NASDAQ: CRUS

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Oct 27, 2020 04:00 PM Pricing delayed 20 minutes

Cirrus Logic Reports Q4 FY20 Revenue of $279.3 Million

May 04, 2020

Content Gains Contribute to Eight Percent Year Over Year Revenue Growth in FY20

AUSTIN, Texas--(BUSINESS WIRE)-- Cirrus Logic, Inc. (Nasdaq: CRUS)today posted on its website at http://investor.cirrus.comthe quarterly Shareholder Letter that contains the complete financial results for the fourth quarter and full fiscal year 2020, which ended March 28, 2020, as well as the company’s current business outlook.

“In FY20, we experienced strong demand for products shipping in smartphones and increased our penetration of tablets, truly wireless headsets and wearables,” said Jason Rhode, chief executive officer. “As the global community continues to confront the COVID-19 pandemic and the unknown economic consequences, Cirrus Logic’s priority is to ensure the safety and well-being of our employees, their families and our communities worldwide, while maintaining business continuity and continuing to provide outstanding support to our customers. With approximately $600 million in cash, no debt and outstanding relationships with the leaders in the markets we serve, Cirrus Logic is in a strong position to weather the storm and maximize our long-term growth opportunities.”

Reported Financial Results – Fourth Quarter FY20

  • Revenue of $279.3 million;
  • GAAP and non-GAAP gross margin of 52.4 percent;
  • GAAP operating expenses of $136.2 million and non-GAAP operating expenses of $98.7 million;
  • GAAP operating expense included $20.7 million in restructuring costs associated with exiting the MEMS product line, $13.8 million in stock-based compensation and $3 million in amortization of acquired intangibles;
  • GAAP earnings per share of $0.17 and non-GAAP earnings per share of $0.68.

Reported Financial Results – Full Year FY20

  • Revenue of $1.28 billion;
  • GAAP and non-GAAP gross margin are 52.6 percent and 52.7, respectively;
  • GAAP operating expenses of $500.7 million and non-GAAP operating expenses of $402.5 million;
  • GAAP operating expense included $52.8 million in stock-based compensation, $23.4 million in amortization of acquired intangibles and $21.9 million in restructuring costs associated with exiting the MEMS product line;
  • GAAP earnings per share of $2.64 and non-GAAP earnings per share of $3.99.

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

Business Outlook – First Quarter FY21

  • Revenue is expected to range between $200 million and $250 million;
  • GAAP gross margin to be between 51 percent and 53 percent; and
  • Combined GAAP R&D and SG&A expenses to range between $111 million and $117 million, including approximately $14 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: 9199070).

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 our ability to weather the storm during these challenging times and maximize our long-term growth opportunities, along with estimates for the first 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. 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 first 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 30, 2019 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 Twelve Months Ended
 
Mar. 28, Dec. 28, Mar. 30, Mar. 28, Mar. 30,

2020

2019

2019

2020

2019

Q4'20 Q3'20 Q4'19 Q4'20 Q4'19
Portable products

$

249,731

 

$

344,870

 

$

207,099

 

$

1,146,918

 

$

1,032,049

 

Non-portable and other products

 

29,560

 

 

29,798

 

 

33,342

 

 

134,206

 

 

153,475

 

Net sales

 

279,291

 

 

374,668

 

 

240,441

 

 

1,281,124

 

 

1,185,524

 

Cost of sales

 

133,056

 

 

177,163

 

 

115,802

 

 

606,957

 

 

588,027

 

Gross profit

 

146,235

 

 

197,505

 

 

124,639

 

 

674,167

 

 

597,497

 

Gross margin

 

52.4

%

 

52.7

%

 

51.8

%

 

52.6

%

 

50.4

%

 
Research and development

 

81,865

 

 

88,713

 

 

92,251

 

 

347,647

 

 

375,139

 

Selling, general and administrative

 

32,464

 

 

36,113

 

 

30,194

 

 

131,115

 

 

126,502

 

Restructuring costs

 

21,925

 

 

-

 

 

-

 

 

21,925

 

 

-

 

Gain on sale of assets

 

-

 

 

-

 

 

(4,913

)

 

-

 

 

(4,913

)

Total operating expenses

 

136,254

 

 

124,826

 

 

117,532

 

 

500,687

 

 

496,728

 

 
Income from operations

 

9,981

 

 

72,679

 

 

7,107

 

 

173,480

 

 

100,769

 

 
Interest income

 

2,474

 

 

2,392

 

 

2,248

 

 

9,401

 

 

6,960

 

U.K. pension settlement

 

-

 

 

-

 

 

-

 

 

-

 

 

(13,768

)

Other expense

 

(106

)

 

(563

)

 

(150

)

 

(1,615

)

 

(217

)

Income before income taxes

 

12,349

 

 

74,508

 

 

9,205

 

 

181,266

 

 

93,744

 

Provision for income taxes

 

2,191

 

 

5,996

 

 

