NASDAQ: CRUS

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May 23, 2022 04:00 PM Pricing delayed 20 minutes

Cirrus Logic Reports Fourth Quarter Revenue of $490.0 Million and Full Fiscal Year 2022 Revenue of $1.78 Billion

May 03, 2022

Content Gains Drove Record Fourth Quarter and Full Fiscal Year Revenue and EPS

Cirrus Logic, Inc. (Nasdaq: CRUS)today posted on its website at investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the fourth quarter and full fiscal year 2022, which ended March 26, 2022, as well as the company’s current business outlook.

“We delivered strong financial results in FY22 as revenue increased 30 percent year over year driven by high-performance mixed-signal content gains,” said John Forsyth, Cirrus Logic president and chief executive officer. “In FY22, the company successfully executed several key strategic initiatives and increased product diversification through significant growth in our high-performance mixed-signal business. Going forward, we expect to continue leveraging our expertise in data conversion and signal processing to capitalize on exciting opportunities in new applications and markets.”

Reported Financial Results – Fourth Quarter FY22

  • Revenue of $490.0 million;
  • GAAP gross margin of 52.8 percent and non-GAAP gross margin of 52.9 percent;
  • GAAP operating expenses of $150.9 million and non-GAAP operating expenses of $123.1 million; and
  • GAAP earnings per share of $1.64 and non-GAAP earnings per share of $2.01.

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

Reported Financial Results – Full Year FY22

  • Revenue of $1.78 billion;
  • GAAP gross margin of 51.8 percent and non-GAAP gross margin of 52.1 percent;
  • GAAP operating expenses of $557.3 million and non-GAAP operating expenses of $456.2 million; and
  • GAAP earnings per share of $5.52 and non-GAAP earnings per share of $6.90.

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

Business Outlook – First Quarter FY23

  • Revenue is expected to range between $350 million and $390 million;
  • GAAP gross margin is forecasted to be between 49 percent and 51 percent; and
  • Combined GAAP R&D and SG&A expenses are anticipated to range between $147 million and $153 million, including approximately $19 million in stock-based compensation expense, $8 million in amortization of acquired intangibles and $3 million in acquisition-related costs.

Cirrus Logic will host a live Q&A session at 5 p.m. EDT today to discuss its financial results and business outlook. Participants may listen to the conference call on the investor relations website at investor.cirrus.com. Participants who have questions that they would like addressed 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: 8385942).

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.

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, effective tax rate, and free cash flow. 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 continue to leverage our expertise in data conversion and signal processing to capitalize on exciting opportunities in new applications and markets and our estimates for the first quarter fiscal year 2023 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock compensation expense, amortization of acquired intangibles and acquisition-related costs. 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; our ability to attract, hire, and retain qualified personnel to support the development, marketing, and sales of our products; the level of orders and shipments during the first quarter of fiscal year 2023, 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 27, 2021 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. 26, Dec. 25, Mar. 27, Mar. 26, Mar. 27,

2022

2021

2021

2022

2021

Q4'22 Q3'22 Q4'21 Q4'22 Q4'21
Audio

$

327,099

 

$

341,897

 

$

235,821

 

$

1,187,126

 

$

1,104,060

 

High-Performance Mixed-Signal

 

162,873

 

 

206,452

 

 

57,716

 

 

594,334

 

 

265,170

 

Net sales

 

489,972

 

 

548,349

 

 

293,537

 

 

1,781,460

 

 

1,369,230

 

Cost of sales

 

231,243

 

 

258,827

 

 

145,418

 

 

857,819

 

 

661,929

 

Gross profit

 

258,729

 

 

289,522

 

 

148,119

 

 

923,641

 

 

707,301

 

Gross margin

 

52.8

%

 

52.8

%

 

50.5

%

 

51.8

%

 

51.7

%

 
Research and development

 

111,394

 

 

107,101

 

 

89,773

 

 

406,307

 

 

342,759

 

Selling, general and administrative

 

39,470

 

 

38,247

 

 

33,642

 

 

150,996

 

 

127,008

 

Restructuring costs

 

-

 

 

-

 

 

-

 

 

-

 

 

352

 

Total operating expenses

 

150,864

 

 

145,348

 

 

123,415

 

 

557,303

 

 

470,119

 

 
Income from operations

 

107,865

 

 

144,174

 

 

24,704

 

 

366,338

 

 

237,182

 

 
Interest income (expense)

