Cirrus Logic Reports Q4 Revenue of $149.7 Million and Full FY14 Revenue of $714.3 Million

AUSTIN, Texas--(BUSINESS WIRE)--

Cirrus Logic, Inc. CRUS, a leader in high-precision analog and digital signal processing components, today posted on its investor relations website at http://investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the fourth quarter and full fiscal year 2014, which ended March 29, as well as the company's current business outlook.

“Cirrus Logic is entering into FY15 with a robust pipeline of innovative products, a compelling roadmap pairing our best in class hardware with embedded SoundClear^® software and solid relationships with leading players in our target markets,” said Jason Rhode, president and chief executive officer. “Many of our new developments are now under way in more advanced process geometries, allowing our engineers to add meaningful signal processing capabilities to our products and significantly enhance the value we add for our customers.”

Reported Financial Results – Fourth Quarter FY14

• Revenue of $149.7 million;
• Gross margin of 49 percent;
• GAAP operating expenses of $53.3 million and non-GAAP operating expenses of $47.9 million; and
• GAAP diluted earnings per share of $0.20 and non-GAAP diluted earnings per share of $0.41.

Reported Financial Results – Complete FY14

• Revenue of $714.3 million;
• Gross margin of 50 percent;
• GAAP operating expenses of $201.1 million and non-GAAP operating expenses of $178.3 million; and
• GAAP diluted earnings per share of $1.65 and non-GAAP diluted earnings per share of $2.69.

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

Business Outlook – First Quarter FY15

• Revenue is expected to range between $135 million and $155 million;
• Gross margin is expected to be between 47 percent and 49 percent; and
• Combined R&D and SG&A expenses are expected to range between $57 million and $62 million, which includes approximately $7 million in share-based compensation and amortization of acquired intangibles.

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.relations@cirrus.com. A replay of the webcast can be accessed on the Cirrus Logic website approximately two hours following its completion, or by calling (404) 537-3406, or toll-free at (855) 859-2056 (Access Code: 23057089).

Upcoming Investor Conference

Cirrus Logic CEO Jason Rhode will present at the Jefferies 2014 Global Technology, Media and Telecom Conference in Miami on May 6 at 12:00 pm EDT. A live webcast of the presentation will be available on the company's investor relations website http://investor.cirrus.com. An archived replay of the webcast will be available for 90 days on the website following the event.

Cirrus Logic, Inc.

Cirrus Logic develops high-precision, analog and mixed-signal integrated circuits for a broad range of innovative customers. Building on its diverse analog and signal-processing patent portfolio, Cirrus Logic delivers highly optimized products for a variety of audio and energy-related applications. The company operates from headquarters in Austin, Texas, with offices in Phoenix, Ariz., Europe, Japan and Asia. More information about Cirrus Logic is available at www.cirrus.com.

Use of non-GAAP Financial Information

To supplement Cirrus Logic's financial statements presented on a GAAP basis, Cirrus has provided non-GAAP financial information, including operating expenses, net income, operating profit and diluted earnings per share. 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 estimates of first quarter fiscal year 2015 revenue, gross margin, combined research and development and selling, general and administrative expense levels, share-based 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. These risks and uncertainties include, but are not limited to, the following: the level of orders and shipments during the first quarter of fiscal year 2015, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; and the risk factors listed in our Form 10-K for the year ended March 30, 2013, 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 undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

Cirrus Logic, Cirrus and SoundClear are registered trademarks of Cirrus Logic, Inc.

Summary financial data follows:

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
			Three Months Ended												Twelve Months Ended
			Mar. 29,				Dec. 28,				Mar. 30,				Mar. 29,				Mar. 30,
			2014				2013				2013				2014				2013
			Q4'14				Q3'14				Q4'13				Q4'14				Q4'13
Audio products			$	137,773			$	206,388			$	196,098			$	667,739			$	754,769
Energy products				11,886				12,495				10,775				46,599				55,017
Net revenue				149,659				218,883				206,873				714,338				809,786
Cost of sales				76,291				115,034				123,259				358,175				414,595
Gross Profit				73,368				103,849				83,614				356,163				395,191
Gross Margin				49.0	%			47.4	%			40.4	%			49.9	%			48.8	%
Research and development				35,511				32,426				30,085				126,189				114,071
Selling, general and administrative				17,823				18,625				19,724				74,861				76,998
Restructuring and other costs				(26	)			12				-				(598	)			3,539
Gain on sale of asset				-				-				-				-				(247	)
Patent settlements, net				-				-				-				695				-
Total operating expenses				53,308				51,063				49,809				201,147				194,361
Operating income				20,060				52,786				33,805				155,016				200,830
Interest income, net				267				222				106				848				440
Other income (expense), net				(27	)			(45	)			14				(127	)			(80	)
Income before income taxes				20,300				52,963				33,925				155,737				201,190
Provision for income taxes				7,698				11,463				7,565				47,626				64,592
Net income			$	12,602			$	41,500			$	26,360			$	108,111			$	136,598
Basic earnings per share:			$	0.20			$	0.66			$	0.41			$	1.72			$	2.12
Diluted earnings per share:			$	0.20			$	0.63			$	0.39			$	1.65			$	2.00
Weighted average number of shares:
Basic				62,215				62,854				63,877				62,926				64,580
Diluted				64,545				65,368				67,138				65,535				68,454
Prepared in accordance with Generally Accepted Accounting Principles

CIRRUS LOGIC, INC.

