Record Fiscal Year 2023 Revenue Driven By
Higher Sales of Components Shipping in Smartphones
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 fourth quarter and full
fiscal year 2023, which ended March 25, 2023, as well as the
company’s current business outlook.
“We delivered solid financial results in FY23 as higher sales of
products shipping in smartphones drove seven percent year-over-year
revenue growth,” said John Forsyth, Cirrus Logic president and
chief executive officer. “Additionally, the company made
significant progress in our strategy of driving product
diversification through our high-performance mixed-signal products,
with revenue derived from these solutions increasing to 38 percent
of total sales. With an extensive portfolio of existing products
and a pipeline of innovations in development, we look forward to
capitalizing on the many opportunities ahead of us to further
broaden our technology and market reach.”
Reported Financial Results – Fourth Quarter FY23
- Revenue of $372.8 million;
- GAAP and non-GAAP gross margin of 50.0 percent and 50.1
percent;
- GAAP operating expenses of $249.2 million and non-GAAP
operating expenses of $119.8 million; and
- GAAP loss per share of $(0.97) and non-GAAP earnings per share
of $0.92.
Reported Financial Results – Full Year FY23
- Revenue of $1.90 billion;
- GAAP and non-GAAP gross margin of 50.4 percent and 50.5
percent;
- GAAP operating expenses of $707.9 million and non-GAAP
operating expenses of $486.4 million; and
- GAAP earnings per share of $3.09 and non-GAAP earnings per
share of $6.42.
GAAP operating expense for Q4 FY23 and the full fiscal year 2023
included $85.8 million in intangibles impairment and $10.6 million
in lease impairments and restructuring costs.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – First Quarter FY24
- Revenue is expected to range between $260 million and $320
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 $142 million and $148 million, including
approximately $23 million in stock-based compensation expense, $2
million in amortization of acquired intangibles, and $3 million in
acquisition-related costs.
Cirrus Logic will host a live Q&A session at 6 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: 95424).
About 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, diluted share count, 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 drive product
diversification through high-performance mixed-signal; our ability
to capitalize on the many opportunities ahead and broaden our
technology and market reach; and our estimates for the first
quarter fiscal year 2024 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
first quarter of fiscal year 2024, 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
Twelve Months Ended
Mar. 25,
Dec. 24,
Mar. 26,
Mar. 25,
Mar. 26,
2023
2022
2022
2023
2022
Q4'23
Q3'23
Q4'22
Q4'23
Q4'22
Audio
$
232,402
$
347,297
$
327,099
$
1,172,007
$
1,187,126
High-Performance Mixed-Signal
140,420
243,285
162,873
725,610
594,334
Net sales
372,822
590,582
489,972
1,897,617
1,781,460
Cost of sales
186,468
293,877
231,243
940,638
857,819
Gross profit
186,354
296,705
258,729
956,979
923,641
Gross margin
50.0
%
50.2
%
52.8
%
50.4
%
51.8
%
Research and development
115,162
118,063
111,394
458,412
406,307
Selling, general and administrative
37,642
37,262
39,470
153,144
150,996
Lease impairments and restructuring
10,632
—
—
10,632
—
Intangibles impairment
85,760
—
—
85,760
—
Total operating expenses
249,196
155,325
150,864
707,948
557,303
Income (loss) from operations
(62,842
)
141,380
107,865
249,031
366,338
Interest income (expense)
4,720
2,777
(103
)
9,087
615
Other income (expense)
(464
)
(3,716
)
180
(3,379
)
1,710
Income (loss) before income
taxes
(58,586
)
140,441
107,942
254,739
368,663
Provision for income taxes
(4,917
)
36,964
11,528
78,036
42,308
Net income (loss)
$
(53,669
)
$
103,477
$
96,414
$
176,703
$
326,355
Basic earnings (loss) per share
$
(0.97
)
$
1.87
$
1.69
$
3.18
$
5.70
Diluted earnings (loss) per share:
$
(0.97
)
$
1.83
$
1.64
$
3.09
$
5.52
Weighted average number of shares:
Basic
55,219
55,239
56,993
55,614
57,278
Diluted
55,219
56,583
58,625
57,226
59,143
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
