Silicon Laboratories, Inc. Net Income jumped on 77.5% and Revenue surged on 12.9%
01/30/2019 • About Silicon Laboratories, Inc. (
$SLAB) • By InTwits
Silicon Laboratories, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Silicon Laboratories, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 5.9% while average EBITDA Margin was 14.9% for the sames years
- Silicon Laboratories, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's a lot of higher than industry average of 7.4%.
- CAPEX is quite volatile: $24m in FY2018, $12m in FY2017, $11m in FY2016, $11m in FY2015, $11m in FY2014
- In the last 5 years the company invested considerably less than D&A: $70m vs. $215m. In FY2018 this situation was still the same: CAPEX was 24 while D&A was 60
- The company has potentially unprofitable business model: ROIC is 6.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Silicon Laboratories, Inc.'s Revenue surged on 12.9%. Revenue growth showed slowdown in FY18Q4 - it was 7.2% YoY. During the last 5 years Revenue growth bottomed in FY2015 at 3.9% and was accelerating since that time. EBITDA Margin showed almost no change in FY2018. During the last 5 years EBITDA Margin bottomed in FY2015 at 11.5% and was growing since that time.
Gross Margin increased slightly on 0.98 pp from 59.1% to 60.1% in FY2018. SG&A as a % of Revenue increased on 2.0 pp from 20.8% to 22.8% in FY2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018.
Net Income margin increased on 3.5 pp from 6.1% to 9.6% in FY2018.
Investments (CAPEX, working capital and M&A)
Silicon Laboratories, Inc.'s CAPEX/Revenue was 2.8% in FY2018. CAPEX/Revenue increased slightly on 1.1 pp from 1.7% in FY2015 to 2.8% in FY2018. It's average CAPEX/Revenue for the last three years was 2.0%. During FY2014-FY2018 CAPEX as a % of Revenue bottomed in FY2016 at 1.6% and was growing since that time.
Accounts receivable as a % of Revenue decreased slightly on 0.85 pp from 9.3% to 8.4% in FY2018. Inventories as a % of Revenue decreased slightly on 0.88 pp from 9.5% to 8.6% in FY2018. Accounts payable as a % of Revenue showed almost no change in FY2018.
Silicon Laboratories, Inc. has spent
$240m on M&A in FY2018 which accounts for 27.6% of revenue.
Return on investment
The company operates at low ROIC (6.3%) and ROE (8.3%). ROIC decreased slightly on 1.5 pp from 7.7% to 6.3% in FY2018. ROE increased on 3.0 pp from 5.3% to 8.3% in FY2018.
Leverage (Debt)
Debt level is 1.1x Net Debt / EBITDA and 2.4x Debt / EBITDA. Net Debt / EBITDA surged on 0.5x from 0.6x to 1.1x in FY2018. Debt increased on 3.8% while cash dropped on 26.8%. Net Debt/EBITDA stuck to a growing trend at 0.5x per annum in FY2014-FY2018.
The company has no short term refinancing risk: short term debt is zero.
Valuation and dividends
The company's trades at EV/EBITDA 26.3x and P/E 43.8x.
Management team
Silicon Laboratories, Inc.'s CEO G Tyson Tuttle is a founder and has spent 7 years with the company. CEO total compensation was
$6,077,880 in FY2018 which included
$648,147 salary. Silicon Laboratories, Inc.'s CFO is John C Hollister. John C Hollister has 6 years tenure at the company.
2.4% of the company is owned by insiders. Insider ownership didn't change in 2018.
The company has 1,505 employees. The number of employees surged on 17.7%. Average revenue per employee in FY2018 was
$576,922 and it decreased on 4.0%.
