Announces CEO and Board Leadership Transition
Plans
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 second quarter
fiscal year 2021, which ended Sept. 26, 2020, as well as the
company’s current business outlook.
“Cirrus Logic delivered revenue above the high end of guidance
in the September quarter. We experienced solid sales across the
breadth of our product portfolio, with particularly strong demand
for components shipping in smartphones,” said Jason Rhode, chief
executive officer. “During the quarter, we were pleased to have
expanded the number of smartphones, tablets and wearables that are
utilizing our technology. The company also reached several
meaningful development milestones that we believe will fuel product
diversification and growth opportunities in the coming years.”
The company also announced today that the Board of Directors has
appointed current President John Forsyth, 47, as president and
chief executive officer effective Jan. 1, 2021, at which time Jason
Rhode will transition into his new role as executive fellow.
“John’s strong leadership and strategic vision make him the right
choice to lead Cirrus Logic into what we believe is a very bright
future,” said Jason Rhode, chief executive officer. In addition,
the company announced that David Tupman will become chair of the
Board of Directors, effective the same date, succeeding Al Schuele
ahead of his retirement prior to the next annual meeting of
stockholders.
For more information on the CEO and Board leadership transition
plans, please visit http://investor.cirrus.com/.
Reported Financial Results – Second Quarter FY21
- Revenue of $347.3 million;
- GAAP and non-GAAP gross margin of 51.9 percent;
- GAAP operating expenses of $116.1 million and non-GAAP
operating expenses of $97.8 million;
- GAAP earnings per share of $0.99 and non-GAAP earnings per
share of $1.26.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – Third Quarter FY21
- Revenue is expected to range between $440 million and $480
million;
- GAAP gross margin to be between 50 percent and 52 percent;
and
- Combined GAAP R&D and SG&A expenses to range between
$121 million and $127 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. 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: 9088457).
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 the company’s product
diversification and growth opportunities in the coming years and
our ability to lead the company into what we believe is a very
bright future, along with estimates for the third 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 third 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 Six Months Ended
Sep. 26, Jun. 27, Sep. 28, Sep. 26,
Sep. 28,
2020
2020
2019
2020
2019
Q2'21 Q1'21 Q2'20 Q2'21 Q2'20
Portable products
$
312,911
$
210,661
$
349,379
$
523,572
$
552,317
Non-portable and other products
34,414
31,912
39,533
66,326
74,848
Net sales
347,325
242,573
388,912
589,898
627,165
Cost of sales
167,115
115,101
180,979
282,216
296,738
Gross profit
180,210
127,472
207,933
307,682
330,427
Gross margin
51.9
%
52.6
%
53.5
%
52.2
%
52.7
%
Research and development
84,810
78,741
88,239
163,551
177,069
Selling, general and administrative
31,247
29,704
33,018
60,951
62,538
Restructuring costs
-
352
-
352
-
Total operating expenses
116,057
108,797
121,257
224,854
239,607
Income from operations
64,153
18,675
86,676
82,828
90,820
Interest income
1,378
1,576
2,250
2,954
4,535
Other income (expense)
784
111
(568
)
895
(946
)
Income before income taxes
66,315
20,362
88,358
86,677
94,409
Provision for income taxes
6,829
2,153
12,148
8,982
13,581
Net income
$
59,486
$
18,209
$
76,210
$
77,695
$
80,828
Basic earnings per share:
$
1.02
$
0.31
$
1.31
$
1.33
$
1.39
Diluted earnings per share:
$
0.99
$
0.30
$
1.27
$
1.29
$
1.34
Weighted average number of shares: Basic
58,191
58,313
58,011
58,252
58,276
Diluted
60,127
60,280
60,213
60,203
60,260
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 Six Months Ended
Sep. 26,
Jun. 27,
Sep. 28,
Sep. 26,
Sep. 28,
2020
2020
2019
2020
2019
Net Income Reconciliation
Q2'21 Q1'21 Q2'20
Q2'21 Q2'20 GAAP Net Income
$
59,486
$
18,209
$
76,210
$
77,695
$
80,828
Amortization of acquisition intangibles
2,998
2,998
6,722
5,996
13,950
Stock-based compensation expense
15,476
13,306
13,759
28,782
25,545
Restructuring costs
-
352
-
352
-
Adjustment to income taxes
(2,293
)
(2,982
)
