Cirrus Logic Reports Revenue of $298.6 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 third quarter fiscal year 2015, which ended Dec. 27, 2014, as well as the company's current business outlook.

“Q3 was an excellent quarter for Cirrus Logic, as strength in portable audio fueled revenue growth and operating profit expansion,” said Jason Rhode, president and chief executive officer. “We are very excited about the outlook for Cirrus Logic. We expect to deliver year-over-year revenue growth in Q4 and FY16 driven by a continued strong market for our innovative audio and voice products, a compelling lineup of new product introductions, and significantly improved contributions from the Wolfson acquisition.”

Reported Financial Results – Third Quarter FY15

• Revenue of $298.6 million;
• GAAP gross margin of 43.8 percent and non-GAAP gross margin of 46.2 percent;
• GAAP operating expenses of $86.5 million and non-GAAP operating expenses of $70.6 million; and
• GAAP diluted earnings per share of $0.35 and non-GAAP diluted earnings per share of $0.97.

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

Business Outlook – Fourth Quarter FY15

• Revenue is expected to range between $220 million and $240 million;
• GAAP gross margin is expected to be between 45 percent and 47 percent; and
• Combined R&D and SG&A expenses are expected to range between $88 million and $92 million, which includes approximately $8 million in share-based compensation and $7 million in amortization of acquired intangibles.

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.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: 61707935).

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, industrial and energy-related applications. The company operates from headquarters in Austin, Texas, with offices in the United States, United Kingdom, 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 gross margins, operating expenses, net income, operating profit and income, 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 fourth 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 fourth 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 29, 2014, 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 Wolfson are registered trademarks of Cirrus Logic, Inc. or its subsidiaries. All other company or product names noted herein may be trademarks of their respective holders.

Summary financial data follows:

