Cirrus Logic Reports Q4 Revenue of $232 Million and Record Revenue of $1.2 Billion for FY16

Anticipates Strong Annual Revenue Growth in FY17 Fueled by Portable Audio Products

AUSTIN, Texas--()--Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-precision analog and digital signal processing products, 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 2016, which ended Mar. 26, 2016, as well as the company’s current business outlook.

“FY16 was an outstanding year for Cirrus Logic as we delivered record revenue of $1.2 billion, up 28 percent from the prior year. Additionally, the company is positioned to exceed our long-term revenue growth model again in FY17”

“FY16 was an outstanding year for Cirrus Logic as we delivered record revenue of $1.2 billion, up 28 percent from the prior year. Additionally, the company is positioned to exceed our long-term revenue growth model again in FY17,” said Jason Rhode, president and chief executive officer. “Demand for our products continues to gain momentum as our customers push to further differentiate their devices with compelling and consistent audio and voice capabilities. With a robust portfolio of components and an extensive roadmap the company is well positioned to capitalize on the rapidly growing markets for audio and voice in FY17 and beyond.”

Reported Financial Results – Fourth Quarter FY16

  • Revenue of $232 million;
  • GAAP gross margin of 49.7 percent and non-GAAP gross margin of 49.8 percent;
  • GAAP operating expenses of $93.1 million; non-GAAP operating expenses of $79.7 million; and
  • GAAP diluted earnings per share of $0.21 and non-GAAP diluted earnings per share of $0.38.

Reported Financial Results – Full Year FY16

  • Revenue of $1.2 billion;
  • GAAP gross margin of 47.5 percent and non-GAAP gross margin of 47.6 percent;
  • GAAP operating expenses of $374.6 million; non-GAAP operating expenses of $325.3 million; and
  • GAAP diluted earnings per share of $1.87 and non-GAAP diluted earnings per share of $2.40.

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

Business Outlook – First Quarter FY17

  • Revenue is expected to range between $220 million and $250 million;
  • GAAP gross margin is expected to be between 47 percent and 49 percent; and
  • Combined GAAP R&D and SG&A expenses are expected to range between $103 million and $107 million, which includes approximately $9 million in share-based compensation and $9 million in amortization of acquired intangibles.

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: 77072356).

Cirrus Logic, Inc.

Cirrus Logic is a leader in high performance, low-power ICs for audio and voice signal processing applications. Cirrus Logic’s products span the entire audio signal chain, from capture to playback, providing innovative products for the world’s top smartphones, tablets, digital headsets, wearables and emerging smart home applications. With headquarters in Austin, Texas, Cirrus Logic is recognized globally for its award-winning corporate culture. Check us out 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 gross margins, operating expenses, net income, operating profit and income, tax expenses 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 future growth opportunities and our estimates of first quarter fiscal year 2017 revenue, gross margin, combined research and development and selling, general and administrative expense levels, share-based 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. 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 2017, customer cancellations of orders, or the failure to place orders consistent with forecasts, along with the timing and success of future product ramps; and the risk factors listed in our Form 10-K for the year ended March 28, 2015, 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 registered trademarks of Cirrus Logic, Inc. All other company or product names noted herein may be trademarks of their respective holders.

 
 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
                     
Three Months Ended Twelve Months Ended
Mar. 26, Dec. 26, Mar. 28, Mar. 26, Mar. 28,
2016 2015 2015 2016 2015
Q4'16 Q3'16 Q4'15 Q4'16 Q4'15
Portable audio products $ 187,280 $ 308,803 $ 210,814 $ 989,101 $ 740,302
Non-portable audio and other products   44,719     39,060     44,369     180,150     176,266  
Net sales   231,999     347,863     255,183     1,169,251     916,568  
Cost of sales   116,745     182,952     136,208     614,411     490,820  
Gross profit 115,254 164,911 118,975 554,840 425,748
Gross margin 49.7 % 47.4 % 46.6 % 47.5 % 46.5 %
 
Research and development 65,834 70,290 58,070 269,217 197,878
Selling, general and administrative 27,228 30,632 30,498 117,082 99,509
Acquisition related costs - - - - 18,137
Restructuring and other - - - - 1,455
Patent agreement and other   -     78     -     (11,670 )   -  
Total operating expenses   93,062     101,000     88,568     374,629     316,979  
 
