Silicon Laboratories Inc 10-Q for FY2021 Q1

Silicon Laboratories Inc. (SLAB)

10-Q 2021-04-28 For: 2021-04-03

Added on April 08, 2026

About this 10-Q

Silicon Laboratories Inc filed this 10-Q on April 28, 2021, covering the quarter ended April 3, 2021 (FY2021 Q1).

Headline figures

Quarter ended April 3, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $255.51M; up 18.9% from $214.88M a year earlier
Net income: $13.51M; up 502.0% from net income of $2.24M a year earlier
Diluted EPS: $0.29; up 480.0% from $0.05 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 3, 2021 and January 2, 2021	3

	Condensed Consolidated Statements of Income for the three months ended April 3, 2021 and April 4, 2020	4

	Condensed Consolidated Statements of Comprehensive Income for the three months ended April 3, 2021 and April 4, 2020	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended April 3, 2021 and April 4, 2020	6

	Condensed Consolidated Statements of Cash Flows for the three months ended April 3, 2021 and April 4, 2020	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	27

Part II. Other Information

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 3.	Defaults Upon Senior Securities	41

Item 4.	Mine Safety Disclosures	41

Item 5.	Other Information	41

Item 6.	Exhibits	42


	April 3,		January 2,
	2021		2021
Assets
Current assets:
Cash and cash equivalents	$	205,224	$	202,720
Short-term investments		367,708		521,963
Accounts receivable, net		103,699		95,169
Inventories		79,244		66,662
Prepaid expenses and other current assets		105,056		89,307
Total current assets		860,931		975,821
Property and equipment, net		141,000		139,439
Goodwill		631,932		631,932
Other intangible assets, net		154,379		166,084
Other assets, net		82,381		80,211
Total assets	$	1,870,623	$	1,993,487
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	68,998	$	54,949
Current portion of convertible debt, net		—		134,480
Deferred revenue and returns liability		13,450		12,986
Other current liabilities		68,351		82,083
Total current liabilities		150,799		284,498
Convertible debt, net		434,288		428,945
Other non-current liabilities		78,557		80,203
Total liabilities		663,644		793,646
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; 44,749 and 43,925 shares issued and outstanding at April 3, 2021 and January 2, 2021, respectively		4		4
Additional paid-in capital		199,576		204,359
Retained earnings		1,007,173		993,664
Accumulated other comprehensive income		226		1,814
Total stockholders' equity		1,206,979		1,199,841
Total liabilities and stockholders’ equity	$	1,870,623	$	1,993,487


	Three Months Ended
	April 3,		April 4,
	2021		2020
Revenues	$	255,505	$	214,877
Cost of revenues		104,922		85,711
Gross profit		150,583		129,166
Operating expenses:
Research and development		76,474		71,223
Selling, general and administrative		51,950		53,996
Operating expenses		128,424		125,219
Operating income		22,159		3,947
Other income (expense):
Interest income and other, net		2,875		3,251
Interest expense		(11,324)		(5,541)
Income before income taxes		13,710		1,657
Provision (benefit) for income taxes		201		(587)

Net income	$	13,509	$	2,244

Earnings per share:
Basic	$	0.31	$	0.05
Diluted	$	0.29	$	0.05

Weighted-average common shares outstanding:
Basic		44,160		43,642
Diluted		45,832		44,388


				Additional				Accumulated Other		Total
		Common		Paid-In		Retained		Comprehensive		Stockholders’
Three Months Ended April 3, 2021	Shares	Stock		Capital		Earnings		Income (Loss)		Equity
Balance as of January 2, 2021	43,925	$	4	$	204,359	$	993,664	$	1,814	$	1,199,841
Net income	—		—		—		13,509		—		13,509
Other comprehensive loss	—		—		—		—		(1,588)		(1,588)
Stock issuances, net of shares withheld for taxes	296		—		(17,817)		—		—		(17,817)
Stock-based compensation	—		—		13,782		—		—		13,782
Convertible debt activity	528		—		(748)		—		—		(748)
Balance as of April 3, 2021	44,749	$	4	$	199,576	$	1,007,173	$	226	$	1,206,979


	Fair Value Measurements
	at April 3, 2021 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	$	67,279	$	—	$	—	$	67,279
Corporate debt securities		—		1,202		—		1,202
Total cash equivalents	$	67,279	$	1,202	$	—	$	68,481

