Cirrus Logic, Inc. · NASDAQ:CRUS
Cirrus Logic — NASDAQ OMX 31st Investor Program, London (December 2014)
25 slides from Cirrus Logic's conference presentation, Dec 3, 2014
Slide 1: NASDAQ London Investor Program Presentation
NASDAQ London Investor Program Presentation December 3, 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement Except for historical information contained herein, the matters set forth in this presentation contain forward-looking statements, including industry market projections; our revenue growth opportunities; future product releases; and forecasted revenue, gross margin, R&D and SG&
Slide 3: Cirrus Logic at a Glance
Cirrus Logic at a Glance • Founded 1984 • Listed on NASDAQ: CRUS PROFILE • Headquartered in Austin, Texas • Fabless • Products: Codecs, Digital Signal Processors, Amplifiers and MEMS microphones PRODUCTS • Product Applications: Portable, Non-Portable Consumer, Automotive, Energy, Industrial • Shippe
Slide 4: Compelling Business Strategy
Compelling Business Strategy LEVERAGE BEST IN CLASS IP HIGH OPERATING EXPAND WITH MORE CONTENT, MORE TARGET FAST MARGINS GROWING MARKETS BOXES STRONG CASH FLOW DESIGN BEST-IN- CLASS CUSTOM, ENGAGE TIER-ONE SEMI-CUSTOM & MARKET LEADERS GENERAL MARKET LEADER IN ANALOG PRODUCTS & MIXED SIGNAL DEVELOP T
Slide 5: Focus on Tier One Customers
Focus on Tier One Customers • Approximately 3,100 customers worldwide • Largest customer represented 73% of revenue in Q2 FY15 • Majority of products sold through direct sales channels • Acquisition of Wolfson broadens and diversifies customer base 5
Slide 6: Unique Corporate Culture
Unique Corporate Culture SUPPORT O M M UNITY “Best Places to Work” C 2011, 2012, 2013 & 2014 WORK HARD , PLAY HARD 6
Slide 7: Product Overview
PRODUCT OVERVIEW 7
Slide 8: Portable Audio: An Evolving Market
Portable Audio: An Evolving Market Global Smartphone Market Maturing: Global Smartphone Market Shipments • Ultra high volume and very competitive • New players targeting mid-to-high end devices • Audio/voice features increasingly viewed as 1.3Bu differentiators Audio and Voice Features Driving SAM 2
Slide 9: Capture to Playback: Our Product Offerings
Capture to Playback: Our Product Offerings MEMS Audio Audio Audio Audio Mics Codecs DSP Software Amplifiers Cirrus Logic is Currently the Only IC Company with a Comprehensive Hardware & Software Solution that Spans the Entire Audio Signal Chain 9
Slide 10: Extensive Software Platform: SoundClear
Extensive Software Platform: SoundClear VOICE PLAYBACK RECORD CONTROL SENSE MULTI-MIC MUSIC/AUDIO MULTI-MIC RECORD ASR PRE- CONTEXT NOISE REDUCTION ENHANCEMENT PROCESSING AWARENESS INTELLIGENT GAIN ECHO CANCELLATION VIRTUAL SURROUND CONTROL VOICE WAKE & SIMULTANEOUS GESTURE FULL-DUPLEX AMPLIFICATION
Slide 11: Additional Features Driving SAM Expansion
Additional Features Driving SAM Expansion Active Noise Canceling (ANC) Contextual Awareness & Sensing Always-On Voice Multi-Microphone Control Beamforming Features Driving Future Innovation Noise Suppression Boosted Amp w/ Speaker Protection Echo Cancellation High Performance Mixed Signal >115dB Req
Slide 12: The Evolution of Audio Codecs
The Evolution of Audio Codecs* • 55nm • > 600 MIPS • Lower Power • 65nm • Reduced PCB size • 600 MIPS • Improved Codec Performance & Value • +120dB Playback SNR • + Sensor Hub • 152nm • + Active Noise • + Enhanced multi- • 50 MIPS Cancellation (ANC) microphone capability • + Voice Processor • + Alwa
Slide 13: Opportunity to Expand Total Content
Opportunity to Expand Total Content MEMS MICROPHONES Potential Content Per Up to four per device / ASPs ~$0.20 - $0.30 Device* ~$4.00 SMART CODEC + One per device / ASPs ~$2.50 - $3.50 vs. EMBEDDED SOFTWARE Previous Content Per Device** AUDIO AMPLIFIERS Up to two per device/ ASPs ~$0.50 - $0.75 ~$1.
