Cirrus Logic expects revenue in Q2 2013 to increase by 70 percent sequentially and expects significant growth in Q3 as well. The Q2 increase is both unit-based and increased content ASP.
The company expects operation expenses to be 25 percent of revenues, which is below the 35 percent target. As to expenses, there are some one-time anomalies in Q2 due to relocation of Cirrus Logic's headquarters. It will continue to hire as many people it can deploy and integrate. It sees a lot of new opportunities for which it will need more engineers. However, it can only hire at a rate of 20 to 25 percent a year to effectively maintain its culture.
Cirrus Logic does not expect any pressure on margins in Q3.
In Q1, Cirrus Logic's first digital LED lighting controller began shipping in a European LED light bulb from Philips. Cirrus Logic will be expanding this business with other lighting leaders.
In Q1, Cirrus Logic also introduced its second family of digital LED controllers, which have 2 channel color mixing that allows manufacturers to efficiently create warm, natural light while providing great dimming compatibility. Cirrus will be shipping several A19 lamps later this year in North America. This is the type of lamp one would screw into a typical replacement socket. It is getting a lot of traction in this area. Cirrus is trying to cover all different price points with its LED business.
Cirrus Logic also continues to have revenue growth in its audio products. The new DSP is programmable by the consumer, which allows Cirrus Logic to use the device in a lot of different applications. It has been used in camcorders, tablets, and other mobile devices and can be used for applications such as reducing noise from the environment.
Cirrus Logic has not yet seen any revenue from its new boosted audio amplifier.
The company sees some “okay opportunities” in the broad based consumer audio market. Audio is a seasonal business and there will be some build into Christmas. It continues to selectively look for partners for its custom audio CODEC.
Cirrus Logic is selling some of the assets from the Apex Precision Power acquisition. It is keeping the IC-centric capabilities, but decided the hybrid assets do not fit with Cirrus's business. It would be willing to consider an acquisition that would help it achieve its strategy more quickly or accelerate its progress, but those kinds of acquisitions are hard to find.
CapEx spending for fiscal year 2013 should be about $50 to $60 million.
Cirrus Logic cannot talk about it's largest customer, Apple, which made this conference call very short.
The full transcript of the earnings conference call can be found on Seeking Alpha at the following link:
Copyright 2012 Jaygo's Earnings Conference Call Summaries
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