Exhibit 99

 

Silicon Labs Announces Second Quarter 2020 Results

-- Strong Results Led by Accelerating Trends in Connectivity --

AUSTIN, Texas – July 29, 2020 – 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 July 4, 2020. Revenue was near the top end of the guidance range at $207.5 million, down from $214.9 million in the first quarter. Second quarter GAAP and non-GAAP diluted earnings (loss) per share (EPS) were $(0.04) and $0.74, respectively.

“Second quarter revenue was at the high end of our guidance range at $207.5 million,” said Tyson Tuttle, CEO of Silicon Labs. “Clearly, the global pandemic has and will continue to impact the way people live, work and play. We are well-positioned to execute our strategy in IoT connectivity and internet infrastructure in light of recent trends in the market, which we see accelerating as the world moves even faster to becoming more connected.”

Second Quarter Financial Highlights

· IoT revenue declined to $115.1 million, down 3% sequentially and 8% year-on-year.

· Infrastructure and Automotive revenue declined to $92.5 million, down 5% sequentially and up 13% year-on-year.

On a GAAP basis:

· GAAP gross margin was 60.9%.

· GAAP R&D expenses were $71 million.

· GAAP SG&A expenses were $48 million.

· GAAP operating income as a percentage of revenue was 3.4%.

· GAAP diluted loss per share was $(0.04).

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, restructuring charges, non-cash interest expense and other costs associated with convertible notes, and certain other items as set forth in the reconciliation tables below:

· Non-GAAP gross margin was 61.4%.

· Non-GAAP R&D expenses were $52 million.

· Non-GAAP SG&A expenses were $37 million.

· Non-GAAP operating income as a percentage of revenue was 18.0%.

· Non-GAAP diluted earnings per share were $0.74.

Product Results

· Announced the EFP01 PMIC family, a new line of energy-friendly power management ICs serving as dedicated companion chips for EFR32 wireless devices and EFM32 microcontrollers. The EFP01 PMIC family provides a flexible, system-level power management solution enhancing the energy efficiency of battery-powered applications including IoT sensors, asset tags, smart meters, home and building automation, security, and health and wellness products.

Business Highlights

· Successfully completed the operational integration of Redpine Signals’ connectivity business and Hyderabad, India design center.

· Joined the Wi-SUN Alliance’s board of directors to accelerate the global adoption of Wi-SUN. The Wi-SUN Alliance aims to advance seamless, ubiquitous LPWAN connectivity via a standards-based, interoperable solution for global markets.

· Continued preparation for our first-ever Works With smart home developer conference September 9^th – 10^th, a two-day virtual event where smart home developers will learn how to connect our platforms, devices and protocols to work with ecosystems from industry leaders including Amazon, Apple HomeKit, Google, Samsung and many others.

· Migrated marketing and customer engagement initiatives to a virtual environment, holding weekly virtual Tech Talks and BG22 workshops with more attendees, repeat views and more accounts engaged than in-person events of this nature.

· Added Karuna Annavajjala to Silicon Labs’ executive team as Chief Information Officer to lead the company’s global IT team responsible for strategic planning, business application platforms, cyber security and service delivery.

Business Outlook

The company expects third quarter revenue to be in the range of $208 to $218 million, with IoT up and Infrastructure & Automotive down, and estimates the following:

On a GAAP basis:

· GAAP gross margin at approximately 60%.

· GAAP operating expenses at approximately $118 million.

· GAAP effective tax rate of 0.0%.

· GAAP diluted earnings (loss) per share between $(0.01) and $0.09.

On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, acquisition related charges, restructuring charges, non-cash interest expense and other costs associated with convertible notes, and certain other items as set forth in the reconciliation tables below:

· Non-GAAP gross margin at approximately 60.5%.

· Non-GAAP operating expenses at approximately $92 million.

· Non-GAAP effective tax rate at 11.5%.

· Non-GAAP diluted earnings per share between $0.67 and $0.77.

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 10145993. The replay will be available through August 29, 2020.

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: the impact of COVID-19 on the U.S. and global economy, including the restrictions on travel and transportation and other actions taken by governmental authorities and disruptions to the business of our customers or our global supply chain that have occurred or may occur in the future, the ongoing impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs; 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; risks associated with international activities (including trade barriers); intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing Silicon Labs’ distributors, manufacturers and subcontractors; dependence on a limited number of products; absence of long-term commitments from customers; 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 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 or pandemics, 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: George Lane, +1 (512) 712-0019, George.Lane@silabs.com

Silicon Laboratories Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	July 4, 2020			June 29, 2019			July 4, 2020			June 29, 2019
Revenues	$	207,533		$	206,709		$	422,410		$	394,822
Cost of revenues		81,222			79,660			166,933			151,899
Gross profit		126,311			127,049			255,477			242,923
Operating expenses:
Research and development		70,838			63,856			142,061			125,422
Selling, general and administrative		48,404			48,637			102,400			97,853
Operating expenses		119,242			112,493			244,461			223,275
Operating income		7,069			14,556			11,016			19,648
Other income (expense):
Interest income and other, net		3,267			3,696			6,518			6,519
Interest expense		(11,778	)		(5,005	)		(17,319	)		(10,002	)
Income (loss) before income taxes		(1,442	)		13,247			215			16,165
Provision (benefit) for income taxes		381			29,276			(206	)		26,796
Net income (loss)	$	(1,823	)	$	(16,029	)	$	421		$	(10,631	)
Earnings (loss) per share:
Basic	$	(0.04	)	$	(0.37	)	$	0.01		$	(0.25	)
Diluted	$	(0.04	)	$	(0.37	)	$	0.01		$	(0.25	)
Weighted-average common shares outstanding:
Basic		43,761			43,386			43,699			43,287
Diluted		43,761			43,386			44,219			43,287