 

(103

)

 

(78

)

 

1,064

 

 

615

 

 

5,224

 

Other income (expense)

 

180

 

 

(87

)

 

2,152

 

 

1,710

 

 

2,840

 

Income before income taxes

 

107,942

 

 

144,009

 

 

27,920

 

 

368,663

 

 

245,246

 

Provision for income taxes

 

11,528

 

 

16,373

 

 

2,639

 

 

42,308

 

 

27,902

 

Net income

$

96,414

 

$

127,636

 

$

25,281

 

$

326,355

 

$

217,344

 

 
Basic earnings per share:

$

1.69

 

$

2.23

 

$

0.44

 

$

5.70

 

$

3.74

 

Diluted earnings per share:

$

1.64

 

$

2.16

 

$

0.42

 

$

5.52

 

$

3.62

 

 
Weighted average number of shares:
Basic

 

56,993

 

 

57,178

 

 

57,899

 

 

57,278

 

 

58,106

 

Diluted

 

58,625

 

 

59,031

 

 

59,922

 

 

59,143

 

 

60,060

 

 

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. 26, Dec. 25, Mar. 27, Mar. 26, Mar. 27,

2022

2021

2021

2022

2021

Net Income Reconciliation Q4'22 Q3'22 Q4'21 Q4'22 Q4'21
GAAP Net Income

$

96,414

 

$

127,636

 

$

25,281

 

$

326,355

 

$

217,344

 

Amortization of acquisition intangibles

 

7,882

 

 

9,083

 

 

2,998

 

 

27,017

 

 

11,992

 

Stock-based compensation expense

 

17,024

 

 

17,833

 

 

14,693

 

 

66,392

 

 

56,762

 

Restructuring costs

 

-

 

 

-

 

 

-

 

 

-

 

 

352

 

Acquisition-related costs

 

3,164

 

 

3,155

 

 

-

 

 

12,153

 

 

-

 

Adjustment to income taxes

 

(6,778

)

 

(7,903

)

 

(3,251

)

 

(23,675

)

 

(11,423

)

Non-GAAP Net Income

$

117,706

 

$

149,804

 

$

39,721

 

$

408,242

 

$

275,027

 

 
Earnings Per Share Reconciliation
GAAP Diluted earnings per share

$

1.64

 

$

2.16

 

$

0.42

 

$

5.52

 

$

3.62

 

Effect of Amortization of acquisition intangibles

 

0.14

 

 

0.16

 

 

0.05

 

 

0.46

 

 

0.20

 

Effect of Stock-based compensation expense

 

0.29

 

 

0.30

 

 

0.24

 

 

1.12

 

 

0.94

 

Effect of Restructuring costs

 

-

 

 

-

 

 

-

 

 

-

 

 

0.01

 

Effect of Acquisition-related costs

 

0.05

 

 

0.05

 

 

-

 

 

0.20

 

 

-

 

Effect of Adjustment to income taxes

 

(0.11

)

 

(0.13

)

 

(0.05

)

 

(0.40

)

 

(0.19

)

Non-GAAP Diluted earnings per share

$

2.01

 

$

2.54

 

$

0.66

 

$

6.90

 

$

4.58

 

 
Operating Income Reconciliation
GAAP Operating Income

$

107,865

 

$

144,174

 

$

24,704

 

$

366,338

 

$

237,182

 

GAAP Operating Profit

 

22.0

%

 

26.3

%

 

8.4

%

 

20.6

%

 

17.3

%

Amortization of acquisition intangibles

 

7,882

 

 

9,083

 

 

2,998

 

 

27,017

 

 

11,992

 

Stock-based compensation expense - COGS

 

261

 

 

245

 

 

260

 

 

1,024

 

 

900

 

Stock-based compensation expense - R&D

 

11,786

 

 

12,260

 

 

10,069

 

 

44,154

 

 

37,483

 

Stock-based compensation expense - SG&A

 

4,977

 

 

5,328

 

 

4,364

 

 

21,214

 

 

18,379

 

Restructuring costs

 

-

 

 

-

 

 

-

 

 

-

 

 

352

 

Acquisition-related costs

 

3,164

 

 

3,155

 

 

-

 

 

12,153

 

 

-

 

Non-GAAP Operating Income

$

135,935

 

$

174,245

 

$

42,395

 

$

471,900

 

$

306,288

 

Non-GAAP Operating Profit

 

27.7

%

 

