Cirrus Logic Reports Q4 FY21 Revenue of $293.5 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 fourth quarter and full fiscal year 2021, which ended March 27, 2021, as well as the company’s current business outlook.
“In FY21 the company delivered solid revenue, operating profit and EPS growth, driven by both content gains and higher unit volumes,” said John Forsyth, chief executive officer. “In the past year we increased the penetration of our audio solutions in smartphones, expanded the range of end products containing our audio and haptic components and made significant progress diversifying our mixed-signal product portfolio with key product launches in new areas. While supply constraints had some impact on our Q4 revenue results and Q1 outlook, we have a really exciting pipeline of new components ramping this year, and expect revenue growth to accelerate in FY22.”
Reported Financial Results – Fourth Quarter FY21
Revenue of $293.5 million; GAAP and non-GAAP gross margin of 50.5 percent; GAAP operating expenses of $123.4 million and non-GAAP operating expenses of $106.0 million; and GAAP earnings per share of $0.42 and non-GAAP earnings per share of $0.66.A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.
Reported Financial Results – Full Year FY21
Revenue of $1.37 billion; GAAP and non-GAAP gross margin of 51.7 percent; GAAP operating expenses of $470.1 million and non-GAAP operating expenses of $401.9 million; and GAAP earnings per share of $3.62 and non-GAAP earnings per share of $4.58.A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.
Business Outlook – First Quarter FY22
Revenue is expected to range between $240 million and $280 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 $120 million and $126 million, including approximately $15 million in stock-based compensation expense and $3 million in amortization of acquired intangibles.Beginning this quarter, we are adjusting how we report product line revenue to better represent our business and strategic focus. Sales will be designated in two categories: audio and high-performance mixed-signal. While we continue to see new opportunities in audio, we believe our investment in high-performance mixed-signal technologies will drive product diversification and fuel exciting avenues of growth in the coming years. Additional details relating to these product lines are provided in the Q4 FY21 Shareholder Letter. Prior periods in the statement of operations below have been retrospectively adjusted to reflect revenue in these new product lines.
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@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: 5783516).
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 expectations of accelerating revenue growth in FY22, our ability to ramp new components this year, and our opportunities to drive product diversification and growth in the coming years, along with estimates for the first quarter fiscal year 2022 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 first 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, 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 Twelve Months Ended Mar. 27, Dec. 26, Mar. 28, Mar. 27, Mar. 28,2021
2020
2020
2021
2020
Q4'21 Q3'21 Q4'20 Q4'21 Q4'20 Audio$
235,821
$
381,885
$
238,330
$
1,104,060
$
1,109,958
High-Performance Mixed-Signal
57,716
103,910
40,961
265,170
171,166
Net sales
293,537
485,795
279,291
1,369,230
1,281,124
Cost of sales
145,418
234,295
133,056
661,929
606,957
Gross profit
148,119
251,500
146,235
707,301
674,167
Gross margin
50.5%
51.8%
52.4%
51.7%
52.6%
Research and development
89,773
89,435
81,865
342,759
347,647
Selling, general and administrative
33,642
32,415
32,464
127,008
131,115
Restructuring costs
-
-
21,925
352
21,925
Total operating expenses
123,415
121,850
136,254
470,119
500,687
Income from operations
24,704
129,650
9,981
237,182
173,480
Interest income
1,064
1,206
2,474
5,224
9,401
Other income (expense)
2,152
(207
)
(106
)
2,840
(1,615
)
Income before income taxes
27,920
130,649
12,349
245,246
181,266
Provision for income taxes
2,639
16,281
2,191
27,902
21,768
Net income
$
25,281
$
114,368
$
10,158
$
217,344
$
159,498
Basic earnings per share:
$
0.44
$
1.97
$
0.17
$
3.74
$
2.74
Diluted earnings per share:
$
0.42
$
1.91
$
0.17
$
3.62
$
2.64
Weighted average number of shares: Basic
57,899
58,024
58,527
58,106
58,317
Diluted
59,922
59,963
60,683
60,060
60,462