Income from operations 22,192 63,911 30,407 180,211 108,769
 
Interest expense, net (601 ) (591 ) (869 ) (2,431 ) (5,048 )
Other income (expense), net   (478 )   (925 )   392     (1,791 )   (12,172 )
Income before income taxes 21,113 62,395 29,930 175,989 91,549
Provision for income taxes   7,101     21,011     8,581     52,359     36,371  
Net income $ 14,012   $ 41,384   $ 21,349   $ 123,630   $ 55,178  
 
Basic earnings per share: $ 0.22 $ 0.65 $ 0.34 $ 1.96 $ 0.88
Diluted earnings per share: $ 0.21 $ 0.63 $ 0.32 $ 1.87 $ 0.85
 
Weighted average number of shares:
Basic 62,843 63,328 62,852 63,197 62,503
Diluted 65,398 65,761 65,815 65,993 65,235
 
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. Certain modifications to prior year non-GAAP presentation has been made and had no material effect on the results of operations.

    Three Months Ended       Twelve Months Ended
Mar. 26,     Dec. 26,     Mar. 28, Mar. 26,     Mar. 28,
2016 2015 2015 2016 2015
Net Income Reconciliation Q4'16 Q3'16 Q4'15 Q4'16 Q4'15
GAAP Net Income $ 14,012 $ 41,384 $ 21,349 $ 123,630 $ 55,178
Amortization of acquisition intangibles 8,363 8,634 7,141 32,271 15,062
Stock based compensation expense 8,858 7,761 7,735 33,578 27,668
Patent agreement and other - 78 - (11,670 ) -
Restructuring and other costs, net (3,667 ) - - (3,667 ) 1,455
Wolfson acquisition items - - - - 43,082
Adjustment to income taxes   (2,658 )   (3,737 )   7,230     (16,062 )   31,934  
Non-GAAP Net Income $ 24,908   $ 54,120   $ 43,455   $ 158,080   $ 174,379  
 
Earnings Per Share Reconciliation
GAAP Diluted earnings per share $ 0.21 $ 0.63 $ 0.32 $ 1.87 $ 0.85
Effect of Amortization of acquisition intangibles 0.13 0.13 0.11 0.49 0.23
Effect of Stock based compensation expense 0.14 0.12 0.12 0.51 0.42
Effect of Patent agreement and other - - - (0.18 ) -
Effect of Restructuring and other costs, net (0.06 ) - - (0.05 ) 0.02
Effect of Wolfson acquisition items - - - - 0.66
Effect of Adjustment to income taxes   (0.04 )   (0.06 )   0.11     (0.24 )   0.49  
Non-GAAP Diluted earnings per share $ 0.38   $ 0.82   $ 0.66   $ 2.40   $ 2.67  
 
Operating Income Reconciliation
GAAP Operating Income $ 22,192 $ 63,911 $ 30,407 $ 180,211 $ 108,769
GAAP Operating Profit 10 % 18 % 12 % 15 % 12 %
Amortization of acquisition intangibles 8,363 8,634 7,141 32,271 15,062
Stock compensation expense - COGS 233 213 (10 ) 1,151 747
Stock compensation expense - R&D 4,996 4,183 2,994 17,173 11,222
Stock compensation expense - SG&A 3,629 3,365 4,751 15,254 15,699
Patent agreement and other - 78 - (11,670 ) -
Restructuring and other costs, net (3,667 ) - - (3,667 ) 1,455
Wolfson acquisition items   -     -     -     -     28,642  
Non-GAAP Operating Income $ 35,746   $ 80,384   $ 45,283   $ 230,723   $ 181,596  
Non-GAAP Operating Profit 15 % 23 % 18 % 20 % 20 %
 
Operating Expense Reconciliation
GAAP Operating Expenses $ 93,062 $ 101,000 $ 88,568 $ 374,629 $ 316,979
Amortization of acquisition intangibles (8,363 ) (8,634 ) (7,141 ) (32,271 ) (15,062 )
Stock compensation expense - R&D (4,996 ) (4,183 ) (2,994 ) (17,173 ) (11,222 )
Stock compensation expense - SG&A (3,629 ) (3,365 ) (4,751 ) (15,254 ) (15,699 )
Patent agreement and other - (78 ) - 11,670 -
Restructuring and other costs, net 3,667 - - 3,667 (1,455 )
Wolfson acquisition items   -     -     -     -     (20,329 )
Non-GAAP Operating Expenses $ 79,741   $ 84,740   $ 73,682   $ 325,268   $ 253,212  
 
