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Silicon Laboratories Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 31, 2011 04:52PM
Silicon Laboratories Inc. (SLAB) filed Quarterly Report for the period ended 2011-10-01. Silicon Laboratories Inc. has a market cap of $1.94 billion; its shares were traded at around $43.73 with a P/E ratio of 41.65 and P/S ratio of 3.92. Silicon Laboratories Inc. had an annual average earning growth of 20.7% over the past 5 years.
Highlight of Business Operations:The Company is exposed to interest rate fluctuations in the normal course of its business, including through its corporate headquarters leases. The base rents for these leases are calculated using a variable interest rate based on the three-month LIBOR. The Company has entered into interest rate swap agreements with notional values of $44.3 million and $50.1 million and, effectively, fixed the rent payment amounts on these leases through March 2011 and March 2013, respectively. The Companys swap agreement with a notional value of $44.3 million matured in March 2011 and was not renewed. The Companys objective in entering into such swap agreements was to offset increases and decreases in expenses resulting from changes in interest rates with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative purposes.
During the nine months ended October 1, 2011, one customer, Samsung, represented more than 10% of our revenues. No other single end customer accounted for more than 10% of our revenues during the nine months ended October 1, 2011. In addition to direct sales to customers, some of our end customers purchase products indirectly from us through distributors and contract manufacturers. An end customer purchasing through a contract manufacturer typically instructs such contract manufacturer to obtain our products and incorporate such products with other components for sale by such contract manufacturer to the end customer. Although we actually sell the products to, and are paid by, the distributors and contract manufacturers, we refer to such end customer as our customer. Three of our distributors, Edom Technology, Avnet and Macnica, represented 24%, 13% and 11% of our revenues during the nine months ended October 1, 2011, respectively. There were no other distributors or contract manufacturers that accounted for more than 10% of our revenues during the nine months ended October 1, 2011.
The decline in the sales of our products in the recent three and nine month periods was driven primarily by demand weakness. Unit volumes of our products increased by 4.6% and average selling prices decreased by 4.4% compared to the three months ended October 2, 2010. Unit volumes of our products decreased by 7.0% and average selling prices increased by 3.6% compared to the nine months ended October 2, 2010.
Accounts receivable increased to $58.4 million at October 1, 2011 from $45.0 million at January 1, 2011. The increase in accounts receivable resulted primarily from (a) a larger portion of the shipments occurring in the second half of the quarter ended October 1, 2011 in contrast to the more linear shipments that occurred during the last quarter of fiscal 2010, and (b) an increase in shipments during the quarter ended October 1, 2011 compared to the last quarter of fiscal 2010. Our average days sales outstanding (DSO) was 44 days at October 1, 2011 and 36 days at January 1, 2011.
Net cash provided by investing activities was $16.9 million during the nine months ended October 1, 2011, compared to net cash used of $48.3 million during the nine months ended October 2, 2010. The increase in cash inflows was principally due to an increase of $68.4 million in net inflows for sales and maturities of investments.
Stocks Discussed: SLAB,