Slide 14: Leveraging Technology Beyond Mobile
Leveraging Technology Beyond Mobile Wearables Accessories Automotive Audio Connected Home 14
Slide 15: Non-Portable Audio & Other
Non-Portable Audio & Other AUTOMOTIVE CONSUMER ENERGY INDUSTRIAL ESTABLISHED CORE BUSINESS WITH STRONG CUSTOMER BASE (Sony, Harman, Bose, Ford, LG) COMPREHENSIVE PRODUCT PORTFOLIO (ADC, DAC, CODEC, DSP, Interface, Amps) HIGH DOLLAR CONTENT AND STABLE MARGINS (Up to $13 per box) 15
Slide 16: Accelerating Investment in Key Projects
Accelerating Investment in Key Projects • Integrate functionality of several discrete chips into one SMART CODECS • Reduce board space and customer BOM while commanding higher ASPs • Enable enhanced features/functionality including intelligent MEMS communication between audio chips and environmental
Slide 17: Cirrus Logic's Advantage
Cirrus Logic’s Advantage TIER I P PO RTFOLIO -ONE CUST STRONG O ME RS ENGI NEER WI NG M ARKETS ING E XECU O FAST GR TION 17
Slide 18: Financials
FINANCIALS 18
Slide 19: Financial Highlights
Financial Highlights • $143M total cash, down from the prior quarter as portion of cash funded the acquisition of Wolfson BALANCE SHEET • $226M debt associated with Wolfson acquisition • Q2 ending inventory ~$121M, up from ~$92M in Q1 • $200M repurchase announced Nov 20, 2012 • Repurchased 579,633 s
Slide 20: Strong Cash Position
Strong Cash Position Operating Cash Flow Potential Use of Cash • FY2014 operating cash flow up 42% Y/Y • Repayment of debt • Share repurchase • Increased investment in R&D $228M • Acquisitions • Infrastructure improvements 58% CAGR $25M FY2010 FY2014 20
Slide 21: R&D Investment: Driving Future Opportunities
R&D Investment: Driving Future Opportunities $M 90 80 70 60 1,099 ** 751 739 735 698 678 50 667 652 665 OpEx* 635 644 637 623 594 SG&A 40 R&D 30 Headcount 20 10 0 *Midpoint of guidance as of October 29, 2014 **Reflects Wolfson Microelectronics acquisition 21
Slide 22: Operating Margin Profile
Operating Margin Profile 40% 37% GAAP Non-‐GAAP* 35% 34% 30% 30% 29% 27% 24% 25% 26% 24% 27% 22% 23% 19% 24% 21% 20% 22% 20% 17% 15% 19% 18% 15% 16% 16% 13% 10% 11% 9%** 10% 5% 0% Q2/FY12 Q3/FY12 Q4/FY12 Q1/FY13 Q2/FY13 Q3/FY13 Q4/FY13 Q1/FY14 Q2/FY14 Q3/FY14 Q4/FY14 Q1/FY15 Q2/FY15 *GAAP to non-GA
Slide 23: Financial Results and Outlook
Financial Results and Outlook $310 Revenue (M) $275* § September Quarter Results (Q2) $207 $219 $210 $194 $191 § Revenue: $210.2M $155 $150 $153 § Cirrus Logic $197.2M $122 $111 $99 $92 $102 § Wolfson $13M § Gross Margin: 48% § R&D/SGA: $82.5M (incl. $18.7M in acquisition costs and $6.2M in st
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 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 b
Slide 25: Cirrus Logic
—— — — ee — —e CIRRUS LOGIC’ 25 => CIRRUS LOGIC’
Cirrus Logic — NASDAQ OMX 31st Investor Program, London (December 2014) on 6ix