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 24, 2019

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	SLAB	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act of 1934. o

Item 2.02. Results of Operations and Financial Condition

On July 24, 2019, Silicon Laboratories Inc. (“Silicon Laboratories”) issued a press release describing its results of operations for its fiscal quarter ended June 29, 2019. 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 24, 2019

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.

Non-GAAP financial measures used by Silicon Laboratories include non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling, general and administrative expense, non-GAAP operating income, non-GAAP interest expense, non-GAAP tax expense, non-GAAP net income and non-GAAP diluted earnings per share. 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.

Non-GAAP financial measures are adjusted by the following items:

·Stock compensation expense — represents charges for employee stock awards issued under Silicon Laboratories’ stock-based compensation plans. Stock compensation expense is excluded from non-GAAP financial measures because it is a non-cash expense, and excluding such expense provides meaningful supplemental information regarding core ongoing operations.

·Intangible asset amortization — primarily represents charges for the amortization of intangibles assets, such as core and developed technology, customer relationships and trademarks, acquired in connection with business combinations. Intangible asset amortization is excluded from non-GAAP financial measures because it is a non-cash expense, and excluding such expense provides meaningful supplemental information regarding core ongoing operations.

·Acquisition related items — primarily including the following: charges for the fair value write-up associated with inventory acquired; adjustments to the fair value of acquisition-related contingent consideration; and acquisition-related costs of a business combination, such as costs for attorneys, investment bankers, accountants and other third party service providers. Acquisition related items are excluded from non-GAAP financial measures because excluding such amounts provides meaningful supplemental information regarding core ongoing operations.

·Termination costs and fair value adjustments — primarily include costs associated with certain employee terminations, asset impairments and fair value adjustments resulting from observable price changes. Termination costs and fair value adjustments are excluded from non-GAAP financial measures because excluding such amounts provides meaningful supplemental information regarding core ongoing operations.

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·Non-cash interest expense — represents charges for the amortization of the debt discount on Silicon Laboratories’ convertible senior notes. Such interest expense is excluded from non-GAAP financial measures because it is a non-cash expense, and excluding such expense provides meaningful supplemental information regarding core ongoing operations.

·Income tax adjustments — primarily include the following: the effect of the Tax Cuts & Jobs Act of 2017; the current and deferred income tax effects of the above non-GAAP adjustments; other indirect impacts of excluding stock-based compensation; and the income tax impact of certain intercompany license arrangements for technology acquired in business combinations. Income tax adjustments are excluded from non-GAAP financial measures because excluding such amounts provides meaningful supplemental information regarding 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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EXHIBIT INDEX

Exhibit No.	Description
99	Press Release of Silicon Laboratories Inc. dated July 24, 2019

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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 24, 2019	/s/ John C. Hollister
Date	John C. Hollister Senior Vice President and Chief Financial Officer (Principal Financial Officer)

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EX-99

Exhibit 99

Silicon Labs Announces Second Quarter 2019 Results

— IoT Powering Ahead on Wireless Strength —

AUSTIN, Texas — July 24, 2019 — Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its second quarter ended June 29, 2019. Revenue was at the midpoint of guidance at $206.7 million, up 10 percent from $188.1 million in the first quarter. Second quarter GAAP loss per share was $(0.37), which includes an approximate $(0.64) per share impact from a $28.1 million discrete tax charge to the GAAP tax provision related to a tax ruling on intercompany cost sharing arrangements. Second quarter non-GAAP diluted earnings per share were $0.83.

“We grew second quarter revenue 10 percent sequentially despite macro headwinds impacting the semiconductor industry,” said Tyson Tuttle, CEO of Silicon Labs. “We are gaining traction in our target markets, with total estimated design win lifetime revenue establishing a new record, up 25 percent year-on-year. Wireless products achieved more than one billion units shipped to date and established record revenue in the second quarter.”

Second Quarter Financial Highlights

·IoT revenue increased to $125 million, up 17% sequentially and 7% year-on-year.

·Infrastructure revenue declined to $44 million, down 4% sequentially and 15% year-on-year.

·Broadcast revenue was flat sequentially at $26 million, and down 23% year-on-year.

·Access revenue increased to $12 million, up 24% sequentially and down 23% year-on-year.

