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

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

Operating Profit Increases Year Over Year and Sequentially

AUSTIN, Texas--(BUSINESS WIRE)-- Cirrus Logic, Inc. (NAS: 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 atwww.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