Exhibit 99
|
News Release |
SILICON LABORATORIES REPORTS STRONG SECOND QUARTER PERFORMANCE
— Company Announces Share Repurchase Program —
AUSTIN, Texas — July 24, 2006 — Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal ICs, today reported second quarter revenues of $123.5 million, an eight percent sequential increase and a fifteen percent increase over the same period in 2005. The company also announced that based on confidence in the future potential of the business, Silicon Laboratories’ Board of Directors authorized a share repurchase program having an aggregate value of up to $100 million over a period of twelve months.
The repurchase program allows for repurchases to be made in open market or privately negotiated transactions subject to market conditions, applicable legal requirements and other factors.
Quarterly Business Highlights
The diversity of Silicon Laboratories’ product portfolio is driving growth opportunities across a wide variety of markets and customers. Both the broad-based mixed-signal and mobile handset businesses grew sequentially in the second quarter driven by strong market demand and market share gains. The broad-based mixed-signal business experienced growth across all major product lines including modems, ProSLIC® voice over IP solutions, mixed-signal microcontrollers (MCUs) and timing solutions.
Strength in the handset market resulted in nine percent sequential growth in mobile handset revenues for the second quarter. Penetration of the company’s FM tuner continued throughout the quarter across a broad set of handset customers. Silicon Laboratories also reported additional design wins with the Aero® IIe EDGE transceiver.
“Product execution is our main priority, and we’re starting to see the results of this in customer engagements on new products and strong demand for existing products,” said Necip Sayiner, president and CEO of Silicon Laboratories. “The expansion of our portfolio, the access to new markets and large customers and the potential of our R&D pipeline give me a great deal of confidence in the future growth and profitability potential of our business.”
Financial Highlights
GAAP operating income for the second quarter was $11.3 million. Non-GAAP operating income for the second quarter was $23.8 million or 19.3 percent of revenue. GAAP net income for the second quarter was $10.1 million or 18 cents per fully diluted share. Non-GAAP net income per fully diluted share, excluding pro-forma charges, was 37 cents. The reconciling charges are set forth in the reconciliation of GAAP to non-GAAP financial measures table included below. The company’s cash and short-term investments totaled approximately $407 million at quarter end.
For the third quarter of 2006, the company anticipates revenue of $122 to $127 million.
Conference Call Today
A conference call discussing the second quarter results will follow the release at 7:30 a.m. Central Time. An audio webcast will be available simultaneously on Silicon Laboratories’ website under Investor Relations (www.silabs.com). A replay will be available after the call at the same website listed above or by calling (888) 673-3571 or 402-220-6434 (international). These replays will be available through August 14th, 2006.
About Silicon Laboratories Inc.
Silicon Laboratories Inc. is a leading designer of high-performance, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Silicon Laboratories’ diverse portfolio of highly integrated, patented solutions is developed by a world-class engineering team with decades of cumulative expertise in cutting-edge mixed-signal design. The company has design, engineering, marketing, sales and applications offices throughout North America, Europe and Asia. For more information about Silicon Laboratories please visit www.silabs.com.
Cautionary Language
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, especially for mobile handset products; dependence on a limited number of products and customers; risks associated with shifting market demand from GSM/GPRS to EDGE and WCDMA; difficulties developing new products that achieve market acceptance; risks that Silicon Laboratories may not be able to manage strains associated with its growth; dependence on key personnel; difficulties managing our manufacturers and subcontractors; difficulties managing international activities; credit risks associated with our accounts receivable; geographic concentration of manufacturers, assemblers, test service providers and customers in the Pacific Rim that subjects Silicon Laboratories’ business and results of operations to risks of natural disasters, epidemics, war and political unrest; product development risks; inventory-related risks; intellectual property litigation risks; risks associated with acquisitions; 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, ProSLIC, Aero and the Silicon Laboratories logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.
