EX-99.1 2 q1fy24pressrelease.htm EX-99.1 Document
Exhibit 99.1
    
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FINANCIAL NEWS
    


Cirrus Logic Reports Fiscal First Quarter Revenue of $317.0 Million


AUSTIN, Texas – Aug. 3, 2023 – Cirrus Logic, Inc. (NASDAQ: CRUS) today posted on its website at investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the first quarter fiscal year 2024, which ended June 24, 2023, as well as the company’s current business outlook.
“Cirrus Logic reported revenue for the June quarter towards the top end of guidance as we benefited from higher-than-expected unit volumes,” said John Forsyth, Cirrus Logic president and chief executive officer. “During the quarter, we taped out our next-generation boosted amplifier, completed product validation on our first 22-nanometer smart codec, and began ramping production of our latest camera controller. We also made progress on product and end-market diversification as we gained momentum in laptops and began selectively refreshing certain core product lines that are expected to drive expansion outside of smartphones.”


Reported Financial Results – First Quarter FY24
•Revenue of $317.0 million;
•GAAP and non-GAAP gross margin of 50.3 percent and 50.4 percent;
•GAAP operating expenses of $141.6 million and non-GAAP operating expenses of $113.8 million; and
•GAAP earnings per share of $0.28 and non-GAAP earnings per share of $0.67.

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





Business Outlook – Second Quarter FY24
•Revenue is expected to range between $430 million and $490 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 $141 million and $147 million, including approximately $22 million in stock-based compensation expense, $2 million in amortization of acquired intangibles, and $3 million in acquisition-related costs and restructuring charges associated with our recently announced workforce reduction.

Cirrus Logic will host a live Q&A session at 6 p.m. EDT today to discuss its financial results and business outlook. Participants may listen to the conference call on the investor relations website at 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 (647) 362-9199, or toll-free at (800) 770-2030 (Access Code: 95424).


Cirrus Logic to Present at Upcoming Conference
Cirrus Logic Chief Financial Officer Venk Nathamuni and Vice President of Mixed-Signal Products Carl Alberty will present at the KeyBanc Technology Leadership Forum in Vail, Colorado on August 7, 2023 at 2:30 p.m. MDT. A live webcast and replay of the presentation will be available on the company's investor relations website.

About 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.

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.


Investor Contact:                            
Chelsea Heffernan
Vice President, Investor Relations
Cirrus Logic, Inc.                            
(512) 851-4125                            
Investor@cirrus.com


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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, diluted share count, operating income and profit, operating expenses, gross margin and profit, tax expense, tax expense impact on earnings per share, effective tax rate, free cash flow, and free cash flow margin. 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 our ability to make progress with product and end-market diversification and refresh certain core product lines that are expected to drive expansion outside of smartphones; and our estimates for the second quarter fiscal year 2024 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock compensation expense, amortization of acquired intangibles and acquisition-related costs and restructuring charges associated with our recently announced workforce reduction. 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: our ability to develop and ramp new products in a timely manner, including our next-generation boosted amplifier, our first 22-nm smart codec, and latest camera controller; our ability to commercialize new research and development efforts into new markets outside of smartphones; and the level and timing of orders and shipments during the second quarter of fiscal year 2024, 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 25, 2023 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.


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Summary Financial Data Follows:

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands, except per share data; unaudited)
Three Months Ended
Jun. 24,Mar. 25,Jun. 25,
202320232022
Q1'24Q4'23Q1'23
Audio$195,806 $232,402 $254,496 
High-Performance Mixed-Signal121,210 140,420 139,143 
Net sales317,016 372,822 393,639 
Cost of sales157,629 186,468 191,005 
Gross profit159,387 186,354 202,634 
Gross margin50.3 %50.0 %51.5 %
Research and development106,215 115,162 109,716 
Selling, general and administrative35,379 37,642 38,642 
Lease impairments and restructuring— 10,632 — 
Intangibles impairment— 85,760 — 
Total operating expenses141,594 249,196 148,358 
Income (loss) from operations17,793 (62,842)54,276 
Interest income (expense)4,600 4,720 305 
Other income (expense)377 (464)506 
Income (loss) before income taxes22,770 (58,586)55,087 
Provision for income taxes7,170 (4,917)15,380 
Net income (loss) $15,600 $(53,669)$39,707 
Basic earnings (loss) per share$0.28 $(0.97)$0.71 
Diluted earnings (loss) per share:$0.28 $(0.97)$0.69 
Weighted average number of shares:
Basic54,862 55,219 56,277 
Diluted56,631 55,219 57,804 
Prepared in accordance with Generally Accepted Accounting Principles

