Demand for Portable Audio Products Drives Strong September Guidance
Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-precision
analog and digital signal processing components, today posted on its
investor relations website at http://investor.cirrus.com
the quarterly Shareholder Letter that contains the complete
financial results for the first quarter fiscal year 2016, which ended
June 27, 2015, as well as the company’s current business outlook.
“Q1 was a great quarter for Cirrus Logic. We delivered solid financial
results as demand for our smart codecs and amplifiers pushed revenue
above the high end of our guidance,” said Jason Rhode, president and
chief executive officer. “FY16 looks to be an outstanding year with a
significant increase in revenue being driven by new products. We expect
strong demand for our audio and voice solutions to fuel additional
growth in FY17.”
Reported Financial Results – First Quarter FY16
-
Revenue of $282.6 million;
-
GAAP and non-GAAP gross margin of approximately 47 percent;
-
GAAP operating expenses of $82.5 million, which included a one-time
$12.5 million benefit from the sale of certain LED patents; non-GAAP
operating expenses of $79.9 million; and
-
GAAP diluted earnings per share of $0.50 and non-GAAP diluted earnings
per share of $0.54.
A reconciliation of the non-GAAP charges is included in the tables
accompanying this press release.
Business Outlook – Second Quarter FY16
-
Revenue is expected to range between $290 million and $310 million;
-
GAAP gross margin is expected to be between 45 percent and 47 percent;
and
-
Combined GAAP R&D and SG&A expenses are expected to range between $96
million and $100 million, which includes approximately $9 million in
share-based compensation and $7 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 (404) 537-3406, or toll-free at (855) 859-2056
(Access Code: 75505782).
Cirrus Logic, Inc.
Cirrus Logic develops high-precision, analog and mixed-signal integrated
circuits for a broad range of innovative customers. Building on its
diverse analog and signal-processing patent portfolio, Cirrus Logic
delivers highly optimized products for a variety of audio, industrial
and energy-related applications. The company operates from headquarters
in Austin, Texas, with offices in the United States, United Kingdom,
Australia, Japan and Asia. More information about Cirrus Logic is
available at www.cirrus.com.
Use of non-GAAP Financial Information
To supplement Cirrus Logic's financial statements presented on a GAAP
basis, Cirrus has provided non-GAAP financial information, including
gross margins, operating expenses, net income, operating profit and
income, effective tax rate and diluted earnings per share. 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
future growth opportunities and our estimates of second quarter fiscal
year 2016 revenue, gross margin, combined research and development and
selling, general and administrative expense levels, share-based
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.
These risks and uncertainties include, but are not limited to, the
following: the level of orders and shipments during the second quarter
of fiscal year 2016, as well as customer cancellations of orders, or the
failure to place orders consistent with forecasts; and the risk factors
listed in our Form 10-K for the year ended March 28, 2015, 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 undertake no obligation to update or revise any
forward-looking statements, whether as a result of new developments or
otherwise.
Cirrus Logic and Cirrus are registered trademarks of Cirrus Logic, Inc.
All other company or product names noted herein may be trademarks of
their respective holders.
Summary financial data follows:
|
CIRRUS LOGIC, INC.
