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Cirrus Logic Reports Q3 FY21 Revenue of $485.8 Million

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Smartphone Demand Fueled 30 Percent Year-Over-Year Revenue Growth

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 third quarter fiscal year 2021, which ended Dec. 26, 2020, as well as the company’s current business outlook.

"Cirrus Logic delivered revenue above the high end of guidance in the December quarter, as we experienced strong demand for products shipping in recently introduced smartphones," said John Forsyth, chief executive officer. "We are delighted with our customer engagement and design-in activity during the quarter, and remain focused on developing a roadmap of innovative products that will enable the company to capitalize on growing demand for audio and high-performance mixed-signal solutions. Given the strength of the current smartphone market cycle, and the new product introductions in the pipeline, we are excited about the outlook for the company."

Reported Financial Results – Third Quarter FY21

  • Revenue of $485.8 million;

  • GAAP and non-GAAP gross margin of 51.8 percent;

  • GAAP operating expenses of $121.8 million and non-GAAP operating expenses of $105.7 million; and

  • GAAP earnings per share of $1.91 and non-GAAP earnings per share of $2.13.

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

Business Outlook – Fourth Quarter FY21

  • Revenue is expected to range between $280 million and $320 million;

  • GAAP gross margin is forecasted to be between 50 percent and 52 percent; and

  • Combined GAAP R&D and SG&A expenses are anticipated to range between $121 million and $127 million, including approximately $15 million in stock-based compensation expense and $3 million in amortization of acquired intangibles.

Share Repurchase Authorization

The company also announced that its Board of Directors recently authorized the repurchase of up to an additional $350 million of the company's common stock, in addition to the $55 million remaining from the Board’s previous share repurchase authorization in January 2019. The repurchases will be funded from working capital and anticipated cash from operations and may occur from time to time depending on a variety of factors, including general market and economic conditions and other corporate considerations. The share repurchase program is designed to comply with all applicable securities laws and may be suspended or discontinued at any time without notice.

Cirrus Logic will host a live Q&A session at 5 p.m. EST 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: 5791509).

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 ability to develop a robust pipeline of innovative products that will enable us to capitalize on growing demand for audio and high-performance mixed-signal solutions in the markets we serve, along with estimates for the fourth quarter fiscal year 2021 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 fourth quarter of fiscal year 2021, 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, 2020 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

Nine Months Ended

Dec. 26,

Sep. 26,

Dec. 28,

Dec. 26,

Dec. 28,

2020

2020

2019

2020

2019

Q3'21

Q2'21

Q3'20

Q3'21

Q3'20

Portable products

$

450,305

$

312,911

$

344,870

$

973,877

$

897,187

Non-portable and other products

35,490

34,414

29,798

101,816

104,646

Net sales

485,795

347,325

374,668

1,075,693

1,001,833

Cost of sales

234,295

167,115

177,163

516,511

473,901

Gross profit

251,500

180,210

197,505

559,182

527,932

Gross margin

51.8

%

51.9

%

52.7

%

52.0

%

52.7

%

Research and development

89,435

84,810

88,713

252,986

265,782

Selling, general and administrative

32,415

31,247

36,113

93,366

98,651

Restructuring costs

-

-

-

352

-

Total operating expenses

121,850

116,057

124,826

346,704

364,433

Income from operations

129,650

64,153

72,679

212,478

163,499

Interest income

1,206

1,378

2,392

4,160

6,927

Other income (expense)

(207

)

784

(563

)

688

(1,509

)

Income before income taxes

130,649

66,315

74,508

217,326

168,917

Provision for income taxes

16,281

6,829

5,996

25,263

19,577

Net income

$

114,368

$

59,486

$

68,512

$

192,063

$

149,340

Basic earnings per share:

$

1.97

$

1.02

$

1.18

$

3.30

$

2.56

Diluted earnings per share:

$

1.91

$

0.99

$

1.13

$

3.20

$

2.47

Weighted average number of shares:

Basic

58,024

58,191

58,188

58,176

58,247

Diluted

59,963

60,127

60,492

60,101

60,395

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

Nine Months Ended

Dec. 26,

Sep. 26,

Dec. 28,

Dec. 26,

Dec. 28,

2020

2020

2019

2020

2019

Net Income Reconciliation

Q3'21

Q2'21

Q3'20

Q3'21

Q3'20

GAAP Net Income

$

114,368

$

59,486

$

68,512

$

192,063

$

149,340

Amortization of acquisition intangibles

2,998

2,998

6,470

8,994

20,420

Stock-based compensation expense

13,287

15,476

14,160

42,069

39,705

Restructuring costs

-

-

1,323

352

1,323

Adjustment to income taxes

(2,897

)

(2,293

)

(4,871

)

(8,172

)

(11,091

)

Non-GAAP Net Income

$

127,756

$

75,667

$

85,594

$

235,306

$

199,697

Earnings Per Share Reconciliation

GAAP Diluted earnings per share

$

1.91

$

0.99

$

1.13

$

3.20

$

2.47

Effect of Amortization of acquisition intangibles

0.05

0.05

0.11

0.15

0.34

Effect of Stock-based compensation expense

0.22

0.26

0.23

0.70

0.66

Effect of Restructuring costs

-

-

0.02

0.01

0.02

Effect of Adjustment to income taxes

(0.05

)

