Cirrus Logic, Inc. CAPEX jumped on 64.7% and Revenue showed almost no change
05/02/2018 • About Cirrus Logic, Inc. (
$CRUS) • By InTwits
Cirrus Logic, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cirrus Logic, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's a lot of higher than industry average of 13.3%.
- CAPEX is quite volatile: $85m in FY2018, $51m in FY2017, $42m in FY2016, $37m in FY2015, $17m in FY2014
- The company has highly profitable business model: ROIC is 22.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue showed almost no change in FY2018. Revenue decline showed acceleration in FY18Q4 - it was 7.5% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.3 pp from 24.7% to 22.4% in FY2018.
Gross Margin showed almost no change in FY2018. During FY2014-FY2018 Gross Margin bottomed in FY2015 at 46.5% and was growing since that time. SG&A as a % of Revenue showed almost no change in FY2018. SG&A as a % of Revenue followed a declining trend at -0.63 pp per annum in the last 5 years. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 0.61 pp from 2.6% to 3.2% in FY2018. During FY2014-FY2018 SBC as a % of Revenue bottomed in FY2015 at -0.016% and was growing since that time.
Net Income margin decreased on 6.4 pp from 17.0% to 10.6% in FY2018. The efficient tax rate was 38.9% in FY2018 while the average for the last five years was 29.2%.
Investments (CAPEX, working capital and M&A)
Cirrus Logic, Inc.'s CAPEX/Revenue was 5.5% in FY2018. The company showed small growth in CAPEX/Revenue of 1.5 pp from 4.0% in FY2015 to 5.5% in FY2018. Average CAPEX/Revenue for the last three years was 4.1%.
Accounts receivable as a % of Revenue decreased slightly on 1.2 pp from 7.8% to 6.6% in FY2018. Inventories as a % of Revenue increased on 2.5 pp from 10.9% to 13.4% in FY2018. Accounts payable as a % of Revenue showed almost no change in FY2018.
Return on investment
The company operates at high and attractive ROIC (22.0%) while ROE is a bit lower (14.0%). ROIC decreased on 6.0 pp from 28.0% to 22.0% in FY2018. ROE dropped on 12.0 pp from 26.0% to 14.0% in FY2018.
Leverage (Debt)
The company paid down all the debt in FY2018. Cash dropped on 32.9%.
Valuation and dividends
The company's trades at EV/EBITDA 6.5x and P/E 15.2x.
Management team
Jason P Rhode is a Cirrus Logic, Inc.'s CEO. Jason P Rhode is a founder and has spent 12 years with the company. CEO total compensation was
$5,941,204 in FY2018 which included
$775,962 salary. The company's CFO is Thurman K Case. Thurman K Case has 12 years tenure at the company.
Insider ownership is 0.85%. Insider ownership didn't change in 2018.
At the end of financial year the company had 1,596 employees. The number of employees jumped on 10.5%. Average revenue per employee in FY2018 was
$960,016 and it decreased on 9.9%.