31.8

%

 

14.4

%

 

26.5

%

 

22.4

%

 
Operating Expense Reconciliation
GAAP Operating Expenses

$

150,864

 

$

145,348

 

$

123,415

 

$

557,303

 

$

470,119

 

Amortization of acquisition intangibles

 

(7,882

)

 

(9,083

)

 

(2,998

)

 

(27,017

)

 

(11,992

)

Stock-based compensation expense - R&D

 

(11,786

)

 

(12,260

)

 

(10,069

)

 

(44,154

)

 

(37,483

)

Stock-based compensation expense - SG&A

 

(4,977

)

 

(5,328

)

 

(4,364

)

 

(21,214

)

 

(18,379

)

Restructuring costs

 

-

 

 

-

 

 

-

 

 

-

 

 

(352

)

Acquisition-related costs

 

(3,164

)

 

(3,155

)

 

-

 

 

(8,692

)

 

-

 

Non-GAAP Operating Expenses

$

123,055

 

$

115,522

 

$

105,984

 

$

456,226

 

$

401,913

 

 
Gross Margin/Profit Reconciliation
GAAP Gross Profit

$

258,729

 

$

289,522

 

$

148,119

 

$

923,641

 

$

707,301

 

GAAP Gross Margin

 

52.8

%

 

52.8

%

 

50.5

%

 

51.8

%

 

51.7

%

Acquisition-related costs

 

-

 

 

-

 

 

-

 

 

3,461

 

 

-

 

Stock-based compensation expense - COGS

 

261

 

 

245

 

 

260

 

 

1,024

 

 

900

 

Non-GAAP Gross Profit

$

258,990

 

$

289,767

 

$

148,379

 

$

928,126

 

$

708,201

 

Non-GAAP Gross Margin

 

52.9

%

 

52.8

%

 

50.5

%

 

52.1

%

 

51.7

%

 
Effective Tax Rate Reconciliation
GAAP Tax Expense

$

11,528

 

$

16,373

 

$

2,639

 

$

42,308

 

$

27,902

 

GAAP Effective Tax Rate

 

10.7

%

 

11.4

%

 

9.5

%

 

11.5

%

 

11.4

%

Adjustments to income taxes

 

6,778

 

 

7,903

 

 

3,251

 

 

23,675

 

 

11,423

 

Non-GAAP Tax Expense

$

18,306

 

$

24,276

 

$

5,890

 

$

65,983

 

$

39,325

 

Non-GAAP Effective Tax Rate

 

13.5

%

 

13.9

%

 

12.9

%

 

13.9

%

 

12.5

%

 
Tax Impact to EPS Reconciliation
GAAP Tax Expense

$

0.20

 

$

0.28

 

$

0.04

 

$

0.72

 

$

0.46

 

Adjustments to income taxes

 

0.11

 

 

0.13

 

 

0.05

 

 

0.40

 

 

0.19

 

Non-GAAP Tax Expense

$

0.31

 

$

0.41

 

$

0.09

 

$

1.12

 

$

0.65

 

 
 
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
Mar. 26, Dec. 25, Mar. 27,

2022

2021

2021

ASSETS
Current assets
Cash and cash equivalents

$

369,814

 

$

195,121

 

$

442,164

 

Marketable securities

 

10,601

 

 

3,719

 

 

55,697

 

Accounts receivable, net

 

240,264

 

 

326,131

 

 

108,712

 

Inventories

 

138,436

 

 

148,525

 

 

173,263

 

Other current assets

 

80,900

 

 

90,025

 

 

62,683

 

Total current Assets

 

840,015

 

 

763,521

 

 

842,519

 

 
Long-term marketable securities

 

63,749

 

 

72,118

 

 

312,759

 

Right-of-use lease assets

 

171,003

 

 

173,054

 

 

133,548

 

Property and equipment, net

 

157,077

 

 

157,186

 

 

154,942

 

Intangibles, net

 

158,145

 

 

165,581

 

 

22,031

 

Goodwill

 

435,791

 

 

437,783

 

 

287,518

 

Deferred tax asset

 

11,068

 

 

7,203

 

 

9,977

 

Long-term prepaid wafers

 

195,000

 

 

195,000

 

 

-

 

Other assets

 

91,552

 

 

96,671

 

 

67,320

 

Total assets

$

2,123,400

 

$

2,068,117

 

$

1,830,614

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable

$

115,417

 

$

110,250

 

