Silicon Labs Announces Fourth Quarter and Full Year 2015 Results

Business Outlook

The company expects revenue in the first quarter to be in the range of $157 million to $162 million. First quarter diluted earnings (loss) per share are expected to be between $(0.08) and $(0.02) on a GAAP basis and between $0.42 and $0.48 on a non-GAAP basis.

“Strong top line performance combined with favorable opex drove a solid beat in fourth quarter EPS,” said Tyson Tuttle, CEO of Silicon Labs. “During 2015, we made significant progress in laying the foundation for our continued success as a leading supplier of silicon, software and solutions for a more connected world. Our strategic growth products, including IoT, Infrastructure and Broadcast automotive, all delivered record revenue in 2015.”

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 under Investor Relations ( www.silabs.com). 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 ID 83469958. The replay will be available through March 3, 2016.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for the Internet of Things, Infrastructure, industrial automation, consumer and automotive markets. We solve the electronics industry’s toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity. Backed by our world-class engineering teams with strong software and mixed-signal design expertise, Silicon Labs empowers developers with the tools and technologies they need to advance quickly and easily from initial idea to final product. www.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 our distributors, manufacturers and subcontractors; 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 our 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; 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, the Silicon Laboratories logo, and EFM32, EFM8, Simplicity Studio and TouchXpress 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 Income
(In thousands, except per share data)
(Unaudited)
 
Three Months Ended Year Ended
January 2,   January 3, January 2,   January 3,
2016 2015 2016 2015
Revenues $ 160,071 $ 161,951 $ 644,826 $ 620,704
Cost of revenues   66,533     65,279     264,056     242,153  
Gross margin 93,538 96,672 380,770 378,551
Operating expenses:
Research and development 47,245 46,139 188,050 172,985
Selling, general and administrative   41,497     39,527     160,486     154,145  
Operating expenses   88,742     85,666     348,536     327,130  
Operating income 4,796 11,006 32,234 51,421
Other income (expense):
Interest income 186 274 730 1,007
Interest expense (668 ) (808 ) (2,828 ) (3,154 )
Other income (expense), net   (91 )   (337 )   127     (234 )
Income before income taxes 4,223 10,135 30,263 49,040
Provision (benefit) for income taxes   (1,435 )   111     677     11,019  
 

Net income

$ 5,658   $ 10,024   $ 29,586   $ 38,021  
 
Earnings per share:
Basic $ 0.14 $ 0.24 $ 0.70 $ 0.88
Diluted $ 0.13 $ 0.23 $ 0.69 $ 0.87
 
Weighted-average common shares outstanding:
Basic 41,670 42,279 42,309 42,970
Diluted 42,374 43,137 42,945 43,793
 
 
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
   

Non-GAAP Income
Statement Items

Three Months Ended
January 2, 2016

  GAAP   Stock   Intangible   Acquisition      

Non-GAAP

GAAP Percent of Compensation Asset Related Termination Non-GAAP

Percent of

Measure Revenue Expense Amortization Items Costs Measure Revenue
Revenues $ 160,071
 
Gross margin 93,538 58.4 % $ 251 $ 390 $ 201 $ -- $ 94,380 59.0 %
 

Research and development

47,245 29.5 % 5,073 5,441 -- 336

36,395

22.7 %
 

Selling, general and administrative

41,497

25.9

%

6,669 1,286 1,752

380

31,410

19.7 %
 
Operating income 4,796 3.0 % 11,993 7,117 1,953 716 26,575 16.6 %
 
                           

Non-GAAP
Earnings Per Share

Three Months Ended
January 2, 2016

Stock Intangible Acquisition
GAAP Compensation Asset Related Termination Income Tax Non-GAAP
Measure Expense* Amortization* Items* Costs* Adjustments Measure
Net income $ 5,658 $ 11,993 $ 7,117 $ 1,953 $ 716 $ (889 ) $ 26,548
 

Diluted shares outstanding

42,374

42,374

 

Diluted earnings per share

$ 0.13

$

0.63

 

* Represents pre-tax amounts

 
 

