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 first quarter fiscal year
2024, which ended June 24, 2023, as well as the company’s current
business outlook.
“Cirrus Logic reported revenue for the June quarter towards the
top end of guidance as we benefited from higher-than-expected unit
volumes,” said John Forsyth, Cirrus Logic president and chief
executive officer. “During the quarter, we taped out our
next-generation boosted amplifier, completed product validation on
our first 22-nanometer smart codec, and began ramping production of
our latest camera controller. We also made progress on product and
end-market diversification as we gained momentum in laptops and
began selectively refreshing certain core product lines that are
expected to drive expansion outside of smartphones.”
Reported Financial Results – First Quarter FY24
- Revenue of $317.0 million;
- GAAP and non-GAAP gross margin of 50.3 percent and 50.4
percent;
- GAAP operating expenses of $141.6 million and non-GAAP
operating expenses of $113.8 million; and
- GAAP earnings per share of $0.28 and non-GAAP earnings per
share of $0.67.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – Second Quarter FY24
- Revenue is expected to range between $430 million and $490
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 $141 million and $147 million, including
approximately $22 million in stock-based compensation expense, $2
million in amortization of acquired intangibles, and $3 million in
acquisition-related costs and restructuring charges associated with
our recently announced workforce reduction.
Cirrus Logic will host a live Q&A session at 6 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. A replay of the webcast
can be accessed on the Cirrus Logic website approximately two hours
following its completion or by calling (647) 362-9199, or toll-free
at (800) 770-2030 (Access Code: 95424).
Cirrus Logic to Present at Upcoming Conference
Cirrus Logic Chief Financial Officer Venk Nathamuni and Vice
President of Mixed-Signal Products Carl Alberty will present at the
KeyBanc Technology Leadership Forum in Vail, Colorado on August 7,
2023 at 2:30 p.m. MDT. A live webcast and replay of the
presentation will be available on the company's investor relations
website.
About 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, diluted share count, operating income and profit, operating
expenses, gross margin and profit, tax expense, tax expense impact
on earnings per share, effective tax rate, free cash flow, and free
cash flow margin. 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 make progress with
product and end-market diversification and refresh certain core
product lines that are expected to drive expansion outside of
smartphones; and our estimates for the second quarter fiscal year
2024 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 and restructuring charges associated with
our recently announced workforce reduction. 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: our ability to
develop and ramp new products in a timely manner, including our
next-generation boosted amplifier, our first 22-nm smart codec, and
latest camera controller; our ability to commercialize new research
and development efforts into new markets outside of smartphones;
and the level and timing of orders and shipments during the second
quarter of fiscal year 2024, 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
25, 2023 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
(in thousands, except per
share data; unaudited)
Three Months Ended
Jun. 24,
Mar. 25,
Jun. 25,
2023
2023
2022
Q1'24
Q4'23
Q1'23
Audio
$
195,806
$
232,402
$
254,496
High-Performance Mixed-Signal
121,210
140,420
139,143
Net sales
317,016
372,822
393,639
Cost of sales
157,629
186,468
191,005
Gross profit
159,387
186,354
202,634
Gross margin
50.3
%
50.0
%
51.5
%
Research and development
106,215
115,162
109,716
Selling, general and administrative
35,379
37,642
38,642
Lease impairments and restructuring
—
10,632
—
Intangibles impairment
—
85,760
—
Total operating expenses
141,594
249,196
148,358
Income (loss) from operations
17,793
(62,842
)
54,276
Interest income (expense)
4,600
4,720
305
Other income (expense)
377
(464
)
506
Income (loss) before income