$

102,744

 

Accrued salaries and benefits

 

65,261

 

 

43,044

 

 

54,849

 

Lease liability

 

14,680

 

 

14,653

 

 

14,573

 

Acquisition-related liabilities

 

30,964

 

 

30,964

 

 

-

 

Other accrued liabilities

 

38,461

 

 

40,603

 

 

41,444

 

Total current liabilities

 

264,783

 

 

239,514

 

 

213,610

 

 
Non-current lease liability

 

163,162

 

 

164,896

 

 

127,883

 

Non-current income taxes

 

73,383

 

 

77,683

 

 

64,020

 

Long-term acquisition-related liabilities

 

8,692

 

 

5,528

 

 

-

 

Other long-term liabilities

 

13,563

 

 

17,749

 

 

36,096

 

 
Stockholders' equity:
Capital stock

 

1,578,427

 

 

1,556,746

 

 

1,498,819

 

Accumulated earnings (deficit)

 

23,435

 

 

6,416

 

 

(112,689

)

Accumulated other comprehensive income (loss)

 

(2,045

)

 

(415

)

 

2,875

 

Total stockholders' equity

 

1,599,817

 

 

1,562,747

 

 

1,389,005

 

Total liabilities and stockholders' equity

$

2,123,400

 

$

2,068,117

 

$

1,830,614

 

 
Prepared in accordance with Generally Accepted Accounting Principles
 
 
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(unaudited)
(in thousands)
 
Three Months Ended Twelve Months Ended
 
Mar. 26, Mar. 26,

2022

2022

Q4'22 Q4'22
Cash flows from operating activities:
Net income

$

96,414

 

$

326,355

 

Adjustments to net cash provided by operating activities:
Depreciation and amortization

 

16,905

 

 

62,061

 

Stock-based compensation expense

 

17,024

 

 

66,392

 

Deferred income taxes

 

(6,759

)

 

(15,002

)

Loss on retirement or write-off of long-lived assets

 

115

 

 

642

 

Other non-cash (gains) / charges

 

88

 

 

370

 

Net change in operating assets and liabilities:
Accounts receivable, net

 

85,868

 

 

(124,826

)

Inventories

 

10,089

 

 

42,502

 

Long-term prepaid wafers

 

-

 

 

(195,000

)

Other assets

 

8,576

 

 

(92,584

)

Accounts payable and other accrued liabilities

 

27,711

 

 

14,991

 

Income taxes payable

 

(963

)

 

(804

)

Acquisition-related liabilities

 

3,163

 

 

39,656

 

Net cash provided by operating activities

 

258,231

 

 

124,753

 

Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities

 

4,963

 

 

371,545

 

Purchases of available-for-sale marketable securities

 

(5,307

)

 

(83,023

)

Purchases of property, equipment and software

 

(8,048

)

 

(26,139

)

Investments in technology

 

(408

)

 

(3,871

)

Acquisition of business, net of cash obtained

 

-

 

 

(276,884

)

Net cash used in investing activities

 

(8,800

)

 

(18,372

)

Cash flows from financing activities:
Debt issuance costs

 

-

 

 

(1,718

)

Issuance of common stock, net of shares withheld for taxes

 

4,658

 

 

13,220

 

Repurchase of stock to satisfy employee tax withholding obligations

 

(4,397

)

 

(22,732

)

Repurchase and retirement of common stock

 

(74,999

)

 

(167,501

)

Net cash used in financing activities

 

(74,738

)

 

(178,731

)

Net increase (decrease) in cash and cash equivalents

 

174,693

 

 

(72,350

)

Cash and cash equivalents at beginning of period

 

195,121

 

 

442,164

 

Cash and cash equivalents at end of period

$

369,814

 

$

369,814

 

 
Prepared in accordance with Generally Accepted Accounting Principles
 
Reconciliation of GAAP to Non-GAAP Financial Measure
 
Free Cash Flow (in thousands)
Net cash provided by operating activities

$

258,231

 

$

124,753

 

Purchases of property, equipment and software

 

(8,048

)

 

(26,139

)

Investments in technology

 

(408

)

 

(3,871

)

Free Cash Flow

$

249,775

 

$

94,743

 

 

 

Investor Contact:
Chelsea Heffernan
Vice President, Investor Relations
Cirrus Logic, Inc.
(512) 851-4125
Investor@cirrus.com

 

Source: Cirrus Logic, Inc.

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