Expects to Close Wolfson Microelectronics
Acquisition in September Quarter
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 2015, which ended June
28, 2014, as well as the company’s current business outlook.
“We are pleased with our Q1 financial results as we experienced
strong demand for our custom and general market portable audio
products across our customer base,” said Jason Rhode, president and
chief executive officer. “With a robust pipeline of innovative
products and the pending acquisition of Wolfson, we are
strengthening the company’s position as a market leader in audio
with a comprehensive product portfolio, differentiated software
capabilities and a top-tier customer base.”
Reported Financial Results – First Quarter FY15
- Revenue of $152.6 million;
- Gross margin of 49 percent;
- GAAP operating expenses of $59.5
million and non-GAAP operating expenses of $51.6 million; and
- GAAP diluted earnings per share of
$0.16 and non-GAAP diluted earnings per share of $0.37.
A reconciliation of the non-GAAP charges is included in the
tables accompanying this press release.
Business Outlook – Second Quarter FY15
Guidance for the September quarter excludes any potential
financial contributions or expenses associated with the Wolfson
acquisition.
- Revenue is expected to range between
$175 million and $195 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 $58 million and $62 million, which
includes approximately $7 million in share-based compensation and
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: 66089509).
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 second quarter fiscal year 2015 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 2015, 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 29, 2014, 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, Cirrus and SoundClear are registered 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 Jun. 28, Mar. 29,
Jun. 29, 2014 2014 2013 Q1'15
Q4'14 Q1'14 Audio products $ 141,161 $ 137,773 $
143,666 Energy products 11,404 11,886
11,459
Net revenue 152,565
149,659 155,125
Cost of sales 77,190 76,291
75,627
Gross Profit 75,375 73,368
79,498 Gross Margin 49.4 % 49.0
% 51.2 % Research and development
39,777 35,511 28,530 Selling, general and administrative 19,683
17,823 19,198 Restructuring and other costs - (26 ) (430 ) Patent
infringement settlements, net - -
695 Total operating expenses 59,460
53,308 47,993
Operating
income 15,915 20,060 31,505
Interest income, net (467 ) 267 158 Other income (expense), net
501 (27 ) (17 )
Income before income
taxes 15,949 20,300 31,646 Provision
(benefit) for income taxes 5,701 7,698
11,004
Net income $ 10,248
$ 12,602 $ 20,642
Basic earnings per share: $ 0.17 $ 0.20 $ 0.33 Diluted
earnings per share: $ 0.16 $ 0.20 $ 0.31 Weighted average
number of shares: Basic 62,032 62,215 63,363 Diluted 64,688 64,545
66,188 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. 28,
Mar. 29, Jun. 29, 2014 2014
2013 Net Income Reconciliation
Q1'15 Q4'14
Q1'14 GAAP Net Income $ 10,248 $
12,602 $ 20,642 Amortization of acquisition
intangibles 246 217 - Stock based compensation expense 5,622 5,545
5,774 Provision for litigation expenses and settlements - - 695
Restructuring and other costs, net - (26 ) (430 ) Wolfson
acquisition items 2,304 - - Provision (benefit) for income taxes
5,226 7,808 10,161
Non-GAAP Net Income $ 23,646 $
26,146 $ 36,842 Earnings
Per Share Reconciliation
GAAP Diluted earnings per share
$ 0.16 $ 0.20 $ 0.31
Effect of Stock based compensation expense 0.09 0.09 0.09 Effect of
Provision for litigation expenses and settlements - - 0.01 Effect
of Wolfson acquisition items 0.04 - - Effect of Provision (benefit)
for income taxes 0.08 0.12 0.15
Non-GAAP Diluted earnings per share $
0.37 $ 0.41 $ 0.56
Operating Income Reconciliation
GAAP Operating
Income $ 15,915 $ 20,060 $
31,505 GAAP Operating Profit 10 % 13 % 20 % Amortization of
acquisition intangibles 246 217 - Stock compensation expense - COGS
231 287 6 Stock compensation expense - R&D 2,543 2,546 2,854
Stock compensation expense - SG&A 2,848 2,712 2,914 Provision
for litigation expenses and settlements - - 695 Restructuring and
other costs, net - (26 ) (430 ) Wolfson acquisition items
2,192 - -
Non-GAAP Operating
Income $ 23,975 $ 25,796
$ 37,544 Non-GAAP Operating Profit 16 %
17 % 24 % Operating Expense Reconciliation
GAAP Operating
Expenses $ 59,460 $ 53,308 $
47,993 Amortization of acquisition intangibles (246 ) (217 )
- Stock compensation expense - R&D (2,543 ) (2,546 ) (2,854 )
Stock compensation expense - SG&A (2,848 ) (2,712 ) (2,914 )
Provision for litigation expenses and settlements - - (695 )
Restructuring and other costs, net - 26 430 Wolfson acquisition
items (2,192 ) - -
Non-GAAP
Operating Expenses $ 51,631 $
47,859 $ 41,960
CIRRUS LOGIC, INC. CONSOLIDATED
CONDENSED BALANCE SHEET (in thousands) Jun.
28, Mar. 29, Jun. 29, 2014 2014
2013 (unaudited) (unaudited) ASSETS Current assets Cash and
cash equivalents $ 268,544 $ 31,850 $ 67,170 Restricted investments
- - - Marketable securities 75,198 263,417 165,540 Accounts
receivable, net 77,219 63,220 63,642 Inventories 92,002 69,743
110,624 Deferred tax asset 19,921 22,024 54,774 Other current
assets 40,469 25,079 20,810
Total Current Assets 573,353 475,333 482,560
Long-term marketable securities 39,952 89,243 39,408 Property and
equipment, net 102,765 103,650 99,169 Intangibles, net 11,341
11,999 4,714 Goodwill 16,367 16,367 6,027 Deferred tax asset 25,034
25,065 16,732 Other assets 1,007 3,087
11,289 Total Assets $ 769,819 $ 724,744
$ 659,899 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $ 75,695 $ 51,932 $ 47,341
Accrued salaries and benefits 11,598 13,388 13,476 Other accrued
liabilities 14,080 11,572 9,532 Deferred income on shipments to
distributors 7,398 5,631 4,419
Total Current Liabilities 108,771 82,523 74,768 Other
long-term obligations 4,039 4,863 9,706 Stockholders'
equity: Capital stock 1,088,493 1,078,878 1,048,497 Accumulated
deficit (430,663 ) (440,634 ) (472,180 ) Accumulated other
comprehensive loss (821 ) (886 ) (892 ) Total
Stockholders' Equity 657,009 637,358
575,425 Total Liabilities and Stockholders' Equity $
769,819 $ 724,744 $ 659,899 Prepared in
accordance with Generally Accepted Accounting Principles
Cirrus Logic, Inc.Thurman K. Case, 512-851-4125Chief Financial
OfficerInvestor.Relations@cirrus.com
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