NASDAQ: CRUS

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May 21, 2024 04:00 PM Pricing delayed 20 minutes

Cirrus Logic Reports Fiscal First Quarter Revenue of $317.0 Million

Aug 03, 2023

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 first quarter fiscal year 2024, which ended June 24, 2023, as well as the company’s current business outlook.

“Cirrus Logic reported revenue for the June quarter towards the top end of guidance as we benefited from higher-than-expected unit volumes,” said John Forsyth, Cirrus Logic president and chief executive officer. “During the quarter, we taped out our next-generation boosted amplifier, completed product validation on our first 22-nanometer smart codec, and began ramping production of our latest camera controller. We also made progress on product and end-market diversification as we gained momentum in laptops and began selectively refreshing certain core product lines that are expected to drive expansion outside of smartphones.”

Reported Financial Results – First Quarter FY24

  • Revenue of $317.0 million;
  • GAAP and non-GAAP gross margin of 50.3 percent and 50.4 percent;
  • GAAP operating expenses of $141.6 million and non-GAAP operating expenses of $113.8 million; and
  • GAAP earnings per share of $0.28 and non-GAAP earnings per share of $0.67.

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

Business Outlook – Second Quarter FY24

  • Revenue is expected to range between $430 million and $490 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 $141 million and $147 million, including approximately $22 million in stock-based compensation expense, $2 million in amortization of acquired intangibles, and $3 million in acquisition-related costs and restructuring charges associated with our recently announced workforce reduction.

Cirrus Logic will host a live Q&A session at 6 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. A replay of the webcast can be accessed on the Cirrus Logic website approximately two hours following its completion or by calling (647) 362-9199, or toll-free at (800) 770-2030 (Access Code: 95424).

Cirrus Logic to Present at Upcoming Conference

Cirrus Logic Chief Financial Officer Venk Nathamuni and Vice President of Mixed-Signal Products Carl Alberty will present at the KeyBanc Technology Leadership Forum in Vail, Colorado on August 7, 2023 at 2:30 p.m. MDT. A live webcast and replay of the presentation will be available on the company's investor relations website.

About 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, diluted share count, operating income and profit, operating expenses, gross margin and profit, tax expense, tax expense impact on earnings per share, effective tax rate, free cash flow, and free cash flow margin. 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 make progress with product and end-market diversification and refresh certain core product lines that are expected to drive expansion outside of smartphones; and our estimates for the second quarter fiscal year 2024 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 and restructuring charges associated with our recently announced workforce reduction. 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: our ability to develop and ramp new products in a timely manner, including our next-generation boosted amplifier, our first 22-nm smart codec, and latest camera controller; our ability to commercialize new research and development efforts into new markets outside of smartphones; and the level and timing of orders and shipments during the second quarter of fiscal year 2024, 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 25, 2023 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

(in thousands, except per share data; unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

Jun. 24,

 

Mar. 25,

 

Jun. 25,

 

2023

 

2023

 

2022

 

Q1'24

 

Q4'23

 

Q1'23

Audio

$

195,806

 

 

$

232,402

 

 

$

254,496

 

High-Performance Mixed-Signal

 

121,210

 

 

 

140,420

 

 

 

139,143

 

Net sales

 

317,016

 

 

 

372,822

 

 

 

393,639

 

Cost of sales

 

157,629

 

 

 

186,468

 

 

 

191,005

 

Gross profit

 

159,387

 

 

 

186,354

 

 

 

202,634

 

Gross margin

 

50.3

%

 

 

50.0

%

 

 

51.5

%

 

 

 

 

 

 

Research and development

 

106,215

 

 

 

115,162

 

 

 

109,716

 

Selling, general and administrative

 

35,379

 

 

 

37,642

 

 

 

38,642

 

Lease impairments and restructuring

 

 

 

 

10,632

 

 

 

 

Intangibles impairment

 

 

 

 

85,760

 

 

 

 

Total operating expenses

 

141,594

 

 

 

249,196

 

 

 

148,358

 

 

 

 

 

 

 

Income (loss) from operations

 

17,793

 

 

 

(62,842

)

 

 

54,276

 

 

 

 

 

 

 

Interest income (expense)

 

4,600

 

 

 

4,720

 

 

 

305

 

Other income (expense)

 

377

 

 

 

(464

)

 

 

506

 

Income (loss) before income taxes

 

22,770

 

 

 

(58,586

)

 

 

55,087

 

Provision for income taxes

 

7,170

 

 

 

(4,917

)

 

 

15,380

 

Net income (loss)

$

15,600

 

 

$

(53,669

)

 

$

39,707

 

 

 

 

 

 

 

Basic earnings (loss) per share

$

0.28

 

 

$

(0.97

)

 

$

0.71

 

