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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 September 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 StreetAustin,Texas78701
(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 classTrading SymbolName of each exchange on which registered
Common stock, $0.001 par valueCRUSThe 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 October 28, 2021 was 57,136,039.




CIRRUS LOGIC, INC.
FORM 10-Q QUARTERLY REPORT
QUARTERLY PERIOD ENDED SEPTEMBER 25, 2021
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
 
Item 1.Financial Statements 
 
Consolidated Condensed Balance Sheets - September 25, 2021 (unaudited) and March 27, 2021
  
Consolidated Condensed Statements of Income (unaudited) - Three and Six Months Ended September 25, 2021 and September 26, 2020
  
Consolidated Condensed Statements of Comprehensive Income (unaudited) - Three and Six Months Ended September 25, 2021 and September 26, 2020
  
Consolidated Condensed Statements of Cash Flows (unaudited) - Six Months Ended September 25, 2021 and September 26, 2020
Consolidated Condensed Statements of Stockholders' Equity (unaudited) - Three and Six Months Ended September 25, 2021 and September 26, 20207
Notes to Consolidated Condensed Financial Statements (unaudited)
  
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
  
Item 3.Quantitative and Qualitative Disclosures about Market Risk
  
Item 4.Controls and Procedures
  
PART II - OTHER INFORMATION
  
Item 1.Legal Proceedings
  
Item 1A.Risk Factors
  
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
  
Item 3.Defaults Upon Senior Securities
  
Item 4.Mine Safety Disclosures
  
Item 5.Other Information
  
Item 6.Exhibits
  
Signatures

2


Part I. FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
September 25,March 27,
20212021
(unaudited) 
Assets  
Current assets:  
Cash and cash equivalents$386,741 $442,164 
Marketable securities8,152 55,697 
Accounts receivable, net280,967 108,712 
Inventories188,360 173,263 
Prepaid assets39,057 37,576 
Other current assets45,779 25,107 
Total current assets949,056 842,519 
  
Long-term marketable securities67,726 312,759 
Right-of-use lease assets129,298 133,548 
Property and equipment, net159,480 154,942 
Intangibles, net174,852 22,031 
Goodwill437,783 287,518 
Deferred tax assets10,073 9,977 
Long-term prepaid wafers195,000  
Other assets102,892 67,320 
Total assets$2,226,160 $1,830,614 
  
Liabilities and Stockholders' Equity  
Current liabilities:  
Accounts payable$386,699 $102,744 
Accrued salaries and benefits54,919 54,849 
Software license agreements25,414 28,006 
Current lease liabilities14,359 14,573 
Other accrued liabilities18,990 13,438 
Total current liabilities500,381 213,610 
  
Long-term liabilities:  
Software license agreements21,818 36,096 
Non-current income taxes79,727 64,020 
Non-current lease liabilities122,815 127,883 
Long-term acquisition-related liabilities33,329  
Total long-term liabilities257,689 227,999 
  
Stockholders' equity:  
Capital stock1,533,557 1,498,819 
Accumulated deficit(65,672)(112,689)
Accumulated other comprehensive income205 2,875 
Total stockholders' equity1,468,090 1,389,005 
Total liabilities and stockholders' equity$2,226,160 $1,830,614 
The accompanying notes are an integral part of these consolidated condensed financial statements.
3


CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share amounts; unaudited)
Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
Net sales$465,886 $347,325 $743,139 $589,898 
Cost of sales230,442 167,115 367,749 282,216 
Gross profit235,444 180,210 375,390 307,682 
Operating expenses  
Research and development102,116 84,810 187,812 163,551 
Selling, general and administrative38,132 31,247 73,279 60,951 
Restructuring costs   352 
Total operating expenses140,248 116,057 261,091 224,854 
Income from operations95,196 64,153 114,299 82,828 
Interest income288 1,658 1,308 3,493 
Interest expense(253)(280)(512)(539)
Other income1,859 784 1,617 895 
Income before income taxes97,090 66,315 116,712 86,677 
Provision for income taxes11,994 6,829 14,407 8,982 
Net income$85,096 $59,486 $102,305 $77,695 
  
Basic earnings per share$1.48 $1.02 $1.78 $1.33 
Diluted earnings per share$1.43 $0.99 $1.72 $1.29 
Basic weighted average common shares outstanding57,364 58,191 57,473 58,252 
Diluted weighted average common shares outstanding59,451 60,127 59,485 60,203 

The accompanying notes are an integral part of these consolidated condensed financial statements.
4


CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands; unaudited)
Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
Net income$85,096 $59,486 $102,305 $77,695 
Other comprehensive income (loss), before tax  
Foreign currency translation gain (loss)(165)651 (217)1,665 
Unrealized gain (loss) on marketable securities(1,983)(733)(3,106)8,755 
Benefit (provision) for income taxes417 154 653 (1,838)
Comprehensive income $83,365 $59,558 $99,635 $86,277 

The accompanying notes are an integral part of these consolidated condensed financial statements.
5


CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
Six Months Ended
September 25,September 26,
20212020
Cash flows from operating activities:  
Net income$102,305 $77,695 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization27,710 23,845 
Stock-based compensation expense31,536 28,782 
Deferred income taxes(8,976)(1,221)
Loss on retirement or write-off of long-lived assets331 11 
Other non-cash adjustments200 124 
MEMS restructuring charges 352 
Net change in operating assets and liabilities:  
Accounts receivable, net(165,529)(27,498)
Inventories(7,422)(62,325)
Long-term prepaid wafers(195,000) 
Other assets(101,368)(4,630)
Accounts payable and other accrued liabilities280,941 19,351 
Income taxes payable4,320 (12,348)
Long-term acquisition-related liabilities33,329  
Net cash provided by operating activities2,377 42,138 
  
Cash flows from investing activities:  
Maturities and sales of available-for-sale marketable securities357,636 73,458 
Purchases of available-for-sale marketable securities(68,163)(124,016)
Purchases of property, equipment and software(14,728)(6,967)
Investments in technology(3,102)(1,189)
Acquisition of business, net of cash obtained(275,642) 
Net cash used in investing activities(3,999)(58,714)
  
Cash flows from financing activities:  
Debt issuance costs(1,716) 
Issuance of common stock, net of shares withheld for taxes3,203 3,267 
Repurchase of stock to satisfy employee tax withholding obligations(2,785)(1,273)
Repurchase and retirement of common stock(52,503)(30,001)
Net cash used in financing activities(53,801)(28,007)
  
Net decrease in cash and cash equivalents(55,423)(44,583)
  
Cash and cash equivalents at beginning of period442,164 292,119 
Cash and cash equivalents at end of period$386,741 $247,536 

The accompanying notes are an integral part of these consolidated condensed financial statements.
6


CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands; unaudited)
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income / (Loss)Total
Three Months EndedSharesAmount
Balance, June 27, 202058,381 $58 $1,451,239 $(184,049)$5,041 $1,272,289 
Net income— — — 59,486 — 59,486 
Change in unrealized gain (loss) on marketable securities, net of tax— — — — (579)(579)
Change in foreign currency translation adjustments— — — — 651 651 
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes52 — 205 (696)— (491)
Repurchase and retirement of common stock(476) — (30,001)— (30,001)
Stock-based compensation— — 15,476 — — 15,476 
Balance, September 26, 202057,957 $58 $1,466,920 $(155,260)$5,113 $1,316,831 
Balance, June 26, 202157,547 $58 $1,514,491 $(109,754)$1,936 $1,406,731 
Net income— — — 85,096 — 85,096 
Change in unrealized gain (loss) on marketable securities, net of tax— — — — (1,566)(1,566)
Change in foreign currency translation adjustments— — — — (165)(165)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes86 — 2,458 (1,012)— 1,446 
Repurchase and retirement of common stock(505)(1)— (40,002)— (40,003)
Stock-based compensation— — 16,551 — — 16,551 
Balance, September 25, 202157,128 $57 $1,533,500 $(65,672)$205 $1,468,090 
Six Months Ended
Balance, March 28, 202058,242 $58 $1,434,871 $(201,681)$(3,469)$1,229,779 
Net income— — — 77,695 — 77,695 
Change in unrealized gain (loss) on marketable securities, net of tax— — — — 6,917 6,917 
Change in foreign currency translation adjustments— — — — 1,665 1,665 
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes191 — 3,267 (1,273)— 1,994 
Repurchase and retirement of common stock(476) — (30,001)— (30,001)
Stock-based compensation— — 28,782 — — 28,782 
Balance, September 26, 202057,957 $58 $1,466,920 $(155,260)$5,113 $1,316,831 
Balance, March 27, 202157,652 $58 $1,498,761 $(112,689)$2,875 $1,389,005 
Net income— — — 102,305 — 102,305 
Change in unrealized gain (loss) on marketable securities, net of tax— — — — (2,453)(2,453)
Change in foreign currency translation adjustments— — — — (217)(217)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes147 — 3,203 (2,785)— 418 
Repurchase and retirement of common stock(671)(1)— (52,503)— (52,504)
Stock-based compensation— — 31,536 — — 31,536 
Balance, September 25, 202157,128 $57 $1,533,500 $(65,672)$205 $1,468,090 

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

7

CIRRUS LOGIC, INC.
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation

The unaudited consolidated condensed financial statements have been prepared by Cirrus Logic, Inc. (“Cirrus Logic,” “we,” “us,” “our,” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”).  The accompanying unaudited consolidated condensed financial statements do not include complete footnotes and financial presentations.  As a result, these financial statements should be read along with the audited consolidated financial statements and notes thereto for the year ended March 27, 2021, included in our Annual Report on Form 10-K filed with the Commission on May 21, 2021.  In our opinion, the financial statements reflect all material adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position, operating results and cash flows for those periods presented.  The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported assets, liabilities, revenues and expenses.  Actual results could differ from those estimates and assumptions.  Moreover, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.

2. Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company adopted this ASU in the first quarter of fiscal year 2022, with no impact to the financial statements.

In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321) - Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies the interaction of the accounting for equity securities and investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company adopted this ASU in the first quarter of fiscal year 2022, with no material impact to the financial statements.

In May 2020, the SEC adopted final rules that amend the financial statement requirements for significant business acquisitions and dispositions. Among other things, the rules modify the significance tests and improve the disclosure requirements for acquired or to be acquired businesses and related pro forma financial information, the periods those financial statements must cover, and the form and content of the pro forma financial information. The final rules were effective January 1, 2021. The Company has adopted the final rules and applied changes in conjunction with its recently-announced business acquisition described in Note 8 - Acquisition.

3. Marketable Securities

The Company’s investments have been classified as available-for-sale securities in accordance with U.S. GAAP.  Marketable securities are categorized on the consolidated condensed balance sheet as "Marketable securities", within the short-term or long-term classification, as appropriate.

The following table is a summary of available-for-sale securities at September 25, 2021 (in thousands):
As of September 25, 2021Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
(Net Carrying
Amount)
Corporate debt securities$72,235 $230 $(80)$72,385 
Non-U.S. government securities1,688 11  1,699 
U.S. Treasury securities1,797  (3)1,794 
Total securities$75,720 $241 $(83)$75,878 

The Company typically invests in highly-rated securities with original maturities generally ranging from one to three years. The Company's specifically identified gross unrealized losses of $0.1 million related to securities with total amortized
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costs of approximately $33.4 million at September 25, 2021. There were no securities that had been in a continuous unrealized loss position for more than 12 months as of September 25, 2021. The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipated or actual changes in credit rating and duration management.  The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors including the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, changes in market interest rates and whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s cost basis. As of September 25, 2021, the Company does not consider any of its investments to be impaired.

The following table is a summary of available-for-sale securities at March 27, 2021 (in thousands):
As of March 27, 2021Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
(Net Carrying
Amount)
Corporate debt securities$348,971 $3,403 $(313)$352,061 
Non-U.S. government securities13,462 172 (1)13,633 
Agency discount notes2,759 4 (1)2,762 
Total securities$365,192 $3,579 $(315)$368,456 

The Company's specifically identified gross unrealized losses of $0.3 million related to securities with total amortized costs of approximately $92 million at March 27, 2021. There were no securities that had been in a continuous unrealized loss position for more than 12 months as of March 27, 2021. As of March 27, 2021, the Company did not consider any of its investments to be impaired.

The cost and estimated fair value of available-for-sale securities by contractual maturities were as follows (in thousands):
September 25, 2021March 27, 2021
AmortizedEstimatedAmortizedEstimated
CostFair ValueCostFair Value
Within 1 year$8,074 $8,152 $54,895 $55,698 
After 1 year67,646 67,726 310,297 312,758 
Total$75,720 $75,878 $365,192 $368,456 

4. Fair Value of Financial Instruments

The Company has determined that the only material assets and liabilities in the Company’s financial statements that are required to be measured at fair value on a recurring basis are the Company’s cash equivalents and marketable securities portfolio.  The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s cash equivalents and marketable securities portfolio consist of money market funds, debt securities, non-U.S. government securities, U.S Treasury securities and securities of U.S. government-sponsored enterprises and are reflected on our consolidated condensed balance sheets under the headings cash and cash equivalents, marketable securities,
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and long-term marketable securities.  The Company determines the fair value of its marketable securities portfolio by obtaining non-binding market prices from third-party pricing providers on the last day of the quarter, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.

The Company's long-term revolving credit facility, described in Note 9, bears interest at a base rate plus applicable margin or LIBOR plus applicable margin. As of September 25, 2021, there are no amounts drawn under the credit facility and the fair value is zero.

As of September 25, 2021 and March 27, 2021, the Company has no material Level 3 assets or liabilities.  There were no transfers between Level 1, Level 2, or Level 3 measurements for the three or six months ended September 25, 2021. 

The following summarizes the fair value of our financial instruments at September 25, 2021 (in thousands):
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
Significant
Other
Observable
Inputs
Level 2
Significant
Unobservable
Inputs
Level 3
Total
Assets:    
Cash equivalents    
Money market funds$272,982 $ $ $272,982 
Available-for-sale securities    
Corporate debt securities$ $72,385 $ $72,385 
Non-U.S. government securities 1,699  1,699 
U.S. Treasury securities1,794   1,794 
$1,794 $74,084 $ $75,878 

The following summarizes the fair value of our financial instruments at March 27, 2021 (in thousands):
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
Significant
Other
Observable
Inputs
Level 2
Significant
Unobservable
Inputs
Level 3
Total
Assets:
Cash equivalents    
Money market funds$405,819 $ $ $405,819 
Available-for-sale securities    
Corporate debt securities$ $352,061 $ $352,061 
Non-U.S. government securities 13,633  13,633 
Agency discount notes 2,762  2,762 
$ $368,456 $ $368,456 

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5. Derivative Financial Instruments

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-functional currency balance sheet exposures. The Company recognizes both the gains and losses on foreign currency forward contracts and the gains and losses on the remeasurement of non-functional currency assets and liabilities within "Other income" in the consolidated condensed statements of income. The Company does not apply hedge accounting to these foreign currency derivative instruments.

