The company reported fourth quarter fiscal year 2007 revenue of $43.6 million, compared with $42.2 million of total revenue during the fourth quarter of fiscal year 2006. Fourth quarter gross margin was 60.2 percent compared to 58.1 percent for the fourth quarter of fiscal year 2006. Combined research and development (R&D) and selling, general and administrative (SG&A) expenses for the fourth fiscal quarter of 2007 were $25.8 million. R&D and SG&A expenses included $1.0 million in stock-based compensation expense due to the adoption of SFAS 123(R) at the beginning of this fiscal year, as well as $1.6 million in expenses associated with the company's recently concluded stock-option review. R&D and SG&A expenses also included $1.0 million in facility-related charges, and a $0.4 million charge related to an executive termination agreement. Excluding these charges, combined non-GAAP R&D and SG&A expenses were $21.8 million.
Fourth fiscal quarter net income was $7.3 million, or $0.08 per share based on 89.3 million diluted shares outstanding. These results include a $4.3 million impairment charge to our investment in Magnum Semiconductor, as well as a $0.5 million restructuring charge and an $8.2 million tax benefit. The non-GAAP net income for the quarter, excluding the items mentioned above, was $7.9 million or $0.09 per diluted share.
Total cash and marketable securities at the end of the fourth fiscal quarter was $271.7 million, compared with $264.2 million at the end of the prior fiscal quarter, an increase of $7.5 million.
"I'm pleased that our March quarter revenue came in at the high end of our expectations, with continued profitability highlighted by strong gross margins," said Mike Hackworth, Cirrus Logic's chairman and acting chief executive officer. "For the June quarter, we expect softer demand for legacy products as we transition to anticipated revenue growth for newer consumer products."
Outlook for First Quarter FY 2008 (ending June 30, 2007):
-- Revenue is expected to range between $40 million and $44 million;
-- Gross margin is expected to be between 58 percent and 60 percent; and
-- Combined GAAP R&D and SG&A expenses are expected to range between $23 million and $25 million, including share-based compensation expense of approximately $1.1 million.
Use of Non-GAAP Financial Information
Cirrus Logic has included in this release certain financial information that has not been prepared in accordance with GAAP. A reconciliation of such non-GAAP financial information to the most comparable GAAP information is included in the financial statements portion of this release, as well as on our Web site in the Investors section at www.cirrus.com. This non-GAAP financial information is not meant as a substitute for the company's GAAP results, but is included solely for informational and comparative purposes. Cirrus Logic management believes that certain non-GAAP financial information is useful to investors because it may enhance their understanding of the results and trends in the company's business. Cirrus Logic also uses certain non-GAAP financial information internally to evaluate and manage the company's operations. The non-GAAP financial information that the company uses may differ from that used by other companies. This non-GAAP financial information should be considered in addition to, and not as a substitute for, the company's results that were prepared in accordance with GAAP.
Conference Call
Cirrus Logic management will hold a conference call to discuss the company's results for the fourth quarter of fiscal year 2007, on May 9, 2007, at 5:00 p.m. EDT. Those wishing to join should call 303-262-2131 (passcode: Cirrus Logic) at approximately 4:50 p.m. EDT. A replay of the conference call will also be available beginning one hour after the completion of the call, until May 16, 2007. To access the recording, call 303-590-3000 (passcode: 11088085 #). A live and an archived webcast of the conference call will also be available via the company's Web site at www.cirrus.com.
Cirrus Logic, Inc.
Cirrus Logic develops high-precision, analog and mixed-signal integrated circuits for a broad range of consumer and industrial markets. Building on its diverse analog mixed-signal patent portfolio, Cirrus Logic delivers highly optimized products for consumer and commercial audio, automotive entertainment and industrial applications. The company operates from headquarters in Austin, Texas, with offices in Europe, Japan and Asia. More information about Cirrus Logic is available at www.cirrus.com.
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 first quarter fiscal year 2008 revenue, gross margin, combined research and development and selling, general and administrative expense levels, and share-based compensation expense. In some cases, forward-looking statements are identified by words such as we "expect," "anticipate," "target," "project," "believe," "goals," "estimates," and "intend," variations of these types of words and similar expressions are intended to identify these forward-looking statements. 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: overall conditions in the semiconductor market; our ability to introduce new products on a timely basis and to deliver products that perform as anticipated; risks associated with international sales and international operations; the level of orders and shipments during the first quarter of fiscal year 2008, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; overall economic pressures; pricing pressures; hardware or software deficiencies; our dependence on subcontractors for assembly, manufacturing, packaging and testing functions; our ability to make continued sufficient investments in research and development; foreign currency fluctuations; the retention of key employees; expenses associated with the Company's stock option investigation, and related on-going litigation and administrative proceedings; and the risk factors listed in our Form 10-K/A for the year ended March 25, 2006, 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 trademarks of Cirrus Logic Inc. Summary financial data follows:
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Quarter Ended
--------------------------
Mar. 31, Dec. 30, Mar. 25,
2007 2006 2006
-------- -------- --------
Net revenue $43,647 $45,297 $42,158
Cost of sales 17,369 17,886 17,683
-------- -------- --------
Gross Margin 26,278 27,411 24,475
-------- -------- --------
Gross Margin Percentage 60.2% 60.5% 58.1%
Operating expenses:
Research and development 10,998 11,190 10,570
Selling, general and administrative 14,797 13,478 9,731
Restructuring and other costs 521 1,013 -
Impairment of goodwill and other
intangibles 4,290 - -
Acquired in process R&D - 1,925 -
License agreement - - (7,000)
-------- -------- --------
Total operating expenses 30,606 27,606 13,301
-------- -------- --------
Income (loss) from operations (4,328) (195) 11,174
Realized gain on marketable equity
securities - - -
Interest income, net 3,412 3,615 2,510
Other income, net 71 76 21
-------- -------- --------
Income (loss) before income taxes (845) 3,496 13,705
Provision (benefit) for income taxes (8,124) 32 (1,241)
-------- -------- --------
Net income $7,279 $3,464 $14,946
======== ======== ========
Basic income per share: $0.08 $0.04 $0.17
Diluted income per share: $0.08 $0.04 $0.17
Basic weighted average common shares
outstanding 88,076 87,756 86,718
Diluted weighted average common shares
outstanding 89,333 88,725 88,924
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)
We use these non-GAAP financial numbers to assist us in the management
of the Company because we believe that this information provides a
more consistent and complete understanding of the underlying results
and trends of the ongoing business due to the uniqueness of these
charges.