Gross Margin/Profit Reconciliation
GAAP Gross Margin $ 115,254 $ 164,911 $ 118,975 $ 554,840 $ 425,748
GAAP Gross Profit 49.7 % 47.4 % 46.6 % 47.5 % 46.5 %
Wolfson acquisition items - - - - 8,313
Stock compensation expense - COGS   233     213     (10 )   1,151     747  
Non-GAAP Gross Margin $ 115,487   $ 165,124   $ 118,965   $ 555,991   $ 434,808  
Non-GAAP Gross Profit 49.8 % 47.5 % 46.6 % 47.6 % 47.4 %
 
Effective Tax Rate Reconciliation
GAAP Tax Expense $ 7,101 $ 21,011 $ 8,581 $ 52,359 $ 36,371
GAAP Effective Tax Rate 33.6 % 33.7 % 28.7 % 29.8 % 39.7 %
Adjustments to income taxes   2,658     3,737     (7,230 )   16,062     (31,934 )
Non-GAAP Tax Expense $ 9,759   $ 24,748   $ 1,351   $ 68,421   $ 4,437  
Non-GAAP Effective Tax Rate 28.2 % 31.4 % 3.0 % 30.2 % 2.5 %
 
Tax Impact to EPS Reconciliation
GAAP Tax Expense $ 0.11 $ 0.32 $ 0.13 $ 0.79 $ 0.56
Adjustments to income taxes   0.04     0.06     (0.11 )   0.24     (0.49 )
Non-GAAP Tax Expense $ 0.15   $ 0.38   $ 0.02   $ 1.03   $ 0.07  
 

 
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
           
Mar. 26, Dec. 26, Mar. 28,
2016 2015 2015
ASSETS
Current assets
Cash and cash equivalents $ 168,793 $ 159,572 $ 76,401
Marketable securities 60,582 67,148 124,246
Accounts receivable, net 88,532 127,754 112,608
Inventories 142,015 137,723 84,196
Deferred tax asset - 19,404 18,559
Other current assets   46,207     37,982     35,903  
Total current Assets 506,129 549,583 451,913
 
Long-term marketable securities 20,631 22,327 60,072
Property and equipment, net 162,656 159,149 144,346
Intangibles, net 162,832 171,664 175,743
Goodwill 287,518 287,518 263,115
Deferred tax asset 25,772 27,581 25,593
Other assets   16,345     18,099     27,996  
Total assets $ 1,181,883   $ 1,235,921   $ 1,148,778  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 71,619 $ 114,483 $ 112,213
Accrued salaries and benefits 21,239 22,438 24,132
Deferred income - 4,162 6,105
Other accrued liabilities   35,266     36,301     34,128  
Total current liabilities 128,124 177,384 176,578
 
Long-term debt 160,439 160,439 180,439
Other long-term liabilities 33,837 38,223 34,990
 
Stockholders' equity:
Capital stock 1,203,496 1,198,547 1,159,494
Accumulated deficit (344,345 ) (336,653 ) (400,613 )
Accumulated other comprehensive income (loss)   332     (2,019 )   (2,110 )
Total stockholders' equity   859,483     859,875     756,771  
Total liabilities and stockholders' equity $ 1,181,883   $ 1,235,921   $ 1,148,778  
 
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

Recent Stories

  • Cirrus Logic Reports Q1 FY18 Revenue of $320.7 Million
    August 02, 2017
    AUSTIN, Texas--(EON: Enhanced Online News)--Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high performance, low-power ICs for audio and voice signal processing applications, today posted on its in... more »
  • Cirrus Logic to Present at Upcoming Conferences
    July 17, 2017
    AUSTIN, Texas--(EON: Enhanced Online News)--Cirrus Logic, Inc. (Nasdaq: CRUS) today announced that the company is pleased to be presenting at the following investor conferences: Vail, Colo., Aug. 7... more »
  • Cirrus Logic to Announce Q1 Results August 2
    July 06, 2017
    AUSTIN, Texas--(EON: Enhanced Online News)--Cirrus Logic, Inc. (Nasdaq: CRUS) today announced that the company will post its first quarter fiscal year 2018 financial results and business outlook on... more »
RSS feed for Cirrus Logic, Inc.

Cirrus Logic, Inc.