CIRRUS LOGIC, INC., 10-K filed on 5/20/2020
Annual Report
v3.20.1
Cover - USD ($)
12 Months Ended
Mar. 28, 2020
May 18, 2020
Sep. 28, 2019
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Mar. 28, 2020    
Document Transition Report false    
Entity File Number 0-17795    
Entity Registrant Name CIRRUS LOGIC, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 77-0024818    
Entity Address, Address Line One 800 W. 6th Street    
Entity Address, City or Town Austin,    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 78701    
City Area Code (512)    
Local Phone Number 851-4000    
Title of 12(g) Security Common stock, $0.001 par value    
Trading Symbol CRUS    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Smaller Reporting Company false    
Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 2,157,695,761
Entity Common Stock, Shares Outstanding (in shares)   58,363,550  
Documents Incorporated by Reference Certain information contained in the registrant’s proxy statement for its annual meeting of stockholders to be held July 31, 2020 is incorporated by reference in Part II – Item 5 and Part III of this Annual Report on Form 10-K.    
Amendment Flag false    
Entity Central Index Key 0000772406    
Document Fiscal Year Focus 2020    
Document Fiscal Period Focus FY    
Current Fiscal Year End Date --03-28    
v3.20.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 28, 2020
Mar. 30, 2019
Current assets:    
Cash and cash equivalents $ 292,119 $ 216,172
Marketable securities 22,008 70,183
Accounts receivable, net 153,998 120,656
Inventories 146,725 164,733
Prepaid assets 23,594 30,794
Other current assets 11,752 22,445
Total current assets 650,196 624,983
Long-term marketable securities 283,573 158,968
Right-of-use lease assets 141,274  
Property and equipment, net 158,244 186,185
Intangibles, net 34,430 67,847
Goodwill 287,088 286,241
Deferred tax assets 10,052 8,727
Other assets 27,820 19,689
Total assets 1,592,677 1,352,640
Current liabilities:    
Accounts payable 78,412 48,398
Accrued salaries and benefits 42,439 29,289
Software license agreements 10,888 21,514
Current lease liabilities 13,580  
Other accrued liabilities 13,318 16,339
Total current liabilities 158,637 115,540
Long-term liabilities:    
Software license agreements 3,806 8,662
Non-current income taxes 71,143 78,309
Non-current lease liabilities 129,312  
Other long-term liabilities 0 9,889
Total long-term liabilities 204,261 96,860
Stockholders’ equity:    
Preferred stock, 5.0 million shares authorized but unissued 0 0
Common stock, $0.001 par value, 280,000 shares authorized, 58,242 shares and 58,954 shares issued and outstanding at March 28, 2020 and March 30, 2019, respectively 58 59
Additional paid-in capital 1,434,871 1,363,677
Accumulated deficit (201,681) (222,430)
Accumulated other comprehensive loss (3,469) (1,066)
Total stockholders’ equity 1,229,779 1,140,240
Total liabilities and stockholders’ equity $ 1,592,677 $ 1,352,640
v3.20.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 28, 2020
Mar. 30, 2019
Statement of Financial Position [Abstract]    
Preferred stock, shares authorized but unissued (in shares) 5,000,000.0 5,000,000.0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 280,000,000 280,000,000
Common stock, shares issued (in shares) 58,242,000 58,954,000
Common stock, shares outstanding (in shares) 58,242,000 58,954,000
v3.20.1
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Mar. 28, 2020
Mar. 30, 2019
Mar. 31, 2018
Income Statement [Abstract]      
Net sales $ 1,281,124 $ 1,185,524 $ 1,532,186
Cost of sales 606,957 588,027 771,470
Gross profit 674,167 597,497 760,716
Operating expenses      
Research and development 347,647 375,139 366,444
Selling, general and administrative 131,115 126,502 131,811
Restructuring costs 21,925 0 0
Gain on sale of assets 0 (4,913) 0
Total operating expenses 500,687 496,728 498,255
Income from operations 173,480 100,769 262,461
Interest income 10,458 8,017 4,762
Interest expense (1,057) (1,057) (1,153)
U.K. pension settlement 0 (13,768) 0
Other expense (1,615) (217) (971)
Income before income taxes 181,266 93,744 265,099
Provision for income taxes 21,768 3,753 103,104
Net income $ 159,498 $ 89,991 $ 161,995
Basic earnings per share (in dollars per share) $ 2.74 $ 1.50 $ 2.55
Diluted earnings per share (in dollars per share) $ 2.64 $ 1.46 $ 2.46
Basic weighted average common shares outstanding (in shares) 58,317 60,116 63,407
Diluted weighted average common shares outstanding (in shares) 60,462 61,583 65,951
v3.20.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Mar. 28, 2020
Mar. 30, 2019
Mar. 31, 2018
Statement of Comprehensive Income [Abstract]      
Net income $ 159,498 $ 89,991 $ 161,995
Other comprehensive income (loss), before tax      
Foreign currency translation gain (loss) 68 (3,125) 2,791
Unrealized gain (loss) on marketable securities (2,803) 2,823 (2,380)
U.K. pension settlement 0 13,814 0
Actuarial loss on defined benefit pension plan 0 0 (14,729)
Cumulative effect of adoption of ASU 2018-02 (257) 0 0
Benefit (provision) for income taxes 589 (3,217) 3,530
Comprehensive income $ 157,095 $ 100,286 $ 151,207
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Mar. 28, 2020
Mar. 30, 2019
Mar. 31, 2018
Cash flows from operating activities:      
Net income $ 159,498 $ 89,991 $ 161,995
Adjustments to net cash provided by operating activities:      
Depreciation and amortization 68,237 79,826 81,399
Stock-based compensation expense 53,757 49,689 48,741
Deferred income taxes (5,888) 1,717 11,646
(Gain) loss on retirement or write-off of long-lived assets 379 (2,713) 626
Charges (payments) for defined benefit pension plan 0 11,189 (10,929)
Other non-cash charges 697 429 (3,864)
MEMS restructuring charges 21,925 0 0
Net change in operating assets and liabilities:      
Accounts receivable, net (33,082) (14,316) 19,173
Inventories 17,765 40,636 (37,865)
Other assets 1,379 965 16,824
Accounts payable 27,626 (21,965) 143
Accrued salaries and benefits 11,470 (6,432) (4,469)
Income taxes payable (9,809) (7,974) 22,983
Other accrued liabilities (18,139) (14,348) 12,308
Net cash provided by operating activities 295,815 206,694 318,711
Cash flows from investing activities:      
Maturities and sales of available-for-sale marketable securities 170,818 70,840 138,221
Purchases of available-for-sale marketable securities (249,463) (98,864) (238,434)
Purchases of property, equipment and software (15,656) (31,615) (55,180)
Investments in technology (5,920) (4,143) (29,323)
Proceeds from the sale of assets 0 9,120 0
Net cash used in investing activities (100,221) (54,662) (184,716)
Cash flows from financing activities:      
Principal payments on long-term revolver 0 0 (60,000)
Issuance of common stock, net of shares withheld for taxes 18,635 1,616 4,417