As of September 25, 2021, the Company held one foreign currency forward contract denominated in British Pound Sterling with a notional value of $18.0 million. The fair value of this contract was not material as of September 25, 2021.

The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands):
Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020Location
Gain (loss) recognized in income:
Foreign currency forward contracts$(397)$735 $(65)$1,918 Other income

6. Accounts Receivable, net

The following are the components of accounts receivable, net (in thousands):
September 25,March 27,
20212021
Gross accounts receivable$280,967 $108,712 
Allowance for doubtful accounts  
Accounts receivable, net$280,967 $108,712 

The significant increase in accounts receivable is due primarily to the volume and timing of shipments in the current fiscal quarter versus the fourth quarter of fiscal year 2021.

7. Inventories

Inventories are comprised of the following (in thousands):
September 25,March 27,
20212021
Work in process$106,007 $92,073 
Finished goods82,353 81,190 
$188,360 $173,263 


8. Acquisition

On July 20, 2021, the Company completed the acquisition of Lion Semiconductor, Inc. ("Lion") (the "Acquisition"). Lion's switched-capacitor architectures deliver higher efficiency and better heat dissipation for the rapidly developing fast-charging market and are used today in numerous flagship and mid-tier smartphones. The Acquisition is expected to bring unique intellectual property and products for power applications in smartphones, laptops and other devices and accelerate growth of the Company’s high-performance mixed-signal product line.

As a result of acquiring 100% of the outstanding share capital of Lion, Lion became a wholly-owned subsidiary of the Company. This transaction is being accounted for as a business combination using the acquisition method of accounting. All
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of the acquired assets and liabilities of Lion have been recorded at their respective fair values as of the acquisition date. Transaction costs have been expensed as incurred.

At the acquisition date, total consideration transferred was approximately $280.5 million, inclusive of $4.9 million in cash acquired. Additional merger consideration of $32.2 million is subject to indemnity and adjustment provisions as outlined in the merger agreement and is recorded as a liability as of September 25, 2021.

In addition, $25.4 million of the merger consideration relates to retention agreements with certain key employees that are subject to continued employment with the Company. The merger consideration subject to retention agreements is treated as compensation expense and is recognized over the retention period in "Research and development" expense in the consolidated condensed statements of income.

The excess of the purchase price over the net assets acquired is recorded as goodwill and is attributable primarily to expected growth in the scope of and market opportunities of the products and customer base of Lion. None of the goodwill is deductible for income tax purposes.

The following table presents the preliminary allocation of the purchase price at the date of acquisition (in thousands):

July 20, 2021
Cash$4,924 
Account receivable6,725 
Inventory7,675 
Manufacturing advances8,502 
Other current assets321 
Intangibles162,960 
Goodwill150,265 
Other non-current assets453 
Current liabilities(2,927)
Deferred tax liabilities(26,123)
Total purchase price$312,775 

Preliminary estimates of the fair value of the assets acquired and the liabilities assumed are based on the information currently available. The Company is continuing to evaluate the underlying inputs and assumptions used in the valuations and related income tax impacts of the transaction. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the date of acquisition.

The components of the acquired intangible assets and related weighted average amortization periods are detailed below (in thousands):
AmountWeighted Average Amortization Period (years)
Developed Technology$144,390 7
Customer Relationships18,570 5
Total$162,960 

Developed technology represents the fair value of the intellectual property portfolio related to Lion's fast-charging products that are expected to contribute meaningful growth. Developed technology was valued using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the technology less charges representing the contribution of other assets to those cash flows. The economic useful life was determined based on the technology cycle, as well as the cash flows over the forecast period.

Customer relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers. Customer relationships were valued using the with-and-without-method under the income approach. In
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the with-and-without method, the fair value was measured by the difference between the present values of the cash flows with and without the existing customers in place over the period of time necessary to reacquire the customers. The economic useful life was determined by evaluating many factors, including the useful life of comparable intangible assets, the length of time
remaining on the acquired contracts and the historical customer turnover rates.

Revenues attributable to the Lion business from the date of acquisition to September 25, 2021 were $16.8 million and are included in the consolidated condensed statements of income for the current period. Transaction costs in connection with the Acquisition were immaterial for the six months ended September 25, 2021, and are included in "Selling, general and administrative" expense in the consolidated condensed statements of income. Pro forma information related to the Acquisition has not been presented because it would not be materially different from amounts reported.

9. Revolving Credit Facility

On July 8, 2021, the Company entered into a second amended and restated credit agreement (the “Second Amended Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. The Second Amended Credit Agreement provides for a $300 million senior secured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility matures on July 8, 2026 (the “Maturity Date”). The Revolving Credit Facility is required to be guaranteed by all of Cirrus Logic’s material domestic subsidiaries (the "Subsidiary Guarantors"). The Revolving Credit Facility is secured by substantially all the assets of Cirrus Logic and any Subsidiary Guarantors, except for certain excluded assets.

