Demand for New Products Expected to Fuel
Significant Revenue Growth in September Quarter
Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-precision
analog and digital signal processing products, today posted on its
investor relations website at http://investor.cirrus.com the
quarterly Shareholder Letter that contains the complete financial
results for the first quarter of fiscal 2017, which ended June 25,
2016, as well as the company’s current business outlook.
“We are pleased to have delivered results above the high end of
our guidance for the June quarter, and we continue to expect strong
growth in FY17 driven by new product introductions,” said Jason
Rhode, president and chief executive officer. “Our team has done a
great job of developing a compelling portfolio of high performance
audio and voice solutions, and we believe the company is well
positioned to capitalize on these exciting markets into the
future.”
Reported Financial Results – First Quarter FY17
- Revenue of $259.4 million;
- GAAP gross margin of 48.8 percent and
non-GAAP gross margin of 48.9 percent;
- GAAP operating expenses of $104.5
million; non-GAAP operating expenses of $87 million; and
- GAAP diluted earnings per share of
$0.24 and non-GAAP diluted earnings per share of $0.44.
A reconciliation of the non-GAAP charges is included in the
tables accompanying this press release.
Business Outlook – Second Quarter FY17
- Revenue is expected to range between
$380 million and $410 million;
- GAAP gross margin is expected to be
between 47 percent and 49 percent; and
- Combined GAAP R&D and SG&A
expenses are expected to range between $110 million and $114
million, which includes approximately $10 million in share-based
compensation and $8 million in amortization of acquired
intangibles.
Cirrus Logic will host a live Q&A session at 5 p.m. EDT
today to answer questions related to its financial results and
business outlook. Participants may listen to the conference call on
the Cirrus Logic website. Participants who would like to submit a
question to be addressed during the call are requested to email
investor.relations@cirrus.com. A replay of the webcast can be
accessed on the Cirrus Logic website approximately two hours
following its completion, or by calling (404) 537-3406, or
toll-free at (855) 859-2056 (Access Code: 40728133).
Cirrus Logic, Inc.
Cirrus Logic is a leader in high performance,
low-power ICs for audio and voice signal processing applications.
Cirrus Logic’s products span the entire audio signal
chain, from capture to playback, providing
innovative products for the world’s top smartphones,
tablets, digital headsets, wearables and emerging smart home
applications. With headquarters in Austin, Texas, Cirrus Logic
is recognized globally for its award-winning corporate
culture. Check us out at www.cirrus.com.
Use of non-GAAP Financial Information
To supplement Cirrus Logic's financial statements presented on a
GAAP basis, Cirrus has provided non-GAAP financial information,
including gross margins, operating expenses, net income, operating
profit and income, tax expenses and diluted earnings per share. A
reconciliation of the adjustments to GAAP results is included in
the tables below. Non-GAAP financial information is not meant as a
substitute for GAAP results, but is included because management
believes such information is useful to our investors for
informational and comparative purposes. In addition, certain
non-GAAP financial information is used internally by management to
evaluate and manage the company. The non-GAAP financial information
used by Cirrus Logic may differ from that used by other companies.
These non-GAAP measures should be considered in addition to, and
not as a substitute for, the results prepared in accordance with
GAAP.
Safe Harbor Statement
Except for historical information contained herein, the matters
set forth in this news release contain forward-looking statements,
including future growth opportunities and our estimates of second
quarter fiscal year 2017 revenue, gross margin, combined research
and development and selling, general and administrative expense
levels, share-based compensation expense and amortization of
acquired intangibles. In some cases, forward-looking statements are
identified by words such as “expect,” “anticipate,” “target,”
“project,” “believe,” “goals,” “opportunity,” “estimates,”
“intend,” and variations of these types of words and similar
expressions. In addition, any statements that refer to our plans,
expectations, strategies or other characterizations of future
events or circumstances are forward-looking statements. These
forward-looking statements are based on our current expectations,
estimates and assumptions and are subject to certain risks and
uncertainties that could cause actual results to differ materially.
