Silicon Laboratories, Inc. Debt surged on 18.8% while EBITDA dropped on 10.6%
02/03/2021 • About Silicon Laboratories, Inc. (
$SLAB) • By InTwits
Silicon Laboratories, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Silicon Laboratories, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 3.3%. Average EBITDA Margin for the same period was 14.9%
- Silicon Laboratories, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $22m in FY2020, $25m in FY2019, $24m in FY2018, $12m in FY2017, $11m in FY2016
- In the last 5 years the company invested considerably less than D&A: $94m vs. $143m
- The company has potentially unprofitable business model: ROIC is 2.5%
- It operates with high leverage: Net Debt/EBITDA is 2.4x while industry average is 0.3x
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 increased on 5.9%. Revenue growth showed acceleration in FY20Q4 - it increased 10.7% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 14.2% to 12.0% in FY2020. During the last 5 years EBITDA Margin topped in FY2018 at 16.7% and was declining since that time.
Gross Margin decreased slightly on 1.4 pp from 60.9% to 59.5% in FY2020. SG&A as a % of Revenue decreased slightly on 0.75 pp from 23.5% to 22.7% in FY2020.
Net Income margin decreased slightly on 0.89 pp from 2.3% to 1.4% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.5% in FY2020. The company's CAPEX/Revenue increased slightly on 0.89 pp from 1.6% in FY2017 to 2.5% in FY2020. It's average level of CAPEX/Revenue for the last three years was 2.7%. During FY2016-FY2020 CAPEX as a % of Revenue topped in FY2019 at 2.9%.
Return on investment
The company operates at low ROIC (2.5%) and ROE (1.1%). ROIC decreased slightly on 1.5 pp from 3.9% to 2.5% in FY2020. ROE decreased slightly on 0.68 pp from 1.8% to 1.1% in FY2020. ROIC followed a declining trend at -1.4 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is 2.4x Net Debt / EBITDA and 4.3x Debt / EBITDA. Net Debt / EBITDA jumped on 1.1x from 1.3x to 2.4x in FY2020. Debt surged on 18.8% while cash dropped on 10.8%. Net Debt/EBITDA grew at 0.7x per annum in FY2016-FY2020.
Silicon Laboratories, Inc. has no short term refinancing risk: cash is higher than short term debt (2,986.9%).
Valuation and dividends
The company's trades at EV/EBITDA 61.7x and P/E 503.8x.
Management team
Silicon Laboratories, Inc.'s CEO G Tyson Tuttle has spent 8 years with the company. Silicon Laboratories, Inc.'s CFO is John C Hollister. John C Hollister has 7 years tenure at the company.
Financial and operational results
FY ended 01/02/2021
Silicon Laboratories, Inc. ($SLAB) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 697.6 | 768.9 | 868.3 | 837.6 | 886.7 | 5.9% |
| Gross Profit | 421.5 | 454.2 | 521.4 | 510.3 | 527.5 | 3.4% |
| SG&A | 155.5 | 159.7 | 197.8 | 196.4 | 201.3 | 2.5% |
| EBITDA | 107.2 | 127.0 | 145.2 | 119.0 | 106.4 | -10.6% |
| EBIT | 66.3 | 85.0 | 85.2 | | | |
| Interest expence | 2.6 | 14.1 | | | | |
| Tax | 3.0 | 29.8 | -11.4 | | | |
| Net Income | 61.5 | 47.1 | 83.6 | 19.3 | 12.5 | -35.0% |
| Stock Based Compensation | 38.0 | 44.8 | 50.1 | | | |
Balance Sheet
|
|---|
