Silicon Laboratories Inc 10-Q for FY2022 Q1

Silicon Laboratories Inc. (SLAB)

10-Q 2022-04-27 For: 2022-04-02

Added on April 08, 2026

About this 10-Q

Silicon Laboratories Inc filed this 10-Q on April 27, 2022, covering the quarter ended April 2, 2022 (FY2022 Q1).

Headline figures

Quarter ended April 2, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $233.81M; up 48.1% from $157.86M a year earlier
Net income: $22.91M; up 69.6% from net income of $13.51M a year earlier
Diluted EPS: $0.58; up 100.0% from $0.29 a year earlier

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Delaware		74-2793174
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


400 West Cesar Chavez, Austin, Texas		78701
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	SLAB	The NASDAQ Stock Market LLC


Part I. Financial Information		Page Number

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets at April 2, 2022 and January 1, 2022	3

	Condensed Consolidated Statements of Income for the three months ended April 2, 2022 and April 3, 2021	4

	Condensed Consolidated Statements of Comprehensive Income for the three months ended April 2, 2022 and April 3, 2021	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended April 2, 2022 and April 3, 2021	6

	Condensed Consolidated Statements of Cash Flows for the three months ended April 2, 2022 and April 3, 2021	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

Part II. Other Information

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults Upon Senior Securities	44

Item 4.	Mine Safety Disclosures	44

Item 5.	Other Information	44

Item 6.	Exhibits	45


	April 2,		January 1,
	2022		2022
Assets
Current assets:
Cash and cash equivalents	$	765,911	$	1,074,623
Short-term investments		1,167,807		964,582
Accounts receivable, net		79,233		98,313
Inventories		55,515		49,307
Prepaid expenses and other current assets		54,932		51,748
Total current assets		2,123,398		2,238,573
Property and equipment, net		147,940		146,516
Goodwill		376,389		376,389
Other intangible assets, net		108,627		118,978
Other assets, net		87,408		77,839
Total assets	$	2,843,762	$	2,958,295
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	64,388	$	47,327
Current portion of convertible debt, net		—		450,599
Deferred revenue and returns liability		21,640		13,849
Other current liabilities		160,180		157,052
Total current liabilities		246,208		668,827
Convertible debt, net		528,086		—
Other non-current liabilities		61,813		77,044
Total liabilities		836,107		745,871
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; 37,204 and 38,481 shares issued and outstanding at April 2, 2022 and January 1, 2022, respectively		4		4
Retained earnings		2,018,117		2,214,839
Accumulated other comprehensive loss		(10,466)		(2,419)
Total stockholders’ equity		2,007,655		2,212,424
Total liabilities and stockholders’ equity	$	2,843,762	$	2,958,295


	Three Months Ended
	April 2,		April 3,
	2022		2021
Revenues	$	233,814	$	157,857
Cost of revenues		78,042		66,103
Gross profit		155,772		91,754
Operating expenses:
Research and development		77,542		64,015
Selling, general and administrative		44,647		42,454
Operating expenses		122,189		106,469
Operating income (loss)		33,583		(14,715)
Other income (expense):
Interest income and other, net		1,499		1,149
Interest expense		(1,680)		(11,324)
Income (loss) from continuing operations before income taxes		33,402		(24,890)
Provision for income taxes		11,689		1,992
Equity-method earnings		1,194		1,726
Income (loss) from continuing operations		22,907		(25,156)
Income from discontinued operations, net of income taxes		—		38,665

Net income	$	22,907	$	13,509

Basic earnings (loss) per share:
Continuing operations	$	0.60	$	(0.57)
Net income	$	0.60	$	0.31

Diluted earnings (loss) per share:
Continuing operations	$	0.58	$	(0.57)
Net income	$	0.58	$	0.29

Weighted-average common shares outstanding:
Basic		38,003		44,160
Diluted		39,523		45,832


				Additional				Accumulated Other		Total
		Common		Paid-In		Retained		Comprehensive		Stockholders’
Three Months Ended April 2, 2022	Shares	Stock		Capital		Earnings		Income (Loss)		Equity
Balance as of January 1, 2022	38,481	$	4	$	—	$	2,214,839	$	(2,419)	$	2,212,424
Cumulative effect of adoption of accounting standard	—		—		—		(59,963)		—		(59,963)
Net income	—		—		—		22,907		—		22,907
Other comprehensive loss	—		—		—		—		(8,047)		(8,047)
Stock issuances, net of shares withheld for taxes	142		—		(8,755)		—		—		(8,755)
Repurchases of common stock	(1,419)		—		(4,114)		(159,666)		—		(163,780)
Stock-based compensation	—		—		12,869		—		—		12,869
Balance as of April 2, 2022	37,204	$	4	$	—	$	2,018,117	$	(10,466)	$	2,007,655


	Increase
Financial Statement Line Item	(Decrease)
Current portion of convertible debt, net	$	76,991
Other non-current liabilities	$	(17,028)
Retained earnings	$	(59,963)


	Fair Value Measurements
	at April 2, 2022 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash equivalents:
Money market funds	$	489,907	$	—	$	—	$	489,907
Corporate debt securities		—		31,417		—		31,417
Total cash equivalents	$	489,907	$	31,417	$	—	$	521,324

Short-term investments:
Government debt securities	$	209,331	$	85,053	$	—	$	294,384
Corporate debt securities		—		873,423		—		873,423
Total short-term investments	$	209,331	$	958,476	$	—	$	1,167,807

Other assets, net:
Auction rate securities	$	—	$	—	$	4,944	$	4,944
Total	$	—	$	—	$	4,944	$	4,944

