Exhibit 99

 

 

Silicon Labs Announces Fourth Quarter and Full Year 2020 Results

 

-- Record Fourth Quarter Revenue Sets the Stage for an Even Stronger 2021 --

 

AUSTIN, Texas – February 3, 2021 – Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its fourth quarter ended January 2, 2021. Revenue exceeded the top end of the guidance range at $242.9 million, up from $221.3 million in the third quarter. Revenue for the full year was $886.7 million, up from $837.6 million in 2019. Fourth quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.20 and $0.84, respectively. Full year GAAP and non-GAAP diluted EPS were $0.28 and $3.01, respectively.

 

“Fourth quarter revenue set a record at $242.9 million resulting in 10% sequential growth and full year revenue grew 6% over 2019,” said Tyson Tuttle, CEO of Silicon Labs. “Our IoT products led the way with a second consecutive quarter of record revenue. We exited the year with momentum, and we are looking forward to an even stronger 2021.”

 

Fourth Quarter Financial Highlights

 

·

IoT revenue increased to $147.4 million, up 11% sequentially and 15% year-on-year.

·

Infrastructure and Automotive revenue increased to $95.5 million, up 8% sequentially and 4% year-on-year.

 

On a GAAP basis:

 

·

GAAP gross margin was 58.4%.

·

GAAP R&D expenses were $74 million.

·

GAAP SG&A expenses were $50 million.

·

GAAP operating income as a percentage of revenue was 7.3%.

·

GAAP diluted earnings per share was $0.20.

 

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 below:

 

·

Non-GAAP gross margin was 58.6%.

·

Non-GAAP R&D expenses were $58 million.

·

Non-GAAP SG&A expenses were $39 million.

·

Non-GAAP operating income as a percentage of revenue was 18.7%.

·

Non-GAAP diluted earnings per share were $0.84.

 

 

Product Results

 

·

Announced Z-Wave Long Range (LR) support for existing Z-Wave 700 Series products. Z-Wave LR is a new specification by the Z-Wave Alliance, offering point-to-point wireless connectivity up to several miles away with scalability to support thousands of nodes from a single smart home network. Z-Wave LR eliminates the need for mesh repeaters, saving time and money for developers and end customers.

·

Announced a portfolio expansion of pre-certified wireless modules specifically designed to address modern needs of IoT application development. The portfolio consists of the only modules in the industry with full stack support for multiprotocol solutions to enable commercial and consumer IoT applications, with flexible package options and highly integrated device security. Silicon Labs’ new modules include xGM210PB, BGM220, MGM220, and BGX220 Xpress. The xGM210PB includes Secure Vault technology and PSA level 2 certification.

 

Business Highlights

 

·

Announced a collaboration with Orvibo, a leading provider of artificial intelligence-driven smart home products, systems, and solutions, to develop a new line of smart home devices using Silicon Labs’ Wireless Gecko Series 2 SoCs. Orvibo’s latest MixPad smart panels leverage Silicon Labs’ SoCs to reliably connect smart home control panels and switches to many applications including automated lighting, curtain, HVAC systems, and wireless home security devices.

·

Extended ClockBuilder Pro to support configuration and control of our IEEE 1588 modules, helping customers accelerate time to market and simplify design. Our IEEE 1588 modules are used in communications, smart grid, financial trading systems and industrial applications that need a consistent, reliable time reference between devices operating over Ethernet networks.

·

Announced a new high reliability isolation partnership with Teledyne Technologies, a leading provider of high-performance, high-reliability semiconductors for the aerospace and defense markets. Under the new agreement, Teledyne will market custom high reliability solutions based on Silicon Labs' Si827x isolated gate driver family. These solutions are optimized for space, aerospace, military, energy and other markets requiring advanced technology and high reliability.

·

Awarded Gold in 2020 LEAP Awards for Secure Vault. Silicon Labs products with Secure Vault were the first SoC and module with a radio to earn PSA Level 2 security certification.

