Revenue Exceeded Guidance Due to Stronger than
Anticipated Demand for Portable Audio
Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high performance,
low-power ICs for audio and voice signal processing applications,
today posted on its website at http://investor.cirrus.com the
quarterly Shareholder Letter that contains the complete financial
results for the first quarter fiscal year 2019, which ended June
30, 2018, as well as the company’s current business outlook.
“We are pleased with our results in the June quarter as several
customers launched new smartphones and wireless headsets utilizing
our technology and customer engagements continued to be strong,”
said Jason Rhode, president and chief executive officer. “With a
diversified product portfolio that addresses a wide range of
performance and cost requirements, the company expects to
capitalize on increasing demand for innovative audio and voice
solutions, as well as adjacent opportunities including haptics, all
of which we believe will contribute to the company’s continued
success.”
Reported Financial Results – First Quarter FY19
- Revenue of $254.5 million;
- GAAP and non-GAAP gross margin of 48.9
percent and 49 percent, respectively;
- GAAP operating expenses of $130.7
million and non-GAAP operating expenses of $104.8 million; and
- GAAP loss per share of $0.07 and
non-GAAP earnings per share of $0.28.
A reconciliation of the non-GAAP charges is included in the
tables accompanying this press release.
Business Outlook – Second Quarter FY19
- Revenue is expected to range between
$310 million and $350 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 $132 million and $138
million, which includes approximately $15 million in share-based
compensation and $13 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: 9589402).
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.
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.
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, diluted
share count, operating income, operating expenses, gross margin,
tax expense 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 our statements about our future growth opportunities and
expectations with respect to our ability to capitalize on
increasing demand for innovative audio and voice solutions, as well
as adjacent opportunities including haptics, along with estimates
for the second quarter fiscal year 2019 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 2019,
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 extent to which customers adopt our new
technologies and devices in new markets such as haptics; and the
risk factors listed in our Form 10-K for the year ended March 31,
2018 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.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited) (in thousands, except per share data)
Three Months Ended
Jun. 30, Mar. 31, Jun. 24, 2018
2018 2017 Q1'19 Q4'18 Q1'18
Portable audio products $ 212,260 $ 262,777 $ 280,688 Non-portable
audio and other products 42,223 40,396
40,047
Net sales 254,483
303,173 320,735 Cost of
sales 129,924 150,543 159,019
Gross profit 124,559 152,630
161,716 Gross margin 48.9 % 50.3
% 50.4 % Research and development
97,932 95,556 83,557 Selling, general and administrative
32,784 36,307 30,859 Total
operating expenses 130,716 131,863
114,416
Income (loss) from operations
(6,157 ) 20,767 47,300 Interest
income (expense), net 1,447 1,378 594 Other income (expense), net
210 (158 ) (19 )
Income (loss)
before income taxes (4,500 ) 21,987
47,875 Provision (benefit) for income taxes (228 )
9,983 4,963
Net income (loss)
$ (4,272 ) $ 12,004
$ 42,912 Basic earnings (loss) per
share: $ (0.07 ) $ 0.19 $ 0.67 Diluted earnings (loss) per share: $
(0.07 ) $ 0.19 $ 0.64 Weighted average number of shares:
Basic 61,462 62,654 64,097 Diluted 61,462 64,572 67,160
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
Jun. 30, Mar. 31, Jun. 24, 2018
2018 2017 Net Income Reconciliation
Q1'19
Q4'18 Q1'18 GAAP Net Income (Loss) $
(4,272 ) $ 12,004 $