Repurchase of stock to satisfy employee tax withholding obligations (18,280) (13,083) (17,806)
Repurchase and retirement of common stock (120,002) (159,997) (175,776)
Contingent consideration payments 0 0 (392)
Net cash used in financing activities (119,647) (171,464) (249,557)
Net increase (decrease) in cash and cash equivalents 75,947 (19,432) (115,562)
Cash and cash equivalents at beginning of period 216,172 235,604 351,166
Cash and cash equivalents at end of period 292,119 216,172 235,604
Cash payments during the year for:      
Income taxes 22,321 20,617 34,385
Interest $ 457 $ 612 $ 835
v3.20.1
Consolidated Statements of Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Income / (Loss)
Cumulative effect of adoption of new ASU | Accounting Standards Update 2016-16 $ (747)     $ (747)  
Balance (in shares) at Mar. 25, 2017   64,295      
Balance at Mar. 25, 2017 1,151,692 $ 64 $ 1,259,215 (107,014) $ (573)
Net income 161,995     161,995  
Change in unrealized gain (loss) on marketable securities, net of tax (1,630)       (1,630)
Change in defined benefit pension plan liability, net of tax (11,949)       (11,949)
Change in foreign currency translation adjustments 2,791       2,791
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (in shares)   1,054      
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (13,389) $ 1 4,416 (17,806)  
Cumulative effect of adoption of ASU 2018-02 0        
Repurchase and retirement of common stock (in shares)   (3,389)      
Repurchase and retirement of common stock (175,776) $ (3)   (175,773)  
Amortization of deferred stock compensation 48,741   48,741    
Balance (in shares) at Mar. 31, 2018   61,960      
Balance at Mar. 31, 2018 1,161,728 $ 62 1,312,372 (139,345) (11,361)
Net income 89,991     89,991  
Change in unrealized gain (loss) on marketable securities, net of tax 2,231       2,231
Change in defined benefit pension plan liability, net of tax 11,189       11,189
Change in foreign currency translation adjustments (3,125)       (3,125)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (in shares)   964      
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (11,466) $ 1 1,616 (13,083)  
Cumulative effect of adoption of ASU 2018-02 0        
Repurchase and retirement of common stock (in shares)   (3,970)      
Repurchase and retirement of common stock (159,997) $ (4)   (159,993)  
Amortization of deferred stock compensation 49,689   49,689    
Balance (in shares) at Mar. 30, 2019   58,954      
Balance at Mar. 30, 2019 1,140,240 $ 59 1,363,677 (222,430) (1,066)
Cumulative effect of adoption of new ASU | Accounting Standards Update 2016-02 (726)     (726)  
Net income 159,498     159,498  
Change in unrealized gain (loss) on marketable securities, net of tax (2,214)       (2,214)
Change in foreign currency translation adjustments 68       68
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (in shares)   1,418      
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes 355 $ 1 18,634 (18,280)  
Cumulative effect of adoption of ASU 2018-02 (257)     257 (257)
Repurchase and retirement of common stock (in shares)   (2,130)      
Repurchase and retirement of common stock (120,002) $ (2)   (120,000)  
Amortization of deferred stock compensation 52,560   52,560    
Balance (in shares) at Mar. 28, 2020   58,242      
Balance at Mar. 28, 2020 $ 1,229,779 $ 58 $ 1,434,871 $ (201,681) $ (3,469)
v3.20.1
Description of Business
12 Months Ended
Mar. 28, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business Description of Business
Description of Business
Cirrus Logic, Inc. (“Cirrus Logic,” “We,” “Us,” “Our,” or the “Company”) is a leader in low-power, high-precision mixed-signal processing solutions that create innovative user experiences for the world’s top mobile and consumer applications.
We were incorporated in California in 1984, became a public company in 1989, and were reincorporated in the State of Delaware in February 1999. Our primary facility housing engineering, sales and marketing, and administration functions is located in Austin, Texas. We also have offices in various other locations in the United States, United Kingdom, Spain, and Asia, including the People’s Republic of China, Hong Kong, South Korea, Japan, Singapore, and Taiwan. Our common stock, which has been publicly traded since 1989, is listed on the NASDAQ's Global Select Market under the symbol CRUS.
Basis of Presentation
We prepare financial statements on a 52- or 53-week year that ends on the last Saturday in March. Fiscal years 2020 and 2019 were 52-week years. Fiscal year 2018 was a 53-week year.
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (U.S. GAAP) and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Reclassifications
Certain reclassifications have been made to prior year balances in order to conform to the current year’s presentation of financial information.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires the use of management estimates. These estimates are subjective in nature and involve judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at fiscal year-end and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.
v3.20.1
Summary of Significant Accounting Policies
12 Months Ended
Mar. 28, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of money market funds, commercial paper, and U.S. Government Treasury and Agency instruments with original maturities of three months or less at the date of purchase.
Inventories
We use the lower of cost or net realizable value to value our inventories, with cost being determined on a first-in, first-out basis. One of the factors we consistently evaluate in the application of this method is the extent to which products are accepted into the marketplace. By policy, we evaluate market acceptance based on known business factors and conditions by comparing forecasted customer unit demand for our products over a specific future period, or demand horizon, to quantities on hand at the end of each accounting period.
On a quarterly and annual basis, we analyze inventories on a part-by-part basis. Product life cycles and the competitive nature of the industry are factors considered in the evaluation of customer unit demand at the end of each quarterly accounting period. Inventory on-hand in excess of forecasted demand is considered to have reduced market value and, therefore, the cost basis is adjusted to the lower of cost or net realizable value. Typically, market values for excess or obsolete inventories are considered to be zero. Inventory charges recorded for excess and obsolete inventory, including scrapped inventory, were $2.8 million and $6.2 million, in fiscal year 2020 and 2019, respectively. Inventory charges in fiscal year 2020 and 2019 related to a combination of quality issues and inventory exceeding demand.
Inventories were comprised of the following (in thousands):
 
