Significant Revenue Growth in FY17 Fueled by
Demand for Portable Audio Products
Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high performance,
low-power ICs for audio and voice signal processing applications,
today posted on its investor relations website at
http://investor.cirrus.com the quarterly Shareholder Letter that
contains the complete financial results for the fourth quarter and
full fiscal year 2017, which ended Mar. 25, 2017, as well as the
company’s current business outlook.
“We are extremely pleased with Cirrus Logic’s FY17 financial
performance as we delivered outstanding revenue, operating profit
and earnings per share growth,” said Jason Rhode, president and
chief executive officer. “With a growing product line spanning the
complete audio signal chain, Cirrus Logic expects to leverage our
solid customer relationships and engineering execution to
capitalize on our rapidly expanding growth opportunities.”
Reported Financial Results – Fourth Quarter FY17
- Revenue of $327.9 million;
- GAAP gross margin of 50.1 percent and
non-GAAP gross margin of 50.2 percent;
- GAAP operating expenses of $119.6
million and non-GAAP operating expenses of $90.9 million; and
- GAAP diluted earnings per share of
$0.52 and non-GAAP diluted earnings per share of $0.85.
Reported Financial Results – Full Year FY17
- Revenue of $1.5 billion;
- GAAP gross margin of 49.2 percent and
non-GAAP gross margin of 49.3 percent;
- GAAP operating expenses of $440.8
million and non-GAAP operating expenses of $362.7 million; and
- GAAP diluted earnings per share of
$3.92 and non-GAAP diluted earnings per share of $4.49.
A reconciliation of the non-GAAP charges is included in the
tables accompanying this press release.
Business Outlook – First Quarter FY18
- Revenue is expected to range between
$300 million and $340 million;
- GAAP gross margin is expected to be
between 48 percent and 50 percent; and
- Combined GAAP R&D and SG&A
expenses are expected to range between $118 million and $124
million, which includes approximately $11 million in share-based
compensation and $10 million in 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 (416) 621-4642, or
toll-free at (800) 585-8367 (Access Code: 2452447).
Cirrus Logic, Inc.
Cirrus Logic is a leader in high performance,
low-power ICs for audio and voice signal processing applications.
Cirrus Logic’s products span the entire audio signal
chain, from capture to playback, providing
innovative products for the world’s top smartphones,
tablets, digital headsets, wearables and emerging smart home
applications. With headquarters in Austin, Texas, Cirrus Logic
is recognized globally for its award-winning corporate
culture. Check us out 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 non-GAAP net income, diluted earnings per share,
operating income, operating expenses, gross margins, tax expenses
and tax expense impact on 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 statements about our future ability to leverage our solid
customer relationships and engineering execution to capitalize on
our rapidly expanding growth opportunities, and our estimates of
first quarter fiscal year 2018 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 first
quarter of fiscal year 2018, customer cancellations of orders, or
the failure to place orders consistent with forecasts, along with
the timing and success of new product ramps; and the risk factors
listed in our Form 10-K for the year ended March 26, 2016, as
amended, 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:
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited) (in thousands, except per share data)
Three Months Ended
Twelve Months Ended
Mar. 25, Dec. 24, Mar. 26, Mar.
