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Cirrus Logic Reports Q4 FY21 Revenue of $293.5 Million

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Content Gains in High-Performance Mixed-Signal Expected to Drive Acceleration of Revenue Growth in FY22

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 fourth quarter and full fiscal year 2021, which ended March 27, 2021, as well as the company's current business outlook.

"In FY21 the company delivered solid revenue, operating profit and EPS growth, driven by both content gains and higher unit volumes," said John Forsyth, chief executive officer. "In the past year we increased the penetration of our audio solutions in smartphones, expanded the range of end products containing our audio and haptic components and made significant progress diversifying our mixed-signal product portfolio with key product launches in new areas. While supply constraints had some impact on our Q4 revenue results and Q1 outlook, we have a really exciting pipeline of new components ramping this year, and expect revenue growth to accelerate in FY22."

Reported Financial Results – Fourth Quarter FY21

  • Revenue of $293.5 million;
  • GAAP and non-GAAP gross margin of 50.5 percent;
  • GAAP operating expenses of $123.4 million and non-GAAP operating expenses of $106.0 million; and
  • GAAP earnings per share of $0.42 and non-GAAP earnings per share of $0.66.

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

Reported Financial Results – Full Year FY21

  • Revenue of $1.37 billion;
  • GAAP and non-GAAP gross margin of 51.7 percent;
  • GAAP operating expenses of $470.1 million and non-GAAP operating expenses of $401.9 million; and
  • GAAP earnings per share of $3.62 and non-GAAP earnings per share of $4.58.

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

Business Outlook – First Quarter FY22

  • Revenue is expected to range between $240 million and $280 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 $120 million and $126 million, including approximately $15 million in stock-based compensation expense and $3 million in amortization of acquired intangibles.

Beginning this quarter, we are adjusting how we report product line revenue to better represent our business and strategic focus. Sales will be designated in two categories: audio and high-performance mixed-signal. While we continue to see new opportunities in audio, we believe our investment in high-performance mixed-signal technologies will drive product diversification and fuel exciting avenues of growth in the coming years. Additional details relating to these product lines are provided in the Q4 FY21 Shareholder Letter. Prior periods in the statement of operations below have been retrospectively adjusted to reflect revenue in these new product lines.

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: 5783516).

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 the company's expectations of accelerating revenue growth in FY22, our ability to ramp new components this year, and our opportunities to drive product diversification and growth in the coming years, along with estimates for the first 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 first 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, 2020 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 Twelve Months Ended
 
Mar. 27, Dec. 26, Mar. 28, Mar. 27, Mar. 28,

2021

2020

2020

2021

2020

Q4'21 Q3'21 Q4'20 Q4'21 Q4'20
Audio

$

235,821

 

$

381,885

 

$

238,330

 

$

1,104,060

 

$

1,109,958

 

High-Performance Mixed-Signal

 

57,716

 

 

103,910

 

 

40,961

 

 

265,170

 

 

171,166

 

Net sales

 

293,537

 

 

485,795

 

 

279,291

 

 

1,369,230

 

 

1,281,124

 

Cost of sales

 

145,418

 

 

234,295

 

 

133,056

 

 

661,929

 

 

606,957

 

Gross profit

 

148,119

 

 

251,500

 

 

146,235

 

 

707,301

 

 

674,167

 

Gross margin

 

50.5%

 

51.8%

 

52.4%

 

51.7%

 

52.6%

 
Research and development

 

89,773

 

 

89,435

 

 

81,865

 

 

342,759

 

 

347,647

 

Selling, general and administrative

 

33,642

 

 

32,415

 

 

32,464

 

 

127,008

 

 

131,115

 

Restructuring costs

 

-

 

 

-

 

 

21,925

 

 

352

 

 

21,925

 

Total operating expenses

 

123,415

 

 

121,850

 

 

136,254

 

 

470,119

 

 

500,687

 

 
Income from operations

 

24,704

 

 

129,650

 

 

9,981

 

 

237,182

 

 

173,480

 

 
Interest income

 

1,064

 

 

1,206

 

 

2,474

 

 

5,224

 

 

9,401

 

Other income (expense)

 

2,152

 

 

(207

)

 

(106

)

 

2,840

 

 

(1,615

)

Income before income taxes

 

27,920

 

 

130,649

 

 

12,349

 

 

245,246

 

 

181,266

 

Provision for income taxes

 

2,639

 

 

16,281

 

 

2,191

 

 

27,902

 

 

21,768

 

Net income

$

25,281

 

$

114,368

 

