PR Newswire
AUSTIN, Texas, Oct. 24, 2018
AUSTIN, Texas, Oct. 24, 2018 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its third quarter ended September 29, 2018. Revenue in the third quarter established a new, all-time record, exceeding the high end of guidance at $230.2 million, up from $217.1 million in the second quarter. Third quarter GAAP and non-GAAP diluted earnings per share (EPS) established eight-year record highs at $0.63 and $1.01, respectively.
"We are delighted to report outstanding third quarter 2018 financial performance, including 16 percent year-on-year revenue growth," said Tyson Tuttle, CEO of Silicon Labs. "We saw sequential growth in all core business categories in Q3 and delivered record performance in IoT and Infrastructure. We have delivered target operating model performance in top line revenue growth, non-GAAP gross margin, non-GAAP opex and non-GAAP operating margin for the past five quarters."
Third Quarter Financial Highlights
On a GAAP basis:
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:
Product Highlights
Business Highlights
Business Outlook
The company expects revenue in the fourth quarter to be in the range of $221 to $227 million, with IoT up and declines in Infrastructure, Broadcast and Access, and estimates the following:
On a GAAP basis:
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:
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 (855) 859-2056 or (404) 537-3406 (international) and entering conference 88340293. The replay will be available through November 20, 2018.
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, [email protected]
Silicon Laboratories Inc. | |||||||
Condensed Consolidated Statements of Income | |||||||
(In thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 29, | September 30, | September 29, | September 30, | ||||
Revenues | $230,243 | $198,723 | $652,733 | $567,849 | |||
Cost of revenues | 94,616 | 82,149 | 261,577 | 232,922 | |||
Gross margin | 135,627 | 116,574 | 391,156 | 334,927 | |||
Operating expenses: | |||||||
Research and development | 61,091 | 52,000 | 175,414 | 156,756 | |||
Selling, general and administrative | 49,406 | 39,606 | 148,896 | 119,587 | |||
Operating expenses | 110,497 | 91,606 | 324,310 | 276,343 | |||
Operating income | 25,130 | 24,968 | 66,846 | 58,584 | |||
Other income (expense): | |||||||
Interest income and other, net | 2,109 | 1,923 | 6,920 | 4,094 | |||
Interest expense | (4,932) | (4,764) | (14,703) | (9,265) | |||
Income before income taxes | 22,307 | 22,127 | 59,063 | 53,413 | |||
Provision (benefit) for income taxes | (5,454) | 2,178 | (9,383) | 1,469 | |||
Net income | $ 27,761 | $ 19,949 | $ 68,446 | $ 51,944 | |||
Earnings per share: | |||||||
Basic | $ 0.64 | $ 0.47 | $ 1.59 | $ 1.23 | |||
Diluted | $ 0.63 | $ 0.46 | $ 1.55 | $ 1.20 | |||
Weighted-average common shares outstanding: | |||||||
Basic | 43,256 | 42,553 | 43,177 | 42,376 | |||
Diluted | 44,194 | 43,374 | 44,135 | 43,194 |
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Non-GAAP Income | Three Months Ended | |||||||||||||||
GAAP | GAAP | Stock Compensation | Intangible | Acquisition | Termination | Non-GAAP Measure | Non-GAAP Percent of | |||||||||
Revenues | $230,243 | |||||||||||||||
Gross margin | 135,627 | 58.9% | $ 324 | $ -- | $3,967 | $ -- | $139,918 | 60.8% | ||||||||
Research and development | 61,091 | 26.5% | 6,016 | 7,810 | -- | -- | 47,265 | 20.5% | ||||||||
Selling, general and administrative | 49,406 | 21.5% | 6,242 | 3,179 | -- | 256 | 39,729 | 17.3% | ||||||||
Operating income | 25,130 | 10.9% | 12,582 | 10,989 | 3,967 | 256 | 52,924 | 23.0% | ||||||||
Non-GAAP Earnings Per Share | Three Months Ended September 29, 2018 | |||||||||||||||
GAAP Measure | Stock Compensation | Intangible | Acquisition Items* | Termination Costs * | Non-cash Expense* | Income Tax | Non-GAAP Measure | |||||||||
Net income | $27,761 | $12,582 | $10,989 | $3,967 | $256 | $2,801 | $(13,700) | $44,656 | ||||||||
Diluted shares outstanding | 44,194 | 44,194 | ||||||||||||||
Diluted earnings per share | $ 0.63 | $ 1.01 |
* Represents pre-tax amounts |
Unaudited Forward-Looking Statements Regarding Business Outlook | ||||||
(In millions, except per share data) | ||||||
Business Outlook | Three Months Ending December 29, 2018 | |||||
