Record Revenue for 2013 AUSTIN, Texas --(BUSINESS WIRE)-- Silicon Labs (NASDAQ: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported financial results for its fourth quarter and fiscal year ended Dec. 28, 2013 . Revenue in the fourth quarter was $146.2 million , a slight decrease from the $146.9 million reported in the third quarter. Revenue for fiscal 2013 was a record $580.1 million , compared with $563.3 million in 2012. Q4 Financial Highlights On a GAAP basis: Gross margins increased sequentially to 60.6 percent R&D investment increased sequentially to $42.2 million SG&A expenses declined sequentially to $32.3 million Operating income increased sequentially to 9.7 percent of revenue Diluted earnings per share increased sequentially to $0.24 On a non-GAAP basis (results exclude the impact of stock compensation, amortization from acquired intangible assets and certain other items as set forth in the reconciliation table below): Gross margins increased sequentially to 61.2 percent R&D expenses increased sequentially to $34.5 million SG&A expenses declined sequentially to $27.7 million Operating income increased sequentially to 18.7 percent Diluted earnings per share increased sequentially to $0.49 Business Highlights Broad-based revenue was $72.4 million , reflecting a record quarter in microcontrollers and wireless offset by lower than expected revenue for timing due to general weakness in the telecom infrastructure market. Broadcast outperformed expectations in the fourth quarter with revenue of $49.6 million . Access grew slightly in the fourth quarter, exceeding expectations, with revenue of $24.3 million . During the fourth quarter, the company announced several important mixed-signal products for Internet of Things applications, including the energy-friendly EFM32™ Zero Gecko MCU family, the ultra-low-power Si106x/8x wireless MCU family, and the next-generation Si701x/2x relative humidity and temperature sensor family. “We are very pleased with our performance in the fourth quarter, as our microcontroller and wireless products delivered another record revenue quarter, and we experienced better than expected revenue from Broadcast and Access products,” said Tyson Tuttle , CEO of Silicon Labs . “Revenue for 2013 was a record for the company, and we believe we are entering 2014 well positioned in growth markets such as the Internet of Things, smart energy and Internet infrastructure.” Business Outlook The company expects revenue in the first quarter to be in the range of $142 million to $146 million . The company expects first quarter earnings per share to be between $0.14 and $0.18 on a GAAP basis and between $0.40 and $0.44 on a non-GAAP basis. 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 simultaneously 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 by entering 39717387. The replay will be available through March 8 . About Silicon Labs Silicon Labs is an industry leader in the innovation of high-performance, analog-intensive, mixed-signal ICs. Developed by a world-class engineering team with unsurpassed expertise in mixed-signal design, Silicon Labs' diverse portfolio of patented semiconductor solutions offers customers significant advantages in performance, size and power consumption. For more information about Silicon Labs , please visit 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 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 December 28 , 2013 December 29 , 2012 December 28 , 2013 December 29 , 2012 Revenues $ 146,236 $ 152,461 $ 580,087 $ 563,294 Cost of revenues 57,638 58,835 227,183 225,277 Gross margin 88,598 93,626 352,904 338,017 Operating expenses: Research and development 42,168 36,009 157,799 137,952 Selling, general and administrative 32,276 32,315 130,795 114,390 Operating expenses 74,444 68,324 288,594 252,342 Operating income 14,154 25,302 64,310 85,675 Other income (expense): Interest income 237 235 853 1,338 Interest expense (807 ) (850 ) (3,293 ) (1,149 ) Other income (expense), net 118 (323 ) 157 484 Income before income taxes 13,702 24,364 62,027 86,348 Provision for income taxes 3,060 5,669 12,208 22,800 Net income $ 10,642 $ 18,695 $ 49,819 $ 63,548 Earnings per share: Basic $ 0.25 $ 0.45 $ 1.17 $ 1.51 Diluted $ 0.24 $ 0.44 $ 1.14 $ 1.47 Weighted-average common shares outstanding: Basic 42,972 41,705 42,715 42,136 Diluted 43,847 42,641 43,537 43,106 Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share data) Non-GAAP Income Statement Items Three Months Ended December 28, 2013 GAAP Measure GAAP Percent of Revenue Stock Compensation Expense Intangible Asset Amortization Termination Costs Acquisition Related Items Non- GAAP Measure Non- GAAP Percent of Revenue