 

Business Outlook

 

The company expects first quarter revenue to be in the range of $237 to $247 million, with both IoT and Infrastructure & Automotive approximately flat to fourth quarter, and estimates the following:

 

On a GAAP basis:

 

·

GAAP gross margin at approximately 58.1%.

·

GAAP operating expenses at approximately $126 million.

 

·

GAAP effective tax rate of 0.0%.

·

GAAP diluted earnings per share between $0.05 and $0.15.

 

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, acquisition related charges, restructuring charges, non-cash interest expense and other costs associated with convertible notes, and certain other items as set forth in the reconciliation tables below:

 

·

Non-GAAP gross margin at approximately 58.2%.

·

Non-GAAP operating expenses at approximately $100 million.

·

Non-GAAP effective tax rate at 13.0%.

·

Non-GAAP diluted earnings per share between $0.70 and $0.80.

 

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 on Silicon Labs' website (www.silabs.com) under Investor Relations. A replay will be available after the call at the same website listed above or by calling 1 (877) 344-7529 (US) or (412) 317-0088 (International) and entering access code 10145993. The replay will be available through March 3, 2021.

 

About Silicon Labs

 

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. 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 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 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. 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.

 

CONTACT: George Lane, +1 (512) 712-0019, George.Lane@silabs.com

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended								Year Ended
		January 2, 2021				December 28, 2019				January 2, 2021				December 28, 2019
Revenues		$	242,917			$	219,438			$	886,677			$	837,554
Cost of revenues			100,942				86,167				359,151				327,270
Gross profit			141,975				133,271				527,526				510,284
Operating expenses:
Research and development			73,857				69,176				287,887				257,150
Selling, general and administrative			50,456				50,866				201,339				196,437
Operating expenses			124,313				120,042				489,226				453,587
Operating income			17,662				13,229				38,300				56,697
Other income (expense):
Interest income and other, net			2,581				3,494				11,143				13,185
Interest expense			(8,219	)			(5,105	)			(34,142	)			(20,233	)
Income before income taxes			12,024				11,618				15,301				49,649
Provision for income taxes			3,076				1,903				2,770				30,384
Net income		$	8,948			$	9,715			$	12,531			$	19,265
Earnings per share:
Basic		$	0.20			$	0.22			$	0.29			$	0.44
Diluted		$	0.20			$	0.22			$	0.28			$	0.43
Weighted-average common shares outstanding:
Basic			43,895				43,450				43,775				43,346
Diluted			44,729				44,801				44,372				44,290

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

 

		Three Months Ended January 2, 2021
Non-GAAP Income Statement Items		GAAP Measure				GAAP Percent of Revenue				Stock Compensation Expense				Intangible Asset Amortization				Non-GAAP Measure				Non-GAAP Percent of Revenue
Revenues		$	242,917
Gross profit			141,975				58.4	%		$	375			$	--			$	142,350				58.6	%
Research and development			73,857				30.4	%			7,386				8,654				57,817				23.8	%
Selling, general and administrative			50,456				20.7	%			8,000				3,338				39,118				16.1	%
Operating income			17,662				7.3	%			15,761				11,992				45,415				18.7	%

 

		Three Months Ended January 2, 2021
Non-GAAP Earnings Per Share			GAAP Measure				Stock Compensation Expense*				Intangible Asset Amortization*				Investment Fair Value Adjustments*				Interest Expense Adjustments*				Income Tax Adjustments				Non- GAAP Measure
Net income		$	8,948			$	15,761			$	11,992			$	(1,438	)		$	6,039			$	(3,685	)		$	37,617
Diluted shares outstanding			44,729																								44,729
Diluted earnings per share		$	0.20																							$	0.84

 

* Represents pre-tax amounts

 

		Year Ended January 2, 2021
Non-GAAP Earnings Per Share			GAAP Measure				Stock Compensation Expense*				Intangible Asset Amortization*				Acquisition Related Items*				Restructuring Charges*				Investment Fair Value Adjustments*				Interest Expense Adjustments*				Income Tax Adjustments				Non- GAAP Measure
Net income		$	12,531			$	60,091			$	44,733			$	6,061			$	4,269			$	(1,438	)		$	24,350			$	(17,074	)		$	133,523
Diluted shares outstanding			44,372																																44,372
Diluted earnings per share		$	0.28																															$	3.01

