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Cirrus Logic Reports Q2 FY22 Revenue of $465.9 Million

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  • CRUS

High-Performance Mixed-Signal Content Gains Drove 34 Percent Year-Over-Year Revenue Growth

AUSTIN, Texas, November 01, 2021--(BUSINESS WIRE)--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 second quarter fiscal year 2022, which ended Sept. 25, 2021, as well as the company’s current business outlook.

"Cirrus Logic reported record revenue and EPS for the September quarter and delivered solid year-over-year operating profit growth," said John Forsyth, Cirrus Logic president and chief executive officer. "During the quarter we made great progress on the company’s strategy to diversify beyond audio. In our high-performance mixed-signal product line, we brought our new power conversion and control IC to market, increased the attach rate of our camera controllers in smartphones and sampled new fast-charging products to our general market customers. This represents a significant expansion of Cirrus Logic’s technology and product mix, with our high-performance mixed-signal business delivering 30 percent of total revenue in the first half fiscal year 2022, up 117 percent year over year. We continue to be excited about the opportunities these new technologies offer for further growth and diversification in the future."

Reported Financial Results – Second Quarter FY22

  • Revenue of $465.9 million;

  • GAAP gross margin of 50.5 percent and non-GAAP gross margin of 51.3 percent;

  • GAAP operating expenses of $140.2 million and non-GAAP operating expenses of $114.5 million; and

  • GAAP earnings per share of $1.43 and non-GAAP earnings per share of $1.82.

A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.

Business Outlook – Third Quarter FY22

  • Revenue is expected to range between $490 million and $530 million;

  • GAAP gross margin is forecasted to be between 50 percent and 52 percent; and

  • Combined GAAP R&D and SG&A expenses are anticipated to range between $141 million and $147 million, including approximately $19 million in stock-based compensation expense, $9 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 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: 3476036).

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 opportunities for further growth and diversification in the future, and our estimates for the third 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 third 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

Six Months Ended

Sep. 25,

Jun. 26,

Sep. 26,

Sep. 25,

Sep. 26,

2021

2021

2020

2021

2020

Q2'22

Q1'22

Q2'21

Q2'22

Q2'21

Audio

$

300,775

$

217,355

$

279,905

$

518,130

$

486,354

High-Performance Mixed-Signal

165,111

59,898

67,420

225,009

103,544

Net sales

465,886

277,253

347,325

743,139

589,898

Cost of sales

230,442

137,307

167,115

367,749

282,216

Gross profit

235,444

139,946

180,210

375,390

307,682

Gross margin

50.5

%

50.5

%

51.9

%

50.5

%

52.2

%

Research and development

102,116

85,696

84,810

187,812

163,551

Selling, general and administrative

38,132

35,147

31,247

73,279

60,951

Restructuring costs

-

-

-

-

352

Total operating expenses

140,248

120,843

116,057

261,091

224,854

Income from operations

95,196

19,103

64,153

114,299

82,828

Interest income

35

761

1,378

796

2,954

Other income (expense)

1,859

(242

)

784

1,617

895

Income before income taxes

97,090

19,622

66,315

116,712

86,677

Provision for income taxes

11,994

2,413

6,829

14,407

8,982

Net income

$

85,096

$

17,209

$

59,486

$

102,305

$

77,695

Basic earnings per share:

$

1.48

$

0.30

$

1.02

$

1.78

$

1.33

Diluted earnings per share:

$

1.43

$

0.29

$

0.99

$

1.72

$

1.29

Weighted average number of shares:

Basic

57,364

57,582

58,191

57,473

58,252

Diluted

59,451

59,513

60,127

59,485

60,203

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

Six Months Ended

Sep. 25,

Jun. 26,

Sep. 26,

Sep. 25,

Sep. 26,

2021

2021

2020

2021

2020

Net Income Reconciliation

Q2'22

Q1'22

Q2'21

Q2'22

Q2'21

GAAP Net Income

$

85,096

$

17,209

$

59,486

$

102,305

$

77,695

Amortization of acquisition intangibles

7,054

2,998

2,998

10,052

5,996

Stock-based compensation expense

16,551

14,984

15,476

31,535

28,782

Restructuring costs

-

-

-

-

352

Acquisition-related costs

5,834

-

-

5,834

-

Adjustment to income taxes

(6,045

)

(2,949

)

(2,293

)

(8,994

)

(5,275

)

Non-GAAP Net Income

$

108,490

$

32,242

$

75,667

$

140,732

$

107,550

Earnings Per Share Reconciliation

GAAP Diluted earnings per share

$

1.43

$

0.29

$

0.99

$

1.72

$

1.29

Effect of Amortization of acquisition intangibles

0.12

0.05

0.05

0.17

0.10

Effect of Stock-based compensation expense

0.28

0.25

0.26

0.53

0.48

Effect of Restructuring costs

-

-

-

-

0.01

Effect of Acquisition-related costs

0.09

-

-

0.09

-

Effect of Adjustment to income taxes

(0.10

)

(0.05

)

(0.04

)

(0.14

)

(0.09

)