Financial and operational results
FY ended 03/31/2018
Cirrus Logic, Inc. ($CRUS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 714 | 917 | 1,169 | 1,539 | 1,532 | -0.4% |
| Gross Profit | 356 | 426 | 555 | 758 | 761 | 0.4% |
| SG&A | 75 | 100 | 117 | 127 | 132 | 3.6% |
| EBITDA | 170 | 144 | 238 | 380 | 344 | -9.6% |
| EBIT | 155 | 109 | 180 | 317 | 262 | -17.2% |
| Interest expence | | 6 | | 4 | 1 | -68.0% |
| Tax | 48 | 36 | 52 | 54 | 103 | 91.5% |
| Net Income | 108 | 55 | 124 | 261 | 162 | -38.0% |
| Stock Based Compensation | 15 | -0 | 30 | 40 | 49 | 23.1% |
Balance Sheet
|
|---|
| Cash | 32 | 76 | 169 | 351 | 236 | -32.9% |
| Accounts Receivable | 63 | 113 | 89 | 120 | 101 | -16.0% |
| Inventory | 70 | 84 | 142 | 168 | 206 | 22.6% |
| Accounts Payable | 52 | 112 | 72 | 74 | 70 | -5.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 5 | 180 | 160 | 60 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 17 | 37 | 42 | 51 | 85 | 64.7% |
| Acquisitions | 20 | 444 | 37 | | | |
Ratios
|
|---|
| Revenue growth | -11.8% | 28.3% | 27.6% | 31.6% | -0.4% | |
| EBITDA growth | -20.8% | -15.5% | 65.9% | 59.7% | -9.6% | |
|
|---|
| Gross Margin | 49.9% | 46.5% | 47.5% | 49.2% | 49.6% | 0.4% |
| EBITDA Margin | 23.8% | 15.7% | 20.4% | 24.7% | 22.4% | -2.3% |
| EBIT Margin | 21.7% | 11.9% | 15.4% | 20.6% | 17.1% | -3.5% |
| SG&A, % of revenue | 10.5% | 10.9% | 10.0% | 8.3% | 8.6% | 0.3% |
| SBC, % of revenue | 2.0% | -0.0% | 2.5% | 2.6% | 3.2% | 0.6% |
| Net Income Margin | 15.1% | 6.0% | 10.6% | 17.0% | 10.6% | -6.4% |
| CAPEX, % of revenue | 2.4% | 4.0% | 3.6% | 3.3% | 5.5% | 2.2% |
|
|---|
| ROIC | 26.2% | 14.0% | 18.5% | 28.0% | 22.0% | -6.0% |
| ROE | 18.2% | 7.9% | 15.3% | 26.0% | 14.0% | -12.0% |
| Net Debt/EBITDA | -0.2x | 0.7x | -0.0x | -0.8x | -0.7x | 0.1x |
| Interest expence / Average debt | | 6.0% | | 6.0% | | |
People
|
|---|
| Insider ownership | 0.8% | 0.8% | 0.8% | 0.8% | 0.8% | 0.0% |
| Employees | 751 | 1,104 | 1,291 | 1,444 | 1,596 | 10.5% |
| Revenue/Employee, th. $ | 951 | 830 | 906 | 1,066 | 960 | -9.9% |
Cirrus Logic, Inc. ($CRUS) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 321 | 426 | 483 | 303 | | 23.6% | -0.7% | -7.7% | -7.5% |
| EBITDA | 67 | 110 | 124 | 43 | | 66.7% | -7.3% | -23.3% | -28.5% |
| Net Income | 43 | 73 | 34 | 12 | | 137.5% | -14.8% | -72.3% | -65.8% |
Balance Sheet
|
|---|
| Cash | 164 | 180 | 227 | 236 | | 14.2% | 59.1% | -27.0% | -32.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | -100.0% | -100.0% | -100.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 50.4% | 49.7% | 48.7% | 50.3% | | 1.6% | 0.3% | -0.1% | 0.2% |
| EBITDA Margin | 20.9% | 25.9% | 25.6% | 14.2% | | 5.4% | -1.8% | -5.2% | -4.2% |
| Net Income Margin | 13.4% | 17.2% | 7.0% | 4.0% | | 6.4% | -2.8% | -16.3% | -6.7% |
Peers in Semiconductors
Below we provide Cirrus Logic, Inc. benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 4.4% | 10.9% | 5.0% |
|---|
| Cirrus Logic, Inc. ($CRUS) | | 28.3% | 27.6% | 31.6% | -0.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.7% | 47.8% | 48.6% | 51.0% |
|---|
| Cirrus Logic, Inc. ($CRUS) | 49.9% | 46.5% | 47.5% | 49.2% | 49.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 9.8% |
|---|
| Cirrus Logic, Inc. ($CRUS) | 23.8% | 15.7% | 20.4% | 24.7% | 22.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.7% | 4.7% | 4.4% |
|---|
| Cirrus Logic, Inc. ($CRUS) | 2.4% | 4.0% | 3.6% | 3.3% | 5.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.4% | 3.2% | 3.0% |
|---|
| Cirrus Logic, Inc. ($CRUS) | 26.2% | 14.0% | 18.5% | 28.0% | 22.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.6x | -0.3x | 0.4x | 0.4x | 0.3x |
|---|
| Cirrus Logic, Inc. ($CRUS) | -0.2x | 0.7x | -0.0x | -0.8x | -0.7x |
