Silicon Labs Announces Second Quarter 2019 Results
AUSTIN, Texas, July 24, 2019 /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 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, June 30, June 29, June 30,
2019 2018 2019 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)
Non-GAAP Income
Three Months Ended
Statement Items
June 29, 2019
GAAP
GAAP
Stock
Intangible
Acquisition
Non-GAAP Non-GAAP
Asset Related Items
Measure
Percent of
Compensation Amortization
Measure Percent of
Revenue Expense Revenue
Revenues $206,709
Gross profit 127,049 61.5% $326
$ --
$ -- $127,375 61.6%
Research and 63,856 30.9% 6,459 7,687 49,710 24.0%
development
Selling, general and 48,637 23.6% 6,884 2,469 1,248 38,036 18.4%
administrative
Operating income 14,556 7.0% 13,669 10,156 1,248 39,629 19.2%
Non-GAAP
Three Months Ended
Earnings Per Share
June 29, 2019
---
GAAP
Stock
Intangible Acquisition Non-cash Interest Expense*
Income Tax Non-GAAP
Asset Related Adjustments
Measure
Compensation Amortization* Items* Measure
Expense*
Net income (loss) $(16,029) $13,669 $10,156 $1,248 $2,900 $24,476 $36,420
GAAP
Dilutive Securities Excluded From GAAP Measure Due to Net Loss Non-GAAP
Measure Measure
Diluted shares 43,386 624 44,010
outstanding
Diluted earnings $(0.37) $0.83
(loss) per share
* Represents pre-tax amounts
Unaudited Forward-Looking Statements Regarding Business Outlook
(In millions, except per share data)
Business Outlook Three Months Ending
September 28, 2019
GAAP
Non-GAAP Non-GAAP
Measure Adjustments 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,
December 29,
2019 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; 4 4
43,344 and 43,088 shares issued and outstanding at
June 29, 2019 and December 29, 2018, respectively
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, June 30,
2019 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
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SOURCE Silicon Labs
