Company Announces $200 Million Share Repurchase
Program
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 third quarter fiscal year 2019, which ended Dec.
29, 2018, as well as the company’s current business outlook.
“Cirrus Logic reported revenue for the third quarter in line
with our revised expectations as we experienced the effects of the
turbulent macroeconomic environment and reduced demand for
smartphones,” said Jason Rhode, president and chief executive
officer. “Despite these challenges, we are encouraged to see
continued broad-based interest for low-latency, low-power signal
processing across a wide range of product categories. We are making
considerable investments in technologies addressing audio, voice
and other adjacent applications that we believe will fuel growth
opportunities in the coming years.”
Reported Financial Results – Third Quarter FY19
- Revenue of $324.3 million;
- GAAP and non-GAAP gross margin of 50.3
percent and 50.4 percent, respectively;
- GAAP operating expenses of $118.9
million and non-GAAP operating expenses of $100.3 million; and
- GAAP earnings per share of $0.49 and
non-GAAP earnings per share of $0.91.
A reconciliation of the non-GAAP charges is included in the
tables accompanying this press release.
Business Outlook – Fourth Quarter FY19
- Revenue is expected to range between
$200 million and $240 million;
- GAAP gross margin is expected to be
between 49 percent and 51 percent; and
- Combined GAAP R&D and SG&A
expenses are expected to range between $119 million and $125
million, which includes approximately $12 million in share-based
compensation and $7 million in amortization of acquired
intangibles.
Share Repurchase Authorization
The company also announced that its Board of Directors recently
authorized the repurchase of up to an additional $200 million of
the company's common stock, in addition to the $50 million
remaining from the Board’s previous share repurchase authorization
in January 2018. The repurchases will be funded from working
capital and anticipated cash from operations and may occur from
time to time depending on a variety of factors, including general
market and economic conditions and other corporate considerations.
The share repurchase program is designed to comply with all
applicable securities laws and may be suspended or discontinued at
any time without notice.
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 (416) 621-4642, or
toll-free at (800) 585-8367 (Access Code: 9569708).
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,
operating income and profit, operating expenses, gross margin and
profit, 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,
along with estimates for the fourth 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 fourth quarter of fiscal year 2019,
customer cancellations of orders, or the failure to place orders
consistent with forecasts, along with 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 Nine Months Ended
Dec. 29, Sep. 29, Dec. 30, Dec.
29, Dec. 30, 2018 2018 2017
2018 2017 Q3'19 Q2'19 Q3'18
Q3'19 Q3'18 Portable audio products $ 288,640 $
324,049 $ 438,650 $ 824,950 $ 1,101,099 Non-portable audio and
other products 35,655 42,256
44,091 120,133 127,914
Net
sales 324,295 366,305
482,741 945,083
1,229,013 Cost of sales 161,115
181,186 247,653 472,225
620,927
Gross profit 163,180 185,119
235,088 472,858 608,086 Gross margin
50.3 % 50.5 % 48.7 %
50.0 % 49.5 % Research and
development 88,575 96,381 96,978 282,888 270,888 Selling, general
and administrative 30,364 33,160
34,604 96,308 95,504 Total
operating expenses 118,939 129,541
131,582 379,196 366,392
Income from operations 44,241 55,578
103,506 93,662 241,694 Interest income
(expense), net 1,740 1,525 912 4,712 2,231 U.K. pension settlement
(13,768 ) - - (13,768 ) - Other income (expense), net 101
(378 ) 322 (67 ) (813 )
Income before income taxes 32,314 56,725
104,740 84,539 243,112 Provision (benefit) for
income taxes 2,381 (1,448 ) 70,961
705 93,121
Net income
$ 29,933 $ 58,173
$ 33,779 $ 83,834
$ 149,991 Basic earnings per share: $
0.50 $ 0.96 $ 0.53 $ 1.39 $ 2.36 Diluted earnings per share: $ 0.49
$ 0.93 $ 0.52 $ 1.35 $ 2.26 Weighted average number of
shares: Basic 59,511 60,472 63,453 60,482 63,655 Diluted 60,783
62,431 65,557 62,076 66,377 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 Nine Months Ended
Dec. 29, Sep. 29, Dec. 30, Dec.
29, Dec. 30, 2018 2018 2017
2018 2017 Net Income Reconciliation
Q3'19
Q2'19 Q3'18 Q3'19 Q3'18 GAAP Net
Income $ 29,933 $ 58,173 $
33,779 $ 83,834 $ 149,991
Amortization of acquisition intangibles 7,630 12,867 11,600 33,763
34,800 Stock based compensation expense 11,181 13,131 12,512 37,106
36,207 U.K. pension settlement 13,768 - - 13,768 -
Acquisition-related items - - - - (4,048 ) Adjustment to income
taxes (7,003 ) (17,054 ) 46,273
(27,983 ) 31,756
Non-GAAP Net Income $
55,509 $ 67,117 $
104,164 $ 140,488 $
248,706 Earnings Per Share Reconciliation
GAAP Diluted earnings per share $ 0.49
$ 0.93 $ 0.52 $ 1.35
$ 2.26 Effect of Amortization of acquisition
intangibles 0.13 0.21 0.18 0.54 0.52 Effect of Stock based
compensation expense 0.18 0.21 0.19 0.60 0.55 Effect of U.K.