March 28, 2020March 30, 2019
Work in process$82,494  $80,100  
Finished goods64,231  84,633  
$146,725  $164,733  
Property, Plant and Equipment, net
Property, plant and equipment is recorded at cost, net of depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over estimated economic lives, ranging from 3 to 39 years. Leasehold improvements are depreciated over the shorter of the term of the lease or the estimated useful life. Furniture, fixtures, machinery, and equipment are all depreciated over a useful life of 3 to 10 years, while buildings are depreciated over a period of up to 39 years. In general, our capitalized software is amortized over a useful life of 3 years, with capitalized enterprise resource planning software being amortized over a useful life of 10 years. Gains or losses related to retirements or dispositions of fixed assets are recognized in the period incurred. Additionally, if impairment indicators exist, the Company will assess the carrying value of the associated asset. In the fourth quarter of fiscal year 2019, the Company sold the Edinburgh, Scotland property for a $4.9 million gain presented separately in the Consolidated Statements of Income as "Gain on sale of assets". During the fourth quarter of fiscal year 2020, the Company recorded $9.6 million of equipment disposal charges, net of recovery, related to the MEMS restructuring. See Note 11 — Restructuring Costs for further detail.
Property, plant and equipment was comprised of the following (in thousands):
 
March 28, 2020March 30, 2019
Land$23,853  $23,853  
Buildings63,803  63,172  
Furniture and fixtures23,059  22,762  
Leasehold improvements51,525  45,286  
Machinery and equipment159,201  157,994  
Capitalized software25,942  25,763  
Construction in progress and other892  3,689  
Total property, plant and equipment348,275  342,519  
Less: Accumulated depreciation and amortization(190,031) (156,334) 
Property, plant and equipment, net$158,244  $186,185  
Depreciation and amortization expense on property, plant, and equipment for fiscal years 2020, 2019, and 2018 was $31.9 million, $32.0 million, and $27.7 million, respectively.
Goodwill and Intangibles, net
Intangible assets include purchased technology licenses and patents that are reported at cost and are amortized on a straight-line basis over their useful lives, generally ranging from 1 to 10 years. Acquired intangibles include existing technology, core technology or patents, license agreements, in-process research & development, trademarks, tradenames, customer relationships, non-compete agreements, and backlog. These assets are amortized on a straight-line basis over lives ranging from 1 to 15 years.
Goodwill is recorded at the time of an acquisition and is calculated as the difference between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. The Company tests goodwill and indefinite lived intangibles for impairment on an annual basis or more frequently if the Company believes indicators of impairment exist. Impairment evaluations involve management’s assessment of qualitative factors to determine whether it is more likely than not that goodwill and other intangible assets are impaired. If management concludes from its assessment of qualitative factors that it is more likely than not that impairment exists, then a quantitative impairment test will be performed involving management estimates of asset useful lives and future cash flows. Significant management judgment is required in the forecasts of future operating results that are used in these evaluations. If our actual results, or the plans and estimates used in future impairment analyses, are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges in a future period. The Company has recorded no goodwill impairments in fiscal years 2020, 2019, and 2018. During the fourth quarter of fiscal year 2020, the Company recorded $10.0 million of intangible asset
impairment charges related to the MEMS restructuring. See Note 11 — Restructuring Costs for further detail. There were no material intangible asset impairments in fiscal years 2019 or 2018.
Long-Lived Assets
We test for impairment losses on long-lived assets and definite-lived intangibles used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. We measure any impairment loss by comparing the fair value of the asset to its carrying amount. We estimate fair value based on discounted future cash flows, quoted market prices, or independent appraisals.
Foreign Currency Translation
Some of the Company's subsidiaries utilize the local currency as the functional currency. The Company’s main entities, including the entities that generate the majority of sales and employ the majority of employees, are US dollar functional.
Concentration of Credit Risk
Financial instruments that potentially subject us to material concentrations of credit risk consist primarily of cash equivalents, marketable securities, long-term marketable securities, and trade accounts receivable. We are exposed to credit risk to the extent of the amounts recorded on the balance sheet. By policy, our cash equivalents, marketable securities, and long-term marketable securities are subject to certain nationally recognized credit standards, issuer concentrations, sovereign risk, and marketability or liquidity considerations.
In evaluating our trade receivables, we perform credit evaluations of our major customers’ financial condition and monitor closely all of our receivables to limit our financial exposure by limiting the length of time and amount of credit extended. In certain situations, we may require payment in advance or utilize letters of credit to reduce credit risk. By policy, we establish a reserve for trade accounts receivable based on the type of business in which a customer is engaged, the length of time a trade account receivable is outstanding, and other knowledge that we may possess relating to the probability that a trade receivable is at risk for non-payment.
We had two contract manufacturers, Hongfujin Precision and Pegatron, who represented 29 percent and 20 percent, respectively of our consolidated gross trade accounts receivable as of the end of fiscal year 2020. Hongfujin Precision, Pegatron, and Foxconn represented 22 percent, 19 percent, and 11 percent, respectively of our consolidated gross trade accounts receivable as of the end of fiscal year 2019. No other distributor or customer had receivable balances that represented more than 10 percent of consolidated gross trade accounts receivable as of the end of fiscal year 2020 and 2019.
Since the components we produce are largely proprietary and generally not available from second sources, we consider our end customer to be the entity specifying the use of our component in their design. These end customers may then purchase our products directly from us, from a distributor, or through a third-party manufacturer contracted to produce their end product. For fiscal years 2020, 2019, and 2018, our ten largest end customers represented approximately 93 percent, 91 percent, and 92 percent, of our sales, respectively. For fiscal years 2020, 2019, and 2018, we had one end customer, Apple Inc., who purchased through multiple contract manufacturers and represented approximately 79 percent, 78 percent, and 81 percent, of the Company’s total sales, respectively. No other customer or distributor represented more than 10 percent of net sales in fiscal years 2020, 2019, or 2018.
Revenue Recognition
We recognize revenue upon the transfer of promised goods or services to customers, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services.
Performance Obligations
The Company’s single performance obligation is the delivery of promised goods to the customer. The promised goods are explicitly stated in the customer contract and are comprised of either a single type of good or a series of goods that are substantially the same, have the same pattern of transfer to the customer, and are neither capable of being distinct nor separable from the other promised goods in the contract. This performance obligation is satisfied upon transfer of control of the promised goods to the customer, as defined per the shipping terms within the customer’s contract. The vast majority of the Company’s contracts with customers have an original expected term of one year or less. As allowed by ASC 606, the Company has not disclosed of the value of any unsatisfied performance obligations related to these contracts.
The Company’s products typically include a warranty period of one to three years. These warranties qualify as assurance-type warranties, as goods can be returned for product non-conformance and defect only. As such, these warranties are accounted for under ASC 460, Guarantees, and are not considered a separate performance obligation.
Contract balances
Payments are typically due within 30 to 60 days of invoicing and terms do not include a significant financing component or noncash consideration. There have been no material impairment losses on accounts receivable. There are no material contract assets or contract liabilities recorded on the consolidated balance sheets.
Transaction price
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods to the customer. Fixed pricing is the consideration that is agreed upon in the customer contract. Variable pricing includes rebates, rights of return, warranties, price protection and stock rotation. Rebates are granted as a customer account credit, based on agreed-upon sales thresholds. Rights of return and warranty costs are estimated using the "most likely amount" method by reviewing historical returns to determine the most likely customer return rate and applying materiality thresholds. Price protection includes price adjustments available to certain distributors based upon established book price and a stated adjustment period. Stock rotation is also available to certain distributors based on a stated maximum of prior billings.
The Company estimates all variable consideration at the most likely amount which it expects to be entitled. The estimate is based on current and historical information available to the Company, including recent sales activity and pricing. Variable consideration is only included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company defers all variable consideration that does not meet the revenue recognition criteria.
Warranty Expense
We warrant our products and maintain a provision for warranty repair or replacement of shipped products. The accrual represents management’s estimate of probable returns. Our estimate is based on an analysis of our overall sales volume and historical claims experience. The estimate is re-evaluated periodically for accuracy.
Shipping Costs
Our shipping and handling costs are included in cost of sales for all periods presented in the Consolidated Statements of Income.
Advertising Costs
Advertising costs are expensed as incurred. Advertising costs were $0.9 million, $1.0 million, and $1.4 million, in fiscal years 2020, 2019, and 2018, respectively.
Stock-Based Compensation
Stock-based compensation is measured at the grant date based on the grant-date fair value of the awards and is recognized as an expense, on a ratable basis, over the vesting period, which is generally between 0 and 4 years. Determining the amount of stock-based compensation to be recorded requires the Company to develop estimates used in calculating the grant-date fair value of stock options and performance awards (also called market stock units). The Company calculates the grant-date fair value for stock options and market stock units using the Black-Scholes valuation model and the Monte Carlo simulation, respectively. The use of valuation models requires the Company to make estimates of assumptions such as expected volatility, expected term, risk-free interest rate, expected dividend yield, and forfeiture rates. The grant-date fair value of restricted stock units is the market value at grant date multiplied by the number of units.
Income Taxes
We are required to calculate income taxes in each of the jurisdictions in which we operate. This process involves calculating the actual current tax liability as well as assessing temporary differences in the recognition of income or loss for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheet. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The Company evaluates the ability to realize its deferred tax assets based on all the facts and circumstances, including projections of future taxable income and expiration dates of carryover tax attributes.
The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules and the potential for future adjustment of our uncertain tax positions by the Internal Revenue Service or other taxing jurisdiction. We recognize liabilities for uncertain tax positions based on the required two-step process. The first step requires us to determine if the weight of available evidence indicates that the tax position has met the threshold for recognition; therefore, we must evaluate whether it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step requires us to measure the tax benefit of the tax position taken, or expected to be taken, in an income tax return as the largest amount that is more than 50 percent likely of being realized upon
ultimate settlement. We reevaluate the uncertain tax positions each quarter based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, expirations of statutes of limitation, effectively settled issues under audit, and new audit activity. A change in the recognition step or measurement step would result in the recognition of a tax benefit or an additional charge to the tax provision in the period.
Although we believe the measurement of our liabilities for uncertain tax positions is reasonable, we cannot assure that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. If additional taxes are assessed as a result of an audit or litigation, it could have a material effect on our income tax provision and net income in the period or periods for which that determination is made. We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues which may require an extended period of time to resolve and could result in additional assessments of income tax. We believe adequate provisions for income taxes have been made for all periods.
Net Income Per Share
Basic net income per share is based on the weighted effect of common shares issued and outstanding and is calculated by dividing net income by the basic weighted average shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares used in the basic net income per share calculation, plus the equivalent number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. These potentially dilutive items consist primarily of outstanding stock options and restricted stock grants.
The following table details the calculation of basic and diluted earnings per share for fiscal years 2020, 2019, and 2018, (in thousands, except per share amounts):
 
