Cirrus Logic Reports Fourth Quarter Revenue of $490.0 Million and Full Fiscal Year 2022 Revenue of $1.78 Billion
Cirrus Logic, Inc. (Nasdaq: CRUS) today posted on its website at investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the fourth quarter and full fiscal year 2022, which ended March 26, 2022, as well as the company’s current business outlook.
“We delivered strong financial results in FY22 as revenue increased 30 percent year over year driven by high-performance mixed-signal content gains,” said John Forsyth, Cirrus Logic president and chief executive officer. “In FY22, the company successfully executed several key strategic initiatives and increased product diversification through significant growth in our high-performance mixed-signal business. Going forward, we expect to continue leveraging our expertise in data conversion and signal processing to capitalize on exciting opportunities in new applications and markets.”
Reported Financial Results – Fourth Quarter FY22
Revenue of $490.0 million; GAAP gross margin of 52.8 percent and non-GAAP gross margin of 52.9 percent; GAAP operating expenses of $150.9 million and non-GAAP operating expenses of $123.1 million; and GAAP earnings per share of $1.64 and non-GAAP earnings per share of $2.01.A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.
Reported Financial Results – Full Year FY22
Revenue of $1.78 billion; GAAP gross margin of 51.8 percent and non-GAAP gross margin of 52.1 percent; GAAP operating expenses of $557.3 million and non-GAAP operating expenses of $456.2 million; and GAAP earnings per share of $5.52 and non-GAAP earnings per share of $6.90.A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.
Business Outlook – First Quarter FY23
Revenue is expected to range between $350 million and $390 million; GAAP gross margin is forecasted to be between 49 percent and 51 percent; and Combined GAAP R&D and SG&A expenses are anticipated to range between $147 million and $153 million, including approximately $19 million in stock-based compensation expense, $8 million in amortization of acquired intangibles and $3 million in acquisition-related costs.Cirrus Logic will host a live Q&A session at 5 p.m. EDT today to discuss its financial results and business outlook. Participants may listen to the conference call on the investor relations website at investor.cirrus.com. Participants who have questions that they would like addressed 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: 8385942).
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.
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, effective tax rate, and free cash flow. 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 our ability to continue to leverage our expertise in data conversion and signal processing to capitalize on exciting opportunities in new applications and markets and our estimates for the first quarter fiscal year 2023 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock compensation expense, amortization of acquired intangibles and acquisition-related costs. 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; our ability to attract, hire, and retain qualified personnel to support the development, marketing, and sales of our products; the level of orders and shipments during the first quarter of fiscal year 2023, 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 27, 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 Twelve Months Ended Mar. 26, Dec. 25, Mar. 27, Mar. 26, Mar. 27,2022
2021
2021
2022
2021
Q4'22 Q3'22 Q4'21 Q4'22 Q4'21 Audio$
327,099
$
341,897
$
235,821
$
1,187,126
$
1,104,060
High-Performance Mixed-Signal
162,873
206,452
57,716
594,334
265,170
Net sales
489,972
548,349
293,537
1,781,460
1,369,230
Cost of sales
231,243
258,827
145,418
857,819
661,929
Gross profit
258,729
289,522
148,119
923,641
707,301
Gross margin
52.8
%
52.8
%
50.5
%
51.8
%
51.7
