Cirrus Logic Reports Q3 FY22 Revenue of $548.3 Million
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 2022, which ended Dec. 25, 2021, as well as the company’s current business outlook.
“Cirrus Logic reported record revenue in the December quarter, above the top end of our guidance, driven by significant contributions from the expanded high-performance mixed-signal content shipping into smartphones and strong overall demand for our products,” said John Forsyth, Cirrus Logic president and chief executive officer. “These results reflect our continued momentum in FY22 and mark another milestone in the execution of our strategy to diversify our product and technology portfolio. Building on our success over the past few years, we are investing in additional technologies targeting new opportunities for incremental content, including the areas of sensing, power, and battery systems. Moving forward, we believe we are well-positioned to increase the diversity of our business and drive long-term revenue growth.”
Reported Financial Results – Third Quarter FY22
Revenue of $548.3 million; GAAP gross margin of 52.8 percent and non-GAAP gross margin of 52.8 percent; GAAP operating expenses of $145.3 million and non-GAAP operating expenses of $115.5 million; and GAAP earnings per share of $2.16 and non-GAAP earnings per share of $2.54.A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.
Business Outlook – Fourth Quarter FY22
Revenue is expected to range between $400 million and $440 million; GAAP gross margin is forecasted to be between 51 percent and 53 percent; and Combined GAAP R&D and SG&A expenses are anticipated to range between $150 million and $156 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. 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: 3871289).
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 our ability to diversify our product and technology portfolios and drive long-term revenue growth, , and our estimates for the fourth quarter fiscal year 2022 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 fourth 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
Nine Months Ended
Dec. 25,
Sep. 25,
Dec. 26,
Dec. 25,
Dec. 26,
2021
2021
2020
2021
2020
Q3'22
Q2'22
Q3'21
Q3'22
Q3'21
Audio$
341,897
$
300,775
$
381,885
$
860,027
$
868,239
High-Performance Mixed-Signal
206,452
165,111
103,910
431,461
207,454
Net sales
548,349
465,886
485,795
1,291,488
1,075,693
Cost of sales
258,827
230,442
234,295
626,576
516,511
Gross profit
289,522
235,444
251,500
664,912
559,182
Gross margin
52.8
%
50.5
%
51.8
%
51.5
%
52.0
%
Research and development
107,101
102,116
89,435
294,913
252,986
Selling, general and administrative
38,247
38,132
32,415
111,526
93,366
Restructuring costs
-
-
-
-
352
Total operating expenses
145,348
140,248
121,850
406,439
346,704
Income from operations
144,174
95,196
129,650
258,473
212,478
Interest income (expense)
(78
)
35
1,206
718
4,160
Other income (expense)
(87
)
1,859
(207
)
1,530
688
Income before income taxes
144,009
97,090
130,649
260,721
217,326
Provision for income taxes
16,373
11,994
16,281
30,780
25,263
Net income
$
127,636
$
85,096
$
114,368
$
229,941
$
192,063
Basic earnings per share:
$
2.23
$
1.48
$
1.97
$
4.01
$
3.30
Diluted earnings per share:
$
2.16
$
1.43
$
1.91
$
3.88
$
3.20
Weighted average number of shares: Basic
57,178
57,364
58,024
57,374
58,176
Diluted
59,031
59,451
59,963
59,317
60,101
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. 25,
Sep. 25,
Dec. 26,
Dec. 25,
Dec. 26,
2021
2021
2020
2021
2020
Net Income ReconciliationQ3'22
Q2'22
Q3'21
Q3'22
Q3'21
GAAP Net Income$
127,636
$
85,096
$
114,368
$
229,941
$
192,063
Amortization of acquisition intangibles
9,083
7,054
2,998
19,135
8,994
Stock-based compensation expense
17,833
16,551
13,287
49,368
42,069
Restructuring costs
-
-
-
-
352
Acquisition-related costs
3,155
5,834
-
8,989
-
Adjustment to income taxes
(7,903
)
(6,045
)
(2,897
)
(16,897
)
(8,172
)
Non-GAAP Net Income$
149,804
$
108,490
$
127,756
$
290,536
$
235,306
Earnings Per Share Reconciliation GAAP Diluted earnings per share
$
2.16
$
1.43
$
1.91
$
3.88
$
3.20
Effect of Amortization of acquisition intangibles
