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January 24, 2013

Cirrus Logic Reports December Quarter Revenue Up 153 Percent Year-Over-Year to $310 Million

Company Guides March Quarter Revenue Up More than 80 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 third quarter of fiscal year 2013, which ended Dec. 29, as well as the company's current business outlook.

"Q3 was a great quarter for Cirrus Logic as demand for multiple new products in portable audio drove revenue above our expectations," said Jason Rhode, president and chief executive officer. "During the quarter, we gained traction with our portable audio and LED lighting products, where we began shipping in additional SKUs and customers. Our outlook for the year remains on track, and we are positioned well for further growth in FY14. We continue to see significant opportunities to grow our business with both new and existing customers."

Reported Financial Results — Third Quarter FY2013

  • Revenue of $310 million;
  • Gross margin of 51 percent;
  • GAAP operating expenses of $52 million and non-GAAP operating expenses of $43 million;
  • GAAP diluted earnings per share of $ 0.99 and non-GAAP diluted earnings per share of $1.64.

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

Business Outlook — Fourth Quarter FY2013

  • Revenue is expected to range between $200 million and $220 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 $51 million, which includes approximately $6 million in share-based compensation.

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: 86031084).

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 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 fourth quarter fiscal year 2013 revenue, gross margin, combined research and development and selling, general and administrative expense levels, and share-based compensation expense, as well as estimates for our fiscal year 2014 revenue growth. 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 fourth 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 Nine Months Ended
Dec. 29, Sep. 29, Dec. 31, Dec. 29, Dec. 31,
2012 2012 2011 2012 2011
Q3'13 Q2'13 Q3'12 Q3'13 Q3'12
Audio products $ 300,010 $ 177,915 $ 105,418 $ 558,671 $ 260,220
Energy products   10,123     15,859     16,950     44,242     55,992  
Net revenue   310,133     193,774     122,368     602,913     316,212  
Cost of sales   152,083     93,687     56,338     291,336     148,118  
Gross Profit 158,050 100,087 66,030 311,577 168,094
 
Research and development 29,608 29,468 23,143 83,986 61,592
Selling, general and administrative 19,021 20,194 16,488 57,274 47,854
Restructuring and other costs   3,292     -     -     3,292     -  
Total operating expenses   51,921     49,662     39,631     144,552     109,446  
 
Operating income 106,129 50,425 26,399 167,025 58,648
 
Interest income, net 76 131 112 334 378
Other expense, net   (31 )   (40 )   (71 )   (94 )   (115 )
Income before income taxes 106,174 50,516 26,440 167,265 58,911
Provision for income taxes   38,312     15,067     9,709     57,027     21,755  
Net income $ 67,862   $ 35,449   $ 16,731   $ 110,238   $ 37,156  
 
Basic earnings per share: $ 1.04 $ 0.55 $ 0.26 $ 1.70 $ 0.57
Diluted earnings per share: $ 0.99 $ 0.51 $ 0.25 $ 1.60 $ 0.55
 
Weighted average number of shares:
Basic 65,055 64,924 63,957 64,859 65,161
Diluted 68,866 69,207 66,989 68,946 68,099
 
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 Nine Months Ended
Dec. 29, Sep. 29, Dec. 31, Dec. 29, Dec. 31,
2012 2012 2011 2012 2011
Net Income Reconciliation Q3'13 Q2'13 Q3'12 Q3'13 Q3'12
GAAP Net Income $ 67,862 $ 35,449 $ 16,731 $ 110,238 $ 37,156
Amortization of acquisition intangibles - 251 353 604 1,059
Stock based compensation expense 6,026 5,563 2,769 15,762 8,728
Restructuring and other costs, net ** 3,245 - - 3,245 622
Provision for income taxes   35,667     13,580     8,992     52,602     20,139  
Non-GAAP Net Income $ 112,800   $ 54,843   $ 28,845   $ 182,451   $ 67,704  
 
