Revenue at the High End of Guidance Due to
Demand for Handset Products
Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-performance,
low-power ICs for audio, voice and other 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 2020, which ended June 29, 2019, as well as the
company’s current business outlook.
“Cirrus Logic reported revenue for the June quarter at the
high-end of guidance as we experienced solid demand for amplifiers
and smart codecs shipping in handsets,” said Jason Rhode, president
and chief executive officer. “We remain focused on product
development execution, increasing penetration of new and existing
customers and continuing to capitalize on demand for low-power,
low-latency audio, voice and other signal-processing components,
which we believe will position the company for long-term
success.”
Reported Financial Results – First Quarter FY20
- Revenue of $238.3 million;
- GAAP and non-GAAP gross margin of 51.4 percent and 51.5
percent, respectively;
- GAAP operating expenses of $118.4 million and non-GAAP
operating expenses of $99.6 million; and
- GAAP earnings per share of $0.08 and non-GAAP earnings per
share of $0.35.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – Second Quarter FY20
- Revenue is expected to range between $300 million and $340
million;
- GAAP gross margin is expected to be between 51 percent and 53
percent; and
- Combined GAAP R&D and SG&A expenses are expected to
range between $118 million and $124 million, which includes
approximately $13 million in stock-based compensation and $7
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: 8745219).
Cirrus Logic, Inc.
Cirrus Logic is a leader in high-performance, low-power ICs for
audio, voice and other 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, Cirrus and the Cirrus Logic logo 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 and profit, operating expenses, gross
margin and profit, tax expense and effective tax rate impact on
earnings per share, and effective tax rate. 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 second quarter fiscal year 2020
revenue, gross margin, combined research and development and
selling, general and administrative expense levels, stock
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 2020,
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 30, 2019 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.
Summary financial data follows:
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited) (in thousands, except per share data)
Three Months Ended
Jun. 29,
Mar. 30,
Jun. 30,
2019
2019
2018
Q1'20 Q4'19 Q1'19 Portable products
$
202,938
$
207,099
$
212,260
Non-portable and other products
35,315
33,342
42,223
Net sales
238,253
240,441
254,483
Cost of sales
115,759
115,802
129,924
Gross profit
122,494
124,639
124,559
Gross margin
51.4
%
51.8
%
48.9
%
Research and development
88,830
92,251
97,932
Selling, general and administrative
29,520
30,194
32,784
Gain on sale of assets
-
(4,913
)
-
Total operating expenses
118,350
117,532
130,716
Income (loss) from operations
4,144
7,107
(6,157
)
Interest income
2,285
2,248
1,447
Other (expense) income
(378
)
(150
)
210
Income (loss) before income taxes
6,051
9,205
(4,500
)
Provision (benefit) for income taxes
1,433
3,048
(228
)
Net income (loss)
$
4,618
$
6,157
$
(4,272
)
Basic earnings (loss) per share:
$
0.08
$
0.10
$
(0.07
)
Diluted earnings (loss) per share:
$
0.08
$
0.10
$
(0.07
)
Weighted average number of shares: Basic
58,540
59,031
61,462
Diluted
60,258
60,199
61,462
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. 29,
Mar. 30,
Jun. 30,
2019
2019
2018
Net Income (Loss) Reconciliation
Q1'20
Q4'19
Q1'19
GAAP Net Income (Loss)
$
4,618
$
6,157
$
(4,272
)
Amortization of acquisition
intangibles
7,228
7,228
13,266
Stock-based compensation expense
11,786
12,583
12,794
Gain on asset sale
-
(4,913
)
-
Adjustment to income taxes
(2,803
)
1,202
