Silicon Labs Announces Second Quarter 2020 Results
AUSTIN, Texas, July 29, 2020 /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 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.
Silicon Laboratories Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
July 4, June 29,
July 4, June 29,
2020 2019 2020 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
$(1,823) $(16,029) $421 $(10,631)
Net income (loss)
===
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
Three Months Ended
Statement Items
July 4, 2020
GAAP
GAAP
Stock Intangible Asset Amortization Acquisition Related Restructuring Charges
Non-GAAP Non-GAAP
Percent of
Measure Revenue Compensation Expense
Items
Measure Percent of
Revenue
Revenues $207,533
Gross margin 126,311 60.9% $376
$ -- $608 $44 $127,339 61.4%
Research and 70,838 34.1% 7,072 8,454 844 52,451 25.3%
development 2,017
Selling, general and 48,404 7,009 2,764 397 37,467
administrative 23.4% 767 18.1%
Operating income 7,069 3.4% 14,457 11,218 3,392 1,285 37,421 18.0%
Non-GAAP
Three Months Ended
Earnings Per Share
July 4, 2020
---
GAAP
Stock Intangible Asset Amortization* Acquisition Related Items* Restructuring Charges* Interest Expense
Income Non-
GAAP
Measure
Measure Compensation Expense*
Adjustments*
Tax
Adjustments
Net income (loss) $(1,823) $14,457 $11,218 $3,392 $1,285 $8,692 $(4,533) $32,688
GAAP
Dilutive Securities Excluded From GAAP Measure Due to Net Loss Non-
GAAP
Measure
Measure
Diluted shares
outstanding 43,761 293
44,054
Diluted earnings $(0.04)
(loss) per share $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
Non-GAAP Non-GAAP
Measure
Adjustments* 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, December 28,
2020 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; 4 4
43,796 and 43,496 shares issued
and outstanding at
July 4, 2020 and December 28,
2019, respectively
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, June 29,
2020 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
View original content to download multimedia:http://www.prnewswire.com/news-releases/silicon-labs-announces-second-quarter-2020-results-301101864.html
SOURCE Silicon Labs