Borrowings under the Revolving Credit Facility may, at Cirrus Logic’s election, bear interest at either (a) a base rate plus the applicable margin ("Base Rate Loans") or (b) a LIBOR rate plus the applicable margin ("LIBOR Rate Loans"). The applicable margin ranges from 0% to 0.75% per annum for Base Rate Loans and 1.00% to 1.75% per annum for LIBOR Rate Loans based on the ratio of consolidated funded indebtedness to consolidated EBITDA for the most recently ended period of four consecutive fiscal quarters (the “Consolidated Leverage Ratio”). The Second Amended Credit Agreement further provides a method for determining an alternative rate of interest if the LIBOR Rate is no longer available or upon the occurrence of certain other events. A Commitment Fee accrues at a rate per annum ranging from 0.175% to 0.275% (based on the Consolidated Leverage Ratio) on the average daily unused portion of the commitment of the lenders.

The Second Amended Credit Agreement contains customary affirmative covenants, including, among others, covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements, and compliance with applicable laws and regulations. Further, the Second Amended Credit Agreement contains customary negative covenants limiting the ability of Cirrus Logic or any Subsidiary to, among other things, incur debt, grant liens, make investments, effect certain fundamental changes, make certain asset dispositions, and make certain restricted payments. The Revolving Credit Facility also contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness (minus up to $200 million of unrestricted cash and cash equivalents available on such date) to consolidated EBITDA for the prior four consecutive quarters must not be greater than 3.00 to 1.00 (the “Consolidated Net Leverage Ratio”) and (b) the ratio of consolidated EBITDA for the prior four consecutive quarters to consolidated interest expense paid or payable in cash for the prior four consecutive quarters must not be less than 3.00 to 1.00 (the “Consolidated Interest Coverage Ratio”).

As of September 25, 2021, the Company had no amounts outstanding under the Revolving Credit Facility and was in compliance with all covenants under the Second Amended Credit Agreement.  

10. Revenues

Disaggregation of revenue

We disaggregate revenue from contracts with customers by product line and ship to location of the customer. During the fourth quarter of fiscal year 2021, we adjusted how we report product line revenue to better represent our business and strategic focus. Sales are designated in the product line categories of Audio and High-Performance Mixed-Signal.

Total net sales based on the product line disaggregation criteria described above are shown in the table below (in thousands). Prior periods were retrospectively adjusted to conform to the new product line categories.
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Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
Audio Products$300,775 $279,905 $518,130 $486,354 
High-Performance Mixed-Signal Products165,111 67,420 225,009 103,544 
$465,886 $347,325 $743,139 $589,898 

The geographic regions that are reviewed are China, the United States, and the rest of the world. Total net sales based on the geographic disaggregation criteria described are as follows (in thousands):
Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
China$303,193 $255,840 $471,518 $451,311 
United States5,337 4,211 11,356 8,287 
Rest of World157,356 87,274 260,265 130,300 
$465,886 $347,325 $743,139 $589,898 
Performance obligations

The Company's single performance obligation is the delivery of promised goods to the customer. The promised goods are explicitly stated in the customer contract and are comprised of either a single type of good or a series of goods that are substantially the same, have the same pattern of transfer to the customer, and are neither capable of being distinct nor separable from the other promised goods in the contract. This performance obligation is satisfied upon transfer of control of the promised goods to the customer, as defined per the shipping terms within the customer's contract. The vast majority of the Company's contracts with customers have an original expected term length of one year or less. As allowed by Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, the Company has not disclosed the value of any unsatisfied performance obligations related to these contracts.

The Company’s products typically include a warranty period of one to three years. These warranties qualify as assurance-type warranties, as goods can be returned for product non-conformance and defect only. As such, these warranties are accounted for under ASC 460, Guarantees, and are not considered a separate performance obligation.

Contract balances

Payments are typically due within 30 to 60 days of invoicing and terms do not include significant financing components or noncash consideration. There have been no material impairment losses on accounts receivable. There are no material contract assets or contract liabilities recorded on the consolidated condensed balance sheets.

Transaction price

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods to the customer. Fixed pricing is the consideration that is agreed upon in the customer contract. Variable pricing includes rebates, rights of return, warranties, price protection and stock rotation. Rebates are granted as a customer account credit, based on agreed-upon sales thresholds. Rights of return and warranty costs are estimated using the "most likely amount" method by reviewing historical returns to determine the most likely customer return rate and applying materiality thresholds. Price protection includes price adjustments available to certain distributors based upon established book price and a stated adjustment period. Stock rotation is also available to certain distributors based on a stated maximum of prior billings.

The Company estimates all variable consideration at the most likely amount that it expects to be entitled to receive. The estimate is based on current and historical information, including recent sales activity and pricing, available to the Company. Variable consideration is only included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company defers all variable consideration that does not meet the revenue recognition criteria.