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
			Three Months Ended													Nine Months Ended
			Dec. 27,				Sep. 27,				Dec. 28,					Dec. 27,				Dec. 28,
			2014				2014				2013					2014				2013
			Q3'15				Q2'15				Q3'14					Q3'15				Q3'14
Portable products			$	253,355			$	163,563			$	181,749				$	529,487			$	449,305
Consumer, automotive and other products				45,251				46,651				37,134					131,898				115,374
Net sales				298,606				210,214				218,883					661,385				564,679
Cost of sales				167,775				109,647				115,034					354,612				281,884
Gross profit				130,831				100,567				103,849					306,773				282,795
Gross margin				43.8	%			47.8	%			47.4	%				46.4	%			50.1	%
Research and development				55,474				44,557				32,426					139,808				90,678
Selling, general and administrative				27,783				21,545				18,625					69,011				57,038
Acquisition related costs				3,200				14,937				-					18,137				-
Restructuring and other				-				1,455				12					1,455				(572	)
Patent infringement settlements, net				-				-				-					-				695
Total operating expenses				86,457				82,494				51,063					228,411				147,839
Income from operations				44,374				18,073				52,786					78,362				134,956
Interest income (expense), net				(1,042	)			(2,670	)			222					(4,179	)			581
Other expense				(1,071	)			(11,994	)			(45	)				(12,564	)			(100	)
Income before income taxes				42,261				3,409				52,963					61,619				135,437
Provision for income taxes				19,532				2,557				11,463					27,790				39,928
Net income			$	22,729			$	852			$	41,500				$	33,829			$	95,509
Basic earnings per share:			$	0.36			$	0.01			$	0.66				$	0.54			$	1.51
Diluted earnings per share:			$	0.35			$	0.01			$	0.63				$	0.52			$	1.45
Weighted average number of shares:
Basic				62,885				62,241				62,854					62,386				63,170
Diluted				65,214				65,085				65,368					65,024				65,894
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													Nine Months Ended
			Dec. 27,				Sep. 27,				Dec. 28,					Dec. 27,				Dec. 28,
			2014				2014				2013					2014				2013
Net Income Reconciliation			Q3'15				Q2'15				Q3'14					Q3'15				Q3'14
GAAP Net Income			$	22,729			$	852			$	41,500				$	33,829			$	95,509
Amortization of acquisition intangibles				5,151				2,524				275					7,921				275
Stock based compensation expense				7,815				6,496				6,016					19,933				17,529
Provision for litigation expenses and settlements				-				-				-					-				695
Restructuring and other costs, net				-				1,455				12					1,455				(572	)
Wolfson acquisition items				9,903				30,875				-					43,082				-
Provision (benefit) for income taxes				17,714				1,764				10,300					24,704				36,839
Non-GAAP Net Income			$	63,312			$	43,966			$	58,103				$	130,924			$	150,275
Earnings Per Share Reconciliation
GAAP Diluted earnings per share			$	0.35			$	0.01			$	0.63				$	0.52			$	1.45
Effect of Amortization of acquisition intangibles				0.08				0.04				-					0.12				-
Effect of Stock based compensation expense				0.12				0.10				0.10					0.31				0.27
Effect of Provision for litigation expenses and settlements				-				-				-					-				0.01
Effect of Restructuring and other costs, net				-				0.03				-					0.02				(0.01	)
Effect of Wolfson acquisition items				0.15				0.47				-					0.66				-
Effect of Provision (benefit) for income taxes				0.27				0.03				0.16					0.38				0.56
Non-GAAP Diluted earnings per share			$	0.97			$	0.68			$	0.89				$	2.01			$	2.28
Operating Income Reconciliation
GAAP Operating Income			$	44,374			$	18,073			$	52,786				$	78,362			$	134,956
GAAP Operating Profit				15	%			9	%			24	%				12	%			24	%
Amortization of acquisition intangibles				5,151				2,524				275					7,921				275
Stock compensation expense - COGS				273				253				332					757				577
Stock compensation expense - R&D				2,904				2,781				2,834					8,228				7,846
Stock compensation expense - SG&A				4,638				3,462				2,850					10,948				9,106
Provision for litigation expenses and settlements				-				-				-					-				695
Restructuring and other costs, net				-				1,455				12					1,455				(572	)
Wolfson acquisition items				9,903				16,547				-					28,642				-
Non-GAAP Operating Income			$	67,243			$	45,095			$	59,089				$	136,313			$	152,883
Non-GAAP Operating Profit				23	%			21	%			27	%				21	%			27	%
Operating Expense Reconciliation
GAAP Operating Expenses			$	86,457			$	82,494			$	51,063				$	228,411			$	147,839
Amortization of acquisition intangibles				(5,151	)			(2,524	)			(275	)				(7,921	)			(275	)
Stock compensation expense - R&D				(2,904	)			(2,781	)			(2,834	)				(8,228	)			(7,846	)
Stock compensation expense - SG&A				(4,638	)			(3,462	)			(2,850	)				(10,948	)			(9,106	)
Provision for litigation expenses and settlements				-				-				-					-				(695	)
Restructuring and other costs, net				-				(1,455	)			(12	)				(1,455	)			572
Wolfson acquisition items				(3,200	)			(14,937	)			-					(20,329	)			-
Non-GAAP Operating Expenses			$	70,564			$	57,335			$	45,092				$	179,530			$	130,489
Gross Margin/Profit Reconciliation
GAAP Gross Margin			$	130,831			$	100,567			$	103,849				$	306,773			$	282,795
GAAP Gross Profit				43.8	%			47.8	%			47.4	%				46.4	%			50.1	%
Wolfson acquisition items				6,703				1,610				-					8,313				-
Stock compensation expense - COGS				273				253				332					757				577
Non-GAAP Gross Margin			$	137,807			$	102,430			$	104,181				$	315,843			$	283,372
Non-GAAP Gross Profit				46.2	%			48.7	%			47.6	%				47.8	%			50.2	%

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
			Dec. 27,				Mar. 29,				Dec. 28,
			2014				2014				2013
			(unaudited)								(unaudited)
ASSETS
Current assets
Cash and cash equivalents			$	66,607			$	31,850			$	74,690
Marketable securities				106,061				263,417				215,792
Accounts receivable, net				148,386				63,220				109,535
Inventories				73,896				69,743				69,985
Deferred tax asset				14,143				22,024				33,155
Other current assets				27,081				25,079				25,662
Total current Assets				436,174				475,333				528,819
Long-term marketable securities				3,404				89,243				37,115
Property and equipment, net				137,291				103,650				102,542
Intangibles, net				181,675				11,999				13,427
Goodwill				264,879				16,367				16,335
Deferred tax asset				24,991				25,065				17,354
Other assets				16,654				3,087				6,848
Total assets			$	1,065,068			$	724,744			$	722,440
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable			$	77,195			$	51,932			$	60,493
Accrued salaries and benefits				20,164				13,388				13,937
Deferred income				5,417				5,631				4,998
Other accrued liabilities				27,402				11,572				12,881
Total current liabilities				130,178				82,523				92,309
Long-term debt				200,439				-				-
Other long-term liabilities				21,073				4,863				5,108
Stockholders' equity:
Capital stock				1,135,719				1,078,878				1,069,113
Accumulated deficit				(421,514	)			(440,634	)			(443,322	)
Accumulated other comprehensive loss				(827	)			(886	)			(768	)
Total stockholders' equity				713,378				637,358				625,023
Total liabilities and stockholders' equity			$	1,065,068			$	724,744			$	722,440
Prepared in accordance with Generally Accepted Accounting Principles