|
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
|
(unaudited)
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
Jun. 27,
|
|
Mar. 28,
|
|
Jun. 28,
|
|
|
|
2015
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
Q1'16
|
|
Q4'15
|
|
Q1'15
|
Portable audio products
|
|
$
|
235,866
|
|
|
$
|
210,814
|
|
|
$
|
112,570
|
|
Non-portable audio and other products
|
|
|
46,767
|
|
|
|
44,369
|
|
|
|
39,995
|
|
Net sales
|
|
|
282,633
|
|
|
|
255,183
|
|
|
|
152,565
|
|
Cost of sales
|
|
|
150,179
|
|
|
|
136,208
|
|
|
|
77,190
|
|
Gross profit
|
|
|
132,454
|
|
|
|
118,975
|
|
|
|
75,375
|
|
Gross margin
|
|
|
46.9
|
%
|
|
|
46.6
|
%
|
|
|
49.4
|
%
|
|
|
|
|
|
|
|
Research and development
|
|
|
65,835
|
|
|
|
58,070
|
|
|
|
39,777
|
|
Selling, general and administrative
|
|
|
29,119
|
|
|
|
30,498
|
|
|
|
19,683
|
|
Patent agreement, net
|
|
|
(12,500
|
)
|
|
|
-
|
|
|
|
-
|
|
Total operating expenses
|
|
|
82,454
|
|
|
|
88,568
|
|
|
|
59,460
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
50,000
|
|
|
|
30,407
|
|
|
|
15,915
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(638
|
)
|
|
|
(869
|
)
|
|
|
(467
|
)
|
Other expense
|
|
|
136
|
|
|
|
392
|
|
|
|
501
|
|
Income before income taxes
|
|
|
49,498
|
|
|
|
29,930
|
|
|
|
15,949
|
|
Provision for income taxes
|
|
|
16,144
|
|
|
|
8,581
|
|
|
|
5,701
|
|
Net income
|
|
$
|
33,354
|
|
|
$
|
21,349
|
|
|
$
|
10,248
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
$
|
0.53
|
|
|
$
|
0.34
|
|
|
$
|
0.17
|
|
Diluted earnings per share:
|
|
$
|
0.50
|
|
|
$
|
0.32
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
Basic
|
|
|
63,274
|
|
|
|
62,852
|
|
|
|
62,032
|
|
Diluted
|
|
|
66,410
|
|
|
|
65,815
|
|
|
|
64,688
|
|
|
|
|
|
|
|
|
Prepared in accordance with Generally Accepted Accounting
Principles
|
|
|
|
|
|
|
|
CIRRUS LOGIC, INC.
|
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.
Certain modifications to prior year non-GAAP presentation has been
made and had no material effect on the results of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Jun. 27,
|
|
Mar. 28,
|
|
Jun. 28,
|
|
|
|
2015
|
|
|
|
2015
|
|
|
|
2014
|
|
Net Income Reconciliation
|
|
Q1'16
|
|
Q4'15
|
|
Q1'15
|
GAAP Net Income
|
|
$
|
33,354
|
|
|
$
|
21,349
|
|
|
$
|
10,248
|
|
Amortization of acquisition intangibles
|
|
|
7,141
|
|
|
|
7,141
|
|
|
|
246
|
|
Stock based compensation expense
|
|
|
8,271
|
|
|
|
7,735
|
|
|
|
5,622
|
|
Patent agreement, net
|
|
|
(12,500
|
)
|
|
|
-
|
|
|
|
-
|
|
Wolfson acquisition items
|
|
|
-
|
|
|
|
-
|
|
|
|
2,304
|
|
Provision (benefit) for income taxes
|
|
|
(175
|
)
|
|
|
7,230
|
|
|
|
5,226
|
|
Non-GAAP Net Income
|
|
$
|
36,091
|
|
|
$
|
43,455
|
|
|
$
|
23,646
|
|
|
|
|
|
|
|
|
Earnings Per Share Reconciliation
|
|
|
|
|
|
|
GAAP Diluted earnings per share
|
|
$
|
0.50
|
|
|
$
|
0.32
