Silicon Laboratories Results Exceed Expectations

Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported 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.

Financial Highlights

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.

Business Highlights

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.

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