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Cirrus Logic Reports June Quarter Revenue Up 57 Percent Year Over Year To $155 Million

Stocks in this article: CRUS

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 first quarter fiscal year 2014, which ended June 29, as well as the company’s current business outlook.

“We are pleased to have delivered strong operating profit growth year over year and sequentially,” said Jason Rhode, president and chief executive officer. “During the quarter, we added new customers in portable audio and expanded into more SKUs in LED lighting. We are especially excited about the lineup of custom and general market products we currently have in development.”

Reported Financial Results – First Quarter FY14

  • Revenue of $155 million;
  • Gross margin of 51.2 percent;
  • GAAP operating expenses of $48 million and non-GAAP operating expenses of $42 million; and
  • GAAP diluted earnings per share of $0.31 and non-GAAP diluted earnings per share of $0.56.




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

Business Outlook – Second Quarter FY14

  • Revenue is expected to range between $170 million and $190 million;
  • Gross margin is expected to be between 46 percent and 48 percent; and
  • Combined R&D and SG&A expenses are expected to range between $49 million and $53 million, which includes approximately $7 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: 99347958).

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 second 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 second 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 30, 2013, 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.

 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
         
Three Months Ended
Jun. 29, Mar. 30, Jun. 30,
2013 2013 2012
Q1'14 Q4'13 Q1'13
Audio products $ 143,666 $ 196,098 $ 80,747
Energy products   11,459     10,775   18,259  
Net revenue   155,125     206,873   99,006  
Cost of sales   75,627     123,259   45,566  
Gross Profit 79,498 83,614 53,440
 
Research and development 28,530 30,085 24,910
Selling, general and administrative 19,198 19,724 18,059
Other expenses, net *   265     -   -  
Total operating expenses   47,993     49,809   42,969  
 
Operating income 31,505 33,805 10,471
 
Interest income, net 158 106 127
Other income (expense), net   (17 )   14   (23 )
Income before income taxes 31,646 33,925 10,575
Provision (benefit) for income taxes   11,004     7,565   3,648  
Net income $ 20,642   $ 26,360 $ 6,927  
 
Basic earnings per share: $ 0.33 $ 0.41 $ 0.11
Diluted earnings per share: $ 0.31 $ 0.39 $ 0.10
 
Weighted average number of shares:
Basic 63,363 63,877 64,470
Diluted 66,188 67,138 68,529
 

Prepared in accordance with Generally Accepted Accounting Principles

 

* Other expenses, net may contain certain items such as litigation expenses, proceeds from a patent agreement, restructuring items, sales reorganizations, asset gains and impairments of non-marketable securities.

 
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
Jun. 29,     Mar. 30, Jun. 30,
2013 2013 2012
Net Income Reconciliation Q1'14 Q4'13 Q1'13
GAAP Net Income $ 20,642 $ 26,360 $ 6,927
Amortization of acquisition intangibles - - 353
Stock based compensation expense 5,774 5,734 4,173
International sales reorganization charges - 442 -
Restructuring and other costs (430 ) - -
Patent settlements, net 695 - -
Provision (benefit) for income taxes   10,161     7,372     3,355  
Non-GAAP Net Income $ 36,842   $ 39,908   $ 14,808  
 
Earnings Per Share Reconciliation
GAAP Diluted earnings per share $ 0.31 $ 0.39 $ 0.10
Effect of Amortization of acquisition intangibles - - 0.01
Effect of Stock based compensation expense 0.09 0.09 0.06
Effect of International sales reorganization charges - 0.01 -
Effect of Patent settlements, net 0.01 - -
Effect of Provision (benefit) for income taxes   0.15     0.10     0.05  
Non-GAAP Diluted earnings per share $ 0.56   $ 0.59   $ 0.22  
 
Operating Income Reconciliation
GAAP Operating Income $ 31,505 $ 33,805 $ 10,471
GAAP Operating Profit 20 % 16 % 11 %
Amortization of acquisition intangibles - - 353
Stock compensation expense - COGS 6 296 118
Stock compensation expense - R&D 2,854 2,976 2,243
Stock compensation expense - SG&A 2,914 2,462 1,812
International sales reorganization charges - 442 -
Restructuring and other costs (430 ) - -
Patent settlements, net   695     -     -  
Non-GAAP Operating Income $ 37,544   $ 39,981   $ 14,997  
Non-GAAP Operating Profit 24 % 19 % 15 %
 
Operating Expense Reconciliation
GAAP Operating Expenses $ 47,993 $ 49,809 $ 42,969
Amortization of acquisition intangibles - - (353 )
Stock compensation expense - R&D (2,854 ) (2,976 ) (2,243 )
Stock compensation expense - SG&A (2,914 ) (2,462 ) (1,812 )
International sales reorganization charges - (442 ) -
Restructuring and other costs 430 - -
Patent settlements, net   (695 )   -     -  
Non-GAAP Operating Expenses $ 41,960   $ 43,929   $ 38,561  
 

 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
 
  Jun. 29,     Mar. 30,     Jun. 30,
2013 2013 2012
(unaudited) (unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 67,170 $ 66,402 $ 84,312
Restricted investments - - -
Marketable securities 165,540 105,235 82,359
Accounts receivable, net 63,642 69,289 49,262
Inventories 110,624 119,300 96,790
Deferred tax asset 54,774 64,937 53,139
Other current assets   20,810     19,371     14,574  
Total Current Assets 482,560 444,534 380,436
 
Long-term marketable securities 39,408 64,910 -
Property and equipment, net 99,169 100,623 85,337
Intangibles, net 4,714 4,650 18,457
Goodwill 6,027 6,027 6,027
Deferred tax asset 16,732 16,671 85,721
Other assets   11,289     13,932     9,300  
Total Assets $ 659,899   $ 651,347   $ 585,278  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 47,341 $ 60,827 $ 75,507
Accrued salaries and benefits 13,476 16,592 10,956
Other accrued liabilities 9,532 10,704 9,498
Deferred income on shipments to distributors   4,419     4,956     7,158  
Total Current Liabilities 74,768 93,079 103,119
 
Other long-term obligations 9,706 10,094 4,159
 
Stockholders' equity:
Capital stock 1,048,497 1,041,834 1,013,442
Accumulated deficit (472,180 ) (492,741 ) (534,682 )
Accumulated other comprehensive loss   (892 )   (919 )   (760 )
Total Stockholders' Equity   575,425     548,174     478,000  
Total Liabilities and Stockholders' Equity $ 659,899   $ 651,347   $ 585,278  
 
Prepared in accordance with Generally Accepted Accounting Principles




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