Short-term investments:
Government debt securities	$	5,226	$	80,124	$	—	$	85,350
Corporate debt securities		—		282,358		—		282,358
Total short-term investments	$	5,226	$	362,482	$	—	$	367,708

Other assets, net:
Auction rate securities	$	—	$	—	$	5,262	$	5,262
Total	$	—	$	—	$	5,262	$	5,262

Total	$	72,505	$	363,684	$	5,262	$	441,451


	Fair Value Measurements
	at January 2, 2021 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	$	75,606	$	—	$	—	$	75,606
Corporate debt securities		—		14,995		—		14,995
Government debt securities		2,355		2,564		—		4,919
Total cash equivalents	$	77,961	$	17,559	$	—	$	95,520

Short-term investments:
Government debt securities	$	38,461	$	104,112	$	—	$	142,573
Corporate debt securities		—		379,390		—		379,390
Total short-term investments	$	38,461	$	483,502	$	—	$	521,963

Other assets, net:
Auction rate securities	$	—	$	—	$	5,340	$	5,340
Total	$	—	$	—	$	5,340	$	5,340

Total	$	116,422	$	501,061	$	5,340	$	622,823


			Fair
	Cost		Value
Due in one year or less	$	270,863	$	271,720
Due after one year through ten years		151,369		151,669
Due after ten years		18,800		18,062
	$	441,032	$	441,451


	Less Than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of April 3, 2021	Value		Losses		Value		Losses		Value		Losses
Government debt securities	$	6,719	$	(6)	$	—	$	—	$	6,719	$	(6)
Corporate debt securities		59,542		(56)		—		—		59,542		(56)
Auction rate securities		—		—		5,262		(738)		5,262		(738)
	$	66,261	$	(62)	$	5,262	$	(738)	$	71,523	$	(800)


Fair Value at
April 3, 2021
(000s)		Valuation Technique	Unobservable Input	Weighted Average
$	5,262	Discounted cash flow	Estimated yield	1.18	%

			Expected holding period	10 years

			Estimated discount rate	2.57	%


	Three Months
Auction Rate Securities	Ended
Beginning balance	$	5,340
Loss included in other comprehensive loss		(78)
Balance at April 3, 2021	$	5,262


Income Statement Item		Estimate

Revenues		$262 million to $272 million

Gross margin		57% - 58%

Operating expenses		$130 million

Effective tax rate		7%

Diluted earnings per share		$0.28 to $0.38


Exhibit Number
2.1*		Asset Purchase Agreement, dated March 11, 2020, by and among Silicon Laboratories Inc., Silicon Laboratories International Pte. Ltd. and Redpine Signals, Inc. (filed as Exhibit 2.1 to the Form 8-K filed on March 12, 2020).

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).

10.1*		Silicon Laboratories Inc. 2021 Bonus Plan (filed as Exhibit 10.1 to the Form 8-K filed on February 3, 2021).

10.2*		Silicon Laboratories Inc. Form of Change in Control Agreement (filed as Exhibit 10.2 to the Form 8-K filed on February 3, 2021).

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)


	April 3,		January 2,
	2021		2021
Work in progress	$	68,747	$	56,165
Finished goods		10,497		10,497
	$	79,244	$	66,662


	April 3,		January 2,
	2021		2021
Liability component
Principal	$	535,000	$	675,567
Unamortized debt discount		(93,693)		(103,953)
Unamortized debt issuance costs		(7,019)		(8,189)
Net carrying amount	$	434,288	$	563,425

Equity component
Net carrying amount	$	107,927	$	108,438


	Three Months Ended
	April 3,		April 4,
	2021		2020
Contractual interest expense	$	1,163	$	1,467
Amortization of debt discount		5,938		3,246
Amortization of debt issuance costs		518		490
	$	7,619	$	5,203


	Three Months Ended
	April 3,		April 4,				%
(in millions)	2021		2020		Change		Change
Internet of Things	$	158.2	$	118.1	$	40.1	34.1	%
Infrastructure and automotive		97.3		96.8		0.5	0.4	%
Revenues	$	255.5	$	214.9	$	40.6	18.9	%

		SILICON LABORATORIES INC.


April 28, 2021		/s/ G. Tyson Tuttle
Date		G. Tyson Tuttle
		President and
		Chief Executive Officer
		(Principal Executive Officer)


April 28, 2021		/s/ John C. Hollister
Date		John C. Hollister
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial Officer)


April 28, 2021		/s/ Mark D. Mauldin
Date		Mark D. Mauldin
		Chief Accounting Officer
		(Principal Accounting Officer)