Non-GAAP Diluted earnings per share

$

1.82

$

0.54

$

1.26

$

2.37

$

1.79

Operating Income Reconciliation

GAAP Operating Income

$

95,196

$

19,103

$

64,153

$

114,299

$

82,828

GAAP Operating Profit

20.4

%

6.9

%

18.5

%

15.4

%

14.0

%

Amortization of acquisition intangibles

7,054

2,998

2,998

10,052

5,996

Stock-based compensation expense - COGS

272

246

197

518

404

Stock-based compensation expense - R&D

10,496

9,612

9,235

20,108

17,888

Stock-based compensation expense - SG&A

5,783

5,126

6,044

10,909

10,490

Restructuring costs

-

-

-

-

352

Acquisition-related costs

5,834

-

-

5,834

-

Non-GAAP Operating Income

$

124,635

$

37,085

$

82,627

$

161,720

$

117,958

Non-GAAP Operating Profit

26.8

%

13.4

%

23.8

%

21.8

%

20.0

%

Operating Expense Reconciliation

GAAP Operating Expenses

$

140,248

$

120,843

$

116,057

$

261,091

$

224,854

Amortization of acquisition intangibles

(7,054

)

(2,998

)

(2,998

)

(10,052

)

(5,996

)

Stock-based compensation expense - R&D

(10,496

)

(9,612

)

(9,235

)

(20,108

)

(17,888

)

Stock-based compensation expense - SG&A

(5,783

)

(5,126

)

(6,044

)

(10,909

)

(10,490

)

Restructuring costs

-

-

-

-

(352

)

Acquisition-related costs

(2,373

)

-

-

(2,373

)

-

Non-GAAP Operating Expenses

$

114,542

$

103,107

$

97,780

$

217,649

$

190,128

Gross Margin/Profit Reconciliation

GAAP Gross Profit

$

235,444

$

139,946

$

180,210

$

375,390

$

307,682

GAAP Gross Margin

50.5

%

50.5

%

51.9

%

50.5

%

52.2

%

Acquisition-related costs

3,461

-

-

3,461

-

Stock-based compensation expense - COGS

272

246

197

518

404

Non-GAAP Gross Profit

$

239,177

$

140,192

$

180,407

$

379,369

$

308,086

Non-GAAP Gross Margin

51.3

%

50.6

%

51.9

%

51.0

%

52.2

%

Effective Tax Rate Reconciliation

GAAP Tax Expense

$

11,994

$

2,413

$

6,829

$

14,407

$

8,982

GAAP Effective Tax Rate

12.4

%

12.3

%

10.3

%

12.3

%

10.4

%

Adjustments to income taxes

6,045

2,949

2,293

8,994

5,275

Non-GAAP Tax Expense

$

18,039

$

5,362

$

9,122

$

23,401

$

14,257

Non-GAAP Effective Tax Rate

14.3

%

14.3

%

10.8

%

14.3

%

11.7

%

Tax Impact to EPS Reconciliation

GAAP Tax Expense

$

0.20

$

0.04

$

0.11

$

0.24

$

0.15

Adjustments to income taxes

0.10

0.05

0.04

0.14

0.09

Non-GAAP Tax Expense

$

0.30

$

0.09

$

0.15

$

0.38

$

0.24

CONSOLIDATED CONDENSED BALANCE SHEET

unaudited; in thousands

Sep. 25,

Mar. 27,

Sep. 26,

2021

2021

2020

ASSETS

Current assets

Cash and cash equivalents

$

386,741

$

442,164

$

247,536

Marketable securities

8,152

55,697

36,641

Accounts receivable, net

280,967

108,712

181,496

Inventories

188,360

173,263

209,050

Other current assets

84,836

62,683

34,508

Total current Assets

949,056

842,519

709,231

Long-term marketable securities

67,726

312,759

328,255

Right-of-use lease assets

129,298

133,548

137,045

Property and equipment, net

159,480

154,942

153,640

Intangibles, net

174,852

22,031

27,898

Goodwill

437,783

287,518

287,673

Deferred tax asset

10,073

9,977

7,899

Long-term prepaid wafers

195,000

-

-

Other assets

102,892

67,320

48,223

Total assets

$

2,226,160

$

1,830,614

$

1,699,864

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

386,699

$

102,744

$

99,105

Accrued salaries and benefits

54,919

54,849

41,707

Lease liability

14,359

14,573

13,994

Other accrued liabilities

44,404

41,444

23,237

Total current liabilities

500,381

213,610

178,043

Non-current lease liability

122,815

127,883

128,570

Non-current income taxes

79,727

64,020

66,503

Long-term acquisition-related liabilities

33,329

-

-

Other long-term liabilities

21,818

36,096

9,917

Stockholders' equity:

Capital stock

1,533,557

1,498,819

1,466,978

Accumulated deficit

(65,672)

(112,689)

(155,260)

Accumulated other comprehensive income

205

2,875

5,113

Total stockholders' equity

1,468,090

1,389,005

1,316,831

Total liabilities and stockholders' equity

$

2,226,160

$

1,830,614

$

1,699,864

Prepared in accordance with Generally Accepted Accounting Principles

View source version on businesswire.com: https://www.businesswire.com/news/home/20211101005296/en/

Contacts

Investor Contact:
Thurman K. Case
Chief Financial Officer
Cirrus Logic, Inc.
(512) 851-4125
Investor@cirrus.com

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