Results Reflect Strong Demand for Products
Shipping in Certain Tablets and Smartphones
Cirrus Logic, Inc. (Nasdaq: CRUS) 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 2021, which ended June 27, 2020, as well as the
company’s current business outlook.
“We are pleased with our results in the June quarter as we
experienced robust demand for certain products shipping in tablets
and smartphones,” said Jason Rhode, chief executive officer.
“Despite the continuing challenges and adverse economic effects
associated with COVID-19, design activity and new product
development efforts were encouraging during the quarter. The
company remains focused on leveraging our strong customer
relationships and mixed-signal processing expertise to broaden our
penetration in audio, voice and other mixed-signal domains and
position the company for growth in the coming years.”
Reported Financial Results – First Quarter FY21
- Revenue of $242.6 million;
- GAAP and non-GAAP gross margin of 52.6 percent;
- GAAP operating expenses of $108.8 million and non-GAAP
operating expenses of $92.4 million;
- GAAP earnings per share of $0.30 and non-GAAP earnings per
share of $0.53.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – Second Quarter FY21
- Revenue is expected to range between $290 million and $330
million;
- GAAP gross margin to be between 51 percent and 53 percent;
and
- Combined GAAP R&D and SG&A expenses to range between
$114 million and $120 million, including approximately $15 million
in stock-based compensation expense and $3 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: 1899640).
Cirrus Logic, Inc.
Cirrus Logic is a leader in low-power, high-precision
mixed-signal processing solutions that create innovative user
experiences for the world’s top mobile and consumer 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, the company 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, tax expense 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 broadening our penetration in audio,
voice, and other domains, and positioning the company for growth in
the coming years, along with estimates for the second quarter
fiscal year 2021 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
and readers should not place undue reliance on such statements.
These risks and uncertainties include, but are not limited to, the
following: the effects of the global COVID-19 outbreak and the
measures taken to limit the spread of COVID-19, including any
disruptions to our business that could result from measures to
contain the outbreak that may be taken by governmental authorities
in the jurisdictions in which we and our supply chain operate; the
susceptibility of the markets we address to economic downturns,
including as a result of the COVID-19 outbreak and the actions
taken to mitigate the spread of COVID-19; the risks of doing
business internationally, including increased import/export
restrictions and controls (e.g., the effect of the U.S. Bureau of
Industry and Security of the U.S. Department of Commerce placing
Huawei Technologies Co., Ltd. and certain of its affiliates on the
Bureau’s Entity List), imposition of trade protection measures
(e.g., tariffs or taxes), security and health risks, possible
disruptions in transportation networks, and other economic, social,
military and geo-political conditions in the countries in which we,
our customers or our suppliers operate; the level of orders and
shipments during the second quarter of fiscal year 2021, 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 28, 2020 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 expressly disclaim any 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. 27,
Mar. 28,
Jun. 29,
2020
2020
2019
Q1'21 Q4'20 Q1'20 Portable
products
$
210,661
$
249,731
$
202,938
Non-portable and other products
31,912
29,560
35,315
Net sales
242,573
279,291
238,253
Cost of sales
115,101
133,056
115,759
Gross profit
127,472
146,235
122,494
Gross margin
52.6
%
52.4
%
51.4
%
Research and development
78,741
81,865
88,830
Selling, general and administrative
29,704
32,464
29,520
Restructuring costs
352
21,925
-
Total operating expenses
108,797
136,254
118,350
Income from operations
18,675
9,981
4,144
Interest income
1,576
2,474
2,285
Other income (expense)
111
(106
)
(378
)
Income before income taxes
20,362
12,349
6,051
Provision for income taxes
2,153
2,191
1,433
Net income
$
18,209
$
10,158
$