Twelve Months Ended
Mar. 25,
Dec. 24,
Mar. 26,
Mar. 25,
Mar. 26,
2023
2022
2022
2023
2022
Net Income (Loss) Reconciliation
Q4'23
Q3'23
Q4'22
Q4'23
Q4'22
GAAP Net Income (Loss)
$
(53,669
)
$
103,477
$
96,414
$
176,703
$
326,355
Amortization of acquisition
intangibles
7,657
8,807
7,882
32,086
27,017
Stock-based compensation expense
22,533
20,487
17,024
81,641
66,392
Lease impairments and restructuring
10,632
—
—
10,632
—
Intangibles impairment
85,760
—
—
85,760
—
Acquisition-related costs
3,166
3,176
3,164
12,670
12,153
Investment write off
—
2,746
—
2,746
—
Adjustment to income taxes
(23,461
)
(2,936
)
(6,778
)
(34,832
)
(23,675
)
Non-GAAP Net Income
$
52,618
$
135,757
$
117,706
$
367,406
$
408,242
Earnings (Loss) Per Share
Reconciliation
GAAP Diluted earnings (loss) per
share
$
(0.97
)
$
1.83
$
1.64
$
3.09
$
5.52
Effect of Amortization of acquisition
intangibles
0.14
0.15
0.14
0.56
0.46
Effect of Stock-based compensation
expense
0.40
0.36
0.29
1.43
1.12
Effect of Lease impairments and
restructuring
0.19
—
—
0.18
—
Effect of Intangibles impairment
1.51
—
—
1.50
—
Effect of Acquisition-related costs
0.06
0.06
0.05
0.22
0.20
Effect of Investment write off
—
0.05
—
0.05
—
Effect of Adjustment to income taxes
(0.41
)
(0.05
)
(0.11
)
(0.61
)
(0.40
)
Non-GAAP Diluted earnings per
share
$
0.92
$
2.40
$
2.01
$
6.42
$
6.90
Diluted Shares Reconciliation
GAAP Diluted shares
55,219
56,583
58,625
57,226
59,143
Effect of weighted dilutive shares
1,821
—
—
—
—
Non-GAAP Diluted shares
57,040
56,583
58,625
57,226
59,143
Operating Income (Loss) Reconciliation
GAAP Operating Income (Loss)
$
(62,842
)
$
141,380
$
107,865
$
249,031
$
366,338
GAAP Operating Profit (Loss)
(16.9
)%
23.9
%
22.0
%
13.1
%
20.6
%
Amortization of acquisition
intangibles
7,657
8,807
7,882
32,086
27,017
Stock-based compensation expense -
COGS
372
309
261
1,270
1,024
Stock-based compensation expense -
R&D
15,782
14,710
11,786
57,312
44,154
Stock-based compensation expense -
SG&A
6,379
5,468
4,977
23,059
21,214
Lease impairments and restructuring
10,632
—
—
10,632
—
Intangibles impairment
85,760
—
—
85,760
—
Acquisition-related costs
3,166
3,176
3,164
12,670
12,153
Non-GAAP Operating Income
$
66,906
$
173,850
$
135,935
$
471,820
$
471,900
Non-GAAP Operating Profit
17.9
%
29.4
%
27.7
%
24.9
%
26.5
%
Operating Expense Reconciliation
GAAP Operating Expenses
$
249,196
$
155,325
$
150,864
$
707,948
$
557,303
Amortization of acquisition
intangibles
(7,657
)
(8,807
)
(7,882
)
(32,086
)
(27,017
)
Stock-based compensation expense -
R&D
(15,782
)
(14,710
)
(11,786
)
(57,312
)
(44,154
)
Stock-based compensation expense -
SG&A
(6,379
)
(5,468
)
(4,977
)
(23,059
)
(21,214
)
Lease impairments and restructuring
(10,632
)
—
—
(10,632
)
—
Intangibles impairment
(85,760
)
—
—
(85,760
)
—
Acquisition-related costs
(3,166
)
(3,176
)
(3,164
)
(12,670
)
(8,692
)
Non-GAAP Operating Expenses
$
119,820
$
123,164
$
123,055
$
486,429
$
456,226
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
186,354
$
296,705
$
258,729
$
956,979
$
923,641
GAAP Gross Margin
50.0
%
50.2
%
52.8
%
50.4
%
51.8
%
Acquisition-related costs
—
—
—
—
3,461
Stock-based compensation expense -
COGS
372
309
261
1,270
1,024
Non-GAAP Gross Profit
$
186,726
$
297,014
$
258,990
$
958,249
$
928,126
Non-GAAP Gross Margin
50.1
%
50.3
%
52.9
%
50.5
%
52.1
%
Three Months Ended
Twelve Months Ended
Mar. 25,
Dec. 24,
Mar. 26,
Mar. 25,
Mar. 26,
2023
2022
2022
2023
2022
Effective Tax Rate Reconciliation
Q4'23
Q3'23
Q4'22
Q4'23
Q4'22
GAAP Tax Expense (Benefit)
$
(4,917
)
$
36,964
$
11,528
$
78,036
$
42,308
GAAP Effective Tax Rate
8.4
%
26.3
%
10.7
%
30.6
%
11.5
%
Adjustments to income taxes
23,461
2,936
6,778
34,832
23,675
Non-GAAP Tax Expense
$
18,544
$
39,900
$
18,306
$
112,868
$
65,983
Non-GAAP Effective Tax Rate
26.1
%
22.7
%
13.5
%
23.5
%
13.9
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense (Benefit)
$
(0.09
)
$
0.65
$
0.20
$
1.36
$
0.72
Adjustments to income taxes
0.41
0.05
0.11
0.61
0.40
Non-GAAP Tax Expense
$
0.32
$
0.70
$
0.31
$
1.97
$
1.12
CONSOLIDATED CONDENSED BALANCE
SHEET
(in thousands;
unaudited)
Mar. 25,
Dec. 24,
Mar. 26,
2023
2022
2022
ASSETS
Current assets
Cash and cash equivalents
$
445,784
$
434,544
$
369,814
Marketable securities
