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Silicon Laboratories Inc. Reports Operating Results (10-Q)

July 25, 2012 | About:

Silicon Laboratories Inc. (NASDAQ:SLAB) filed Quarterly Report for the period ended 2012-06-30.

Silicon Laboratories has a market cap of $1.56 billion; its shares were traded at around $37.98 with a P/E ratio of 31.1 and P/S ratio of 3.2. Silicon Laboratories had an annual average earning growth of 22.1% 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 is 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 six months ended June 30, 2012, we had one customer, Samsung, whose purchases across a variety of product areas represented more than 10% of our revenues. 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. Two of our distributors, Edom Technology and Avnet, represented more than 10% of our revenues during the six months ended June 30, 2012. There were no other distributors or contract manufacturers that accounted for more than 10% of our revenues during the six months ended June 30, 2012.

The growth in revenues in the recent three and six month periods was due primarily to increases in market share. Unit volumes of our products increased compared to the three and six months ended July 2, 2011 by 11.6% and 13.2%, respectively. Average selling prices decreased during the same periods by 3.8% and 6.1%, respectively. The average selling prices of our products may fluctuate significantly from period to period. In general, as our products become more mature, we expect to experience decreases in average selling prices. We anticipate that newly announced, higher priced, next generation products and product derivatives will offset some of these decreases.

Accounts receivable increased to $72.7 million at June 30, 2012 from $55.4 million at December 31, 2011. The increase in accounts receivable resulted primarily from an increase in shipments during the quarter ended June 30, 2012 compared to the last quarter of fiscal 2011. Our average days sales outstanding (DSO) was 48 days at June 30, 2012 and 39 days at December 31, 2011.

Net cash provided by investing activities was $68.3 million during the six months ended June 30, 2012, compared to net cash used of $4.0 million during the six months ended July 2, 2011. The increase in cash inflows was principally due to an increase of $52.4 million from net proceeds from sales and maturities of marketable securities and a net payment of $27.3 million for the acquisition of Spectra Linear during the six months ended July 2, 2011.

Read the The complete Report

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