These risks and uncertainties include, but are not limited to, the
following: the level of orders and shipments during the second
quarter of fiscal year 2017, customer cancellations of orders, or
the failure to place orders consistent with forecasts, along with
the timing and success of new product ramps; and the risk factors
listed in our Form 10-K for the year ended March 26, 2016, and in
our other filings with the Securities and Exchange Commission,
which are available at www.sec.gov. The foregoing information
concerning our business outlook represents our outlook as of the
date of this news release, and we undertake no obligation to update
or revise any forward-looking statements, whether as a result of
new developments or otherwise.
Cirrus Logic and Cirrus are registered trademarks of Cirrus
Logic, Inc. All other company or product names noted herein may be
trademarks of their respective holders.
Summary financial data follows:
CIRRUS LOGIC,
INC. CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited) (in thousands, except per share data)
Three Months Ended Jun. 25, Mar. 26,
Jun. 27, 2016 2016 2015 Q1'17
Q4'16 Q1'16 Portable audio products $ 216,068 $
187,280 $ 235,866 Non-portable audio and other products
43,360 44,719 46,767
Net
sales 259,428 231,999
282,633 Cost of sales 132,743
116,745 150,179
Gross profit
126,685 115,254 132,454 Gross margin
48.8 % 49.7 % 46.9 %
Research and development 73,934 65,834 65,835 Selling,
general and administrative 30,540 27,228 29,119 Patent agreement
and other - - (12,500 ) Total
operating expenses 104,474 93,062
82,454
Income from operations
22,211 22,192 50,000 Interest expense,
net (689 ) (709 ) (745 ) Other income (expense), net 147
(370 ) 243
Income before income
taxes 21,669 21,113 49,498 Provision for
income taxes 5,805 7,101 16,144
Net income $ 15,864 $
14,012 $ 33,354 Basic
earnings per share: $ 0.25 $ 0.22 $ 0.53 Diluted earnings per
share: $ 0.24 $ 0.21 $ 0.50 Weighted average number of
shares: Basic 62,450 62,843 63,274 Diluted 65,232 65,398 66,410
Prepared in accordance with Generally Accepted Accounting
Principles
CIRRUS LOGIC, INC.
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL
INFORMATION (unaudited, in thousands, except per share
data) (not prepared in accordance with GAAP)
Non-GAAP financial information is not meant as a substitute for
GAAP results, but is included because management believes such
information is useful to our investors for informational and
comparative purposes. In addition, certain non-GAAP financial
information is used internally by management to evaluate and manage
the company. As a note, the non-GAAP financial information used by
Cirrus Logic may differ from that used by other companies. These
non-GAAP measures should be considered in addition to, and not as a
substitute for, the results prepared in accordance with GAAP.
Certain modifications to prior year non-GAAP presentation has been
made and had no material effect on the results of operations.
Three Months Ended Jun. 25,
Mar. 26, Jun. 27, 2016
2016 2015 Net Income Reconciliation
Q1'17
Q4'16 Q1'16 GAAP Net Income $
15,864 $ 14,012 $ 33,354
Amortization of acquisition intangibles 8,363 8,363 7,141 Stock
based compensation expense 9,310 8,858 8,271 Patent agreement and
other - - (12,500 ) Restructuring and other costs, net - (3,667 ) -
Adjustment to income taxes (4,639 ) (2,658 )
(175 )
Non-GAAP Net Income $ 28,898
$ 24,908 $ 36,091
Earnings Per Share Reconciliation
GAAP Diluted earnings per
share $ 0.24 $ 0.21 $
0.50 Effect of Amortization of acquisition intangibles 0.13
0.13 0.11 Effect of Stock based compensation expense 0.14 0.14 0.12
