Cirrus Logic(US:CRUS)2021-07-27 16:00Financial Performance - Cirrus Logic reported net sales of $277.3 million for the first quarter of fiscal year 2022, an increase of $34.7 million, or 14%, compared to $242.6 million in the same period of fiscal year 2021[93]. - Gross margin decreased to 50.5% in the first quarter of fiscal year 2022 from 52.6% in the first quarter of fiscal year 2021, primarily due to pricing reductions and higher supply chain costs[97]. - Research and development expenses rose to $85.7 million in the first quarter of fiscal year 2022, an increase of $7.0 million from $78.7 million in the first quarter of fiscal year 2021[97]. - Selling, general and administrative expenses increased to $35.1 million in the first quarter of fiscal year 2022, up $5.4 million from $29.7 million in the first quarter of fiscal year 2021[98]. - Cash used in operations was $26.8 million for the first three months of fiscal year 2022, compared to $0.5 million generated in the same period of fiscal year 2021[104]. - Net cash used in investing activities was $16.7 million during the first three months of fiscal year 2022, compared to $9.2 million in the same period of fiscal year 2021[105]. - The effective tax rate for the first quarter of fiscal year 2022 was 12.3%, compared to 10.6% for the first quarter of fiscal year 2021[102]. - International sales accounted for approximately 98% of net sales for both the first quarters of fiscal years 2022 and 2021[95]. Strategic Initiatives - The company announced the acquisition of Lion Semiconductor for $335 million in cash, aimed at accelerating growth in its high-performance mixed-signal product line[82]. - Cirrus Logic has entered into a $225 million Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries to address market demand and supply assurance[83]. - The company is considering potential future acquisitions of companies or technologies as part of its growth strategy[108]. Credit and Financial Agreements - The company has a $300 million senior secured revolving credit facility, which is guaranteed by all material domestic subsidiaries[109]. - As of June 26, 2021, the company had no outstanding amounts under the credit facility and was in compliance with all covenants[111]. - The credit agreement includes a financial covenant that limits the ratio of consolidated funded indebtedness to consolidated EBITDA to not greater than 3.00 to 1.00[110]. - The credit agreement contains negative covenants that limit the company's ability to incur debt and make certain investments[110]. Market Risks - The company is exposed to market risks associated with interest rates, currency movements, and the value of marketable securities[112]. - The company uses forward contracts to manage foreign currency exchange risk, with gains and losses recognized in earnings[112]. - The applicable margin for Base Rate Loans ranges from 0% to 0.50% per annum, while for LIBOR Rate Loans it ranges from 1.25% to 2.00% per annum based on the Leverage Ratio[110]. - A commitment fee accrues at a rate ranging from 0.20% to 0.30% on the average daily unused portion of the lenders' commitment[110]. - The company believes its expected future cash earnings and existing cash will be sufficient to meet capital requirements for at least the next 12 months[108].