AUSTIN, Texas, Jan. 30, 2019 /PRNewswire/ -- 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 December 29, 2018. Revenue in the fourth quarter fell short of the low end of guidance at $215.5 million, down from $230.2 million in the third quarter. Fourth quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.35 and $0.91, respectively.

"We are proud of our performance in 2018, which was a strong year for Silicon Labs in many dimensions. We completed the successful acquisition of Z-Wave, strengthened our team, and grew our revenue and design wins to record levels," said Tyson Tuttle, CEO of Silicon Labs. "Despite current volatility, we remain confident about our longer-term ability to outperform the market. We are focused on executing on our product roadmaps and converting a large pipeline of opportunities into additional wins and share gains. The technologies we are developing are enabling our customers to transform industries and improve lives."

Fourth Quarter Financial Highlights

• IoT revenue declined to $119 million, down 5% sequentially and up 9% year-on-year.
• Infrastructure revenue declined to $46 million, down 13% sequentially and up 18% year-on-year.
• Broadcast revenue declined to $35 million, down 3% sequentially and 3% year-on-year.
• Access revenue declined to $15 million, down 7% sequentially and 8% year-on-year.

On a GAAP basis:

• GAAP gross margin was 60.4%.
• GAAP R&D expenses were $63 million.
• GAAP SG&A expenses were $49 million.
• GAAP operating income as a percentage of revenue was 8.5%.
• GAAP diluted earnings per share were $0.35.

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

• Non-GAAP gross margin was 60.6%.
• Non-GAAP R&D expenses were $49 million.
• Non-GAAP SG&A expenses were $39 million.
• Non-GAAP operating income as a percentage of revenue was 19.6%.
• Non-GAAP diluted earnings per share were $0.91.

Product Results

• Launched the next-generation Z-Wave® 700 on the Wireless Gecko platform, building on Z-Wave's S2 security and interoperability framework, while improving energy efficiency and adding longer range RF capabilities.
• Released new Bluetooth® 5.1 software for the Wireless Gecko platform with a direction finding feature that enables more precise indoor navigation and location services.
• Expanded Silicon Labs' groundbreaking low-power Wi-Fi® portfolio of modules and transceivers designed specifically for the requirements of IoT applications.
• Announced that Xiaomi, a leading IoT ecosystem provider in China, launched new smart lighting products based on Silicon Labs' Wireless Gecko SoCs and Bluetooth mesh software.
• Tuya, a leading artificial intelligence and IoT (AIoT) platform provider in China, announced they are using the Wireless Gecko platform to enable their smart multiprotocol products to easily connect to multi-node mesh networks deployed in smart homes.
• Announced a collaboration with Tile, makers of the world's best-selling Bluetooth location tracker, with Silicon Labs providing enabling software to its partners to support the expansion of Tile's ecosystem.
• Collaborated with Cognosos to create a wireless networking device using Wireless Gecko SoCs to improve the management of automotive asset tracking.

Business Highlights

• Added Christy Wyatt, CEO of Absolute Software Corporation and a thought leader in the cybersecurity industry, to Silicon Labs' board of directors.
• Won the Global Semiconductor Alliance's "Most Respected Public Semiconductor Company" award for the fourth year in a row.
• Honored at the 2018 ASPENCORE World Electronics Achievement Awards (WEAA) in Shenzhen, China; Tyson Tuttle named Executive of the Year, and Wireless Gecko won in the wireless product category.

Business Outlook

In light of macro uncertainty and volatility, the company expects first quarter revenue to be in the range of $183 to $193 million, with IoT, Infrastructure, Broadcast and Access down, and estimates the following:

On a GAAP basis:

• GAAP gross margin at approximately 60.0%.
• GAAP operating expenses at approximately $114.0 million.
• GAAP effective tax rate of 10.0%.
• GAAP diluted loss per share between $(0.11) and $(0.01).

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

• Non-GAAP gross margin at approximately 60.0%.
• Non-GAAP operating expenses at approximately $90.0 million.
• Non-GAAP effective tax rate at 13.0%.
• Non-GAAP diluted earnings per share between $0.42 and $0.52.

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 10127685. The replay will be available through March 2, 2019.

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: 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; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing Silicon Labs' distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks associated with international activities (including trade barriers); 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, 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; conflict mineral risks 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: Jalene Hoover, +1 (512) 428-1610, [email protected]

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