8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 29, 2009

SILICON LABORATORIES INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-29823	74-2793174
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

400 West Cesar Chavez, Austin, TX  78701

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (512) 416-8500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On July 29, 2009, Silicon Laboratories Inc. (“Silicon Laboratories”) issued a press release describing its results of operations for its fiscal quarter ended July 4, 2009.  A copy of the press release is attached as Exhibit 99 to this report.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

99  Press Release of Silicon Laboratories Inc. dated July 29, 2009.

Use of Non-GAAP Financial Information

From time to time, Silicon Laboratories provides certain non-GAAP financial measures as additional information relating to its operating results.  The non-GAAP financial measurements provided in the press release furnished herewith do not replace the presentation of Silicon Laboratories’ GAAP financial results. These additional measurements merely provide supplemental information to assist investors in analyzing Silicon Laboratories’ financial position and results of operations; however, these measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. Silicon Laboratories has chosen to provide this information to investors because it believes that such supplemental information enables them to perform meaningful comparisons of past, present and future operating results, and as a means to highlight the results of core ongoing operations.

Pursuant to the requirements of Regulation G, we have provided in the press release furnished with this report a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  The information contained therein and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Silicon Laboratories, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SILICON LABORATORIES INC.
July 29, 2009	/s/ Paul V. Walsh, Jr.
Date	Paul V. Walsh, Jr. Vice President of Finance (Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	Description
99	Press release dated July 29, 2009 of the Registrant

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EX-99

Exhibit 99

SILICON LABORATORIES REPORTS STRONG REVENUE AND EARNINGS GROWTH

— Gross Margin Increases and Company Guides to Record Revenue —

AUSTIN, Texas – July 29, 2009 – Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported second quarter revenue of $104.2 million, a 25 percent sequential increase. GAAP diluted earnings per share of $0.21 increased dramatically from one cent in the first quarter, and non-GAAP diluted earnings per share increased 90 percent sequentially to $0.42. Better than anticipated earnings performance resulted from improved gross margin and the company’s expense controls.  The company guided expected revenue to $114 to $119 million for the third quarter, record revenue levels for continuing operations.

Second Quarter Financial Results

Second quarter revenue of $104.2 million was approximately flat to the same period last year. Second quarter GAAP gross margin increased considerably sequentially to 62.2 percent of revenue. R&D investment for the period was $25.9 million, and SG&A was $26.2 million.  GAAP diluted earnings per share was $0.21, significantly better than forecasted.

The following non-GAAP results exclude the impact of stock compensation expense. Non-GAAP gross margin increased sequentially by 150 basis points to 62.5 percent. The company expects the improved 62.5 percent margin will likely be sustainable through the end of 2009. Non-GAAP operating expenses declined sequentially as a percent of revenue, totaling $41.6 million. Non-GAAP operating income was 22.6 percent and is forecasted to reach 25 percent in the third quarter. Non-GAAP diluted earnings per share were $0.42, considerably better than anticipated. The reconciling charges are set forth in the financial tables below.

During the second quarter, accounts receivable returned to normal levels as demand improved. Inventory rose, but remained lower than the same period last year at $26.7 million. The company repurchased approximately $7 million in shares and ended the quarter with a higher level of cash, cash equivalents and investments at $336 million.

Business Summary

The company’s outstanding performance during the quarter was due primarily to a number of new product cycles and relative geographic strength from Asia. The company also experienced a very strong rebound in the access and broadcast audio products, both of which were up more than 25 percent sequentially.

Access product revenue in the second quarter nearly met the record revenue level achieved during the same period last year, due to strength in both modem and voice products. RF product revenue increased by more than 20 percent year over year, driven by growth in all three of the product lines: audio, video and short range wireless. The strength of ramps into the digital TV market with the company’s video demodulator contributed to the growth. New programs and market share gains continued in handsets, where FM penetration has increased and large customers have expanded their market share. The company’s consumer audio business grew as well, with the AM/FM tuner adoption accelerating in Asia.

The Broad-based business was about flat sequentially with growth in MCU and timing offsetting a sequential decline in the power product line. Design wins stepped up during the quarter across the portfolio. In aggregate, the Broad-based business is expected to reach record revenue levels in the third quarter.

“Our business is benefiting from wins in new customer programs, market share gains and seasonality. The increased revenue, strong margins and good expense management are generating tremendous earnings power,” said Necip Sayiner, president and CEO of Silicon Laboratories. “We think financial discipline and focus on investing in the right R&D projects are enabling the company to get back to peak revenue levels ahead of our peers, building a foundation for sustainable growth in the future as we continue to execute.”

Webcast and Conference Call

A conference call discussing the 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 1 800-873-2051 or +1 402-220-5370 (international). Replays will be available through August 12, 2009.

