Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-precision
analog and digital signal processing components, today announced
financial results for the second quarter of fiscal year 2011, which
ended September 25, 2010.
Revenue for the quarter was $100.6 million, up 81 percent
compared to $55.7 million during the second quarter of fiscal year
2010, and up 23 percent from $81.9 million in the previous quarter.
Gross margin for the quarter was 56 percent, up from 52 percent in
the second quarter a year ago, and down slightly from 57 percent
for the previous quarter.
Total GAAP operating expenses for the quarter were approximately
$27.7 million, compared to $29.2 million in the previous quarter.
Research and Development (R&D) investment for the quarter was
$15.5 million, and Selling, General and Administrative (SG&A)
expenses totaled $15.4 million. Income from operations on a GAAP
basis was approximately $29.1 million, or a 29 percent operating
margin.
Non-GAAP operating expenses for the quarter were approximately
$27.6 million, resulting in non-GAAP income from operations of
$29.2 million, or a 29 percent operating margin. In the previous
quarter, non-GAAP operating expenses were $26.6 million, with
non-GAAP income from operations of $20.2 million, or a 25 percent
operating margin. A reconciliation of the charges is included in a
table below.
GAAP net income for the quarter was approximately $30.9 million
or $0.42 per share, based on 72.9 million average diluted shares
outstanding. Excluding the items noted in the reconciliation table,
non-GAAP net income was $28.8 million, or $0.40 per diluted
share.
“Portable audio was a continued highlight in Q2, and we are
preparing for additional production ramps coming over the next
several quarters,” said Jason Rhode, president and chief executive
officer, Cirrus Logic. “Our energy product lines also delivered
strong results, and we received our first production orders for our
power factor correction chip - a great indication that our energy
control initiative is on the right track.”
Outlook for Third Quarter FY 2011 (ending December 25,
2010):
- Revenue is expected to range between
$88 million and $94 million;
- Gross margin is expected to be between
54 percent and 56 percent; and
- Combined R&D and SG&A expenses
are expected to range between $28 million and $30 million, which
include approximately $2.5 million in share-based compensation and
amortization of acquisition-related intangibles expenses.
Conference Call
Cirrus Logic management will hold a conference call to discuss
the company’s results for the second quarter fiscal year 2011, on
October 21, 2010 at 10:30 a.m. EDT. Those wishing to join should
call (480) 629-9645, or toll-free at (877) 941-0844 (Conference ID:
4370151) by 10:20 a.m. on October 21, 2010. A replay of the
conference call will also be available beginning one hour after the
completion of the call, until October 28, 2010. To access the
recording, call (303) 590-3030, or toll-free at (800) 406-7325
(Conference ID: 4370151). A live and an archived webcast of the
conference call will also be available via the Investor section of
the company’s website at investor.cirrus.com.
Shareholders who would like to submit a question to be addressed
during the call are requested to contact
investor.relations@cirrus.com.
Cirrus Logic, Inc.
Cirrus Logic develops high-precision, analog and mixed-signal
integrated circuits for a broad range of innovative customers.
Building on its diverse analog and signal-processing patent
portfolio, Cirrus Logic delivers highly optimized products for a
variety of audio and energy-related applications. The company
operates from headquarters in Austin, Texas, with offices in
Tucson, Ariz., Europe, Japan and Asia. More information about
Cirrus Logic is available 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 non-GAAP operating expenses, non-GAAP net income,
non-GAAP income from operations, non-GAAP operating margin and
non-GAAP 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. 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.
Safe Harbor Statement
Except for historical information contained herein, the matters
set forth in this news release contain forward-looking statements,
including our estimates of third quarter fiscal year 2011 revenue,
gross margin, combined research and development and selling,
general and administrative expense levels, share-based compensation
expense, and amortization of acquired intangible expenses. 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: overall economic
pressures and general market and economic conditions; overall
conditions in the semiconductor market; the level of orders and
shipments during the third quarter of fiscal year 2011, as well as
customer cancellations of orders, or the failure to place orders
consistent with forecasts; the loss of a key customer; pricing
pressures; and the risk factors listed in our Form 10-K for the
year ended March 27, 2010, 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 trademarks of Cirrus Logic Inc.