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11. Restructuring Costs

During the fourth quarter of fiscal year 2020, the Company approved a restructuring plan (the “MEMS Restructuring”), including discontinuing efforts relating to the microelectromechanical systems ("MEMS") microphone product line, which allowed the Company to concentrate resources on projects with an anticipated larger return on investment. The MEMS Restructuring was substantially complete as of the first quarter of fiscal year 2021 with a $0.4 million "Restructuring Costs" charge to the income statement. No additional restructuring charges have been incurred since the first quarter of fiscal year 2021.

12. Income Taxes
Our provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items, and any applicable income tax credits.

The following table presents the provision for income taxes (in thousands) and the effective tax rates:
Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
Income before income taxes$97,090 $66,315 $116,712 $86,677 
Provision for income taxes$11,994 $6,829 $14,407 $8,982 
Effective tax rate12.4 %10.3 %12.3 %10.4 %

Our income tax expense was $12.0 million and $6.8 million for the second quarters of fiscal years 2022 and 2021, respectively, resulting in effective tax rates of 12.4% and 10.3%, respectively.  Our income tax expense was $14.4 million and $9.0 million for the first six months of fiscal years 2022 and 2021, respectively, resulting in effective tax rates of 12.3% and 10.4%, respectively. Our effective tax rates for the second quarter and first six months of fiscal year 2022 were lower than the federal statutory rate primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate. Our effective tax rates for the second quarter and first six months of fiscal year 2021 were lower than the federal statutory rate primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and the remeasurement of previously unrecognized tax benefits recognized as a discrete item in the second quarter of fiscal year 2021 .

The Company records unrecognized tax benefits for the estimated risk associated with tax positions taken on tax returns.  At September 25, 2021, the Company had unrecognized tax benefits of $32.9 million, all of which would impact the effective tax rate if recognized.  The Company’s total unrecognized tax benefits are classified as “Non-current income taxes" in the consolidated condensed balance sheets. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes.  As of September 25, 2021, the balance of accrued interest and penalties, net of tax, was $4.6 million. 

On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. et al. v. Commissioner which concluded that the regulations relating to the treatment of stock-based compensation expense in intercompany cost-sharing arrangements were invalid. In 2016 the U.S. Internal Revenue Service appealed the decision to the U.S. Court of Appeals for the Ninth Circuit (the “Ninth Circuit”). On July 24, 2018, the Ninth Circuit issued a decision that was subsequently withdrawn and a reconstituted panel conferred on the appeal. On June 7, 2019, the Ninth Circuit reversed the decision of the U.S. Tax Court and upheld the cost-sharing regulations. On February 10, 2020, Altera Corp. filed a Petition for a Writ of Certiorari with the Supreme Court of the United States, which was denied by the Supreme Court on June 22, 2020. Although the issue is now resolved in the Ninth Circuit, the Ninth Circuit's opinion is not binding in other circuits. The potential impact of this issue on the Company, which is not located within the jurisdiction of the Ninth Circuit, is unclear at this time. We will continue to monitor developments related to this issue and the potential impact of those developments on the Company's current and prior fiscal years.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Fiscal years 2017 through 2021 remain open to examination by the major taxing jurisdictions to which the Company is subject, although carry forward attributes that were generated in tax years prior to fiscal year 2017 may be adjusted upon examination by the tax authorities if they have been, or will be, used in a future period.  The Company's federal income tax returns for fiscal years 2017, 2018, and 2019 are under examination by the U.S. Internal Revenue Service.  The Company
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believes it has accrued adequate reserves related to the matters under examination. The Company is not under an income tax audit in any other major taxing jurisdiction.

13. Net Income Per Share

Basic net income per share is based on the weighted effect of common shares issued and outstanding and is calculated by dividing net income by the basic weighted average shares outstanding during the period.  Diluted net income per share is calculated by dividing net income by the weighted average number of common shares used in the basic net income per share calculation, plus the equivalent number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding.  These potentially dilutive items consist primarily of outstanding stock options and restricted stock grants.

The following table details the calculation of basic and diluted earnings per share for the three and six months ended September 25, 2021 and September 26, 2020 (in thousands, except per share amounts):
Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
Numerator:    
Net income$85,096 $59,486 $102,305 $77,695 
Denominator:    
Weighted average shares outstanding57,364 58,191 57,473 58,252 
Effect of dilutive securities2,087 1,936 2,012 1,951 
Weighted average diluted shares59,451 60,127 59,485 60,203 
Basic earnings per share$1.48 $1.02 $1.78 $1.33 
Diluted earnings per share$1.43 $0.99 $1.72 $1.29 

The weighted outstanding shares excluded from our diluted calculation for the three and six months ended September 25, 2021 were 95 thousand and 99 thousand, respectively, as the shares were anti-dilutive. The weighted outstanding shares excluded from our diluted calculation for the three and six months ended September 26, 2020, were 247 thousand and 226 thousand, respectively, as the shares were anti-dilutive.