 

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

 

		Three Months Ending April 3, 2021
Business Outlook			GAAP Measure				Non-GAAP Adjustments*				Non-GAAP Measure
Gross margin			58.1	%			0.1	%			58.2	%
Operating expenses		$	126			$	26			$	100
Effective tax rate			0.0	%			13.0	%			13.0	%
Diluted earnings per share - low		$	0.05			$	0.65			$	0.70
Diluted earnings per share - high		$	0.15			$	0.65			$	0.80

 

* Non-GAAP adjustments include the following estimates: stock compensation expense of $13.9 million, intangible asset amortization of $11.7 million, interest expense adjustments of $9.4 million, and the associated tax impact from the aforementioned items.

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 

		January 2, 2021				December 28, 2019
Assets
Current assets:
Cash and cash equivalents		$	202,720			$	227,146
Short-term investments			521,963				498,825
Accounts receivable, net			95,169				75,639
Inventories			66,662				73,057
Prepaid expenses and other current assets			89,307				69,192
Total current assets			975,821				943,859
Property and equipment, net			139,439				135,939
Goodwill			631,932				398,402
Other intangible assets, net			166,084				134,279
Other assets, net			80,211				62,374
Total assets		$	1,993,487			$	1,674,853
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	54,949			$	38,899
Current portion of convertible debt, net			134,480				--
Deferred revenue and returns liability			12,986				19,251
Other current liabilities			82,083				79,551
Total current liabilities			284,498				137,701
Convertible debt, net			428,945				368,257
Other non-current liabilities			80,203				53,844
Total liabilities			793,646				559,802
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; 43,925 and 43,496 shares issued and outstanding at January 2, 2021 and December 28, 2019, respectively			4				4
Additional paid-in capital			204,359				133,793
Retained earnings			993,664				980,608
Accumulated other comprehensive income			1,814				646
Total stockholders' equity			1,199,841				1,115,051
Total liabilities and stockholders' equity		$	1,993,487			$	1,674,853

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

		Year Ended
		January 2, 2021				December 28, 2019
Operating Activities
Net income		$	12,531			$	19,265
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment			17,780				16,883
Amortization of other intangible assets and other assets			44,733				39,584
Amortization of debt discount and debt issuance costs			21,433				13,485
Loss on extinguishment of convertible debt			4,060				--
Stock-based compensation expense			60,091				54,799
Deferred income taxes			(6,533	)			23,048
Changes in operating assets and liabilities:
Accounts receivable			(17,612	)			(2,401	)
Inventories			10,748				2,171
Prepaid expenses and other assets			(51,839	)			8,965
Accounts payable			15,263				7,830
Other current liabilities and income taxes			3,257				(6,826	)
Deferred revenue and returns liability			(6,694	)			(3,243	)
Other non-current liabilities			28,500				(7,038	)
Net cash provided by operating activities			135,718				166,522
Investing Activities
Purchases of available-for-sale investments			(519,567	)			(424,524	)
Sales and maturities of available-for-sale investments			497,357				344,937
Purchases of property and equipment			(20,422	)			(16,279	)
Purchases of other assets			(1,570	)			(8,396	)
Acquisitions of businesses, net of cash acquired			(316,809	)			(2,510	)
Net cash used in investing activities			(361,011	)			(106,772	)
Financing Activities
Proceeds from issuance of debt			845,000				--
Payments on debt			(624,737	)			(1,132	)
Repurchases of common stock			(16,287	)			(26,716	)
Payment of taxes withheld for vested stock awards			(18,124	)			(16,295	)
Proceeds from the issuance of common stock			15,015				14,496
Net cash provided by (used in) financing activities			200,867				(29,647	)
Increase (decrease) in cash and cash equivalents			(24,426	)			30,103
Cash and cash equivalents at beginning of period			227,146				197,043
Cash and cash equivalents at end of period		$	202,720			$	227,146