|
|
|
$
|
0.16
|
|
Effect of Amortization of acquisition intangibles
|
|
|
0.11
|
|
|
|
0.11
|
|
|
|
-
|
|
Effect of Stock based compensation expense
|
|
|
0.12
|
|
|
|
0.12
|
|
|
|
0.09
|
|
Effect of Patent agreement, net
|
|
|
(0.19
|
)
|
|
|
-
|
|
|
|
-
|
|
Effect of Wolfson acquisition items
|
|
|
-
|
|
|
|
-
|
|
|
|
0.04
|
|
Effect of Provision (benefit) for income taxes
|
|
|
-
|
|
|
|
0.11
|
|
|
|
0.08
|
|
Non-GAAP Diluted earnings per share
|
|
$
|
0.54
|
|
|
$
|
0.66
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
Operating Income Reconciliation
|
|
|
|
|
|
|
GAAP Operating Income
|
|
$
|
50,000
|
|
|
$
|
30,407
|
|
|
$
|
15,915
|
|
GAAP Operating Profit
|
|
|
18
|
%
|
|
|
12
|
%
|
|
|
10
|
%
|
Amortization of acquisition intangibles
|
|
|
7,141
|
|
|
|
7,141
|
|
|
|
246
|
|
Stock compensation expense - COGS
|
|
|
325
|
|
|
|
(10
|
)
|
|
|
231
|
|
Stock compensation expense - R&D
|
|
|
3,868
|
|
|
|
2,994
|
|
|
|
2,543
|
|
Stock compensation expense - SG&A
|
|
|
4,078
|
|
|
|
4,751
|
|
|
|
2,848
|
|
Patent agreement, net
|
|
|
(12,500
|
)
|
|
|
-
|
|
|
|
-
|
|
Wolfson acquisition items
|
|
|
-
|
|
|
|
-
|
|
|
|
2,192
|
|
Non-GAAP Operating Income
|
|
$
|
52,912
|
|
|
$
|
45,283
|
|
|
$
|
23,975
|
|
Non-GAAP Operating Profit
|
|
|
19
|
%
|
|
|
18
|
%
|
|
|
16
|
%
|
|
|
|
|
|
|
|
Operating Expense Reconciliation
|
|
|
|
|
|
|
GAAP Operating Expenses
|
|
$
|
82,454
|
|
|
$
|
88,568
|
|
|
$
|
59,460
|
|
Amortization of acquisition intangibles
|
|
|
(7,141
|
)
|
|
|
(7,141
|
)
|
|
|
(246
|
)
|
Stock compensation expense - R&D
|
|
|
(3,868
|
)
|
|
|
(2,994
|
)
|
|
|
(2,543
|
)
|
Stock compensation expense - SG&A
|
|
|
(4,078
|
)
|
|
|
(4,751
|
)
|
|
|
(2,848
|
)
|
Patent agreement, net
|
|
|
12,500
|
|
|
|
-
|
|
|
|
-
|
|
Wolfson acquisition items
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,192
|
)
|
Non-GAAP Operating Expenses
|
|
$
|
79,867
|
|
|
$
|
73,682
|
|
|
$
|
51,631
|
|
|
|
|
|
|
|
|
Gross Margin/Profit Reconciliation
|
|
|
|
|
|
|
GAAP Gross Margin
|
|
$
|
132,454
|
|
|
$
|
118,975
|
|
|
$
|
75,375
|
|
GAAP Gross Profit
|
|
|
46.9
|
%
|
|
|
46.6
|
%
|
|
|
49.4
|
%
|
Stock compensation expense - COGS
|
|
|
325
|
|
|
|
(10
|
)
|
|
|
231
|
|
Non-GAAP Gross Margin
|
|
$
|
132,779
|
|
|
$
|
118,965
|
|
|
$
|
75,606
|
|
Non-GAAP Gross Profit
|
|
|
47.0
|
%
|
|
|
46.6
|
%
|
|
|
49.6
|
%
|
|
|
|
|
|
|
|
Effective Tax Rate Reconciliation
|
|
|
|
|
|
|
GAAP Tax Expense
|
|
$
|
16,144
|
|
|
$
|
8,581
|
|
|
$
|
5,701
|
|
GAAP Effective Tax Rate
|
|
|
32.6
|
%
|
|
|
28.7
|
%
|
|
|
35.7
|
%
|
Adjustments to income taxes
|
|
|
175
|
|
|
|
(7,230
|
)
|
|
|
(5,226
|
)
|
Non-GAAP Tax Expense
|
|
$
|
16,319
|
|
|
$
|
1,351
|
|
|
$
|
475
|
|
Non-GAAP Effective Tax Rate
|
|
|
31.1
|
%
|
|
|
3.0
|
%
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIRRUS LOGIC, INC.