| Cash | 141.1 | 269.4 | 197.0 | 227.1 | 202.7 | -10.8% |
| Accounts Receivable | 74.4 | 71.4 | 73.2 | | | |
| Inventory | 59.6 | 73.1 | 75.0 | | | |
| Accounts Payable | 39.6 | 38.9 | 41.2 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 5.6 | 6.8 | 21.1% |
| Long Term Debt | 72.5 | 341.9 | 354.8 | 380.5 | 452.1 | 18.8% |
Cash flow
|
|---|
| Capex | 10.9 | 12.3 | 24.5 | 24.7 | 22.0 | -10.9% |
| Acquisitions | 6.5 | 15.2 | 239.7 | | | |
Ratios
|
|---|
| Revenue growth | 8.2% | 10.2% | 12.9% | -3.5% | 5.9% | |
| EBITDA growth | 45.1% | 18.4% | 14.4% | -18.1% | -10.6% | |
|
|---|
| Gross Margin | 60.4% | 59.1% | 60.1% | 60.9% | 59.5% | -1.4% |
| EBITDA Margin | 15.4% | 16.5% | 16.7% | 14.2% | 12.0% | -2.2% |
| EBIT Margin | 9.5% | 11.1% | 9.8% | | |
| SG&A, % of revenue | 22.3% | 20.8% | 22.8% | 23.5% | 22.7% | -0.7% |
| SBC, % of revenue | 5.4% | 5.8% | 5.8% | | |
| Net Income Margin | 8.8% | 6.1% | 9.6% | 2.3% | 1.4% | -0.9% |
| CAPEX, % of revenue | 1.6% | 1.6% | 2.8% | 2.9% | 2.5% | -0.5% |
|
|---|
| ROIC | 7.6% | 7.7% | 6.3% | 3.9% | 2.5% | -1.5% |
| ROE | 7.7% | 5.3% | 8.3% | 1.8% | 1.1% | -0.7% |
| Net Debt/EBITDA | -0.6x | 0.6x | 1.1x | 1.3x | 2.4x | 1.1x |
| Interest expence / Average debt | 3.6% | 6.8% | | | | |
People
|
|---|
| Insider ownership | 2.4% | 2.4% | 2.4% | | | |
| Employees | 1,252 | 1,279 | 1,505 | | | |
| Revenue/Employee, th. $ | 557 | 601 | 577 | | | |
Silicon Laboratories, Inc. ($SLAB) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 215 | 208 | 221 | 243 | | 14.2% | 0.4% | -0.9% | 10.7% |
| EBITDA | 18 | 23 | 25 | 35 | | -14.7% | -24.2% | -35.0% | 20.6% |
| Net Income | 2 | -2 | 3 | 9 | | -58.4% | - | -84.3% | -7.9% |
Balance Sheet
|
|---|
| Cash | 616 | 278 | 230 | 203 | | 166.4% | 46.5% | -2.8% | -10.8% |
| Short Term Debt | 310 | 0 | 0 | 7 | | 6,935.9% | -100.0% | -100.0% | 21.1% |
| Long Term Debt | 372 | 572 | 562 | 452 | | -0.7% | 51.2% | 47.1% | 18.8% |
Ratios
|
|---|
| Gross Margin | 60.1% | 60.9% | 58.8% | 58.4% | | -1.5% | -0.6% | -1.3% | -2.3% |
| EBITDA Margin | 8.4% | 11.1% | 11.4% | 14.2% | | -2.8% | -3.6% | -6.0% | 1.2% |
| Net Income Margin | 1.0% | -0.9% | 1.4% | 3.7% | | -1.8% | 6.9% | -7.6% | -0.7% |
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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 11.0% | 4.4% | -3.0% | 1.0% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | - | 10.2% | 12.9% | -3.5% | 5.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.4% | 49.2% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 60.4% | 59.1% | 60.1% | 60.9% | 59.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.4% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 15.4% | 16.5% | 16.7% | 14.2% | 12.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.7% | 4.7% | 4.4% | 3.8% | 4.0% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 1.6% | 1.6% | 2.8% | 2.9% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 2.2% | 2.2% | 5.5% |
|---|
| Silicon Laboratories, Inc. ($SLAB) | 7.6% | 7.7% | 6.3% | 3.9% | 2.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.1x |
|---|
| Silicon Laboratories, Inc. ($SLAB) | -0.6x | 0.6x | 1.1x | 1.3x | 2.4x |
