AUSTIN, Texas, Oct. 27, 2021 /PRNewswire/ -- Silicon
Labs (NASDAQ: SLAB), a leader in secure, intelligent
wireless technology for a more connected world, reported
strong financial results for the third quarter, which ended
October 2, 2021. Revenue from
continuing operations exceeded the top of the guidance range at
$185 million, up 9% sequentially and
39% year-on-year.
"I'm really proud of what our team has accomplished," said
Silicon Labs President Matt Johnson.
"We brought the industry together, delivered significant innovation
and drove record revenue, all while navigating a uniquely
challenging environment."
"IoT solutions are being adopted at a rapid pace in large,
diverse, and fast-growing home and industrial end markets," said
Silicon Labs CEO Tyson Tuttle. "Ten
years ago, Silicon Labs set its sights on being a leader in IoT. I
am confident in Matt's ability to carry that vision forward,
building on a strong foundation."
During the third quarter, Silicon Labs completed the divestiture
of its Infrastructure and Automotive (I&A) business to Skyworks
Solutions, Inc. (NASDAQ: SWKS) for $2.75 billion in an all-cash transaction.
Accordingly, all information included below is to be considered
from continuing operations unless explicitly noted as "discontinued
operations."
Third Quarter Financial Highlights
- Revenue increased to $185
million, up 9% sequentially and 39% year-on-year
Results on a GAAP
basis:
- GAAP gross margin was 59.2%
- GAAP R&D expenses were $73
million
- GAAP SG&A expenses were $46
million
- GAAP operating loss as a percentage of revenue was (5)%
- GAAP diluted loss per share was $(0.45)
Results 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 were as follows:
- Non-GAAP gross margin was 59.4%
- Non-GAAP R&D expenses were $57
million
- Non-GAAP SG&A expenses were $36
million
- Non-GAAP operating income as a percentage of revenue was
9%
- Non-GAAP diluted earnings per share were $0.34
Business Highlights
- After completing a smooth transition of the infrastructure and
automotive business to Skyworks Solutions, Silicon Labs returned
capital to shareholders through a "modified Dutch auction" tender
offer. The tender offer was successfully completed on August 30th.
- Concurrent with the sale of the I&A business, Silicon Labs
initiated its CEO succession plan as Tyson
Tuttle announced his intention to retire at the end of this
year. Company President Matt Johnson
will succeed Tyson as CEO on January
2nd, 2022.
- Our annual WorksWith developers conference drew nearly eight
thousand registrants, breaking last year's record. Featured
speakers included representatives from Amazon, Google, IKEA, Landis
+ Gyr, and Schneider Electric in virtual keynotes and hands-on
technology sessions.
- Announced new sub-GHz SoCs, delivering the world's first
sub-GHz wireless solutions that combine long-range RF and energy
efficiency with certified Arm PSA Level 3 security to meet the
global demand for high-performance, battery-powered IoT
products.
- Announced the new Unify Software Development Kit (SDK), which
provides the common building blocks for connectivity across IoT
ecosystems that allow cloud and platform developers to design their
devices and gateways with the confidence of "design once, support
all" capability. The Unify SDK offers a bridge to Matter, an
industry-unifying connectivity standard anticipated in Spring
2022.
- Announced new Security Services, supporting IoT companies with
the implementation of Zero Trust security architectures to meet
emerging cybersecurity standards and combat the rising tide of
threats. The new security offerings complement Silicon Labs'
industry-leading Secure Vaultâ„¢ technologies with a
first-of-its-kind Custom Part Manufacturing Service (CPMS) for
wireless SoCs and modules.
Business Outlook
The company expects fourth quarter revenue to be in the range
of $195 to $205 million. The
company also estimates the following results:
On a GAAP basis:
- GAAP gross margin of approximately 59.0%
- GAAP operating expenses of approximately $126 million
- GAAP effective tax rate of approximately (14)%
- GAAP diluted loss per share to be in the range of a
$(0.41) to $(0.31)
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:
- Non-GAAP gross margin of approximately 59.5%
- Non-GAAP operating expenses of approximately $95 million
- Non-GAAP effective tax rate of approximately 8%
- Non-GAAP diluted earnings per share between $0.50 and $0.60
Share Repurchase Program
As of October 2, 2021, the company
had repurchased $54 million under its
$150 million repurchase program
previously announced on May 19, 2021.
In addition, on October 21, 2021, the
Board of Directors authorized the repurchase of up to an
incremental $400 million of the
company's common stock. In connection with this authorization, the
company intends to enter into an accelerated share repurchase (ASR)
agreement with an investment bank under which it will repurchase
$400 million of its common stock on
terms to be negotiated, subject to customary adjustments. The final
settlement of the ASR is expected to be completed in the first
quarter of 2022.