CONTACT: Silicon Laboratories Inc., Shannon Pleasant, 512/464-9254 investor.relations@silabs.com
Silicon Laboratories Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| July 1, |
| July 2, |
| July 1, |
| July 2, |
| ||||
Revenues |
| $ | 123,504 |
| $ | 107,156 |
| $ | 238,044 |
| $ | 211,920 |
|
Cost of revenues |
| 52,996 |
| 48,576 |
| 104,296 |
| 97,136 |
| ||||
Gross profit |
| 70,508 |
| 58,580 |
| 133,748 |
| 114,784 |
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Research and development |
| 30,467 |
| 21,374 |
| 58,024 |
| 40,927 |
| ||||
Selling, general and administrative |
| 26,163 |
| 19,297 |
| 50,865 |
| 36,175 |
| ||||
In-process research and development |
| 2,600 |
| —- |
| 2,600 |
| —- |
| ||||
Operating expenses |
| 59,230 |
| 40,671 |
| 111,489 |
| 77,102 |
| ||||
Operating income |
| 11,278 |
| 17,909 |
| 22,259 |
| 37,682 |
| ||||
Other income (expense): |
|
|
|
|
|
|
|
|
| ||||
Interest income |
| 3,623 |
| 1,992 |
| 6,826 |
| 3,404 |
| ||||
Interest expense |
| (225 | ) | (45 | ) | (400 | ) | (101 | ) | ||||
Other income (expense), net |
| 45 |
| (178 | ) | 291 |
| (193 | ) | ||||
Income before income taxes |
| 14,721 |
| 19,678 |
| 28,976 |
| 40,792 |
| ||||
Provision for income taxes |
| 4,584 |
| 4,064 |
| 7,775 |
| 7,805 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 10,137 |
| $ | 15,614 |
| $ | 21,201 |
| $ | 32,987 |
|
Net income per share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 0.18 |
| $ | 0.29 |
| $ | 0.38 |
| $ | 0.62 |
|
Diluted |
| $ | 0.18 |
| $ | 0.28 |
| $ | 0.37 |
| $ | 0.60 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 55,842 |
| 53,149 |
| 55,460 |
| 52,807 |
| ||||
Diluted |
| 57,858 |
| 55,027 |
| 57,761 |
| 55,196 |
|
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
|
| Three Months Ended |
| ||||
|
| July 1, |
| July 2, |
| ||
GAAP operating income |
| $ | 11,278 |
| $ | 17,909 |
|
Stock compensation adjustments: |
|
|
|
|
| ||
Cost of revenues |
| 219 |
| 10 |
| ||
Research and development |
| 4,756 |
| 479 |
| ||
Selling, general and administrative |
| 4,942 |
| 2,078 |
| ||
In-process research and development |
| 2,600 |
| —- |
| ||
Non-GAAP operating income |
| $ | 23,795 |
| $ | 20,476 |
|
|
|
|
|
|
| ||
Non-GAAP operating income% |
| 19.3 | % | 19.1 | % |
|
| Three Months Ended |
| ||||
|
| July 1, |
| July 2, |
| ||
GAAP net income |
| $ | 10,137 |
| $ | 15,614 |
|
Stock compensation adjustments: |
|
|
|
|
| ||
Cost of revenues |
| 219 |
| 10 |
| ||
Research and development |
| 4,756 |
| 479 |
| ||
Selling, general and administrative |
| 4,942 |
| 2,078 |
| ||
Provision for income taxes |
| (1,403 | ) | (965 | ) | ||
In-process research and development |
| 2,600 |
| —- |
| ||
Non-GAAP net income |
| $ | 21,251 |
| $ | 17,216 |
|
|
|
|
|
|
| ||
Diluted shares outstanding |
| 57,858 |
| 55,027 |
| ||
|
|
|
|
|
| ||
Non-GAAP diluted net income per share |
| $ | 0.37 |
| $ | 0.31 |
|
Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
|
| July 1, |
| December 31, |
| ||
ASSETS |
| (Unaudited) |
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 179,205 |
| $ | 100,504 |
|
Short-term investments |
| 227,764 |
| 263,206 |
| ||
Accounts receivable, net of allowance for doubtful accounts of |
| 75,686 |
| 68,824 |
| ||
Inventories |
| 38,187 |
| 23,132 |
| ||
Deferred income taxes |
| 14,118 |
| 11,505 |
| ||
Prepaid expenses and other |
| 15,173 |
| 9,670 |
| ||
Total current assets |
| 550,133 |
| 476,841 |
| ||
Property, equipment and software, net |
| 30,854 |
| 32,584 |
| ||
Goodwill |
| 69,856 |
| 62,877 |
| ||
Other intangible assets, net |
| 22,545 |
| 14,838 |
| ||
Other assets, net |
| 39,302 |
| 25,863 |
| ||
Total assets |
| $ | 712,690 |
| $ | 613,003 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable |
| $ | 47,626 |
| $ | 43,846 |
|
Accrued expenses |
| 15,637 |
| 11,307 |
| ||
Deferred income on shipments to distributors |
| 39,046 |
| 34,036 |
| ||
Income taxes payable |
| 12,935 |
| 18,348 |
| ||
Total current liabilities |
| 115,244 |
| 107,537 |
| ||
Long-term obligations and other liabilities |
| 15,377 |
| 7,418 |
| ||
Total liabilities |
| 130,621 |
| 114,955 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Preferred stock—$0.0001 par value; 10,000 shares authorized; no |
| — |
| — |
| ||
Common stock—$0.0001 par value; 250,000 shares authorized; |
| 6 |
| 5 |
| ||
Additional paid-in capital |
| 396,998 |
| 335,284 |
| ||
Deferred stock compensation |
| — |
| (1,105 | ) | ||
Retained earnings |
| 185,065 |
| 163,864 |
| ||
Total stockholders’ equity |
| 582,069 |
| 498,048 |
| ||
Total liabilities and stockholders’ equity |
| $ | 712,690 |
| $ | 613,003 |
|
Certain prior period amounts have been reclassified to conform to the current period presentation.
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