Company Announces $500 Million Share Repurchase
Program
Cirrus Logic, Inc. (Nasdaq: CRUS) today posted on its website at
investor.cirrus.com the quarterly Shareholder Letter that contains
the complete financial results for the first quarter fiscal year
2023, which ended June 25, 2022, as well as the company’s current
business outlook.
“Cirrus Logic delivered record revenue for the June quarter,
above the high end of guidance, as component shipments into
smartphones exceeded expectations, and we continued to benefit from
strong demand for flagship devices,” said John Forsyth, Cirrus
Logic president and chief executive officer. “We remain focused on
delivering long-term growth through our investment in new
technologies and high-performance mixed-signal products. With a
compelling pipeline of low-power, low-latency signal processing
components, we believe the company is well-positioned to drive
content expansion opportunities in FY24 and beyond.”
Reported Financial Results – First Quarter FY23
- Revenue of $393.6 million;
- GAAP and non-GAAP gross margin of 51.5 percent;
- GAAP operating expenses of $148.4 million and non-GAAP
operating expenses of $119.5 million; and
- GAAP earnings per share of $0.69 and non-GAAP earnings per
share of $1.12.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – Second Quarter FY23
- Revenue is expected to range between $450 million and $490
million;
- GAAP gross margin is forecasted to be between 49 percent and 51
percent; and
- Combined GAAP R&D and SG&A expenses are anticipated to
range between $154 million and $160 million, including
approximately $20 million in stock-based compensation expense, $8
million in amortization of acquired intangibles, and $3 million in
acquisition-related costs.
Share Repurchase Authorization
The company also announced that its Board of Directors recently
authorized the repurchase of up to an additional $500 million of
the company's common stock, in addition to the $136.1 million
remaining from the Board’s previous share repurchase authorization
in January 2021. The repurchases will be funded from working
capital and anticipated cash flow 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. Repurchases may also be affected through open
market purchases, 10b5-1 plans, or other means. 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. EDT
today to discuss its financial results and business outlook.
Participants may listen to the conference call on the investor
relations website at 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 (647) 362-9199, or
toll-free at (800) 770-2030 (Access Code: 9542479).
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.
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, effective tax rate, free cash flow, and free cash flow
margin. 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 deliver long-term
growth through investment in new technologies and high-performance
mixed-signal products, drive content expansion opportunities in
FY24 and beyond, and our estimates for the second quarter fiscal
year 2023 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; 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; recent significant
increases in inflation in the U.S. and overseas; the level and
timing of orders and shipments during the second quarter of fiscal
year 2023, 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 26, 2022 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 (in
thousands, except per share data; unaudited) Three Months
Ended Jun. 25, Mar. 26, Jun. 26,
2022
2022
2021
Q1'23 Q4'22 Q1'22 Audio
$
254,496
$
327,099
$
217,355
High-Performance Mixed-Signal
139,143
162,873
59,898
Net sales
393,639
489,972
277,253
Cost of sales
191,005
231,243
137,307
Gross profit
202,634
258,729
139,946
Gross margin
51.5
%
52.8
%
50.5
%
Research and development
109,716
111,394
85,696
Selling, general and administrative
38,642
39,470
35,147