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RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in thousands, except per share data; unaudited)
(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
Jun. 24,Mar. 25,Jun. 25,
202320232022
Net Income (Loss) ReconciliationQ1'24Q4'23Q1'23
GAAP Net Income (Loss)$15,600 $(53,669)$39,707 
Amortization of acquisition intangibles2,170 7,657 7,835 
Stock-based compensation expense22,715 22,533 18,138 
Lease impairments and restructuring— 10,632 — 
Intangibles impairment— 85,760 — 
Acquisition-related costs3,166 3,166 3,164 
Adjustment to income taxes(5,628)(23,461)(4,300)
Non-GAAP Net Income$38,023 $52,618 $64,544 
Earnings (Loss) Per Share Reconciliation
GAAP Diluted earnings (loss) per share$0.28 $(0.97)$0.69 
Effect of Amortization of acquisition intangibles0.04 0.14 0.14 
Effect of Stock-based compensation expense0.40 0.40 0.31 
Effect of Lease impairments and restructuring— 0.19 — 
Effect of Intangibles impairment— 1.51 — 
Effect of Acquisition-related costs0.05 0.06 0.05 
Effect of Adjustment to income taxes(0.10)(0.41)(0.07)
Non-GAAP Diluted earnings per share$0.67 $0.92 $1.12 
Diluted Shares Reconciliation
GAAP Diluted shares56,631 55,219 57,804 
Effect of weighted dilutive shares— 1,821 — 
Non-GAAP Diluted shares56,631 57,040 57,804 
Operating Income (Loss) Reconciliation
GAAP Operating Income (Loss)$17,793 $(62,842)$54,276 
GAAP Operating Profit (Loss)5.6 %(16.9)%13.8 %
Amortization of acquisition intangibles2,170 7,657 7,835 
Stock-based compensation expense - COGS285 372 277 
Stock-based compensation expense - R&D15,952 15,782 12,592 
Stock-based compensation expense - SG&A6,478 6,379 5,269 
Lease impairments and restructuring— 10,632 — 
Intangibles impairment— 85,760 — 
Acquisition-related costs3,166 3,166 3,164 
Non-GAAP Operating Income$45,844 $66,906 $83,413 
Non-GAAP Operating Profit14.5 %17.9 %21.2 %
Operating Expense Reconciliation
GAAP Operating Expenses$141,594 $249,196 $148,358 
Amortization of acquisition intangibles(2,170)(7,657)(7,835)
Stock-based compensation expense - R&D(15,952)(15,782)(12,592)
Stock-based compensation expense - SG&A(6,478)(6,379)(5,269)
Lease impairments and restructuring— (10,632)— 
Intangibles impairment— (85,760)— 
Acquisition-related costs(3,166)(3,166)(3,164)
Non-GAAP Operating Expenses$113,828 $119,820 $119,498 
Gross Margin/Profit Reconciliation
GAAP Gross Profit$159,387 $186,354 $202,634 
GAAP Gross Margin50.3 %50.0 %51.5 %
Stock-based compensation expense - COGS285 372 277 
Non-GAAP Gross Profit$159,672 $186,726 $202,911 
Non-GAAP Gross Margin50.4 %50.1 %51.5 %
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RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in thousands, except per share data; unaudited)
(not prepared in accordance with GAAP)
Three Months Ended
Jun. 24,Mar. 25,Jun. 25,
202320232022
Effective Tax Rate ReconciliationQ1'24Q4'23Q1'23
GAAP Tax Expense (Benefit)$7,170 $(4,917)$15,380 
GAAP Effective Tax Rate31.5 %8.4 %27.9 %
Adjustments to income taxes5,628 23,461 4,300 
Non-GAAP Tax Expense$12,798 $18,544 $19,680 
Non-GAAP Effective Tax Rate25.2 %26.1 %23.4 %
Tax Impact to EPS Reconciliation
GAAP Tax Expense (Benefit)$0.13 $(0.09)$0.27 
Adjustments to income taxes0.10 0.41 0.07 
Non-GAAP Tax Expense$0.23 $0.32 $0.34 
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CONSOLIDATED CONDENSED BALANCE SHEET
 (in thousands; unaudited)
Jun. 24,Mar. 25,Jun. 25,
202320232022
ASSETS
Current assets
Cash and cash equivalents$352,346 $445,784 $379,335 
Marketable securities35,765 34,978 18,397 
Accounts receivable, net186,033 150,473 206,272 
Inventories300,956 233,450 174,370 
Prepaid wafers84,739 60,638 — 
Other current assets88,829 92,533 82,634 
Total current Assets1,048,668 1,017,856 861,008 
Long-term marketable securities38,029 36,509 55,965 
Right-of-use lease assets125,538 128,145 168,680 
Property and equipment, net167,238 162,972 157,165 
Intangibles, net36,447 38,876 149,984 
Goodwill435,936 435,936 435,936 
Deferred tax asset44,991 35,580 16,928 
Long-term prepaid wafers110,262 134,363 195,000 
Other assets49,483 73,729 65,236 
 Total assets$2,056,592 $2,063,966 $2,105,902 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable$75,941 $81,462 $121,451 
Accrued salaries and benefits36,465 50,606 41,026 
Lease liability19,903 18,442 13,988 
Acquisition-related liabilities24,527 21,361 30,964 
Other accrued liabilities46,018 44,469 45,167 
Total current liabilities202,854 216,340 252,596 
Non-current lease liability125,071 122,631 159,344 
Non-current income taxes59,587 59,013 73,735 
Long-term acquisition-related liabilities— — 11,856 
Other long-term liabilities12,286 7,700 9,184 
Total long-term liabilities196,944 189,344 254,119 
Stockholders' equity:
Capital stock1,693,420 1,670,141 1,596,684 
Accumulated earnings (deficit)(33,621)(9,320)5,894 
Accumulated other comprehensive loss(3,005)(2,539)(3,391)
Total stockholders' equity1,656,794 1,658,282 1,599,187 
Total liabilities and stockholders' equity$2,056,592 $2,063,966 $2,105,902 
    
