CRUS Cirrus Logic Inc

Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-precision analog and digital signal processing components, 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 fiscal year 2014, which ended June 29, as well as the company’s current business outlook.

“We are pleased to have delivered strong operating profit growth year over year and sequentially,” said Jason Rhode, president and chief executive officer. “During the quarter, we added new customers in portable audio and expanded into more SKUs in LED lighting. We are especially excited about the lineup of custom and general market products we currently have in development.”

Reported Financial Results – First Quarter FY14

• Revenue of $155 million;
• Gross margin of 51.2 percent;
• GAAP operating expenses of $48 million and non-GAAP operating expenses of $42 million; and
• GAAP diluted earnings per share of $0.31 and non-GAAP diluted earnings per share of $0.56.

A reconciliation of the non-GAAP charges is included in the tables accompanying this press release.

Business Outlook – Second Quarter FY14

• Revenue is expected to range between $170 million and $190 million;
• Gross margin is expected to be between 46 percent and 48 percent; and
• Combined R&D and SG&A expenses are expected to range between $49 million and $53 million, which includes approximately $7 million in share-based compensation.

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: 99347958).

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 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 profit 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 our estimates of second quarter fiscal year 2014 revenue, gross margin, combined research and development and selling, general and administrative expense levels, and share-based compensation expense. 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 2014, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; and the risk factors listed in our Form 10-K for the year ended March 30, 2013, 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.

  CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited) (in thousands, except per share data)           Three Months Ended Jun. 29, Mar. 30, Jun. 30, 2013 2013 2012 Q1'14 Q4'13 Q1'13 Audio products $ 143,666 $ 196,098 $ 80,747 Energy products   11,459     10,775   18,259   Net revenue   155,125     206,873   99,006   Cost of sales   75,627     123,259   45,566   Gross Profit 79,498 83,614 53,440   Research and development 28,530 30,085 24,910 Selling, general and administrative 19,198 19,724 18,059 Other expenses, net *   265     -   -   Total operating expenses   47,993     49,809   42,969     Operating income 31,505 33,805 10,471   Interest income, net 158 106 127 Other income (expense), net   (17 )   14   (23 ) Income before income taxes 31,646 33,925 10,575 Provision (benefit) for income taxes   11,004     7,565   3,648   Net income $ 20,642   $ 26,360 $ 6,927     Basic earnings per share: $ 0.33 $ 0.41 $ 0.11 Diluted earnings per share: $ 0.31 $ 0.39 $ 0.10   Weighted average number of shares: Basic 63,363 63,877 64,470 Diluted 66,188 67,138 68,529  

Prepared in accordance with Generally Accepted Accounting Principles

 

* Other expenses, net may contain certain items such as litigation expenses, proceeds from a patent agreement, restructuring items, sales reorganizations, asset gains and impairments of non-marketable securities.

  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 Jun. 29,     Mar. 30, Jun. 30, 2013 2013 2012 Net Income Reconciliation Q1'14 Q4'13 Q1'13 GAAP Net Income $ 20,642 $ 26,360 $ 6,927 Amortization of acquisition intangibles - - 353 Stock based compensation expense 5,774 5,734 4,173 International sales reorganization charges - 442 - Restructuring and other costs (430 ) - - Patent settlements, net 695 - - Provision (benefit) for income taxes   10,161     7,372     3,355   Non-GAAP Net Income $ 36,842   $ 39,908   $ 14,808     Earnings Per Share Reconciliation GAAP Diluted earnings per share $ 0.31 $ 0.39 $ 0.10 Effect of Amortization of acquisition intangibles - - 0.01 Effect of Stock based compensation expense 0.09 0.09 0.06 Effect of International sales reorganization charges - 0.01 - Effect of Patent settlements, net 0.01 - - Effect of Provision (benefit) for income taxes   0.15     0.10     0.05   Non-GAAP Diluted earnings per share $ 0.56   $ 0.59   $ 0.22     Operating Income Reconciliation GAAP Operating Income $ 31,505 $ 33,805 $ 10,471 GAAP Operating Profit 20 % 16 % 11 % Amortization of acquisition intangibles - - 353 Stock compensation expense - COGS 6 296 118 Stock compensation expense - R&D 2,854 2,976 2,243 Stock compensation expense - SG&A 2,914 2,462 1,812 International sales reorganization charges - 442 - Restructuring and other costs (430 ) - - Patent settlements, net   695     -     -   Non-GAAP Operating Income $ 37,544   $ 39,981   $ 14,997   Non-GAAP Operating Profit 24 % 19 % 15 %   Operating Expense Reconciliation GAAP Operating Expenses $ 47,993 $ 49,809 $ 42,969 Amortization of acquisition intangibles - - (353 ) Stock compensation expense - R&D (2,854 ) (2,976 ) (2,243 ) Stock compensation expense - SG&A (2,914 ) (2,462 ) (1,812 ) International sales reorganization charges - (442 ) - Restructuring and other costs 430 - - Patent settlements, net   (695 )   -     -   Non-GAAP Operating Expenses $ 41,960   $ 43,929   $ 38,561       CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED BALANCE SHEET (in thousands)     Jun. 29,     Mar. 30,     Jun. 30, 2013 2013 2012 (unaudited) (unaudited) ASSETS Current assets Cash and cash equivalents $ 67,170 $ 66,402 $ 84,312 Restricted investments - - - Marketable securities 165,540 105,235 82,359 Accounts receivable, net 63,642 69,289 49,262 Inventories 110,624 119,300 96,790 Deferred tax asset 54,774 64,937 53,139 Other current assets   20,810     19,371     14,574   Total Current Assets 482,560 444,534 380,436   Long-term marketable securities 39,408 64,910 - Property and equipment, net 99,169 100,623 85,337 Intangibles, net 4,714 4,650 18,457 Goodwill 6,027 6,027 6,027 Deferred tax asset 16,732 16,671 85,721 Other assets   11,289     13,932     9,300   Total Assets $ 659,899   $ 651,347   $ 585,278     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 47,341 $ 60,827 $ 75,507 Accrued salaries and benefits 13,476 16,592 10,956 Other accrued liabilities 9,532 10,704 9,498 Deferred income on shipments to distributors   4,419     4,956     7,158   Total Current Liabilities 74,768 93,079 103,119   Other long-term obligations 9,706 10,094 4,159   Stockholders' equity: Capital stock 1,048,497 1,041,834 1,013,442 Accumulated deficit (472,180 ) (492,741 ) (534,682 ) Accumulated other comprehensive loss   (892 )   (919 )   (760 ) Total Stockholders' Equity   575,425     548,174     478,000   Total Liabilities and Stockholders' Equity $ 659,899   $ 651,347   $ 585,278     Prepared in accordance with Generally Accepted Accounting Principles