4,618
Basic earnings per share:
$
0.31
$
0.17
$
0.08
Diluted earnings per share:
$
0.30
$
0.17
$
0.08
Weighted average number of shares:
Basic
58,313
58,527
58,540
Diluted
60,280
60,683
60,258
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. 27, Mar. 28, Jun. 29,
2020
2020
2019
Net Income Reconciliation
Q1'21 Q4'20
Q1'20 GAAP Net Income
$
18,209
$
10,158
$
4,618
Amortization of acquisition intangibles
2,998
3,000
7,228
Stock-based compensation expense
13,306
14,052
11,786
Restructuring costs
352
20,602
-
Adjustment to income taxes
(2,982
)
(6,320
)
(2,803
)
Non-GAAP Net Income
$
31,883
$
41,492
$
20,829
Earnings Per Share Reconciliation
GAAP Diluted earnings per share
$
0.30
$
0.17
$
0.08
Effect of Amortization of acquisition intangibles
0.05
0.05
0.12
Effect of Stock-based compensation expense
0.22
0.23
0.20
Effect of Restructuring costs
0.01
0.34
-
Effect of Adjustment to income taxes
(0.05
)
(0.11
)
(0.05
)
Non-GAAP Diluted earnings per share
$
0.53
$
0.68
$
0.35
Operating Income Reconciliation
GAAP
Operating Income
$
18,675
$
9,981
$
4,144
GAAP Operating Profit
7.7
%
3.6
%
1.7
%
Amortization of acquisition intangibles
2,998
3,000
7,228
Stock-based compensation expense - COGS
207
213
241
Stock-based compensation expense - R&D
8,653
9,446
7,240
Stock-based compensation expense - SG&A
4,446
4,393
4,305
Restructuring costs
352
20,602
-
Non-GAAP Operating Income
$
35,331
$
47,635
$
23,158
Non-GAAP Operating Profit
14.6
%
17.1
%
9.7
%
Operating Expense Reconciliation
GAAP Operating Expenses
$
108,797
$
136,254
$
118,350
Amortization of acquisition intangibles
(2,998
)
(3,000
)
(7,228
)
Stock-based compensation expense - R&D
(8,653
)
(9,446
)
(7,240
)
Stock-based compensation expense - SG&A
(4,446
)
(4,393
)
(4,305
)
Restructuring costs
(352
)
(20,724
)
-
Non-GAAP Operating Expenses
$
92,348
$
98,691
$
99,577
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
127,472
$
146,235
$
122,494
GAAP Gross Margin
52.6
%
52.4
%
51.4
%
Stock-based compensation expense - COGS
207
213
241
Restructuring costs - COGS
-
(122
)
-
Non-GAAP Gross Profit
$
127,679
$
146,326
$
122,735
Non-GAAP Gross Margin
52.6
%
52.4
%
51.5
%
Effective Tax Rate Reconciliation
GAAP Tax Expense
$
2,153
$
2,191
$
1,433
GAAP Effective Tax Rate
10.6
%
17.7
%
23.7
%
Adjustments to income taxes
2,982
6,320
2,803
Non-GAAP Tax Expense
$
5,135
$
8,511
$
4,236
Non-GAAP Effective Tax Rate
13.9
%
17.0
%
16.9
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense
$
0.04
$
0.04
$
0.02
Adjustments to income taxes
0.05
0.11
0.05
Non-GAAP Tax Expense
$
0.09
$
0.15
$
0.07
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands Jun. 27,
Mar. 28, Jun. 29,
2020
2020
2019
ASSETS Current assets Cash and cash
equivalents
$
285,922
$
292,119
$
198,077
Marketable securities
29,943
22,008
52,350
Accounts receivable, net
136,539
153,998
111,497
Inventories
199,332
146,725
146,317
Other current assets
38,231
35,346
55,834
Total current Assets
689,967
650,196
564,075
Long-term marketable securities
290,186
283,573
205,079
Right-of-use lease assets
139,492
141,274
146,035
Property and equipment, net
154,286
158,244
182,042
Intangibles, net
31,185
34,430
62,496
Goodwill
287,399
287,088
286,370
Deferred tax asset
6,970
10,052
9,394
Other assets
44,554
27,820
14,625
Total assets
$
1,644,039
$
1,592,677
$
1,470,116
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable
$
95,523
$
78,412
$
60,408
Accrued salaries and benefits
28,768
42,439
23,416
Current lease liability
13,887
13,580
14,517
Other accrued liabilities
24,866
24,206
32,865
Total current liabilities
163,044
158,637
131,206
Non-current lease liability
129,627
129,312
137,180
Non-current income taxes
69,130
71,143
79,484
Other long-term liabilities
9,949
3,806
4,996
Stockholders' equity: Capital stock
1,451,297
1,434,929
1,375,777
Accumulated deficit
(184,049
)
(201,681
)
(258,899
)
Accumulated other comprehensive income (loss)
5,041
(3,469
)
372
Total stockholders' equity
1,272,289
1,229,779
1,117,250
Total liabilities and stockholders' equity
$
1,644,039
$
1,592,677
$
1,470,116
Prepared in accordance with Generally Accepted
Accounting Principles
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version on businesswire.com: https://www.businesswire.com/news/home/20200803005446/en/
Thurman K. Case Chief Financial Officer Cirrus Logic, Inc. (512)
851-4125 Investor.Relations@cirrus.com
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