Completes Acquisition of Leading Voice-Based
Technology Supplier Acoustic Technologies
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 third quarter fiscal year 2014, which ended Dec.
28, as well as the company’s current business outlook.
“We delivered strong revenue, operating profit and EPS results
for the third quarter,” said Jason Rhode, president and chief
executive officer. “While our business is typically driven by
product cycles that weight our revenue more heavily towards the
September and December quarters, we expect to exceed our operating
profit goal of 20 percent in FY14 and we remain committed to this
long-term target. We are extremely excited to be taping out a wave
of new products in advanced geometries this year as we look to
capitalize on strategic opportunities in audio with new and
existing customers, especially the growing trend of voice as a
powerful interface to a wide variety of devices. We anticipate
these products will contribute to future revenue growth as early as
calendar year 2015.”
Reported Financial Results – Third Quarter FY14
- Revenue of $218.9 million;
- Gross margin of 47.4 percent;
- GAAP operating expenses of $51 million
and non-GAAP operating expenses of $45 million; and
- GAAP diluted earnings per share of
$0.63 and non-GAAP diluted earnings per share of $0.89.
A reconciliation of the non-GAAP charges is included in the
tables accompanying this press release.
Business Outlook – Fourth Quarter FY14
- Revenue is expected to range between
$130 million and $150 million;
- Gross margin is expected to be between
47 percent and 49 percent; and
- Combined R&D and SG&A expenses
are expected to range between $51 million and $55 million, which
includes approximately $6 million in share-based compensation and
amortization of acquired intangibles.
Cirrus Logic will host a live Q&A session at 5 p.m. EST
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: 27210276).
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
Phoenix, 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 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 fourth quarter fiscal year 2014 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 fourth 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.
Summary financial data follows:
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited) (in thousands, except per share data)
Three Months Ended
Nine Months Ended
Dec. 28, Sep. 28, Dec. 29, Dec.
28, Dec. 29, 2013 2013 2012
2013 2012 Q3'14 Q2'14 Q3'13
Q3'14 Q3'13 Audio products $ 206,388 $ 179,912 $
300,010 $ 529,966 $ 558,671 Energy products 12,495
10,759 10,123 34,713
44,242
Net revenue 218,883
190,671 310,133
564,679 602,913 Cost of
sales 115,034 91,223 152,083
281,884 291,336
Gross
Profit 103,849 99,448 158,050
282,795 311,577 Gross Margin 47.4
% 52.2 % 51.0 % 50.1
% 51.7 % Research and development
32,426 29,722 29,608 90,678 83,986 Selling, general and
administrative 18,625 19,215 19,021 57,038 57,274 Restructuring and
other costs 12 (154 ) 3,539 (572 ) 3,539 Gain on sale of asset - -
(247 ) - (247 ) Patent settlements, net - -
- 695 - Total
operating expenses 51,063 48,783
51,921 147,839 144,552
Operating income 52,786 50,665 106,129
134,956 167,025 Interest income, net 222 201
76 581 334 Other income (expense), net (45 ) (38 )
(31 ) (100 ) (94 )
Income before income
taxes 52,963 50,828 106,174 135,437
167,265 Provision (benefit) for income taxes 11,463
17,461 38,312 39,928
57,027
Net income $
41,500 $ 33,367 $
67,862 $ 95,509 $
110,238 Basic earnings per share: $ 0.66 $
0.53 $ 1.04 $ 1.51 $ 1.70 Diluted earnings per share: $ 0.63 $ 0.50
$ 0.99 $ 1.45 $ 1.60 Weighted average number of shares:
Basic 62,854 63,217 65,055 63,170 64,859 Diluted 65,368 66,125
68,866 65,894 68,946 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
Nine Months Ended
Dec. 28, Sep. 28, Dec. 29, Dec.