Revenues $ 146,236 Gross margin 88,598 60.6 % $ 166 $ 390 $ -- $ 400 $ 89,554 61.2 % Research and development 42,168 28.8 % 3,979 3,217 447 -- 34,525 23.6 % Selling, general and administrative 32,276 22.1 % 4,351 729 895 (1,384 ) 27,685 18.9 % Operating income 14,154 9.7 % 8,496 4,336 1,342 (984 ) 27,344 18.7 % Non-GAAP Diluted Earnings Per Share Three Months Ended December 28, 2013 GAAP Measure Stock Compensation Expense Intangible Asset Amortization Termination Costs Acquisition Related Items Non- GAAP Measure Net income $ 10,642 $ 7,685 $ 2,986 $ 1,179 $ (1,096 ) $ 21,396 Diluted shares outstanding 43,847 -- -- -- -- 43,847 Diluted earnings per share $ 0.24 $ 0.49 Unaudited Forward-Looking Statements Regarding Business Outlook (In thousands, except per share information) Business Outlook Three Months Ending March 29, 2014 High Low Estimated GAAP diluted earnings per share $ 0.18 $ 0.14 Estimated non-GAAP charges 0.26 0.26 Estimated non-GAAP diluted earnings per share $ 0.44 $ 0.40 Silicon Laboratories Inc. Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) December 28 , 2013 December 29 , 2012 Assets Current assets: Cash and cash equivalents $ 95,800 $ 105,426 Short-term investments 179,593 176,565 Accounts receivable, net of allowances for doubtful accounts of $797 at December 28, 2013 and $670 at December 29, 2012 72,124 78,023 Inventories 45,271 49,579 Deferred income taxes 18,878 16,652 Prepaid expenses and other current assets 47,651 41,437 Total current assets 459,317 467,682 Long-term investments 10,632 11,369 Property and equipment, net 132,445 135,271 Goodwill 228,781 130,265 Other intangible assets, net 131,593 90,750 Other assets, net 28,382 36,629 Total assets $ 991,150 $ 871,966 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 22,126 $ 29,622 Current portion of long-term debt 7,500 5,000 Accrued expenses 45,975 40,410 Deferred income on shipments to distributors 30,853 30,259 Income taxes 2,693 1,087 Total current liabilities 109,147 106,378 Long-term debt 87,500 95,000 Other non-current liabilities 55,941 20,615 Total liabilities 252,588 221,993 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; 42,779 and 41,879 shares issued and outstanding at December 28, 2013 and December 29, 2012 , respectively 4 4 Additional paid-in capital 48,630 10,122 Retained earnings 690,612 640,793 Accumulated other comprehensive loss (684 ) (946 ) Total stockholders' equity 738,562 649,973 Total liabilities and stockholders' equity $ 991,150 $ 871,966 Silicon Laboratories Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended December 28 , 2013 December 29 , 2012 Operating Activities Net income $ 49,819 $ 63,548 Adjustments to reconcile net income to cash provided by operating activities: Depreciation of property and equipment 13,491 13,621 Net gain on the purchase of property and equipment -- (8,457 ) Amortization of other intangible assets and other assets 15,911 14,154 Impairment of long-lived assets -- 708 Stock-based compensation expense 30,800 31,176 Income tax benefit (detriment) from employee stock-based awards (606 ) 1,827 Excess income tax benefit from employee stock-based awards (290 ) (1,294 ) Deferred income taxes 3,319 4,725 Changes in operating assets and liabilities: Accounts receivable 8,972 (20,743 ) Inventories 5,588 (13,056 ) Prepaid expenses and other assets (2,514 ) 10,629 Accounts payable (3,979 ) 7,217 Accrued expenses (3,169 ) (3,812 ) Deferred income on shipments to distributors (2,381 ) 4,623 Income taxes 5,189 (7,816 ) Net cash provided by operating activities 120,150 97,050 Investing Activities Purchases of available-for-sale investments (213,883 ) (192,450 ) Proceeds from sales and maturities of available-for-sale investments 210,824 235,517 Purchases of property and equipment (10,472 ) (102,043 ) Purchases of other assets (5,939 ) (8,508 ) Acquisitions of businesses, net of cash acquired (86,441 ) (71,852 ) Net cash used in investing activities (105,911 ) (139,336 ) Financing Activities Proceeds from issuance of common stock, net of shares withheld for taxes 15,301 15,148 Excess income tax benefit from employee stock-based awards 290 1,294 Repurchases of common stock (26,022 ) (62,019 ) Proceeds from issuance of long-term debt, net -- 98,325 Payments on debt (13,434 ) -- Net cash provided by (used in) financing activities (23,865 ) 52,748 Increase (decrease) in cash and cash equivalents (9,626 ) 10,462 Cash and cash equivalents at beginning of period 105,426 94,964 Cash and cash equivalents at end of period $ 95,800 $ 105,426 Silicon Labs Deborah Stapleton , +1-650-470-4200 Deborah.Stapleton@silabs.com Source: Silicon Laboratories Inc.
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