42,912 Amortization of acquisition intangibles 13,266 13,266
11,600 Stock based compensation expense 12,794 12,533 11,403
Acquisition-related items - (279 ) (4,048 ) Adjustment to income
taxes (3,926 ) (4,502 ) (7,257 )
Non-GAAP
Net Income $ 17,862 $ 33,022
$ 54,610 Earnings Per Share
Reconciliation
GAAP Diluted earnings (loss) per share
$ (0.07 ) $ 0.19 $
0.64 Effect of Amortization of acquisition intangibles 0.21
0.21 0.17 Effect of Stock based compensation expense 0.20 0.19 0.17
Effect of Acquisition-related items - - (0.06 ) Effect of
Adjustment to income taxes (0.06 ) (0.08 )
(0.11 )
Non-GAAP Diluted earnings per share $
0.28 $ 0.51 $ 0.81
Diluted Shares Reconciliation
GAAP Diluted
shares 61,462 64,572 67,160 Effect of
weighted dilutive shares 1,723 -
-
Non-GAAP Diluted shares 63,185
64,572 67,160
Operating Income Reconciliation
GAAP Operating Income (Loss)
$ (6,157 ) $ 20,767 $
47,300 GAAP Operating Profit (Loss) -2 % 7 % 15 %
Amortization of acquisition intangibles 13,266 13,266 11,600 Stock
compensation expense - COGS 199 422 338 Stock compensation expense
- R&D 7,250 6,847 6,260 Stock compensation expense - SG&A
5,345 5,264 4,805 Acquisition-related items -
(279 ) (4,048 )
Non-GAAP Operating Income $
19,903 $ 46,287 $
66,255 Non-GAAP Operating Profit 8 % 15 % 21 %
Operating Expense Reconciliation
GAAP Operating Expenses
$ 130,716 $ 131,863 $
114,416 Amortization of acquisition intangibles (13,266 )
(13,266 ) (11,600 ) Stock compensation expense - R&D (7,250 )
(6,847 ) (6,260 ) Stock compensation expense - SG&A (5,345 )
(5,264 ) (4,805 ) Acquisition-related items -
279 4,048
Non-GAAP Operating Expenses
$ 104,855 $ 106,765
$ 95,799 Gross Margin/Profit
Reconciliation
GAAP Gross Profit $ 124,559
$ 152,630 $ 161,716 GAAP Gross Margin
48.9 % 50.3 % 50.4 % Stock compensation expense - COGS 199
422 338
Non-GAAP Gross
Profit $ 124,758 $ 153,052
$ 162,054 Non-GAAP Gross Margin 49.0 %
50.5 % 50.5 % Effective Tax Rate Reconciliation
GAAP Tax
Expense (Benefit) $ (228 ) $
9,983 $ 4,963 GAAP Effective Tax Rate 5.1 %
45.4 % 10.4 % Adjustments to income taxes 3,926
4,502 7,257
Non-GAAP Tax Expense
$ 3,698 $ 14,485 $
12,220 Non-GAAP Effective Tax Rate 17.2 % 30.5 % 18.3
% Tax Impact to EPS Reconciliation
GAAP Tax Expense
$ - $ 0.15 $ 0.07
Adjustments to income taxes 0.06 0.08
0.11
Non-GAAP Tax Expense $ 0.06
$ 0.23 $ 0.18
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
Jun. 30, Mar. 31, Jun. 24, 2018
2018 2017 ASSETS Current assets Cash and cash
equivalents $ 186,459 $ 235,604 $ 163,918 Marketable securities
39,877 26,397 11,380 Accounts receivable, net 126,604 100,801
162,437 Inventories 173,063 205,760 202,429 Other current assets
49,118 45,112 38,342
Total current Assets 575,121 613,674 578,506 Long-term
marketable securities 159,334 172,499 134,851 Property and
equipment, net 195,804 191,154 170,829 Intangibles, net 99,366
111,547 143,107 Goodwill 287,042 288,718 287,049 Deferred tax asset
15,985 14,716 31,971 Other assets 34,151
37,809 20,337 Total assets $ 1,366,803
$ 1,430,117 $ 1,366,650 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 53,655
$ 69,850 $ 85,995 Accrued salaries and benefits 22,924 35,721
31,113 Other accrued liabilities 42,065 34,638
28,767 Total current liabilities 118,644
140,209 145,875 Non-current income taxes 94,612 92,753
50,415 Other long-term liabilities 26,451 35,427 9,655
Stockholders' equity: Capital stock 1,325,287 1,312,434 1,272,570
Accumulated deficit (184,673 ) (139,345 ) (112,258 ) Accumulated
other comprehensive income (loss) (13,518 ) (11,361 )
393 Total stockholders' equity 1,127,096
1,161,728 1,160,705 Total
liabilities and stockholders' equity $ 1,366,803 $ 1,430,117
$ 1,366,650 Prepared in accordance with
Generally Accepted Accounting Principles
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version on businesswire.com: https://www.businesswire.com/news/home/20180801005660/en/
Cirrus Logic, Inc.Thurman K. Case, 512-851-4125Chief Financial
OfficerInvestor.Relations@cirrus.com
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