Exhibit 99.1
Cirrus Logic Reports Revenue of $210.2 Million
Strong Demand for Portable Audio Drives September Quarter Revenue Growth
AUSTIN, Texas--(BUSINESS WIRE)--October 29, 2014--Cirrus Logic, Inc. (Nasdaq: 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 second quarter fiscal year 2015, which ended Sept. 27, 2014, as well as the company’s current business outlook.
“Q2 was an outstanding quarter for Cirrus Logic, as strong demand for portable audio products drove revenue above expectations. In addition, we were pleased to have closed the acquisition of Wolfson Microelectronics on Aug. 21,” said Jason Rhode, president and chief executive officer. “The acquisition further strengthens Cirrus Logic’s position as a market leader and helps accelerate critical R&D programs we believe will fuel revenue growth in the future.”
Reported Financial Results – Second Quarter FY15
- Revenue of $210.2 million, including $197.2 million from Cirrus Logic and $13 million from five weeks of Wolfson Microelectronics;
- GAAP gross margin of 47.8 percent and non-GAAP gross margin of 48.7 percent;
- GAAP operating expenses of $82.5 million and non-GAAP operating expenses of $57.3 million. GAAP operating expense includes $18.7 million in acquisition costs and $6.5 million of share-based compensation and amortization of acquired intangibles; and
- GAAP diluted earnings per share of $0.01 and non-GAAP diluted earnings per share of $0.68.
A reconciliation of the non-GAAP charges is included in the tables accompanying this press release.
Business Outlook – Third Quarter FY15
- Revenue is expected to range between $265 million and $285 million;
- GAAP gross margin is expected to be between 42 percent and 44 percent, which includes roughly 200 basis points of costs associated with the fair value write up of acquired inventory; and
- Combined R&D and SG&A expenses are expected to range between $86 million and $90 million, which includes approximately $9 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. 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: 13896797).
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 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 third quarter fiscal year 2015 revenue, gross margin, combined research and development and selling, general and administrative expense levels, share-based compensation expense, amortization of acquired intangibles and acquisition related costs associated with the fair value write up of acquired inventory. 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 third 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 | Six Months Ended | ||||||||||||||||||||||||
| Sep. 27, | Jun. 28, | Sep. 28, | Sep. 27, | Sep. 28, | |||||||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
| Q2'15 | Q1'15 | Q2'14 | Q2'15 | Q2'14 | |||||||||||||||||||||
| Portable audio products | $ | 163,563 | $ | 112,570 | $ | 150,949 | $ | 276,132 | $ | 267,556 | |||||||||||||||
| Non-portable audio and other products | 46,651 | 39,995 | 39,722 | 86,647 | 78,240 | ||||||||||||||||||||
| Net sales | 210,214 | 152,565 | 190,671 | 362,779 | 345,796 | ||||||||||||||||||||
| Cost of sales | 109,647 | 77,190 | 91,223 | 186,837 | 166,850 | ||||||||||||||||||||
| Gross profit | 100,567 | 75,375 | 99,448 | 175,942 | 178,946 | ||||||||||||||||||||
| Gross margin | 47.8 | % | 49.4 | % | 52.2 | % | 48.5 | % | 51.7 | % | |||||||||||||||
| Research and development | 44,557 | 39,777 | 29,722 | 84,334 | 58,252 | ||||||||||||||||||||
| Selling, general and administrative | 21,545 | 19,683 | 19,215 | 41,228 | 38,413 | ||||||||||||||||||||
| Restructuring and other | 1,455 | - | (154 | ) | 1,455 | (584 | ) | ||||||||||||||||||
| Acquisition related costs | 14,937 | - | - | 14,937 | - | ||||||||||||||||||||
| Patent infringement settlements, net | - | - | - | - | 695 | ||||||||||||||||||||
| Total operating expenses | 82,494 | 59,460 | 48,783 | 141,954 | 96,776 | ||||||||||||||||||||
