Cirrus Logic, Inc. · NASDAQ:CRUS
Cirrus Logic — Investor Presentation (August 2017)
23 slides from Cirrus Logic's investor presentation, Aug 2, 2017
Slide 1: Investor Presentation
Investor Presentation As of August 2, 2017 Advanced Signal Processing Products
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; our forecasted revenue, gross margin and R&D and SG&A expenses; and our es
Slide 3: Cirrus Logic at a Glance
Cirrus Logic at a Glance CORE PROFILE PRODUCTS STRENGTHS Analog and digital signal processing Founded in 1984 Audio codecs and DSPs for audio and voice Listed on NASDAQ: CRUS Amplifiers Engineering execution World-class customer support and FY17 revenue: $1.5B MEMS microphones application expertise
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 LEADING SUPPLIER GENERAL MARKET PRODUCTS OF COMPLETE AUDIO SIGNAL
Slide 5: Continuous Investment in Innovation
Continuous Investment in Innovation R&D Spend FY12-FY17 (M) More than 1,000 Engineers Focused on Execution: $304 $269 • Accelerating product development 29% CAGR • Identifying and targeting new market $198 opportunities • Broadening IP portfolio $126 $114 • Best-in-class quality control and $86 supp
Slide 6: Long-Term Track Record of Growth
Long-Term Track Record of Growth • 10-year CAGR of 24% fueled by Cirrus Logic Revenue (M) strong demand for portable audio products $1,539 • FY17 revenue up 32% Y/Y to $1.5B $1,169 $917 $810 $714 $427 $370 $221 $182 $182 $175 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 6
Slide 7: Focus on Tier One Customers
Focus on Tier One Customers • Approximately 3,000 customers worldwide • In Q1 FY18, our top customer represented 76% of total revenue • Majority of sales are through direct channels 7
Slide 8: Unique Corporate Culture
Unique Corporate Culture “Best Places to Work” 2011-2016 8
Slide 9: Market & Product Overview
Market & Product Overview — —=_ —= — —
Slide 10: Opportunities in Key Markets Are Growing
Opportunities in Key Markets Are Growing • Demand for Audio & Voice in Smartphones Continues to Expand Smartphones • Content expansion in flagship models & • Penetration of mid-tier models Tablets • Interest from China OEMs • Rapid Growth for Smart Accessories 2020 • Headset market transitioning to
Slide 11: Smartphone SAM Continues to Increase
Smartphone SAM Continues to Increase Smartphone Market Volume by Price Band 100% • Flagship Trends Fueling Demand 90% • Ultra-low power complex signal processing 80% to enable audio and voice use cases ~55% • Increasing channel count for audio and 70% of market voice I/O 60% • Growing Beyond Flagshi
Slide 12: Digital Headsets Are Here
Digital Headsets Are Here • Improving Phone Design Improved New Form New • Consolidates on a single modern connector, Audio Factors Features enables industrial design improvements Performance • Removal of 3.5mm jack opens up valuable space inside the handset for other features Estimated total market
Slide 13: From Capture to Playback: Our Product Offerings
From Capture to Playback: Our Product Offerings MEMS Audio Audio Audio Audio Mics Codec DSP Software Amplifiers Smart Codec: Codec +DSP + Embedded Software Cirrus Logic is a Leading Supplier of Comprehensive Hardware & Software Solutions Spanning the Entire Audio Signal Chain 13
Slide 14: SoundClear Software Platform
SoundClear Software Platform VOICE PLAYBACK RECORD CONTROL MULTI-MIC MUSIC/AUDIO MULTI-MIC ASR NOISE REDUCTION ENHANCEMENT RECORD PRE-PROCESSING ECHO VIRTUAL INTELLIGENT GAIN VOICE WAKE AND CANCELLATION SURROUND CONTROL SIMULTANEOUS MULTI-TRIGGER FULL-DUPLEX POST AUDIO ZOOM PROCESSING SEAMLESS VOICE
Slide 15: Scalable Portfolio Drives New Opportunity
Scalable Portfolio Drives New Opportunity • New Solutions to Enable Mid-Tier Mobile Mobile • Optimizing features, use cases and cost • Enabling new features in mid-tier Flagship Mid-Tier • Always on voice activation and control Boosted MEMS Smart Codecs Smart Codecs Amplifiers Microphones • Boosted
Slide 16: Positioning the Company for Long-Term Growth
Positioning the Company for Long-Term Growth • Multiple Vectors for Content Expansion • Use cases/features fueling need for ultra-low power sophisticated signal processing products in wide range of mobile, accessory and consumer devices • Scalable platforms with hardware and software solutions that
Slide 17: Financials
Financials — —=_ —= — —
Slide 18: Financial Highlights
Financial Highlights • $310M total cash, down from $451M in Q4 FY17 due to timing of receivables, an increase in inventory ahead of product ramps, repayment BALANCE SHEET of debt, repurchase of shares and a small technology acquisition • Remaining $60M debt paid in full • Q1 ending inventory $202.4M
Slide 19: Strong Cash Generation
Strong Cash Generation Cash Generation Potential Use of Cash • Over last 5 fiscal years generated $1.1B of • Increased investment in R&D Cash Flow from Operations • New products/technologies to drive organic • Ended Q1 FY18 with $310M Cash and growth Investments • Investment in R&D facilities/equipm
Slide 20: Operating Profit Profile
Operating Profit Profile 35% 31% 30% 28% 25% 28% 23% 22% 20% 24% 21% 19% 20% 18% 15% 15% 15% 18% 15% 14% 14% 10% 10% 9% GAAP Non-GAAP* 5% 0% Q1/FY16 Q2/FY16 Q3/FY16 Q4/FY16 Q1/FY17 Q2/FY17 Q3/FY17 Q4/FY17 Q1/FY18 *GAAP to non-GAAP reconciliations available on slide 22 and at www.cirrus.com 20
Slide 21: Financial Results and Outlook
Financial Results and Outlook $523 June Quarter Results (Q1) $429 $410* • Revenue: $320.7M $348 $328 $321 $307 • Gross Margin: 50.4% $283 $232 $259 • OpEx: $114.4M (incl. $11.1M in stock comp, $11.6M in amort., $4M credit related to a fair value adjustment) Q1/FY16 Q2/FY16 Q3/FY16 Q4/FY16 Q1/FY17 Q2
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (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
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