Cirrus Logic Guides September Quarter Revenue Up More Than 70 Percent Sequentially

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, which ended June 30, 2012, as well as the company’s current business outlook.

“I would like to take this opportunity to publicly thank all of the Cirrus Logic employees who have worked incredibly hard over the past several years to position the company for this sharp transition to a higher level of revenue," said Jason Rhode, president and chief executive officer. "This team's ability to formulate and execute a strategy is truly remarkable and gives us great confidence as we continue to increase our R&D investment in order to support our customers and pursue further growth opportunities. We expect FY13 to be an outstanding year for Cirrus Logic and our long term shareholders.”

Reported Financial Results – First Quarter FY2013
  • Revenue of $99 million;
  • Gross margin of 54 percent;
  • GAAP operating expenses of $43 million;
  • Non-GAAP operating expenses of $38.6 million.

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

Business Outlook – Second Quarter FY2013
  • Revenue is expected to range between $170 million and $190 million;
  • Gross margin is expected to be between 52 percent and 54 percent;
  • Combined R&D and SG&A expenses are expected to range between $49 million and $53 million, which includes approximately $6 million in share-based compensation and amortization of acquisition-related intangibles expenses.

In addition, the company is announcing the sale of assets associated with its Apex Precision Power business in Tucson, Ariz., for $26 million. After the sale, Cirrus Logic will continue to maintain a high voltage/high power IC design team in Tucson. This transaction is expected to close within 45 days, subject to certain standard closing conditions. More information is included in our quarterly Shareholder Letter.

Cirrus Logic will host a live Q&A session at 5 p.m. EDT on Monday, July 30, 2012, to answer questions related to its financial results and business outlook. Shareholders who would like to submit a question to be addressed during the call are requested to email investor.relations@cirrus.com. A live webcast of the Q&A session can be accessed on the Cirrus Logic website, and a replay will be available approximately two hours after the completion of the call, or by dialing (719) 457-0820, or toll-free at (888) 203-1112 (Access Code: 98762608).

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 Tucson, Ariz., 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 margin 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 2013 revenue, gross margin, combined research and development and selling, general and administrative expense levels, share-based compensation expense, amortization of acquired intangible expenses, and inventory increases. 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 and third quarter and complete fiscal year 2013, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; our ability to introduce and ramp production of new products in a timely manner; 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

Summary financial data follows:
 
 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
               
Three Months Ended
 
Jun. 30, Mar. 31, Jun. 25,
2012 2012 2011
Q1'13 Q4'12 Q1'12
Audio products $ 80,747 $ 90,522 $ 71,120
Energy products   18,259     20,109     21,122  
Net revenue   99,006     110,631     92,242  
Cost of sales   45,566     48,284     44,533  
Gross Profit 53,440 62,347 47,709
 
Research and development 24,910 24,105 18,767
Selling, general and administrative 18,059 17,254 14,606
Other expenses (proceeds)   -     100     -  
Total operating expenses   42,969     41,459     33,373  
 
Operating income 10,471 20,888 14,336
 
Interest income, net 127 139 154
Other income (expense), net   (23 )   45     (17 )
Income before income taxes 10,575 21,072 14,473
Provision (benefit) for income taxes   3,648     (29,755 )   5,295  
Net income $ 6,927   $ 50,827   $ 9,178  
 
Basic income per share: $ 0.11 $ 0.79 $ 0.14
Diluted income per share: $ 0.10 $ 0.75 $ 0.13
 
Weighted average number of shares:
Basic 64,470 64,213 67,099
Diluted 68,529 67,913 70,445
 
See notes to Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles

 
 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
               
Jun. 30, Mar. 31,
2012 2012
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 84,312 $ 65,997
Restricted investments - -
Marketable securities 82,359 115,877
Accounts receivable, net 49,262 44,153
Inventories 96,790 55,915
Deferred tax asset 53,139 53,137
Other current assets   14,574     16,508  
Total Current Assets 380,436 351,587
 
Long-term marketable securities - 2,914
Property and equipment, net 85,337 66,978
Intangibles, net 18,457 18,241
Goodwill 6,027 6,027
Deferred tax asset 85,721 89,071
Other assets   9,300     9,644  
Total Assets $ 585,278   $ 544,462  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 75,507 $ 38,108
Accrued salaries and benefits 10,956 13,634
Other accrued liabilities 9,498 14,015
Deferred income on shipments to distributors   7,158     7,228  
Total Current Liabilities 103,119 72,985
 
Long-term restructuring accrual - -
Other long-term obligations 4,159 5,620
 
Stockholders' equity:
Capital stock 1,013,442 1,008,228
Accumulated deficit (534,682 ) (541,609 )
Accumulated other comprehensive loss   (760 )   (762 )
Total Stockholders' Equity   478,000     465,857  
Total Liabilities and Stockholders' Equity $ 585,278   $ 544,462  
 
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
           
Jun. 30, Mar. 31, Jun. 25,
2012 2012 2011
Net Income Reconciliation Q1'13 Q4'12 Q1'12
GAAP Net Income $ 6,927 $ 50,827 $ 9,178
Amortization of acquisition intangibles 353 353 353
Stock based compensation expense 4,173 3,451 2,442
Other expenses (proceeds) * - 263 -
Provision (benefit) for income taxes   3,355     (30,310 )   4,984  
Non-GAAP Net Income $ 14,808   $ 24,584   $ 16,957  
 
Earnings Per Share Reconciliation
GAAP Diluted income per share $ 0.10 $ 0.75 $ 0.13
Effect of Amortization of acquisition intangibles 0.01 0.01 0.01
Effect of Stock based compensation expense 0.06 0.05 0.03
Effect of Other expenses (proceeds) * - - -
Effect of Provision (benefit) for income taxes 0.05 (0.45 ) 0.07
     
Non-GAAP Diluted income per share $ 0.22   $ 0.36   $ 0.24  
 
Operating Income Reconciliation
GAAP Operating Income $ 10,471 $ 20,888 $ 14,336
GAAP Operating Margin 11 % 19 % 16 %
Amortization of acquisition intangibles 353 353 353
Stock compensation expense - COGS 118 113 89
Stock compensation expense - R&D 2,243 1,753 1,043
Stock compensation expense - SG&A 1,812 1,585 1,310
Other expenses (proceeds) *   -     263     -  
Non-GAAP Operating Income $ 14,997   $ 24,955   $ 17,131  
Non-GAAP Operating Margin 15 % 23 % 19 %
 
Operating Expense Reconciliation
GAAP Operating Expenses $ 42,969 $ 41,459 $ 33,373
Amortization of acquisition intangibles (353 ) (353 ) (353 )
Stock compensation expense - R&D (2,243 ) (1,753 ) (1,043 )
Stock compensation expense - SG&A (1,812 ) (1,585 ) (1,310 )
Other expenses (proceeds) *   -     (263 )   -  

Non-GAAP Operating Expenses
$ 38,561   $ 37,505   $ 30,667  
 

* Other expenses (proceeds) may contain certain items such as litigation expenses, proceeds from a patent agreement, restructuring items, and impairments of non-marketable securities.
 

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