Cirrus Logic Reports March Quarter Revenue Up 87 Percent Year-Over-Year to $207 Million

June Quarter Guidance Reflects an Increase of More Than 50 Percent Year Over Year

AUSTIN, Texas--()--Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-precision analog and digital signal processing components, today posted on its investor relations website at http://investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the fourth quarter and full fiscal year 2013, which ended March 30, as well as the company’s current business outlook.

“FY13 was a tremendous year for Cirrus Logic. We experienced substantial growth in our revenue and operating profit, we significantly expanded our footprint in portable audio and we launched our new LED lighting products,” said Jason Rhode, president and chief executive officer. “We are aligned with the best customers around, and our team is actively engaged in new developments that are expected to drive our growth over time.”

Reported Financial Results – Fourth Quarter FY13

  • Revenue of $207 million;
  • Gross margin of 40.4 percent, which, as disclosed in our press release on April 16, included an inventory reserve of approximately $20.7 million that resulted in a gross margin decline of slightly more than 10 percent;
  • GAAP operating expenses of $50 million and non-GAAP operating expenses of $44 million; and
  • GAAP diluted earnings per share of $0.39 and non-GAAP diluted earnings per share of $0.59.

Reported Financial Results – Complete FY13

  • Revenue of $810 million;
  • Gross margin of 49 percent;
  • GAAP operating expenses of $194 million and non-GAAP operating expenses of $169 million; and
  • GAAP diluted earnings per share of $2.00 and non-GAAP diluted earnings per share of $3.24.

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

Business Outlook – First Quarter FY14

  • Revenue is expected to range between $150 million and $170 million;
  • Gross margin is expected to be between 50 percent and 52 percent; and
  • Combined R&D and SG&A expenses are expected to range between $51 million and $55 million, which includes approximately $6 million in share-based compensation.

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 (404) 537-3406, or toll-free at (855) 859-2056 (Access Code: 32769785).

Cirrus Logic, Inc.

Cirrus Logic develops high-precision, analog and mixed-signal integrated circuits for a broad range of innovative customers. Building on its diverse analog and signal-processing patent portfolio, Cirrus Logic delivers highly optimized products for a variety of audio and energy-related applications. The company operates from headquarters in Austin, Texas, with offices in Europe, Japan and Asia. More information about Cirrus Logic is available at www.cirrus.com.

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 operating expenses, net income, operating profit and diluted earnings per share. 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 estimates of first quarter fiscal year 2014 revenue, gross margin, combined research and development and selling, general and administrative expense levels, and share-based compensation expense. 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 first quarter of fiscal year 2014, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; and the risk factors listed in our Form 10-K for the year ended March 31, 2012, 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.

Cirrus Logic and Cirrus are trademarks of Cirrus Logic Inc.

CRUS-F

 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
                   
Three Months Ended Twelve Months Ended
Mar. 30, Dec. 29, Mar. 31, Mar. 30, Mar. 31,
2013 2012 2012 2013 2012
Q4'13 Q3'13 Q4'12 Q4'13 Q4'12
Audio products $ 196,098 $ 300,010 $ 90,522 $ 754,769 $ 350,743
Energy products   10,775   10,123     20,109     55,017     76,100  
Net revenue   206,873   310,133     110,631     809,786     426,843  
Cost of sales   123,259   152,083     48,284     414,595     196,402  
Gross Profit 83,614 158,050 62,347 395,191 230,441
 
Research and development 30,085 29,608 24,105 114,071 85,697
Selling, general and administrative 19,724 19,021 17,254 76,998 65,108
Restructuring and other costs - 3,539 - 3,539 -
Gain on sale of asset - (247 ) - (247 ) -
Provision for litigation expenses   -   -     100     -     100  
Total operating expenses   49,809   51,921     41,459     194,361     150,905  
 
Operating income 33,805 106,129 20,888 200,830 79,536
 
Interest income, net 106 76 139 440 517
Other income (expense), net   14   (31 )   45     (80 )   (70 )
Income before income taxes 33,925 106,174 21,072 201,190 79,983
Provision (benefit) for income taxes   7,565   38,312     (29,755 )   64,592     (8,000 )
Net income $ 26,360 $ 67,862   $ 50,827   $ 136,598   $ 87,983  
 
Basic earnings per share: $ 0.41 $ 1.04 $ 0.79 $ 2.12 $ 1.35
Diluted earnings per share: $ 0.39 $ 0.99 $ 0.75 $ 2.00 $ 1.29
 
Weighted average number of shares:
Basic 63,877 65,055 64,213 64,580 64,934
Diluted 67,138 68,866 67,913 68,454 68,064
 