0.16
0.12
0.05
0.32
0.15
Effect of Stock-based compensation expense
0.30
0.28
0.22
0.83
0.70
Effect of Restructuring costs
-
-
-
-
0.01
Effect of Acquisition-related costs
0.05
0.09
-
0.15
-
Effect of Adjustment to income taxes
(0.13
)
(0.10
)
(0.05
)
(0.28
)
(0.14
)
Non-GAAP Diluted earnings per share$
2.54
$
1.82
$
2.13
$
4.90
$
3.92
Operating Income Reconciliation GAAP Operating Income
$
144,174
$
95,196
$
129,650
$
258,473
$
212,478
GAAP Operating Profit
26.3
%
20.4
%
26.7
%
20.0
%
19.8
%
Amortization of acquisition intangibles
9,083
7,054
2,998
19,135
8,994
Stock-based compensation expense - COGS
245
272
236
763
640
Stock-based compensation expense - R&D
12,260
10,496
9,526
32,368
27,414
Stock-based compensation expense - SG&A
5,328
5,783
3,525
16,237
14,015
Restructuring costs
-
-
-
-
352
Acquisition-related costs
3,155
5,834
-
8,989
-
Non-GAAP Operating Income
$
174,245
$
124,635
$
145,935
$
335,965
$
263,893
Non-GAAP Operating Profit
31.8
%
26.8
%
30.0
%
26.0
%
24.5
%
Operating Expense Reconciliation GAAP Operating Expenses$
145,348
$
140,248
$
121,850
$
406,439
$
346,704
Amortization of acquisition intangibles
(9,083
)
(7,054
)
(2,998
)
(19,135
)
(8,994
)
Stock-based compensation expense - R&D
(12,260
)
(10,496
)
(9,526
)
(32,368
)
(27,414
)
Stock-based compensation expense - SG&A
(5,328
)
(5,783
)
(3,525
)
(16,237
)
(14,015
)
Restructuring costs
-
-
-
-
(352
)
Acquisition-related costs
(3,155
)
(2,373
)
-
(5,528
)
-
Non-GAAP Operating Expenses
$
115,522
$
114,542
$
105,801
$
333,171
$
295,929
Gross Margin/Profit Reconciliation GAAP Gross Profit
$
289,522
$
235,444
$
251,500
$
664,912
$
559,182
GAAP Gross Margin
52.8
%
50.5
%
51.8
%
51.5
%
52.0
%
Acquisition-related costs
-
3,461
-
3,461
-
Stock-based compensation expense - COGS
245
272
236
763
640
Non-GAAP Gross Profit
$
289,767
$
239,177
$
251,736
$
669,136
$
559,822
Non-GAAP Gross Margin
52.8
%
51.3
%
51.8
%
51.8
%
52.0
%
Effective Tax Rate Reconciliation GAAP Tax Expense$
16,373
$
11,994
$
16,281
$
30,780
$
25,263
GAAP Effective Tax Rate
11.4
%
12.4
%
12.5
%
11.8
%
11.6
%
Adjustments to income taxes
7,903
6,045
2,897
16,897
8,172
Non-GAAP Tax Expense
$
24,276
$
18,039
$
19,178
$
47,677
$
33,435
Non-GAAP Effective Tax Rate
13.9
%
14.3
%
13.1
%
14.1
%
12.4
%
Tax Impact to EPS Reconciliation GAAP Tax Expense$
0.28
$
0.20
$
0.27
$
0.52
$
0.42
Adjustments to income taxes
0.13
0.10
0.05
0.28
0.14
Non-GAAP Tax Expense
$
0.41
$
0.30
$
0.32
$
0.80
$
0.56
Dec. 25,
Mar. 27,
Dec. 26,
2021
2021
2020
ASSETS Current assets Cash and cash equivalents$
195,121
$
442,164
$
327,294
Marketable securities
3,719
55,697
43,289
Accounts receivable, net
326,131
108,712
244,803
Inventories
148,525
173,263
142,689
Other current assets
90,025
62,683
45,469
Total current Assets
763,521
842,519
803,544
Long-term marketable securities
72,118
312,759
326,491
Right-of-use lease assets
173,054
133,548
135,719
Property and equipment, net
157,186
154,942
154,312
Intangibles, net
165,581
22,031
24,322
Goodwill
437,783
287,518
287,518
Deferred tax asset
7,203
9,977
7,277
Long-term prepaid wafers
195,000
-
-
Other assets
96,671
67,320
86,446
Total assets
$
2,068,117
$
1,830,614
$
1,825,629
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable
$
110,250
$
102,744
$
90,814
Accrued salaries and benefits
43,044
54,849
39,367
Lease liability
14,653
14,573
14,539
Acquisition-related liabilities
30,964
-
-
Other accrued liabilities
40,603
41,444
40,135
Total current liabilities
239,514
213,610
184,855
Non-current lease liability
164,896
127,883
129,583
Non-current income taxes
77,683
64,020
70,866
Long-term acquisition-related liabilities
5,528
-
-
Other long-term liabilities
17,749
36,096
39,968
Stockholders' equity: Capital stock
1,556,746
1,498,819
1,483,567
Accumulated earnings (deficit)
6,416
(112,689
)
(88,238
)
Accumulated other comprehensive income (loss)
(415
)
2,875
5,028
Total stockholders' equity
1,562,747
1,389,005
1,400,357
Total liabilities and stockholders' equity
$
2,068,117
$
1,830,614
$
1,825,629
Prepared in accordance with Generally Accepted Accounting Principles
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