 Fiscal Years Ended
March 28, 2020March 30, 2019March 31, 2018
Numerator:
Net income$159,498  $89,991  $161,995  
Denominator:
Weighted average shares outstanding58,317  60,116  63,407  
Effect of dilutive securities2,145  1,467  2,544  
Weighted average diluted shares60,462  61,583  65,951  
Basic earnings per share$2.74  $1.50  $2.55  
Diluted earnings per share$2.64  $1.46  $2.46  
The weighted outstanding shares excluded from our diluted calculation for the years ended March 28, 2020, March 30, 2019, and March 31, 2018 were 543 thousand, 872 thousand, and 326 thousand, respectively, as the exercise price of certain outstanding stock options exceeded the average market price during the period.
Accumulated Other Comprehensive Loss
Our accumulated other comprehensive loss is comprised of foreign currency translation adjustments, unrealized gains and losses on investments classified as available-for-sale and actuarial gains and losses on our defined benefit pension plan assets, prior to plan settlement in fiscal year 2019. See Note 17 — Accumulated Other Comprehensive Loss for additional discussion.
Recently Issued Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases, which the Company adopted in the first quarter of fiscal year 2020. The new standard provides a number of optional practical expedients in transition. We elected the use-of-hindsight practical expedient and the ‘package of practical expedients’ which permit us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for qualifying leases, which are those with terms of less than twelve months, we will not recognize right-of-use ("ROU") assets or lease liabilities. We also do not separate lease and non-lease components for all classes of assets. Most of our operating lease commitments were subject to the new standard and recognized as ROU assets and operating lease liabilities upon adoption, which materially increased the total assets and total liabilities that we reported relative to such amounts prior to adoption.
In applying the use-of-hindsight practical expedient, we re-assessed whether we were reasonably certain to exercise extension options within our lease agreements. This resulted in the lease term being extended on a number of leases. The
previously capitalized initial direct costs and accrued lease payments were recalculated assuming these extended lease terms had always applied, resulting in an adjustment of $0.7 million net of tax, to opening retained earnings on transition.
On adoption, we recognized additional operating liabilities, with corresponding ROU assets based on the present value of the lease payments over the lease term under current leasing contracts for existing operating leases. In addition, existing capitalized initial direct costs and accrued lease payments were reclassified from prepayments and accruals to the ROU asset. There was no income statement or cash flow statement impact on adoption, nor were prior periods adjusted.
The effects of the changes made to our balance sheet at adoption were as follows (in thousands):
Balance at March 30, 2019Impact from ASU 2016-02 AdoptionBalance at March 31, 2019
Financial statement line item:
Prepaid assets$30,794  $(2,833) $27,961  
Right-of-use lease assets—  149,746  149,746  
Lease liabilities—  (14,899) (14,899) 
Other accrued liabilities(16,339) 11,071  (5,268) 
Non-current lease liabilities—  (143,085) (143,085) 
Other long-term liabilities(9,889) (965) (10,854) 
Accumulated deficit$(222,430) $965  $(221,465) 
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  This ASU requires credit losses on available-for-sale debt securities to be presented as an allowance rather than a write-down. Unlike current U.S. GAAP, the credit losses could be reversed with changes in estimates, and recognized in current year earnings.  This ASU is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods.  Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods.  The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption in the first quarter of fiscal year 2021.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.  This ASU eliminates step two of the goodwill impairment test.  An impairment charge is to be recognized for the amount by which the current value exceeds the fair value. This ASU is effective for annual periods beginning after December 15, 2019, including interim periods.  Early adoption is permitted, for interim or annual goodwill impairment tests performed after January 1, 2017, and should be applied prospectively. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure should be provided in the first annual period and in the interim period within the first annual period when the entity initially adopts the amendments in this update. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.
In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU allows for the classification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) from accumulated other comprehensive income to retained earnings. This ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The standard should be applied in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in tax rate is recognized. The Company adopted this ASU in the first quarter of fiscal year 2020 and elected to reclassify the stranded tax effects of $0.3 million from accumulated other comprehensive income to retained earnings in the period of adoption.
In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees and will apply to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, with early adoption permitted. The Company adopted this ASU in the first quarter of fiscal year 2020, with no material impact to the financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This ASU adjusts current required disclosures related to
fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.
In August 2018, the Commission adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule was published in the Federal Register on October 4, 2018, effective November 5, 2018. The Company adopted the amendments in the first quarter of fiscal year 2020.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.
In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321) - Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies the interaction of the accounting for equity securities, investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU, effective immediately for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., LIBOR) with a new alternative reference rate. The guidance is applicable to investment securities, receivables, debt, leases, hedging relationships and other contractual arrangements. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.
v3.20.1
Marketable Securities
12 Months Ended
Mar. 28, 2020
Marketable Securities [Abstract]  
Marketable Securities Marketable Securities
The Company’s investments have been classified as available-for-sale securities in accordance with U.S. GAAP. Marketable securities are categorized on the Consolidated Balance Sheet as “Marketable securities” within the short-term or long-term classification, as appropriate.
The following table is a summary of available-for-sale securities (in thousands):
 