14. Commitments and Contingencies

On July 28, 2021, the Company entered into a Capacity Reservation and Wafer Supply Commitment Agreement (the “Capacity Reservation Agreement”) with GLOBALFOUNDRIES Singapore Pte. Ltd. (“GlobalFoundries”) to provide the Company a wafer capacity commitment and wafer pricing for Company products for calendar years 2022-2026 (the “Commitment Period”).

The Capacity Reservation Agreement requires GlobalFoundries to provide, and the Company to purchase, a defined number of wafers on a quarterly basis for the Commitment Period, subject to shortfall payments. In exchange for GlobalFoundries’ capacity commitment, the Company agreed to pay a $50 million non-refundable capacity reservation fee. This reservation fee is recorded in "Other assets" on the consolidated condensed balance sheets within the short-term or long-term classification, as appropriate, and amortized over the Commitment Period. In addition, the Company agreed to pre-pay GlobalFoundries $175 million for future wafer purchases, which will be credited back to the Company as a portion of the price of wafers purchased beginning in the third quarter of calendar year 2023. This prepayment is currently recorded in "Long-term prepaid wafers" on the consolidated condensed balance sheets. The Company currently estimates that it is obligated to purchase at least approximately $1.6 billion of wafers from GlobalFoundries under the Capacity Reservation Agreement

In addition, the Capacity Reservation Agreement provides the Company an option to reserve a specified portion of the capacity commitment for wafers that include certain additional technology beginning in calendar year 2023. The Company exercised that option in the second quarter of fiscal year 2022, and GlobalFoundries agreed to provide up to a maximum portion of the wafers pursuant to the capacity commitment with this additional technology. In exchange for the capacity commitment with the additional technology, the Company agreed to pay an additional $10 million non-refundable fee and pre-pay an additional $20 million for future wafer purchases. These payments are recorded similarly to the description above.

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15. Legal Matters
From time to time, we are involved in legal proceedings concerning matters arising in connection with the conduct of our business activities.  We regularly evaluate the status of legal proceedings in which we are involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss or additional loss may have been incurred, and to determine if accruals are appropriate.  We further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made.    

Based on current knowledge, management does not believe that there are any pending matters that could potentially have a material adverse effect on our business, financial condition, results of operations or cash flows.  However, we are engaged in various legal actions in the normal course of business.  There can be no assurances in light of the inherent uncertainties involved in any potential legal proceedings, some of which are beyond our control, and an adverse outcome in any legal proceeding could be material to our results of operations or cash flows for any particular reporting period.

16. Stockholders’ Equity

Common Stock 
 
The Company issued a net 0.1 million and 0.1 million shares of common stock during each of the three and six months ended September 25, 2021, pursuant to the Company's equity incentive plans. The Company issued a net 0.1 million and 0.2 million shares of common stock during each of the three and six months ended September 26, 2020, pursuant to the Company's equity incentive plans.

Share Repurchase Program   

In January 2021, the Board of Directors authorized the repurchase of an additional $350 million of the Company’s common stock. Since inception, approximately $42.5 million of the Company’s common stock has been repurchased under the 2021 share repurchase program, leaving approximately $307.5 million available for repurchase under this plan as of September 25, 2021.  During the three months ended September 25, 2021, the Company repurchased 0.5 million shares of its common stock under the 2021 plan for $40.0 million, at an average cost of $79.28 per share. During the six months ended September 25, 2021, the Company repurchased 0.7 million shares of its common stock under both the 2021 plan and the prior $200 million 2019 plan for $52.5 million, at an average cost of $78.26 per share. During the three months ended June 26, 2021, the Company completed share repurchases under the 2019 plan.

17. Segment Information

We determine our operating segments in accordance with FASB guidelines.  Our Chief Executive Officer (“CEO”) has been identified as the chief operating decision maker under these guidelines. 

The Company operates and tracks its results in one reportable segment, but reports revenue in two product lines, Audio and High-Performance Mixed-Signal.  Our CEO receives and uses enterprise-wide financial information to assess financial performance and allocate resources, rather than detailed information at a product line level.  Additionally, our product lines have similar characteristics and customers.  They share support functions such as sales, public relations, supply chain management, various research and development and engineering support, in addition to the general and administrative functions of human resources, legal, finance and information technology.  Therefore, there is no complete, discrete financial information maintained for these product lines. Revenue by product line is disclosed in Note 10 - Revenues.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read along with the unaudited consolidated condensed financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended March 27, 2021, contained in our fiscal year 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on May 21, 2021.  We maintain a website at investor.cirrus.com, which makes available free of charge our most recent annual report and all other filings we have made with the Commission. 

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This quarterly report on Form 10-Q including Management’s Discussion and Analysis of Financial Condition and Results of Operations and certain information incorporated herein by reference contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act").  These forward-looking statements are based on expectations, estimates, forecasts and projections and the beliefs and assumptions of our management as of the filing of this Form 10-Q.  In some cases, forward-looking statements are identified by words such as “expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “estimates,” “intend,” and variations of these types of words and similar expressions which 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.  Readers are cautioned that these forward-looking statements are predictions and are subject to risks, uncertainties and assumptions that are difficult to predict.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements and readers should not place undue reliance on such statements.  We undertake no obligation, and expressly disclaim any duty, to revise or update publicly any forward-looking statement for any reason.

