Silicon Laboratories Reports Fourth Quarter and Year End Results

Forward-Looking Statements

This press release contains forward-looking statements based on Silicon Laboratories’ current expectations. The words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “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 the following: risks that Silicon Laboratories may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; volatile stock price; average selling prices of products may decrease significantly and rapidly; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; inventory-related risks; risks associated with acquisitions; difficulties managing international activities; difficulties managing our manufacturers and subcontractors; risks that Silicon Laboratories may not be able to manage strains associated with its growth; credit risks associated with our accounts receivable; dependence on key personnel; risks associated with divestitures; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Laboratories’ business and results of operations to risks of natural disasters, epidemics, war and political unrest; the competitive and cyclical nature of the semiconductor industry and other factors that are detailed in Silicon Laboratories’ filings with the SEC. Silicon Laboratories disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note to editors: Silicon Laboratories, Silicon Labs 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 Income

(In thousands, except per share data)

(Unaudited)

       
Three Months Ended Year Ended
January 1,

2011

January 2,

2010

January 1,

2011

January 2,

2010

Revenues $ 111,891 $ 127,190 $ 493,341 $ 441,020
Cost of revenues   40,800     43,930     169,097     161,267  
Gross margin 71,091 83,260 324,244 279,753
Operating expenses:
Research and development 32,621 26,553 123,821 104,394
Selling, general and administrative   27,456     30,629     113,752     108,848  
Operating expenses   60,077     57,182     237,573     213,242  
Operating income 11,014 26,078 86,671 66,511
Other income (expense):
Interest income 479 640 2,318 2,725
Interest expense (11 ) (25 ) (77 ) (180 )
Other income (expense), net   24     (388 )   (1,253 )   (90 )
Income before income taxes 11,506 26,305 87,659 68,966
Provision (benefit) for income taxes   (1,377 )   (13,946 )   14,417     (4,126 )

Net income

$ 12,883   $ 40,251   $ 73,242   $ 73,092  
 
Earnings per share:
Basic $ 0.29 $ 0.88 $ 1.63 $ 1.62
Diluted $ 0.28 $ 0.84 $ 1.57 $ 1.57
 
Weighted-average common shares outstanding:
Basic 43,834 45,650 44,845 45,023
Diluted 45,658 47,786 46,742 46,542
 
 
 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

                     
Non-GAAP Income Statement Items Three Months Ended

January 1, 2011

GAAP

Measure

  GAAP

Percent of Revenue

  Stock

Compensation Expense

  Non-GAAP

Measure

  Non-GAAP

Percent of Revenue

Revenues $ 111,891
 
Gross margin 71,091 63.5 % $ 361 $ 71,452 63.9 %
 
Research and development 32,621 29.2 % 4,095 28,526 25.5 %
 
Selling, general and
administrative 27,456 24.5 % 4,607 22,849 20.4 %
 
Operating expenses 60,077 53.7 % 8,702 51,375 45.9 %
 
Operating income 11,014 9.8 % 9,063 20,077 17.9 %
 
           
Non-GAAP Diluted Earnings Per Share Three Months Ended

January 1, 2011

GAAP

Measure

Stock

Compensation Expense

Non-GAAP

Measure

Net income $ 12,883 $ 7,929 $ 20,812
 
Diluted shares outstanding 45,658 -- 45,658
 
Diluted earnings per share $ 0.28 $ 0.46
 
                   
Non-GAAP Income Statement Items Year Ended

January 1, 2011

GAAP

Measure

GAAP

Percent of Revenue

Stock

Compensation Expense

Non-GAAP

Measure

Non-GAAP

Percent of Revenue

Revenues $ 493,341
 
Gross margin 324,244 65.7 % $ 1,435 $ 325,679 66.0 %
 
Operating income 86,671 17.6 % 40,324 126,995 25.7 %
 
 
 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

   
January 1,

2011

January 2,

2010

Assets
Current assets:
Cash and cash equivalents $ 138,567 $ 195,737
Short-term investments 227,295 214,486

Accounts receivable, net of allowance for doubtful accounts of

$772 at January 1, 2011 and $567 at January 2, 2010 45,030 56,128
Inventories 39,450 31,512
Deferred income taxes 9,140 7,620
Prepaid expenses and other current assets   34,447     18,515  
Total current assets 493,929 523,998
Long-term investments 17,500 24,676
Property and equipment, net 29,945 27,785
Goodwill 112,296 105,109
Other intangible assets, net 53,242 41,886
Other assets, net   20,746     19,384  
Total assets $ 727,658   $ 742,838  
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 24,433 $ 28,759
Accrued expenses 25,604 25,399
Deferred income on shipments to distributors 26,127 28,470
Income taxes   3,692     6,011  
Total current liabilities 79,856 88,639
Long-term obligations and other liabilities   22,372     24,403  
Total liabilities 102,228 113,042
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;

43,933 and 45,772 shares issued and outstanding at
January 1, 2011 and January 2, 2010, respectively 4 5
Additional paid-in capital 49,947 128,262
Retained earnings 579,127 505,885
Accumulated other comprehensive loss   (3,648 )   (4,356 )
Total stockholders' equity   625,430     629,796  
Total liabilities and stockholders' equity $ 727,658   $ 742,838  
 
 
 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

   
Year Ended
January 1,

2011

January 2,

2010

Operating Activities
Net income $ 73,242 $ 73,092
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment 11,797 11,887
Loss on disposal of property and equipment 21 33
Amortization of other intangible assets and other assets 7,494 7,842
Stock compensation expense 40,324 43,974
Income tax benefit from employee stock-based awards 3,295 2,422
Excess income tax benefit from employee stock-based awards (2,412 ) (1,862 )
Deferred income taxes (552 ) 1,896
Changes in operating assets and liabilities:
Accounts receivable 11,342 (19,657 )
Inventories (7,811 ) (3,216 )
Prepaid expenses and other assets (5,321 ) 3,362
Accounts payable (777 ) 8,036
Accrued expenses (2,590 ) (825 )
Deferred income on shipments to distributors (2,343 ) 6,871
Income taxes   (7,774 )   (12,914 )
Net cash provided by operating activities 117,935 120,941
 
Investing Activities
Purchases of available-for-sale investments (357,777 ) (237,968 )
Proceeds from sales and maturities of marketable securities 352,779 153,275
Purchases of property and equipment (13,850 ) (8,943 )
Purchases of other assets (8,372 ) (6,408 )
Acquisitions of businesses, net of cash acquired   (28,021 )   (4,300 )
Net cash used in investing activities (55,241 ) (104,344 )
 
Financing Activities
Proceeds from issuance of common stock, net of shares withheld for taxes 18,055 25,187
Excess income tax benefit from employee stock-based awards 2,412 1,862
Repurchases of common stock   (140,331 )   (20,181 )
Net cash provided by (used in) financing activities (119,864 ) 6,868
 
Increase (decrease) in cash and cash equivalents (57,170 ) 23,465
Cash and cash equivalents at beginning of period   195,737     172,272  
Cash and cash equivalents at end of period $ 138,567   $ 195,737  






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