CRUS Cirrus Logic Inc

Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-precision analog and digital signal processing components, today announced financial results for the fourth quarter and fiscal year 2011, which ended March 26, 2011.

Revenue for the quarter was $91.4 million, up 46 percent compared to $62.6 million in the same quarter a year ago, and down 4 percent sequentially from $95.6 million in the previous quarter. Revenue for fiscal year 2011 totaled $370 million, a 67 percent increase compared to $221 million in fiscal year 2010.

Gross margin for the quarter was 50 percent, and reflects the charge of $4.2 million related to the production issue the company disclosed on April 14, 2011. This compares to gross margins of 56 percent in the fourth quarter a year ago, and 55 percent in the previous quarter. The company’s long term gross margin target remains 55 percent. Gross margin for fiscal year 2011 was 55 percent, compared to 54 percent in fiscal year 2010.

Total GAAP operating expenses for the quarter were $32.4 million, compared to $29.4 million in the previous quarter. Non-GAAP operating expenses for the quarter were $29.7 million compared to $28.0 million in the previous quarter.

GAAP operating margin was 15 percent for the March quarter and 23 percent for fiscal year 2011. Operating margin on a non-GAAP basis was 18 percent for the March quarter and 24 percent for fiscal year 2011.

GAAP net income for the quarter was $130.4 million, or $1.80 per share, based on 72.3 million average diluted shares outstanding and $203.5 million, or $2.82 per share, based on 72.1 million average diluted shares for fiscal year 2011. Net income includes a $117 million net tax benefit, as the company revalued the deferred tax asset due to improved business performance. Non-GAAP net income for the quarter was $16.0 million, or $0.22 per diluted share and $89.3 million, or $1.24 per diluted share for fiscal year 2011.

A reconciliation of the non-GAAP charges is included in a table below.

“FY11 was an outstanding year for Cirrus Logic, as we grew revenue 67 percent, maintained our 55 percent gross margins target, and increased operating profit from 13 percent to 24 percent on a non-GAAP basis,” said Jason Rhode, president and chief executive officer, Cirrus Logic. “We have made excellent progress on our strategic initiatives in both audio and energy, and we expect meaningful new product introductions from multiple customers throughout the year.”

Outlook for First Quarter FY 2012 (ending June 25, 2011):

• Revenue is expected to range between $88 million and $94 million;
• Gross margin is expected to be between 51 percent and 54 percent, and reflects the residual impact of the production yield issues the company disclosed on April 14, 2011; and
• Combined R&D and SG&A expenses are expected to range between $32 million and $35 million, which include approximately $2.7 million in share-based compensation and amortization of acquisition-related intangibles expenses.

Other Highlights and Company News

• A new ultra low power DSP, optimized for portable devices, is ramping into production.
• Total cash from operations was $20.4 million for the March quarter and $86.9 million for fiscal year 2011, an increase of approximately 246% compared with fiscal year 2010.
• Total employee headcount during the quarter increased to 570 employees, a net increase of 21 employees.
• The company began construction on its new headquarters facility at 800 W. Sixth Street in downtown Austin, which is expected to be completed in the summer of 2012.
• Jason Rhode, president and chief executive officer, will be presenting at the Jefferies Global Technology Conference in New York on May 13, at 9:00 a.m. EDT. A live webcast will be available in the Investor Relations section of the Cirrus Logic website.

Conference Call

Cirrus Logic management will hold a conference call to discuss the company’s results for the fourth quarter and fiscal year 2011, on April 28, at 10:30 a.m. EDT. The conference call will be simulcast over the internet in the Investor Relations section of the company website at http://investor.cirrus.com. A replay of the conference call will be available on the website listed above beginning one hour following the completion of the call, or by calling (303) 590-3030, or toll-free at (800) 406-7325 (Access Code: 4430704).

Shareholders who would like to submit a question to be addressed during the call are requested to email 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 operating expenses, net income, operating margin 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. 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 first quarter fiscal year 2012 revenue, our future growth rate, 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: the level of orders and shipments during the first quarter of fiscal year 2012, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; the loss of a key customer; 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.

