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Cirrus Logic Reports Q2 FY20 Revenue of $388.9 Million

October 30, 2019

AUSTIN, Texas--(BUSINESS WIRE)--Oct 30, 2019--

Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-performance, low-power ICs for audio, voice and other signal-processing applications, today posted on its website at http://investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the second quarter fiscal year 2020, which ended Sept. 28, 2019, as well as the company’s current business outlook.

“Cirrus Logic reported revenue for the September quarter significantly above the high end of guidance as we experienced stronger-than-anticipated demand for certain components,” said Jason Rhode, president and chief executive officer. “The company continues to experience increased demand for products that solve complex analog and digital signal-processing challenges. Leveraging solid relationships with many of the leaders in the markets we target, a robust product portfolio and meaningful investments in innovative technologies, we are excited about our opportunities for growth in the coming years.”

Reported Financial Results – Second Quarter FY20

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

Business Outlook – Third Quarter FY20

Cirrus Logic will host a live Q&A session at 5:30 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: 6988221).

Cirrus Logic, Inc.

Cirrus Logic is a leader in high-performance, low-power ICs for audio, voice and other signal-processing applications. Cirrus Logic’s products span the entire audio signal chain, from capture to playback, providing innovative products for the world’s top smartphones, tablets, digital headsets, wearables and emerging smart home 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, Cirrus 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 and effective tax rate 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 future growth opportunities, along with estimates for the third quarter fiscal year 2020 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 level of orders and shipments during the third quarter of fiscal year 2020, 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 undertake no 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

Six Months Ended

Sep. 28,

 

Jun. 29,

 

Sep. 29,

 

Sep. 28,

 

Sep. 29,

2019

 

2019

 

2018

 

2019

 

2018

Q2'20

 

Q1'20

 

Q2'19

 

Q2'20

 

Q2'19

Portable products

$

349,379

 

$

202,938

 

$

324,049

 

$

552,317

 

$

536,309

 

Non-portable and other products

 

39,533

 

 

35,315

 

 

42,256

 

 

74,848

 

 

84,479

 

Net sales

 

388,912

 

 

238,253

 

 

366,305

 

 

627,165

 

 

620,788

 

Cost of sales

 

180,979

 

 

115,759

 

 

181,186

 

 

296,738

 

 

311,110

 

Gross profit

 

207,933

 

 

122,494

 

 

185,119

 

 

330,427

 

 

309,678

 

Gross margin

 

53.5

%

 

51.4

%

 

50.5

%

 

52.7

%

 

49.9

%

 

Research and development

 

88,239

 

 

88,830

 

 

96,381

 

 

177,069

 

 

194,313

 

Selling, general and administrative

 

33,018

 

 

29,520

 

 

33,160

 

 

62,538

 

 

65,944

 

Total operating expenses

 

121,257

 

 

118,350

 

 

129,541

 

 

239,607

 

 

260,257

 

 

Income from operations

 

86,676

 

 

4,144

 

 

55,578

 

 

90,820

 

 

49,421

 

 

Interest income

 

2,250

 

 

2,285

 

 

1,525

 

 

4,535

 

 

2,972

 

Other (expense) income

 

(568

)

 

(378

)

 

(378

)

 

(946

)

 

(168

)

Income before income taxes

 

88,358

 

 

6,051

 

 

56,725

 

 

94,409

 

 

52,225

 

Provision (benefit) for income taxes

 

12,148

 

 

1,433

 

 

(1,448

)

 

13,581

 

 

(1,676

)

Net income

$

76,210

 

$

4,618

 

$

58,173

 

$

80,828

 

$

53,901

 

 

Basic earnings per share:

$

1.31

 

$

0.08

 

$

0.96

 

$

1.39

 

$

0.88

 

Diluted earnings per share:

$

1.27

 

$

0.08

 

$

0.93

 

$

1.34

 

$

0.86

 

 

Weighted average number of shares:

Basic

 

58,011

 

 

58,540

 

 

60,472

 

 

58,276

 

 

60,967

 

Diluted

 

60,213

 

 

60,258

 

 

62,431

 

 

60,260

 

 

62,810

 

 

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

 

Six Months Ended

Sep. 28,

 

Jun. 29,

 