Total	$	699,238	$	989,893	$	4,944	$	1,694,075


	Fair Value Measurements
	at January 1, 2022 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash equivalents:
Money market funds	$	845,740	$	—	$	—	$	845,740
Corporate debt securities		—		3,552		—		3,552
Government debt securities		—		2,950				2,950
Total cash equivalents	$	845,740	$	6,502	$	—	$	852,242

Short-term investments:
Government debt securities	$	71,509	$	119,612	$	—	$	191,121
Corporate debt securities		—		773,461		—		773,461
Total short-term investments	$	71,509	$	893,073	$	—	$	964,582

Other assets, net:
Auction rate securities	$	—	$	—	$	4,980	$	4,980
Total	$	—	$	—	$	4,980	$	4,980

Total	$	917,249	$	899,575	$	4,980	$	1,821,804


			Fair
	Cost		Value
Due in one year or less	$	638,424	$	636,611
Due after one year through ten years		572,449		562,613
Due after ten years		6,000		4,944
	$	1,216,873	$	1,204,168


	Less Than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of April 2, 2022	Value		Losses		Value		Losses		Value		Losses
Government debt securities	$	290,078	$	(3,907)	$	478	$	(12)	$	290,556	$	(3,919)
Corporate debt securities		628,199		(7,707)		2,629		(34)		630,828		(7,741)
Auction rate securities		—		—		4,944		(1,056)		4,944		(1,056)
	$	918,277	$	(11,614)	$	8,051	$	(1,102)	$	926,328	$	(12,716)


Fair Value at
April 2, 2022
(000s)		Valuation Technique	Unobservable Input	Weighted Average
	$4,944	Discounted cash flow	Estimated yield	1.01%

			Expected holding period	10 years

			Estimated discount rate	3.58%


	Three Months
Auction Rate Securities	Ended
Beginning balance	$	4,980
Loss included in other comprehensive loss		(36)
Balance at April 2, 2022	$	4,944


Income Statement Item		Estimate

Revenues		$245 million to $255 million

Gross margin		60.9%

Operating expenses		$129 million

Effective tax rate		33%

Diluted earnings per share		$0.37 to $0.47


	April 2,		January 1,
	2022		2022
Work in progress	$	43,415	$	36,078
Finished goods		12,100		13,229
	$	55,515	$	49,307


	April 2,		January 1,
	2022		2022
Liability component
Principal	$	535,000	$	535,000
Unamortized debt discount		—		(78,519)
Unamortized debt issuance costs		(6,914)		(5,882)
Net carrying amount	$	528,086	$	450,599

Equity component
Net carrying amount	$	—	$	107,928


	Three Months Ended
	April 2,		April 3,				%
(in millions)	2022		2021		Change		Change
Industrial & Commercial	$	126.7	$	78.7	$	48.0	60.9	%
Home & Life		107.1		79.2		27.9	35.4	%
	$	233.8	$	157.9	$	75.9	48.1	%


				Total Number of	Approximate Dollar
	Total			Shares Purchased as	Value of Shares that
	Number of	Average Price		Part of Publicly	May Yet Be
	Shares	Paid per		Announced Plans	Purchased Under the
Period	Purchased	Share		or Programs	Plans or Programs
January 2, 2022 – January 29, 2022 (1)	284	$	—	284	$	250,000

January 30, 2022 – February 26, 2022	213	$	153.46	213	$	217,360

February 27, 2022 – April 2, 2022	922	$	142.28	922	$	86,244
Total	1,419	$	115.43	1,419


Exhibit Number
2.1*		Asset Purchase Agreement dated April 22, 2021 between Silicon Laboratories Inc. and Skyworks Solutions, Inc. (filed as Exhibit 2.1 to the Form 8-K filed on April 22, 2021).

3.1*		Form of Fourth Amended and Restated Certificate of Incorporation of Silicon Laboratories Inc. (filed as Exhibit 3.1 to the Registration Statement on Form S-1 (Securities and Exchange Commission File No. 333-94853) (the “IPO Registration Statement”)).

3.2*		Fifth Amended and Restated Bylaws of Silicon Laboratories Inc. (filed as Exhibit 3.1 to the Form 8-K filed on February 3, 2021).

4.1*		Specimen certificate for shares of common stock (filed as Exhibit 4.1 to the IPO Registration Statement).

4.2*		Indenture between Silicon Laboratories Inc. and Wilmington Trust, National Association, as trustee, dated March 6, 2017 (filed as Exhibit 4.1 to the Form 8-K filed on March 6, 2017).

4.3*		Form of 1.375% Convertible Senior Note due 2022 (filed as Exhibit 4.2 to the Form 8-K filed on March 6, 2017).

4.4*		Indenture between Silicon Laboratories Inc. and Wilmington Trust, National Association, as trustee, dated June 1, 2020 (filed as Exhibit 4.1 to the Form 8-K filed on June 1, 2020).

4.5*		Form of 0.625% Convertible Senior Note due 2025 (filed as Exhibit 4.2 to the Form 8-K filed on June 1, 2020).

4.6*		First Supplemental Indenture between Silicon Laboratories Inc. and Wilmington Trust, National Association, as trustee, dated January 2, 2022 (filed as Exhibit 4.1 to the Form 8-K filed on January 3, 2022).

10.1*		Silicon Laboratories Inc. 2022 Bonus Plan (filed as Exhibit 10.1 to the Form 8-K filed on January 28, 2022).

31.1		Certification of the Principal Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification as required by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

		SILICON LABORATORIES INC.


April 27, 2022		/s/ R. Matthew Johnson
Date		R. Matthew Johnson
		President and
		Chief Executive Officer
		(Principal Executive Officer)


April 27, 2022		/s/ John C. Hollister
Date		John C. Hollister
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial Officer)


April 27, 2022		/s/ Mark D. Mauldin
Date		Mark D. Mauldin
		Chief Accounting Officer
		(Principal Accounting Officer)