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 25, 2012
SILICON LABORATORIES INC.
(Exact Name of Registrant as Specified in Charter)
Delaware |
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000-29823 |
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74-2793174 |
(State or Other Jurisdiction |
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(Commission File Number) |
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(IRS Employer |
of Incorporation) |
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Identification No.) |
400 West Cesar Chavez, Austin, TX |
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78701 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrants 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 25, 2012, Silicon Laboratories Inc. (Silicon Laboratories) issued a press release describing its results of operations for its fiscal quarter ended June 30, 2012. A copy of the press release is attached as Exhibit 99 to this report.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
99 |
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Press Release of Silicon Laboratories Inc. dated July 25, 2012 |
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.
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.
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SILICON LABORATORIES INC. |
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July 25, 2012 |
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/s/ Paul V. Walsh, Jr. |
Date |
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Paul V. Walsh, Jr. |
Exhibit 99
SILICON LABORATORIES RESULTS EXCEED EXPECTATIONS
Company Reports Strong Quarterly Performance and Outlook
AUSTIN, Texas July 25, 2012 Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported second quarter revenue of $135.7 million, an impressive eight percent sequential increase. GAAP and non-GAAP diluted earnings per share of $0.47 and $0.51, respectively, also exceeded expectations and represented significant growth.
Financial Highlights
Second quarter revenue was a company record and resulted from growth across the companys major product categories. On a GAAP-basis, gross margin improved to 61.0 percent. R&D investment increased to $34.2 million and SG&A expense was $32.2 million. Resulting GAAP operating income was 12.1 percent. Diluted GAAP earnings per share increased by 42 percent sequentially to 47 cents, due in part to a tax reserve release.
The following non-GAAP results exclude the impact of stock compensation and other one-time items. Significant strength in the companys Broad-based products improved the gross margin mix, resulting in gross margin of 61.3 percent for the quarter. R&D increased to $31.3 million due to a record quarter of new product activity, and SG&A increased slightly to $24.4 million. Operating income, therefore, was better than expected at 20.2 percent of revenue. Strong revenue growth and margin expansion provided significant earnings leverage resulting in diluted earnings per share of 51 cents, a 19 percent sequential increase. Reconciling charges are set forth in the financial measures table included below.
The company ended the quarter with $323 million in cash, cash equivalents and investments due to continued healthy cash flow from operations.
Business Highlights
All three of the companys major product categories, Access, Broadcast and Broad-based, grew sequentially in the second quarter.
Within the Broad-based business, the companys timing and MCU products posted record quarters as the company began shipping into new applications in storage, security, and test and measurement. Both product lines also posted record design wins, indicating strength in the revenue pipeline and supporting the continued market share gains driving the outperformance versus the end markets.
The companys wireless products increased over 50 percent in the quarter and are expected to contribute meaningfully to future growth with the addition of the Ember products acquired early in the third quarter. When combined with the companys emerging 32-bit MCU portfolio, the company anticipates having the industrys strongest offering for embedded wireless devices.
The Broadcast business increased in the second quarter driven by audio products, which were up meaningfully due to seasonal builds of consumer radios. The video business was also solid, coming in about flat to the record high in the first quarter. The Access products saw growth across voice over IP, modems and Power over Ethernet applications.
Our business is hitting on all cylinders, underscoring the strength of our portfolio and ability to gain market share, said Tyson Tuttle, president and CEO of Silicon Laboratories. Were focusing on developing products that address some of the most significant trends impacting the industry. The global build-out of infrastructure to support growing bandwidth needs, the emergence of the Internet of Things, and the increasing importance of energy efficient and green technology all require analog-intensive, mixed-signal ICs.
The company expects revenue for the third quarter to increase to $140 to $145 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 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 (855) 859-2056 or +1 (404) 537-3406 (international) and by entering 99916472. The replay will be available through August 8th.
