Demand for Portable Audio Products Drives
Strong September Guidance
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 2016, which ended June
27, 2015, as well as the company’s current business outlook.
“Q1 was a great quarter for Cirrus Logic. We delivered solid
financial results as demand for our smart codecs and amplifiers
pushed revenue above the high end of our guidance,” said Jason
Rhode, president and chief executive officer. “FY16 looks to be an
outstanding year with a significant increase in revenue being
driven by new products. We expect strong demand for our audio and
voice solutions to fuel additional growth in FY17.”
Reported Financial Results – First Quarter FY16
- Revenue of $282.6 million;
- GAAP and non-GAAP gross margin of
approximately 47 percent;
- GAAP operating expenses of $82.5
million, which included a one-time $12.5 million benefit from the
sale of certain LED patents; non-GAAP operating expenses of $79.9
million; and
- GAAP diluted earnings per share of
$0.50 and non-GAAP diluted earnings per share of $0.54.
A reconciliation of the non-GAAP charges is included in the
tables accompanying this press release.
Business Outlook – Second Quarter FY16
- Revenue is expected to range between
$290 million and $310 million;
- GAAP gross margin is expected to be
between 45 percent and 47 percent; and
- Combined GAAP R&D and SG&A
expenses are expected to range between $96 million and $100
million, which includes approximately $9 million in share-based
compensation and $7 million in 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: 75505782).
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, industrial and energy-related applications. The
company operates from headquarters in Austin, Texas, with offices
in the United States, United Kingdom, Australia, 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 gross margins, operating expenses, net income, operating
profit and income, effective tax rate 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 future growth opportunities and our estimates of second
quarter fiscal year 2016 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 2016, 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 28, 2015, 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 registered trademarks of Cirrus
Logic, Inc. All other company or product names noted herein may be
trademarks of their respective holders.
Summary financial data follows:
CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED
STATEMENT OF OPERATIONS (unaudited) (in thousands,
except per share data) Three Months
Ended Jun. 27, Mar. 28, Jun. 28,
2015 2015
2014 Q1'16 Q4'15 Q1'15 Portable
audio products $ 235,866 $ 210,814 $ 112,570 Non-portable audio and
other products 46,767 44,369
39,995
Net sales 282,633
255,183 152,565 Cost of sales
150,179 136,208 77,190
Gross profit 132,454 118,975 75,375
Gross margin 46.9 % 46.6 %
49.4 % Research and development 65,835 58,070
39,777 Selling, general and administrative 29,119 30,498 19,683
Patent agreement, net (12,500 ) - -
Total operating expenses 82,454 88,568
59,460
Income from operations
50,000 30,407 15,915 Interest expense,
net (638 ) (869 ) (467 ) Other expense 136 392
501
Income before income taxes
49,498 29,930 15,949 Provision for income
taxes
16,144
8,581 5,701
Net income
$
33,354
$ 21,349 $ 10,248
Basic earnings per share: $
0.53
$ 0.34 $ 0.17 Diluted earnings per share: $
0.50
$ 0.32 $ 0.16 Weighted average number of shares: Basic
63,274 62,852 62,032 Diluted 66,410 65,815 64,688 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. 27, Mar. 28, Jun. 28,
2015 2015 2014
Net Income Reconciliation
Q1'16 Q4'15
Q1'15 GAAP Net Income $
33,354
$ 21,349 $ 10,248 Amortization of
acquisition intangibles 7,141 7,141 246 Stock based compensation