As of March 28, 2020Amortized
Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Estimated Fair Value
(Net Carrying Amount)
Corporate debt securities$286,668  $1,157  $(3,993) $283,832  
Non-US government securities12,483  260  —  12,743  
US Treasury securities8,839  167  —  9,006  
Total securities$307,990  $1,584  $(3,993) $305,581  
The Company typically invests in highly-rated securities with original maturities generally ranging from one to three years. The Company's specifically identified certain securities with a total gross unrealized loss of $4.0 million at March 28, 2020. The total amortized cost of these securities was approximately $172.9 million. There were no securities that have been in a continuous unrealized loss position for more than 12 months as of March 28, 2020. The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipated or actual changes in credit rating and duration management.  When evaluating an investment for other-than-temporary impairment, the Company reviews factors including the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, changes in market interest rates and whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s cost basis. As of March 28, 2020, the Company does not consider any of its investments to be other-than-temporarily impaired.
 
As of March 30, 2019Amortized
Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Estimated Fair Value
(Net Carrying Amount)
Corporate debt securities$215,098  $1,027  $(600) $215,525  
Non-US government securities13,209   (40) 13,177  
Agency discount notes450  —  (1) 449  
Total securities$228,757  $1,035  $(641) $229,151  
The Company’s specifically identified certain securities with a total gross unrealized losses of $0.6 million at March 30, 2019. The total amortized cost of these securities was approximately $123.1 million. Securities in a continuous unrealized loss position for more than 12 months as of March 30, 2019 had an aggregate amortized cost of $120.3 million and an aggregate unrealized loss of $0.6 million. As of March 30, 2019, the Company did not consider any of its investments to be other-than-temporarily impaired.
The cost and estimated fair value of available-for-sale investments by contractual maturity were as follows:
 
 March 28, 2020March 30, 2019
Amortized
Cost
Estimated
Fair Value
Amortized
Cost
Estimated
Fair Value
Within 1 year$22,012  $22,008  $70,490  $70,183  
After 1 year285,978  283,573  158,267  158,968  
Total$307,990  $305,581  $228,757  $229,151  
v3.20.1
Fair Value of Financial Instruments
12 Months Ended
Mar. 28, 2020
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
The Company has determined that the only assets and liabilities in the Company’s financial statements that are required to be measured at fair value on a recurring basis are the Company’s cash equivalents and marketable securities portfolio. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company’s cash equivalents and marketable securities portfolio consist of money market funds, debt securities, non-U.S government securities, U.S Treasury securities, and securities of U.S. government-sponsored enterprises, and are reflected on our Consolidated Balance Sheet under the headings cash and cash equivalents, marketable securities, and long-term marketable securities. The Company determines the fair value of its marketable securities portfolio by obtaining non-binding market prices from its third-party pricing providers on the last day of the quarter, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.
The Company’s long-term revolving facility, described in Note 8, bears interest at a base rate plus applicable margin or LIBOR plus applicable margin.  As of March 28, 2020, there are no amounts drawn under the facility and the fair value is zero.
As of March 28, 2020 and March 30, 2019, the Company has no material Level 3 assets or liabilities. There were no transfers between Level 1, Level 2, or Level 3 measurements for the years ending March 28, 2020 and March 30, 2019.
The following summarizes the fair value of our financial instruments at March 28, 2020 (in thousands):
 
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
Significant
Other
Observable
Inputs
Level 2
Significant
Unobservable
Inputs
Level 3
Total
Assets:
Cash equivalents
Money market funds$237,714  $—  $—  $237,714  
Available-for-sale securities
Corporate debt securities$—  $283,832  $—  $283,832  
Non-US government securities—  12,743  —  12,743  
US Treasury securities9,006  —  —  9,006  
$9,006  $296,575  $—  $305,581  

The following summarizes the fair value of our financial instruments at March 30, 2019 (in thousands):
 
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
Significant
Other
Observable
Inputs
Level 2
Significant
Unobservable
Inputs
Level 3
Total
Assets:
Cash equivalents
Money market funds$174,214  $—  $—  $174,214  
Available-for-sale securities
Corporate debt securities$—  $215,525  $—  $215,525  
Non-US government securities—  13,177  —  13,177  
Agency discount notes—  449  —  449  
$—  $229,151  $—  $229,151  
v3.20.1
Derivative Financial Instruments
12 Months Ended
Mar. 28, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Foreign Currency Forward Contracts
Beginning in the first quarter of fiscal year 2020, the Company began using foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes both the gains and losses on foreign currency forward contracts and the gains and losses on the remeasurement of non-U.S. dollar denominated assets and liabilities within "Other income (expense)" in the consolidated statements of income. The Company does not apply hedge accounting to these foreign currency derivative instruments.
As of March 28, 2020, the Company held one foreign currency forward contract denominated in British Pound Sterling with a notional value of $29.2 million. The fair value of this contract was not material as of March 28, 2020.