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Summary financial data follows:

  CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

(unaudited)

(in thousands, except per share data)                     Three Months Ended Twelve Months Ended   Mar. 26, Dec. 25, Mar. 27, Mar. 26, Mar. 27, 2011 2010 2010 2011 2010 Q4'11 Q3'11 Q4'10 Q4'11 Q4'10 Audio products $ 66,965 $ 72,716 $ 40,540 $ 264,840 $ 153,661 Energy products   24,468     22,909     22,099     104,731     67,328   Net revenue   91,433     95,625     62,639     369,571     220,989   Cost of sales   45,415     43,163     27,355     167,576     102,258   Gross Profit 46,018 52,462 35,284 201,995 118,731   Operating expenses: Research and development 17,044 16,348 13,724 63,934 51,421 Selling, general and administrative 15,252 13,431 12,678 58,066 45,923 Restructuring and other costs, net - (395 ) 572 6 493 Charge (benefit) from non-marketable securities - - - 500 (500 ) Provision (benefit) for litigation expenses and settlements 57 (30 ) - 162 (2,610 ) Patent purchase agreement, net   -     -     -     (4,000 )   (1,400 ) Total operating expenses   32,353     29,354     26,974     118,668     93,327     Operating income 13,665 23,108 8,310 83,327 25,404   Interest income, net 187 212 237 860 1,345 Other income (expense), net   40     (31 )   (20 )   27     (66 ) Income before income taxes 13,892 23,289 8,527 84,214 26,683 Benefit for income taxes   (116,514 )   (1,332 )   (11,831 )   (119,289 )   (11,715 ) Net income $ 130,406   $ 24,621   $ 20,358   $ 203,503   $ 38,398     Basic income per share: $ 1.91 $ 0.36 $ 0.31 $ 3.00 $ 0.59 Diluted income per share: $ 1.80 $ 0.34 $ 0.31 $ 2.82 $ 0.59   Weighted average number of shares: Basic 68,164 68,074 65,517 67,857 65,338 Diluted 72,344 71,695 66,595 72,103 65,626   Prepared in accordance with Generally Accepted Accounting Principles   CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED BALANCE SHEET

(unaudited)

