UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

		
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended December 30, 2017

		
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934	
For the Transition Period from ____ to ____
Commission File Number 0-17795
CIRRUS LOGIC, INC.
(Exact name of registrant as specified in its charter)

			
DELAWARE	 	77-0024818	
(State or other jurisdiction of incorporation or organization)	 	(I.R.S. Employer Identification No.)	
800 W. 6 th   Street, Austin, TX 78701
(Address of principal executive offices)
Registrant’s telephone number, including area code:   (512) 851-4000	
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  YES þ   NO ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding   12 months (or for such shorter period that the registrant was required to submit and post such files).  YES    þ    NO  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

					
Large accelerated filer  þ	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐	
 	 	(Do not check if a smaller reporting company)	 	 	
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES ☐    NO þ
The number of shares of the registrant's common stock, $0.001 par value, outstanding as of February 1, 2018 was 63,366,331 .

	

CIRRUS LOGIC, INC.
FORM 10-Q QUARTERLY REPORT
QUARTERLY PERIOD ENDED DECEMBER 30, 2017
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION	
 	 	 	
Item 1.	Financial Statements	 	
 	 	 	
﻿	Consolidated Condensed Balance Sheets - December 30, 2017 (unaudited) and March 25, 2017	3	
﻿	 	 	
﻿	Consolidated Condensed Statements of Income (unaudited) - Three and Nine Months Ended December 30, 2017 and December 24, 2016	4	
﻿	 	 	
﻿	Consolidated Condensed Statements of Comprehensive Income (unaudited) - Three and Nine Months Ended December 30, 2017 and December 24, 2016	5	
﻿	 	 	
﻿	Consolidated Condensed Statements of Cash Flows (unaudited) - Nine Months Ended December 30, 2017 and December 24, 2016	6	
﻿	 	 	
﻿	Notes to Consolidated Condensed Financial Statements (unaudited)	7	
﻿	 	 	
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15	
﻿	 	 	
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21	
﻿	 	 	
Item 4.	Controls and Procedures	21	
﻿	 	 	
PART II - OTHER INFORMATION	
﻿	 	 	
Item 1.	Legal Proceedings	22	
﻿	 	 	
Item 1A.	Risk Factors	22	
﻿	 	 	
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23	
﻿	 	 	
Item 3.	Defaults Upon Senior Securities	24	
﻿	 	 	
Item 4.	Mine Safety Disclosures	24	
﻿	 	 	
Item 5.	Other Information	24	
﻿	 	 	
Item 6.	Exhibits	24	
﻿	 	 	
﻿	Signatures	24	
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2

Part I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)

								
﻿	December 30,	 	March 25,	
 	2017	 	2017	
﻿	(unaudited)	 	 		
Assets	 	 	 		
Current assets:	 		 	 		
Cash and cash equivalents	$	226,640		 	$	351,166		
Marketable securities	12,822		 	99,813		
Accounts receivable, net	217,619		 	119,974		
Inventories	192,967		 	167,895		
Prepaid assets	19,425		 	24,987		
Other current assets	10,020		 	12,093		
Total current assets	679,493		 	775,928		
﻿	 		 	 		
Long-term marketable securities	173,717		 	—		
Property and equipment, net	187,143		 	168,139		
Intangibles, net	126,183		 	135,188		
Goodwill	288,481		 	286,767		
Deferred tax assets	16,467		 	32,841		
Other assets	21,841		 	14,607		
Total assets	$	1,493,325		 	$	1,413,470		
﻿	 		 	 		
Liabilities and Stockholders' Equity	 		 	 		
Current liabilities:	 		 	 		
Accounts payable	$	116,274		 	$	73,811		
Accrued salaries and benefits	29,543		 	40,190		
Software license agreements	7,270		 	14,990		
Other accrued liabilities	22,633		 	15,084		
Total current liabilities	175,720		 	144,075		
﻿	 		 	 		
Long-term liabilities:	 		 	 		
Debt	—		 	60,000		
Software license agreements	7,357		 	3,146		
Other long-term liabilities	98,882		 	54,557		
Total long-term liabilities	106,239		 	117,703		
﻿	 		 	 		
Stockholders' equity:	 		 	 		
Capital stock	1,301,800		 	1,259,279		
Accumulated deficit	(92,402	)	 	(107,014	)	
Accumulated other comprehensive income (loss)	1,968		 	(573	)	
Total stockholders' equity	1,211,366		 	1,151,692		
Total liabilities and stockholders' equity	$	1,493,325		 	$	1,413,470		