Prepared in accordance with Generally Accepted Accounting Principles


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CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands; unaudited)
Three Months Ended
Jun. 24,Jun. 25,
20232022
Q1'24Q1'23
Cash flows from operating activities:
Net income$15,600 $39,707 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization11,941 16,515 
Stock-based compensation expense22,715 18,138 
Deferred income taxes(9,411)(5,860)
Loss on retirement or write-off of long-lived assets6 292 
Other non-cash charges1,334 99 
Net change in operating assets and liabilities:
Accounts receivable, net(35,560)33,992 
Inventories(67,506)(35,934)
Other assets8,101 549 
Accounts payable and other accrued liabilities(10,278)(20,327)
Income taxes payable20,079 24,030 
Acquisition-related liabilities3,166 3,164 
Net cash provided by (used in) operating activities(39,813)74,365 
Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities11,048 4,694 
Purchases of available-for-sale marketable securities(13,372)(5,186)
Purchases of property, equipment and software(12,310)(6,776)
Investments in technology— (448)
Net cash used in investing activities(14,634)(7,716)
Cash flows from financing activities:
Issuance of common stock, net of shares withheld for taxes560 120 
Repurchase of stock to satisfy employee tax withholding obligations(1,047)(866)
Repurchase and retirement of common stock(38,504)(56,382)
Net cash used in financing activities(38,991)(57,128)
Net increase (decrease) in cash and cash equivalents(93,438)9,521 
Cash and cash equivalents at beginning of period445,784 369,814 
Cash and cash equivalents at end of period$352,346 $379,335 
Prepared in accordance with Generally Accepted Accounting Principles
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RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in thousands; unaudited)
Free cash flow, a non-GAAP financial measure, is GAAP cash flow from operations (or cash provided by operating activities) less capital expenditures. Capital expenditures include purchases of property, equipment and software as well as investments in technology, as presented within our GAAP Consolidated Condensed Statement of Cash Flows. Free cash flow margin represents free cash flow divided by revenue.
Twelve Months EndedThree Months Ended
Jun. 24,Jun. 24,Mar. 25,Dec. 24,Sep. 24,
20232023202320222022
Q1'24Q1'24Q4'23Q3'23Q2'23
Net cash provided by (used in) operating activities (GAAP)$225,390 $(39,813)$48,266 $180,948 $35,989 
Capital expenditures(41,800)(12,310)(11,635)(7,608)(10,247)
Free Cash Flow (Non-GAAP)$183,590 $(52,123)$36,631 $173,340 $25,742 
Cash Flow from Operations as a Percentage of Revenue (GAAP)12 %(13)%13 %31 %7 %
Capital Expenditures as a Percentage of Revenue (GAAP)2 %4 %3 %1 %2 %
Free Cash Flow Margin (Non-GAAP)10 %(16)%10 %29 %5 %
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