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. Certain modifications to prior year non-GAAP presentation has been made and had no material effect on the results of operations.

			Three Months Ended												Twelve Months Ended
			Mar. 29,				Dec. 28,				Mar. 30,				Mar. 29,				Mar. 30,
			2014				2013				2013				2014				2013
Net Income Reconciliation			Q4'14				Q3'14				Q4'13				Q4'14				Q4'13
GAAP Net Income			$	12,602			$	41,500			$	26,360			$	108,111			$	136,598
Amortization of acquisition intangibles				217				275				-				492				604
Stock based compensation expense				5,545				6,016				5,734				23,074				21,496
International sales reorganization charges				-				-				442				-				395
Restructuring and other costs, net				(26	)			12				-				(598	)			3,539
Gain on asset sale				-				-				-				-				(247	)
Patent settlements, net				-				-				-				695				-
Provision for income taxes				7,808				10,300				7,041				44,647				59,643
Non-GAAP Net Income			$	26,146			$	58,103			$	39,577			$	176,421			$	222,028
Earnings Per Share Reconciliation
GAAP Diluted earnings per share			$	0.20			$	0.63			$	0.39			$	1.65			$	2.00
Effect of Amortization of acquisition intangibles				-				-				-				0.01				0.01
Effect of Stock based compensation expense				0.09				0.10				0.09				0.35				0.31
Effect of International sales reorganization charges				-				-				0.01				-				-
Effect of Restructuring and other costs, net				-				-				-				(0.01	)			0.05
Effect of Patent settlements, net				-				-				-				0.01				-
Effect of Provision for income taxes				0.12				0.16				0.10				0.68				0.87
Non-GAAP Diluted earnings per share			$	0.41			$	0.89			$	0.59			$	2.69			$	3.24
Operating Income Reconciliation
GAAP Operating Income			$	20,060			$	52,786			$	33,805			$	155,016			$	200,830
GAAP Operating Profit				13	%			24	%			16	%			22	%			25	%
Amortization of acquisition intangibles				217				275				-				492				604
Stock compensation expense - COGS				287				332				296				864				751
Stock compensation expense - R&D				2,546				2,834				2,976				10,392				10,550
Stock compensation expense - SG&A				2,712				2,850				2,462				11,818				10,195
International sales reorganization charges				-				-				442				-				395
Restructuring and other costs, net				(26	)			12				-				(598	)			3,539
Gain on asset sale				-				-				-				-				(247	)
Patent settlements, net				-				-				-				695				-
Non-GAAP Operating Income			$	25,796			$	59,089			$	39,981			$	178,679			$	226,617
Non-GAAP Operating Profit				17	%			27	%			19	%			25	%			28	%
Operating Expense Reconciliation
GAAP Operating Expenses			$	53,308			$	51,063			$	49,809			$	201,147			$	194,361
Amortization of acquisition intangibles				(217	)			(275	)			-				(492	)			(604	)
Stock compensation expense - R&D				(2,546	)			(2,834	)			(2,976	)			(10,392	)			(10,550	)
Stock compensation expense - SG&A				(2,712	)			(2,850	)			(2,462	)			(11,818	)			(10,195	)
International sales reorganization charges				-				-				(442	)			-				(395	)
Restructuring and other costs, net				26				(12	)			-				598				(3,539	)
Gain on asset sale				-				-				-				-				247
Patent settlements, net				-				-				-				(695	)			-
Non-GAAP Operating Expenses			$	47,859			$	45,092			$	43,929			$	178,348			$	169,325

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
			Mar. 29,				Dec. 28,				Mar. 30,
			2014				2013				2013
ASSETS
Current assets
Cash and cash equivalents			$	31,850			$	74,690			$	66,402
Restricted investments				-				-				-
Marketable securities				263,417				215,792				105,235
Accounts receivable, net				63,220				109,535				69,289
Inventories				69,743				69,985				119,300
Deferred tax asset				22,024				33,155				64,937
Other current assets				25,079				25,662				19,371
Total Current Assets				475,333				528,819				444,534
Long-term marketable securities				89,243				37,115				64,910
Property and equipment, net				103,650				102,542				100,623
Intangibles, net				11,999				13,427				4,650
Goodwill				16,367				16,335				6,027
Deferred tax asset				25,065				17,354				16,671
Other assets				3,087				6,848				13,932
Total Assets			$	724,744			$	722,440			$	651,347
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable			$	51,932			$	60,493			$	60,827
Accrued salaries and benefits				13,388				13,937				16,592
Other accrued liabilities				11,572				12,881				10,704
Deferred income on shipments to distributors				5,631				4,998				4,956
Total Current Liabilities				82,523				92,309				93,079
Other long-term obligations				4,863				5,108				10,094
Stockholders' equity:
Capital stock				1,078,878				1,069,113				1,041,834
Accumulated deficit				(440,634	)			(443,322	)			(492,741	)
Accumulated other comprehensive loss				(886	)			(768	)			(919	)
Total Stockholders' Equity				637,358				625,023				548,174
Total Liabilities and Stockholders' Equity			$	724,744			$	722,440			$	651,347
Prepared in accordance with Generally Accepted Accounting Principles