With the anticipated completion of the ASR, the previously
executed "modified Dutch auction" tender offer, and open market
stock repurchases completed year-to-date, the company will have
returned approximately $1.1 billion
of the proceeds from the divestiture of the infrastructure and
automotive business. John Hollister,
senior vice president and chief financial officer, said, "This
accelerated share repurchase is the next step in our capital
deployment program and demonstrates our continued commitment to
deliver value to our shareholders through a prudent capital
allocation strategy."
Earnings Webcast and Conference Call
Silicon Labs will host an earnings conference call to discuss
the quarterly results and answer questions at 7:30 am CDT today. An audio webcast will be
available on Silicon Labs' website (www.silabs.com) under Investor
Relations. The company will post an audio recording of the event at
silabs.com/investors and make a replay available through
November 24, 2021, online or by
calling (877) 344-7529 (US) or (412) 317-0088 (international) and
entering access code 10160443.
About Silicon Labs
Silicon Labs (NASDAQ: SLAB) is a leader in secure,
intelligent wireless technology for a more connected
world. Our integrated hardware and software platform,
intuitive development tools, thriving ecosystem and
robust support make us an ideal long-term partner in building
advanced industrial, commercial, home and life
applications. We make it easy for developers to solve
complex wireless challenges throughout the
product lifecycle and get to market
quickly with innovative solutions that transform
industries, grow economies, and improve lives.
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 effect of the Skyworks
transaction on the ability of Silicon Labs to retain and hire key
personnel and maintain relationships with its customers, suppliers,
advertisers, partners and others with whom it does business, or on
its operating results and businesses generally; risks associated
with the disruption of management's attention from ongoing business
operations due to such transaction; the timing and scope of
anticipated share repurchases, including the anticipated ASR
transaction, and/or dividends; 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, particularly with respect to
China); intellectual property
litigation risks; risks associated with acquisitions and
divestitures; product liability risks; difficulties managing and/or
obtaining sufficient supply from 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 and
other factors that are detailed in the SEC filings of Silicon
Laboratories Inc. The level of share repurchases and/or dividends
depends on market conditions and the level of other uses of
cash. 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 Income
(In thousands,
except per share data)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
October 2,
2021
|
|
October 3, 2
020
|
|
October 2,
2021
|
|
October 3,
2020
|
Revenues
|
$
184,831
|
|
$132,731
|
|
$
512,180
|
|
$365,099
|
Cost of
revenues
|
75,322
|
|
57,247
|
|
214,619
|
|
154,189
|
Gross
profit
|
109,509
|
|
75,484
|
|
297,561
|
|
210,910
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research
and development
|
72,656
|
|
58,929
|
|
201,503
|
|
174,631
|
Selling,
general and administrative
|
46,128
|
|
40,154
|
|
131,535
|
|
124,956
|
Operating
expenses
|
118,784
|
|
99,083
|
|
333,038
|
|
299,587
|
Operating
loss
|
(9,275)
|
|
(23,599)
|
|
(35,477)
|
|
(88,677)
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income and other, net
|
5,516
|
|
2,044
|
|
9,038
|
|
8,562
|
Interest
expense
|
(6,595)
|
|
(8,604)
|
|
(24,405)
|
|
(25,923)
|
Loss from continuing
operations before income taxes
|
(10,354)
|
|
(30,159)
|
|
(50,844)
|
|
(106,038)
|
Provision (benefit)
for income taxes
|
9,386
|
|
(3,457)
|
|
12,543
|
|
(11,900)
|
Loss from continuing
operations
|
(19,740)
|
|
(26,702)
|
|
(63,387)
|
|
(94,138)
|
Income from
discontinued operations, net of income taxes
|
2,106,796
|
|
29,864
|
|
2,183,884
|
|
97,721
|
|
|
|
|
|
|
|
|
Net income
|
$2,087,056
|
|
$
3,162
|
|
$2,120,497
|
|
$
3,583
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
|
|
|
|
Continuing operations
|
$
(0.45)
|
|
$
(0.61)
|
|
$
(1.44)
|
|
$
(2.15)
|
Net
income
|
$
48.11
|
|
$
0.07
|
|
$
48.08
|
|
$
0.08
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
Continuing operations
|
$
(0.45)
|
|
$
(0.61)
|
|
$
(1.44)
|
|
$
(2.15)
|
Net
income
|
$
46.76
|
|
$
0.07
|
|
$
46.71
|
|
$
0.08
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
43,385
|
|
43,815
|
|
44,103
|
|
43,737
|
Diluted
|
44,634
|
|
44,328
|
|
45,394
|
|
44,254
|
Silicon
Laboratories Inc.
