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October 31, 2012

Cirrus Logic Reports September Quarter Revenue Up 91 Percent Year-Over-Year to $194 Million

Company Guides December Quarter Revenue Up More than 120 Percent Year-Over-Year

AUSTIN, Texas--(BUSINESS WIRE)-- 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 second quarter of fiscal year 2013, which ended Sept. 29, as well as the company's current business outlook.

"Our outstanding revenue and earnings growth demonstrate that Cirrus Logic is targeting the right opportunities and our product development efforts remain on track," said Jason Rhode, president and chief executive officer. "The new product ramps driving this growth have required extraordinary efforts from Cirrus Logic employees as well as from our external partners. We are very thankful for their support."

Reported Financial Results — Second Quarter FY2013

  • Revenue of $194 million;
  • Gross margin of 52 percent;
  • GAAP operating expenses of $50 million and non-GAAP operating expenses of $44 million;
  • GAAP diluted earnings per share of $0.51 and non-GAAP diluted earnings per share of $0.79.

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

Business Outlook — Third Quarter FY2013

  • Revenue is expected to range between $270 million and $300 million;
  • Gross margin is expected to be between 50 percent and 52 percent;
  • Combined R&D and SG&A expenses are expected to range between $49 million and $53 million, which includes approximately $6 million in share-based compensation.

Cirrus Logic will host a live Q&A session at 5 p.m. EDT on Wednesday, October 31, 2012, to answer questions related to its financial results and business outlook. Shareholders who would like to submit a question to be addressed during the call are requested to email investor.relations@cirrus.com. A live webcast of the Q&A session can be accessed on the Cirrus Logic website, and a replay will be available approximately two hours after the completion of the call, or by dialing (404) 537-3406, or toll-free at (855) 859-2056 (Access Code: 35941792).

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 and energy-related applications. The company operates from headquarters in Austin, Texas, with offices in Tucson, Ariz., Europe, 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 operating expenses, net income, operating margin 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 our estimates of third quarter fiscal year 2013 revenue, gross margin, combined research and development and selling, general and administrative expense levels, and share-based compensation expense. 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 third quarter and complete fiscal year 2013, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; our ability to introduce and ramp production of new products in a timely manner; and the risk factors listed in our Form 10-K for the year ended March 31, 2012, 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 trademarks of Cirrus Logic Inc.

CRUS-F

Summary financial data follows:

 
 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
                           
Three Months Ended Six Months Ended
Sep. 29, Jun. 30, Sep. 24, Sep. 29, Sep. 24,
2012 2012 2011 2012 2011
Q2'13 Q1'13 Q2'12 Q2'13 Q2'12
Audio products $ 177,915 $ 80,747 $ 83,683 $ 258,662 $ 154,802
Energy products   15,859     18,259     17,919     34,118     39,042  
Net revenue   193,774     99,006     101,602     292,780     193,844  
Cost of sales   93,687     45,566     47,247     139,253     91,780  
Gross Profit 100,087 53,440 54,355 153,527 102,064
 
Research and development 29,468 24,910 19,682 54,378 38,449
Selling, general and administrative   20,194     18,059     16,760     38,253     31,366  
Total operating expenses   49,662     42,969     36,442     92,631     69,815  
 
Operating income 50,425 10,471 17,913 60,896 32,249
 
Interest income, net 131 127 112 258 266
Other income (expense), net   (40 )   (23 )   (27 )   (63 )   (44 )
Income before income taxes 50,516 10,575 17,998 61,091 32,471
Provision (benefit) for income taxes   15,067     3,648     6,751     18,715     12,046  
Net income $ 35,449   $ 6,927   $ 11,247   $ 42,376   $ 20,425  
 
Basic earnings per share: $ 0.55 $ 0.11 $ 0.17 $ 0.65 $ 0.31
Diluted earnings per share: $ 0.51 $ 0.10 $ 0.17 $ 0.61 $ 0.30
 
Weighted average number of shares:
Basic 64,924 64,470 64,426 64,697 65,763
Diluted 69,207 68,529 67,265 68,920 68,657
 
See notes to Consolidated Condensed Statement of Operations
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.