GAAP Measure | Non-GAAP Adjustments | Non-GAAP Measure | ||||
Gross margin | 60.0% | 0.0% - 0.5% | 60.0% - 60.5% | |||
Operating expenses | $111 | $23 | $88 | |||
Effective tax rate | 10.0% | 3.0% | 13.0% | |||
Diluted earnings per share - low | $0.39 | $0.52 | $0.91 | |||
Diluted earnings per share - high | $0.45 | $0.52 | $0.97 |
Silicon Laboratories Inc. | |||
Condensed Consolidated Balance Sheets | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
September 29, | December 30, | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 225,326 | $ 269,366 | |
Short-term investments | 376,603 | 494,657 | |
Accounts receivable, net | 74,607 | 71,367 | |
Inventories | 77,563 | 73,132 | |
Prepaid expenses and other current assets | 46,952 | 39,120 | |
Total current assets | 801,051 | 947,642 | |
Property and equipment, net | 135,566 | 127,682 | |
Goodwill | 396,689 | 288,227 | |
Other intangible assets, net | 181,611 | 83,144 | |
Other assets, net | 89,372 | 88,387 | |
Total assets | $1,604,289 | $1,535,082 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | $ 43,647 | $ 38,851 | |
Deferred revenue and returns liability | 25,880 | -- | |
Deferred income on shipments to distributors | -- | 50,115 | |
Other current liabilities | 77,821 | 73,359 | |
Total current liabilities | 147,348 | 162,325 | |
Convertible debt | 351,457 | 341,879 | |
Other non-current liabilities | 57,777 | 77,862 | |
Total liabilities | 556,582 | 582,066 | |
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; 43,147 and 42,707 shares issued and outstanding at September 29, 2018 and December 30, 2017, respectively | 4 | 4 | |
Additional paid-in capital | 103,169 | 102,862 | |
Retained earnings | 946,201 | 851,307 | |
Accumulated other comprehensive loss | (1,667) | (1,157) | |
Total stockholders' equity | 1,047,707 | 953,016 | |
Total liabilities and stockholders' equity | $1,604,289 | $1,535,082 |
Silicon Laboratories Inc. | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(In thousands) | ||||
(Unaudited) | ||||
Nine Months Ended | ||||
September 29, | September 30, | |||
Operating Activities | ||||
Net income | $ 68,446 | $ 51,944 | ||
Adjustments to reconcile net income to cash provided by operating activities: | ||||
Depreciation of property and equipment | 11,781 | 11,068 | ||
Amortization of other intangible assets and other assets | 33,322 | 20,531 | ||
Amortization of debt discount and debt issuance costs | 9,578 | 6,984 | ||
Stock-based compensation expense | 36,893 | 33,007 | ||
Deferred income taxes | (2,994) | (5,703) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 2,518 | (1,587) | ||
Inventories | 5,066 | (13,196) | ||
Prepaid expenses and other assets | 6,349 | 23,506 | ||
Accounts payable | 8,675 | 1,746 | ||
Other current liabilities and income taxes | (23,814) | 9,296 | ||
Deferred income, deferred revenue and returns liability | (2,816) | 11,039 | ||
Other non-current liabilities | (7,878) | (7,269) | ||
Net cash provided by operating activities | 145,126 | 141,366 | ||
Investing Activities | ||||
Purchases of available-for-sale investments | (253,973) | (471,938) | ||
Sales and maturities of available-for-sale investments | 371,885 | 143,765 | ||
Purchases of property and equipment | (18,267) | (10,494) | ||
Purchases of other assets | (9,088) | (2,622) | ||
Acquisition of business, net of cash acquired | (239,729) | (13,658) | ||
Net cash used in investing activities | (149,172) | (354,947) | ||
Financing Activities | ||||
Proceeds from issuance of long-term debt, net | -- | 389,468 | ||
Payments on debt | -- | (72,500) | ||
Repurchases of common stock | (24,272) | -- | ||
Payment of taxes withheld for vested stock awards | (18,927) | (14,870) | ||
Proceeds from the issuance of common stock | 6,585 | 6,836 | ||
Payment of acquisition-related contingent consideration | (3,380) | -- | ||
Net cash provided by (used in) financing activities | (39,994) | 308,934 | ||
Increase (decrease) in cash and cash equivalents | (44,040) | 95,353 | ||
Cash and cash equivalents at beginning of period | 269,366 | 141,106 | ||
Cash and cash equivalents at end of period | $225,326 | $236,459 |
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SOURCE Silicon Labs
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