Total operating expenses
148,358
150,864
120,843
Income from operations
54,276
107,865
19,103
Interest income (expense)
305
(103
)
761
Other income (expense)
506
180
(242
)
Income before income taxes
55,087
107,942
19,622
Provision for income taxes
15,380
11,528
2,413
Net income
$
39,707
$
96,414
$
17,209
Basic earnings per share:
$
0.71
$
1.69
$
0.30
Diluted earnings per share:
$
0.69
$
1.64
$
0.29
Weighted average number of shares: Basic
56,277
56,993
57,582
Diluted
57,804
58,625
59,513
Prepared in accordance with Generally Accepted Accounting
Principles
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL
INFORMATION (in thousands, except per share data;
unaudited) (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. 25, Mar. 26, Jun. 26,
2022
2022
2021
Net Income Reconciliation
Q1'23 Q4'22 Q1'22
GAAP Net Income
$
39,707
$
96,414
$
17,209
Amortization of acquisition intangibles
7,835
7,882
2,998
Stock-based compensation expense
18,138
17,024
14,984
Acquisition-related costs
3,164
3,164
-
Adjustment to income taxes
(4,300
)
(6,778
)
(2,949
)
Non-GAAP Net Income
$
64,544
$
117,706
$
32,242
Earnings Per Share Reconciliation
GAAP Diluted earnings
per share
$
0.69
$
1.64
$
0.29
Effect of Amortization of acquisition intangibles
0.14
0.14
0.05
Effect of Stock-based compensation expense
0.31
0.29
0.25
Effect of Acquisition-related costs
0.05
0.05
-
Effect of Adjustment to income taxes
(0.07
)
(0.11
)
(0.05
)
Non-GAAP Diluted earnings per share
$
1.12
$
2.01
$
0.54
Operating Income Reconciliation
GAAP Operating Income
$
54,276
$
107,865
$
19,103
GAAP Operating Profit
13.8
%
22.0
%
6.9
%
Amortization of acquisition intangibles
7,835
7,882
2,998
Stock-based compensation expense - COGS
277
261
246
Stock-based compensation expense - R&D
12,592
11,786
9,612
Stock-based compensation expense - SG&A
5,269
4,977
5,126
Acquisition-related costs
3,164
3,164
-
Non-GAAP Operating Income
$
83,413
$
135,935
$
37,085
Non-GAAP Operating Profit
21.2
%
27.7
%
13.4
%
Operating Expense Reconciliation
GAAP Operating
Expenses
$
148,358
$
150,864
$
120,843
Amortization of acquisition intangibles
(7,835
)
(7,882
)
(2,998
)
Stock-based compensation expense - R&D
(12,592
)
(11,786
)
(9,612
)
Stock-based compensation expense - SG&A
(5,269
)
(4,977
)
(5,126
)
Acquisition-related costs
(3,164
)
(3,164
)
-
Non-GAAP Operating Expenses
$
119,498
$
123,055
$
103,107
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
202,634
$
258,729
$
139,946
GAAP Gross Margin
51.5
%
52.8
%
50.5
%
Stock-based compensation expense - COGS
277
261
246
Non-GAAP Gross Profit
$
202,911
$
258,990
$
140,192
Non-GAAP Gross Margin
51.5
%
52.9
%
50.6
%
Effective Tax Rate Reconciliation
GAAP Tax
Expense
$
15,380
$
11,528
$
2,413
GAAP Effective Tax Rate
27.9
%
10.7
%
12.3
%
Adjustments to income taxes
4,300
6,778
2,949
Non-GAAP Tax Expense
$
19,680
$
18,306
$
5,362
Non-GAAP Effective Tax Rate
23.4
%
13.5
%
14.3
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense
$
0.27
$
0.20
$
0.04
Adjustments to income taxes
0.07
0.11
0.05
Non-GAAP Tax Expense
$
0.34
$
0.31
$
0.09
CONSOLIDATED CONDENSED BALANCE SHEET (in thousands;
unaudited) Jun. 25, Mar. 26, Jun. 26,
2022
2022
2021
ASSETS Current assets Cash and cash equivalents
$
379,335
$
369,814
$
385,127
Marketable securities
18,397
10,601
60,503
Accounts receivable, net
206,272
240,264
136,534
Inventories
174,370
138,436
192,722
Other current assets
82,634
80,900
64,458
Total current Assets
861,008
840,015
839,344
Long-term marketable securities
55,965
63,749
311,643
Right-of-use lease assets
168,680
171,003
131,446
Property and equipment, net
157,165
157,077
158,451
Intangibles, net
149,984
158,145
18,429
Goodwill
435,936
435,791
287,518
Deferred tax asset
16,928
11,068
19,482
Long-term prepaid wafers
195,000
195,000
-
Other assets
65,236
91,552
47,693
Total assets
$
2,105,902
$
2,123,400
$
1,814,006
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts
