Smartphone Demand Fueled 30 Percent
Year-Over-Year Revenue Growth
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 third quarter
fiscal year 2021, which ended Dec. 26, 2020, as well as the
company’s current business outlook.
“Cirrus Logic delivered revenue above the high end of guidance
in the December quarter, as we experienced strong demand for
products shipping in recently introduced smartphones,” said John
Forsyth, chief executive officer. “We are delighted with our
customer engagement and design-in activity during the quarter, and
remain focused on developing a roadmap of innovative products that
will enable the company to capitalize on growing demand for audio
and high-performance mixed-signal solutions. Given the strength of
the current smartphone market cycle, and the new product
introductions in the pipeline, we are excited about the outlook for
the company.”
Reported Financial Results – Third Quarter FY21
- Revenue of $485.8 million;
- GAAP and non-GAAP gross margin of 51.8 percent;
- GAAP operating expenses of $121.8 million and non-GAAP
operating expenses of $105.7 million; and
- GAAP earnings per share of $1.91 and non-GAAP earnings per
share of $2.13.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – Fourth Quarter FY21
- Revenue is expected to range between $280 million and $320
million;
- GAAP gross margin is forecasted to be between 50 percent and 52
percent; and
- Combined GAAP R&D and SG&A expenses are anticipated 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.
Share Repurchase Authorization
The company also announced that its Board of Directors recently
authorized the repurchase of up to an additional $350 million of
the company's common stock, in addition to the $55 million
remaining from the Board’s previous share repurchase authorization
in January 2019. 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@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: 5791509).
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 ability to develop a
robust pipeline of innovative products that will enable us to
capitalize on growing demand for audio and high-performance
mixed-signal solutions in the markets we serve, along with
estimates for the fourth 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;
recent increased industry-wide capacity constraints that may impact
our ability to meet current customer demand, which could cause an
unanticipated decline in our sales and damage our existing customer
relationships and our ability to establish new customer
relationships; the potential for increased prices due to capacity
constraints in our supply chain, which, if we are unable to
increase our selling price to our customers, could result in lower
revenues and margins that could adversely affect our financial
results; the level of orders and shipments during the fourth
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 Nine Months Ended Dec. 26,
Sep. 26, Dec. 28, Dec. 26, Dec. 28,
2020
2020
2019
2020
2019
Q3'21 Q2'21 Q3'20 Q3'21 Q3'20
Portable products
$
450,305
$
312,911
$
344,870
$
973,877
$
897,187
Non-portable and other products
35,490
34,414
29,798
101,816
104,646
Net sales
485,795
347,325
374,668
1,075,693
1,001,833
Cost of sales
234,295
167,115
177,163
516,511
473,901
Gross profit
251,500
180,210
197,505
559,182
527,932
Gross margin
51.8
%
51.9
%
52.7
%
52.0
%
52.7
%
Research and development
89,435
84,810
88,713
252,986
265,782
Selling, general and administrative
32,415
31,247
36,113
93,366
98,651
Restructuring costs
-
-
-
352
-
Total operating expenses
121,850
116,057
124,826
346,704
364,433
Income from operations
129,650
64,153
72,679
212,478
163,499
Interest income
1,206
1,378
2,392
4,160
6,927
Other income (expense)
(207
)
784
(563
)
688
(1,509
)
Income before income taxes
130,649
66,315
74,508
217,326
168,917
Provision for income taxes
16,281
6,829
5,996
25,263
19,577
Net income
$
114,368
$
59,486
$
68,512
$
192,063
$
149,340
Basic earnings per share:
$
1.97
$
1.02
$
1.18
$
3.30
$
2.56
Diluted earnings per share:
$
1.91
$
0.99
$
1.13
$
3.20
$
2.47
Weighted average number of shares: Basic
58,024
58,191
58,188
58,176
58,247
Diluted
59,963
60,127
60,492
60,101
60,395
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. 26, Sep. 26, Dec. 28,
Dec. 26, Dec. 28,
2020
2020
2019
2020
2019
Net Income Reconciliation
Q3'21 Q2'21 Q3'20
Q3'21 Q3'20 GAAP Net Income
$
114,368
$
59,486
$
68,512
$
192,063
$
149,340
Amortization of acquisition intangibles
2,998
2,998
6,470
8,994
20,420
