crus-20211225

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 25, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ____ to ____

Commission File Number 0-17795

CIRRUS LOGIC, INC.

(Exact name of registrant as specified in its charter)

Delaware

77-0024818

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

800 W. 6th Street

Austin,

Texas

78701

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(512)

851-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $0.001 par value

CRUS

The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares of the registrant's common stock, $0.001 par value, outstanding as of January 27, 2022 was 57,282,584.

CIRRUS LOGIC, INC.

FORM 10-Q QUARTERLY REPORT

QUARTERLY PERIOD ENDED DECEMBER 25, 2021

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION








Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets - December 25, 2021 (unaudited) and March 27, 2021	3

	Consolidated Condensed Statements of Income (unaudited) - Three and Nine Months Ended December 25, 2021 and December 26, 2020	4

	Consolidated Condensed Statements of Comprehensive Income (unaudited) - Three and Nine Months Ended December 25, 2021 and December 26, 2020	5

	Consolidated Condensed Statements of Cash Flows (unaudited) - Nine Months Ended December 25, 2021 and December 26, 2020	6

	Consolidated Condensed Statements of Stockholders' Equity (unaudited) - Three and Nine Months Ended December 25, 2021 and December 26, 2020	7

	Notes to Consolidated Condensed Financial Statements (unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24

Item 4.	Controls and Procedures	24

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 3.	Defaults Upon Senior Securities	28

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	29

	Signatures	30

Part I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)


	December 25,		March 27,
	2021		2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	195,121	$	442,164
Marketable securities	3,719		55,697
Accounts receivable, net	326,131		108,712
Inventories	148,525		173,263
Prepaid assets	41,406		37,576
Other current assets	48,619		25,107
Total current assets	763,521		842,519

Long-term marketable securities	72,118		312,759
Right-of-use lease assets	173,054		133,548
Property and equipment, net	157,186		154,942
Intangibles, net	165,581		22,031
Goodwill	437,783		287,518
Deferred tax assets	7,203		9,977
Long-term prepaid wafers	195,000		—
Other assets	96,671		67,320
Total assets	$	2,068,117	$	1,830,614

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	110,250	$	102,744
Accrued salaries and benefits	43,044		54,849
Software license agreements	24,791		28,006
Current lease liabilities	14,653		14,573
Acquisition-related liabilities	30,964		—
Other accrued liabilities	15,812		13,438
Total current liabilities	239,514		213,610

Long-term liabilities:

Software license agreements	17,749		36,096
Non-current income taxes	77,683		64,020
Non-current lease liabilities	164,896		127,883
Long-term acquisition-related liabilities	5,528		—

Total long-term liabilities	265,856		227,999

Stockholders' equity:
Capital stock	1,556,746		1,498,819
Accumulated earnings (deficit)	6,416		(112,689)
Accumulated other comprehensive income (loss)	(415)		2,875
Total stockholders' equity	1,562,747		1,389,005
Total liabilities and stockholders' equity	$	2,068,117	$	1,830,614

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(in thousands, except per share amounts; unaudited)


	Three Months Ended				Nine Months Ended
	December 25,		December 26,		December 25,		December 26,
	2021		2020		2021		2020
Net sales	$	548,349	$	485,795	$	1,291,488	$	1,075,693
Cost of sales	258,827		234,295		626,576		516,511
Gross profit	289,522		251,500		664,912		559,182
Operating expenses
Research and development	107,101		89,435		294,913		252,986
Selling, general and administrative	38,247		32,415		111,526		93,366
Restructuring costs	—		—		—		352
Total operating expenses	145,348		121,850		406,439		346,704
Income from operations	144,174		129,650		258,473		212,478
Interest income	140		1,465		1,448		4,958
Interest expense	(218)		(259)		(730)		(798)
Other income (expense)	(87)		(207)		1,530		688
Income before income taxes	144,009		130,649		260,721		217,326
Provision for income taxes	16,373		16,281		30,780		25,263
Net income	$	127,636	$	114,368	$	229,941	$	192,063

Basic earnings per share	$	2.23	$	1.97	$	4.01	$	3.30
Diluted earnings per share	$	2.16	$	1.91	$	3.88	$	3.20
Basic weighted average common shares outstanding	57,178		58,024		57,374		58,176
Diluted weighted average common shares outstanding	59,031		59,963		59,317		60,101

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands; unaudited)


	Three Months Ended				Nine Months Ended
	December 25,		December 26,		December 25,		December 26,
	2021		2020		2021		2020
Net income	$	127,636	$	114,368	$	229,941	$	192,063
Other comprehensive income (loss), before tax
Foreign currency translation gain (loss)	(107)		428		(324)		2,093
Unrealized gain (loss) on marketable securities	(650)		(649)		(3,756)		8,106

Benefit (provision) for income taxes	137		136		790		(1,702)
Comprehensive income	$	127,016	$	114,283	$	226,651	$	200,560

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands; unaudited)


	Nine Months Ended
	December 25,		December 26,
	2021		2020
Cash flows from operating activities:
Net income	$	229,941	$	192,063
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	45,156		35,478
Stock-based compensation expense	49,368		42,069
Deferred income taxes	(8,243)		3,679
Loss on retirement or write-off of long-lived assets	527		52

Other non-cash adjustments	282		124
MEMS restructuring charges	—		352
Net change in operating assets and liabilities:
Accounts receivable, net	(210,694)		(90,806)
Inventories	32,413		4,036
Long-term prepaid wafers	(195,000)		—
Other assets	(101,160)		(3,529)
Accounts payable and other accrued liabilities	(12,720)		6,157
Income taxes payable	159		(13,233)
Acquisition-related liabilities	36,493		—
Net cash (used in) provided by operating activities	(133,478)		176,442

Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities	366,582		97,415
Purchases of available-for-sale marketable securities	(77,716)		(153,505)
Purchases of property, equipment and software	(18,091)		(11,734)
Investments in technology	(3,463)		(1,310)
Acquisition of business, net of cash obtained	(276,884)		—


Net cash used in investing activities	(9,572)		(69,134)

Cash flows from financing activities:

Debt issuance costs	(1,718)		—
Issuance of common stock, net of shares withheld for taxes	8,562		6,487
Repurchase of stock to satisfy employee tax withholding obligations	(18,335)		(13,619)
Repurchase and retirement of common stock	(92,502)		(65,001)
Net cash used in financing activities	(103,993)		(72,133)

Net (decrease) increase in cash and cash equivalents	(247,043)		35,175

Cash and cash equivalents at beginning of period	442,164		292,119
Cash and cash equivalents at end of period	$	195,121	$	327,294

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands; unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total
Three Months Ended	Shares	Amount
Balance, September 26, 2020	57,957	$	58	$	1,466,920	$	(155,260)	$	5,113	$	1,316,831
Net income	—	—		—		114,368		—

SEC Form 10-Q filed by Cirrus Logic Inc.