Financial and operational results
FY ended 12/29/2018
Silicon Laboratories, Inc. ($SLAB) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 620.7 | 644.8 | 697.6 | 768.9 | 868.3 | 12.9% |
| Gross Profit | 378.6 | 380.8 | 421.5 | 454.2 | 521.4 | 14.8% |
| SG&A | 154.1 | 160.5 | 155.5 | 159.7 | 197.8 | 23.9% |
| EBITDA | 81.9 | 73.9 | 107.2 | 127.0 | 145.2 | 14.4% |
| EBIT | 51.4 | 32.2 | 66.3 | 85.0 | 85.2 | 0.3% |
| Interest expence | 3.2 | | 2.6 | 14.1 | | |
| Tax | 11.0 | 0.7 | 3.0 | 29.8 | -11.4 | -138.3% |
| Net Income | 38.0 | 29.6 | 61.5 | 47.1 | 83.6 | 77.5% |
| Stock Based Compensation | 38.9 | 40.8 | 38.0 | 44.8 | 50.1 | 11.9% |
Balance Sheet
|
|---|
| Cash | 141.7 | 114.1 | 141.1 | 269.4 | 197.0 | -26.8% |
| Accounts Receivable | 70.4 | 73.6 | 74.4 | 71.4 | 73.2 | 2.6% |
| Inventory | 52.6 | 53.9 | 59.6 | 73.1 | 75.0 | 2.5% |
| Accounts Payable | 38.9 | 42.1 | 39.6 | 38.9 | 41.2 | 6.0% |
| Short Term Debt | 10.0 | 10.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 77.5 | 67.5 | 72.5 | 341.9 | 354.8 | 3.8% |
Cash flow
|
|---|
| Capex | 11.2 | 11.3 | 10.9 | 12.3 | 24.5 | 99.7% |
| Acquisitions | | 96.1 | 6.5 | 15.2 | 239.7 | 1,480.5% |
Ratios
|
|---|
| Revenue growth | 7.0% | 3.9% | 8.2% | 10.2% | 12.9% | |
| EBITDA growth | -12.6% | -9.8% | 45.1% | 18.4% | 14.4% | |
|
|---|
| Gross Margin | 61.0% | 59.1% | 60.4% | 59.1% | 60.1% | 1.0% |
| EBITDA Margin | 13.2% | 11.5% | 15.4% | 16.5% | 16.7% | 0.2% |
| EBIT Margin | 8.3% | 5.0% | 9.5% | 11.1% | 9.8% | -1.2% |
| SG&A, % of revenue | 24.8% | 24.9% | 22.3% | 20.8% | 22.8% | 2.0% |
| SBC, % of revenue | 6.3% | 6.3% | 5.4% | 5.8% | 5.8% | -0.1% |
| Net Income Margin | 6.1% | 4.6% | 8.8% | 6.1% | 9.6% | 3.5% |
| CAPEX, % of revenue | 1.8% | 1.7% | 1.6% | 1.6% | 2.8% | 1.2% |
|
|---|
| ROIC | 6.1% | 3.8% | 7.6% | 7.7% | 6.3% | -1.5% |
| ROE | 5.1% | 3.9% | 7.7% | 5.3% | 8.3% | 3.0% |
| Net Debt/EBITDA | -0.7x | -0.5x | -0.6x | 0.6x | 1.1x | 0.5x |
| Interest expence / Average debt | 3.6% | | 3.4% | 6.8% | | |
People
|
|---|
| Insider ownership | 2.4% | 2.4% | 2.4% | 2.4% | 2.4% | 0.0% |
| Employees | 1,107 | 1,199 | 1,252 | 1,279 | 1,505 | 17.7% |
| Revenue/Employee, th. $ | 561 | 538 | 557 | 601 | 577 | -4.0% |
Silicon Laboratories, Inc. ($SLAB) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 205 | 217 | 230 | 216 | | 14.7% | 14.2% | 15.9% | 7.2% |
| EBITDA | 34 | 34 | 44 | 33 | | 47.0% | 7.7% | 23.9% | -9.6% |
| Net Income | 26 | 14 | 28 | 15 | | 71.2% | -13.8% | 39.2% | |
Balance Sheet
|
|---|
| Cash | 342 | 195 | 225 | 197 | | 51.9% | -7.5% | -4.7% | -26.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 345 | 348 | 351 | 355 | | 3.8% | 3.8% | 3.8% | 3.8% |
Ratios
|
|---|
| Gross Margin | 60.5% | 60.5% | 58.9% | 60.4% | | 1.8% | 0.9% | 0.2% | 1.1% |
| EBITDA Margin | 16.5% | 15.6% | 19.2% | 15.4% | | 3.6% | -0.9% | 1.2% | -2.9% |
| Net Income Margin | 12.9% | 6.6% | 12.1% | 7.0% | | 4.2% | -2.1% | 2.0% | 9.4% |
Peers in Semiconductors
Below you can find Silicon Laboratories, Inc. benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 4.4% | 11.0% | 4.7% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | | 3.9% | 8.2% | 10.2% | 12.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 48.6% | 50.4% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 61.0% | 59.1% | 60.4% | 59.1% | 60.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 9.8% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 13.2% | 11.5% | 15.4% | 16.5% | 16.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.7% | 4.7% | 4.6% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 1.8% | 1.7% | 1.6% | 1.6% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.4% | 3.2% | 3.0% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 6.1% | 3.8% | 7.6% | 7.7% | 6.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.4x | 0.4x | 0.3x |
|---|
| Silicon Laboratories, Inc. ($SLAB) | -0.7x | -0.5x | -0.6x | 0.6x | 1.1x |