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; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; inventory-related risks; risks associated with acquisitions; difficulties managing international activities; difficulties managing our manufacturers and subcontractors; risks that Silicon Laboratories may not be able to manage strains associated with its growth; credit risks associated with our accounts receivable; dependence on key personnel;
risks associated with divestitures; 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; 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)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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July 2, |
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June 30, |
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July 2, |
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Revenues |
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$ |
135,670 |
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$ |
126,197 |
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$ |
261,372 |
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$ |
245,833 |
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Cost of revenues |
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52,868 |
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49,985 |
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103,474 |
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97,463 |
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Gross margin |
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82,802 |
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76,212 |
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157,898 |
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148,370 |
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Operating expenses: |
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Research and development |
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34,245 |
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34,173 |
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67,175 |
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69,533 |
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Selling, general and administrative |
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32,178 |
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26,055 |
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57,580 |
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57,914 |
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Operating expenses |
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66,423 |
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60,228 |
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124,755 |
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127,447 |
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Operating income |
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16,379 |
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15,984 |
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33,143 |
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20,923 |
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Other income (expense): |
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Interest income |
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363 |
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473 |
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860 |
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1,044 |
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Interest expense |
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(32 |
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(5 |
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(65 |
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(10 |
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Other income (expense), net |
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1,079 |
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164 |
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968 |
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373 |
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Income before income taxes |
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17,789 |
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16,616 |
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34,906 |
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22,330 |
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Provision (benefit) for income taxes |
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(2,720 |
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3,244 |
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77 |
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10,918 |
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Net income |
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$ |
20,509 |
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$ |
13,372 |
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$ |
34,829 |
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$ |
11,412 |
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Earnings per share: |
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Basic |
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$ |
0.48 |
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$ |
0.30 |
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$ |
0.82 |
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$ |
0.26 |
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Diluted |
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$ |
0.47 |
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$ |
0.29 |
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$ |
0.80 |
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$ |
0.25 |
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Weighted-average common shares outstanding: |
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Basic |
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42,655 |
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44,602 |
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42,556 |
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44,435 |
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Diluted |
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43,423 |
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45,951 |
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43,637 |
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45,998 |
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Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
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Three Months Ended |
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Non-GAAP Income |
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GAAP |
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GAAP |
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Stock |
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Termination |
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Acquisition |
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Non-GAAP |
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Non-GAAP |
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Revenues |
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$ |
135,670 |
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Gross margin |
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82,802 |
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61.0 |
% |
$ |
317 |
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$ |
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$ |
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$ |
83,119 |
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61.3 |
% | |
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Research and development |
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34,245 |
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25.2 |
% |
2,954 |
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31,291 |
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23.1 |
% | |||||
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Selling, general and administrative |
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32,178 |
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23.7 |
% |
3,340 |
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3,946 |
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483 |
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24,409 |
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18.0 |
% | |||||
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Operating income |
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16,379 |
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12.1 |
% |
6,611 |
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3,946 |
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483 |
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27,419 |
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20.2 |
% | |||||
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Three Months Ended |
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Non-GAAP Diluted |
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GAAP |
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Stock |
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Termination |
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Acquisition |
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Release of |
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Non-GAAP |
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Net income |
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$ |
20,509 |
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$ |
5,846 |
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$ |
2,729 |
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$ |
483 |
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$ |
(7,265 |
) |
$ |
22,302 |
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Diluted shares outstanding |
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43,423 |
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43,423 |
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Diluted earnings per share |
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$ |
0.47 |
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$ |
0.51 |
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* Excludes stock compensation recognized in connection with terminations costs for our former CEO.
