NASDAQ: CRUS

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Mar 03, 2021 04:00 PM Pricing delayed 20 minutes

Cirrus Logic Reports Q3 FY21 Revenue of $485.8 Million

Feb 01, 2021

Smartphone Demand Fueled 30 Percent Year-Over-Year Revenue Growth

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 third quarter fiscal year 2021, which ended Dec. 26, 2020, as well as the company’s current business outlook.

“Cirrus Logic delivered revenue above the high end of guidance in the December quarter, as we experienced strong demand for products shipping in recently introduced smartphones,” said John Forsyth, chief executive officer. “We are delighted with our customer engagement and design-in activity during the quarter, and remain focused on developing a roadmap of innovative products that will enable the company to capitalize on growing demand for audio and high-performance mixed-signal solutions. Given the strength of the current smartphone market cycle, and the new product introductions in the pipeline, we are excited about the outlook for the company.”

Reported Financial Results – Third Quarter FY21

  • Revenue of $485.8 million;
  • GAAP and non-GAAP gross margin of 51.8 percent;
  • GAAP operating expenses of $121.8 million and non-GAAP operating expenses of $105.7 million; and
  • GAAP earnings per share of $1.91 and non-GAAP earnings per share of $2.13.

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

Business Outlook – Fourth Quarter FY21

  • Revenue is expected to range between $280 million and $320 million;
  • GAAP gross margin is forecasted to be between 50 percent and 52 percent; and
  • Combined GAAP R&D and SG&A expenses are anticipated to range between $121 million and $127 million, including approximately $15 million in stock-based compensation expense and $3 million in amortization of acquired intangibles.

Share Repurchase Authorization

The company also announced that its Board of Directors recently authorized the repurchase of up to an additional $350 million of the company's common stock, in addition to the $55 million remaining from the Board’s previous share repurchase authorization in January 2019. The repurchases will be funded from working capital and anticipated cash from operations and may occur from time to time depending on a variety of factors, including general market and economic conditions and other corporate considerations. The share repurchase program is designed to comply with all applicable securities laws and may be suspended or discontinued at any time without notice.

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@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: 5791509).

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 the company’s ability to develop a robust pipeline of innovative products that will enable us to capitalize on growing demand for audio and high-performance mixed-signal solutions in the markets we serve, along with estimates for the fourth 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; recent increased industry-wide capacity constraints that may impact our ability to meet current customer demand, which could cause an unanticipated decline in our sales and damage our existing customer relationships and our ability to establish new customer relationships; the potential for increased prices due to capacity constraints in our supply chain, which, if we are unable to increase our selling price to our customers, could result in lower revenues and margins that could adversely affect our financial results; the level of orders and shipments during the fourth 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 Nine Months Ended
Dec. 26, Sep. 26, Dec. 28, Dec. 26, Dec. 28,

2020

2020

2019

2020

2019

Q3'21 Q2'21 Q3'20 Q3'21 Q3'20
Portable products

$

450,305

 

$

312,911

 

$

344,870

 

$

973,877

 

$

897,187

 

Non-portable and other products

 

35,490

 

 

34,414

 

 

29,798

 

 

101,816

 

 

104,646

 

Net sales

 

485,795

 

 

347,325

 

 

374,668

 

 

1,075,693

 

 

1,001,833

 

Cost of sales

 

234,295

 

 

167,115

 

 

177,163

 

 

516,511

 

 

473,901

 

Gross profit

 

251,500

 

 

180,210

 

 

197,505

 

 

559,182

 

 

527,932

 

Gross margin

 

51.8

%

 

51.9

%

 

52.7

%

 

52.0

%

 

52.7

%

Research and development

 

89,435

 

 

84,810

 

 

88,713

 

 

252,986

 

 

265,782

 

Selling, general and administrative

 

32,415

 

 

31,247

 

 

36,113

 

 

93,366

 

 

98,651

 

Restructuring costs

 

-

 

 

-

 

 

-

 

 

352

 

 

-

 

Total operating expenses

 

121,850

 

 

116,057

 

 

124,826

 

 

346,704

 

 

364,433

 

Income from operations

 

129,650

 

 

64,153

 

 

72,679

 

 

212,478

 

 

163,499

 

Interest income

 

1,206

 

 

1,378

 

 

2,392

 

 

4,160

 

 

6,927

 

Other income (expense)

 

(207

)

 

784

 

 

(563

)

 

688

 

 

(1,509

)

Income before income taxes

 

130,649

 

 

66,315

 

 

74,508

 

 

217,326

 

 

168,917

 

Provision for income taxes

 

16,281

 

 

6,829

 

 

5,996

 

 

25,263

 

 

19,577

 

Net income

$

114,368

 

$

59,486

 

$

68,512

 

$

192,063

 

$

149,340

 

Basic earnings per share:

$

1.97

 

$

1.02

 

$

1.18

 

$

3.30

 

$

2.56

 

Diluted earnings per share:

$

1.91

 

$

0.99

 

$

1.13

 

$

3.20

 

$

2.47

 

Weighted average number of shares:
Basic

 

58,024

 

 

58,191

 

 

58,188

 

 

58,176

 

 

58,247

 

Diluted

 

59,963

 

 

60,127

 

 

60,492

 

 

60,101

 

 

60,395

 

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 Nine Months Ended
 
Dec. 26, Sep. 26, Dec. 28, Dec. 26, Dec. 28,

2020

2020

2019

2020

2019

Net Income Reconciliation Q3'21 Q2'21 Q3'20 Q3'21 Q3'20
GAAP Net Income 

 $

      114,368

 

 $

      59,486

 

 $

   68,512

 

 $

  192,063

 

 $

  149,340

 

Amortization of acquisition intangibles

 

                2,998

 

 

             2,998

 

 

          6,470

 

 

           8,994

 

 

         20,420

 

Stock-based compensation expense

 

              13,287

 

 

           15,476

 

 

        14,160

 

 

         42,069

 

 

         39,705

 

Restructuring costs

 

                     -

 

 

                  -

 

 

          1,323

 

 

              352

 

 

           1,323

 

Adjustment to income taxes

 

              (2,897

)

 

           (2,293

)

 

         (4,871

)

 

          (8,172

)

 

        (11,091

)

Non-GAAP Net Income

 $

      127,756

 

 $

      75,667

 

 $

   85,594

 

 $

  235,306

 

 $

  199,697

 

 
Earnings Per Share Reconciliation
GAAP Diluted earnings per share

 $

             1.91

 

 $

          0.99

 

 $

        1.13

 

 $

         3.20

 

 $

         2.47

 

Effect of Amortization of acquisition intangibles

 

                  0.05

 

 

               0.05

 

 

            0.11

 

 

             0.15

 

 

             0.34

 

Effect of Stock-based compensation expense

 

                  0.22

 

 

               0.26

 

 

            0.23

 

 

             0.70

 

 

             0.66

 

Effect of Restructuring costs

 

                     -

 

 

                  -

 

 

            0.02

 

 

             0.01

 

 

             0.02

 

Effect of Adjustment to income taxes

 

                (0.05

)

 

             (0.04

)

 

           (0.08

)

 

            (0.14

)

 

            (0.18

)

Non-GAAP Diluted earnings per share

 $

             2.13

 

 $

          1.26

 

 $

        1.41

 

 $

         3.92

 

 $

         3.31

 

 
Operating Income Reconciliation
GAAP Operating Income

 $

      129,650

 

 $

      64,153

 

 $

   72,679

 

 $

  212,478

 

 $

  163,499

 

GAAP Operating Profit 

 

26.7

%

 

18.5

%

 

19.4

%

 

19.8

%

 

16.3

%

Amortization of acquisition intangibles

 

                2,998

 

 

             2,998

 

 

          6,470

 

 

           8,994

 

 

         20,420

 

Stock-based compensation expense - COGS

 

                   236

 

 

                197

 

 

             200

 

 

              640

 

 

              695

 

Stock-based compensation expense - R&D

 

                9,526

 

 

             9,235

 

 

          9,343

 

 

         27,414

 

 

         24,413

 

Stock-based compensation expense - SG&A

 

                3,525

 

 

             6,044

 

 

          4,617

 

 

         14,015

 

 

         14,597

 

Restructuring costs

 

                     -

 

 

                  -

 

 

          1,323

 

 

              352

 

 

           1,323

 

Non-GAAP Operating Income

 $

      145,935

 

 $

      82,627

 

 $

   94,632

 

 $

  263,893

 

 $

  224,947

 

Non-GAAP Operating Profit

 

30.0

%

 

23.8

%

 

25.3

%

 

24.5

%

 

22.5

%

 
Operating Expense Reconciliation
GAAP Operating Expenses

 $

      121,850

 

 $

   116,057

 

 $

124,826

 

 $

  346,704

 

 $

  364,433

 

Amortization of acquisition intangibles

 

              (2,998

)

 

           (2,998

)

 

         (6,470

)

 

          (8,994

)

 

        (20,420

)

Stock-based compensation expense - R&D

 

              (9,526

)

 

           (9,235

)

 

         (9,343

)

 

        (27,414

)

 

        (24,413

)

Stock-based compensation expense - SG&A

 

              (3,525

)

 

           (6,044

)

 

         (4,617

)

 

        (14,015

)

 

        (14,597

)

Restructuring costs

 

                     -

 

 

                  -

 

 

         (1,201

)

 

             (352

)

 

          (1,201

)

Non-GAAP Operating Expenses

 $

      105,801

 