The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands):
Fiscal Years Ended
March 28, 2020March 30, 2019March 31, 2018Location
Gain (loss) recognized in income
Foreign currency forward contracts$(4,226) $—  $—  Other income (expense)
v3.20.1
Accounts Receivable, net
12 Months Ended
Mar. 28, 2020
Accounts Receivable, after Allowance for Credit Loss [Abstract]  
Accounts Receivable, net Accounts Receivable, net
The following are the components of accounts receivable, net (in thousands):
 
March 28, 2020March 30, 2019
Gross accounts receivable$153,998  $120,926  
Allowance for doubtful accounts—  (270) 
Accounts receivable, net$153,998  $120,656  
The Company regularly evaluates the collectability of accounts receivable based on age, historical customer payment trends and ongoing customer relations. The following table summarizes the changes in the allowance for doubtful accounts (in thousands):
 
Balance, March 25, 2017$(434) 
Bad debt expense, net of recoveries231  
Balance, March 31, 2018(203) 
Bad debt expense, net of recoveries(67) 
Balance, March 30, 2019(270) 
Bad debt expense, net or recoveries270  
Balance, March 28, 2020$—  
Recoveries on bad debt were immaterial for the three years presented above.
v3.20.1
Intangibles, net and Goodwill
12 Months Ended
Mar. 28, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangibles, net and Goodwill Intangibles, net and Goodwill
The intangibles, net balance included on the Consolidated Balance Sheet was $34.4 million and $67.8 million at March 28, 2020 and March 30, 2019, respectively.
The following information details the gross carrying amount and accumulated amortization of our intangible assets (in thousands):
 
 March 28, 2020March 30, 2019
Intangible Category / Weighted-Average Amortization
period (in years)
Gross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
Core technology (a)$1,390  $(1,390) $1,390  $(1,390) 
License agreement (a)440  (440) 440  (440) 
Existing technology (6.7)
111,005  (100,145) 117,976  (94,136) 
In-process research & development (“IPR&D”) (7.5)
70,936  (58,284) 97,972  (69,794) 
Trademarks and tradename (10.0)
3,037  (2,589) 3,037  (2,461) 
Customer relationships (10.0)
15,381  (8,808) 15,381  (7,270) 
Backlog (a)220  (220) 220  (220) 
Non-compete agreements (a)470  (470) 470  (470) 
Technology licenses (3.0)
23,820  (19,923) 28,336  (21,194) 
Total$226,699  $(192,269) $265,222  $(197,375) 
 
(a)Intangible assets are fully amortized.
Amortization expense for intangibles in fiscal years 2020, 2019, and 2018 was $28.3 million, $47.8 million, and $53.7 million, respectively. The following table details the estimated aggregate amortization expense for all intangibles owned as of March 28, 2020, for each of the five succeeding fiscal years and in the aggregate thereafter (in thousands):
 
For the year ended March 27, 2021$14,368  
For the year ended March 26, 2022$11,817  
For the year ended March 25, 2023$6,009  
For the year ended March 30, 2024$1,695  
For the year ended March 29, 2025$541  
Thereafter$—  
The goodwill balance included on the Consolidated Balance Sheet is $287.1 million and $286.2 million at March 28, 2020 and March 30, 2019, respectively.
v3.20.1
Revolving Credit Facility
12 Months Ended
Mar. 28, 2020
Line of Credit Facility [Abstract]  
Revolving Credit Facility Revolving Credit Facility
On July 12, 2016, Cirrus Logic entered into an amended and restated credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent, and the Lenders party thereto, for the purpose of refinancing an existing credit facility and providing ongoing working capital. The Credit Agreement provides for a $300 million senior secured revolving credit facility (the “Credit Facility”). The Credit Facility matures on July 12, 2021.  The Credit Facility is required to be guaranteed by all of Cirrus Logic’s material domestic subsidiaries (the “Subsidiary Guarantors”). The Credit Facility is secured by substantially all of the assets of Cirrus Logic and any Subsidiary Guarantors, except for certain excluded assets.
Borrowings under the Credit Facility may, at Cirrus Logic’s election, bear interest at either (a) a base rate plus the applicable margin (“Base Rate Loans”) or (b) a LIBOR Rate plus the applicable margin (“LIBOR Rate Loans”).  The applicable margin ranges from 0% to 0.50% per annum for Base Rate Loans and 1.25% to 2.00% per annum for LIBOR Rate Loans based on the Leverage Ratio (as defined below). A commitment fee accrues at a rate per annum ranging from 0.20% to 0.30% (based on the Leverage Ratio) on the average daily unused portion of the commitment of the lenders. The Credit Agreement contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness to consolidated EBITDA for the prior four consecutive quarters must not be greater than 3.00 to 1.00 (the “Leverage Ratio”) and (b) the ratio of consolidated EBITDA for the prior four consecutive fiscal quarters to consolidated fixed charges (including amounts paid in cash for consolidated interest expenses, capital expenditures, scheduled principal payments of indebtedness, and income taxes) for the prior four consecutive fiscal quarters must not be less than 1.25 to 1.00 as of the end of each fiscal quarter.  The Credit Agreement also contains negative covenants limiting the Company’s or any Subsidiary’s ability to, among other things, incur debt, grant liens, make investments, effect certain fundamental changes, make certain asset dispositions, and make certain restricted payments.
As of March 28, 2020, the Company had no amounts outstanding under the Credit Facility and was in compliance with all covenants under the Credit Agreement.
v3.20.1
Revenues
12 Months Ended
Mar. 28, 2020
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Disaggregation of revenue
We disaggregate revenue from contracts with customers based on the ship to location of the customer. The geographic regions that are reviewed are the United States and countries outside of the United States (primarily located in Asia).
Total net sales based on the disaggregation criteria described above are as follows:
Fiscal Years Ended
March 28,March 30,March 31,
202020192018
Non-United States$1,264,025  $1,159,342  $1,498,454  
United States17,099  26,182  33,732  
$1,281,124  $1,185,524  $1,532,186  
See Note 2 - Summary of Significant Accounting Policies for additional discussion surrounding revenue recognition considerations.
v3.20.1
Leases
12 Months Ended
Mar. 28, 2020
Leases [Abstract]  
Leases Leases
The Company has operating leases for corporate offices and certain office equipment. Our leases have remaining lease terms of 1 year to 29 years, some of which include options to extend the leases that are considered reasonably certain to be exercised. Our leases generally contain fixed rental payments, with additional variable payments linked to actual common area maintenance costs incurred by the landlord. These variable payments are therefore not included within the lease liability and ROU asset, but are recognized as an expense when incurred. As our leases typically do not provide an implicit rate, the Company determined the Incremental Borrowing Rate ("IBR") for each lease based on the information available at the commencement date, taking into consideration necessary adjustments for collateral, currency, and lease term. There are no residual value guarantees in any of our leases. No restrictions or covenants have been imposed on the Company as a result of the lease agreements in place.
The Company also leases a small portion of our office space to tenants under operating leases, receiving monthly rental payments. Payments are generally fixed, with variable payments linked to actual common area maintenance costs incurred. Total fixed lease payments to be received over the life of the lease are recognized on a straight-line basis over the lease term.
All of the Company’s leases have been classified as operating leases. Operating leases in excess of 12 months are recognized on the balance sheet, with future lease payments recognized as a liability, measured at present value, and the right-of-use asset recognized for the lease term. A single lease cost is recognized in the income statement over the lease term.
The components of net operating lease expense were as follows (in thousands):
Fiscal Year Ended
March 28, 2020
Operating lease - in excess of 12 months$13,518  
Variable lease4,721  
Short-term lease119  
Operating lease income(1,296) 
Total net operating lease expense$17,062  
Other information related to operating leases was as follows:
Fiscal Year Ended
March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
Operating cash flows from operating leases$13,955  
Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands)1,107  
Weighted-average remaining lease term - operating leases (in years)20
Weighted-average discount rate - operating leases%
As of March 28, 2020, there are no leases that have not yet commenced that would create significant rights and obligations on the Company.
Future lease commitments under non-cancellable leases, including extension options reasonably anticipated to be exercised as of March 28, 2020, are as follows (in thousands):

