BusinessWire

Cirrus Logic Reports Q1 FY21 Revenue of $242.6 Million

Results Reflect Strong Demand for Products Shipping in Certain Tablets and Smartphones

AUSTIN, Texas--(BUSINESS WIRE)--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 first quarter fiscal year 2021, which ended June 27, 2020, as well as the company’s current business outlook.

We are pleased with our results in the June quarter as we experienced robust demand for certain products shipping in tablets and smartphones,” said Jason Rhode, chief executive officer. “Despite the continuing challenges and adverse economic effects associated with COVID-19, design activity and new product development efforts were encouraging during the quarter. The company remains focused on leveraging our strong customer relationships and mixed-signal processing expertise to broaden our penetration in audio, voice and other mixed-signal domains and position the company for growth in the coming years.”

Reported Financial Results – First Quarter FY21

  • Revenue of $242.6 million;
  • GAAP and non-GAAP gross margin of 52.6 percent;
  • GAAP operating expenses of $108.8 million and non-GAAP operating expenses of $92.4 million;
  • GAAP earnings per share of $0.30 and non-GAAP earnings per share of $0.53.

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

Business Outlook – Second Quarter FY21

  • Revenue is expected to range between $290 million and $330 million;
  • GAAP gross margin to be between 51 percent and 53 percent; and
  • Combined GAAP R&D and SG&A expenses to range between $114 million and $120 million, including approximately $15 million in stock-based compensation expense and $3 million in amortization of acquired intangibles.

Cirrus Logic will host a live Q&A session at 5 p.m. EDT 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 (416) 621-4642, or toll-free at (800) 585-8367 (Access Code: 1899640).

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 broadening our penetration in audio, voice, and other domains, and positioning the company for growth in the coming years, along with estimates for the second 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; the level of orders and shipments during the second 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

Jun. 27,

 

Mar. 28,

 

Jun. 29,

2020

 

2020

 

2019

Q1'21   Q4'20   Q1'20
Portable products

$

210,661

 

 

$

249,731

 

 

$

202,938

 

Non-portable and other products

 

31,912

 

 

 

29,560

 

 

 

35,315

 

Net sales

 

242,573

 

 

 

279,291

 

 

 

238,253

 

Cost of sales

 

115,101

 

 

 

133,056

 

 

 

115,759

 

Gross profit

 

127,472

 

 

 

146,235

 

 

 

122,494

 

Gross margin

 

52.6

%

 

 

52.4

%

 

 

51.4

%

   
Research and development

 

78,741

 

 

 

81,865

 

 

 

88,830

 

Selling, general and administrative

 

29,704

 

 

 

32,464

 

 

 

29,520

 

Restructuring costs

 

352

 

 

 

21,925

 

 

 

-

 

Total operating expenses

 

108,797

 

 

 

136,254

 

 

 

118,350

 

   
Income from operations

 

18,675

 

 

 

9,981

 

 

 

4,144

 

   
Interest income

 

1,576

 

 

 

2,474

 

 

 

2,285

 

Other income (expense)

 

111

 

 

 

(106

)

 

 

(378

)

Income before income taxes

 

20,362

 

 

 

12,349

 

 

 

6,051

 

Provision for income taxes

 

2,153

 

 

 

2,191

 

 

 

1,433

 

Net income

$

18,209

 

 

$

10,158

 

 

$

4,618

 

   
Basic earnings per share:

$

0.31

 

 

$

0.17

 

 

$

0.08

 

Diluted earnings per share:

$

0.30

 

 

$

0.17

 

 

$

0.08

 

   
Weighted average number of shares:    
Basic

 

58,313

 

 

 

58,527

 

 

 

58,540

 

Diluted

 

60,280

 

 

 

60,683

 

 

 

60,258

 

 

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

Jun. 27,   Mar. 28,   Jun. 29,

2020

 

2020

 

2019

Net Income Reconciliation Q1'21   Q4'20   Q1'20
GAAP Net Income

$

18,209

 

 

$

10,158

 

 

$

4,618

 

Amortization of acquisition intangibles

 

2,998

 

 

 

3,000

 

 

 

7,228

 

Stock-based compensation expense

 

13,306

 

 

 

14,052

 

 

 

11,786

 

Restructuring costs

 

352

 

 

 

20,602

 

 

 

-

 

Adjustment to income taxes

 

(2,982

)

 

 

(6,320

)

 

 

(2,803

)

Non-GAAP Net Income

$

31,883

 

 

$

41,492

 

 

$

20,829

 

   
Earnings Per Share Reconciliation    
GAAP Diluted earnings per share

$

0.30

 

 

$

0.17

 

 

$

0.08

 

Effect of Amortization of acquisition intangibles

 

0.05

 

 

 

0.05

 

 

 

0.12

 

Effect of Stock-based compensation expense

 

0.22

 

 

 

0.23

 

 

 

0.20

 

Effect of Restructuring costs

 

0.01

 

 

 

0.34

 

 

 

-

 

Effect of Adjustment to income taxes

 

(0.05

)

 

 

(0.11

)

 

 

(0.05

)

Non-GAAP Diluted earnings per share

$

0.53

 

 

$

0.68

 

 

$

0.35

 

   
Operating Income Reconciliation    
GAAP Operating Income

$

18,675

 

 

$

9,981

 

 

$

4,144

 

GAAP Operating Profit

 

7.7

%

 

 

3.6

%

 

 

1.7

%

Amortization of acquisition intangibles

 

2,998

 

 

 

3,000

 

 

 

7,228

 

Stock-based compensation expense - COGS

 

207

 

 

 

213

 

 

