Silicon Labs Reports Strong Quarterly Performance and Outlook
News Release from:
Silicon Laboratories Inc
27 July 2012
Silicon Laboratories has today revealed second quarter revenue of $135.7 million, an impressive eight percent sequential increase. GAAP and non-GAAP diluted earnings per share of $0.47 and $0.51, respectively, also exceeded expectations and represented significant growth.
Second quarter revenue was a company record and resulted from growth across the company’s major product categories. On a GAAP-basis, gross margin improved to 61.0 percent. R&D investment increased to $34.2 million and SG&A expense was $32.2 million. Resulting GAAP operating income was 12.1 percent. Diluted GAAP earnings per share increased by 42 percent sequentially to 47 cents, due in part to a tax reserve release.
The following non-GAAP results exclude the impact of stock compensation and other one-time items. Significant strength in the company’s Broad-based products improved the gross margin mix, resulting in gross margin of 61.3 percent for the quarter. R&D increased to $31.3 million due to a record quarter of new product activity, and SG&A increased slightly to $24.4 million. Operating income, therefore, was better than expected at 20.2 percent of revenue. Strong revenue growth and margin expansion provided significant earnings leverage resulting in diluted earnings per share of 51 cents, a 19 percent sequential increase. Reconciling charges are set forth in the financial measures table included below.
The company ended the quarter with $323 million in cash, cash equivalents and investments due to continued healthy cash flow from operations.
All three of the company’s major product categories, Access, Broadcast and Broad-based, grew sequentially in the second quarter.
Within the Broad-based business, the company’s timing and MCU products posted record quarters as the company began shipping into new applications in storage, security, and test and measurement. Both product lines also posted record design wins, indicating strength in the revenue pipeline and supporting the continued market share gains driving the outperformance versus the end markets.
The company’s wireless products increased over 50 percent in the quarter and are expected to contribute meaningfully to future growth with the addition of the Ember products acquired early in the third quarter. When combined with the company’s emerging 32-bit MCU portfolio, the company anticipates having the industry’s strongest offering for embedded wireless devices.
The Broadcast business increased in the second quarter driven by audio products, which were up meaningfully due to seasonal builds of consumer radios. The video business was also solid, coming in about flat to the record high in the first quarter. The Access products saw growth across voice over IP, modems and Power over Ethernet applications.
“Our business is hitting on all cylinders, underscoring the strength of our portfolio and ability to gain market share,” said Tyson Tuttle, president and CEO of Silicon Laboratories. “We’re focusing on developing products that address some of the most significant trends impacting the industry. The global build-out of infrastructure to support growing bandwidth needs, the emergence of the Internet of Things, and the increasing importance of energy efficient and green technology all require analog-intensive, mixed-signal ICs.”
The company expects revenue for the third quarter to increase to $140 to $145 million.
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 Laboratories’ website here. A replay will be available after the call at the same web address or by calling 1 (855) 859-2056 or +1 (404) 537-3406 (international) and by entering 99916472. The replay will be available through August 8th.