(3,926
)
Non-GAAP Net Income
$
20,829
$
22,257
$
17,862
Earnings (Loss) Per Share
Reconciliation
GAAP Diluted earnings (loss) per
share
$
0.08
$
0.10
$
(0.07
)
Effect of Amortization of acquisition
intangibles
0.12
0.12
0.21
Effect of Stock-based compensation
expense
0.20
0.21
0.20
Effect of Gain on asset sale
-
(0.08
)
-
Effect of Adjustment to income taxes
(0.05
)
0.02
(0.06
)
Non-GAAP Diluted earnings per
share
$
0.35
$
0.37
$
0.28
Diluted Shares Reconciliation
GAAP Diluted shares
60,258
60,199
61,462
Effect of weighted dilutive shares
-
-
1,723
Non-GAAP Diluted shares
60,258
60,199
63,185
Operating Income (Loss) Reconciliation
GAAP Operating Income (Loss)
$
4,144
$
7,107
$
(6,157
)
GAAP Operating Profit (Loss)
2
%
3
%
-2
%
Amortization of acquisition
intangibles
7,228
7,228
13,266
Stock-based compensation expense -
COGS
241
288
199
Stock-based compensation expense -
R&D
7,240
8,270
7,250
Stock-based compensation expense -
SG&A
4,305
4,025
5,345
Gain on asset sale
-
(4,913
)
-
Non-GAAP Operating Income
$
23,158
$
22,005
$
19,903
Non-GAAP Operating Profit
10
%
9
%
8
%
Operating Expense Reconciliation
GAAP Operating Expenses
$
118,350
$
117,532
$
130,716
Amortization of acquisition
intangibles
(7,228
)
(7,228
)
(13,266
)
Stock-based compensation expense -
R&D
(7,240
)
(8,270
)
(7,250
)
Stock-based compensation expense -
SG&A
(4,305
)
(4,025
)
(5,345
)
Gain on asset sale
-
4,913
-
Non-GAAP Operating Expenses
$
99,577
$
102,922
$
104,855
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
122,494
$
124,639
$
124,559
GAAP Gross Margin
51.4
%
51.8
%
48.9
%
Stock-based compensation expense -
COGS
241
288
199
Non-GAAP Gross Profit
$
122,735
$
124,927
$
124,758
Non-GAAP Gross Margin
51.5
%
52.0
%
49.0
%
Effective Tax Rate Reconciliation
GAAP Tax Expense (Benefit)
$
1,433
$
3,048
$
(228
)
GAAP Effective Tax Rate
23.7
%
33.1
%
5.1
%
Adjustments to income taxes
2,803
(1,202
)
3,926
Non-GAAP Tax Expense
$
4,236
$
1,846
$
3,698
Non-GAAP Effective Tax Rate
16.9
%
7.7
%
17.2
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense
$
0.02
$
0.05
$
-
Adjustments to income taxes
0.05
(0.02
)
0.06
Non-GAAP Tax Expense
$
0.07
$
0.03
$
0.06
CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in
thousands
Jun. 29,
Mar. 30,
Jun. 30,
2019
2019
2018
ASSETS Current assets Cash and cash equivalents
$
198,077
$
216,172
$
186,459
Marketable securities
52,350
70,183
39,877
Accounts receivable, net
111,497
120,656
126,604
Inventories
146,317
164,733
173,063
Other current assets
55,834
53,239
49,118
Total current Assets
564,075
624,983
575,121
Long-term marketable securities
205,079
158,968
159,334
Right-of-use lease assets
146,035
-
-
Property and equipment, net
182,042
186,185
195,804
Intangibles, net
62,496
67,847
99,366
Goodwill
286,370
286,241
287,042
Deferred tax asset
9,394
8,727
15,985
Other assets
14,625
19,689
34,151
Total assets
$
1,470,116
$
1,352,640
$
1,366,803
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities
Accounts payable
$
60,408
$
48,398
$
53,655
Accrued salaries and benefits
23,416
29,289
22,924
Other accrued liabilities
47,382
37,853
42,065
Total current liabilities
131,206
115,540
118,644
Non-current lease liability
137,180
-
-
Non-current income taxes
79,484
78,309
94,612
Other long-term liabilities
4,996
18,551
26,451
Stockholders' equity: Capital stock
1,375,777
1,363,736
1,325,287
Accumulated deficit
(258,899
)
(222,430
)
(184,673
)
Accumulated other comprehensive income (loss)
372
(1,066
)
(13,518
)
Total stockholders' equity
1,117,250
1,140,240
1,127,096
Total liabilities and stockholders' equity
$
1,470,116
$
1,352,640
$
1,366,803
Prepared in accordance with Generally Accepted Accounting
Principles
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190731005658/en/
Thurman K. Case Chief Financial Officer Cirrus Logic, Inc. (512)
851-4125 Investor.Relations@cirrus.com
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