EX-99 3 a4437971ex99.txt EXHIBIT 99 PRESS RELEASE Exhibit 99 Silicon Laboratories Reports Record Financial Results -- Company Announces CEO Succession Plan AUSTIN, Texas--(BUSINESS WIRE)--July 21, 2003--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal ICs, today reported second quarter results for the period ended June 28, 2003. The company delivered record revenue and earnings during the quarter. Financial Results Revenues for the second quarter of 2003 increased eight percent sequentially to $69.1 million from $63.8 million in the first quarter of 2003. This represents a 68 percent increase over revenues of $41.2 million during the second quarter of 2002. Under generally accepted accounting principles (GAAP), net income for the second quarter of 2003 was $10.9 million, resulting in diluted net income per share of $0.21, compared to second quarter 2002 net income of $2.7 million, which resulted in diluted net income per share of $0.05. Excluding non-cash charges for amortization of deferred stock compensation, adjusted net income for the second quarter of 2003 was $12.1 million, representing 18 percent of revenues. Adjusted diluted net income per share in the second quarter of 2003 was $0.24. The reconciling charges are set forth in the reconciliation of GAAP to non-GAAP financial measures tables included below. As of June 28, 2003, cash and short-term investments totaled $131 million, essentially even with the cash balance at the end of the first quarter of 2003. The company had 412 employees at the end of the second quarter, compared to 383 at the end of the first quarter. Business Summary "We are pleased to report another quarter of solid sequential growth," said Nav Sooch, chairman and chief executive officer of Silicon Laboratories. "We believe that the compelling nature of our products and our increasingly diversified product portfolio will continue to drive revenue growth." This quarter marks the ninth consecutive quarter of sequential revenue growth and the fourth consecutive quarter the company achieved its target operating goal. The strong performance during the quarter was driven primarily by the silicon DAA, ISOmodem(tm) and Aero(tm) product families. Rapid acceptance of next generation products and the addition of new customers were primary factors behind the revenue growth. "We are making strong progress on our new product pipeline and investing in world-class design engineering talent to ensure our continued technology leadership," said Dan Artusi, president and chief operating officer of Silicon Laboratories. "We believe our ability to execute on new product development while expanding the applications and markets for our existing products positions us strongly to gain market share and establish the company as a long-term market leader in mixed-signal ICs." Business Outlook For the third quarter of 2003, the company currently anticipates revenues in the range of $71 to $74 million, and Q3 diluted net income per share on a GAAP basis is expected to be $0.18 to $0.21. Q3 adjusted diluted net income per share, which excludes a non-cash charge of approximately $1.2 million for amortization of deferred stock compensation, is expected to be $0.21 to $0.24. The company also announced that Dan Artusi will assume the role of CEO at the end of fiscal 2003 and Nav Sooch will continue in his role as chairman of the board of directors, focusing on technology and product selection strategy. Mr. Artusi has 25 years of industry experience and a track record of successfully building and managing major business operations. Since Mr. Artusi joined Silicon Laboratories, the company has achieved record revenues, expanded globally and exceeded financial targets. "Dan has been successfully directing day-to-day operations since he joined Silicon Labs nearly two years ago and this transition is a natural extension of his role," said Mr. Sooch. "I will continue to play an active role in the company, working closely with the management team on corporate strategy." Conference Call Today A conference call discussing the second quarter results is scheduled for 3:15 p.m. Central Time. An audio webcast will be available simultaneously on Silicon Laboratories' website under Investor Relations http://www.silabs.com. A replay will be available after the call at the website listed above or by calling 800-879-6480 (U.S.) or 402-220-4749 (international). These replays will be available through August 21, 2003. 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 decades of cumulative 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. Cautionary Language This press release contains forward-looking statements based on Silicon Laboratories' current expectations. The words "believe," "expect," "intend," "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 as follows: risks that Silicon Laboratories may not be able to maintain its historical growth rate; quarterly fluctuations in revenues and operating results; risks that Silicon Labs may not be able to manage strains associated with its growth; difficulties developing new products that achieve market acceptance; 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; dependence on a limited number of products and customers; product development risks; intellectual property litigation risks; the competitive and cyclical nature of the semiconductor industry and other factors that are detailed in Silicon Laboratories filings with the SEC, including the Form 10-K filed January 22, 2003 and the Form 10-Q that we anticipate will be filed on or about July 21, 2003. Non-GAAP Financial Measurements In addition to the GAAP results provided