25, Mar. 26, 2017 2016 2016
2017 2016 Q4'17 Q3'17 Q4'16
Q4'17 Q4'16 Portable audio products $ 290,658 $
483,712 $ 187,280 $ 1,373,848 $ 989,101 Non-portable audio and
other products 37,206 39,317
44,719 165,092 180,150
Net
sales 327,864 523,029
231,999 1,538,940
1,169,251 Cost of sales 163,585
267,877 116,745 781,125
614,411
Gross profit 164,279 255,152
115,254 757,815 554,840 Gross margin
50.1 % 48.8 % 49.7 %
49.2 % 47.5 % Research and
development 77,972 76,079 65,834 303,658 269,217 Selling, general
and administrative 31,752 32,884 27,228 127,265 117,082 Asset
impairment 9,842 - - 9,842 - Patent agreement and other -
- - -
(11,670 ) Total operating expenses 119,566
108,963 93,062 440,765
374,629
Income from operations 44,713
146,189 22,192 317,050 180,211
Interest income (expense), net 118 (350 ) (709 ) (1,924 ) (2,861 )
Other income (expense), net 82 (47 )
(370 ) (79 ) (1,361 )
Income before income
taxes 44,913 145,792 21,113 315,047
175,989 Provision for income taxes 9,855
23,751 7,101 53,838
52,359
Net income $ 35,058
$ 122,041 $ 14,012
$ 261,209 $ 123,630
Basic earnings per share: $ 0.55 $ 1.91 $ 0.22 $ 4.12 $ 1.96
Diluted earnings per share: $ 0.52 $ 1.83 $ 0.21 $ 3.92 $ 1.87
Weighted average number of shares: Basic 64,232 63,837
62,843 63,329 63,197 Diluted 67,062 66,748 65,398 66,561 65,993
Prepared in accordance with Generally Accepted Accounting
Principles
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. 25, Dec. 24, Mar. 26, Mar.
25, Mar. 26, 2017
2016 2016 2017
2016 Net Income Reconciliation
Q4'17 Q3'17 Q4'16 Q4'17 Q4'16
GAAP Net Income $ 35,058 $
122,041 $ 14,012 $ 261,209
$ 123,630 Amortization of acquisition intangibles
8,255 8,308 8,363 33,252 32,271 Stock based compensation expense
10,888 9,471 8,858 39,594 33,578 Patent agreement and other - - - -
(11,670 ) Restructuring and other costs, net - - (3,667 ) - (3,667
) Acquisition-related items - - - (3,566 ) - Asset impairment 9,842
- - 9,842 - Adjustment to income taxes (7,289 )
(15,094 ) (2,658 ) (41,480 ) (16,062 )
Non-GAAP Net Income $ 56,754 $
124,726 $ 24,908 $
298,851 $ 158,080
Earnings Per Share Reconciliation
GAAP Diluted earnings per
share $ 0.52 $ 1.83 $
0.21 $ 3.92 $ 1.87 Effect of
Amortization of acquisition intangibles 0.13 0.13 0.13 0.50 0.49
Effect of Stock based compensation expense 0.16 0.14 0.14 0.59 0.51
Effect of Patent agreement and other - - - - (0.18 ) Effect of
Restructuring and other costs, net - - (0.06 ) - (0.05 ) Effect of
Acquisition-related items - - - (0.05 ) - Effect of Asset
impairment 0.15 - - 0.15 - Effect of Adjustment to income taxes
(0.11 ) (0.23 ) (0.04 ) (0.62 )
(0.24 )
Non-GAAP Diluted earnings per share $
0.85 $ 1.87 $ 0.38
$ 4.49 $ 2.40
Operating Income Reconciliation
GAAP Operating Income
$ 44,713 $ 146,189 $
22,192 $ 317,050 $ 180,211 GAAP
Operating Profit 14 % 28 % 10 % 21 % 15 % Amortization of
acquisition intangibles 8,255 8,308 8,363 33,252 32,271 Stock
compensation expense - COGS 324 282 233 1,071 1,151 Stock
compensation expense - R&D 5,987 5,078 4,996 21,186 17,173
Stock compensation expense - SG&A 4,577 4,111 3,629 17,337
15,254 Patent agreement and other - - - - (11,670 ) Restructuring
and other costs, net - - (3,667 ) - (3,667 ) Acquisition-related
items - - - (3,566 ) - Asset impairment 9,842
- - 9,842 -