$

10,158

 

$

217,344

 

$

159,498

 

 
Basic earnings per share:

$

0.44

 

$

1.97

 

$

0.17

 

$

3.74

 

$

2.74

 

Diluted earnings per share:

$

0.42

 

$

1.91

 

$

0.17

 

$

3.62

 

$

2.64

 

 
Weighted average number of shares:
Basic

 

57,899

 

 

58,024

 

 

58,527

 

 

58,106

 

 

58,317

 

Diluted

 

59,922

 

 

59,963

 

 

60,683

 

 

60,060

 

 

60,462

 

 
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 Twelve Months Ended
 
Mar. 27, Dec. 26, Mar. 28, Mar. 27, Mar. 28,

2021

2020

2020

2021

2020

Net Income Reconciliation Q4'21 Q3'21 Q4'20 Q4'21 Q4'20
GAAP Net Income

$

25,281

 

$

114,368

 

$

10,158

 

$

217,344

 

$

159,498

 

Amortization of acquisition intangibles

 

2,998

 

 

2,998

 

 

3,000

 

 

11,992

 

 

23,420

 

Stock-based compensation expense

 

14,693

 

 

13,287

 

 

14,052

 

 

56,762

 

 

53,757

 

Restructuring costs

 

-

 

 

-

 

 

20,602

 

 

352

 

 

21,925

 

Adjustment to income taxes

 

(3,251

)

 

(2,897

)

 

(6,320

)

 

(11,423

)

 

(17,411

)

Non-GAAP Net Income

$

39,721

 

$

127,756

 

$

41,492

 

$

275,027

 

$

241,189

 

 
Earnings Per Share Reconciliation
GAAP Diluted earnings per share

$

0.42

 

$

1.91

 

$

0.17

 

$

3.62

 

$

2.64

 

Effect of Amortization of acquisition intangibles

 

0.05

 

 

0.05

 

 

0.05

 

 

0.20

 

 

0.39

 

Effect of Stock-based compensation expense

 

0.24

 

 

0.22

 

 

0.23

 

 

0.94

 

 

0.89

 

Effect of Restructuring costs

 

-

 

 

-

 

 

0.34

 

 

0.01

 

 

0.36

 

Effect of Adjustment to income taxes

 

(0.05

)

 

(0.05

)

 

(0.11

)

 

(0.19

)

 

(0.29

)

Non-GAAP Diluted earnings per share

$

0.66

 

$

2.13

 

$

0.68

 

$

4.58

 

$

3.99

 

 
Operating Income Reconciliation
GAAP Operating Income

$

24,704

 

$

129,650

 

$

9,981

 

$

237,182

 

$

173,480

 

GAAP Operating Profit

 

8.4%

 

26.7%

 

3.6%

 

17.3%

 

13.5%

Amortization of acquisition intangibles

 

2,998

 

 

2,998

 

 

3,000

 

 

11,992

 

 

23,420

 

Stock-based compensation expense - COGS

 

260

 

 

236

 

 

213

 

 

900

 

 

908

 

Stock-based compensation expense - R&D

 

10,069

 

 

9,526

 

 

9,446

 

 

37,483

 

 

33,859

 

Stock-based compensation expense - SG&A

 

4,364

 

 

3,525

 

 

4,393

 

 

18,379

 

 

18,990

 

Restructuring costs

 

-

 

 

-

 

 

20,602

 

 

352

 

 

21,925

 

Non-GAAP Operating Income

$

42,395

 

$

145,935

 

$

47,635

 

$

306,288

 

$

272,582

 

Non-GAAP Operating Profit

 

14.4%

 

30.0%

 

17.1%

 

22.4%

 

21.3%

 
Operating Expense Reconciliation
GAAP Operating Expenses

$

123,415

 

$

121,850

 

$

136,254

 

$

470,119

 

$

500,687

 

Amortization of acquisition intangibles

 

(2,998

)

 

(2,998

)

 

(3,000

)

 

(11,992

)

 

(23,420

)

Stock-based compensation expense - R&D

 

(10,069

)

 

(9,526

)

 

(9,446

)

 

(37,483

)

 

(33,859

)

Stock-based compensation expense - SG&A

 

(4,364

)

 

(3,525

)

 

(4,393

)

 

(18,379

)

 

(18,990

)

Restructuring costs

 

-

 

 

-

 

 

(20,724

)

 

(352

)

 

(21,925

)

Non-GAAP Operating Expenses

$

105,984

 

$

105,801

 

$

98,691

 

$

401,913

 

$

402,493

 