(in thousands)     Mar. 26,     Dec. 25,     Mar. 27, 2011 2010 2010 ASSETS Current assets Cash and cash equivalents $ 37,039 $ 28,491 $ 16,109 Restricted investments 5,786 5,755 5,855 Marketable securities 159,528 156,052 85,384 Accounts receivable, net 39,098 37,266 23,963 Inventories 40,497 40,196 35,396 Other current assets   37,522     22,612     18,148   Total Current Assets 319,470 290,372 184,855   Long-term marketable securities 12,702 - 34,278 Property and equipment, net 34,563 32,919 18,674 Intangibles, net 20,125 20,688 21,896 Goodwill 6,027 6,027 6,027 Deferred tax asset 102,136 360 339 Other assets   1,598     1,618     1,541   Total Assets $ 496,621   $ 351,984   $ 267,610     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 27,639 $ 25,371 $ 20,340 Accrued salaries and benefits 12,402 9,509 9,962 Other accrued liabilities 5,169 5,034 5,100 Deferred income on shipments to distributors   6,844     7,108     6,488   Total Current Liabilities 52,054 47,022 41,890   Long-term restructuring accrual 113 179 596 Other long-term obligations 6,075 6,113 6,523   Stockholders' equity: Capital stock 991,947 982,610 952,803 Accumulated deficit (552,814 ) (683,220 ) (733,553 ) Accumulated other comprehensive loss   (754 )   (720 )   (649 ) Total Stockholders' Equity   438,379     298,670     218,601   Total Liabilities and Stockholders' Equity $ 496,621   $ 351,984   $ 267,610     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 Twelve Months Ended   Mar. 26, Dec. 25, Mar. 27, Mar. 26, Mar. 27, 2011 2010 2010 2011 2010 Net Income Reconciliation Q4'11 Q3'11 Q4'10 Q4'11 Q4'10 GAAP Net Income $ 130,406 $ 24,621 $ 20,358 $ 203,503 $ 38,398 Amortization of acquisition intangibles 353 353 404 1,429 1,616 Stock based compensation expense 2,294 1,467 1,181 8,142 5,314 Facility Related adjustments - - - (96 ) (397 ) International sales reorganization charges - - - 790 - Provision (benefit) for litigation expenses and settlements 57 (30 ) - 162 (2,610 ) Restructuring and other costs, net - (395 ) 572 6 493 Charge (benefit) from non-marketable securities - - - 500 (500 ) Patent purchase agreement, net - - - (4,000 ) (1,400 ) Benefit for income taxes   (117,078 )   (1,847 )   (11,838 )   (121,154 )   (11,838 ) Non-GAAP Net Income $ 16,032   $ 24,169   $ 10,677   $ 89,282   $ 29,076     Earnings Per Share Reconciliation GAAP Diluted income per share $ 1.80 $ 0.34 $ 0.31 $ 2.82 $ 0.59 Effect of Amortization of acquisition intangibles - - - 0.02 0.02 Effect of Stock based compensation expense 0.03 0.02 0.02 0.11 0.08 Effect of Facility Related adjustments - - - - (0.01 ) Effect of International sales reorganization charges - - - 0.01 - Effect of Provision (benefit) for litigation expenses and settlements - - - - (0.04 ) Effect of Restructuring and other costs, net - - 0.01 - 0.01 Effect of Charge (benefit) from non-marketable securities - - - 0.01 (0.01 ) Effect of Patent purchase agreement, net - - - (0.05 ) (0.02 ) Effect of Benefit for income taxes   (1.61 )   (0.02 )   (0.18 )   (1.68 )   (0.18 ) Non-GAAP Diluted income per share $ 0.22   $ 0.34   $ 0.16   $ 1.24   $ 0.44     Operating Income Reconciliation GAAP Operating Income $ 13,665 $ 23,108 $ 8,310 $ 83,327 $ 25,404 GAAP Operating Margin 15 % 24 % 13 % 23 % 11 % Amortization of acquisition intangibles 353 353 404 1,429 1,616 Stock compensation expense - COGS 78 46 61 243 211 Stock compensation expense - R&D 924 579 501 2,641 1,881 Stock compensation expense - SG&A 1,292 842 619 5,258 3,222 Facility Related adjustments - - - (96 ) (397 ) International sales reorganization charges - - - 790 - Provision (benefit) for litigation expenses and settlements 57 (30 ) - 162 (2,610 ) Restructuring and other costs, net - (395 ) 572 6 493 Charge (benefit) from non-marketable securities - - - 500 (500 ) Patent purchase agreement, net   -     -     -     (4,000 )   (1,400 ) Non-GAAP Operating Income $ 16,369   $ 24,503   $ 10,467   $ 90,260   $ 27,920   Non-GAAP Operating Margin 18 % 26 % 17 % 24 % 13 %   Operating Expense Reconciliation GAAP Operating Expenses $ 32,353 $ 29,354 $ 26,974 $ 118,668 $ 93,327 Amortization of acquisition intangibles (353 ) (353 ) (404 ) (1,429 ) (1,616 ) Stock compensation expense - R&D (924 ) (579 ) (501 ) (2,641 ) (1,881 ) Stock compensation expense - SG&A (1,292 ) (842 ) (619 ) (5,258 ) (3,222 ) Facility Related adjustments - - - 96 397 International sales reorganization charges - - - (790 ) - Benefit (provision) for litigation expenses and settlements (57 ) 30 - (162 ) 2,610 Restructuring and other costs, net - 395 (572 ) (6 ) (493 ) Benefit (charge) from non-marketable securities - - - (500 ) 500 Patent purchase agreement, net   -     -     -     4,000     1,400   Non-GAAP Operating Expenses $ 29,727   $ 28,005   $ 24,878   $ 111,978   $ 91,022