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. 27, Dec. 26, Mar. 28, Mar. 27, Mar. 28,2021
2020
2020
2021
2020
Net Income Reconciliation Q4'21 Q3'21 Q4'20 Q4'21 Q4'20 GAAP Net Income$
25,281
$
114,368
$
10,158
$
217,344
$
159,498
Amortization of acquisition intangibles
2,998
2,998
3,000
11,992
23,420
Stock-based compensation expense
14,693
13,287
14,052
56,762
53,757
Restructuring costs
-
-
20,602
352
21,925
Adjustment to income taxes
(3,251
)
(2,897
)
(6,320
)
(11,423
)
(17,411
)
Non-GAAP Net Income$
39,721
$
127,756
$
41,492
$
275,027
$
241,189
Earnings Per Share Reconciliation GAAP Diluted earnings per share
$
0.42
$
1.91
$
0.17
$
3.62
$
2.64
Effect of Amortization of acquisition intangibles
0.05
0.05
0.05
0.20
0.39
Effect of Stock-based compensation expense
0.24
0.22
0.23
0.94
0.89
Effect of Restructuring costs
-
-
0.34
0.01
0.36
Effect of Adjustment to income taxes
(0.05
)
(0.05
)
(0.11
)
(0.19
)
(0.29
)
Non-GAAP Diluted earnings per share$
0.66
$
2.13
$
0.68
$
4.58
$
3.99
Operating Income Reconciliation GAAP Operating Income
$
24,704
$
129,650
$
9,981
$
237,182
$
173,480
GAAP Operating Profit
8.4%
26.7%
3.6%
17.3%
13.5%
Amortization of acquisition intangibles
2,998
2,998
3,000
11,992
23,420
Stock-based compensation expense - COGS
260
236
213
900
908
Stock-based compensation expense - R&D
10,069
9,526
9,446
37,483
33,859
Stock-based compensation expense - SG&A
4,364
3,525
4,393
18,379
18,990
Restructuring costs
-
-
20,602
352
21,925
Non-GAAP Operating Income
$
42,395
$
145,935
$
47,635
$
306,288
$
272,582
Non-GAAP Operating Profit
14.4%
30.0%
17.1%
22.4%
21.3%
Operating Expense Reconciliation GAAP Operating Expenses$
123,415
$
121,850
$
136,254
$
470,119
$
500,687
Amortization of acquisition intangibles
(2,998
)
(2,998
)
(3,000
)
(11,992
)
(23,420
)
Stock-based compensation expense - R&D
(10,069
)
(9,526
)
(9,446
)
(37,483
)
(33,859
)
Stock-based compensation expense - SG&A
(4,364
)
(3,525
)
(4,393
)
(18,379
)
(18,990
)
Restructuring costs
-
-
(20,724
)
(352
)
(21,925
)
Non-GAAP Operating Expenses$
105,984
$
105,801
$
98,691
$
401,913
$
402,493
Gross Margin/Profit Reconciliation GAAP Gross Profit
$
148,119
$
251,500
$
146,235
$
707,301
$
674,167
GAAP Gross Margin
50.5%
51.8%
52.4%
51.7%
52.6%
Stock-based compensation expense - COGS
260
236
213
900
908
Restructuring costs - COGS
-
-
(122
)
-
-
Non-GAAP Gross Profit
$
148,379
$
251,736
$
146,326
$
708,201
$
675,075
Non-GAAP Gross Margin
50.5%
51.8%
52.4%
51.7%
52.7%
Effective Tax Rate Reconciliation GAAP Tax Expense$
2,639
$
16,281
$
2,191
$
27,902
$
21,768
GAAP Effective Tax Rate
9.5%
12.5%
17.7%
11.4%
12.0%
Adjustments to income taxes
3,251
2,897
6,320
11,423
17,411
Non-GAAP Tax Expense
$
5,890
$
19,178
$
8,511
$
39,325
$
39,179
Non-GAAP Effective Tax Rate
12.9%
13.1%
17.0%
12.5%
14.0%
Tax Impact to EPS Reconciliation GAAP Tax Expense$
0.04
$
0.27
$
0.04
$
0.46
$
0.36
Adjustments to income taxes
0.05
0.05
0.11
0.19
0.29
Non-GAAP Tax Expense
$
0.09
$
0.32
$
0.15
$
0.65
$
0.65
2021
2020
2020
ASSETS Current assets Cash and cash equivalents$
442,164
$
327,294
$
292,119
Marketable securities
55,697
43,289
22,008
Accounts receivable, net
108,712
244,803
153,998
Inventories
173,263
142,689
146,725
Other current assets
62,683
45,469
35,346
Total current Assets
842,519
803,544
650,196
Long-term marketable securities
312,759
326,491
283,573
Right-of-use lease assets
133,548
135,719
141,274
Property and equipment, net
154,942
154,312
158,244
Intangibles, net
22,031
24,322
34,430
Goodwill
287,518
287,518
287,088
Deferred tax asset
9,977
7,277
10,052
Other assets
67,320
86,446
27,820
Total assets
$
1,830,614
$
1,825,629
$
1,592,677
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable
$
102,744
$
90,814
$
78,412
Accrued salaries and benefits
54,849
39,367
42,439
Lease liability
14,573
14,539
13,580
Other accrued liabilities
41,444
40,135
24,206
Total current liabilities
213,610
184,855
158,637
Non-current lease liability
127,883
129,583
129,312
Non-current income taxes
64,020
70,866
71,143
Other long-term liabilities
36,096
39,968
3,806
Stockholders' equity: Capital stock
1,498,819
1,483,567
1,434,929
Accumulated deficit
(112,689
)
(88,238
)
(201,681
)
Accumulated other comprehensive income (loss)
2,875
5,028
(3,469
)
Total stockholders' equity
1,389,005
1,400,357
1,229,779
Total liabilities and stockholders' equity
$
1,830,614
$
1,825,629
$
1,592,677
Prepared in accordance with Generally Accepted Accounting Principles
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