 $

      97,780

 

 $

103,195

 

 $

  295,929

 

 $

  303,802

 

 
Gross Margin/Profit Reconciliation
GAAP Gross Profit

 $

      251,500

 

 $

   180,210

 

 $

197,505

 

 $

  559,182

 

 $

  527,932

 

GAAP Gross Margin

 

51.8

%

 

51.9

%

 

52.7

%

 

52.0

%

 

52.7

%

Stock-based compensation expense - COGS

 

                   236

 

 

                197

 

 

             200

 

 

              640

 

 

              695

 

Restructuring costs - COGS

 

                     -

 

 

                  -

 

 

             122

 

 

                 -

 

 

              122

 

Non-GAAP Gross Profit

 $

      251,736

 

 $

   180,407

 

 $

197,827

 

 $

  559,822

 

 $

  528,749

 

Non-GAAP Gross Margin

 

51.8

%

 

51.9

%

 

52.8

%

 

52.0

%

 

52.8

%

 
Effective Tax Rate Reconciliation
GAAP Tax Expense 

 $

         16,281

 

 $

        6,829

 

 $

      5,996

 

 $

    25,263

 

 $

    19,577

 

GAAP Effective Tax Rate

 

12.5

%

 

10.3

%

 

8.0

%

 

11.6

%

 

11.6

%

Adjustments to income taxes

 

                2,897

 

 

             2,293

 

 

          4,871

 

 

           8,172

 

 

         11,091

 

Non-GAAP Tax Expense

 $

         19,178

 

 $

        9,122

 

 $

   10,867

 

 $

    33,435

 

 $

    30,668

 

Non-GAAP Effective Tax Rate

 

13.1

%

 

10.8

%

 

11.3

%

 

12.4

%

 

13.3

%

 
Tax Impact to EPS Reconciliation
GAAP Tax Expense

 $

             0.27

 

 $

          0.11

 

 $

        0.10

 

 $

         0.42

 

 $

         0.32

 

Adjustments to income taxes

 

                  0.05

 

 

               0.04

 

 

            0.08

 

 

             0.14

 

 

             0.18

 

Non-GAAP Tax Expense

 $

             0.32

 

 $

          0.15

 

 $

        0.18

 

 $

         0.56

 

 $

         0.50

 

 

CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
Dec. 26, Mar. 28, Dec. 28,

2020

2020

2019

ASSETS
Current assets
Cash and cash equivalents

$

327,294

 

$

292,119

 

$

342,301

 

Marketable securities

 

43,289

 

 

22,008

 

 

13,098

 

Accounts receivable, net

 

244,803

 

 

153,998

 

 

175,937

 

Inventories

 

142,689

 

 

146,725

 

 

137,920

 

Other current assets

 

45,469

 

 

35,346

 

 

45,345

 

Total current Assets

 

803,544

 

 

650,196

 

 

714,601

 

Long-term marketable securities

 

326,491

 

 

283,573

 

 

250,162

 

Right-of-use lease assets

 

135,719

 

 

141,274

 

 

141,348

 

Property and equipment, net

 

154,312

 

 

158,244

 

 

174,390

 

Intangibles, net

 

24,322

 

 

34,430

 

 

47,133

 

Goodwill

 

287,518

 

 

287,088

 

 

285,904

 

Deferred tax asset

 

7,277

 

 

10,052

 

 

9,183

 

Other assets

 

86,446

 

 

27,820

 

 

24,819

 

Total assets

$

1,825,629

 

$

1,592,677

 

$

1,647,540

 

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable

$

90,814

 

$

78,412

 

$

98,835

 

Accrued salaries and benefits

 

39,367

 

 

42,439

 

 

34,228

 

Lease liability

 

14,539

 

 

13,580

 

 

13,863

 

Other accrued liabilities

 

40,135

 

 

24,206

 

 

31,385

 

Total current liabilities

 

184,855

 

 

158,637

 

 

178,311

 

Non-current lease liability

 

129,583

 

 

129,312

 

 

133,993

 

Non-current income taxes

 

70,866

 

 

71,143

 

 

72,422

 

Other long-term liabilities

 

39,968

 

 

3,806

 

 

2,934

 

Stockholders' equity:
Capital stock

 

1,483,567

 

 

1,434,929

 

 

1,417,646

 

Accumulated deficit

 

(88,238

)

 

(201,681

)

 

(157,869

)

Accumulated other comprehensive income (loss)

 

5,028

 

 

(3,469

)

 

103

 

Total stockholders' equity

 

1,400,357

 

 

1,229,779

 

 

1,259,880

 

Total liabilities and stockholders' equity

$

1,825,629

 

$

1,592,677

 

$

1,647,540

 

Prepared in accordance with Generally Accepted Accounting Principles

 

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

Source: Cirrus Logic, Inc.

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