3,048

 

 

21,768

 

 

3,753

 

Net income

$

10,158

 

$

68,512

 

$

6,157

 

$

159,498

 

$

89,991

 

 
Basic earnings per share:

$

0.17

 

$

1.18

 

$

0.10

 

$

2.74

 

$

1.50

 

Diluted earnings per share:

$

0.17

 

$

1.13

 

$

0.10

 

$

2.64

 

$

1.46

 

 
Weighted average number of shares:
Basic

 

58,527

 

 

58,188

 

 

59,031

 

 

58,317

 

 

60,116

 

Diluted

 

60,683

 

 

60,492

 

 

60,199

 

 

60,462

 

 

61,583

 

 
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 Twelve Months Ended
 
Mar. 28, Dec. 28, Mar. 30, Mar. 28, Mar. 30,

2020

2019

2019

2020

2019

Net Income Reconciliation Q4'20 Q3'20 Q4'19 Q4'20 Q4'19
GAAP Net Income

$

10,158

 

$

68,512

 

$

6,157

 

$

159,498

 

$

89,991

 

Amortization of acquisition intangibles

 

3,000

 

 

6,470

 

 

7,228

 

 

23,420

 

 

40,991

 

Stock-based compensation expense

 

14,052

 

 

14,160

 

 

12,583

 

 

53,757

 

 

49,689

 

Restructuring costs

 

20,602

 

 

1,323

 

 

-

 

 

21,925

 

 

-

 

U.K. pension settlement

 

-

 

 

-

 

 

-

 

 

-

 

 

13,768

 

Gain on sale of assets

 

-

 

 

-

 

 

(4,913

)

 

-

 

 

(4,913

)

Adjustment to income taxes

 

(6,320

)

 

(4,871

)

 

1,202

 

 

(17,411

)

 

(26,781

)

Non-GAAP Net Income

$

41,492

 

$

85,594

 

$

22,257

 

$

241,189

 

$

162,745

 

 
Earnings Per Share Reconciliation
GAAP Diluted earnings per share

$

0.17

 

$

1.13

 

$

0.10

 

$

2.64

 

$

1.46

 

Effect of Amortization of acquisition intangibles

 

0.05

 

 

0.11

 

 

0.12

 

 

0.39

 

 

0.67

 

Effect of Stock-based compensation expense

 

0.23

 

 

0.23

 

 

0.21

 

 

0.89

 

 

0.81

 

Effect of Restructuring costs

 

0.34

 

 

0.02

 

 

-

 

 

0.36

 

 

-

 

Effect of U.K. pension settlement

 

-

 

 

-

 

 

-

 

 

-

 

 

0.22

 

Effect of Gain on sale of assets

 

-

 

 

-

 

 

(0.08

)

 

-

 

 

(0.08

)

Effect of Adjustment to income taxes

 

(0.11

)

 

(0.08

)

 

0.02

 

 

(0.29

)

 

(0.44

)

Non-GAAP Diluted earnings per share

$

0.68

 

$

1.41

 

$

0.37

 

$

3.99

 

$

2.64

 

 
Operating Income Reconciliation
GAAP Operating Income

$

9,981

 

$

72,679

 

$

7,107

 

$

173,480

 

$

100,769

 

GAAP Operating Profit

 

3.6

%

 

19.4

%

 

3.0

%

 

13.5

%

 

8.5

%

Amortization of acquisition intangibles

 

3,000

 

 

6,470

 

 

7,228

 

 

23,420

 

 

40,991

 

Stock-based compensation expense - COGS

 

213

 

 

200

 

 

288

 

 

908

 

 

877

 

Stock-based compensation expense - R&D

 

9,446

 

 

9,343

 

 

8,270

 

 

33,859

 

 

29,115

 

Stock-based compensation expense - SG&A

 

4,393

 

 

4,617

 

 

4,025

 

 

18,990

 

 

19,697

 

Restructuring costs

 

20,602

 

 

1,323

 

 

-

 

 

21,925

 

 

-

 

Gain on sale of assets

 

-

 

 

-

 

 

(4,913

)

 

-

 

 

(4,913

)

Non-GAAP Operating Income

$

47,635

 

$

94,632

 

$

22,005

 

$

272,582

 

$

186,536

 

Non-GAAP Operating Profit

 

17.1

%

 

25.3

%

 

9.2

%

 

21.3

%

 

15.7

%

 
Operating Expense Reconciliation
GAAP Operating Expenses

$

136,254

 

$

124,826

 

$

117,532

 

$

500,687

 

$

496,728

 

Amortization of acquisition intangibles

 

(3,000

)

 

(6,470

)

 

(7,228

)

 

(23,420

)

 

(40,991

)

Stock-based compensation expense - R&D

 

(9,446

)

 

(9,343

)

 

(8,270

)

 

(33,859

)

 

(29,115

)

Stock-based compensation expense - SG&A

 

(4,393

)

 

(4,617

)

 