Fiscal YearOperating Lease ExpenseOperating Lease Income
2021$13,823  $1,322  
202213,459  1,356  
202313,174  535  
202412,850  264  
202512,507  270  
Thereafter147,661  68  
Total$213,474  $3,815  
Less imputed interest(70,582) —  
Total$142,892  $3,815  

Operating lease liabilities consisted of the following (in thousands):

March 28, 2020
Current lease liabilities$13,580  
Non-current lease liabilities129,312  
Total operating lease liabilities$142,892  
Leases Leases
The Company has operating leases for corporate offices and certain office equipment. Our leases have remaining lease terms of 1 year to 29 years, some of which include options to extend the leases that are considered reasonably certain to be exercised. Our leases generally contain fixed rental payments, with additional variable payments linked to actual common area maintenance costs incurred by the landlord. These variable payments are therefore not included within the lease liability and ROU asset, but are recognized as an expense when incurred. As our leases typically do not provide an implicit rate, the Company determined the Incremental Borrowing Rate ("IBR") for each lease based on the information available at the commencement date, taking into consideration necessary adjustments for collateral, currency, and lease term. There are no residual value guarantees in any of our leases. No restrictions or covenants have been imposed on the Company as a result of the lease agreements in place.
The Company also leases a small portion of our office space to tenants under operating leases, receiving monthly rental payments. Payments are generally fixed, with variable payments linked to actual common area maintenance costs incurred. Total fixed lease payments to be received over the life of the lease are recognized on a straight-line basis over the lease term.
All of the Company’s leases have been classified as operating leases. Operating leases in excess of 12 months are recognized on the balance sheet, with future lease payments recognized as a liability, measured at present value, and the right-of-use asset recognized for the lease term. A single lease cost is recognized in the income statement over the lease term.
The components of net operating lease expense were as follows (in thousands):
Fiscal Year Ended
March 28, 2020
Operating lease - in excess of 12 months$13,518  
Variable lease4,721  
Short-term lease119  
Operating lease income(1,296) 
Total net operating lease expense$17,062  
Other information related to operating leases was as follows:
Fiscal Year Ended
March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
Operating cash flows from operating leases$13,955  
Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands)1,107  
Weighted-average remaining lease term - operating leases (in years)20
Weighted-average discount rate - operating leases%
As of March 28, 2020, there are no leases that have not yet commenced that would create significant rights and obligations on the Company.
Future lease commitments under non-cancellable leases, including extension options reasonably anticipated to be exercised as of March 28, 2020, are as follows (in thousands):

Fiscal YearOperating Lease ExpenseOperating Lease Income
2021$13,823  $1,322  
202213,459  1,356  
202313,174  535  
202412,850  264  
202512,507  270  
Thereafter147,661  68  
Total$213,474  $3,815  
Less imputed interest(70,582) —  
Total$142,892  $3,815  

Operating lease liabilities consisted of the following (in thousands):

March 28, 2020
Current lease liabilities$13,580  
Non-current lease liabilities129,312  
Total operating lease liabilities$142,892  
v3.20.1
Restructuring Costs
12 Months Ended
Mar. 28, 2020
Restructuring and Related Activities [Abstract]  
Restructuring Costs Restructuring Costs
During the fourth quarter of fiscal year 2020, the Company approved a restructuring plan (the “MEMS Restructuring”), including discontinuing efforts relating to the microelectromechanical systems ("MEMS") microphone product line. The MEMS Restructuring allows the Company to concentrate our resources on projects that we anticipate will have a larger return on investment. The Company recorded charges of $21.9 million as part of the MEMS Restructuring, which is expected to be substantially complete by the first quarter of fiscal year 2021.
The following table details the total restructuring charges presented in the Consolidated Statements of Income within the "Restructuring Costs" line item (in thousands):
Fiscal Year Ended
March 28, 2020
Disposal of equipment, net of recovery from sales (a)
$9,578  
Impairment and write-off of intangible assets9,961  
Other exit costs (b)1,903  
Personnel-related charges, net of equity cancellations (c)483  
Total$21,925  

a.Includes accelerated depreciation of equipment of $11.5 million, net of $1.9 million of recovery from equipment sold during the fourth quarter of fiscal 2020.
b.Includes $0.6 million of accrued exit costs as of March 28, 2020 which are presented in the “Other accrued liabilities” line item of our Consolidated Balance Sheet.
c.Personnel-related charges consists of severance costs of $1.7 million, net of $1.2 million of equity cancellation benefits. Includes $0.4 million of accrued severance as of March 28, 2020 which is presented in the “Other accrued liabilities” line item of our Consolidated Balance Sheet.
v3.20.1
Postretirement Benefit Plans
12 Months Ended
Mar. 28, 2020
Retirement Benefits [Abstract]  
Pension Benefit Plans Postretirement Benefit Plans
Defined Benefit Pension Plan
As a result of our acquisition of Wolfson in fiscal year 2015, the Company had a defined benefit pension scheme (the “Scheme”), for some individuals in the United Kingdom. Following the acquisition, the participants in the Scheme no longer accrued benefits and therefore the Company was not required to make contributions in respect of future accruals.
During fiscal year 2018, the Company authorized the termination of the Scheme under which 60 participants had accrued benefits. On March 16, 2018, the Scheme completed a buy-in transaction whereby the assets of the Scheme, together with a final contribution from the Company of $11.0 million, were invested in a bulk purchase annuity contract that fully insured the benefits payable to the members of the Scheme at that time.
The bulk purchase annuity contract was structured to enable the Scheme to move to full buy-out (following which the insurance company became directly responsible for the pension payments). On November 30, 2018, the insurance company confirmed that the buy-out was completed and individual policies had been established for each member. Completion of the buy-out confirmed full and final settlement of the Scheme, and the unamortized loss previously recorded within Accumulated Other Comprehensive Income ("AOCI") of $13.8 million was recognized within other non-operating expense as "U.K. pension settlement" in the third quarter of fiscal year 2019, with the corresponding tax benefit of $2.6 million being recognized within "Provision for income taxes" in the Consolidated Statements of Income. As the buy-out transaction fully settled, there were no further contributions to the Scheme.
Defined Contribution Plans
We have Defined Contribution Plans (“the Plans”) covering all of our qualifying employees. Under the Plans, employees may elect to contribute any percentage of their annual compensation up to the annual regulatory limits. The Company made matching employee contributions of $7.5 million, $7.7 million, and $6.7 million during fiscal years 2020, 2019, and 2018, respectively.
v3.20.1
Equity Compensation
12 Months Ended
Mar. 28, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Equity Compensation Equity CompensationThe Company is currently granting equity awards from the 2018 Long Term Incentive Plan (the “Plan”), which was approved by stockholders in August 2018. The Plan provides for granting of stock options, restricted stock awards, performance awards, phantom stock awards, and bonus stock awards, or any combination of the foregoing.  To date, the Company has granted stock options, restricted stock awards, phantom stock awards (also called restricted stock units), and performance awards (also called market stock units). Each stock option granted reduces the total shares available for grant under the Plan by one share. Each full value award granted (including restricted stock awards, restricted stock units and market stock units) reduces the total shares available for grant under the Plan by 1.5 shares. Stock options generally vest between zero and four years, and are exercisable for a period of ten years from the date of grant.  Restricted stock units are generally subject to vesting from zero to three years, depending upon the terms of the grant. Market stock units are subject to a vesting schedule of three years.
The following table summarizes the activity in total shares available for grant (in thousands):
 
