth was driven by the broadcast, microcontrollers and timing businesses. Broadcast products and microcontrollers experienced double-digit sequential growth rates fueled by demand for products shipping into consumer devices such as handsets and portable navigation devices. Design win activity remained strong across the business and particularly in microcontrollers, which recorded over seven thousand development kit shipments.

 

“The results speak for themselves,” said Necip Sayiner, president and chief executive officer of Silicon Laboratories. “We have a strong portfolio of differentiated products, we are continuing to diversify to expand our market reach and customer base, and we are investing in R&D to fund future growth. We will continue to focus on R&D execution and operational excellence in our business as we monitor the uncertainties in the macroeconomic environment.”

 

For the first quarter of 2008, the company is guiding revenue in the range of $93 to $97 million.

 

Webcast and Conference Call

 

A conference call discussing the fourth quarter results will follow this press release today at 7:30 a.m. Central Time.

 

 


An audio webcast will be available simultaneously on Silicon Laboratories’ website under Investor Relations (www.silabs.com).  A replay will be available after the call at the same website listed above or by calling 800-839-2341 or +1 203-369-3138 (international). Replays will be available through February 13, 2008.

 

About Silicon Laboratories Inc.

 

Silicon Laboratories Inc. is a leading designer of high-performance, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Silicon Laboratories’ 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 Laboratories, please visit www.silabs.com.

 

Forward Looking Statements

 

This press release contains forward-looking statements based on Silicon Laboratories’ 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 Laboratories 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 Laboratories 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, dependence on a limited number of products and customers; difficulties developing new products that achieve market acceptance; risks that Silicon Laboratories may not be able to manage strains associated with its growth (including risks associated with the implementation of its enterprise resource planning system); dependence on key personnel; difficulties managing our manufacturers and subcontractors; difficulties managing international activities; credit risks associated with our accounts receivable; geographic concentration of manufacturers, assemblers, test service providers and customers in the Pacific Rim that subjects Silicon Laboratories’ business and results of operations to risks of

 

 


natural disasters, epidemics, war and political unrest; product development risks; inventory-related risks; intellectual property litigation risks; risks associated with acquisitions and divestitures; the competitive and cyclical nature of the semiconductor industry and other factors that are detailed in Silicon Laboratories’ filings with the SEC. Silicon Laboratories 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.

 

CONTACT: Silicon Laboratories Inc., Shannon Pleasant, (512) 464 9254, shannon.pleasant@silabs.com

 

 

 


Silicon Laboratories Inc.

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 29,
2007

 

December 30,
2006

 

December 29,
2007

 

December 30,
2006

 

Revenues

 

$

100,111

 

$

74,612

 

$

337,461

 

$

288,156

 

Cost of revenues

 

36,565

 

29,229

 

130,225

 

100,678

 

Gross profit

 

63,546

 

45,383

 

207,236

 

187,478

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

21,524

 

23,110

 

89,320

 

89,804

 

Selling, general and administrative

 

27,551

 

21,258

 

94,819

 

89,022

 

In-process research and development

 

—

 

—

 

—

 

2,600

 

Operating expenses

 

49,075

 

44,368

 

184,139

 

181,426

 

Operating income

 

14,471

 

1,015

 

23,097

 

6,052

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

6,523

 

3,394

 

24,525

 

13,745

 

Interest expense

 

(101

)

(236

)

(628

)

(872

)

Other income (expense), net

 

(87

)

399

 

(469

)

744

 

Income from continuing operations before income taxes

 

20,806

 

4,572

 

46,525

 

19,669

 

Provision for income taxes

 

4,888

 

222

 

6,838

 

4,326

 

Income from continuing operations

 

15,918

 

4,350

 

39,687

 

15,343

 

Income from discontinued operations, net of income taxes

 

5,399

 

873

 

165,149

 

15,815

 

 Net income

 

$

21,317

 

$

5,223

 

$

204,836

 

$

31,158

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.29

 

$

0.08

 

$

0.72

 

$

0.28

 

Net income

 

$

0.39

 

$

0.10

 

$

3.74

 

$

0.56

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.28

 

$

0.08

 

$

0.70

 

$

0.27

 

Net income

 

$

0.38

 

$

0.09

 

$

3.64

 

$

0.54

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

54,377

 

54,715

 

54,826

 

55,346

 

Diluted

 

55,901

 

56,109

 

56,321

 

