CRUS Cirrus Logic Inc

Record Revenue Driven by High-Performance Mixed-Signal Content Gains in 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 third quarter fiscal year 2022, which ended Dec. 25, 2021, as well as the company’s current business outlook.

“Cirrus Logic reported record revenue in the December quarter, above the top end of our guidance, driven by significant contributions from the expanded high-performance mixed-signal content shipping into smartphones and strong overall demand for our products,” said John Forsyth, Cirrus Logic president and chief executive officer. “These results reflect our continued momentum in FY22 and mark another milestone in the execution of our strategy to diversify our product and technology portfolio. Building on our success over the past few years, we are investing in additional technologies targeting new opportunities for incremental content, including the areas of sensing, power, and battery systems. Moving forward, we believe we are well-positioned to increase the diversity of our business and drive long-term revenue growth.”

Reported Financial Results – Third Quarter FY22

• Revenue of $548.3 million;
• GAAP gross margin of 52.8 percent and non-GAAP gross margin of 52.8 percent;
• GAAP operating expenses of $145.3 million and non-GAAP operating expenses of $115.5 million; and
• GAAP earnings per share of $2.16 and non-GAAP earnings per share of $2.54.

A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.

Business Outlook – Fourth Quarter FY22

• Revenue is expected to range between $400 million and $440 million;
• GAAP gross margin is forecasted to be between 51 percent and 53 percent; and
• Combined GAAP R&D and SG&A expenses are anticipated to range between $150 million and $156 million, including approximately $19 million in stock-based compensation expense, $8 million in amortization of acquired intangibles and $3 million in acquisition-related costs.

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: 3871289).

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 our ability to diversify our product and technology portfolios and drive long-term revenue growth, , and our estimates for the fourth quarter fiscal year 2022 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock compensation expense, amortization of acquired intangibles and acquisition-related costs. 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; our ability to attract, hire, and retain qualified personnel to support the development, marketing, and sales of our products; the level of orders and shipments during the fourth quarter of fiscal year 2022, 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, 2021 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. 25,

 

Sep. 25,

 

Dec. 26,

 

Dec. 25,

 

Dec. 26,

2021

 

2021

 

2020

 

2021

 

2020

Q3'22

 

Q2'22

 

Q3'21

 

Q3'22

 

Q3'21

Audio

$

341,897

 

$

300,775

 

$

381,885

 

$

860,027

 

$

868,239

 

High-Performance Mixed-Signal

 

206,452

 

 

165,111

 

 

103,910

 

 

431,461

 

 

207,454

 

Net sales

 

548,349

 

 

465,886

 

 

485,795

 

 

1,291,488

 

 

1,075,693

 

Cost of sales

 

258,827

 

 

230,442

 

 

234,295

 

 

626,576

 

 

516,511

 

Gross profit

 

289,522

 

 

235,444

 

 

251,500

 

 

664,912

 

 

559,182

 

Gross margin

 

52.8

%

 

50.5

%

 

51.8

%

 

51.5

%

 

52.0

%

  Research and development

 

107,101

 

 

102,116

 

 

89,435

 

 

294,913

 

 

252,986

 

Selling, general and administrative

 

38,247

 

 

38,132

 

 

32,415

 

 

111,526

 

 

93,366

 

Restructuring costs

 

-

 

 

-

 

 

-

 

 

-

 

 

352

 

Total operating expenses

 

145,348

 

 

140,248

 

 

121,850

 

 

406,439

 

 

346,704

 

  Income from operations

 

144,174

 

 

95,196

 

 

129,650

 

 

258,473

 

 

212,478

 

Interest income (expense)

 

(78

)

 

35

 

 

1,206

 

 

718

 

 

4,160

 

Other income (expense)

 

(87

)

 

1,859

 

 

(207

)

 

1,530

 

 

688

 

Income before income taxes

 

144,009

 

 

97,090

 

 

130,649

 

 

260,721

 

 

217,326

 

Provision for income taxes

 

16,373

 

 

11,994

 

 

16,281

 

 

30,780

 

 

25,263

 

Net income

$

127,636

 

$

85,096

 

$

114,368

 

$

229,941

 

$

192,063

 

  Basic earnings per share:

$

2.23

 

$

1.48

 

$

1.97

 

$

4.01

 

$

3.30

 

Diluted earnings per share:

$

2.16

 

$

1.43

 

$

1.91

 

$

3.88

 

$

3.20

 

  Weighted average number of shares: Basic

 

57,178

 

 

57,364

 

 

58,024

 

 

57,374

 

 

58,176

 

Diluted

 

59,031

 

 

59,451

 

 

59,963

 

 

59,317

 

 

60,101

 

  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. 25,

 

Sep. 25,

 

Dec. 26,

 

Dec. 25,

 

Dec. 26,

 

2021

 

2021

 

2020

 

2021

 