| Operating income | 18,073 | 15,915 | 50,665 | 33,988 | 82,170 | ||||||||||||||||||||
| Interest income (expense), net | (2,670 | ) | (467 | ) | 201 | (3,137 | ) | 359 | |||||||||||||||||
| Other income (expense), net | (11,994 | ) | 501 | (38 | ) | (11,493 | ) | (55 | ) | ||||||||||||||||
| Income before income taxes | 3,409 | 15,949 | 50,828 | 19,358 | 82,474 | ||||||||||||||||||||
| Provision for income taxes | 2,557 | 5,701 | 17,461 | 8,258 | 28,465 | ||||||||||||||||||||
| Net income | $ | 852 | $ | 10,248 | $ | 33,367 | $ | 11,100 | $ | 54,009 | |||||||||||||||
| Basic earnings per share: | $ | 0.01 | $ | 0.17 | $ | 0.53 | $ | 0.18 | $ | 0.85 | |||||||||||||||
| Diluted earnings per share: | $ | 0.01 | $ | 0.16 | $ | 0.50 | $ | 0.17 | $ | 0.82 | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||||
| Basic | 62,241 | 62,032 | 63,217 | 62,137 | 63,329 | ||||||||||||||||||||
| Diluted | 65,085 | 64,688 | 66,125 | 64,892 | 66,203 | ||||||||||||||||||||
| 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. | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Sep. 27, | Jun. 28, | Sep. 28, | Sep. 27, | Sep. 28, | |||||||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
| Net Income Reconciliation | Q2'15 | Q1'15 | Q2'14 | Q2'15 | Q2'14 | ||||||||||||||||||||
| GAAP Net Income | $ | 852 | $ | 10,248 | $ | 33,367 | $ | 11,100 | $ | 54,009 | |||||||||||||||
| Amortization of acquisition intangibles | 2,524 | 246 | - | 2,770 | - | ||||||||||||||||||||
| Stock based compensation expense | 6,496 | 5,622 | 5,739 | 12,118 | 11,513 | ||||||||||||||||||||
| Provision for litigation expenses and settlements | - | - | - | - | 695 | ||||||||||||||||||||
| Restructuring and other costs, net | 1,455 | - | (154 | ) | 1,455 | (584 | ) | ||||||||||||||||||
| Wolfson acquisition items | 30,875 | 2,304 | - | 33,179 | - | ||||||||||||||||||||
| Provision for income taxes | 1,764 | 5,226 | 16,378 | 6,990 | 26,539 | ||||||||||||||||||||
| Non-GAAP Net Income | $ | 43,966 | $ | 23,646 | $ | 55,330 | $ | 67,612 | $ | 92,172 | |||||||||||||||
| Earnings Per Share Reconciliation | |||||||||||||||||||||||||
| GAAP Diluted earnings per share | $ | 0.01 | $ | 0.16 | $ | 0.50 | $ | 0.17 | $ | 0.82 | |||||||||||||||
| Effect of Amortization of acquisition intangibles | 0.04 | - | - | 0.04 | - | ||||||||||||||||||||
| Effect of Stock based compensation expense | 0.10 | 0.09 | 0.09 | 0.19 | 0.17 | ||||||||||||||||||||
| 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 | 0.47 | 0.04 | - | 0.51 | - | ||||||||||||||||||||
| Effect of Provision for income taxes | 0.03 | 0.08 | 0.25 | 0.11 | 0.40 | ||||||||||||||||||||
| Non-GAAP Diluted earnings per share | $ | 0.68 | $ | 0.37 | $ | 0.84 | $ | 1.04 | $ | 1.39 | |||||||||||||||
| Operating Income Reconciliation | |||||||||||||||||||||||||
| GAAP Operating Income | $ | 18,073 | $ | 15,915 | $ | 50,665 | $ | 33,988 | $ | 82,170 | |||||||||||||||
| GAAP Operating Profit | 9 | % | 10 | % | 27 | % | 9 | % | 24 | % | |||||||||||||||
| Amortization of acquisition intangibles | 2,524 | 246 | - | 2,770 | - | ||||||||||||||||||||
| Stock compensation expense - COGS | 253 | 231 | 239 | 484 | 245 | ||||||||||||||||||||
| Stock compensation expense - R&D | 2,781 | 2,543 | 2,158 | 5,324 | 5,012 | ||||||||||||||||||||
| Stock compensation expense - SG&A | 3,462 | 2,848 | 3,342 | 6,310 | 6,256 | ||||||||||||||||||||
| Provision for litigation expenses and settlements | - | - | - | - | 695 | ||||||||||||||||||||
| Restructuring and other costs, net | 1,455 | - | (154 | ) | 1,455 | (584 | ) | ||||||||||||||||||
| Wolfson acquisition items | 16,547 | 2,192 | - | 18,739 | - | ||||||||||||||||||||
| Non-GAAP Operating Income | $ | 45,095 | $ | 23,975 | $ | 56,250 | $ | 69,070 | $ | 93,794 | |||||||||||||||
| Non-GAAP Operating Profit | 21 | % | 16 | % | 30 | % | 19 | % | 27 | % | |||||||||||||||
| Operating Expense Reconciliation | |||||||||||||||||||||||||