taxes
22,770
(58,586
)
55,087
Provision for income taxes
7,170
(4,917
)
15,380
Net income (loss)
$
15,600
$
(53,669
)
$
39,707
Basic earnings (loss) per share
$
0.28
$
(0.97
)
$
0.71
Diluted earnings (loss) per share:
$
0.28
$
(0.97
)
$
0.69
Weighted average number of shares:
Basic
54,862
55,219
56,277
Diluted
56,631
55,219
57,804
Prepared in accordance with
Generally Accepted Accounting Principles
RECONCILIATION BETWEEN GAAP
AND NON-GAAP FINANCIAL INFORMATION
(in thousands, except per
share data; unaudited)
(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. 24,
Mar. 25,
Jun. 25,
2023
2023
2022
Net Income (Loss) Reconciliation
Q1'24
Q4'23
Q1'23
GAAP Net Income (Loss)
$
15,600
$
(53,669
)
$
39,707
Amortization of acquisition
intangibles
2,170
7,657
7,835
Stock-based compensation expense
22,715
22,533
18,138
Lease impairments and restructuring
—
10,632
—
Intangibles impairment
—
85,760
—
Acquisition-related costs
3,166
3,166
3,164
Adjustment to income taxes
(5,628
)
(23,461
)
(4,300
)
Non-GAAP Net Income
$
38,023
$
52,618
$
64,544
Earnings (Loss) Per Share
Reconciliation
GAAP Diluted earnings (loss) per
share
$
0.28
$
(0.97
)
$
0.69
Effect of Amortization of acquisition
intangibles
0.04
0.14
0.14
Effect of Stock-based compensation
expense
0.40
0.40
0.31
Effect of Lease impairments and
restructuring
—
0.19
—
Effect of Intangibles impairment
—
1.51
—
Effect of Acquisition-related costs
0.05
0.06
0.05
Effect of Adjustment to income taxes
(0.10
)
(0.41
)
(0.07
)
Non-GAAP Diluted earnings per
share
$
0.67
$
0.92
$
1.12
Diluted Shares Reconciliation
GAAP Diluted shares
56,631
55,219
57,804
Effect of weighted dilutive shares
—
1,821
—
Non-GAAP Diluted shares
56,631
57,040
57,804
Operating Income (Loss) Reconciliation
GAAP Operating Income (Loss)
$
17,793
$
(62,842
)
$
54,276
GAAP Operating Profit (Loss)
5.6
%
(16.9
)%
13.8
%
Amortization of acquisition
intangibles
2,170
7,657
7,835
Stock-based compensation expense -
COGS
285
372
277
Stock-based compensation expense -
R&D
15,952
15,782
12,592
Stock-based compensation expense -
SG&A
6,478
6,379
5,269
Lease impairments and restructuring
—
10,632
—
Intangibles impairment
—
85,760
—
Acquisition-related costs
3,166
3,166
3,164
Non-GAAP Operating Income
$
45,844
$
66,906
$
83,413
Non-GAAP Operating Profit
14.5
%
17.9
%
21.2
%
Operating Expense Reconciliation
GAAP Operating Expenses
$
141,594
$
249,196
$
148,358
Amortization of acquisition
intangibles
(2,170
)
(7,657
)
(7,835
)
Stock-based compensation expense -
R&D
(15,952
)
(15,782
)
(12,592
)
Stock-based compensation expense -
SG&A
(6,478
)
(6,379
)
(5,269
)
Lease impairments and restructuring
—
(10,632
)
—
Intangibles impairment
—
(85,760
)
—
Acquisition-related costs
(3,166
)
(3,166
)
(3,164
)
Non-GAAP Operating Expenses
$
113,828
$
119,820
$
119,498
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
159,387
$
186,354
$
202,634
GAAP Gross Margin
50.3
%
50.0
%
51.5
%
Stock-based compensation expense -
COGS
285
372
277
Non-GAAP Gross Profit
$
159,672
$
186,726
$
202,911
Non-GAAP Gross Margin
50.4
%
50.1
%
51.5
%
Three Months Ended
Jun. 24,
Mar. 25,
Jun. 25,
2023
2023
2022
Effective Tax Rate Reconciliation
Q1'24
Q4'23
Q1'23
GAAP Tax Expense (Benefit)
$
7,170
$
(4,917
)
$
15,380
GAAP Effective Tax Rate
31.5
%
8.4
%
27.9
%
Adjustments to income taxes
5,628
23,461
4,300
Non-GAAP Tax Expense
$
12,798
$
18,544
$
19,680
Non-GAAP Effective Tax Rate
25.2
%
26.1
%
23.4
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense (Benefit)
$
0.13
$
(0.09
)
$
0.27
Adjustments to income taxes
0.10
0.41
0.07
Non-GAAP Tax Expense
$
0.23
$
0.32
$
0.34
CONSOLIDATED CONDENSED BALANCE
SHEET
(in thousands;
unaudited)
Jun. 24,
Mar. 25,
Jun. 25,
2023
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
352,346
$
445,784
$
379,335
Marketable securities
35,765
34,978
18,397
Accounts receivable, net
186,033
150,473
206,272
Inventories
300,956
233,450
174,370
Prepaid wafers
84,739
60,638
—
Other current assets
88,829
92,533
82,634
Total current Assets
1,048,668
1,017,856
861,008
Long-term marketable securities
38,029
36,509
55,965
Right-of-use lease assets
125,538
128,145
168,680
Property and equipment, net
167,238
162,972
157,165
Intangibles, net
36,447
38,876
149,984
Goodwill
435,936
435,936
435,936