34,978
28,373
10,601
Accounts receivable, net
150,473
270,493
240,264
Inventories
233,450
152,426
138,436
Prepaid wafers
60,638
40,425
—
Other current assets
92,533
87,224
80,900
Total current Assets
1,017,856
1,013,485
840,015
Long-term marketable securities
36,509
44,784
63,749
Right-of-use lease assets
128,145
150,938
171,003
Property and equipment, net
162,972
156,602
157,077
Intangibles, net
38,876
133,032
158,145
Goodwill
435,936
435,936
435,791
Deferred tax asset
35,580
8,630
11,068
Long-term prepaid wafers
134,363
154,575
195,000
Other assets
73,729
67,907
91,552
Total assets
$
2,063,966
$
2,165,889
$
2,123,400
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
81,462
$
117,406
$
115,417
Accrued salaries and benefits
50,606
42,187
65,261
Lease liability
18,442
14,024
14,680
Acquisition-related liabilities
21,361
18,195
30,964
Other accrued liabilities
44,469
36,737
38,461
Total current liabilities
216,340
228,549
264,783
Non-current lease liability
122,631
143,252
163,162
Non-current income taxes
59,013
72,267
73,383
Long-term acquisition-related
liabilities
—
—
8,692
Other long-term liabilities
7,700
5,501
13,563
Total long-term liabilities
189,344
221,020
258,800
Stockholders' equity:
Capital stock
1,670,141
1,639,056
1,578,427
Accumulated earnings (deficit)
(9,320
)
80,865
23,435
Accumulated other comprehensive loss
(2,539
)
(3,601
)
(2,045
)
Total stockholders' equity
1,658,282
1,716,320
1,599,817
Total liabilities and stockholders'
equity
$
2,063,966
$
2,165,889
$
2,123,400
Prepared in accordance with
Generally Accepted Accounting Principles
CONSOLIDATED CONDENSED
STATEMENT OF CASH FLOWS
(in thousands;
unaudited)
Three Months Ended
Mar. 25,
Mar. 26,
2023
2022
Q4'23
Q4'22
Cash flows from operating activities:
Net income (loss)
$
(53,669
)
$
96,414
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
18,844
16,905
Stock-based compensation expense
22,533
17,024
Deferred income taxes
(40,943
)
(6,759
)
Loss on retirement or write-off of
long-lived assets
350
115
Other non-cash charges
85
88
Lease impairments and restructuring
10,632
—
Intangibles impairment
85,760
—
Net change in operating assets and
liabilities:
Accounts receivable, net
120,020
85,868
Inventories
(81,024
)
10,089
Other assets
(2,664
)
8,576
Accounts payable and other accrued
liabilities
(32,260
)
27,711
Income taxes payable
(2,564
)
(963
)
Acquisition-related liabilities
3,166
3,163
Net cash provided by operating
activities
48,266
258,231
Cash flows from investing activities:
Maturities and sales of available-for-sale
marketable securities
8,337
4,963
Purchases of available-for-sale marketable
securities
(5,830
)
(5,307
)
Purchases of property, equipment and
software
(11,326
)
(8,048
)
Investments in technology
(309
)
(408
)
Net cash used in investing activities
(9,128
)
(8,800
)
Cash flows from financing activities:
Issuance of common stock, net of shares
withheld for taxes
8,621
4,658
Repurchase of stock to satisfy employee
tax withholding obligations
(1,519
)
(4,397
)
Repurchase and retirement of common
stock
(35,000
)
(74,999
)
Net cash used in financing activities
(27,898
)
(74,738
)
Net increase in cash and cash
equivalents
11,240
174,693
Cash and cash equivalents at beginning of
period
434,544
195,121
Cash and cash equivalents at end of
period
$
445,784
$
369,814
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
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
Mar. 25,
Mar. 25,
Dec. 24,
Sep. 24,
Jun. 25,
2023
2023
2022
2022
2022
Q4'23
Q4'23
Q3'23
Q2'23
Q1'23
Net cash provided by operating activities
(GAAP)
$
339,568
$
48,266
$
180,948
$
35,989
$
74,365
Capital expenditures
(36,714
)
(11,635
)
(7,608
)
(10,247
)
(7,224
)
Free Cash Flow (Non-GAAP)
$
302,854
$
36,631
$
173,340
$
25,742
$
67,141
Cash Flow from Operations as a
Percentage of Revenue (GAAP)
18
%
13
%
31
%
7
%
19
%
Capital Expenditures as a Percentage of
Revenue (GAAP)
2
%
3
%
1
%
2
%
2
%
Free Cash Flow Margin
(Non-GAAP)
16
%
10
%
29
%
5
%
17
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005492/en/
Investor Contact: Chelsea Heffernan Vice President,
Investor Relations Cirrus Logic, Inc. (512) 851-4125
Investor@cirrus.com
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