Webcast and Conference Call

A conference call discussing the quarterly results will follow this press release at 7:30 a.m. Central time. An audio webcast will be available on Silicon Labs' website under Investor Relations ( www.silabs.com). A replay will be available after the call at the same website listed above or by calling 1 (855) 859-2056 or (404) 537-3406 (international) and entering conference ID 39717390. The replay will be available through November 23, 2014.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and system solutions for the Internet of Things, Internet Infrastructure, industrial control, consumer and automotive markets. We solve the electronics industry’s toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity. Backed by our world-class engineering teams with unsurpassed software and mixed-signal design expertise, Silicon Labs empowers developers with the tools and technologies they need to advance quickly and easily from initial idea to final product. www.silabs.com

Forward-Looking Statements

This press release contains forward-looking statements based on Silicon Labs' current expectations. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will" and similar phrases as they relate to Silicon Labs are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silicon Labs and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: risks that Silicon Labs may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing our distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with our accounts receivable; dependence on key personnel; stock price volatility; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Labs' business and results of operations to risks of natural disasters, epidemics, war and political unrest; debt-related risks; capital-raising risks; the competitive and cyclical nature of the semiconductor industry; average selling prices of products may decrease significantly and rapidly; information technology risks; conflict mineral risks and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. Silicon Labs disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. References in this press release to Silicon Labs shall mean Silicon Laboratories Inc.

Note to editors: Silicon Laboratories, Silicon Labs, the “S” symbol, the Silicon Laboratories logo and the Silicon Labs logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.

Silicon Laboratories Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
			Three Months Ended											Nine Months Ended
			September 27,					September 28,						September 27,					September 28,
			2014					2013						2014					2013
Revenues			$	158,144				$	146,933					$	458,753				$	433,851
Cost of revenues				62,033					58,772						176,874					169,545
Gross margin				96,111					88,161						281,879					264,306
Operating expenses:
Research and development				42,517					40,662						126,846					115,631
Selling, general and administrative				43,990					37,009						114,618					98,519
Operating expenses				86,507					77,671						241,464					214,150
Operating income				9,604					10,490						40,415					50,156
Other income (expense):
Interest income				231					129						733					616
Interest expense				(768	)				(813	)					(2,346	)				(2,486	)
Other income (expense), net				42					(23	)					103					39
Income before income taxes				9,109					9,783						38,905					48,325
Provision for income taxes				3,501					3,252						10,908					9,148
Net income			$	5,608				$	6,531					$	27,997				$	39,177
Earnings per share:
Basic			$	0.13				$	0.15					$	0.65				$	0.92
Diluted			$	0.13				$	0.15					$	0.64				$	0.90
Weighted-average common shares outstanding:
Basic				43,112					42,684						43,218					42,477
Diluted				43,815					43,922						44,030					43,437

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
Non-GAAP Income Statement Items			Three Months Ended September 27, 2014
			GAAP Measure				GAAP Percent of Revenue					Stock Compensation Expense				Intangible Asset Amortization				Acquisition Related Items				Non-GAAP Measure				Non-GAAP Percent of Revenue
Revenues			$	158,144
Gross margin				96,111				60.8	%			$	201			$	390			$	--			$	96,702			61.1	%
Research and development				42,517				26.9	%				4,713				3,008				--				34,796			22.0	%
Selling, general and administrative				43,990				27.8	%				4,700				729				6,483				32,078			20.2	%
Operating income				9,604				6.1	%				9,614				4,127				6,483				29,828			18.9	%
Non-GAAP Diluted Earnings Per Share							Three Months Ended September 27, 2014
							GAAP Measure					Stock Compensation Expense				Intangible Asset Amortization				Acquisition Related Items				Non-GAAP Measure
Net income							$	5,608				$	8,456			$	2,407			$	6,483			$	22,954
Diluted shares outstanding								43,815					--				--				--				43,815
Diluted earnings per share							$	0.13																$	0.52