(4,025

)

 

(18,990

)

 

(19,697

)

Restructuring costs

 

(20,724

)

 

(1,201

)

 

-

 

 

(21,925

)

 

-

 

Gain on sale of assets

 

-

 

 

-

 

 

4,913

 

 

-

 

 

4,913

 

Non-GAAP Operating Expenses

$

98,691

 

$

103,195

 

$

102,922

 

$

402,493

 

$

411,838

 

 
Gross Margin/Profit Reconciliation
GAAP Gross Profit

$

146,235

 

$

197,505

 

$

124,639

 

$

674,167

 

$

597,497

 

GAAP Gross Margin

 

52.4

%

 

52.7

%

 

51.8

%

 

52.6

%

 

50.4

%

Stock-based compensation expense - COGS

 

213

 

 

200

 

 

288

 

 

908

 

 

877

 

Restructuring costs - COGS

 

(122

)

 

122

 

 

-

 

 

-

 

 

-

 

Non-GAAP Gross Profit

$

146,326

 

$

197,827

 

$

124,927

 

$

675,075

 

$

598,374

 

Non-GAAP Gross Margin

 

52.4

%

 

52.8

%

 

52.0

%

 

52.7

%

 

50.5

%

 
Effective Tax Rate Reconciliation
GAAP Tax Expense

$

2,191

 

$

5,996

 

$

3,048

 

$

21,768

 

$

3,753

 

GAAP Effective Tax Rate

 

17.7

%

 

8.0

%

 

33.1

%

 

12.0

%

 

4.0

%

Adjustments to income taxes

 

6,320

 

 

4,871

 

 

(1,202

)

 

17,411

 

 

26,781

 

Non-GAAP Tax Expense

$

8,511

 

$

10,867

 

$

1,846

 

$

39,179

 

$

30,534

 

Non-GAAP Effective Tax Rate

 

17.0

%

 

11.3

%

 

7.7

%

 

14.0

%

 

15.8

%

 
Tax Impact to EPS Reconciliation
GAAP Tax Expense

$

0.04

 

$

0.10

 

$

0.05

 

$

0.36

 

$

0.06

 

Adjustments to income taxes

 

0.11

 

 

0.08

 

 

(0.02

)

 

0.29

 

 

0.44

 

Non-GAAP Tax Expense

$

0.15

 

$

0.18

 

$

0.03

 

$

0.65

 

$

0.50

 

 
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
Mar. 28, Dec. 28, Mar. 30,

2020

2019

2019

ASSETS
Current assets
Cash and cash equivalents

$

292,119

 

$

342,301

 

$

216,172

 

Marketable securities

 

22,008

 

 

13,098

 

 

70,183

 

Accounts receivable, net

 

153,998

 

 

175,937

 

 

120,656

 

Inventories

 

146,725

 

 

137,920

 

 

164,733

 

Other current assets

 

35,346

 

 

45,345

 

 

53,239

 

Total current Assets

 

650,196

 

 

714,601

 

 

624,983

 

 
Long-term marketable securities

 

283,573

 

 

250,162

 

 

158,968

 

Right-of-use lease assets

 

141,274

 

 

141,348

 

 

-

 

Property and equipment, net

 

158,244

 

 

174,390

 

 

186,185

 

Intangibles, net

 

34,430

 

 

47,133

 

 

67,847

 

Goodwill

 

287,088

 

 

285,904

 

 

286,241

 

Deferred tax asset

 

10,052

 

 

9,183

 

 

8,727

 

Other assets

 

27,820

 

 

24,819

 

 

19,689

 

Total assets

$

1,592,677

 

$

1,647,540

 

$

1,352,640

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable

$

78,412

 

$

98,835

 

$

48,398

 

Accrued salaries and benefits

 

42,439

 

 

34,228

 

 

29,289

 

Lease liability

 

13,580

 

 

13,863

 

 

-

 

Other accrued liabilities

 

24,206

 

 

31,385

 

 

37,853

 

Total current liabilities

 

158,637

 

 

178,311

 

 

115,540

 

 
Non-current lease liability

 

129,312

 

 

133,993

 

 

-

 

Non-current income taxes

 

71,143

 

 

72,422

 

 

78,309

 

Other long-term liabilities

 

3,806

 

 

2,934

 

 

18,551

 

 
Stockholders' equity:
Capital stock

 

1,434,929

 

 

1,417,646

 

 

1,363,736

 

Accumulated deficit

 

(201,681

)

 

(157,869

)

 

(222,430

)

Accumulated other comprehensive income (loss)

 

(3,469

)

 

103

 

 

(1,066

)

Total stockholders' equity

 

1,229,779

 

 

1,259,880

 

 

1,140,240

 

Total liabilities and stockholders' equity

$

1,592,677

 

$

1,647,540

 

$

1,352,640

 

 
Prepared in accordance with Generally Accepted Accounting Principles

 

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

Source: Cirrus Logic, Inc.

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