Effect of Patent agreement and other - - (0.19 ) Effect of
Restructuring and other costs, net - (0.06 ) - Effect of Adjustment
to income taxes (0.07 ) (0.04 ) -
Non-GAAP Diluted earnings per share $ 0.44
$ 0.38 $ 0.54
Operating Income Reconciliation
GAAP Operating Income
$ 22,211 $ 22,192 $
50,000 GAAP Operating Profit 9 % 10 % 18 % Amortization of
acquisition intangibles 8,363 8,363 7,141 Stock compensation
expense - COGS 230 233 325 Stock compensation expense - R&D
5,216 4,996 3,868 Stock compensation expense - SG&A 3,864 3,629
4,078 Patent agreement and other - - (12,500 ) Restructuring and
other costs, net - (3,667 ) -
Non-GAAP Operating Income $ 39,884
$ 35,746 $ 52,912
Non-GAAP Operating Profit 15 % 15 % 19 % Operating Expense
Reconciliation
GAAP Operating Expenses $
104,474 $ 93,062 $ 82,454
Amortization of acquisition intangibles (8,363 ) (8,363 ) (7,141 )
Stock compensation expense - R&D (5,216 ) (4,996 ) (3,868 )
Stock compensation expense - SG&A (3,864 ) (3,629 ) (4,078 )
Patent agreement and other - - 12,500 Restructuring and other
costs, net - 3,667 -
Non-GAAP Operating Expenses $ 87,031
$ 79,741 $ 79,867
Gross Margin/Profit Reconciliation
GAAP Gross Margin
$ 126,685 $ 115,254 $
132,454 GAAP Gross Profit 48.8 % 49.7 % 46.9 % Stock
compensation expense - COGS 230 233
325
Non-GAAP Gross Margin $
126,915 $ 115,487 $
132,779 Non-GAAP Gross Profit 48.9 % 49.8 % 47.0 %
Effective Tax Rate Reconciliation
GAAP Tax Expense
$ 5,805 $ 7,101 $ 16,144
GAAP Effective Tax Rate 26.8 % 33.6 % 32.6 % Adjustments to income
taxes 4,639 2,658 175
Non-GAAP Tax Expense $ 10,444 $
9,759 $ 16,319 Non-GAAP
Effective Tax Rate 26.5 % 28.2 % 31.1 % Tax Impact to EPS
Reconciliation
GAAP Tax Expense $ 0.09
$ 0.11 $ 0.24 Adjustments to income
taxes 0.07 0.04 -
Non-GAAP Tax Expense $ 0.16 $
0.15 $ 0.24
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET (in thousands)
Jun. 25, Mar. 26, Jun. 27, 2016
2016 2015 ASSETS (unaudited) (unaudited) Current
assets Cash and cash equivalents $ 143,591 $ 168,793 $ 102,531
Marketable securities 91,090 60,582 120,226 Accounts receivable,
net 140,893 88,532 120,838 Inventories 154,043 142,015 126,195
Deferred tax asset - - 5,276 Other current assets 44,106
46,207 32,982 Total current
Assets 573,723 506,129 508,048 Long-term marketable
securities 3,923 20,631 50,629 Property and equipment, net 160,875
162,656 152,018 Intangibles, net 156,949 162,832 169,158 Goodwill
287,518 287,518 263,583 Deferred tax asset 27,334 25,772 25,639
Other assets 14,776 16,345
24,578 Total assets $ 1,225,098 $ 1,181,883 $
1,193,653 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $ 105,138 $ 71,619 $ 146,370
Accrued salaries and benefits 21,854 21,239 21,380 Deferred income
- - 4,736 Other accrued liabilities 31,068
35,266 30,636 Total current liabilities
158,060 128,124 203,122 Long-term debt 160,439 160,439
160,439 Other long-term liabilities 34,855 33,837 30,320
Stockholders' equity: Capital stock 1,215,749 1,203,496 1,170,436
Accumulated deficit (344,564 ) (344,345 ) (367,691 ) Accumulated
other comprehensive income (loss) 559 332
(2,973 ) Total stockholders' equity 871,744
859,483 799,772 Total
liabilities and stockholders' equity $ 1,225,098 $ 1,181,883
$ 1,193,653 Prepared in accordance with
Generally Accepted Accounting Principles
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version on businesswire.com: http://www.businesswire.com/news/home/20160727006027/en/
Cirrus Logic, Inc.Thurman K. Case, 512-851-4125Chief Financial
OfficerInvestor.Relations@cirrus.com
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