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Cirrus Logic Reports Q1 FY22 Revenue of $277.3 Million

Content Gains in High-Performance Mixed-Signal Expected to Fuel Strong Year-Over-Year Revenue Growth in Q2 FY22

AUSTIN, Texas — (BUSINESS WIRE) — July 28, 2021 — Cirrus Logic, Inc. (Nasdaq: CRUS) today posted on its website at http://investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the first quarter fiscal year 2022, which ended June 26, 2021, as well as the company’s current business outlook.

“In the past quarter, Cirrus Logic accelerated both sales momentum and execution of our growth strategy. We grew revenue by 14 percent year on year, increased penetration of the Android market, began shipments with a leading laptop OEM, ramped new content in anticipation of product launches in the latter half of the year and advanced the development of a number of new components that are expected to drive future revenue growth,” said John Forsyth, Cirrus Logic president and chief executive officer. “The company’s recent investments in power-related products, including the acquisition of Lion Semiconductor, are expected to meaningfully expand our addressable market and continue the exciting progress we have been making in building new and strategic areas of our business. With a strong pipeline of audio and high-performance mixed-signal products ramping in the coming months, we are upbeat about the next several quarters and continue to anticipate accelerated revenue growth in FY22.”

Reported Financial Results – First Quarter FY22

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

Business Outlook – Second Quarter FY22

The company has entered into a long-term Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries, a foundry partner for many of our strategic products. This will expand our ability to address unprecedented market demand and provide customers with much-needed supply assurance. Given our anticipated strong cash generation, we believe this agreement is a good use of our financial resources: it secures supplier commitments to capacity expansion in support of our sales growth, alleviates some of the supply uncertainty currently affecting the company and its customers, and ensures supplier investment in additional technologies for future products.

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@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: 9238026).

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. 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, the company 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, tax expense 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 the company’s expectations for accelerated revenue growth in FY22; our ability to develop products that are expected to drive future revenue growth; our expectation that the company’s recent investments in power-related products, including the acquisition of Lion Semiconductor, will meaningfully expand our addressable market and continue our progress in building new and strategic areas of our business; our belief that the Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries will expand our ability to address unprecedented market demand and provide customers with much-needed supply assurance; our ability to secure supplier commitments to capacity expansion in support of our sales growth and alleviate some of the supply uncertainty currently affecting the company and its customers; and our estimates for the second quarter fiscal year 2022 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 and readers should not place undue reliance on such statements. These risks and uncertainties include, but are not limited to, the following: the effects of the global COVID-19 outbreak and the measures taken to limit the spread of COVID-19, including any disruptions to our business that could result from measures to contain the outbreak that may be taken by governmental authorities in the jurisdictions in which we and our supply chain operate; the susceptibility of the markets we address to economic downturns, including as a result of the COVID-19 outbreak and the actions taken to mitigate the spread of COVID-19; the risks of doing business internationally, including increased import/export restrictions and controls (e.g., the effect of the U.S. Bureau of Industry and Security of the U.S. Department of Commerce placing Huawei Technologies Co., Ltd. and certain of its affiliates on the Bureau’s Entity List), imposition of trade protection measures (e.g., tariffs or taxes), security and health risks, possible disruptions in transportation networks, and other economic, social, military and geo-political conditions in the countries in which we, our customers or our suppliers operate; recent increased industry-wide capacity constraints that may impact our ability to meet current customer demand, which could cause an unanticipated decline in our sales and damage our existing customer relationships and our ability to establish new customer relationships; the potential for increased prices due to capacity constraints in our supply chain, which, if we are unable to increase our selling price to our customers, could result in lower revenues and margins that could adversely affect our financial results; the level of orders and shipments during the second quarter of fiscal year 2022, 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 28, 2021 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
(unaudited)
(in thousands, except per share data)
 
Three Months Ended
 
Jun. 26, Mar. 27, Jun. 27,

2021

2021

2020

Q1'22 Q4'21 Q1'21
Audio

$

217,355

$

235,821

$

206,449

High-Performance Mixed-Signal

 

59,898

 

57,716

 

36,124

Net sales

 

277,253

 

293,537

 

242,573

Cost of sales

 

137,307

 

145,418

 

115,101

Gross profit

 

139,946

 

148,119

 

127,472

Gross margin

 

50.5%

 

50.5%

 

52.6%

 
Research and development

 

85,696

 

89,773

 

78,741

Selling, general and administrative

 

35,147

 

33,642

 

29,704

Restructuring costs

 

-

 

-

 

352

Total operating expenses

 

120,843

 

123,415

 

108,797

 
Income from operations

 

19,103

 

24,704

 

18,675

 
Interest income

 

761

 

1,064

 

1,576

Other income (expense)

 

(242)

 

2,152

 

111

Income before income taxes

 

19,622

 

27,920

 

20,362

Provision for income taxes

 

2,413

 

2,639

 

2,153

Net income

$

17,209

$

25,281

$

18,209

 
Basic earnings per share:

$

0.30

$

0.44

$

0.31

Diluted earnings per share:

$

0.29

$

0.42

$

0.30

 
Weighted average number of shares:
Basic

 

57,582

 

57,899

 

58,313

Diluted

 

59,513

 

59,922

 

60,280

 
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

   
Jun. 26,   Mar. 27,   Jun. 27,

2021

 

2021

 

2020

Net Income Reconciliation Q1'22   Q4'21   Q1'21
GAAP Net Income

$

17,209

 

$

25,281

 

$

18,209

Amortization of acquisition intangibles

 

2,998

 

 

2,998

 

 

2,998

Stock-based compensation expense

 

14,984

 

 

14,693

 

 

13,306

Restructuring costs

 

-

 

 

-

 

 

352

Adjustment to income taxes

 