| GAAP Operating Expenses | $ | 82,494 | $ | 59,460 | $ | 48,783 | $ | 141,954 | $ | 96,776 | |||||||||||||||
| Amortization of acquisition intangibles | (2,524 | ) | (246 | ) | - | (2,770 | ) | - | |||||||||||||||||
| Stock compensation expense - R&D | (2,781 | ) | (2,543 | ) | (2,158 | ) | (5,324 | ) | (5,012 | ) | |||||||||||||||
| Stock compensation expense - SG&A | (3,462 | ) | (2,848 | ) | (3,342 | ) | (6,310 | ) | (6,256 | ) | |||||||||||||||
| Provision for litigation expenses and settlements | - | - | - | - | (695 | ) | |||||||||||||||||||
| Restructuring and other costs, net | (1,455 | ) | - | 154 | (1,455 | ) | 584 | ||||||||||||||||||
| Wolfson acquisition items | (14,937 | ) | (2,192 | ) | - | (17,129 | ) | - | |||||||||||||||||
| Non-GAAP Operating Expenses | $ | 57,335 | $ | 51,631 | $ | 43,437 | $ | 108,966 | $ | 85,397 | |||||||||||||||
| Gross Margin/Profit Reconciliation | |||||||||||||||||||||||||
| GAAP Gross Margin | $ | 100,567 | $ | 75,375 | $ | 99,448 | $ | 175,942 | $ | 178,946 | |||||||||||||||
| GAAP Gross Profit | 47.8 | % | 49.4 | % | 52.2 | % | 48.5 | % | 51.7 | % | |||||||||||||||
| Wolfson acquisition items | 1,610 | - | - | 1,610 | - | ||||||||||||||||||||
| Stock compensation expense - COGS | 253 | 231 | 239 | 484 | 245 | ||||||||||||||||||||
| Non-GAAP Gross Margin | $ | 102,430 | $ | 75,606 | $ | 99,687 | $ | 178,036 | $ | 179,191 | |||||||||||||||
| Non-GAAP Gross Profit | 48.7 | % | 49.6 | % | 52.3 | % | 49.1 | % | 51.8 | % | |||||||||||||||
| CIRRUS LOGIC, INC. | |||||||||||||||||
| CONSOLIDATED CONDENSED BALANCE SHEET | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Sep. 27, | Mar. 29, | Sep. 28, | |||||||||||||||
| 2014 | 2014 | 2013 | |||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets | |||||||||||||||||
| Cash and cash equivalents | $ | 48,214 | $ | 31,850 | $ | 68,886 | |||||||||||
| Marketable securities | 85,796 | 263,417 | 199,423 | ||||||||||||||
| Accounts receivable, net | 126,161 | 63,220 | 97,640 | ||||||||||||||
| Inventories | 121,169 | 69,743 | 91,247 | ||||||||||||||
| Deferred tax assets | 16,435 | 22,024 | 38,398 | ||||||||||||||
| Other current assets | 29,089 | 25,079 | 23,978 | ||||||||||||||
| Total current assets | 426,864 | 475,333 | 519,572 | ||||||||||||||
| Long-term marketable securities | 9,228 | 89,243 | 40,254 | ||||||||||||||
| Property and equipment, net | 133,458 | 103,650 | 101,885 | ||||||||||||||
| Intangibles, net | 187,030 | 11,999 | 4,734 | ||||||||||||||
| Goodwill | 265,410 | 16,367 | 6,027 | ||||||||||||||
| Deferred tax assets | 24,998 | 25,065 | 16,638 | ||||||||||||||
| Other assets | 17,658 | 3,087 | 10,051 | ||||||||||||||
| Total assets | $ | 1,064,646 | $ | 724,744 | $ | 699,161 | |||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Current liabilities | |||||||||||||||||
| Accounts payable | $ | 81,549 | $ | 51,932 | $ | 56,868 | |||||||||||
| Accrued salaries and benefits | 17,706 | 13,388 | 16,894 | ||||||||||||||
| Other accrued liabilities | 34,946 | 11,572 | 6,313 | ||||||||||||||
| Deferred income | 5,218 | 5,631 | 4,858 | ||||||||||||||
| Total current liabilities | 139,419 | 82,523 | 84,933 | ||||||||||||||
| Other long-term liabilities | 25,376 | 4,863 | 11,231 | ||||||||||||||
| Long-term debt | 226,439 | - | - | ||||||||||||||
| Stockholders' equity: | |||||||||||||||||
| Capital stock | 1,104,379 | 1,078,878 | 1,055,256 | ||||||||||||||
| Accumulated deficit | (430,144 | ) | (440,634 | ) | (451,532 | ) | |||||||||||
| Accumulated other comprehensive loss | (823 | ) | (886 | ) | (727 | ) | |||||||||||
| Total stockholders' equity | 673,412 | 637,358 | 602,997 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,064,646 | $ | 724,744 | $ | 699,161 | |||||||||||
| Prepared in accordance with Generally Accepted Accounting Principles | |||||||||||||||||
CONTACT:
Cirrus Logic, Inc.
Investor Contact:
Thurman K. Case, 512-851-4125
Chief Financial Officer
Investor.Relations@cirrus.com