Diluted earnings (loss) per share:

$

0.28

 

 

$

(0.97

)

 

$

0.69

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

Basic

 

54,862

 

 

 

55,219

 

 

 

56,277

 

Diluted

 

56,631

 

 

 

55,219

 

 

 

57,804

 

 

 

 

 

 

 

Prepared in accordance with Generally Accepted Accounting Principles

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION

(in thousands, except per share data; unaudited)

(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

 

Jun. 24,

 

Mar. 25,

 

Jun. 25,

 

2023

 

2023

 

2022

Net Income (Loss) Reconciliation

Q1'24

 

Q4'23

 

Q1'23

GAAP Net Income (Loss)

$

15,600

 

 

$

(53,669

)

 

$

39,707

 

Amortization of acquisition intangibles

 

2,170

 

 

 

7,657

 

 

 

7,835

 

Stock-based compensation expense

 

22,715

 

 

 

22,533

 

 

 

18,138

 

Lease impairments and restructuring

 

 

 

 

10,632

 

 

 

 

Intangibles impairment

 

 

 

 

85,760

 

 

 

 

Acquisition-related costs

 

3,166

 

 

 

3,166

 

 

 

3,164

 

Adjustment to income taxes

 

(5,628

)

 

 

(23,461

)

 

 

(4,300

)

Non-GAAP Net Income

$

38,023

 

 

$

52,618

 

 

$

64,544

 

 

 

 

 

 

 

Earnings (Loss) Per Share Reconciliation

 

 

 

 

 

GAAP Diluted earnings (loss) per share

$

0.28

 

 

$

(0.97

)

 

$

0.69

 

Effect of Amortization of acquisition intangibles

 

0.04

 

 

 

0.14

 

 

 

0.14

 

Effect of Stock-based compensation expense

 

0.40

 

 

 

0.40

 

 

 

0.31

 

Effect of Lease impairments and restructuring

 

 

 

 

0.19

 

 

 

 

Effect of Intangibles impairment

 

 

 

 

1.51

 

 

 

 

Effect of Acquisition-related costs

 

0.05

 

 

 

0.06

 

 

 

0.05

 

Effect of Adjustment to income taxes

 

(0.10

)

 

 

(0.41

)

 

 

(0.07

)

Non-GAAP Diluted earnings per share

$

0.67

 

 

$

0.92

 

 

$

1.12

 

 

 

 

 

 

 

Diluted Shares Reconciliation

 

 

 

 

 

GAAP Diluted shares

 

56,631

 

 

 

55,219

 

 

 

57,804

 

Effect of weighted dilutive shares

 

 

 

 

1,821

 

 

 

 

Non-GAAP Diluted shares

 

56,631

 

 

 

57,040

 

 

 

57,804

 

 

 

 

 

 

 

Operating Income (Loss) Reconciliation

 

 

 

 

 

GAAP Operating Income (Loss)

$

17,793

 

 

$

(62,842

)

 

$

54,276

 

GAAP Operating Profit (Loss)

 

5.6

%

 

 

(16.9

)%

 

 

13.8

%

Amortization of acquisition intangibles

 

2,170

 

 

 

7,657

 

 

 

7,835

 

Stock-based compensation expense - COGS

 

285

 

 

 

372

 

 

 

277

 

Stock-based compensation expense - R&D

 

15,952

 

 

 

15,782

 

 

 

12,592

 

Stock-based compensation expense - SG&A

 

6,478

 

 

 

6,379

 

 

 

5,269

 

Lease impairments and restructuring

 

 

 

 

10,632

 

 

 

 

Intangibles impairment

 

 

 

 

85,760

 

 

 

 

Acquisition-related costs

 

3,166

 

 

 

3,166

 

 

 

3,164

 

Non-GAAP Operating Income

$

45,844

 

 

$

66,906

 

 

$

83,413

 

Non-GAAP Operating Profit

 

14.5

%

 

 

17.9

%

 

 

21.2

%

 

 

 

 

 

 

Operating Expense Reconciliation

 

 

 

 

 

GAAP Operating Expenses

$

141,594

 

 

$

249,196

 

 

$

148,358

 

Amortization of acquisition intangibles

 

(2,170

)

 

 

(7,657

)

 

 

(7,835

)

Stock-based compensation expense - R&D

 

(15,952

)

 

 

(15,782

)

 

 

(12,592

)

Stock-based compensation expense - SG&A

 

(6,478

)

 

 

(6,379

)

 

 

(5,269

)

Lease impairments and restructuring

 

 

 

 

(10,632

)

 

 

 

Intangibles impairment

 

 

 

 

(85,760

)

 

 

 

Acquisition-related costs

 

(3,166

)

 

 

(3,166

)

 

 

(3,164

)