(2,949)

 

 

(3,251)

 

 

(2,982)

Non-GAAP Net Income

$

32,242

 

$

39,721

 

$

31,883

   
Earnings Per Share Reconciliation    
GAAP Diluted earnings per share

$

0.29

 

$

0.42

 

$

0.30

Effect of Amortization of acquisition intangibles

 

0.05

 

 

0.05

 

 

0.05

Effect of Stock-based compensation expense

 

0.25

 

 

0.24

 

 

0.22

Effect of Restructuring costs

 

-

 

 

-

 

 

0.01

Effect of Adjustment to income taxes

 

(0.05)

 

 

(0.05)

 

 

(0.05)

Non-GAAP Diluted earnings per share

$

0.54

 

$

0.66

 

$

0.53

   
Operating Income Reconciliation    
GAAP Operating Income

$

19,103

 

$

24,704

 

$

18,675

GAAP Operating Profit

 

6.9%

 

 

8.4%

 

 

7.7%

Amortization of acquisition intangibles

 

2,998

 

 

2,998

 

 

2,998

Stock-based compensation expense - COGS

 

246

 

 

260

 

 

207

Stock-based compensation expense - R&D

 

9,612

 

 

10,069

 

 

8,653

Stock-based compensation expense - SG&A

 

5,126

 

 

4,364

 

 

4,446

Restructuring costs

 

-

 

 

-

 

 

352

Non-GAAP Operating Income

$

37,085

 

$

42,395

 

$

35,331

Non-GAAP Operating Profit

 

13.4%

 

 

14.4%

 

 

14.6%

   
Operating Expense Reconciliation    
GAAP Operating Expenses

$

120,843

 

$

123,415

 

$

108,797

Amortization of acquisition intangibles

 

(2,998)

 

 

(2,998)

 

 

(2,998)

Stock-based compensation expense - R&D

 

(9,612)

 

 

(10,069)

 

 

(8,653)

Stock-based compensation expense - SG&A

 

(5,126)

 

 

(4,364)

 

 

(4,446)

Restructuring costs

 

-

 

 

-

 

 

(352)

Non-GAAP Operating Expenses

$

103,107

 

$

105,984

 

$

92,348

   
Gross Margin/Profit Reconciliation    
GAAP Gross Profit

$

139,946

 

$

148,119

 

$

127,472

GAAP Gross Margin

 

50.5%

 

 

50.5%

 

 

52.6%

Stock-based compensation expense - COGS

 

246

 

 

260

 

 

207

Non-GAAP Gross Profit

$

140,192

 

$

148,379

 

$

127,679

Non-GAAP Gross Margin

 

50.6%

 

 

50.5%

 

 

52.6%

   
Effective Tax Rate Reconciliation    
GAAP Tax Expense

$

2,413

 

$

2,639

 

$

2,153

GAAP Effective Tax Rate

 

12.3%

 

 

9.5%

 

 

10.6%

Adjustments to income taxes

 

2,949

 

 

3,251

 

 

2,982

Non-GAAP Tax Expense

$

5,362

 

$

5,890

 

$

5,135

Non-GAAP Effective Tax Rate

 

14.3%

 

 

12.9%

 

 

13.9%

   
Tax Impact to EPS Reconciliation    
GAAP Tax Expense

$

0.04

 

$

0.04

 

$

0.04

Adjustments to income taxes

 

0.05

 

 

0.05

 

 

0.05

Non-GAAP Tax Expense

$

0.09

 

$

0.09

 

$

0.09

   
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
 
Jun. 26, Mar. 27, Jun. 27,

2021

2021

2020

ASSETS
Current assets
Cash and cash equivalents

$

385,127

$

442,164

$

285,922

Marketable securities

 

60,503

 

55,697

 

29,943

Accounts receivable, net

 

136,534

 

108,712

 

136,539

Inventories

 

192,722

 

173,263

 

199,332

Other current assets

 

64,458

 

62,683

 

38,231

Total current Assets

 

839,344

 

842,519

 

689,967

Long-term marketable securities

 

311,643

 

312,759

 

290,186

Right-of-use lease assets

 

131,446

 

133,548

 

139,492

Property and equipment, net

 

158,451

 

154,942

 

154,286

Intangibles, net

 

18,429

 

22,031

 

31,185

Goodwill

 

287,518

 

287,518

 

287,399

Deferred tax asset

 

19,482

 

9,977

 

6,970

Other assets

 

47,693

 

67,320

 

44,554

Total assets

$

1,814,006

$

1,830,614

$

1,644,039

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable

$

95,232

$

102,744

$

95,523

Accrued salaries and benefits

 

37,220

 

54,849

 

28,768

Lease liability

 

14,662

 

14,573

 

13,887

Other accrued liabilities

 

39,387

 

41,444

 

24,866

Total current liabilities

 

186,501

 

213,610

 

163,044

Non-current lease liability

 

126,442

 

127,883

 

129,627

Non-current income taxes

 

64,245

 

64,020

 

69,130

Other long-term liabilities

 

30,087

 

36,096

 

9,949

Stockholders' equity:
Capital stock

 

1,514,549

 

1,498,819

 

1,451,297

Accumulated deficit

 

(109,754)

 

(112,689)

 

(184,049)

Accumulated other comprehensive income

 

1,936

 

2,875

 

5,041

Total stockholders' equity

 

1,406,731

 

1,389,005

 

1,272,289

Total liabilities and stockholders' equity

$

1,814,006

$

1,830,614

$

1,644,039

 

Prepared in accordance with Generally Accepted Accounting Principles

 



Contact:

Investor Contact:
Thurman K. Case
Chief Financial Officer
Cirrus Logic, Inc.
(512) 851-4125
Investor@cirrus.com