payable
$
121,451
$
115,417
$
95,232
Accrued salaries and benefits
41,026
65,261
37,220
Lease liability
13,988
14,680
14,662
Acquisition-related liabilities
30,964
30,964
-
Other accrued liabilities
45,167
38,461
39,387
Total current liabilities
252,596
264,783
186,501
Non-current lease liability
159,344
163,162
126,442
Non-current income taxes
73,735
73,383
64,245
Long-term acquisition-related liabilities
11,856
8,692
-
Other long-term liabilities
9,184
13,563
30,087
Stockholders' equity: Capital stock
1,596,684
1,578,427
1,514,549
Accumulated earnings (deficit)
5,894
23,435
(109,754
)
Accumulated other comprehensive income (loss)
(3,391
)
(2,045
)
1,936
Total stockholders' equity
1,599,187
1,599,817
1,406,731
Total liabilities and stockholders' equity
$
2,105,902
$
2,123,400
$
1,814,006
Prepared in accordance with Generally Accepted Accounting
Principles
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands; unaudited) Three Months Ended
Jun. 25, Jun. 26,
2022
2021
Q1'23 Q1'22 Cash flows from operating activities: Net
income
$
39,707
$
17,209
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: Depreciation and amortization
16,515
11,898
Stock-based compensation expense
18,138
14,985
Deferred income taxes
(5,860
)
(9,270
)
Loss on retirement or write-off of long-lived assets
292
-
Other non-cash charges
99
108
Net change in operating assets and liabilities: Accounts
receivable, net
33,992
(27,822
)
Inventories
(35,934
)
(19,459
)
Other assets
549
(6,457
)
Accounts payable and other accrued liabilities
(20,327
)
(21,740
)
Income taxes payable
24,030
13,752
Acquisition-related liabilities
3,164
-
Net cash provided by (used in) operating activities
74,365
(26,796
)
Cash flows from investing activities: Maturities and sales of
available-for-sale marketable securities
4,694
49,158
Purchases of available-for-sale marketable securities
(5,186
)
(53,969
)
Purchases of property, equipment and software
(6,776
)
(10,835
)
Investments in technology
(448
)
(1,068
)
Net cash used in investing activities
(7,716
)
(16,714
)
Cash flows from financing activities: Issuance of common stock, net
of shares withheld for taxes
120
746
Repurchase of stock to satisfy employee tax withholding obligations
(866
)
(1,772
)
Repurchase and retirement of common stock
(56,382
)
(12,501
)
Net cash used in financing activities
(57,128
)
(13,527
)
Net increase (decrease) in cash and cash equivalents
9,521
(57,037
)
Cash and cash equivalents at beginning of period
369,814
442,164
Cash and cash equivalents at end of period
$
379,335
$
385,127
Prepared in accordance with Generally Accepted Accounting
Principles
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL
INFORMATION (in thousands; unaudited) Free cash
flow, a non-GAAP financial measure, is GAAP cash flow from
operations (or cash provided by (used in) operating activities)
less capital expenditures. Capital expenditures include purchases
of property, equipment and software as well as investments in
technology, as presented within our GAAP Consolidated Condensed
Statement of Cash Flows. Free cash flow margin represents free cash
flow divided by revenue.
Twelve Months Ended
Three Months Ended Jun. 25, Jun. 25,
Mar. 26, Dec. 25, Sep. 25,
2022
2022
2022
2021
2021
Q1'23 Q1'23 Q4'22 Q3'22 Q2'22
Net cash provided by (used in) operating activities (GAAP)
$
225,914
$
74,365
$
258,231
$
(135,855
)
$
29,173
Capital expenditures
(25,331
)
(7,224
)
(8,456
)
(3,724
)
(5,927
)
Free Cash Flow (Non-GAAP)
$
200,583
$
67,141
$
249,775
$
(139,579
)
$
23,246
Cash Flow from Operations as a Percentage of Revenue
(GAAP)
12
%
19
%
53
%
-25
%
6
%
Free Cash Flow Margin (Non-GAAP)
11
%
17
%
51
%
-25
%
5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220802005447/en/
Investor Contact: Chelsea Heffernan Vice President,
Investor Relations Cirrus Logic, Inc. (512) 851-4125
Investor@cirrus.com
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