On a GAAP basis:

·GAAP gross margin was 61.5%.

·GAAP R&D expenses were $64 million.

·GAAP SG&A expenses were $49 million.

·GAAP operating income as a percentage of revenue was 7.0%.

·GAAP diluted loss per share was $(0.37).

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 61.6%.

·Non-GAAP R&D expenses were $50 million.

·Non-GAAP SG&A expenses were $38 million.

·Non-GAAP operating income as a percentage of revenue was 19.2%.

·Non-GAAP diluted earnings per share were $0.83.

Product Results

·Announced a collaboration with Signify, the world leader in lighting, to help ecosystem partners develop smart light switches for Philips Hue systems based on Silicon Labs’ Zigbee technology.

·Announced the adoption of Silicon Labs’ microcontrollers in the latest smart lock products from Yunding, an innovative smart device and cloud-based service provider in China and a key member of the Xiaomi Mi Ecosystem.

·Announced a collaboration with Notion, a home monitoring solution provider, on a battery-powered smart home sensor built on Silicon Labs’ Wireless Gecko platform.

·Launched Si539x jitter attenuating clocks with a fully integrated crystal, improving system reliability and performance while simplifying PCB layout in high-speed networking designs.

·Introduced high-performance Si5388 clocks combining Silicon Labs’ DSPLL technology with standards-compliant software to provide a complete timing solution and simplifying the adoption of the IEEE 1588 standard.

Business Outlook

The company expects third quarter revenue to be in the range of  $213 to $223 million, with sequential growth in IoT and Broadcast, Access flat, and a decline in Infrastructure, and estimates the following:

On a GAAP basis:

·GAAP gross margin at approximately 60.0%.

·GAAP operating expenses at approximately $112 million.

·GAAP effective tax rate of 10.5%.

·GAAP diluted earnings per share between $0.29 and $0.39.

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 60.0%.

·Non-GAAP operating expenses at approximately $89 million.

·Non-GAAP effective tax rate at 12.5%.

·Non-GAAP diluted earnings per share between $0.79 and $0.89.

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 (877) 344-7529 (US) or (412) 317-0088 (International) and entering access code 10133130. The replay will be available through August 24, 2019.

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. 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 Silicon Labs’ distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks associated with international activities (including trade barriers); risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with its 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 Silicon Labs’ products and its 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 Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 29, 2019			June 30, 2018			June 29, 2019			June 30, 2018
Revenues	$	206,709		$	217,106		$	394,822		$	422,490
Cost of revenues	79,660			85,814			151,899			166,961
Gross profit	127,049			131,292			242,923			255,529
Operating expenses:
Research and development	63,856			59,495			125,422			114,323
Selling, general and administrative	48,637			53,796			97,853			99,490
Operating expenses	112,493			113,291			223,275			213,813
Operating income	14,556			18,001			19,648			41,716
Other income (expense):
Interest income and other, net	3,696			1,609			6,519			4,811
Interest expense	(5,005		)	(4,888		)	(10,002		)	(9,771		)
Income before income taxes	13,247			14,722			16,165			36,756
Provision (benefit) for income taxes	29,276			442			26,796			(3,929		)
Net income (loss)	$	(16,029	)	$	14,280		$	(10,631	)	$	40,685
Earnings (loss) per share:
Basic	$	(0.37	)	$	0.33		$	(0.25	)	$	0.94
Diluted	$	(0.37	)	$	0.32		$	(0.25	)	$	0.92
Weighted-average common shares outstanding:
Basic	43,386			43,312			43,287			43,138
Diluted	43,386			44,294			43,287			44,106

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

	Three Months Ended June 29, 2019
Non-GAAP Income Statement Items	GAAP Measure		GAAP Percent of Revenue		Stock Compensation Expense		Intangible Asset Amortization		Acquisition Related Items		Non-GAAP Measure		Non-GAAP Percent of Revenue
Revenues	$	206,709
Gross profit	127,049		61.5	%	$	326	$	—	$	—	$	127,375	61.6	%
Research and development	63,856		30.9	%	6,459		7,687		—		49,710		24.0	%
Selling, general and administrative	48,637		23.6	%	6,884		2,469		1,248		38,036		18.4	%
Operating income	14,556		7.0	%	13,669		10,156		1,248		39,629		19.2	%