The accompanying notes are an integral part of these consolidated condensed financial statements.
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3

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share amounts; unaudited)

																
﻿	Three Months Ended	 	Nine Months Ended	
﻿	December 30,	 	December 24,	 	December 30,	 	December 24,	
﻿	2017	 	2016	 	2017	 	2016	
Net sales	$	482,741		 	$	523,029		 	$	1,229,013		 	$	1,211,076		
Cost of sales	247,653		 	267,877		 	620,927		 	617,540		
Gross profit	235,088		 	255,152		 	608,086		 	593,536		
Operating expenses	 		 	 		 	 		 	 		
Research and development	96,978		 	76,079		 	270,888		 	225,686		
Selling, general and administrative	34,604		 	32,884		 	95,504		 	95,513		
Total operating expenses	131,582		 	108,963		 	366,392		 	321,199		
Income from operations	103,506		 	146,189		 	241,694		 	272,337		
Interest income	1,191		 	415		 	3,125		 	978		
Interest expense	(279	)	 	(765	)	 	(894	)	 	(3,020	)	
Other income (expense)	322		 	(47	)	 	(813	)	 	(161	)	
Income before income taxes	104,740		 	145,792		 	243,112		 	270,134		
Provision for income taxes	70,961		 	23,751		 	93,121		 	43,983		
Net income	33,779		 	122,041		 	149,991		 	226,151		
﻿	 		 	 		 	 		 	 		
Basic earnings per share	$	0.53		 	$	1.91		 	$	2.36		 	$	3.59		
Diluted earnings per share	$	0.52		 	$	1.83		 	$	2.26		 	$	3.41		
Basic weighted average common shares outstanding	63,453		 	63,837		 	63,655		 	63,025		
Diluted weighted average common shares outstanding	65,557		 	66,748		 	66,377		 	66,378		

The accompanying notes are an integral part of these consolidated condensed financial statements.

4

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands; unaudited)

																
﻿	Three Months Ended	 	Nine Months Ended	
﻿	December 30,	 	December 24,	 	December 30,	 	December 24,	
﻿	2017	 	2016	 	2017	 	2016	
Net income	$	33,779		 	$	122,041		 	$	149,991		 	$	226,151		
Other comprehensive income (loss), before tax	 		 	 		 	 		 	 		
Foreign currency translation gain (loss)	(811	)	 	(500	)	 	2,500		 	(247	)	
Unrealized gain (loss) on marketable securities	(842	)	 	40		 	(794	)	 	31		
Actuarial gain (loss) on pension plan	—		 	(2,646	)	 	792		 	(2,646	)	
Reclassification of actuarial gain to net income	—		 	(27	)	 	—		 	(80	)	
Benefit for income taxes	194		 	461		 	43		 	481		
Comprehensive income	$	32,320		 	$	119,369		 	$	152,532		 	$	223,690		

The accompanying notes are an integral part of these consolidated condensed financial statements.

5

CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)