|
CONSOLIDATED CONDENSED BALANCE SHEET
|
(in thousands)
|
|
|
Jun. 27,
|
|
|
Mar. 28,
|
|
|
Jun. 28,
|
|
|
|
2015
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
ASSETS
|
|
(unaudited)
|
|
|
|
|
|
(unaudited)
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
102,531
|
|
|
|
$
|
76,401
|
|
|
|
$
|
268,544
|
|
Marketable securities
|
|
|
120,226
|
|
|
|
|
124,246
|
|
|
|
|
75,198
|
|
Accounts receivable, net
|
|
|
120,838
|
|
|
|
|
112,608
|
|
|
|
|
77,219
|
|
Inventories
|
|
|
126,195
|
|
|
|
|
84,196
|
|
|
|
|
92,002
|
|
Deferred tax asset
|
|
|
5,276
|
|
|
|
|
18,559
|
|
|
|
|
19,921
|
|
Other current assets
|
|
|
32,982
|
|
|
|
|
35,903
|
|
|
|
|
40,469
|
|
Total current Assets
|
|
|
508,048
|
|
|
|
|
451,913
|
|
|
|
|
573,353
|
|
|
|
|
|
|
|
|
|
|
Long-term marketable securities
|
|
|
50,629
|
|
|
|
|
60,072
|
|
|
|
|
39,952
|
|
Property and equipment, net
|
|
|
152,018
|
|
|
|
|
144,346
|
|
|
|
|
102,765
|
|
Intangibles, net
|
|
|
169,158
|
|
|
|
|
175,743
|
|
|
|
|
11,341
|
|
Goodwill
|
|
|
263,583
|
|
|
|
|
263,115
|
|
|
|
|
16,367
|
|
Deferred tax asset
|
|
|
25,639
|
|
|
|
|
25,593
|
|
|
|
|
25,034
|
|
Other assets
|
|
|
24,578
|
|
|
|
|
27,996
|
|
|
|
|
1,007
|
|
Total assets
|
|
$
|
1,193,653
|
|
|
|
$
|
1,148,778
|
|
|
|
$
|
769,819
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
146,370
|
|
|
|
$
|
112,213
|
|
|
|
$
|
75,695
|
|
Accrued salaries and benefits
|
|
|
21,380
|
|
|
|
|
24,132
|
|
|
|
|
11,598
|
|
Deferred income
|
|
|
4,736
|
|
|
|
|
6,105
|
|
|
|
|
7,398
|
|
Other accrued liabilities
|
|
|
30,636
|
|
|
|
|
34,128
|
|
|
|
|
14,080
|
|
Total current liabilities
|
|
|
203,122
|
|
|
|
|
176,578
|
|
|
|
|
108,771
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
160,439
|
|
|
|
|
180,439
|
|
|
|
|
-
|
|
Other long-term liabilities
|
|
|
30,320
|
|
|
|
|
34,990
|
|
|
|
|
4,039
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Capital stock
|
|
|
1,170,436
|
|
|
|
|
1,159,494
|
|
|
|
|
1,088,493
|
|
Accumulated deficit
|
|
|
(367,691
|
)
|
|
|
|
(400,613
|
)
|
|
|
|
(430,663
|
)
|
Accumulated other comprehensive loss
|
|
|
(2,973
|
)
|
|
|
|
(2,110
|
)
|
|
|
|
(821
|
)
|
Total stockholders' equity
|
|
|
799,772
|
|
|
|
|
756,771
|
|
|
|
|
657,009
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,193,653
|
|
|
|
$
|
1,148,778
|
|
|
|
$
|
769,819
|
|
|
|
|
|
|
|
|
|
|
Prepared in accordance with Generally Accepted Accounting
Principles
|
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