Cirrus Logic Reports Q4 Revenue of $232 Million and Record Revenue of $1.2 Billion for FY16

AUSTIN, Texas--(BUSINESS WIRE)--

Cirrus Logic, Inc. CRUS, a leader in high-precision analog and digital signal processing products, 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 2016, which ended Mar. 26, 2016, as well as the company's current business outlook.

"FY16 was an outstanding year for Cirrus Logic as we delivered record revenue of $1.2 billion, up 28 percent from the prior year. Additionally, the company is positioned to exceed our long-term revenue growth model again in FY17," said Jason Rhode, president and chief executive officer. "Demand for our products continues to gain momentum as our customers push to further differentiate their devices with compelling and consistent audio and voice capabilities. With a robust portfolio of components and an extensive roadmap the company is well positioned to capitalize on the rapidly growing markets for audio and voice in FY17 and beyond."

Reported Financial Results – Fourth Quarter FY16

• Revenue of $232 million;
• GAAP gross margin of 49.7 percent and non-GAAP gross margin of 49.8 percent;
• GAAP operating expenses of $93.1 million; non-GAAP operating expenses of $79.7 million; and
• GAAP diluted earnings per share of $0.21 and non-GAAP diluted earnings per share of $0.38.

Reported Financial Results – Full Year FY16

• Revenue of $1.2 billion;
• GAAP gross margin of 47.5 percent and non-GAAP gross margin of 47.6 percent;
• GAAP operating expenses of $374.6 million; non-GAAP operating expenses of $325.3 million; and
• GAAP diluted earnings per share of $1.87 and non-GAAP diluted earnings per share of $2.40.

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

Business Outlook – First Quarter FY17

• Revenue is expected to range between $220 million and $250 million;
• GAAP gross margin is expected to be between 47 percent and 49 percent; and
• Combined GAAP R&D and SG&A expenses are expected to range between $103 million and $107 million, which includes approximately $9 million in share-based compensation and $9 million in 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: 77072356).

Cirrus Logic, Inc.

Cirrus Logic is a leader in high performance, low-power ICs for audio and voice signal processing applications. Cirrus Logic's products span the entire audio signal chain, from capture to playback, providing innovative products for the world's top smartphones, tablets, digital headsets, wearables and emerging smart home applications. With headquarters in Austin, Texas, Cirrus Logic is recognized globally for its award-winning corporate culture. Check us out 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, tax expenses 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 future growth opportunities and our estimates of first quarter fiscal year 2017 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 2017, customer cancellations of orders, or the failure to place orders consistent with forecasts, along with the timing and success of future product ramps; and the risk factors listed in our Form 10-K for the year ended March 28, 2015, 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 and Cirrus are registered trademarks of Cirrus Logic, Inc. All other company or product names noted herein may be trademarks of their respective holders.