 
Gross Margin/Profit Reconciliation
GAAP Gross Profit

$

148,119

 

$

251,500

 

$

146,235

 

$

707,301

 

$

674,167

 

GAAP Gross Margin

 

50.5%

 

51.8%

 

52.4%

 

51.7%

 

52.6%

Stock-based compensation expense - COGS

 

260

 

 

236

 

 

213

 

 

900

 

 

908

 

Restructuring costs - COGS

 

-

 

 

-

 

 

(122

)

 

-

 

 

-

 

Non-GAAP Gross Profit

$

148,379

 

$

251,736

 

$

146,326

 

$

708,201

 

$

675,075

 

Non-GAAP Gross Margin

 

50.5%

 

51.8%

 

52.4%

 

51.7%

 

52.7%

 
Effective Tax Rate Reconciliation
GAAP Tax Expense

$

2,639

 

$

16,281

 

$

2,191

 

$

27,902

 

$

21,768

 

GAAP Effective Tax Rate

 

9.5%

 

12.5%

 

17.7%

 

11.4%

 

12.0%

Adjustments to income taxes

 

3,251

 

 

2,897

 

 

6,320

 

 

11,423

 

 

17,411

 

Non-GAAP Tax Expense

$

5,890

 

$

19,178

 

$

8,511

 

$

39,325

 

$

39,179

 

Non-GAAP Effective Tax Rate

 

12.9%

 

13.1%

 

17.0%

 

12.5%

 

14.0%

 
Tax Impact to EPS Reconciliation
GAAP Tax Expense

$

0.04

 

$

0.27

 

$

0.04

 

$

0.46

 

$

0.36

 

Adjustments to income taxes

 

0.05

 

 

0.05

 

 

0.11

 

 

0.19

 

 

0.29

 

Non-GAAP Tax Expense

$

0.09

 

$

0.32

 

$

0.15

 

$

0.65

 

$

0.65

 

 
CONSOLIDATED CONDENSED BALANCE SHEET
unaudited; in thousands
 
Mar. 27, Dec. 26, Mar. 28,

2021

2020

2020

ASSETS
Current assets
Cash and cash equivalents

$

442,164

 

$

327,294

 

$

292,119

 

Marketable securities

 

55,697

 

 

43,289

 

 

22,008

 

Accounts receivable, net

 

108,712

 

 

244,803

 

 

153,998

 

Inventories

 

173,263

 

 

142,689

 

 

146,725

 

Other current assets

 

62,683

 

 

45,469

 

 

35,346

 

Total current Assets

 

842,519

 

 

803,544

 

 

650,196

 

 
Long-term marketable securities

 

312,759

 

 

326,491

 

 

283,573

 

Right-of-use lease assets

 

133,548

 

 

135,719

 

 

141,274

 

Property and equipment, net

 

154,942

 

 

154,312

 

 

158,244

 

Intangibles, net

 

22,031

 

 

24,322

 

 

34,430

 

Goodwill

 

287,518

 

 

287,518

 

 

287,088

 

Deferred tax asset

 

9,977

 

 

7,277

 

 

10,052

 

Other assets

 

67,320

 

 

86,446

 

 

27,820

 

Total assets

$

1,830,614

 

$

1,825,629

 

$

1,592,677

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable

$

102,744

 

$

90,814

 

$

78,412

 

Accrued salaries and benefits

 

54,849

 

 

39,367

 

 

42,439

 

Lease liability

 

14,573

 

 

14,539

 

 

13,580

 

Other accrued liabilities

 

41,444

 

 

40,135

 

 

24,206

 

Total current liabilities

 

213,610

 

 

184,855

 

 

158,637

 

 
Non-current lease liability

 

127,883

 

 

129,583

 

 

129,312

 

Non-current income taxes

 

64,020

 

 

70,866

 

 

71,143

 

Other long-term liabilities

 

36,096

 

 

39,968

 

 

3,806

 

 
Stockholders' equity:
Capital stock

 

1,498,819

 

 

1,483,567

 

 

1,434,929

 

Accumulated deficit

 

(112,689

)

 

(88,238

)

 

(201,681

)

Accumulated other comprehensive income (loss)

 

2,875

 

 

5,028

 

 

(3,469

)

Total stockholders' equity

 

1,389,005

 

 

1,400,357

 

 

1,229,779

 

Total liabilities and stockholders' equity

$

1,830,614

 

$

1,825,629

 

$

1,592,677

 

 
Prepared in accordance with Generally Accepted Accounting Principles
 

 

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