%
Research and development
111,394
107,101
89,773
406,307
342,759
Selling, general and administrative
39,470
38,247
33,642
150,996
127,008
Restructuring costs
-
-
-
-
352
Total operating expenses
150,864
145,348
123,415
557,303
470,119
Income from operations
107,865
144,174
24,704
366,338
237,182
Interest income (expense)
(103
)
(78
)
1,064
615
5,224
Other income (expense)
180
(87
)
2,152
1,710
2,840
Income before income taxes
107,942
144,009
27,920
368,663
245,246
Provision for income taxes
11,528
16,373
2,639
42,308
27,902
Net income
$
96,414
$
127,636
$
25,281
$
326,355
$
217,344
Basic earnings per share:
$
1.69
$
2.23
$
0.44
$
5.70
$
3.74
Diluted earnings per share:
$
1.64
$
2.16
$
0.42
$
5.52
$
3.62
Weighted average number of shares: Basic
56,993
57,178
57,899
57,278
58,106
Diluted
58,625
59,031
59,922
59,143
60,060
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 Twelve Months Ended Mar. 26, Dec. 25, Mar. 27, Mar. 26, Mar. 27,2022
2021
2021
2022
2021
Net Income Reconciliation Q4'22 Q3'22 Q4'21 Q4'22 Q4'21 GAAP Net Income$
96,414
$
127,636
$
25,281
$
326,355
$
217,344
Amortization of acquisition intangibles
7,882
9,083
2,998
27,017
11,992
Stock-based compensation expense
17,024
17,833
14,693
66,392
56,762
Restructuring costs
-
-
-
-
352
Acquisition-related costs
3,164
3,155
-
12,153
-
Adjustment to income taxes
(6,778
)
(7,903
)
(3,251
)
(23,675
)
(11,423
)
Non-GAAP Net Income$
117,706
$
149,804
$
39,721
$
408,242
$
275,027
Earnings Per Share Reconciliation GAAP Diluted earnings per share
$
1.64
$
2.16
$
0.42
$
5.52
$
3.62
Effect of Amortization of acquisition intangibles
0.14
0.16
0.05
0.46
0.20
Effect of Stock-based compensation expense
0.29
0.30
0.24
1.12
0.94
Effect of Restructuring costs
-
-
-
-
0.01
Effect of Acquisition-related costs
0.05
0.05
-
0.20
-
Effect of Adjustment to income taxes
(0.11
)
(0.13
)
(0.05
)
(0.40
)
(0.19
)
Non-GAAP Diluted earnings per share$
2.01
$
2.54
$
0.66
$
6.90
$
4.58
Operating Income Reconciliation GAAP Operating Income
$
107,865
$
144,174
$
24,704
$
366,338
$
237,182
GAAP Operating Profit
22.0
%
26.3
%
8.4
%
20.6
%
17.3
%
Amortization of acquisition intangibles
7,882
9,083
2,998
27,017
11,992
Stock-based compensation expense - COGS
261
245
260
1,024
900
Stock-based compensation expense - R&D
11,786
12,260
10,069
44,154
37,483
Stock-based compensation expense - SG&A
4,977
5,328
4,364
21,214
18,379
Restructuring costs
-
-
-
-
352
Acquisition-related costs
3,164
3,155
-
12,153
-
Non-GAAP Operating Income
$
135,935
$
174,245
$
42,395
$
471,900
$
306,288
Non-GAAP Operating Profit
27.7
%
31.8
%
14.4
%
26.5
%
22.4
%
Operating Expense Reconciliation GAAP Operating Expenses$
150,864
$
145,348
$
123,415
$
557,303
$
470,119
Amortization of acquisition intangibles
(7,882
)
(9,083
)
(2,998
)
(27,017
)
(11,992
)
Stock-based compensation expense - R&D
(11,786
)
(12,260
)
(10,069
)
(44,154
)
(37,483
)
Stock-based compensation expense - SG&A
(4,977
)
(5,328
)
(4,364
)
(21,214
)
(18,379
)
Restructuring costs
-
-
-
-
(352
)
Acquisition-related costs
(3,164
)
(3,155
)
-
(8,692
)
-
Non-GAAP Operating Expenses
$
123,055
$
115,522
$
105,984
$
456,226
$
401,913
Gross Margin/Profit Reconciliation GAAP Gross Profit
$
258,729
$
289,522
$
148,119
$
923,641
$
707,301
GAAP Gross Margin
52.8
%
52.8
%
50.5
%
51.8
%
51.7
%
Acquisition-related costs
-
-
-
3,461
-
Stock-based compensation expense - COGS
261
245
260
1,024
900
Non-GAAP Gross Profit
$
258,990
$
289,767
$
148,379
$
928,126
$
708,201
Non-GAAP Gross Margin
52.9
%
52.8
%
50.5
%
52.1
%
51.7
%
Effective Tax Rate Reconciliation GAAP Tax Expense$
11,528
$
16,373
$
2,639
$
42,308
$
27,902
GAAP Effective Tax Rate
10.7
%
11.4
%
9.5
%
11.5
%
11.4
%
Adjustments to income taxes
6,778
7,903
3,251
23,675
11,423
Non-GAAP Tax Expense
$
18,306
$
24,276
$
5,890
$
65,983
$
39,325
Non-GAAP Effective Tax Rate
13.5
%
13.9
%
12.9
%
13.9
%
12.5
%
Tax Impact to EPS Reconciliation GAAP Tax Expense$