throughout this document, the Company has provided non-GAAP financial measurements that present net income, operating income and net income per share on a basis excluding non-cash and other one-time charges. Details of these excluded items are presented in the table below, which reconciles the GAAP results to non-GAAP financial measurements described in this press release. Also, this press release and the reconciliation from GAAP results to these and other additional non-GAAP financial measurements that may be discussed in the Q2 2003 earnings conference call can be found on the Company's website at http://investor.silabs.com/ireye/ir_site.zhtml?ticker=SLAB&script=950. The non-GAAP financial measurements provided in this press release do not replace the presentation of Silicon Laboratories' GAAP financial results. These 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 it may enable them to perform meaningful comparisons of past, present and future operating results, and as a means to more clearly highlight the results of core ongoing operations. Note to editors: Silicon Laboratories and the Silicon Laboratories logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders. Silicon Laboratories Inc. Unaudited Condensed Consolidated Statements of Income (in thousands, except per share data) THREE MONTHS ENDED SIX MONTHS ENDED ------------------- --------------------- JUNE 28, JUNE 29, JUNE 28, JUNE 29, 2003 2002 2003 2002 ---------- -------- --------- -------- Revenues $69,086 $41,185 $132,839 $70,034 Cost of revenues 30,267 19,304 73,845(a) 31,398 ---------- -------- --------- -------- Gross profit 38,819 21,881 58,994 38,636 Operating expenses: Research and development 11,635 8,211 21,165 16,258 Selling, general and administrative 9,539 8,299 19,537 14,975 Amortization of deferred stock compensation 1,223 1,308 2,489 2,613 ---------- -------- --------- -------- Operating expenses 22,397 17,818 43,191 33,846 ---------- -------- --------- -------- Operating income 16,422 4,063 15,803 4,790 Other income (expense): Interest income 308 367 653 826 Interest expense -- (148) -- (299) Other income (expense), net (119) (9) (783) (10) ---------- -------- --------- -------- Income before income taxes 16,611 4,273 15,673 5,307 Provision for income taxes 5,707 1,618 5,812 2,297 ---------- -------- --------- -------- Net income $10,904 $2,655 $9,861 $3,010 ========== ======== ========= ======== Net income per share: Basic $0.22 $0.06 $0.20 $0.06 Diluted $0.21 $0.05 $0.19 $0.06 Weighted-average common shares outstanding: Basic 48,480 47,482 48,291 47,158 Diluted 51,392 50,901 51,173 50,982 (a) Includes $15.3 million charge for patent infringement litigation settlement Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) GAAP net income $10,904 $2,655 $9,861 $3,010 Tax-effected adjustments: Settlement of patent infringement lawsuit -- -- 10,377 -- Amortization of deferred stock compensation 1,223 1,308 2,489 2,613 ---------- -------- ------------ -------- Adjusted net income $12,127 $3,963 $22,727 $5,623 ========== ======== ============ ======== GAAP diluted shares outstanding 51,392 50,901 51,173 50,982 Adjusted diluted net income per share $0.24 $0.08 $0.44 $0.11 THREE MONTHS ENDED ---------------------------------------------- JUNE 28, MARCH 29, DECEMBER 28, SEPTEMBER 28, 2003 2003 2002 2002 -------- --------- ------------- ------------- GAAP revenues $69,086 $63,753 $60,196 $51,786 GAAP operating income 16,422 (619) 14,485 11,714 GAAP operating income % 23.8% (1.0)% 24.1% 22.6% Adjustments: Settlement of patent infringement lawsuit -- 15,260 -- -- Impairment of goodwill and other intangible assets -- -- 37 -- Amortization of deferred stock compensation 1,223 1,266 1,267 1,293 -------- --------- ------------- ------------- Adjusted operating income $17,645 $15,907 $15,789 $13,007 ======== ========= ============= ============= Adjusted operating income % 25.5% 25.0% 26.2% 25.1% Condensed Consolidated Balance Sheets (in thousands, except per share data) JUNE 28, DECEMBER 28, 2003 2002 ----------- ------------ ASSETS (UNAUDITED) Current assets: Cash and cash equivalents $78,325 $73,950 Short-term investments 52,924 41,216 Accounts receivable, net of allowance for doubtful accounts of $923 at June 28, 2003 and $945 at December 28, 2002 32,268 27,501 Inventories 13,575 13,319 Deferred income taxes 4,921 4,921 Prepaid expenses and other 2,367 1,841 ----------- ------------ Total current assets 184,380 162,748 Property, equipment and software, net 31,933 29,781 Goodwill and other intangible assets 2,056 450 Other assets 6,938 4,086 ----------- ------------ Total assets $225,307 $197,065 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $26,210 $13,272 Accrued expenses 8,234 8,505 Deferred income on shipments to distributors 5,901 10,147 Income taxes payable 9,180 8,470 ----------- ------------ Total current liabilities 49,525 40,394 Other long-term obligations 2,249 949 ----------- ------------ Total liabilities 51,774 41,343 Commitments and contingencies Stockholders' equity: Common stock--$.0001 par value; 250,000 shares authorized; 49,252 and 48,904 shares issued and outstanding at June 28, 2003 and December 28, 2002, respectively 5 5 Additional paid-in capital 178,936 174,088 Stockholder notes receivable (31) (228) Deferred stock compensation (10,188) (13,092) Retained earnings (deficit) 4,811 (5,051) ----------- ------------ Total stockholders' equity 173,533 155,722 ----------- ------------ Total liabilities and stockholders' equity $225,307 $197,065 =========== ============ CONTACT: Silicon Laboratories Inc., Austin Shannon Pleasant, 512/464-9254 investor.relations@silabs.com