CRUS-F
Summary financial data follows:
CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED
STATEMENT OF OPERATIONS (unaudited) (in thousands,
except per share data)
Three Months Ended Six Months Ended
Sep. 25, Jun. 26, Sep. 26, Sep. 25,
Sep. 26, 2010 2010 2009 2010
2009 Q2'11 Q1'11 Q2'10 Q2'11
Q2'10 Audio products $ 71,171 $ 53,988 $ 41,271 $ 125,159 $
66,058 Energy products 29,427 27,927
14,403 57,354 27,130
Net
revenue 100,598 81,915
55,674 182,513
93,188 Cost of sales 43,818
35,180 26,700 78,998 44,627
Gross Profit 56,780 46,735
28,974 103,515 48,561 Operating
expenses: Research and development 15,450 15,092 12,355 30,542
24,863 Selling, general and administrative 15,372 14,011 11,746
29,383 21,817 Restructuring and other costs 401 - (165 ) 401 (165 )
Charge from non-marketable securities 500 - - 500 - Provision for
litigation expenses and settlements - 135 - 135 (2,745 ) Patent
purchase agreement, net (4,000 ) - (1,400 )
(4,000 ) (1,400 ) Total operating expenses
27,723 29,238 22,536 56,961
42,370
Operating income
29,057 17,497 6,438 46,554 6,191
Interest income, net 233 228 376 461 839 Other income
(expense), net (14 ) 32 (21 ) 18
(39 )
Income before income taxes 29,276
17,757 6,793 47,033 6,991 Provision
(benefit) for income taxes (1,598 ) 155 29
(1,443 ) 6
Net income $
30,874 $ 17,602 $ 6,764
$ 48,476 $ 6,985
Basic income per share: $ 0.45 $ 0.26 $ 0.10 $ 0.72 $ 0.11
Diluted income per share: $ 0.42 $ 0.25 $ 0.10 $ 0.67 $ 0.11
Weighted average number of shares: Basic 68,513 66,639 65,281
67,576 65,268 Diluted 72,878 70,755 65,473 71,971 65,392
Prepared in accordance with Generally Accepted Accounting
Principles
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE
SHEET
(in thousands)
Sep. 25, Mar. 27, Sep.
26, 2010 2010
2009
(unaudited)
(unaudited)
ASSETS Current assets Cash and cash equivalents $ 19,837 $ 16,109 $
20,692 Restricted investments 5,755 5,855 5,755 Marketable
securities 153,797 85,384 62,191 Accounts receivable, net 48,451
23,963 26,160 Inventories 41,963 35,396 22,497 Other current assets
21,094 18,148 4,618 Total
Current Assets 290,897 184,855 141,913 Long-term marketable
securities 3,000 34,278 35,391 Property and equipment, net 32,471
18,674 18,788 Intangibles, net 21,042 21,896 22,856 Goodwill 6,027
6,027 6,027 Other assets 1,859 1,880
1,925 Total Assets $ 355,296 $ 267,610
$ 226,900 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $ 29,070 $ 20,340 $ 20,758
Accrued salaries and benefits 12,754 9,962 6,873 Other accrued
liabilities 6,330 5,100 4,894 Deferred income on shipments to
distributors 7,749 6,488 3,728
Total Current Liabilities 55,903 41,890 36,253
Long-term restructuring accrual 395 596 548 Other long-term
obligations 6,143 6,523 7,265 Stockholders' equity: Capital
stock 978,554 952,803 948,371 Accumulated deficit (685,077 )
(733,553 ) (764,966 ) Accumulated other comprehensive loss
(622 ) (649 ) (571 ) Total Stockholders' Equity
292,855 218,601 182,834
Total Liabilities and Stockholders' Equity $ 355,296 $
267,610 $ 226,900 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.
Three Months
Ended Six Months Ended Sep. 25, Jun.