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
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June 30, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
173,753 |
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$ |
94,964 |
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Short-term investments |
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138,147 |
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212,526 |
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Accounts receivable, net of allowances for doubtful accounts of $669 at June 30, 2012 and $725 at December 31, 2011 |
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72,666 |
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55,351 |
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Inventories |
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35,977 |
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34,778 |
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Deferred income taxes |
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6,170 |
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11,563 |
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Prepaid expenses and other current assets |
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48,152 |
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43,867 |
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Total current assets |
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474,865 |
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453,049 |
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Long-term investments |
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11,028 |
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17,477 |
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Property and equipment, net |
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23,468 |
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25,141 |
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Goodwill |
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115,489 |
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115,489 |
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Other intangible assets, net |
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55,447 |
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60,005 |
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Other assets, net |
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40,977 |
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34,830 |
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Total assets |
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$ |
721,274 |
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$ |
705,991 |
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable |
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$ |
36,383 |
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$ |
26,354 |
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Accrued expenses |
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30,955 |
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30,857 |
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Deferred income on shipments to distributors |
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26,334 |
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24,962 |
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Income taxes |
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707 |
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665 |
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Total current liabilities |
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94,379 |
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82,838 |
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Long-term obligations and other liabilities |
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9,700 |
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24,214 |
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Total liabilities |
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104,079 |
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107,052 |
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Commitments and contingencies |
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Stockholders equity: |
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Preferred stock$0.0001 par value; 10,000 shares authorized; no shares issued and outstanding |
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Common stock$0.0001 par value; 250,000 shares authorized; 41,941 and 42,068 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively |
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4 |
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4 |
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Additional paid-in capital |
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14,749 |
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Retained earnings |
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618,839 |
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586,653 |
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Accumulated other comprehensive loss |
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(1,648 |
) |
(2,467 |
) | ||
Total stockholders equity |
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617,195 |
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598,939 |
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Total liabilities and stockholders equity |
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$ |
721,274 |
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$ |
705,991 |
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Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
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Six Months Ended |
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June 30, |
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July 2, |
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Operating Activities |
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Net income |
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$ |
34,829 |
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$ |
11,412 |
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Adjustments to reconcile net income to cash provided by operating activities: |
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Depreciation of property and equipment |
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6,749 |
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6,680 |
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Amortization of other intangible assets and other assets |
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4,559 |
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6,077 |
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Stock-based compensation expense |
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15,865 |
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18,074 |
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Income tax benefit from employee stock-based awards |
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2,627 |
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2,083 |
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Excess income tax benefit from employee stock-based awards |
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(2,450 |
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(1,963 |
) | ||
Deferred income taxes |
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1,625 |
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181 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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(17,315 |
) |
(23,562 |
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Inventories |
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(1,299 |
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2,022 |
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Prepaid expenses and other assets |
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4,806 |
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(1,021 |
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Accounts payable |
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8,766 |
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259 |
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Accrued expenses |
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(5,203 |
) |
(2,841 |
) | ||
Deferred income on shipments to distributors |
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1,372 |
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5,157 |
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Income taxes |
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(13,672 |
) |
3,672 |
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Net cash provided by operating activities |
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41,259 |
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26,230 |
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Investing Activities |
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Purchases of available-for-sale investments |
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(105,169 |
) |
(75,856 |
) | ||
Proceeds from sales and maturities of marketable securities |
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186,514 |
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104,831 |
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Purchases of property and equipment |
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(5,095 |
) |
(5,058 |
) | ||
Purchases of other assets |
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(7,919 |
) |
(665 |
) | ||
Acquisition of businesses, net of cash acquired |
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|
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(27,262 |
) | ||
Net cash provided by (used in) investing activities |
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68,331 |
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(4,010 |
) | ||
Financing Activities |
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Proceeds from issuance of common stock, net of shares withheld for taxes |
|
2,922 |
|
2,489 |
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Excess income tax benefit from employee stock-based awards |
|
2,450 |
|
1,963 |
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Repurchases of common stock |
|
(36,173 |
) |
(23,241 |
) | ||
Payments on debt |
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|
|
(7,174 |
) | ||
Net cash used in financing activities |
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(30,801 |
) |
(25,963 |
) | ||
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|
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Increase (decrease) in cash and cash equivalents |
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78,789 |
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(3,743 |
) | ||
Cash and cash equivalents at beginning of period |
|
94,964 |
|
138,567 |
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Cash and cash equivalents at end of period |
|
$ |
173,753 |
|
$ |
134,824 |
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# # #