Non-GAAP Operating Expenses

$

113,828

 

 

$

119,820

 

 

$

119,498

 

 

 

 

 

 

 

Gross Margin/Profit Reconciliation

 

 

 

 

 

GAAP Gross Profit

$

159,387

 

 

$

186,354

 

 

$

202,634

 

GAAP Gross Margin

 

50.3

%

 

 

50.0

%

 

 

51.5

%

Stock-based compensation expense - COGS

 

285

 

 

 

372

 

 

 

277

 

Non-GAAP Gross Profit

$

159,672

 

 

$

186,726

 

 

$

202,911

 

Non-GAAP Gross Margin

 

50.4

%

 

 

50.1

%

 

 

51.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Jun. 24,

 

Mar. 25,

 

Jun. 25,

 

2023

 

2023

 

2022

Effective Tax Rate Reconciliation

Q1'24

 

Q4'23

 

Q1'23

GAAP Tax Expense (Benefit)

$

7,170

 

 

$

(4,917

)

 

$

15,380

 

GAAP Effective Tax Rate

 

31.5

%

 

 

8.4

%

 

 

27.9

%

Adjustments to income taxes

 

5,628

 

 

 

23,461

 

 

 

4,300

 

Non-GAAP Tax Expense

$

12,798

 

 

$

18,544

 

 

$

19,680

 

Non-GAAP Effective Tax Rate

 

25.2

%

 

 

26.1

%

 

 

23.4

%

 

 

 

 

 

 

Tax Impact to EPS Reconciliation

 

 

 

 

 

GAAP Tax Expense (Benefit)

$

0.13

 

 

$

(0.09

)

 

$

0.27

 

Adjustments to income taxes

 

0.10

 

 

 

0.41

 

 

 

0.07

 

Non-GAAP Tax Expense

$

0.23

 

 

$

0.32

 

 

$

0.34

 

CONSOLIDATED CONDENSED BALANCE SHEET

(in thousands; unaudited)

 

 

 

 

 

 

 

 

 

Jun. 24,

 

Mar. 25,

 

Jun. 25,

 

 

2023

 

2023

 

2022

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

352,346

 

 

$

445,784

 

 

$

379,335

 

Marketable securities

 

 

35,765

 

 

 

34,978

 

 

 

18,397

 

Accounts receivable, net

 

 

186,033

 

 

 

150,473

 

 

 

206,272

 

Inventories

 

 

300,956

 

 

 

233,450

 

 

 

174,370

 

Prepaid wafers

 

 

84,739

 

 

 

60,638

 

 

 

 

Other current assets

 

 

88,829

 

 

 

92,533

 

 

 

82,634

 

Total current Assets

 

 

1,048,668

 

 

 

1,017,856

 

 

 

861,008

 

 

 

 

 

 

 

 

Long-term marketable securities

 

 

38,029

 

 

 

36,509

 

 

 

55,965

 

Right-of-use lease assets

 

 

125,538

 

 

 

128,145

 

 

 

168,680

 

Property and equipment, net

 

 

167,238

 

 

 

162,972

 

 

 

157,165

 

Intangibles, net

 

 

36,447

 

 

 

38,876

 

 

 

149,984

 

Goodwill

 

 

435,936

 

 

 

435,936

 

 

 

435,936

 

Deferred tax asset

 

 

44,991

 

 

 

35,580

 

 

 

16,928

 

Long-term prepaid wafers

 

 

110,262

 

 

 

134,363

 

 

 

195,000

 

Other assets

 

 

49,483

 

 

 

73,729

 

 

 

65,236

 

Total assets

 

$

2,056,592

 

 

$

2,063,966

 

 

$

2,105,902

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

75,941

 

 

$

81,462

 

 

$

121,451

 

Accrued salaries and benefits

 

 

36,465

 

 

 

50,606

 

 

 

41,026

 

Lease liability

 

 

19,903

 

 

 

18,442

 

 

 

13,988

 

Acquisition-related liabilities

 

 

24,527

 

 

 

21,361

 

 

 

30,964

 

Other accrued liabilities

 

 

46,018

 

 

 

44,469

 

 

 

45,167

 

Total current liabilities

 

 

202,854

 

 

 

216,340

 

 

 

252,596

 

 

 

 

 

 

 

 

Non-current lease liability

 

 

125,071

 

 

 

122,631

 

 

 

159,344

 

Non-current income taxes

 

 

59,587

 

 

 

59,013

 

 

 

73,735

 

Long-term acquisition-related liabilities

 

 

 

 

 

 

 

 

11,856

 

Other long-term liabilities

 

 

12,286

 

 

 

7,700

 

 

 

9,184

 

Total long-term liabilities

 

 

196,944

 

 

 

189,344

 

 

 

254,119

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Capital stock

 

 