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 “guide,” “believe,” “estimate,” “expect,” “forecast,” “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; 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 Asia 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 (including risks that acquisitions may not yield the expected benefits due to the failure to properly integrate the acquired businesses and employees; risks that the customer base and revenue of the acquired businesses may cease to expand or may decline; risks that the acquired business’ products under development may fail to achieve market acceptance; risks of disputes regarding the acquired business; risks that the performance of Silicon Laboratories’ existing business may not offset the dilutive effect of an acquisition); risks associated with 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.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	July 4,2009			July 5,2008			July 4,2009			July 5,2008
Revenues	$	104,216		$	104,620		$	187,917		$	202,799
Cost of revenues	39,435			38,587			72,458			76,419
Gross margin	64,781			66,033			115,459			126,380
Operating expenses:
Research and development	25,868			23,378			51,937			48,051
Selling, general and administrative	26,187			24,486			49,629			49,095
Operating expenses	52,055			47,864			101,566			97,146
Operating income	12,726			18,169			13,893			29,234
Other income (expense):
Interest income	655			2,406			1,537			7,204
Interest expense	(51		)	(109		)	(103		)	(254		)
Other income (expense), net	342			(355		)	290			(497		)
Income before income taxes	13,672			20,111			15,617			35,687
Provision for income taxes	3,942			5,468			5,216			10,230
Net income	$	9,730		$	14,643		$	10,401		$	25,457
Earnings per share:
Basic	$	0.22		$	0.30		$	0.23		$	0.51
Diluted	$	0.21		$	0.29		$	0.23		$	0.50
Weighted-average common shares outstanding:
Basic	44,640			48,510			44,336			49,858
Diluted	45,975			49,705			45,229			50,901

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

	Three Months EndedJuly 4, 2009
Non-GAAP Income Statement Items	GAAPMeasure		GAAPPercent of Revenue			StockCompensation Expense		Non-GAAPMeasure		Non-GAAPPercent of Revenue
Revenues	$	104,216
Gross margin	64,781		62.2		%	$	372	$	65,153	62.5	%
Operating expenses	52,055		49.9		%	10,479		41,576		39.9	%
Operating income	12,726		12.3		%	10,851		23,577		22.6	%
	Three Months EndedJuly 4, 2009
Non-GAAP Diluted Earnings Per Share	GAAPMeasure		StockCompensation Expense			Non-GAAPMeasure
Net Income	$	9,730	$	9,394		$	19,124
Diluted shares outstanding	45,975		—			45,975
Diluted earnings per share	$	0.21				$	0.42

	Three Months EndedApril 4, 2009
Non-GAAP Income Statement Items	GAAPMeasure		GAAPPercent of Revenue			StockCompensation Expense		Termination Costs and Impairments		Non-GAAPMeasure		Non-GAAPPercent of Revenue
Revenues	$	83,701
Gross margin	50,678		60.5		%	$	395	$	10	$	51,083	61.0	%
	Three Months EndedApril 4, 2009
Non-GAAP Diluted Earnings Per Share	GAAPMeasure		StockCompensation Expense			Termination Costs and Impairments		Non-GAAPMeasure
Net Income	$	671	$	8,641		$	732	$	10,044
Diluted shares outstanding	45,083		—			—		45,083
Diluted earnings per share	$	0.01						$	0.22

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

	July 4,2009			January 3,2009
Assets
Current assets:
Cash and cash equivalents	$	199,519		$	172,272
Short-term investments	113,205			101,267
Accounts receivable, net of allowance for doubtful accounts of$680 at July 4, 2009 and $1,011 at January 3, 2009	62,890			36,144
Inventories	26,672			28,293
Deferred income taxes	6,587			6,439
Prepaid expenses and other current assets	20,091			18,297
Total current assets	428,964			362,712
Long-term investments	23,138			51,821
Property, equipment and software, net	28,739			30,496
Goodwill	104,612			105,515
Other intangible assets, net	45,778			49,728
Other assets, net	19,831			23,973
Total assets	$	651,062		$	624,245
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	25,416		$	22,274
Accrued expenses	21,973			29,119
Deferred income on shipments to distributors	26,839			21,599
Income taxes	85			4
Total current liabilities	74,313			72,996
Long-term obligations and other liabilities	49,608			48,789
Total liabilities	123,921			121,785
Commitments and contingencies
Stockholders’ equity:
Preferred stock—$0.0001 par value; 10,000 shares authorized; noshares issued and outstanding	—			—
Common stock—$0.0001 par value; 250,000 shares authorized;44,726 and 44,613 shares issued and outstanding atJuly 4, 2009 and January 3, 2009, respectively	4			4
Additional paid-in capital	89,731			75,711
Retained earnings	443,194			432,793
Accumulated other comprehensive loss	(5,788		)	(6,048		)
Total stockholders’ equity	527,141			502,460
Total liabilities and stockholders’ equity	$	651,062		$	624,245

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