                     
Three Months Ended Six Months Ended
 
Sep. 29, Jun. 30, Sep. 24, Sep. 29, Sep. 24,
2012 2012 2011 2012 2011
Net Income Reconciliation Q2'13 Q1'13 Q2'12 Q2'13 Q2'12
GAAP Net Income $ 35,449 $ 6,927 $ 11,247 $ 42,376 $ 20,425
Amortization of acquisition intangibles 251 353 353 604 706
Stock based compensation expense 5,563 4,173 3,517 9,736 5,959
Other expenses ** - - 622 - 622
Provision (benefit) for income taxes   13,580     3,355     6,163     16,935     11,147  
Non-GAAP Net Income $ 54,843   $ 14,808   $ 21,902   $ 69,651   $ 38,859  
 
Earnings Per Share Reconciliation *
GAAP Diluted earnings per share $ 0.51 $ 0.10 $ 0.17 $ 0.61 $ 0.30
Effect of Amortization of acquisition intangibles - 0.01 0.01 0.01 0.01
Effect of Stock based compensation expense 0.08 0.06 0.05 0.14 0.09
Effect of Other expenses ** - - 0.01 - 0.01
Effect of Provision (benefit) for income taxes   0.20     0.05     0.09     0.25     0.16  
Non-GAAP Diluted earnings per share $ 0.79   $ 0.22   $ 0.33   $ 1.01   $ 0.57  
 
Operating Income Reconciliation
GAAP Operating Income $ 50,425 $ 10,471 $ 17,913 $ 60,896 $ 32,249
GAAP Operating Margin 26 % 11 % 18 % 21 % 17 %
Amortization of acquisition intangibles 251 353 353 604 706
Stock compensation expense - COGS 119 118 104 237 193
Stock compensation expense - R&D 2,097 2,243 1,181 4,340 2,224
Stock compensation expense - SG&A 3,347 1,812 2,232 5,159 3,542
Other expenses **   -     -     622     -     622  
Non-GAAP Operating Income $ 56,239   $ 14,997   $ 22,405   $ 71,236   $ 39,536  
Non-GAAP Operating Margin 29 % 15 % 22 % 24 % 20 %
 
Operating Expense Reconciliation
GAAP Operating Expenses $ 49,662 $ 42,969 $ 36,442 $ 92,631 $ 69,815
Amortization of acquisition intangibles (251 ) (353 ) (353 ) (604 ) (706 )
Stock compensation expense - R&D (2,097 ) (2,243 ) (1,181 ) (4,340 ) (2,224 )
Stock compensation expense - SG&A (3,347 ) (1,812 ) (2,232 ) (5,159 ) (3,542 )
Other expenses **   -     -     (622 )   -     (622 )
Non-GAAP Operating Expenses $ 43,967   $ 38,561   $ 32,054   $ 82,528   $ 62,721  
 
* Certain YTD numbers may not tie to individual quarter presentation due to YTD share count dilution
** Other expenses (proceeds) may contain certain items such as litigation expenses , proceeds from a patent agreement, restructuring items, and impairments of non-marketable securities.
 

           
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
 
    Sep. 29, Jun. 30, Sep. 24,
2012 2012 2011
ASSETS
Current assets
Cash and cash equivalents $ 67,846 $ 84,312 $ 39,268
Restricted investments - - 2,898
Marketable securities 66,731 82,359 100,130
Accounts receivable, net 130,870 49,262 44,898
Inventories 144,881 96,790 49,552
Deferred tax asset 53,144 53,139 30,803
Other current assets   19,845     14,574     10,865  
Total Current Assets 483,317 380,436 278,414
 
Long-term marketable securities - - 8,703
Property and equipment, net 86,992 85,337 50,102
Intangibles, net 5,208 18,457 18,905
Goodwill 6,027 6,027 6,027
Deferred tax asset 72,150 85,721 90,995
Other assets   21,402     9,300     7,517  
Total Assets $ 675,096   $ 585,278   $ 460,663  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 103,366 $ 75,507 $ 35,256
Accrued salaries and benefits 15,594 10,956 10,942
Other accrued liabilities 14,218 9,498 10,105
Deferred income on shipments to distributors   6,580     7,158     9,334  
Total Current Liabilities 139,758 103,119 65,637
 
Other long-term obligations 10,042 4,159 6,505
 
Stockholders' equity:
Capital stock 1,025,272 1,013,442 998,572
Accumulated deficit (499,233 ) (534,682 ) (609,167 )
Accumulated other comprehensive loss   (743 )   (760 )   (884 )
Total Stockholders' Equity   525,296     478,000     388,521  
Total Liabilities and Stockholders' Equity $ 675,096   $ 585,278   $ 460,663  
 
Prepared in accordance with Generally Accepted Accounting Principles

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

Source: Cirrus Logic, Inc.

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