Sep. 29,

 

Sep. 28,

 

Sep. 29,

2019

 

2019

 

2018

 

2019

 

2018

Net Income Reconciliation

Q2'20

 

Q1'20

 

Q2'19

 

Q2'20

 

Q2'19

GAAP Net Income

$

76,210

 

$

4,618

 

$

58,173

 

$

80,828

 

$

53,901

 

Amortization of acquisition intangibles

 

6,722

 

 

7,228

 

 

12,867

 

 

13,950

 

 

26,133

 

Stock-based compensation expense

 

13,759

 

 

11,786

 

 

13,131

 

 

25,545

 

 

25,925

 

Adjustment to income taxes

 

(3,417

)

 

(2,803

)

 

(17,054

)

 

(6,220

)

 

(20,980

)

Non-GAAP Net Income

$

93,274

 

$

20,829

 

$

67,117

 

$

114,103

 

$

84,979

 

 

Earnings Per Share Reconciliation

GAAP Diluted earnings per share

$

1.27

 

$

0.08

 

$

0.93

 

$

1.34

 

$

0.86

 

Effect of Amortization of acquisition intangibles

 

0.11

 

 

0.12

 

 

0.21

 

 

0.23

 

 

0.42

 

Effect of Stock-based compensation expense

 

0.23

 

 

0.20

 

 

0.21

 

 

0.42

 

 

0.41

 

Effect of Adjustment to income taxes

 

(0.06

)

 

(0.05

)

 

(0.27

)

 

(0.10

)

 

(0.34

)

Non-GAAP Diluted earnings per share

$

1.55

 

$

0.35

 

$

1.08

 

$

1.89

 

$

1.35

 

 

Operating Income Reconciliation

GAAP Operating Income

$

86,676

 

$

4,144

 

$

55,578

 

$

90,820

 

$

49,421

 

GAAP Operating Profit

 

22

%

 

2

%

 

15

%

 

14

%

 

8

%

Amortization of acquisition intangibles

 

6,722

 

 

7,228

 

 

12,867

 

 

13,950

 

 

26,133

 

Stock-based compensation expense - COGS

 

254

 

 

241

 

 

170

 

 

495

 

 

369

 

Stock-based compensation expense - R&D

 

7,830

 

 

7,240

 

 

6,834

 

 

15,070

 

 

14,084

 

Stock-based compensation expense - SG&A

 

5,675

 

 

4,305

 

 

6,127

 

 

9,980

 

 

11,472

 

Non-GAAP Operating Income

$

107,157

 

$

23,158

 

$

81,576

 

$

130,315

 

$

101,479

 

Non-GAAP Operating Profit

 

28

%

 

10

%

 

22

%

 

21

%

 

16

%

 

Operating Expense Reconciliation

GAAP Operating Expenses

$

121,257

 

$

118,350

 

$

129,541

 

$

239,607

 

$

260,257

 

Amortization of acquisition intangibles

 

(6,722

)

 

(7,228

)

 

(12,867

)

 

(13,950

)

 

(26,133

)

Stock-based compensation expense - R&D

 

(7,830

)

 

(7,240

)

 

(6,834

)

 

(15,070

)

 

(14,084

)

Stock-based compensation expense - SG&A

 

(5,675

)

 

(4,305

)

 

(6,127

)

 

(9,980

)

 

(11,472

)

Non-GAAP Operating Expenses

$

101,030

 

$

99,577

 

$

103,713

 

$

200,607

 

$

208,568

 

 

Gross Margin/Profit Reconciliation

GAAP Gross Profit

$

207,933

 

$

122,494

 

$

185,119

 

$

330,427

 

$

309,678

 

GAAP Gross Margin

 

53.5

%

 

51.4

%

 

50.5

%

 

52.7

%

 

49.9

%

Stock-based compensation expense - COGS

 

254

 

 

241

 

 

170

 

 

495

 

 

369

 

Non-GAAP Gross Profit

$

208,187

 

$

122,735

 

$

185,289

 

$

330,922

 

$

310,047

 

Non-GAAP Gross Margin

 

53.5

%

 

51.5

%

 

50.6

%

 

52.8

%

 

49.9

%

 

Effective Tax Rate Reconciliation

GAAP Tax Expense (Benefit)