57,201

 

 

 


Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

 

Non-GAAP Income Statement Items

 

Three Months Ended
December 29, 2007

 

 

 

GAAP Measure

 

GAAP Percent of Revenue

 

Stock Compensation Expense

 

Relocation Charges

 

Non-GAAP Measure

 

Non-GAAP Percent of Revenue

 

Revenues

 

$

100,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

63,546

 

63.5

%

$

440

 

$

—

 

$

63,986

 

63.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

49,075

 

49.0

%

10,610

 

804

 

37,661

 

37.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

14,471

 

14.5

%

11,050

 

804

 

26,325

 

26.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Diluted Earnings Per Share

 

Three Months Ended
December 29, 2007

 

 

 

GAAP
Measure

 

Stock
Compensation Expense

 

Relocation Charges

 

Non-GAAP
Measure

 

Income from continuing operations

 

$

15,918

 

$

9,025

 

$

523

 

$

25,466

 

 

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

55,901

 

—

 

—

 

55,901

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

0.28

 

 

 

 

 

$

0.46

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Diluted Earnings Per Share

 

Twelve Months Ended
December 29, 2007

 

 

 

GAAP
Measure

 

Stock
Compensation Expense

 

Relocation Charges

 

Non-GAAP
Measure

 

Income from continuing operations

 

$

39,687

 

$

33,223

 

$

523

 

$

73,433

 

 

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

56,321

 

—

 

—

 

56,321

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

0.70

 

 

 

 

 

$

1.30

 

 

 

 


 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(Continued)

 

Non-GAAP Diluted Earnings
Per Share

 

Three Months Ended
December 30, 2006

 

 

 

GAAP
Measure

 

Stock
Compensation Expense

 

Non-GAAP
Measure

 

Income from continuing operations

 

$

4,350

 

$

6,307

 

$

10,657

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

56,109

 

—

 

56,109

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

0.08

 

 

 

$

0.19

 

 

Non-GAAP Diluted Earnings
Per Share

 

Twelve Months Ended
December 30, 2006

 

 

 

GAAP
Measure

 

Stock
Compensation Expense

 

Relocation Charges

 

In-Process R&D

 

Non-GAAP
Measure

 

Income from continuing operations

 

$

15,343

 

$

25,336

 

$

1,921

 

$

2,600

 

$

45,200

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

57,201

 

—

 

—

 

—

 

57,201

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

0.27

 

 

 

 

 

 

 

$

0.79

 

 

 


 

Silicon Laboratories Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 

 

 

December 29,
2007

 

December 30,
2006

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

264,408

 

$

68,188

 

Short-term investments

 

308,566

 

318,104

 

Accounts receivable, net of allowance for doubtful accounts of $517 at December 29, 2007 and $421 at December 30, 2006

 

51,211

 

36,657

 

Inventories

 

28,587

 

22,016

 

Deferred income taxes

 

6,025

 

12,118

 

Prepaid expenses and other current assets

 

33,895

 

12,944

 

Current assets of discontinued operations

 

—

 

33,680

 

Total current assets

 

692,692

 

503,707

 

Property, equipment and software, net

 

28,157

 

34,070

 

Goodwill

 

73,199

 

65,680

 

Other intangible assets, net

 

18,077

 

20,271

 

Other assets, net

 

28,121

 

24,528

 

Non-current assets of discontinued operations

 

—

 

38,739

 

Total assets

 

$

840,246

 

$

686,995

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

33,321

 

$

26,438

 

Accrued expenses

 

26,397

 

23,051

 

Deferred income on shipments to distributors

 

28,448

 

20,568

 

Income taxes

 

5,226

 

15,063

 

Current liabilities of discontinued operations

 

—

 

16,502

 

Total current liabilities

 

93,392

 

101,622

 

Long-term obligations and other liabilities

 

43,309

 

15,641

 

Non-current liabilities of discontinued operations

 

—

 

1,050

 

Total liabilities

 

136,701

 

118,313

 

 

 

 

 

 

 

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; 52,810 and 54,802 shares issued and outstanding at December 29, 2007 and December 30, 2006, respectively

 

5

 

5

 

Additional paid-in capital

 

303,682

 

373,655

 

Retained earnings

 

399,858

 

195,022

 

Total stockholders’ equity

 

703,545

 

568,682

 

Total liabilities and stockholders’ equity

 

$

840,246

 

$

686,995

 

 

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