 

241

 

Stock-based compensation expense - R&D

 

8,653

 

 

 

9,446

 

 

 

7,240

 

Stock-based compensation expense - SG&A

 

4,446

 

 

 

4,393

 

 

 

4,305

 

Restructuring costs

 

352

 

 

 

20,602

 

 

 

-

 

Non-GAAP Operating Income

$

35,331

 

 

$

47,635

 

 

$

23,158

 

Non-GAAP Operating Profit

 

14.6

%

 

 

17.1

%

 

 

9.7

%

   
Operating Expense Reconciliation    
GAAP Operating Expenses

$

108,797

 

 

$

136,254

 

 

$

118,350

 

Amortization of acquisition intangibles

 

(2,998

)

 

 

(3,000

)

 

 

(7,228

)

Stock-based compensation expense - R&D

 

(8,653

)

 

 

(9,446

)

 

 

(7,240

)

Stock-based compensation expense - SG&A

 

(4,446

)

 

 

(4,393

)

 

 

(4,305

)

Restructuring costs

 

(352

)

 

 

(20,724

)

 

 

-

 

Non-GAAP Operating Expenses

$

92,348

 

 

$

98,691

 

 

$

99,577

 

   
Gross Margin/Profit Reconciliation    
GAAP Gross Profit

$

127,472

 

 

$

146,235

 

 

$

122,494

 

GAAP Gross Margin

 

52.6

%

 

 

52.4

%

 

 

51.4

%

Stock-based compensation expense - COGS

 

207

 

 

 

213

 

 

 

241

 

Restructuring costs - COGS

 

-

 

 

 

(122

)

 

 

-

 

Non-GAAP Gross Profit

$

127,679

 

 

$

146,326

 

 

$

122,735

 

Non-GAAP Gross Margin

 

52.6

%

 

 

52.4

%

 

 

51.5

%

   
Effective Tax Rate Reconciliation    
GAAP Tax Expense

$

2,153

 

 

$

2,191

 

 

$

1,433

 

GAAP Effective Tax Rate

 

10.6

%

 

 

17.7

%

 

 

23.7

%

Adjustments to income taxes

 

2,982

 

 

 

6,320

 

 

 

2,803

 

Non-GAAP Tax Expense

$

5,135

 

 

$

8,511

 

 

$

4,236

 

Non-GAAP Effective Tax Rate

 

13.9

%

 

 

17.0

%

 

 

16.9

%

   
Tax Impact to EPS Reconciliation    
GAAP Tax Expense

$

0.04

 

 

$

0.04

 

 

$

0.02

 

Adjustments to income taxes

 

0.05

 

 

 

0.11

 

 

 

0.05

 

Non-GAAP Tax Expense

$

0.09

 

 

$

0.15

 

 

$

0.07

 

 
 
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
 
Jun. 27,   Mar. 28,   Jun. 29,

2020

 

2020

 

2019

ASSETS    
Current assets    
Cash and cash equivalents

$

285,922

 

 

$

292,119

 

 

$

198,077

 

Marketable securities

 

29,943

 

 

 

22,008

 

 

 

52,350

 

Accounts receivable, net

 

136,539

 

 

 

153,998

 

 

 

111,497

 

Inventories

 

199,332

 

 

 

146,725

 

 

 

146,317

 

Other current assets

 

38,231

 

 

 

35,346

 

 

 

55,834

 

Total current Assets

 

689,967

 

 

 

650,196

 

 

 

564,075

 

   
Long-term marketable securities

 

290,186

 

 

 

283,573

 

 

 

205,079

 

Right-of-use lease assets

 

139,492

 

 

 

141,274

 

 

 

146,035

 

Property and equipment, net

 

154,286

 

 

 

158,244

 

 

 

182,042

 

Intangibles, net

 

31,185

 

 

 

34,430

 

 

 

62,496

 

Goodwill

 

287,399

 

 

 

287,088

 

 

 

286,370

 

Deferred tax asset

 

6,970

 

 

 

10,052

 

 

 

9,394

 

Other assets

 

44,554

 

 

 

27,820

 

 

 

14,625

 

Total assets

$

1,644,039

 

 

$

1,592,677

 

 

$

1,470,116

 

   
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities    
Accounts payable

$

95,523

 

 

$

78,412

 

 

$

60,408

 

Accrued salaries and benefits

 

28,768

 

 

 

42,439

 

 

 

23,416

 

Current lease liability

 

13,887

 

 

 

13,580

 

 

 

14,517

 

Other accrued liabilities

 

24,866

 

 

 

24,206

 

 

 

32,865

 

Total current liabilities

 

163,044

 

 

 

158,637

 

 

 

131,206

 

   
Non-current lease liability

 

129,627

 

 

 

129,312

 

 

 

137,180

 

Non-current income taxes

 

69,130

 

 

 

71,143

 

 

 

79,484

 

Other long-term liabilities

 

9,949

 

 

 

3,806

 

 

 

4,996

 

   
Stockholders' equity:    
Capital stock

 

1,451,297

 

 

 

1,434,929

 

 

 

1,375,777

 

Accumulated deficit

 

(184,049

)

 

 

(201,681

)

 

 

(258,899

)

Accumulated other comprehensive income (loss)

 

5,041

 

 

 

(3,469

)

 

 

372

 

Total stockholders' equity

 

1,272,289

 

 

 

1,229,779

 

 

 

1,117,250

 

Total liabilities and stockholders' equity

$

1,644,039

 

 

$

1,592,677

 

 

$

1,470,116

 

   
Prepared in accordance with Generally Accepted Accounting Principles

 


Contacts

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