Exhibit 99.2
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of December 30, 2006
(in thousands, except per share data)
|
| Historical |
| Disposition |
| Pro Forma |
| |||
Assets |
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| |||
Current assets: |
|
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|
|
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| |||
Cash and cash equivalents |
| $ | 68,188 |
| $ | 270,750 | (A) | $ | 338,938 |
|
Short-term investments |
| 318,104 |
| — |
| 318,104 |
| |||
Accounts receivable, net |
| 49,701 |
| — |
| 49,701 |
| |||
Inventories |
| 40,282 |
| (18,266 | )(B) | 22,016 |
| |||
Deferred income taxes |
| 13,330 |
| (1,212 | )(B) | 12,118 |
| |||
Prepaid expenses and other |
| 14,102 |
| 14,250 | (C) |
|
| |||
|
|
|
| (1,159 | )(B) | 27,193 |
| |||
Total current assets |
| 503,707 |
| 264,363 |
| 768,070 |
| |||
Property, equipment and software, net |
| 43,321 |
| (9,251 | )(B) | 34,070 |
| |||
Goodwill |
| 78,224 |
| (12,544 | )(B) | 65,680 |
| |||
Other intangible assets, net |
| 21,970 |
| (1,699 | )(B) | 20,271 |
| |||
Other assets, net |
| 39,773 |
| (16,026 | )(B) | 23,747 |
| |||
Total assets |
| $ | 686,995 |
| $ | 224,843 |
| $ | 911,838 |
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| |||
Liabilities and Stockholders’ Equity |
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Current liabilities: |
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| |||
Accounts payable |
| $ | 36,396 |
| $ | 3,675 | (D) | $ | 40,071 |
|
Accrued expenses |
| 27,929 |
| (4,878 | )(B) |
|
| |||
|
|
|
| 700 | (E) | 23,751 |
| |||
Deferred income on shipments to distributors |
| 22,234 |
| — |
| 22,234 |
| |||
Income taxes |
| 15,063 |
| 66,661 | (F) | 81,724 |
| |||
Total current liabilities |
| 101,622 |
| 66,158 |
| 167,780 |
| |||
Long-term obligations and other liabilities |
| 16,691 |
| (1,050 | )(B) | 15,641 |
| |||
Total liabilities |
| 118,313 |
| 65,108 |
| 183,421 |
| |||
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| |||
Commitments and contingencies |
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Stockholders’ equity: |
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| |||
Preferred stock—$0.0001 par value |
| — |
| — |
| — |
| |||
Common stock—$0.0001 par value |
| 5 |
| — |
| 5 |
| |||
Additional paid-in capital |
| 373,655 |
| 5,512 | (E) | 379,167 |
| |||
Retained earnings |
| 195,022 |
| 154,223 | (G) | 349,245 |
| |||
Total stockholders’ equity |
| 568,682 |
| 159,735 |
| 728,417 |
| |||
Total liabilities and stockholders’ equity |
| $ | 686,995 |
| $ | 224,843 |
| $ | 911,838 |
|
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
For the Year Ended December 30, 2006
(in thousands, except per share data)
|
| Historical |
| Disposition |
| Pro Forma |
| |||
Revenues |
| $ | 464,597 |
| $ | (176,441 | ) | $ | 288,156 | (I) |
Cost of revenues |
| 208,217 |
| (107,539 | ) | 100,678 |
| |||
Gross profit |
| 256,380 |
| (68,902 | ) | 187,478 |
| |||
Operating expenses: |
|
|
|
|
|
|
| |||
Research and development |
| 121,707 |
| (31,903 | ) | 89,804 |
| |||
Selling, general and administrative |
| 102,358 |
| (13,336 | ) | 89,022 |
| |||
In-process research and development |
| 3,200 |
| (600 | ) | 2,600 |
| |||
Operating expenses |
| 227,265 |
| (45,839 | ) | 181,426 |
| |||
Operating income |
| 29,115 |
| (23,063 | ) | 6,052 |
| |||
Other income (expense): |
|
|
|
|
|
|
| |||
Interest income |
| 13,745 |
| — |
| 13,745 |
| |||
Interest expense |
| (872 | ) | — |
| (872 | ) | |||
Other income (expense), net |
| 744 |
| — |
| 744 |
| |||
Income before income taxes |
| 42,732 |
| (23,063 | ) | 19,669 |
| |||
Provision for income taxes |
| 11,574 |
| (7,248 | ) | 4,326 |
| |||
Net income |
| $ | 31,158 |
| $ | (15,815 | ) | $ | 15,343 |
|
Net income per share: |
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| |||
Basic |