pension settlement 0.23 - - 0.22 - Effect of Acquisition-related
items - - - - (0.06 ) Effect of Adjustment to income taxes
(0.12 ) (0.27 ) 0.70 (0.45 )
0.48
Non-GAAP Diluted earnings per share $
0.91 $ 1.08 $ 1.59
$ 2.26 $ 3.75
Operating Income Reconciliation
GAAP Operating Income
$ 44,241 $ 55,578 $
103,506 $ 93,662 $ 241,694 GAAP
Operating Profit 14 % 15 % 21 % 10 % 20 % Amortization of
acquisition intangibles 7,630 12,867 11,600 33,763 34,800 Stock
compensation expense - COGS 220 170 386 589 1,052 Stock
compensation expense - R&D 6,761 6,834 6,995 20,845 19,289
Stock compensation expense - SG&A 4,200 6,127 5,131 15,672
15,866 Acquisition-related items - -
- - (4,048 )
Non-GAAP
Operating Income $ 63,052 $
81,576 $ 127,618 $
164,531 $ 308,653 Non-GAAP
Operating Profit 19 % 22 % 26 % 17 % 25 % Operating Expense
Reconciliation
GAAP Operating Expenses $
118,939 $ 129,541 $ 131,582
$ 379,196 $ 366,392 Amortization of
acquisition intangibles (7,630 ) (12,867 ) (11,600 ) (33,763 )
(34,800 ) Stock compensation expense - R&D (6,761 ) (6,834 )
(6,995 ) (20,845 ) (19,289 ) Stock compensation expense - SG&A
(4,200 ) (6,127 ) (5,131 ) (15,672 ) (15,866 ) Acquisition-related
items - - - -
4,048
Non-GAAP Operating Expenses
$ 100,348 $ 103,713
$ 107,856 $ 308,916
$ 300,485 Gross Margin/Profit
Reconciliation
GAAP Gross Profit $ 163,180
$ 185,119 $ 235,088 $
472,858 $ 608,086 GAAP Gross Margin 50.3 %
50.5 % 48.7 % 50.0 % 49.5 % Stock compensation expense - COGS
220 170 386 589
1,052
Non-GAAP Gross Profit $
163,400 $ 185,289 $
235,474 $ 473,447 $
609,138 Non-GAAP Gross Margin 50.4 % 50.6 % 48.8 %
50.1 % 49.6 % Effective Tax Rate Reconciliation
GAAP Tax
Expense (Benefit) $ 2,381 $ (1,448
) $ 70,961 $ 705 $
93,121 GAAP Effective Tax Rate 7.4 % -2.6 % 67.7 % 0.8 %
38.3 % Adjustments to income taxes 7,003
17,054 (46,273 ) 27,983 (31,756
)
Non-GAAP Tax Expense $ 9,384 $
15,606 $ 24,688 $
28,688 $ 61,365 Non-GAAP
Effective Tax Rate 14.5 % 18.9 % 19.2 % 17.0 % 19.8 % Tax
Impact to EPS Reconciliation
GAAP Tax Expense (Benefit)
$ 0.04 $ (0.02 ) $
1.08 $ 0.01 $ 1.40 Adjustments
to income taxes 0.12 0.27 (0.70
) 0.45 (0.48 )
Non-GAAP Tax Expense
$ 0.16 $ 0.25 $
0.38 $ 0.46 $ 0.92
CIRRUS LOGIC, INC. CONSOLIDATED
CONDENSED BALANCE SHEET unaudited; in thousands
Dec. 29, Mar. 31,
Dec. 30, 2018 2018 2017 ASSETS Current
assets Cash and cash equivalents $ 219,319 $ 235,604 $ 226,640
Marketable securities 59,793 26,397 12,822 Accounts receivable, net
142,135 100,801 217,619 Inventories 167,879 205,760 192,967 Other
current assets 51,151 45,112
29,445 Total current Assets 640,277 613,674 679,493
Long-term marketable securities 165,063 172,499 173,717 Property
and equipment, net 191,324 191,154 187,143 Intangibles, net 76,389
111,547 126,183 Goodwill 286,678 288,718 288,481 Deferred tax asset
13,131 14,716 16,467 Other assets 24,003
37,809 21,841 Total assets $ 1,396,865
$ 1,430,117 $ 1,493,325 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 108,022
$ 69,850 $ 116,274 Accrued salaries and benefits 23,566 35,721
29,543 Other accrued liabilities 38,175 34,638
29,903 Total current liabilities 169,763
140,209 175,720 Non-current income taxes 78,532 92,753
54,652 Other long-term liabilities 18,769 35,427 51,587
Stockholders' equity: Capital stock 1,349,941 1,312,434 1,301,800
Accumulated deficit (217,871 ) (139,345 ) (92,402 ) Accumulated
other comprehensive income (loss) (2,269 ) (11,361 )
1,968 Total stockholders' equity 1,129,801
1,161,728 1,211,366 Total
liabilities and stockholders' equity $ 1,396,865 $ 1,430,117
$ 1,493,325 Prepared in accordance with
Generally Accepted Accounting Principles
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version on businesswire.com: https://www.businesswire.com/news/home/20190130005590/en/
Thurman K. CaseChief Financial OfficerCirrus Logic, Inc.(512)
851-4125Investor.Relations@cirrus.com
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