 Shares
 Available for
 Grant
Balance, March 25, 20174,692  
Shares added—  
Granted(1,755) 
Forfeited128  
Balance, March 31, 20183,065  
Shares added2,509  
Granted(2,371) 
Forfeited120  
Balance, March 30, 20193,323  
Shares added248  
Granted(1,686) 
Forfeited210  
Balance, March 28, 20202,095  

Stock-based Compensation Expense
The following table summarizes the effects of stock-based compensation on cost of goods sold, research and development, sales, general and administrative, pre-tax income, and net income after taxes for shares granted under the Plan (in thousands, except per share amounts):
 
 Fiscal Year
 202020192018
Cost of sales$908  $877  $1,474  
Research and development33,859  29,115  26,137  
Sales, general and administrative18,990  19,697  21,130  
Effect on pre-tax income53,757  49,689  48,741  
Income Tax Benefit(9,336) (5,748) (5,953) 
Total stock-based compensation expense (net of taxes)44,421  43,941  42,788  
Stock-based compensation effects on basic earnings per share$0.76  $0.73  $0.67  
Stock-based compensation effects on diluted earnings per share0.73  0.71  0.65  
The total stock-based compensation expense included in the table above and which is attributable to restricted stock units and market stock units was $50.0 million, $45.5 million, $44.2 million, for fiscal years 2020, 2019, and 2018, respectively. Stock-based compensation expense is presented within operating activities in the Consolidated Statement of Cash Flows.
As of March 28, 2020, there was $97.1 million of compensation costs related to non-vested stock options, restricted stock units, and market stock units granted under the Company’s equity incentive plans not yet recognized in the Company’s financial statements. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.31 years for stock options, 1.61 years for restricted stock units, and 1.55 years for market stock units.
In addition to the income tax benefit of stock-based compensation expense shown in the table above, the Company recognized excess tax benefits of $4.9 million, $0.9 million and $11.7 million in fiscal years 2020, 2019, and 2018 respectively.
Stock Options
We estimate the fair value of each stock option on the date of grant using the Black-Scholes option-pricing model using a dividend yield of zero and the following additional assumptions:
 
March 28, 2020March 30, 2019March 31, 2018
Expected stock price volatility
37.17% - 41.61%
38.00% - 38.14%
37.36 %
Risk-free interest rate
1.54% - 2.29%
2.57% - 2.94%
1.67 %
Expected term (in years)
3.81 - 4.55
3.12 - 3.73
3.03
The Black-Scholes valuation calculation requires us to estimate key assumptions such as stock price volatility, expected term, risk-free interest rate and dividend yield. The expected stock price volatility is based upon implied volatility from traded options on our stock in the marketplace. The expected term of options granted is derived from an analysis of historical exercises and remaining contractual life of stock options, and represents the period of time that options granted are expected to be outstanding after becoming vested. The risk-free interest rate reflects the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term assumption. Finally, we have never paid cash dividends, do not currently intend to pay cash dividends, and thus have assumed a zero percent dividend yield.
Using the Black-Scholes option valuation model, the weighted average estimated fair values of employee stock options granted in fiscal years 2020, 2019, and 2018, were $29.25, $16.27, and $19.87, respectively.
During fiscal years 2020, 2019, and 2018, we received a net $18.6 million, $1.6 million, and $4.4 million, respectively, from the exercise of 0.8 million, 0.1 million, and 0.2 million, respectively, stock options granted under the Company’s Stock Plan.
The total intrinsic value of stock options exercised during fiscal year 2020, 2019, and 2018, was $34.0 million, $2.6 million, and $9.8 million, respectively. Intrinsic value represents the difference between the market value of the Company’s common stock at the time of exercise and the strike price of the stock option.
Additional information with respect to stock option activity is as follows (in thousands, except per share amounts):
 
 Outstanding Options
NumberWeighted
Average
Exercise Price
Balance, March 25, 20171,758  $27.25  
Options granted216  55.72  
Options exercised(234) 18.84  
Options forfeited—  —  
Options expired—  —  
Balance, March 31, 20181,740  $31.91  
Options granted280  40.41  
Options exercised(108) 15.03  
Options forfeited(38) 49.62  
Options expired(9) 55.01  
Balance, March 30, 20191,865  $33.68  
Options granted169  66.93  
Options exercised(780) 23.90  
Options forfeited(27) 50.75  
Options expired(11) 55.03  
Balance, March 28, 20201,216  $44.01  
Additional information with regards to outstanding options that are vesting, expected to vest, or exercisable as of March 28, 2020 is as follows (in thousands, except years and per share amounts):
 
Number of
Options
Weighted
Average
Exercise price
Weighted Average
Remaining Contractual
Term (years)
Aggregate
Intrinsic Value
Vested and expected to vest1,205  $43.90  6.49$22,733  
Exercisable781  $38.41  5.31$18,360  
In accordance with U.S. GAAP, stock options outstanding that are expected to vest are presented net of estimated future option forfeitures, which are estimated as compensation costs are recognized. Options with a fair value of $4.7 million, $4.1 million, and $3.8 million, became vested during fiscal years 2020, 2019, and 2018, respectively.
The following table summarizes information regarding outstanding and exercisable options as of March 28, 2020 (in thousands, except per share amounts):
 
 Options OutstandingOptions Exercisable
Weighted Average
Remaining
Contractual Life
Weighted
Average Exercise
NumberWeighted
Average
Range of Exercise PricesNumber(years)PriceExercisableExercise Price
$14.58 - $31.25
324  4.51$