Deferred tax asset
44,991
35,580
16,928
Long-term prepaid wafers
110,262
134,363
195,000
Other assets
49,483
73,729
65,236
Total assets
$
2,056,592
$
2,063,966
$
2,105,902
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
75,941
$
81,462
$
121,451
Accrued salaries and benefits
36,465
50,606
41,026
Lease liability
19,903
18,442
13,988
Acquisition-related liabilities
24,527
21,361
30,964
Other accrued liabilities
46,018
44,469
45,167
Total current liabilities
202,854
216,340
252,596
Non-current lease liability
125,071
122,631
159,344
Non-current income taxes
59,587
59,013
73,735
Long-term acquisition-related
liabilities
—
—
11,856
Other long-term liabilities
12,286
7,700
9,184
Total long-term liabilities
196,944
189,344
254,119
Stockholders' equity:
Capital stock
1,693,420
1,670,141
1,596,684
Accumulated earnings (deficit)
(33,621
)
(9,320
)
5,894
Accumulated other comprehensive loss
(3,005
)
(2,539
)
(3,391
)
Total stockholders' equity
1,656,794
1,658,282
1,599,187
Total liabilities and stockholders'
equity
$
2,056,592
$
2,063,966
$
2,105,902
Prepared in accordance with
Generally Accepted Accounting Principles
CONSOLIDATED CONDENSED
STATEMENT OF CASH FLOWS
(in thousands;
unaudited)
Three Months Ended
Jun. 24,
Jun. 25,
2023
2022
Q1'24
Q1'23
Cash flows from operating activities:
Net income
$
15,600
$
39,707
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
11,941
16,515
Stock-based compensation expense
22,715
18,138
Deferred income taxes
(9,411
)
(5,860
)
Loss on retirement or write-off of
long-lived assets
6
292
Other non-cash charges
1,334
99
Net change in operating assets and
liabilities:
Accounts receivable, net
(35,560
)
33,992
Inventories
(67,506
)
(35,934
)
Other assets
8,101
549
Accounts payable and other accrued
liabilities
(10,278
)
(20,327
)
Income taxes payable
20,079
24,030
Acquisition-related liabilities
3,166
3,164
Net cash provided by (used in) operating
activities
(39,813
)
74,365
Cash flows from investing activities:
Maturities and sales of available-for-sale
marketable securities
11,048
4,694
Purchases of available-for-sale marketable
securities
(13,372
)
(5,186
)
Purchases of property, equipment and
software
(12,310
)
(6,776
)
Investments in technology
—
(448
)
Net cash used in investing activities
(14,634
)
(7,716
)
Cash flows from financing activities:
Issuance of common stock, net of shares
withheld for taxes
560
120
Repurchase of stock to satisfy employee
tax withholding obligations
(1,047
)
(866
)
Repurchase and retirement of common
stock
(38,504
)
(56,382
)
Net cash used in financing activities
(38,991
)
(57,128
)
Net increase (decrease) in cash and cash
equivalents
(93,438
)
9,521
Cash and cash equivalents at beginning of
period
445,784
369,814
Cash and cash equivalents at end of
period
$
352,346
$
379,335
Prepared in accordance with
Generally Accepted Accounting Principles
RECONCILIATION BETWEEN GAAP
AND NON-GAAP FINANCIAL INFORMATION
(in thousands;
unaudited)
Free cash flow, a non-GAAP financial
measure, is GAAP cash flow from operations (or cash provided by
operating activities) less capital expenditures. Capital
expenditures include purchases of property, equipment and software
as well as investments in technology, as presented within our GAAP
Consolidated Condensed Statement of Cash Flows. Free cash flow
margin represents free cash flow divided by revenue.
Twelve Months Ended
Three Months Ended
Jun. 24,
Jun. 24,
Mar. 25,
Dec. 24,
Sep. 24,
2023
2023
2023
2022
2022
Q1'24
Q1'24
Q4'23
Q3'23
Q2'23
Net cash provided by (used in) operating
activities (GAAP)
$
225,390
$
(39,813
)
$
48,266
$
180,948
$
35,989
Capital expenditures
(41,800
)
(12,310
)
(11,635
)
(7,608
)
(10,247
)
Free Cash Flow (Non-GAAP)
$
183,590
$
(52,123
)
$
36,631
$
173,340
$
25,742
Cash Flow from Operations as a
Percentage of Revenue (GAAP)
12
%
(13
)%
13
%
31
%
7
%
Capital Expenditures as a Percentage of
Revenue (GAAP)
2
%
4
%
3
%
1
%
2
%
Free Cash Flow Margin
(Non-GAAP)
10
%
(16
)%
10
%
29
%
5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803298638/en/
Investor Contact: Chelsea Heffernan Vice President,
Investor Relations Cirrus Logic, Inc. (512) 851-4125
Investor@cirrus.com
Grafico Azioni Cirrus Logic (NASDAQ:CRUS)
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