2020

Net Income Reconciliation  

Q3'22

 

Q2'22

 

Q3'21

 

Q3'22

 

Q3'21

GAAP Net Income  

$

127,636

 

$

85,096

 

$

114,368

 

$

229,941

 

$

192,063

 

Amortization of acquisition intangibles  

 

9,083

 

 

7,054

 

 

2,998

 

 

19,135

 

 

8,994

 

Stock-based compensation expense  

 

17,833

 

 

16,551

 

 

13,287

 

 

49,368

 

 

42,069

 

Restructuring costs  

 

-

 

 

-

 

 

-

 

 

-

 

 

352

 

Acquisition-related costs  

 

3,155

 

 

5,834

 

 

-

 

 

8,989

 

 

-

 

Adjustment to income taxes  

 

(7,903

)

 

(6,045

)

 

(2,897

)

 

(16,897

)

 

(8,172

)

Non-GAAP Net Income  

$

149,804

 

$

108,490

 

$

127,756

 

$

290,536

 

$

235,306

 

    Earnings Per Share Reconciliation   GAAP Diluted earnings per share  

$

2.16

 

$

1.43

 

$

1.91

 

$

3.88

 

$

3.20

 

Effect of Amortization of acquisition intangibles  

 

0.16

 

 

0.12

 

 

0.05

 

 

0.32

 

 

0.15

 

Effect of Stock-based compensation expense  

 

0.30

 

 

0.28

 

 

0.22

 

 

0.83

 

 

0.70

 

Effect of Restructuring costs  

 

-

 

 

-

 

 

-

 

 

-

 

 

0.01

 

Effect of Acquisition-related costs  

 

0.05

 

 

0.09

 

 

-

 

 

0.15

 

 

-

 

Effect of Adjustment to income taxes  

 

(0.13

)

 

(0.10

)

 

(0.05

)

 

(0.28

)

 

(0.14

)

Non-GAAP Diluted earnings per share  

$

2.54

 

$

1.82

 

$

2.13

 

$

4.90

 

$

3.92

 

    Operating Income Reconciliation   GAAP Operating Income  

$

144,174

 

$

95,196

 

$

129,650

 

$

258,473

 

$

212,478

 

GAAP Operating Profit  

 

26.3

%

 

20.4

%

 

26.7

%

 

20.0

%

 

19.8

%

Amortization of acquisition intangibles  

 

9,083

 

 

7,054

 

 

2,998

 

 

19,135

 

 

8,994

 

Stock-based compensation expense - COGS  

 

245

 

 

272

 

 

236

 

 

763

 

 

640

 

Stock-based compensation expense - R&D  

 

12,260

 

 

10,496

 

 

9,526

 

 

32,368

 

 

27,414

 

Stock-based compensation expense - SG&A  

 

5,328

 

 

5,783

 

 

3,525

 

 

16,237

 

 

14,015

 

Restructuring costs  

 

-

 

 

-

 

 

-

 

 

-

 

 

352

 

Acquisition-related costs  

 

3,155

 

 

5,834

 

 

-

 

 

8,989

 

 

-

 

Non-GAAP Operating Income  

$

174,245

 

$

124,635

 

$

145,935

 

$

335,965

 

$

263,893

 

Non-GAAP Operating Profit  

 

31.8

%

 

26.8

%

 

30.0

%

 

26.0

%

 

24.5

%

    Operating Expense Reconciliation   GAAP Operating Expenses  

$

145,348

 

$

140,248

 

$

121,850

 

$

406,439

 

$

346,704

 

Amortization of acquisition intangibles  

 

(9,083

)

 

(7,054

)

 

(2,998

)

 

(19,135

)

 

(8,994

)

Stock-based compensation expense - R&D  

 

(12,260

)

 

(10,496

)

 

(9,526

)

 

(32,368

)

 

(27,414

)

Stock-based compensation expense - SG&A  

 

(5,328

)

 

(5,783

)

 

(3,525

)

 

(16,237

)

 

(14,015

)

Restructuring costs  

 

-

 

 

-

 

 

-

 

 

-

 

 

(352

)

Acquisition-related costs  

 

(3,155

)

 

(2,373

)

 

-

 

 

(5,528

)

 

-

 

Non-GAAP Operating Expenses  

$

115,522

 

$

114,542

 

$

105,801

 

$

333,171

 

$

295,929

 

    Gross Margin/Profit Reconciliation   GAAP Gross Profit  

$

289,522

 

$

235,444

 

$

251,500

 

$

664,912

 

$

559,182

 

GAAP Gross Margin  

 

52.8

%

 

50.5

%

 

51.8

%

 

51.5

%

 

52.0

%

Acquisition-related costs  

 

-

 

 

3,461

 

 

-

 

 

3,461

 

 

-

 

Stock-based compensation expense - COGS  

 

245

 

 

272

 

 

236

 

 

763

 

 

640

 