26, Sep. 26, Sep. 25, Sep. 26,
2010 2010 2009
2010 2009 Net
Income Reconciliation
Q2'11 Q1'11 Q2'10
Q2'11 Q2'10 GAAP Net Income $
30,874 $ 17,602 $ 6,764 $
48,476 $ 6,985 Amortization of acquisition
intangibles 353 370 404 723 808 Stock based compensation expense
3,025 1,356 1,383 4,381 2,736 Facility Related adjustments (100 ) 4
- (96 ) (22 ) International sales reorganization charges - 790 -
790 - Provision for litigation expenses and settlements - 135 - 135
(2,745 ) Restructuring and other costs, net 401 - (165 ) 401 (165 )
Charge from non-marketable securities 500 - - 500 - Patent purchase
agreement, net (4,000 ) - (1,400 ) (4,000 ) (1,400 ) Benefit for
income taxes (2,229 ) - -
(2,229 ) -
Non-GAAP Net Income $
28,824 $ 20,257 $
6,986 $ 49,081 $
6,197 Earnings Per Share Reconciliation
GAAP Diluted income per share $ 0.42 $
0.25 $ 0.10 $ 0.67 $
0.11 Effect of Amortization of acquisition intangibles -
0.01 0.01 0.01 0.01 Effect of Stock based compensation expense 0.04
0.02 0.02 0.06 0.04 Effect of Facility Related adjustments - - - -
- Effect of International sales reorganization charges - 0.01 -
0.01 - Effect of Provision for litigation expenses and settlements
- - - - (0.04 ) Effect of Restructuring and other costs, net 0.01 -
- 0.01 - Effect of Charge from non-marketable securities 0.01 - -
0.01 - Effect of Patent purchase agreement, net (0.05 ) - (0.02 )
(0.06 ) (0.02 ) Effect of Benefit for income taxes (0.03 )
- - (0.03 ) -
Non-GAAP Diluted income per share $ 0.40
$ 0.29 $ 0.11
$ 0.68 $ 0.10
Operating Income Reconciliation
GAAP Operating Income
$ 29,057 $ 17,497 $ 6,438
$ 46,554 $ 6,191 GAAP Operating Margin
29 % 21 % 12 % 26 % 7 % Amortization of acquisition intangibles 353
370 404 723 808 Stock compensation expense - COGS 64 55 43 119 95
Stock compensation expense - R&D 617 521 428 1,138 942 Stock
compensation expense - SG&A 2,344 780 912 3,124 1,699 Facility
Related adjustments (100 ) 4 - (96 ) (22 ) International sales
reorganization charges - 790 - 790 - Provision for litigation
expenses and settlements - 135 - 135 (2,745 ) Restructuring and
other costs, net 401 - (165 ) 401 (165 ) Charge from non-marketable
securities 500 - - 500 - Patent purchase agreement, net
(4,000 ) - (1,400 ) (4,000 )
(1,400 )
Non-GAAP Operating Income $ 29,236
$ 20,152 $ 6,660
$ 49,388 $ 5,403 Non-GAAP
Operating Margin 29 % 25 % 12 % 27 % 6 % Operating Expense
Reconciliation
GAAP Operating Expenses $
27,723 $ 29,238 $ 22,536
$ 56,961 $ 42,370 Amortization of
acquisition intangibles (353 ) (370 ) (404 ) (723 ) (808 ) Stock
compensation expense - R&D (617 ) (521 ) (428 ) (1,138 ) (942 )
Stock compensation expense - SG&A (2,344 ) (780 ) (912 ) (3,124
) (1,699 ) Facility Related adjustments 100 (4 ) - 96 22
International sales reorganization charges - (790 ) - (790 ) -
Provision for litigation expenses and settlements - (135 ) - (135 )
2,745 Restructuring and other costs, net (401 ) - 165 (401 ) 165
Charge from non-marketable securities (500 ) - - (500 ) - Patent
purchase agreement, net 4,000 -
1,400 4,000 1,400
Non-GAAP
Operating Expenses $ 27,608 $
26,638 $ 22,357 $
54,246 $ 43,253
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