Stock-based compensation expense
13,287
15,476
14,160
42,069
39,705
Restructuring costs
-
-
1,323
352
1,323
Adjustment to income taxes
(2,897
)
(2,293
)
(4,871
)
(8,172
)
(11,091
)
Non-GAAP Net Income
$
127,756
$
75,667
$
85,594
$
235,306
$
199,697
Earnings Per Share Reconciliation
GAAP Diluted earnings
per share
$
1.91
$
0.99
$
1.13
$
3.20
$
2.47
Effect of Amortization of acquisition intangibles
0.05
0.05
0.11
0.15
0.34
Effect of Stock-based compensation expense
0.22
0.26
0.23
0.70
0.66
Effect of Restructuring costs
-
-
0.02
0.01
0.02
Effect of Adjustment to income taxes
(0.05
)
(0.04
)
(0.08
)
(0.14
)
(0.18
)
Non-GAAP Diluted earnings per share
$
2.13
$
1.26
$
1.41
$
3.92
$
3.31
Operating Income Reconciliation
GAAP Operating Income
$
129,650
$
64,153
$
72,679
$
212,478
$
163,499
GAAP Operating Profit
26.7
%
18.5
%
19.4
%
19.8
%
16.3
%
Amortization of acquisition intangibles
2,998
2,998
6,470
8,994
20,420
Stock-based compensation expense - COGS
236
197
200
640
695
Stock-based compensation expense - R&D
9,526
9,235
9,343
27,414
24,413
Stock-based compensation expense - SG&A
3,525
6,044
4,617
14,015
14,597
Restructuring costs
-
-
1,323
352
1,323
Non-GAAP Operating Income
$
145,935
$
82,627
$
94,632
$
263,893
$
224,947
Non-GAAP Operating Profit
30.0
%
23.8
%
25.3
%
24.5
%
22.5
%
Operating Expense Reconciliation
GAAP Operating
Expenses
$
121,850
$
116,057
$
124,826
$
346,704
$
364,433
Amortization of acquisition intangibles
(2,998
)
(2,998
)
(6,470
)
(8,994
)
(20,420
)
Stock-based compensation expense - R&D
(9,526
)
(9,235
)
(9,343
)
(27,414
)
(24,413
)
Stock-based compensation expense - SG&A
(3,525
)
(6,044
)
(4,617
)
(14,015
)
(14,597
)
Restructuring costs
-
-
(1,201
)
(352
)
(1,201
)
Non-GAAP Operating Expenses
$
105,801
$
97,780
$
103,195
$
295,929
$
303,802
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
251,500
$
180,210
$
197,505
$
559,182
$
527,932
GAAP Gross Margin
51.8
%
51.9
%
52.7
%
52.0
%
52.7
%
Stock-based compensation expense - COGS
236
197
200
640
695
Restructuring costs - COGS
-
-
122
-
122
Non-GAAP Gross Profit
$
251,736
$
180,407
$
197,827
$
559,822
$
528,749
Non-GAAP Gross Margin
51.8
%
51.9
%
52.8
%
52.0
%
52.8
%
Effective Tax Rate Reconciliation
GAAP Tax
Expense
$
16,281
$
6,829
$
5,996
$
25,263
$
19,577
GAAP Effective Tax Rate
12.5
%
10.3
%
8.0
%
11.6
%
11.6
%
Adjustments to income taxes
2,897
2,293
4,871
8,172
11,091
Non-GAAP Tax Expense
$
19,178
$
9,122
$
10,867
$
33,435
$
30,668
Non-GAAP Effective Tax Rate
13.1
%
10.8
%
11.3
%
12.4
%
13.3
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense
$
0.27
$
0.11
$
0.10
$
0.42
$
0.32
Adjustments to income taxes
0.05
0.04
0.08
0.14
0.18
Non-GAAP Tax Expense
$
0.32
$
0.15
$
0.18
$
0.56
$
0.50
CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in
thousands Dec. 26, Mar. 28, Dec. 28,
2020
2020
2019
ASSETS Current assets Cash and cash equivalents
$
327,294
$
292,119
$
342,301
Marketable securities
43,289
22,008
13,098
Accounts receivable, net
244,803
153,998
175,937
Inventories
142,689
146,725
137,920
Other current assets
45,469
35,346
45,345
Total current Assets
803,544
650,196
714,601
Long-term marketable securities
326,491
283,573
250,162
Right-of-use lease assets
135,719
141,274
141,348
Property and equipment, net
154,312
158,244
174,390
Intangibles, net
24,322
34,430
47,133
Goodwill
287,518
287,088
285,904
Deferred tax asset
7,277
10,052
9,183
Other assets
86,446
27,820
24,819
Total assets
$
1,825,629
$
1,592,677
$
1,647,540
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts
payable
$
90,814
$
78,412
$
98,835
Accrued salaries and benefits
39,367
42,439
34,228
Lease liability
14,539
13,580
13,863
Other accrued liabilities
40,135
24,206
31,385
Total current liabilities
184,855
158,637
178,311
Non-current lease liability
129,583
129,312
133,993
Non-current income taxes
70,866
71,143
72,422
Other long-term liabilities
39,968
3,806
2,934
Stockholders' equity: Capital stock
1,483,567
1,434,929
1,417,646
Accumulated deficit
(88,238
)
(201,681
)
(157,869
)
Accumulated other comprehensive income (loss)
5,028
(3,469
)
103
Total stockholders' equity
1,400,357
1,229,779
1,259,880
Total liabilities and stockholders' equity
$
1,825,629
$
1,592,677
$
1,647,540
Prepared in accordance with Generally Accepted Accounting
Principles
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210201005707/en/
Investor Contact: Thurman K. Case Chief Financial Officer
Cirrus Logic, Inc. (512) 851-4125 Investor@cirrus.com
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