Earnings Per Share Reconciliation *
GAAP Diluted earnings per share $ 0.99 $ 0.51 $ 0.25 $ 1.60 $ 0.55
Effect of Amortization of acquisition intangibles - - 0.01 0.01 0.02
Effect of Stock based compensation expense 0.09 0.08 0.04 0.23 0.13
Effect of Restructuring and other costs, net ** 0.05 - - 0.05 -
Effect of Provision for income taxes   0.51     0.20     0.13     0.76     0.29  
Non-GAAP Diluted earnings per share $ 1.64   $ 0.79   $ 0.43   $ 2.65   $ 0.99  
 
Operating Income Reconciliation
GAAP Operating Income $ 106,129 $ 50,425 $ 26,399 $ 167,025 $ 58,648
GAAP Operating Margin 34 % 26 % 22 % 28 % 19 %
Amortization of acquisition intangibles - 251 353 604 1,059
Stock compensation expense - COGS 218 119 92 455 285
Stock compensation expense - R&D 3,234 2,097 1,613 7,574 3,837
Stock compensation expense - SG&A 2,574 3,347 1,064 7,733 4,606
Restructuring and other costs, net **   3,245     -     -     3,245     622  
Non-GAAP Operating Income $ 115,400   $ 56,239   $ 29,521   $ 186,636   $ 69,057  
Non-GAAP Operating Margin 37 % 29 % 24 % 31 % 22 %
 
Operating Expense Reconciliation
GAAP Operating Expenses $ 51,921 $ 49,662 $ 39,631 $ 144,552 $ 109,446
Amortization of acquisition intangibles - (251 ) (353 ) (604 ) (1,059 )
Stock compensation expense - R&D (3,234 ) (2,097 ) (1,613 ) (7,574 ) (3,837 )
Stock compensation expense - SG&A (2,574 ) (3,347 ) (1,064 ) (7,733 ) (4,606 )
Restructuring and other costs, net **   (3,245 )   -     -     (3,245 )   (622 )
Non-GAAP Operating Expenses $ 42,868   $ 43,967   $ 36,601   $ 125,396   $ 99,322  
 
* 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, sales reorganizations, asset gains and impairments of non-marketable securities.

 

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
 
  Dec. 29,     Sep. 29,     Dec. 31,
2012 2012 2011
ASSETS
Current assets
Cash and cash equivalents $ 87,452 $ 67,846 $ 38,010
Restricted investments - - 2,898
Marketable securities 60,717 66,731 99,342
Accounts receivable, net 170,683 130,870 54,512
Inventories 135,023 144,881 58,079
Deferred tax asset 53,140 53,144 30,798
Other current assets   21,775     19,845     16,116  
Total Current Assets 528,790 483,317 299,755
 
Long-term marketable securities - - 20,092
Property and equipment, net 100,534 86,992 57,263
Intangibles, net 4,920 5,208 18,596
Goodwill 6,027 6,027 6,027
Deferred tax asset 36,466 72,150 82,071
Other assets   15,761     21,402     10,813  
Total Assets $ 692,498   $ 675,096   $ 494,617  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 95,493 $ 103,366 $ 45,104
Accrued salaries and benefits 13,752 15,594 11,539
Other accrued liabilities 13,992 14,218 14,259
Deferred income on shipments to distributors   5,579     6,580     8,511  
Total Current Liabilities 128,816 139,758 79,413
 
Other long-term obligations 10,131 10,042 6,494
 
Stockholders' equity:
Capital stock 1,033,549 1,025,272 1,001,967
Accumulated deficit (479,225 ) (499,233 ) (592,436 )
Accumulated other comprehensive loss   (773 )   (743 )   (821 )
Total Stockholders' Equity   553,551     525,296     408,710  
Total Liabilities and Stockholders' Equity $ 692,498   $ 675,096   $ 494,617  
 
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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