Non-GAAP Operating Income $ 73,698
$ 163,968 $ 35,746
$ 396,172 $ 230,723
Non-GAAP Operating Profit 22 % 31 % 15 % 26 % 20 % Operating
Expense Reconciliation
GAAP Operating Expenses $
119,566 $ 108,963 $ 93,062
$ 440,765 $ 374,629 Amortization of
acquisition intangibles (8,255 ) (8,308 ) (8,363 ) (33,252 )
(32,271 ) Stock compensation expense - R&D (5,987 ) (5,078 )
(4,996 )
(21,186
) (17,173 ) Stock compensation expense - SG&A (4,577 ) (4,111 )
(3,629 ) (17,337 ) (15,254 ) Patent agreement and other - - - -
11,670 Restructuring and other costs, net - - 3,667 - 3,667
Acquisition-related items - - - 3,566 - Asset impairment
(9,842 ) - - (9,842 ) -
Non-GAAP Operating Expenses $ 90,905
$ 91,466 $ 79,741
$ 362,714 $ 325,268
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$ 164,279 $ 255,152 $
115,254 $ 757,815 $ 554,840 GAAP
Gross Margin 50.1 % 48.8 % 49.7 % 49.2 % 47.5 % Acquisition-related
items - - - - - Stock compensation expense - COGS 324
282 233 1,071
1,151
Non-GAAP Gross Profit $ 164,603
$ 255,434 $ 115,487
$ 758,886 $ 555,991
Non-GAAP Gross Margin 50.2 % 48.8 % 49.8 % 49.3 % 47.6 %
Effective Tax Rate Reconciliation
GAAP Tax Expense
$ 9,855 $ 23,751 $ 7,101
$ 53,838 $ 52,359 GAAP Effective Tax
Rate 21.9 % 16.3 % 33.6 % 17.1 % 29.8 % Adjustments to income taxes
7,289 15,094 2,658
41,480 16,062
Non-GAAP Tax Expense
$ 17,144 $ 38,845
$ 9,759 $ 95,318 $
68,421 Non-GAAP Effective Tax Rate 23.2 % 23.7 % 28.2
% 24.2 % 30.2 % Tax Impact to EPS Reconciliation
GAAP Tax
Expense $ 0.15 $ 0.36 $
0.11 $ 0.81 $ 0.79 Adjustments
to income taxes 0.11 0.23 0.04
0.62 0.24
Non-GAAP Tax
Expense $ 0.26 $ 0.59
$ 0.15 $ 1.43 $
1.03
CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in
thousands Mar. 25, Dec. 24, Mar.
26, 2017 2016
2016 ASSETS Current assets Cash and cash equivalents
$ 351,166 $ 310,375 $ 168,793 Marketable securities 99,813 72,342
60,582 Accounts receivable, net 119,974 246,630 88,532 Inventories
167,895 154,128 142,015 Other current assets 37,080
41,747 46,207 Total current Assets
775,928 825,222 506,129 Property and equipment, net 168,139
167,933 162,656 Intangibles, net 135,188 144,005 162,832 Goodwill
286,767 287,518 287,518 Deferred tax asset 32,841 34,737 25,772
Other assets 14,607 13,990
16,345 Total assets $ 1,413,470 $ 1,473,405 $
1,181,883 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $ 73,811 $ 154,930 $ 71,619
Accrued salaries and benefits 40,190 33,122 21,239 Other accrued
liabilities 30,074 24,687 35,266
Total current liabilities 144,075 212,739 128,124
Long-term debt 60,000 100,000 160,439 Other long-term liabilities
57,703 56,631 33,837 Stockholders' equity: Capital stock
1,259,279 1,247,191 1,203,496 Accumulated deficit (107,014 )
(141,027 ) (344,345 ) Accumulated other comprehensive income (loss)
(573 ) (2,129 ) 332 Total stockholders'
equity 1,151,692 1,104,035
859,483 Total liabilities and stockholders' equity $
1,413,470 $ 1,473,405 $ 1,181,883
Prepared in accordance with Generally Accepted Accounting
Principles
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version on businesswire.com: http://www.businesswire.com/news/home/20170503006576/en/
Investor Contact:Cirrus Logic, Inc.Thurman K. Case,
512-851-4125Chief Financial
OfficerInvestor.Relations@cirrus.com
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