Quarter Ended
-------------
Mar. 31,
2007
-------------
GAAP net income $7,279
Non-GAAP adjustments:
Add: Stock compensation expense 975
Stock compensation review expense 1,630
Impairment of Magnum investment 4,290
Restructuring charges 521
Facility-related charges 1,017
Executive termination agreement 378
Benefit for income taxes (8,154)
-------------
Non-GAAP net income $7,936
=============
GAAP diluted earnings per share $0.08
Non-GAAP adjustments:
Effect of the stock compensation expense 0.01
Effect of stock compensation review expense 0.02
Effect of impairment of Magnum investment 0.05
Effect of restructuring charges 0.01
Effect of facility-related charges 0.01
Effect of termination agreement 0.00
Effect of benefit for income taxes (0.09)
-------------
Non-GAAP diluted earnings per share $0.09
=============
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Twelve Months Ended
-------------------
Mar. 31, Mar. 25,
2007 2006
--------- ---------
Net revenue $182,304 $193,694
Cost of sales 73,290 88,502
--------- ---------
Gross Margin 109,014 105,192
--------- ---------
Gross Margin Percentage 59.8% 54.3%
Operating expenses:
Research and development 43,961 45,772
Selling, general and administrative 51,755 51,271
Restructuring and other costs 1,106 2,311
Impairment of goodwill and other intangibles 4,290 -
Acquired in process R&D 1,925 -
Litigation settlement, net - (24,758)
License agreement - (7,000)
--------- ---------
Total operating expenses 103,037 67,596
--------- ---------
Income from operations 5,977 37,596
Realized gain on marketable equity securities 193 388
Interest income, net 13,146 7,461
Other income (expense), net 177 (54)
--------- ---------
Income before income taxes 19,493 45,391
Benefit for income taxes (8,402) (7,035)
--------- ---------
Net income $27,895 $52,426
========= =========
Basic income per share: $0.32 $0.61
Diluted income per share: $0.31 $0.60
Basic weighted average common shares outstanding 87,643 86,036
Diluted weighted average common shares
outstanding 88,805 87,775
Prepared in accordance with Generally Accepted Accounting Principles
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
Mar. 31, Dec. 30, Mar. 25,
2007 2006 2006
--------- ----------- ---------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $87,960 $81,885 $116,675
Restricted investments 5,755 5,755 5,755
Marketable securities 178,000 176,527 102,335
Accounts receivable, net 19,127 16,585 20,937
Inventories 16,496 20,331 18,708
Other current assets 13,699 6,654 7,747
--------- ----------- ---------
Total Current Assets 321,037 307,737 272,157
Long-term marketable securities - - 18,703
Property and equipment, net 11,407 12,324 14,051
Intangibles, net 8,550 9,039 2,966
Goodwill 6,461 6,146 -
Investment in Magnum Semiconductor 3,657 7,947 7,947
Other assets 1,948 3,253 3,217
--------- ----------- ---------
Total Assets $353,060 $346,446 $319,041
========= =========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $10,434 $12,142 $14,129
Accrued salaries and benefits 7,816 6,349 6,460
Other accrued liabilities 10,519 12,425 10,053
Deferred income on shipments to
distributors 4,290 4,907 7,098
Income taxes payable 1,561 2,091 2,228
--------- ----------- ---------
Total Current Liabilities 34,620 37,914 39,968
Long-term restructuring accrual 3,418 3,367 4,694
Other long-term obligations 10,085 9,763 10,109
Stockholders' equity:
Capital stock 926,900 924,665 914,235
Accumulated deficit (621,180) (628,459) (649,075)
Accumulated other comprehensive loss (783) (804) (890)
--------- ----------- ---------
Total Stockholders' Equity 304,937 295,402 264,270
--------- ----------- ---------
Total Liabilities and
Stockholders' Equity $353,060 $346,446 $319,041
========= =========== =========
Prepared in accordance with Generally Accepted Accounting Principles
Contact:
Cirrus Logic, Inc., Austin
Investor Contact:
Thurman
K. Case, 512-851-4125
Chief Financial Officer
Email Contact