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

Non-GAAP Income Statement Items	Three Months Ended July 4, 2020
	GAAP Measure		GAAP Percent of Revenue			Stock Compensation Expense		Intangible Asset Amortization		Acquisition Related Items		Restructuring Charges		Non-GAAP Measure		Non-GAAP Percent of Revenue
Revenues	$	207,533
Gross margin		126,311		60.9	%	$	376	$	--	$	608	$	44	$	127,339		61.4	%
Research and development		70,838		34.1	%		7,072		8,454		2,017		844		52,451		25.3	%
Selling, general and administrative		48,404		23.4	%		7,009		2,764		767		397		37,467		18.1	%
Operating income		7,069		3.4	%		14,457		11,218		3,392		1,285		37,421		18.0	%

Non-GAAP Earnings Per Share	Three Months Ended July 4, 2020
	GAAP Measure			Stock Compensation Expense*		Intangible Asset Amortization*		Acquisition Related Items*		Restructuring Charges*		Interest Expense Adjustments*		Income Tax Adjustments			Non- GAAP Measure
Net income (loss)	$	(1,823	)	$	14,457	$	11,218	$	3,392	$	1,285	$	8,692	$	(4,533	)	$	32,688

	GAAP Measure			Dilutive Securities Excluded From GAAP Measure Due to Net Loss	Non- GAAP Measure
Diluted shares outstanding		43,761		293		44,054
Diluted earnings (loss) per share	$	(0.04	)		$	0.74

* Represents pre-tax amounts

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

Business Outlook	Three Months Ending October 3, 2020
		GAAP Measure			Non-GAAP Adjustments*			Non-GAAP Measure
Gross margin		60	%		0.5	%		60.5	%
Operating expenses	$	118		$	26		$	92
Effective tax rate		0.0	%		11.5	%		11.5	%
Diluted earnings (loss) per share - low	$	(0.01	)	$	0.68		$	0.67
Diluted earnings per share - high	$	0.09		$	0.68		$	0.77

* Non-GAAP adjustments include the following estimates: stock compensation expense of $14.9 million, intangible asset amortization of $11.8 million, acquisition related items of $1.2 million, restructuring charges of $0.04 million, and interest expense adjustments of $6.1 million, and associated tax impact from the aforementioned items. 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

	July 4, 2020		December 28, 2019
Assets
Current assets:
Cash and cash equivalents	$	277,659	$	227,146
Short-term investments		445,685		498,825
Accounts receivable, net		70,487		75,639
Inventories		70,022		73,057
Prepaid expenses and other current assets		53,584		69,192
Total current assets		917,437		943,859
Property and equipment, net		140,200		135,939
Goodwill		631,932		398,402
Other intangible assets, net		189,923		134,279
Other assets, net		44,215		62,374
Total assets	$	1,923,707	$	1,674,853
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	40,245	$	38,899
Deferred revenue and returns liability		26,358		19,251
Other current liabilities		68,397		79,551
Total current liabilities		135,000		137,701
Convertible debt		571,774		368,257
Other non-current liabilities		59,287		53,844
Total liabilities		766,061		559,802
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; 43,796 and 43,496 shares issued and outstanding at July 4, 2020 and December 28, 2019, respectively		4		4
Additional paid-in capital		173,477		133,793
Retained earnings		981,554		980,608
Accumulated other comprehensive income		2,611		646
Total stockholders' equity		1,157,646		1,115,051
Total liabilities and stockholders' equity	$	1,923,707	$	1,674,853

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended
	July 4, 2020			June 29, 2019
Operating Activities
Net income (loss)	$	421		$	(10,631	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation of property and equipment		8,428			8,447
Amortization of other intangible assets and other assets		21,568			20,476
Amortization of debt discount and debt issuance costs		8,359			6,659
Loss on extinguishment of convertible debt		3,685			--
Stock-based compensation expense		29,770			26,253
Deferred income taxes		1,177			24,043
Changes in operating assets and liabilities:
Accounts receivable		7,070			893
Inventories		6,767			1,118
Prepaid expenses and other assets		21,821			11,326
Accounts payable		(769	)		5,321
Other current liabilities and income taxes		(15,442	)		(18,101	)
Deferred revenue and returns liability		6,678			(1,228	)
Other non-current liabilities		970			(3,222	)
Net cash provided by operating activities		100,503			71,354
Investing Activities
Purchases of available-for-sale investments		(199,347	)		(184,170	)
Sales and maturities of available-for-sale investments		255,112			151,428
Purchases of property and equipment		(10,394	)		(9,402	)
Purchases of other assets		(820	)		(2,588	)
Acquisition of business, net of cash acquired		(316,809	)		--
Net cash used in investing activities		(272,258	)		(44,732	)
Financing Activities
Proceeds from issuance of debt		845,000			--
Payments on debt		(597,446	)		--
Repurchases of common stock		(16,287	)		(26,716	)
Payment of taxes withheld for vested stock awards		(16,756	)		(14,509	)
Proceeds from the issuance of common stock		7,757			7,109
Net cash provided by (used in) financing activities		222,268			(34,116	)
Increase (decrease) in cash and cash equivalents		50,513			(7,494	)
Cash and cash equivalents at beginning of period		227,146			197,043
Cash and cash equivalents at end of period	$	277,659		$	189,549