0.20
$
0.28
$
0.04
$
0.72
$
0.46
Adjustments to income taxes
0.11
0.13
0.05
0.40
0.19
Non-GAAP Tax Expense
$
0.31
$
0.41
$
0.09
$
1.12
$
0.65
2022
2021
2021
ASSETS Current assets Cash and cash equivalents$
369,814
$
195,121
$
442,164
Marketable securities
10,601
3,719
55,697
Accounts receivable, net
240,264
326,131
108,712
Inventories
138,436
148,525
173,263
Other current assets
80,900
90,025
62,683
Total current Assets
840,015
763,521
842,519
Long-term marketable securities
63,749
72,118
312,759
Right-of-use lease assets
171,003
173,054
133,548
Property and equipment, net
157,077
157,186
154,942
Intangibles, net
158,145
165,581
22,031
Goodwill
435,791
437,783
287,518
Deferred tax asset
11,068
7,203
9,977
Long-term prepaid wafers
195,000
195,000
-
Other assets
91,552
96,671
67,320
Total assets
$
2,123,400
$
2,068,117
$
1,830,614
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable
$
115,417
$
110,250
$
102,744
Accrued salaries and benefits
65,261
43,044
54,849
Lease liability
14,680
14,653
14,573
Acquisition-related liabilities
30,964
30,964
-
Other accrued liabilities
38,461
40,603
41,444
Total current liabilities
264,783
239,514
213,610
Non-current lease liability
163,162
164,896
127,883
Non-current income taxes
73,383
77,683
64,020
Long-term acquisition-related liabilities
8,692
5,528
-
Other long-term liabilities
13,563
17,749
36,096
Stockholders' equity: Capital stock
1,578,427
1,556,746
1,498,819
Accumulated earnings (deficit)
23,435
6,416
(112,689
)
Accumulated other comprehensive income (loss)
(2,045
)
(415
)
2,875
Total stockholders' equity
1,599,817
1,562,747
1,389,005
Total liabilities and stockholders' equity
$
2,123,400
$
2,068,117
$
1,830,614
Prepared in accordance with Generally Accepted Accounting Principles
2022
2022
Q4'22 Q4'22 Cash flows from operating activities: Net income$
96,414
$
326,355
Adjustments to net cash provided by operating activities: Depreciation and amortization
16,905
62,061
Stock-based compensation expense
17,024
66,392
Deferred income taxes
(6,759
)
(15,002
)
Loss on retirement or write-off of long-lived assets
115
642
Other non-cash (gains) / charges
88
370
Net change in operating assets and liabilities: Accounts receivable, net
85,868
(124,826
)
Inventories
10,089
42,502
Long-term prepaid wafers
-
(195,000
)
Other assets
8,576
(92,584
)
Accounts payable and other accrued liabilities
27,711
14,991
Income taxes payable
(963
)
(804
)
Acquisition-related liabilities
3,163
39,656
Net cash provided by operating activities
258,231
124,753
Cash flows from investing activities: Maturities and sales of available-for-sale marketable securities
4,963
371,545
Purchases of available-for-sale marketable securities
(5,307
)
(83,023
)
Purchases of property, equipment and software
(8,048
)
(26,139
)
Investments in technology
(408
)
(3,871
)
Acquisition of business, net of cash obtained
-
(276,884
)
Net cash used in investing activities
(8,800
)
(18,372
)
Cash flows from financing activities: Debt issuance costs
-
(1,718
)
Issuance of common stock, net of shares withheld for taxes
4,658
13,220
Repurchase of stock to satisfy employee tax withholding obligations
(4,397
)
(22,732
)
Repurchase and retirement of common stock
(74,999
)
(167,501
)
Net cash used in financing activities
(74,738
)
(178,731
)
Net increase (decrease) in cash and cash equivalents
174,693
(72,350
)
Cash and cash equivalents at beginning of period
195,121
442,164
Cash and cash equivalents at end of period
$
369,814
$
369,814
Prepared in accordance with Generally Accepted Accounting Principles Reconciliation of GAAP to Non-GAAP Financial Measure Free Cash Flow (in thousands) Net cash provided by operating activities
$
258,231
$
124,753
Purchases of property, equipment and software
(8,048
)
(26,139
)
Investments in technology
(408
)
(3,871
)
Free Cash Flow$
249,775
$
94,743
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