Unaudited Forward-Looking Statements Regarding Business Outlook
Business Outlook			Three Months Ending January 3, 2015
			High				Low
Estimated GAAP diluted earnings per share			$	0.18			$	0.12
Estimated non-GAAP charges				0.31				0.31
Estimated non-GAAP diluted earnings per share			$	0.49			$	0.43

Silicon Laboratories Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
			September 27,					December 28,
			2014					2013
Assets
Current assets:
Cash and cash equivalents			$	111,705				$	95,800
Short-term investments				216,973					179,593
Accounts receivable, net of allowances for doubtful accounts of $784 at September 27, 2014 and $797 at December 28, 2013				71,355					72,124
Inventories				47,015					45,271
Deferred income taxes				18,064					18,878
Prepaid expenses and other current assets				39,756					47,651
Total current assets				504,868					459,317
Long-term investments				11,505					10,632
Property and equipment, net				128,433					132,445
Goodwill				228,781					228,781
Other intangible assets, net				119,854					131,593
Other assets, net				21,476					28,382
Total assets			$	1,014,917				$	991,150
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable			$	28,361				$	22,126
Current portion of long-term debt				11,250					7,500
Accrued expenses				74,732					45,975
Deferred income on shipments to distributors				37,068					30,853
Income taxes				1,319					2,693
Total current liabilities				152,730					109,147
Long-term debt				80,000					87,500
Other non-current liabilities				32,217					55,941
Total liabilities				264,947					252,588
Commitments and contingencies
Stockholders' equity:
Preferred stock – $0.0001 par value; 10,000 shares authorized; no shares issued and outstanding				--					--
Common stock – $0.0001 par value; 250,000 shares authorized; 42,490 and 42,779 shares issued and outstanding at September 27, 2014 and December 28, 2013, respectively				4					4
Additional paid-in capital				31,467					48,630
Retained earnings				718,609					690,612
Accumulated other comprehensive loss				(110	)				(684	)
Total stockholders' equity				749,970					738,562
Total liabilities and stockholders' equity			$	1,014,917				$	991,150

Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
			Nine Months Ended
			September 27,					September 28,
			2014					2013
Operating Activities
Net income			$	27,997				$	39,177
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment				9,512					10,050
Amortization of other intangible assets and other assets				13,090					11,051
Stock-based compensation expense				28,173					22,304
Income tax benefit (shortfall) from stock-based awards				413					(621	)
Excess income tax benefit from stock-based awards				(654	)				(284	)
Deferred income taxes				3,894					6,790
Changes in operating assets and liabilities:
Accounts receivable				769					12,599
Inventories				(1,591	)				6,213
Prepaid expenses and other assets				12,627					(1,606	)
Accounts payable				5,074					(3,017	)
Accrued expenses				6,966					(2,864	)
Deferred income on shipments to distributors				6,215					(3,169	)
Income taxes				(4,898	)				(1,429	)
Net cash provided by operating activities				107,587					95,194
Investing Activities
Purchases of available-for-sale investments				(137,373	)				(164,317	)
Proceeds from sales and maturities of available-for-sale investments				100,009					186,936
Purchases of property and equipment				(5,500	)				(8,984	)
Purchases of other assets				(3,339	)				(3,499	)
Acquisition of businesses, net of cash acquired				--					(86,441	)
Net cash used in investing activities				(46,203	)				(76,305	)
Financing Activities
Proceeds from issuance of common stock, net of shares withheld for taxes				8,559					11,900
Excess income tax benefit from stock-based awards				654					284
Repurchases of common stock				(50,942	)				(7,776	)
Payments on debt				(3,750	)				(12,184	)
Net cash used in financing activities				(45,479	)				(7,776	)
Increase in cash and cash equivalents				15,905					11,113
Cash and cash equivalents at beginning of period				95,800					105,426
Cash and cash equivalents at end of period			$	111,705				$	116,539