| $ | 0.56 |
|
|
| $ | 0.28 |
| |
Diluted |
| $ | 0.54 |
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|
| $ | 0.27 |
| |
Weighted-average common shares outstanding: |
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| |||
Basic |
| 55,346 |
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|
| 55,346 |
| |||
Diluted |
| 57,201 |
|
|
| 57,201 |
|
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
For the Year Ended December 31, 2005
(in thousands, except per share data)
|
| Historical |
| Disposition |
| Pro Forma |
| |||
Revenues |
| $ | 425,689 |
| $ | (187,102 | ) | $ | 238,587 |
|
Cost of revenues |
| 193,904 |
| (113,954 | ) | 79,950 |
| |||
Gross profit |
| 231,785 |
| (73,148 | ) | 158,637 |
| |||
Operating expenses: |
|
|
|
|
|
|
| |||
Research and development |
| 101,222 |
| (24,845 | ) | 76,377 |
| |||
Selling, general and administrative |
| 72,553 |
| (9,238 | ) | 63,315 |
| |||
Operating expenses |
| 173,775 |
| (34,083 | ) | 139,692 |
| |||
Operating income |
| 58,010 |
| (39,065 | ) | 18,945 |
| |||
Other income (expense): |
|
|
|
|
|
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| |||
Interest income |
| 8,285 |
| — |
| 8,285 |
| |||
Interest expense |
| (322 | ) | — |
| (322 | ) | |||
Other income (expense), net |
| (332 | ) | — |
| (332 | ) | |||
Income before income taxes |
| 65,641 |
| (39,065 | ) | 26,576 |
| |||
Provision for income taxes |
| 18,135 |
| (9,259 | ) | 8,876 |
| |||
Net income |
| $ | 47,506 |
| $ | (29,806 | ) | $ | 17,700 |
|
Net income per share: |
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|
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| |||
Basic |
| $ | 0.89 |
|
|
| $ | 0.33 |
| |
Diluted |
| $ | 0.86 |
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|
| $ | 0.32 |
| |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
| |||
Basic |
| 53,399 |
|
|
| 53,399 |
| |||
Diluted |
| 55,485 |
|
|
| 55,485 |
|
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
For the Year Ended January 1, 2005
(in thousands, except per share data)
|
| Historical |
| Disposition |
| Pro Forma |
| |||
Revenues |
| $ | 456,225 |
| $ | (220,258 | ) | $ | 235,967 |
|
Cost of revenues |
| 206,320 |
| (120,974 | ) | 85,346 |
| |||
Gross profit |
| 249,905 |
| (99,284 | ) | 150,621 |
| |||
Operating expenses: |
|
|
|
|
|
|
| |||
Research and development |
| 78,056 |
| (21,258 | ) | 56,798 |
| |||
Selling, general and administrative |
| 65,164 |
| (11,576 | ) | 53,588 |
| |||
Operating expenses |
| 143,220 |
| (32,834 | ) | 110,386 |
| |||
Operating income |
| 106,685 |
| (66,450 | ) | 40,235 |
| |||
Other income (expense): |
|
|
|
|
|
|
| |||
Interest income |
| 3,054 |
| — |
| 3,054 |
| |||
Interest expense |
| (311 | ) | — |
| (311 | ) | |||
Other income (expense), net |
| 2,148 |
| — |
| 2,148 |
| |||
Income before income taxes |
| 111,576 |
| (66,450 | ) | 45,126 |
| |||
Provision for income taxes |
| 34,883 |
| (21,736 | ) | 13,147 |
| |||
Net income |
| $ | 76,693 |
| $ | (44,714 | ) | $ | 31,979 |
|
Net income per share: |
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| |||
Basic |
| $ | 1.49 |
|
|
| $ | 0.62 |
| |
Diluted |
| $ | 1.39 |
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|
| $ | 0.58 |
| |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
| |||
Basic |
| 51,471 |
|
|
| 51,471 |
| |||
Diluted |
| 54,983 |
|
|
| 54,983 |
|
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
Silicon Laboratories Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
1. Basis of Presentation