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see “Item 1A – Risk Factors” in our 2021 Annual Report on Form 10-K filed with the Commission on May 21, 2021, and in Part II, Item 1A “Risk Factors” within this quarterly report on Form 10-Q.  Readers should carefully review these risk factors, as well as those identified in other documents filed by us with the Commission. 

Overview

Cirrus Logic, Inc. (“Cirrus Logic,” “We,” “Us,” “Our,” or the “Company”) 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.

The Company recently acquired Lion Semiconductor, Inc. ("Lion") (the "Acquisition"), a leading provider of proprietary fast-charging and power ICs. We entered the transaction with the expectation that the Acquisition would accelerate growth of our high-performance mixed-signal product line in the coming years. See additional information in Note 8 - Acquisition of the Notes to the Consolidated Condensed Financial Statements and Item 1A. Risk Factors below.

Cirrus Logic continues to experience demand significantly above available capacity and are actively working with our suppliers to meet as much demand as possible while also balancing our customer relationships and financial health. We have entered into a long-term Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries, a foundry partner for many of our strategic products. This will expand our ability to address unprecedented market demand and provide customers with much-needed supply assurance. We agreed to $255 million in payments to GlobalFoundries in the short-term under this agreement, which includes the previously announced $225 million in capacity commitments and an additional $30 million associated with a technology option that was exercised in the second quarter of fiscal year 2022. See additional information in Note 14 - Commitments and Contingencies of the Notes to the Consolidated Condensed Financial Statements and Item 1A. Risk Factors below.

Impact of COVID-19

The Company remains committed to the safety and well-being of our employees, their families and our communities across the globe, while maintaining business continuity and continuing to provide outstanding support to our customers. At this time, the majority of our employees worldwide continue to work remotely and remain subject to travel restrictions, due to COVID-19. Despite these challenges, all teams across the organization remain highly productive and we currently anticipate that the Company will be able to continue to maintain a similar level of productivity for the foreseeable future. Although we have not experienced a significant reduction in our overall productivity through fiscal year 2022 to date, any increased or additional disruptions to our business operations due to these restrictions would likely impact our ability to continue to maintain current levels of productivity.

The COVID-19 pandemic is likely to continue to cause volatility and uncertainty in customer demand, worldwide economies and financial markets for some period of time. To date, any negative impact of COVID-19 on the overall demand for our products, cash flow from operations, need for capital expenditures, and our liquidity position has been limited, although we are addressing capacity constraints in our supply chain as described above. The Company has not accessed its Revolving Credit Facility or raised capital in the public or private markets. Given our strong net cash position and available borrowings under our $300 million Revolving Credit Facility, we believe the Company has sufficient liquidity to satisfy our cash needs for the foreseeable future.

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Critical Accounting Policies

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the unaudited consolidated condensed financial statements included in this report, which have been prepared in accordance with U.S. GAAP.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts.  We evaluate the estimates on an on-going basis.  We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions and conditions. 

There have been no significant changes during the six months ended September 25, 2021, to the information provided under the heading “Critical Accounting Policies” included in our fiscal year 2021 Annual Report on Form 10-K for the fiscal year ended March 27, 2021, with the exception of the following as a result of the Acquisition.

Business combinations

We account for business combinations using the acquisition method of accounting and allocate the fair value of acquisition consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. The results of operations of the business acquired is included in our consolidated condensed statements of income beginning on the date of the acquisition.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, refer to Note 2 of the Notes to the Consolidated Condensed Financial Statements.

Results of Operations 
Our fiscal year is the 52- or 53-week period ending on the last Saturday in March. Fiscal years 2022 and 2021 are both 52-week fiscal years.

The following table summarizes the results of our operations for the first three and six months of fiscal years 2022 and 2021, respectively, as a percentage of net sales.  All percentage amounts were calculated using the underlying data in thousands, unaudited:

Three Months EndedSix Months Ended
September 25,September 26,September 25,September 26,
2021202020212020
Net sales100 %100 %100 %100 %
Gross margin51 %52 %51 %52 %
Research and development22 %24 %26 %28 %
Selling, general and administrative%%10 %10 %
Restructuring costs— %— %— %— %
Income from operations20 %19 %15 %14 %
Interest income— %— %— %%
Interest expense— %— %— %— %
Other income%— %%— %
Income before income taxes21 %19 %16 %15 %
Provision for income taxes%%%%
Net income18 %17 %14 %13 %


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Net Sales 

Net sales for the second quarter of fiscal year 2022 increased $118.6 million, or 34 percent, to $465.9 million from $347.3 million in the second quarter of fiscal year 2021.  Net sales from our audio products increased $20.9 million, primarily driven by higher volumes in smartphones and an increase in audio components shipping in laptops, which was partially offset by headwinds in wired headset codecs. High-performance mixed-signal produc