(3,417
)
(5,275
)
(6,220
)
Non-GAAP Net Income
$
75,667
$
31,883
$
93,274
$
107,550
$
114,103
Earnings Per Share Reconciliation
GAAP Diluted earnings
per share
$
0.99
$
0.30
$
1.27
$
1.29
$
1.34
Effect of Amortization of acquisition intangibles
0.05
0.05
0.11
0.10
0.23
Effect of Stock-based compensation expense
0.26
0.22
0.23
0.48
0.42
Effect of Restructuring costs
-
0.01
-
0.01
-
Effect of Adjustment to income taxes
(0.04
)
(0.05
)
(0.06
)
(0.09
)
(0.10
)
Non-GAAP Diluted earnings per share
$
1.26
$
0.53
$
1.55
$
1.79
$
1.89
Operating Income Reconciliation
GAAP Operating Income
$
64,153
$
18,675
$
86,676
$
82,828
$
90,820
GAAP Operating Profit
18.5
%
7.7
%
22.3
%
14.0
%
14.5
%
Amortization of acquisition intangibles
2,998
2,998
6,722
5,996
13,950
Stock-based compensation expense - COGS
197
207
254
404
495
Stock-based compensation expense - R&D
9,235
8,653
7,830
17,888
15,070
Stock-based compensation expense - SG&A
6,044
4,446
5,675
10,490
9,980
Restructuring costs
-
352
-
352
-
Non-GAAP Operating Income
$
82,627
$
35,331
$
107,157
$
117,958
$
130,315
Non-GAAP Operating Profit
23.8
%
14.6
%
27.6
%
20.0
%
20.8
%
Operating Expense Reconciliation
GAAP Operating
Expenses
$
116,057
$
108,797
$
121,257
$
224,854
$
239,607
Amortization of acquisition intangibles
(2,998
)
(2,998
)
(6,722
)
(5,996
)
(13,950
)
Stock-based compensation expense - R&D
(9,235
)
(8,653
)
(7,830
)
(17,888
)
(15,070
)
Stock-based compensation expense - SG&A
(6,044
)
(4,446
)
(5,675
)
(10,490
)
(9,980
)
Restructuring costs
-
(352
)
-
(352
)
-
Non-GAAP Operating Expenses
$
97,780
$
92,348
$
101,030
$
190,128
$
200,607
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
180,210
$
127,472
$
207,933
$
307,682
$
330,427
GAAP Gross Margin
51.9
%
52.6
%
53.5
%
52.2
%
52.7
%
Stock-based compensation expense - COGS
197
207
254
404
495
Non-GAAP Gross Profit
$
180,407
$
127,679
$
208,187
$
308,086
$
330,922
Non-GAAP Gross Margin
51.9
%
52.6
%
53.5
%
52.2
%
52.8
%
Effective Tax Rate Reconciliation
GAAP Tax Expense
$
6,829
$
2,153
$
12,148
$
8,982
$
13,581
GAAP Effective Tax Rate
10.3
%
10.6
%
13.7
%
10.4
%
14.4
%
Adjustments to income taxes
2,293
2,982
3,417
5,275
6,220
Non-GAAP Tax Expense
$
9,122
$
5,135
$
15,565
$
14,257
$
19,801
Non-GAAP Effective Tax Rate
10.8
%
13.9
%
14.3
%
11.7
%
14.8
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense
$
0.11
$
0.04
$
0.20
$
0.15
$
0.23
Adjustments to income taxes
0.04
0.05
0.06
0.09
0.10
Non-GAAP Tax Expense
$
0.15
$
0.09
$
0.26
$
0.24
$
0.33
CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in
thousands Sep. 26, Mar. 28, Sep. 28,
2020
2020
2019
ASSETS Current assets Cash and cash equivalents
$
247,536
$
292,119
$
221,937
Marketable securities
36,641
22,008
22,563
Accounts receivable, net
181,496
153,998
217,962
Inventories
209,050
146,725
144,829
Other current assets
34,508
35,346
44,729
Total current Assets
709,231
650,196
652,020
Long-term marketable securities
328,255
283,573
238,741
Right-of-use lease assets
137,045
141,274
142,834
Property and equipment, net
153,640
158,244
178,420
Intangibles, net
27,898
34,430
54,780
Goodwill
287,673
287,088
285,321
Deferred tax asset
7,899
10,052
9,026
Other assets
48,223
27,820
22,489
Total assets
$
1,699,864
$
1,592,677
$
1,583,631
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities
Accounts payable
$
99,105
$
78,412
$
109,374
Accrued salaries and benefits
41,707
42,439
34,870
Lease liability
13,994
13,580
13,751
Other accrued liabilities
23,237
24,206
34,801
Total current liabilities
178,043
158,637
192,796
Non-current lease liability
128,570
129,312
133,105
Non-current income taxes
66,503
71,143
76,847
Other long-term liabilities
9,917
3,806
2,258
Stockholders' equity: Capital stock
1,466,978
1,434,929
1,392,650
Accumulated deficit
(155,260
)
(201,681
)
(213,274
)
Accumulated other comprehensive income (loss)
5,113
(3,469
)
(751
)
Total stockholders' equity
1,316,831
1,229,779
1,178,625
Total liabilities and stockholders' equity
$
1,699,864
$
1,592,677
$
1,583,631
Prepared in accordance with Generally Accepted Accounting
Principles
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version on businesswire.com: https://www.businesswire.com/news/home/20201102005671/en/
Investor Contact: Thurman K. Case Chief Financial Officer
Cirrus Logic, Inc. (512) 851-4125 Investor.Relations@cirrus.com
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