Condensed
Consolidated Balance Sheets
(In thousands,
except per share data)
(Unaudited)
|
|
|
October 2,
2021
|
|
January 2,
2021
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$1,362,412
|
|
$
202,720
|
Short-term investments
|
1,364,095
|
|
521,963
|
Accounts
receivable, net
|
72,596
|
|
95,169
|
Inventories
|
59,114
|
|
47,861
|
Prepaid
expenses and other current assets
|
61,936
|
|
87,103
|
Current
assets of discontinued operations
|
--
|
|
21,005
|
Total current
assets
|
2,920,153
|
|
975,821
|
Property and
equipment, net
|
143,340
|
|
135,803
|
Goodwill
|
376,389
|
|
376,389
|
Other intangible
assets, net
|
129,512
|
|
163,483
|
Other assets,
net
|
70,108
|
|
76,675
|
Non-current assets of
discontinued operations
|
--
|
|
265,316
|
Total
assets
|
$3,639,502
|
|
$1,993,487
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
57,975
|
|
$
54,949
|
Current
portion of convertible debt, net
|
--
|
|
134,480
|
Deferred
revenue and returns liability
|
11,329
|
|
12,986
|
Other
current liabilities
|
389,071
|
|
81,650
|
Current
liabilities of discontinued operations
|
--
|
|
433
|
Total current
liabilities
|
458,375
|
|
284,498
|
Convertible debt,
net
|
445,110
|
|
428,945
|
Other non-current
liabilities
|
88,434
|
|
79,752
|
Non-current
liabilities of discontinued operations
|
--
|
|
451
|
Total
liabilities
|
991,919
|
|
793,646
|
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;
40,547 and 43,925
shares issued and outstanding at
October 2, 2021 and
January 2, 2021, respectively
|
4
|
|
4
|
Additional paid-in capital
|
--
|
|
204,359
|
Retained
earnings
|
2,648,190
|
|
993,664
|
Accumulated other comprehensive income (loss)
|
(611)
|
|
1,814
|
Total stockholders'
equity
|
2,647,583
|
|
1,199,841
|
Total liabilities and
stockholders' equity
|
$3,639,502
|
|
$1,993,487
|
Silicon
Laboratories Inc.
Condensed
Consolidated Statements of Cash Flows
(In
thousands)
(Unaudited)
|
|
|
Nine Months
Ended
|
|
October 2,
2021
|
|
October 3,
2020
|
|
Operating
Activities
|
|
|
|
|
Net income
|
$2,120,497
|
|
$
3,583
|
|
Adjustments to
reconcile net income to cash provided by operating activities
of
continuing operations:
|
|
|
|
|
Income
from discontinued operations, net of income taxes
|
(2,183,884)
|
|
(97,721)
|
|
Depreciation of property and equipment
|
12,925
|
|
11,789
|
|
Amortization of intangible assets and other assets
|
33,971
|
|
31,118
|
|
Amortization of debt discount and debt issuance
costs
|
17,278
|
|
14,946
|
|
Loss on
extinguishment of convertible debt
|
3,370
|
|
3,977
|
|
Stock-based compensation expense
|
36,916
|
|
36,252
|
|
Deferred
income taxes
|
(3,132)
|
|
(7,382)
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
22,573
|
|
(2,902)
|
|
Inventories
|
(11,320)
|
|
12,499
|
|
Prepaid expenses and
other assets
|
27,598
|
|
(5,602)
|
|
Accounts
payable
|
(4,522)
|
|
6,103
|
|
Other current
liabilities and income taxes
|
(10,981)
|
|
3,608
|
|
Deferred revenue and
returns liability
|
(1,657)
|
|
2,643
|
|
Other non-current
liabilities
|
(11,388)
|
|
7,525
|
|
Net cash provided by
operating activities of continuing operations
|
48,244
|
|
20,436
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Purchases of
marketable securities
|
(1,212,572)
|
|
(418,227)
|
|
Sales and maturities
of marketable securities
|
368,416
|
|
427,235
|
|
Purchases of property
and equipment
|
(19,468)
|
|
(13,589)
|
|
Purchases of other
assets
|
(578)
|
|
(920)
|
|
Acquisition of
business, net of cash acquired
|
--
|
|
(316,809)
|
|
Net cash used in
investing activities of continuing operations
|
(864,202)
|
|
(322,310)
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Proceeds from
issuance of debt
|
--
|
|
845,000
|
|
Payments on
debt
|
(140,572)
|
|
(618,729)
|
|
Repurchases of common
stock
|
(688,373)
|
|
(16,287)
|
|
Payment of taxes
withheld for vested stock awards
|
(21,393)
|
|
(17,562)
|
|
Proceeds from the
issuance of common stock
|
8,619
|
|
8,155
|
|
Net cash provided by
(used in) financing activities of continuing operations
|
(841,719)
|
|
200,577
|
|
|
|
|
|
|
Discontinued
Operations
|
|
|
|
|
Operating
activities
|
69,685
|
|
106,527
|
|
Investing
activities
|
2,747,684
|
|
(2,018)
|
|
Net cash provided by
discontinued operations
|
2,817,369
|
|
104,509
|
|
|
|
|
|
|
Increase in cash and
cash equivalents
|
1,159,692
|
|
3,212
|
|
Cash and cash
equivalents at beginning of period
|
202,720
|
|
227,146
|
|
Cash and cash
equivalents at end of period
|
$1,362,412
|
|
$230,358
|
|
Non-GAAP Financial Measurements
In addition to the GAAP results provided throughout this
document, Silicon Labs has provided non-GAAP financial measurements
on a basis excluding non-cash and other charges and benefits.