Prepared in accordance with Generally Accepted Accounting Principles
 

 
CIRRUS LOGIC, INC.
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. 30, Dec. 29, Mar. 31, Mar. 30, Mar. 31,
2013 2012 2012 2013 2012
Net Income Reconciliation Q4'13 Q3'13 Q4'12 Q4'13 Q4'12
GAAP Net Income $ 26,360 $ 67,862 $ 50,827 $ 136,598 $ 87,983
Amortization of acquisition intangibles - - 353 604 1,412
Stock based compensation expense 5,734 6,026 3,451 21,496 12,179
Facility Related adjustments - - 218 - 218
International sales reorganization charges 442 (47 ) (55 ) 395 567
Provision for litigation expenses and settlements - - 100 - 100
Restructuring and other costs, net - 3,539 - 3,539 -
Gain on asset sale - (247 ) - (247 ) -
Provision (benefit) for income taxes   7,372     35,667     (30,310 )   59,974     (10,171 )
Non-GAAP Net Income $ 39,908   $ 112,800   $ 24,584   $ 222,359   $ 92,288  
 
Earnings Per Share Reconciliation
GAAP Diluted earnings per share $ 0.39 $ 0.99 $ 0.75 $ 2.00 $ 1.29
Effect of Amortization of acquisition intangibles - - 0.01 0.01 0.02
Effect of Stock based compensation expense 0.09 0.09 0.05 0.31 0.18
Effect of Facility Related adjustments - - - - -
Effect of International sales reorganization charges 0.01 - - - 0.01
Effect of Restructuring and other costs, net - 0.05 - 0.05 -
Effect of Provision (benefit) for income taxes   0.10     0.51     (0.45 )   0.88     (0.14 )
Non-GAAP Diluted earnings per share $ 0.59   $ 1.64   $ 0.36   $ 3.25   $ 1.36  
 
Operating Income Reconciliation
GAAP Operating Income $ 33,805 $ 106,129 $ 20,888 $ 200,830 $ 79,536
GAAP Operating Profit 16 % 34 % 19 % 25 % 19 %
Amortization of acquisition intangibles - - 353 604 1,412
Stock compensation expense - COGS 296 218 113 751 398
Stock compensation expense - R&D 2,976 3,234 1,753 10,550 5,590
Stock compensation expense - SG&A 2,462 2,574 1,585 10,195 6,191
Facility Related adjustments - - 218 - 218
International sales reorganization charges 442 (47 ) (55 ) 395 567
Provision for litigation expenses and settlements - - 100 - 100
Restructuring and other costs, net - 3,539 - 3,539 -
Gain on asset sale   -     (247 )   -     (247 )   -  
Non-GAAP Operating Income $ 39,981   $ 115,400   $ 24,955   $ 226,617   $ 94,012  
Non-GAAP Operating Profit 19 % 37 % 23 % 28 % 22 %
 
Operating Expense Reconciliation
GAAP Operating Expenses $ 49,809 $ 51,921 $ 41,459 $ 194,361 $ 150,905
Amortization of acquisition intangibles - - (353 ) (604 ) (1,412 )
Stock compensation expense - R&D (2,976 ) (3,234 ) (1,753 ) (10,550 ) (5,590 )
Stock compensation expense - SG&A (2,462 ) (2,574 ) (1,585 ) (10,195 ) (6,191 )
Facility Related adjustments - - (218 ) - (218 )
International sales reorganization charges (442 ) 47 55 (395 ) (567 )
Provision for litigation expenses and settlements - - (100 ) - (100 )
Restructuring and other costs, net - (3,539 ) - (3,539 ) -
Gain on asset sale   -     247     -     247     -  
Non-GAAP Operating Expenses $ 43,929   $ 42,868   $ 37,505   $ 169,325   $ 136,827  
 

 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
 
    Mar. 30,     Dec. 29,     Mar. 31,
2013 2012 2012
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 66,402 $ 87,452 $ 65,997
Restricted investments - - -
Marketable securities 105,235 60,717 115,877
Accounts receivable, net 69,289 170,683 44,153
Inventories 119,300 135,023 55,915
Deferred tax asset 64,937 53,140 53,137
Other current assets   19,371     21,775     16,508  
Total Current Assets 444,534 528,790 351,587
 
Long-term marketable securities 64,910 - 2,914
Property and equipment, net 100,623 100,534 66,978
Intangibles, net 4,650 4,920 18,241
Goodwill 6,027 6,027 6,027
Deferred tax asset 16,671 36,466 89,071
Other assets   13,932     15,761     9,644  
Total Assets $ 651,347   $ 692,498   $ 544,462  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 60,827 $ 95,493 $ 38,108
Accrued salaries and benefits 16,592 13,752 13,634
Other accrued liabilities 10,704 13,992 14,015
Deferred income on shipments to distributors   4,956     5,579     7,228  
Total Current Liabilities 93,079 128,816 72,985
 
Other long-term obligations 10,094 10,131 5,620
 
Stockholders' equity:
Capital stock 1,041,834 1,033,549 1,008,228
Accumulated deficit (492,741 ) (479,225 ) (541,609 )
Accumulated other comprehensive loss   (919 )   (773 )   (762 )
Total Stockholders' Equity   548,174     553,551     465,857  
Total Liabilities and Stockholders' Equity $ 651,347   $ 692,498   $ 544,462  
 
Prepared in accordance with Generally Accepted Accounting Principles

Contacts

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

Release Summary

Cirrus Logic Inc. reports Q4 FY13 Earnings

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Contacts

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