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
			Three Months Ended																Twelve Months Ended
			Mar. 26,					Dec. 26,					Mar. 28,						Mar. 26,					Mar. 28,
			2016					2015					2015						2016					2015
			Q4'16					Q3'16					Q4'15						Q4'16					Q4'15
Portable audio products			$	187,280				$	308,803				$	210,814					$	989,101				$	740,302
Non-portable audio and other products				44,719					39,060					44,369						180,150					176,266
Net sales				231,999					347,863					255,183						1,169,251					916,568
Cost of sales				116,745					182,952					136,208						614,411					490,820
Gross profit				115,254					164,911					118,975						554,840					425,748
Gross margin				49.7	%				47.4	%				46.6	%					47.5	%				46.5	%
Research and development				65,834					70,290					58,070						269,217					197,878
Selling, general and administrative				27,228					30,632					30,498						117,082					99,509
Acquisition related costs				-					-					-						-					18,137
Restructuring and other				-					-					-						-					1,455
Patent agreement and other				-					78					-						(11,670	)				-
Total operating expenses				93,062					101,000					88,568						374,629					316,979
Income from operations				22,192					63,911					30,407						180,211					108,769
Interest expense, net				(601	)				(591	)				(869	)					(2,431	)				(5,048	)
Other income (expense), net				(478	)				(925	)				392						(1,791	)				(12,172	)
Income before income taxes				21,113					62,395					29,930						175,989					91,549
Provision for income taxes				7,101					21,011					8,581						52,359					36,371
Net income			$	14,012				$	41,384				$	21,349					$	123,630				$	55,178
Basic earnings per share:			$	0.22				$	0.65				$	0.34					$	1.96				$	0.88
Diluted earnings per share:			$	0.21				$	0.63				$	0.32					$	1.87				$	0.85
Weighted average number of shares:
Basic				62,843					63,328					62,852						63,197					62,503
Diluted				65,398					65,761					65,815						65,993					65,235
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. 26,					Dec. 26,					Mar. 28,						Mar. 26,					Mar. 28,
			2016					2015					2015						2016					2015
Net Income Reconciliation			Q4'16					Q3'16					Q4'15						Q4'16					Q4'15
GAAP Net Income			$	14,012				$	41,384				$	21,349					$	123,630				$	55,178
Amortization of acquisition intangibles				8,363					8,634					7,141						32,271					15,062
Stock based compensation expense				8,858					7,761					7,735						33,578					27,668
Patent agreement and other				-					78					-						(11,670	)				-
Restructuring and other costs, net				(3,667	)				-					-						(3,667	)				1,455
Wolfson acquisition items				-					-					-						-					43,082
Adjustment to income taxes				(2,658	)				(3,737	)				7,230						(16,062	)				31,934
Non-GAAP Net Income			$	24,908				$	54,120				$	43,455					$	158,080				$	174,379
Earnings Per Share Reconciliation
GAAP Diluted earnings per share			$	0.21				$	0.63				$	0.32					$	1.87				$	0.85
Effect of Amortization of acquisition intangibles				0.13					0.13					0.11						0.49					0.23
Effect of Stock based compensation expense				0.14					0.12					0.12						0.51					0.42
Effect of Patent agreement and other				-					-					-						(0.18	)				-
Effect of Restructuring and other costs, net				(0.06	)				-					-						(0.05	)				0.02
Effect of Wolfson acquisition items				-					-					-						-					0.66
Effect of Adjustment to income taxes				(0.04	)				(0.06	)				0.11						(0.24	)				0.49
Non-GAAP Diluted earnings per share			$	0.38				$	0.82				$	0.66					$	2.40				$	2.67
Operating Income Reconciliation
GAAP Operating Income			$	22,192				$	63,911				$	30,407					$	180,211				$	108,769
GAAP Operating Profit				10	%				18	%				12	%					15	%				12	%
Amortization of acquisition intangibles				8,363					8,634					7,141						32,271					15,062
Stock compensation expense - COGS				233					213					(10	)					1,151					747
Stock compensation expense - R&D				4,996					4,183					2,994						17,173					11,222
Stock compensation expense - SG&A				3,629					3,365					4,751						15,254					15,699
Patent agreement and other				-					78					-						(11,670	)				-
Restructuring and other costs, net				(3,667	)				-					-						(3,667	)				1,455
Wolfson acquisition items				-					-					-						-					28,642
Non-GAAP Operating Income			$	35,746				$	80,384				$	45,283					$	230,723				$	181,596
Non-GAAP Operating Profit				15	%				23	%				18	%					20	%				20	%
Operating Expense Reconciliation
GAAP Operating Expenses			$	93,062				$	101,000				$	88,568					$	374,629				$	316,979
Amortization of acquisition intangibles				(8,363	)				(8,634	)				(7,141	)					(32,271	)				(15,062	)
Stock compensation expense - R&D				(4,996	)				(4,183	)				(2,994	)					(17,173	)				(11,222	)
Stock compensation expense - SG&A				(3,629	)				(3,365	)				(4,751	)					(15,254	)				(15,699	)
Patent agreement and other				-					(78	)				-						11,670					-
Restructuring and other costs, net				3,667					-					-						3,667					(1,455	)
Wolfson acquisition items				-					-					-						-					(20,329	)
Non-GAAP Operating Expenses			$	79,741				$	84,740				$	73,682					$	325,268				$	253,212
Gross Margin/Profit Reconciliation
GAAP Gross Margin			$	115,254				$	164,911				$	118,975					$	554,840				$	425,748
GAAP Gross Profit				49.7	%				47.4	%				46.6	%					47.5	%				46.5	%
Wolfson acquisition items				-					-					-						-					8,313
Stock compensation expense - COGS				233					213					(10	)					1,151					747
Non-GAAP Gross Margin			$	115,487				$	165,124				$	118,965					$	555,991				$	434,808
Non-GAAP Gross Profit				49.8	%				47.5	%				46.6	%					47.6	%				47.4	%
Effective Tax Rate Reconciliation
GAAP Tax Expense			$	7,101				$	21,011				$	8,581					$	52,359				$	36,371
GAAP Effective Tax Rate				33.6	%				33.7	%				28.7	%					29.8	%				39.7	%
Adjustments to income taxes				2,658					3,737					(7,230	)					16,062					(31,934	)
Non-GAAP Tax Expense			$	9,759				$	24,748				$	1,351					$	68,421				$	4,437
Non-GAAP Effective Tax Rate				28.2	%				31.4	%				3.0	%					30.2	%				2.5	%
Tax Impact to EPS Reconciliation
GAAP Tax Expense			$	0.11				$	0.32				$	0.13					$	0.79				$	0.56
Adjustments to income taxes				0.04					0.06					(0.11	)					0.24					(0.49	)
Non-GAAP Tax Expense			$	0.15				$	0.38				$	0.02					$	1.03				$	0.07

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
			Mar. 26,					Dec. 26,					Mar. 28,
			2016					2015					2015
ASSETS
Current assets
Cash and cash equivalents			$	168,793				$	159,572				$	76,401
Marketable securities				60,582					67,148					124,246
Accounts receivable, net				88,532					127,754					112,608
Inventories				142,015					137,723					84,196
Deferred tax asset				-					19,404					18,559
Other current assets				46,207					37,982					35,903
Total current Assets				506,129					549,583					451,913
Long-term marketable securities				20,631					22,327					60,072
Property and equipment, net				162,656					159,149					144,346
Intangibles, net				162,832					171,664					175,743
Goodwill				287,518					287,518					263,115
Deferred tax asset				25,772					27,581					25,593
Other assets				16,345					18,099					27,996
Total assets			$	1,181,883				$	1,235,921				$	1,148,778
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable			$	71,619				$	114,483				$	112,213
Accrued salaries and benefits				21,239					22,438					24,132
Deferred income				-					4,162					6,105
Other accrued liabilities				35,266					36,301					34,128
Total current liabilities				128,124					177,384					176,578
Long-term debt				160,439					160,439					180,439
Other long-term liabilities				33,837					38,223					34,990
Stockholders' equity:
Capital stock				1,203,496					1,198,547					1,159,494
Accumulated deficit				(344,345	)				(336,653	)				(400,613	)
Accumulated other comprehensive income (loss)				332					(2,019	)				(2,110	)
Total stockholders' equity				859,483					859,875					756,771
Total liabilities and stockholders' equity			$	1,181,883				$	1,235,921				$	1,148,778
Prepared in accordance with Generally Accepted Accounting Principles

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