As disclosed in Item 2.01 of this Form 8-K, Silicon Laboratories Inc. (the “Company”) completed the sale of its Aero transceiver, AeroFONE single-chip phone and power amplifier product lines to NXP, on March 23, 2007 (the “Sale”). The unaudited pro forma condensed consolidated financial statements included herein have been prepared based on the Company’s historical consolidated balance sheet as of December 30, 2006 and consolidated statements of income for the fiscal years ended December 30, 2006, December 31, 2005 and January 1, 2005, after giving effect to the disposition of the net assets and operations related to the sold product lines. This disposition will be accounted for as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”
The pro forma condensed consolidated balance sheet gives effect to the Sale as if it had occurred on December 30, 2006. The pro forma balance sheet also reflects the effects of nonrecurring items attributed directly to the Sale, including the gain on sale, net of taxes, and direct transaction costs, including stock compensation charges, as though the Sale occurred on December 30, 2006. The pro forma gain as of December 30, 2006 is expected to differ from the actual gain that ultimately will be recognized as of the closing date of March 23, 2007.
The pro forma condensed consolidated statements of income give effect to the Sale as if it had occurred on January 4, 2004. The disposition adjustments reflect the elimination of revenues and direct costs of the discontinued operations. The pro forma statements of income do not include adjustments for nonrecurring items attributed directly to the Sale. Such items will be recorded in our quarter ended March 31, 2007.
This pro forma financial information is presented for illustrative purposes only, and is not necessarily indicative of the operating results and financial position that might have been achieved had the Sale occurred on the dates indicated, nor are they necessarily indicative of the operating results and financial position that may occur in the future. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the three fiscal years in the period ended December 30, 2006, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on February 7, 2007.
2. Pro Forma Adjustments
The unaudited pro forma condensed consolidated financial statements reflect the following adjustments:
(A) Cash proceeds received from the Sale, excluding $14.3 million of funds held in escrow which are included under “Prepaid expenses and other.”
(B) Removal of balances related to assets and liabilities that will be transferred in the Sale.
(C) Includes $14.3 million of funds held in escrow subject to potential indemnification claims in accordance with the Purchase Agreement.
(D) Accrual of estimated direct transaction costs, other than stock compensation charges.
(E) Accrual of $5.5 million of additional paid-in capital and $0.7 million of payroll taxes for stock compensation charges resulting from modifications of share-based awards held by certain Company employees who were hired by NXP in connection with the Sale.
(F) Represents the estimated tax effect of the pro forma adjustments, including the estimated gain on sale, estimated direct transaction costs and stock compensation charges.
(G) Adjustment for the pro forma gain on sale, net of tax, as though the sale closed on December 30, 2006.
(H) Removal of historical revenues and costs associated with the sold product lines. Unaudited condensed operating results related to the sold product lines for the three fiscal years in the period ended December 30, 2006 are as follows (in thousands):
| Year Ended |
| ||||||||
|
| December 30, |
| December 31, |
| January 1, |
| |||
Revenues |
| $ | 176,441 |
| $ | 187,102 |
| $ | 220,258 |
|
Gross profit |
| 68,902 |
| 73,148 |
| 99,284 |
| |||
Operating income |
| 23,063 |
| 39,065 |
| 66,450 |
| |||
Net income |
| $ | 15,815 |
| $ | 29,806 |
| $ | 44,714 |
|
(I) The following are the Company’s fiscal 2006 pro forma revenues (excluding the sold product lines) by quarter (in thousands):
Quarter |
|
|
| Pro Forma |
| |
First |
| $ | 66,652 |
| ||
Second |
| 73,936 |
| |||
Third |
| 72,956 |
| |||
Fourth |
| 74,612 |
| |||
Total |
| $ | 288,156 |
|