Unaudited Forward-Looking Statements Regarding Business Outlook

   
Business Outlook

Three Months Ending
April 2, 2016

High   Low
Estimated GAAP diluted earnings (loss) per share $ (0.02 ) $ (0.08 )
 
Estimated non-GAAP charges   0.50     0.50  
 
Estimated non-GAAP diluted earnings per share $ 0.48   $ 0.42  
     
 
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
 
January 2, January 3,
2016 2015
Assets
Current assets:
Cash and cash equivalents $ 114,085 $ 141,706
Short-term investments 128,901 193,489

Accounts receivable, net of allowances for doubtful accounts of $671 at January 2, 2016 and $786 at January 3, 2015

73,601 70,367
Inventories 53,895 52,631
Deferred income taxes -- 21,173
Prepaid expenses and other current assets   52,658     49,171  
Total current assets 423,140 528,537
Long-term investments 7,126 7,419
Property and equipment, net 131,132 132,820
Goodwill 272,722 228,781
Other intangible assets, net 121,354 115,021
Other assets, net   55,989     29,983  
Total assets $ 1,011,463   $ 1,042,561  
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 42,127 $ 38,922
Current portion of long-term debt 10,000 10,000
Accrued expenses 52,131 73,646
Deferred income on shipments to distributors 35,448 38,662
Income taxes   2,615     2,084  
Total current liabilities 142,321 163,314
Long-term debt 67,500 77,500
Other non-current liabilities   40,528     43,691  
Total liabilities 250,349 284,505
Commitments and contingencies
Stockholders' equity:

Preferred stock – $0.0001 par value; 10,000 shares authorized; no shares issued and outstanding

-- --

Common stock – $0.0001 par value; 250,000 shares authorized; 41,727 and 42,225 shares issued and outstanding at January 2, 2016 and January 3, 2015, respectively

4 4
Additional paid-in capital 13,868 29,501
Retained earnings 747,749 728,633
Accumulated other comprehensive loss   (507 )   (82 )
Total stockholders' equity   761,114     758,056  
Total liabilities and stockholders' equity $ 1,011,463   $ 1,042,561  
   
 
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
Year Ended
January 2,  

January 3,

2016

2015

Operating Activities
Net income $ 29,586 $ 38,021
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment 12,517 12,561
Amortization of other intangible assets and other assets 29,131 17,923
Stock-based compensation expense 42,791 39,067
Income tax benefit (shortfall) from stock-based awards 469 489
Excess income tax benefit from stock-based awards (2,497 ) (632 )
Deferred income taxes (2,136 ) 3,054
Changes in operating assets and liabilities:
Accounts receivable 1,702 1,757
Inventories 2,093 (7,170 )
Prepaid expenses and other assets (870 ) 9,332
Accounts payable 6,662 11,475
Accrued expenses 1,682 27,671
Deferred income on shipments to distributors (5,298 ) 7,809
Income taxes 776 (3,371 )
Other non-current liabilities   (11,161 )   (20,543 )
Net cash provided by operating activities 105,447 137,443
 
Investing Activities
Purchases of available-for-sale investments (107,366 ) (166,094 )
Proceeds from sales and maturities of available-for-sale investments 171,831 156,520
Purchases of property and equipment (11,268 ) (11,225 )
Purchases of other assets (6,399 ) (5,514 )
Acquisitions of businesses, net of cash acquired   (96,112 )   --  
Net cash used in investing activities (49,314 ) (26,313 )
 
Financing Activities
Proceeds from issuance of common stock, net of cash paid for withheld taxes 3,129 13,320
Excess income tax benefit from stock-based awards 2,497 632
Repurchases of common stock (71,448 ) (71,676 )
Payment of acquisition-related contingent consideration (4,464 ) --
Proceeds from issuance of long-term debt, net 81,238 --
Payments on debt   (94,706 )   (7,500 )
Net cash used in financing activities (83,754 ) (65,224 )
 
Increase (decrease) in cash and cash equivalents (27,621 ) 45,906
Cash and cash equivalents at beginning of period   141,706     95,800  
Cash and cash equivalents at end of period $ 114,085   $ 141,706  




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