expense 8,271 7,735 5,622 Patent agreement, net (12,500 ) - -
Wolfson acquisition items - - 2,304 Provision (benefit) for income
taxes
(175
) 7,230 5,226
Non-GAAP Net
Income $ 36,091 $ 43,455
$ 23,646 Earnings Per Share
Reconciliation
GAAP Diluted earnings per share $
0.50
$ 0.32 $ 0.16 Effect of Amortization of
acquisition intangibles 0.11 0.11 - Effect of Stock based
compensation expense 0.12 0.12 0.09 Effect of Patent agreement, net
(0.19 ) - - Effect of Wolfson acquisition items
-
- 0.04 Effect of Provision (benefit) for income taxes
-
0.11 0.08
Non-GAAP Diluted earnings
per share $ 0.54 $ 0.66
$ 0.37 Operating Income
Reconciliation
GAAP Operating Income $ 50,000
$ 30,407 $ 15,915 GAAP Operating Profit
18 % 12 % 10 % Amortization of acquisition intangibles 7,141 7,141
246 Stock compensation expense - COGS 325 (10 ) 231 Stock
compensation expense - R&D 3,868 2,994 2,543 Stock compensation
expense - SG&A 4,078 4,751 2,848 Patent agreement, net (12,500
) - - Wolfson acquisition items - -
2,192
Non-GAAP Operating Income $
52,912 $ 45,283 $
23,975 Non-GAAP Operating Profit 19 % 18 % 16 %
Operating Expense Reconciliation
GAAP Operating
Expenses $ 82,454 $ 88,568 $
59,460 Amortization of acquisition intangibles (7,141 )
(7,141 ) (246 ) Stock compensation expense - R&D (3,868 )
(2,994 ) (2,543 ) Stock compensation expense - SG&A (4,078 )
(4,751 ) (2,848 ) Patent agreement, net 12,500 - - Wolfson
acquisition items - - (2,192 )
Non-GAAP Operating Expenses $ 79,867
$ 73,682 $ 51,631
Gross Margin/Profit Reconciliation
GAAP Gross Margin
$ 132,454 $ 118,975 $
75,375 GAAP Gross Profit 46.9 % 46.6 % 49.4 % Stock
compensation expense - COGS 325 (10 )
231
Non-GAAP Gross Margin $ 132,779
$ 118,965 $ 75,606
Non-GAAP Gross Profit 47.0 % 46.6 % 49.6 % Effective Tax
Rate Reconciliation
GAAP Tax Expense $
16,144
$ 8,581 $ 5,701 GAAP Effective Tax Rate
32.6
% 28.7 % 35.7 % Adjustments to income taxes
175
(7,230 ) (5,226 )
Non-GAAP Tax Expense
$ 16,319 $ 1,351 $
475 Non-GAAP Effective Tax Rate 31.1 % 3.0 % 2.0 %
CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED
BALANCE SHEET (in thousands) Jun. 27,
Mar. 28, Jun. 28,
2015 2015 2014
ASSETS (unaudited) (unaudited) Current assets Cash and cash
equivalents $ 102,531 $ 76,401 $ 268,544 Marketable securities
120,226 124,246 75,198 Accounts receivable, net 120,838 112,608
77,219 Inventories 126,195 84,196 92,002 Deferred tax asset
5,276
18,559 19,921 Other current assets 32,982
35,903 40,469 Total current Assets
508,048
451,913 573,353 Long-term marketable securities 50,629
60,072 39,952 Property and equipment, net 152,018 144,346 102,765
Intangibles, net 169,158 175,743 11,341 Goodwill 263,583 263,115
16,367 Deferred tax asset 25,639 25,593 25,034 Other assets
24,578 27,996 1,007 Total assets
$
1,193,653
$ 1,148,778 $ 769,819 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 146,370
$ 112,213 $ 75,695 Accrued salaries and benefits 21,380 24,132
11,598 Deferred income 4,736 6,105 7,398 Other accrued liabilities
30,636 34,128 14,080
Total current liabilities 203,122 176,578 108,771 Long-term
debt 160,439 180,439 - Other long-term liabilities
30,320
34,990 4,039 Stockholders' equity: Capital stock 1,170,436
1,159,494 1,088,493 Accumulated deficit
(367,691
) (400,613 ) (430,663 ) Accumulated other comprehensive loss
(2,973
) (2,110 ) (821 ) Total stockholders' equity
799,772
756,771 657,009 Total
liabilities and stockholders' equity $
1,193,653
$ 1,148,778 $ 769,819 Prepared in
accordance with Generally Accepted Accounting Principles
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version on businesswire.com: http://www.businesswire.com/news/home/20150722006173/en/
Cirrus Logic, Inc.Thurman K. Case, 512-851-4125Chief Financial
OfficerInvestor.Relations@cirrus.com
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