(0.04

)

(0.08

)

(0.14

)

(0.18

)

Non-GAAP Diluted earnings per share

$

2.13

$

1.26

$

1.41

$

3.92

$

3.31

Operating Income Reconciliation

GAAP Operating Income

$

129,650

$

64,153

$

72,679

$

212,478

$

163,499

GAAP Operating Profit

26.7

%

18.5

%

19.4

%

19.8

%

16.3

%

Amortization of acquisition intangibles

2,998

2,998

6,470

8,994

20,420

Stock-based compensation expense - COGS

236

197

200

640

695

Stock-based compensation expense - R&D

9,526

9,235

9,343

27,414

24,413

Stock-based compensation expense - SG&A

3,525

6,044

4,617

14,015

14,597

Restructuring costs

-

-

1,323

352

1,323

Non-GAAP Operating Income

$

145,935

$

82,627

$

94,632

$

263,893

$

224,947

Non-GAAP Operating Profit

30.0

%

23.8

%

25.3

%

24.5

%

22.5

%

Operating Expense Reconciliation

GAAP Operating Expenses

$

121,850

$

116,057

$

124,826

$

346,704

$

364,433

Amortization of acquisition intangibles

(2,998

)

(2,998

)

(6,470

)

(8,994

)

(20,420

)

Stock-based compensation expense - R&D

(9,526

)

(9,235

)

(9,343

)

(27,414

)

(24,413

)

Stock-based compensation expense - SG&A

(3,525

)

(6,044

)

(4,617

)

(14,015

)

(14,597

)

Restructuring costs

-

-

(1,201

)

(352

)

(1,201

)

Non-GAAP Operating Expenses

$

105,801

$

97,780

$

103,195

$

295,929

$

303,802

Gross Margin/Profit Reconciliation

GAAP Gross Profit

$

251,500

$

180,210

$

197,505

$

559,182

$

527,932

GAAP Gross Margin

51.8

%

51.9

%

52.7

%

52.0

%

52.7

%

Stock-based compensation expense - COGS

236

197

200

640

695

Restructuring costs - COGS

-

-

122

-

122

Non-GAAP Gross Profit

$

251,736

$

180,407

$

197,827

$

559,822

$

528,749

Non-GAAP Gross Margin

51.8

%

51.9

%

52.8

%

52.0

%

52.8

%

Effective Tax Rate Reconciliation

GAAP Tax Expense

$

16,281

$

6,829

$

5,996

$

25,263

$

19,577

GAAP Effective Tax Rate

12.5

%

10.3

%

8.0

%

11.6

%

11.6

%

Adjustments to income taxes

2,897

2,293

4,871

8,172

11,091

Non-GAAP Tax Expense

$

19,178

$

9,122

$

10,867

$

33,435

$

30,668

Non-GAAP Effective Tax Rate

13.1

%

10.8

%

11.3

%

12.4

%

13.3

%

Tax Impact to EPS Reconciliation

GAAP Tax Expense

$

0.27

$

0.11

$

0.10

$

0.42

$

0.32

Adjustments to income taxes

0.05

0.04

0.08

0.14

0.18

Non-GAAP Tax Expense

$

0.32

$

0.15

$

0.18

$

0.56

$

0.50

CONSOLIDATED CONDENSED BALANCE SHEET

unaudited; in thousands

Dec. 26,

Mar. 28,

Dec. 28,

2020

2020

2019

ASSETS

Current assets

Cash and cash equivalents

$

327,294

$

292,119

$

342,301

Marketable securities

43,289

22,008

13,098

Accounts receivable, net

244,803

153,998

175,937

Inventories

142,689

146,725

137,920

Other current assets

45,469

35,346

45,345

Total current Assets

803,544

650,196

714,601

Long-term marketable securities

326,491

283,573

250,162

Right-of-use lease assets

135,719

141,274

141,348

Property and equipment, net

154,312

158,244

174,390

Intangibles, net

24,322

34,430

47,133

Goodwill

287,518

287,088

285,904

Deferred tax asset

7,277

10,052

9,183

Other assets

86,446

27,820

24,819

Total assets

$

1,825,629

$

1,592,677

$

1,647,540

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

90,814

$

78,412

$

98,835

Accrued salaries and benefits

39,367

42,439

34,228

Lease liability

14,539

13,580

13,863

Other accrued liabilities

40,135

24,206

31,385

Total current liabilities

184,855

158,637

178,311

Non-current lease liability

129,583

129,312

133,993

Non-current income taxes

70,866

71,143

72,422

Other long-term liabilities

39,968

3,806

2,934

Stockholders' equity:

Capital stock

1,483,567

1,434,929

1,417,646

Accumulated deficit

(88,238

)

(201,681

)

(157,869

)

Accumulated other comprehensive income (loss)

5,028

(3,469

)

103

Total stockholders' equity

1,400,357

1,229,779

1,259,880

Total liabilities and stockholders' equity

$

1,825,629

$

1,592,677

$

1,647,540

Prepared in accordance with Generally Accepted Accounting Principles

View source version on businesswire.com: https://www.businesswire.com/news/home/20210201005707/en/

Contacts

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