	Three Months Ended June 29, 2019
Non-GAAP Earnings Per Share	GAAP Measure			Stock Compensation Expense*		Intangible Asset Amortization*		Acquisition Related Items*		Non-cash Interest Expense*		Income Tax Adjustments		Non-GAAP Measure
Net income (loss)	$	(16,029	)	$	13,669	$	10,156	$	1,248	$	2,900	$	24,476	$	36,420
	GAAP Measure			Dilutive Securities Excluded From GAAP Measure Due to Net Loss										Non-GAAP Measure
Diluted shares outstanding	43,386			624										44,010
Diluted earnings (loss) per share	$	(0.37	)											$	0.83

* Represents pre-tax amounts

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

	Three Months Ending September 28, 2019
Business Outlook	GAAP Measure			Non-GAAP Adjustments			Non-GAAP Measure
Gross margin	60.0		%	0.0		%	60.0		%
Operating expenses	$	112.0		$	23.0		$	89.0
Effective tax rate	10.5		%	2.0		%	12.5		%
Diluted earnings per share - low	$	0.29		$	0.50		$	0.79
Diluted earnings per share - high	$	0.39		$	0.50		$	0.89

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

	June 29, 2019		December 29, 2018
Assets
Current assets:
Cash and cash equivalents	$	189,549	$	197,043
Short-term investments	452,265		416,779
Accounts receivable, net	72,301		73,194
Inventories	73,865		74,972
Prepaid expenses and other current assets	59,662		64,650
Total current assets	847,642		826,638
Property and equipment, net	137,644		139,049
Goodwill	397,344		397,344
Other intangible assets, net	150,356		170,832
Other assets, net	69,954		90,491
Total assets	$	1,602,940	$	1,624,354
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	41,585	$	41,171
Deferred revenue and returns liability	21,266		22,494
Other current liabilities	68,186		81,180
Total current liabilities	131,037		144,845
Convertible debt	361,430		354,771
Other non-current liabilities	59,202		57,448
Total liabilities	551,669		557,064
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; 43,344 and 43,088 shares issued and outstanding at June 29, 2019 and December 29, 2018, respectively	4		4
Additional paid-in capital	99,665		107,517
Retained earnings	950,712		961,343
Accumulated other comprehensive income (loss)	890		(1,574		)
Total stockholders’ equity	1,051,271		1,067,290
Total liabilities and stockholders’ equity	$	1,602,940	$	1,624,354

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended
	June 29, 2019			June 30, 2018
Operating Activities
Net income (loss)	$	(10,631	)	$	40,685
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation of property and equipment	8,447			7,643
Amortization of other intangible assets and other assets	20,476			18,366
Amortization of debt discount and debt issuance costs	6,659			6,354
Stock-based compensation expense	26,253			24,311
Deferred income taxes	24,043			(5,830		)
Changes in operating assets and liabilities:
Accounts receivable	893			(16,705		)
Inventories	1,118			(565		)
Prepaid expenses and other assets	11,326			(1,759		)
Accounts payable	5,321			2,980
Other current liabilities and income taxes	(18,101		)	(17,249		)
Deferred income, deferred revenue and returns liability	(1,228		)	(4,193		)
Other non-current liabilities	(3,222		)	(3,260		)
Net cash provided by operating activities	71,354			50,778
Investing Activities
Purchases of available-for-sale investments	(184,170		)	(148,437		)
Sales and maturities of available-for-sale investments	151,428			295,405
Purchases of property and equipment	(9,402		)	(11,406		)
Purchases of other assets	(2,588		)	(5,893		)
Acquisition of business, net of cash acquired	—			(239,729		)
Net cash used in investing activities	(44,732		)	(110,060		)
Financing Activities
Repurchases of common stock	(26,716		)	(3,397		)
Payment of taxes withheld for vested stock awards	(14,509		)	(18,408		)
Proceeds from the issuance of common stock	7,109			6,585
Net cash used in financing activities	(34,116		)	(15,220		)
Decrease in cash and cash equivalents	(7,494		)	(74,502		)
Cash and cash equivalents at beginning of period	197,043			269,366
Cash and cash equivalents at end of period	$	189,549		$	194,864