$

12,148

 

$

1,433

 

$

(1,448

)

$

13,581

 

$

(1,676

)

GAAP Effective Tax Rate

 

13.7

%

 

23.7

%

 

-2.6

%

 

14.4

%

 

-3.2

%

Adjustments to income taxes

 

3,417

 

 

2,803

 

 

17,054

 

 

6,220

 

 

20,980

 

Non-GAAP Tax Expense

$

15,565

 

$

4,236

 

$

15,606

 

$

19,801

 

$

19,304

 

Non-GAAP Effective Tax Rate

 

14.3

%

 

16.9

%

 

18.9

%

 

14.8

%

 

18.5

%

 

Tax Impact to EPS Reconciliation

GAAP Tax Expense

$

0.20

 

$

0.02

 

$

(0.02

)

$

0.23

 

$

(0.03

)

Adjustments to income taxes

 

0.06

 

 

0.05

 

 

0.27

 

 

0.10

 

 

0.34

 

Non-GAAP Tax Expense

$

0.26

 

$

0.07

 

$

0.25

 

$

0.33

 

$

0.31

 

 

CONSOLIDATED CONDENSED BALANCE SHEET

unaudited; in thousands

  

Sep. 28,

 

Mar. 30,

 

Sep. 29,

2019

 

2019

 

2018

ASSETS
Current assets 
Cash and cash equivalents  

$

221,937

 

$

216,172

 

$

195,857

 

Marketable securities 

 

22,563

 

 

70,183

 

 

48,701

 

Accounts receivable, net  

 

217,962

 

 

120,656

 

 

206,789

 

Inventories 

 

144,829

 

 

164,733

 

 

142,315

 

Other current assets 

 

44,729

 

 

53,239

 

 

48,910

 

Total current Assets  

 

652,020

 

 

624,983

 

 

642,572

 

 
Long-term marketable securities  

 

238,741

 

 

158,968

 

 

151,207

 

Right-of-use lease assets  

 

142,834

 

 

-

 

 

-

 

Property and equipment, net  

 

178,420

 

 

186,185

 

 

193,218

 

Intangibles, net 

 

54,780

 

 

67,847

 

 

86,769

 

Goodwill

 

285,321

 

 

286,241

 

 

287,368

 

Deferred tax asset 

 

9,026

 

 

8,727

 

 

13,733

 

Other assets 

 

22,489

 

 

19,689

 

 

29,527

 

Total assets 

$

1,583,631

 

$

1,352,640

 

$

1,404,394

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities 
Accounts payable 

$

109,374

 

$

48,398

 

$

88,473

 

Accrued salaries and benefits  

 

34,870

 

 

29,289

 

 

30,154

 

Other accrued liabilities  

 

48,552

 

 

37,853

 

 

37,275

 

Total current liabilities  

 

192,796

 

 

115,540

 

 

155,902

 

 
Non-current lease liability  

 

133,105

 

 

-

 

 

-

 

Non-current income taxes  

 

76,847

 

 

78,309

 

 

79,127

 

Other long-term liabilities  

 

2,258

 

 

18,551

 

 

26,390

 

 
Stockholders' equity: 
Capital stock 

 

1,392,650

 

 

1,363,736

 

 

1,338,586

 

Accumulated deficit 

 

(213,274

)

 

(222,430

)

 

(182,453

)

Accumulated other comprehensive loss  

 

(751

)

 

(1,066

)

 

(13,158

)

Total stockholders' equity  

 

1,178,625

 

 

1,140,240

 

 

1,142,975

 

Total liabilities and stockholders' equity  

$

1,583,631

 

$

1,352,640

 

$

1,404,394

 

 

 

Prepared in accordance with Generally Accepted Accounting Principles

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191030005701/en/

CONTACT: Thurman K. Case

Chief Financial Officer

Cirrus Logic, Inc.

(512) 851-4125

Investor.Relations@cirrus.com

KEYWORD: TEXAS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: TECHNOLOGY AUDIO/VIDEO HARDWARE

SOURCE: Cirrus Logic, Inc.

Copyright Business Wire 2019.

PUB: 10/30/2019 04:45 PM/DISC: 10/30/2019 04:45 PM

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