Details of these excluded items are presented in the tables below,
which reconcile the GAAP results to non-GAAP financial
measurements.
The non-GAAP financial measurements do not replace the
presentation of Silicon Labs' GAAP financial results. These
measurements provide supplemental information to assist management
and investors in analyzing Silicon Labs' financial position and
results of operations. Silicon Labs has chosen to provide this
information to investors to enable them to perform meaningful
comparisons of past, present, and future operating results and as a
means to emphasize the results of core on-going operations.
Unaudited
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
|
|
Non-GAAP Income
Statement Items
|
|
Three Months
Ended
October 2,
2021
|
|
|
GAAP
Measure
|
|
GAAP
Percent of
Revenue
|
|
|
Stock
Compensation
Expense
|
|
Intangible
Asset
Amortization
|
|
Termination
Costs
|
|
Non-GAAP
Measure
|
|
Non-GAAP
Percent of
Revenue
|
Revenues
|
|
$184,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
109,509
|
|
59.2%
|
|
|
$260
|
|
$
--
|
|
$
--
|
|
$109,769
|
|
59.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
72,656
|
|
39.3%
|
|
|
7,072
|
|
8,198
|
|
--
|
|
57,386
|
|
31.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
46,128
|
|
24.9%
|
|
|
6,963
|
|
2,871
|
|
626
|
|
35,668
|
|
19.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(9,275)
|
|
(5.0)%
|
|
|
14,295
|
|
11,069
|
|
626
|
|
16,715
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings
Per Share – Continuing Operations
|
|
Three Months
Ended
October 2,
2021
|
|
|
GAAP
Measure
|
|
Stock
Compensation
Expense*
|
|
Intangible
Asset
Amortization*
|
|
Termination
Costs*
|
|
Investment
Fair Value
Adjustments*
|
|
Interest
Expense
Adjustments*
|
|
Income
Tax
Adjustments
|
|
Non- GAAP Measure
|
Income (loss) from
continuing operations
|
|
$(19,740)
|
|
$14,295
|
|
$11,069
|
|
$626
|
|
$(4,100)
|
|
$5,076
|
|
$8,121
|
|
$15,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive
Securities Excluded From GAAP Measure Due to Net
Loss
|
|
|
Diluted shares
outstanding
|
|
43,385
|
|
1,249
|
|
44,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
$
(0.45)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
0.34
|
Unaudited
Forward-Looking Statements Regarding Business
Outlook**
(In millions,
except per share data)
|
|
Business
Outlook
|
|
Three Months
Ending
January 1,
2022
|
|
|
GAAP
Measure
|
|
Non-GAAP
Adjustments*
|
|
Non-GAAP
Measure
|
Gross
margin
|
|
59%
|
|
0.5%
|
|
59.5%
|
|
|
|
|
|
|
|
Operating
expenses
|
|
$126
|
|
$31
|
|
$95
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
(14)%
|
|
22%
|
|
8%
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share - low
|
|
$ (0.41)
|
|
$ 0.91
|
|
$ 0.50
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share - high
|
|
$ (0.31)
|
|
$ 0.91
|
|
$ 0.60
|
|
|
|
|
|
|
|
|
** Non-GAAP
adjustments include the following estimates: stock
compensation expense of $20 million, intangible asset amortization
of $11 million, interest expense adjustments of $5 million,
termination costs of $1 million and the associated tax impact from
the aforementioned items.
|
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SOURCE Silicon Labs