Non-GAAP Gross Profit  

$

289,767

 

$

239,177

 

$

251,736

 

$

669,136

 

$

559,822

 

Non-GAAP Gross Margin  

 

52.8

%

 

51.3

%

 

51.8

%

 

51.8

%

 

52.0

%

    Effective Tax Rate Reconciliation   GAAP Tax Expense  

$

16,373

 

$

11,994

 

$

16,281

 

$

30,780

 

$

25,263

 

GAAP Effective Tax Rate  

 

11.4

%

 

12.4

%

 

12.5

%

 

11.8

%

 

11.6

%

Adjustments to income taxes  

 

7,903

 

 

6,045

 

 

2,897

 

 

16,897

 

 

8,172

 

Non-GAAP Tax Expense  

$

24,276

 

$

18,039

 

$

19,178

 

$

47,677

 

$

33,435

 

Non-GAAP Effective Tax Rate  

 

13.9

%

 

14.3

%

 

13.1

%

 

14.1

%

 

12.4

%

    Tax Impact to EPS Reconciliation   GAAP Tax Expense  

$

0.28

 

$

0.20

 

$

0.27

 

$

0.52

 

$

0.42

 

Adjustments to income taxes  

 

0.13

 

 

0.10

 

 

0.05

 

 

0.28

 

 

0.14

 

Non-GAAP Tax Expense  

$

0.41

 

$

0.30

 

$

0.32

 

$

0.80

 

$

0.56

 

CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in thousands  

Dec. 25,

 

Mar. 27,

 

Dec. 26,

 

2021

 

2021

 

2020

ASSETS       Current assets       Cash and cash equivalents  

$

195,121

 

 

$

442,164

 

 

$

327,294

 

Marketable securities  

 

3,719

 

 

 

55,697

 

 

 

43,289

 

Accounts receivable, net  

 

326,131

 

 

 

108,712

 

 

 

244,803

 

Inventories  

 

148,525

 

 

 

173,263

 

 

 

142,689

 

Other current assets  

 

90,025

 

 

 

62,683

 

 

 

45,469

 

Total current Assets  

 

763,521

 

 

 

842,519

 

 

 

803,544

 

      Long-term marketable securities  

 

72,118

 

 

 

312,759

 

 

 

326,491

 

Right-of-use lease assets  

 

173,054

 

 

 

133,548

 

 

 

135,719

 

Property and equipment, net  

 

157,186

 

 

 

154,942

 

 

 

154,312

 

Intangibles, net  

 

165,581

 

 

 

22,031

 

 

 

24,322

 

Goodwill  

 

437,783

 

 

 

287,518

 

 

 

287,518

 

Deferred tax asset  

 

7,203

 

 

 

9,977

 

 

 

7,277

 

Long-term prepaid wafers  

 

195,000

 

 

 

-

 

 

 

-

 

Other assets  

 

96,671

 

 

 

67,320

 

 

 

86,446

 

Total assets  

$

2,068,117

 

 

$

1,830,614

 

 

$

1,825,629

 

      LIABILITIES AND STOCKHOLDERS' EQUITY       Current liabilities       Accounts payable  

$

110,250

 

 

$

102,744

 

 

$

90,814

 

Accrued salaries and benefits  

 

43,044

 

 

 

54,849

 

 

 

39,367

 

Lease liability  

 

14,653

 

 

 

14,573

 

 

 

14,539

 

Acquisition-related liabilities  

 

30,964

 

 

 

-

 

 

 

-

 

Other accrued liabilities  

 

40,603

 

 

 

41,444

 

 

 

40,135

 

Total current liabilities  

 

239,514

 

 

 

213,610

 

 

 

184,855

 

      Non-current lease liability  

 

164,896

 

 

 

127,883

 

 

 

129,583

 

Non-current income taxes  

 

77,683

 

 

 

64,020

 

 

 

70,866

 

Long-term acquisition-related liabilities  

 

5,528

 

 

 

-

 

 

 

-

 

Other long-term liabilities  

 

17,749

 

 

 

36,096

 

 

 

39,968

 

      Stockholders' equity:       Capital stock  

 

1,556,746

 

 

 

1,498,819

 

 

 

1,483,567

 

Accumulated earnings (deficit)  

 

6,416

 

 

 

(112,689

)

 

 

(88,238

)

Accumulated other comprehensive income (loss)  

 

(415

)

 

 

2,875

 

 

 

5,028

 

Total stockholders' equity  

 

1,562,747

 

 

 

1,389,005

 

 

 

1,400,357

 

Total liabilities and stockholders' equity  

$

2,068,117

 

 

$

1,830,614

 

 

$

1,825,629

 

      Prepared in accordance with Generally Accepted Accounting Principles

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220131005288/en/

Investor Contact: Thurman K. Case Chief Financial Officer Cirrus Logic, Inc. (512) 851-4125 Investor@cirrus.com