1,693,420

 

 

 

1,670,141

 

 

 

1,596,684

 

Accumulated earnings (deficit)

 

 

(33,621

)

 

 

(9,320

)

 

 

5,894

 

Accumulated other comprehensive loss

 

 

(3,005

)

 

 

(2,539

)

 

 

(3,391

)

Total stockholders' equity

 

 

1,656,794

 

 

 

1,658,282

 

 

 

1,599,187

 

Total liabilities and stockholders' equity

 

$

2,056,592

 

 

$

2,063,966

 

 

$

2,105,902

 

 

 

 

 

 

 

 

Prepared in accordance with Generally Accepted Accounting Principles

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(in thousands; unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

Jun. 24,

 

Jun. 25,

 

 

2023

 

2022

 

 

Q1'24

 

Q1'23

Cash flows from operating activities:

 

 

 

 

Net income

 

$

15,600

 

 

$

39,707

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

Depreciation and amortization

 

 

11,941

 

 

 

16,515

 

Stock-based compensation expense

 

 

22,715

 

 

 

18,138

 

Deferred income taxes

 

 

(9,411

)

 

 

(5,860

)

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

 

 

6

 

 

 

292

 

Other non-cash charges

 

 

1,334

 

 

 

99

 

Net change in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

 

(35,560

)

 

 

33,992

 

Inventories

 

 

(67,506

)

 

 

(35,934

)

Other assets

 

 

8,101

 

 

 

549

 

Accounts payable and other accrued liabilities

 

 

(10,278

)

 

 

(20,327

)

Income taxes payable

 

 

20,079

 

 

 

24,030

 

Acquisition-related liabilities

 

 

3,166

 

 

 

3,164

 

Net cash provided by (used in) operating activities

 

 

(39,813

)

 

 

74,365

 

Cash flows from investing activities:

 

 

 

 

Maturities and sales of available-for-sale marketable securities

 

 

11,048

 

 

 

4,694

 

Purchases of available-for-sale marketable securities

 

 

(13,372

)

 

 

(5,186

)

Purchases of property, equipment and software

 

 

(12,310

)

 

 

(6,776

)

Investments in technology

 

 

 

 

 

(448

)

Net cash used in investing activities

 

 

(14,634

)

 

 

(7,716

)

Cash flows from financing activities:

 

 

 

 

Issuance of common stock, net of shares withheld for taxes

 

 

560

 

 

 

120

 

Repurchase of stock to satisfy employee tax withholding obligations

 

 

(1,047

)

 

 

(866

)

Repurchase and retirement of common stock

 

 

(38,504

)

 

 

(56,382

)

Net cash used in financing activities

 

 

(38,991

)

 

 

(57,128

)

Net increase (decrease) in cash and cash equivalents

 

 

(93,438

)

 

 

9,521

 

Cash and cash equivalents at beginning of period

 

 

445,784

 

 

 

369,814

 

Cash and cash equivalents at end of period

 

$

352,346

 

 

$

379,335

 

 

 

 

 

 

Prepared in accordance with Generally Accepted Accounting Principles

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION

(in thousands; unaudited)

 

 

 

 

 

 

 

 

 

 

 

Free cash flow, a non-GAAP financial measure, is GAAP cash flow from operations (or cash provided by operating activities) less capital expenditures. Capital expenditures include purchases of property, equipment and software as well as investments in technology, as presented within our GAAP Consolidated Condensed Statement of Cash Flows. Free cash flow margin represents free cash flow divided by revenue.

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

Jun. 24,

 

Jun. 24,

 

Mar. 25,

 

Dec. 24,

 

Sep. 24,

 

 

2023

 

2023

 

2023

 

2022

 

2022

 

 

Q1'24

 

Q1'24

 

Q4'23

 

Q3'23

 

Q2'23

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities (GAAP)

 

$

225,390

 

 

$

(39,813

)

 

$

48,266

 

 

$

180,948

 

 

$

35,989

 

Capital expenditures

 

 

(41,800

)

 

 

(12,310

)

 

 

(11,635

)

 

 

(7,608

)

 

 

(10,247

)

Free Cash Flow (Non-GAAP)

 

$

183,590

 

 

$

(52,123

)

 

$

36,631

 

 

$

173,340

 

 

$

25,742

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Operations as a Percentage of Revenue (GAAP)

 

 

12

%

 

 

(13

)%

 

 

13

%

 

 

31

%

 

 

7

%

Capital Expenditures as a Percentage of Revenue (GAAP)

 

 

2

%

 

 

4

%

 

 

3

%

 

 

1

%

 

 

2

%

Free Cash Flow Margin (Non-GAAP)

 

 

10

%

 

 

(16

)%

 

 

10

%

 

 

29

%

 

 

5

%

 

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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