28, Dec. 29, 2013 2013 2012
2013 2012 Net Income Reconciliation
Q3'14
Q2'14 Q3'13 Q3'14 Q3'13 GAAP Net
Income $ 41,500 $ 33,367 $
67,862 $ 95,509 $ 110,238
Amortization of acquisition intangibles 275 - - 275 604 Stock based
compensation expense 6,016 5,739 6,026 17,529 15,762 International
sales reorganization charges - - (47 ) - (47 ) Restructuring and
other costs, net 12 (154 ) 3,539 (572 ) 3,539 Gain on asset sale -
- (247 ) - (247 ) Patent settlements, net - - - 695 - Provision
(benefit) for income taxes 10,300 16,378
35,667 36,839 52,602
Non-GAAP Net Income $ 58,103
$ 55,330 $ 112,800
$ 150,275 $ 182,451
Earnings Per Share Reconciliation
GAAP Diluted earnings
per share $ 0.63 $ 0.50 $
0.99 $ 1.45 $ 1.60 Effect of
Amortization of acquisition intangibles - - - - 0.01 Effect of
Stock based compensation expense 0.10 0.09 0.09 0.27 0.23 Effect of
Restructuring and other costs, net - - 0.05 (0.01 ) 0.05 Effect of
Patent settlements, net - - - 0.01 - Effect of Provision (benefit)
for income taxes 0.16 0.25 0.51 0.56 0.76
Non-GAAP Diluted earnings per share $
0.89 $ 0.84 $ 1.64
$ 2.28 $ 2.65
Operating Income Reconciliation
GAAP Operating Income
$ 52,786 $ 50,665 $
106,129 $ 134,956 $ 167,025 GAAP
Operating Profit 24 % 27 % 34 % 24 % 28 % Amortization of
acquisition intangibles 275 - - 275 604 Stock compensation expense
- COGS 332 239 218 577 455 Stock compensation expense - R&D
2,834 2,158 3,234 7,846 7,574 Stock compensation expense - SG&A
2,850 3,342 2,574 9,106 7,733 International sales reorganization
charges - - (47 ) - (47 ) Restructuring and other costs, net 12
(154 ) 3,539 (572 ) 3,539 Gain on asset sale - - (247 ) - (247 )
Patent settlements, net - - -
695 -
Non-GAAP Operating
Income $ 59,089 $ 56,250
$ 115,400 $ 152,883
$ 186,636 Non-GAAP Operating Profit 27
% 30 % 37 % 27 % 31 % Operating Expense Reconciliation
GAAP Operating Expenses $ 51,063 $
48,783 $ 51,921 $ 147,839
$ 144,552 Amortization of acquisition intangibles
(275 ) - - (275 ) (604 ) Stock compensation expense - R&D
(2,834 ) (2,158 ) (3,234 ) (7,846 ) (7,574 ) Stock compensation
expense - SG&A (2,850 ) (3,342 ) (2,574 ) (9,106 ) (7,733 )
International sales reorganization charges - - 47 - 47
Restructuring and other costs, net (12 ) 154 (3,539 ) 572 (3,539 )
Gain on asset sale - - 247 - 247 Patent settlements, net -
- - (695 ) -
Non-GAAP Operating Expenses $ 45,092
$ 43,437 $ 42,868
$ 130,489 $ 125,396
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in
thousands Dec. 28, Sep. 28, Dec.
29, 2013 2013 2012 ASSETS Current assets
Cash and cash equivalents $ 74,690 $ 68,886 $ 87,452 Restricted
investments - - - Marketable securities 215,792 199,423 60,717
Accounts receivable, net 109,535 97,640 170,683 Inventories 69,985
91,247 135,023 Deferred tax asset 33,155 38,398 53,140 Other
current assets 25,662 23,978
21,775 Total Current Assets 528,819 519,572 528,790
Long-term marketable securities 37,115 40,254 - Property and
equipment, net 102,542 101,885 100,534 Intangibles, net 13,427
4,734 4,920 Goodwill 16,335 6,027 6,027 Deferred tax asset 17,354
16,638 36,466 Other assets 6,848 10,051
15,761 Total Assets $ 722,440 $ 699,161
$ 692,498 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $ 60,493 $ 56,868 $ 95,493
Accrued salaries and benefits 13,937 16,894 13,752 Other accrued
liabilities 12,881 6,313 13,992 Deferred income on shipments to
distributors 4,998 4,858 5,579
Total Current Liabilities 92,309 84,933 128,816 Other
long-term obligations 5,108 11,231 10,131 Stockholders'
equity: Capital stock 1,069,113 1,055,256 1,033,549 Accumulated
deficit (443,322 ) (451,532 ) (479,225 ) Accumulated other
comprehensive loss (768 ) (727 ) (773 ) Total
Stockholders' Equity 625,023 602,997
553,551 Total Liabilities and Stockholders' Equity $
722,440 $ 699,161 $ 692,498 Prepared in
accordance with Generally Accepted Accounting Principles
Cirrus Logic, Inc.Investor Contact:Thurman K. Case,
512-851-4125Chief Financial
OfficerInvestor.Relations@cirrus.com
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