								
﻿	Nine Months Ended	
﻿	December 30,	 	December 24,	
﻿	2017	 	2016	
Cash flows from operating activities:	 		 	 		
Net income	$	149,991		 	$	226,151		
Adjustments to reconcile net income to net cash generated by operating activities:	 		 	 		
Depreciation and amortization	59,175		 	47,989		
Stock compensation expense	36,208		 	28,708		
Deferred income taxes	13,260		 	5,285		
Loss on retirement or write-off of long-lived assets	461		 	424		
Other non-cash adjustments	(3,692	)	 	(2,547	)	
Net change in operating assets and liabilities:	 		 	 		
Accounts receivable, net	(97,645	)	 	(158,098	)	
Inventories	(25,072	)	 	(12,113	)	
Other assets	8,289		 	(1,215	)	
Accounts payable and other accrued liabilities	27,361		 	96,673		
Income taxes payable	44,687		 	13,636		
Net cash generated by operating activities	213,023		 	244,893		
﻿	 		 	 		
Cash flows from investing activities:	 		 	 		
Maturities and sales of available-for-sale marketable securities	128,536		 	157,234		
Purchases of available-for-sale marketable securities	(215,878	)	 	(148,342	)	
Purchases of property, equipment and software	(38,606	)	 	(26,380	)	
Investments in technology	(23,280	)	 	(8,920	)	
Net cash used in investing activities	(149,228	)	 	(26,408	)	
﻿	 		 	 		
Cash flows from financing activities:	 		 	 		
Principal payments on long-term revolver	(60,000	)	 	(60,439	)	
Debt issuance costs	—		 	(2,152	)	
Payments on capital lease agreements	—		 	(699	)	
Issuance of common stock, net of shares withheld for taxes	6,315		 	14,869		
Repurchase of stock to satisfy employee tax withholding obligations	(19,086	)	 	(13,043	)	
Repurchase and retirement of common stock	(115,550	)	 	(15,439	)	
Net cash used in financing activities	(188,321	)	 	(76,903	)	
﻿	 		 	 		
Net (decrease) increase in cash and cash equivalents	(124,526	)	 	141,582		
﻿	 		 	 		
Cash and cash equivalents at beginning of period	351,166		 	168,793		
Cash and cash equivalents at end of period	$	226,640		 	$	310,375		

The accompanying notes are an integral part of these consolidated condensed financial statements.

6

CIRRUS LOGIC, INC.
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
    
The consolidated condensed financial statements have been prepared by Cirrus Logic, Inc. (“Cirrus Logic,” “we,” “us,” “our,” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”).  The accompanying unaudited consolidated condensed financial statements do not include complete footnotes and financial presentations.  As a result, these financial statements should be read along with the audited consolidated financial statements and notes thereto for the year ended March 25, 2017 , included in our Annual Report on Form 10-K filed with the Commission on May 24, 2017.  In our opinion, the financial statements reflect all material adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position, operating results and cash flows for those periods presented.  The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported assets, liabilities, revenues and expenses, as well as disclosure of contingent assets and liabilities.  Actual results could differ from those estimates and assumptions.  Moreover, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.  Additionally, prior period amounts have been adjusted to conform to current year presentation.

2. Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606) .  The purpose of this ASU is to converge revenue recognition requirements per U.S. GAAP and International Financial Reporting Standards (“IFRS”).  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date  after public comment supported a proposal to delay the effective date of this ASU to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period.  The Company is currently in the process of reviewing our customers’ contracts in respect of performance obligation identification and satisfaction, pricing, warranties, and return rights, among other considerations. The process is substantially complete and the Company currently expects no material modifications to its financial statements upon adoption of this ASU. The standard may be adopted by full retrospective method, which applies retrospectively to each prior period presented, or by modified retrospective method with the cumulative effect adjustment recognized in beginning retained earnings as of the date of adoption. We anticipate using the modified retrospective adoption method.
 
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The FASB issued this update to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key leasing arrangement details .   Lessees would recognize operating leases on the balance sheet under this ASU — with the 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 would be recognized over the lease term.  For terms less than twelve months, a lessee would be permitted to make an accounting policy election to recognize lease expense for such leases generally on a straight-line basis over the lease term.  This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  The Company is currently evaluating the impact of this ASU on our financial statements.

In June 2016, the FASB issued ASU 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 the adoption of this ASU on our financial statements. 
    
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory .  This ASU relates to income tax consequences of non-inventory intercompany asset transfers.  This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods.  Early adoption is permitted, as of the beginning of an annual reporting period.  The guidance requires companies to apply a modified retrospective approach with a cumulative catch-up adjustment to beginning retained earnings in the period of adoption.  The

7

Company early adopted this ASU in the first quarter of fiscal year 2018 with a $0.7 million impact to beginning retained earnings. 

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business .  The update states that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business, and should be treated as an asset acquisition instead. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods.  Early adoption is permitted under specific circumstances, including in an interim period, with prospective application. The Company adopted this ASU and applied the related guidance to an asset acquisition in the first quarter of fiscal year 2018.

In January 2017, the FASB issued ASU 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. 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, which will be applied prospectively.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU applies to any company that changes the terms or conditions of a share-based award, considered a modification. Modification accounting would be applied unless certain conditions were met related to the fair value of the award, the vesting conditions and the classification of the modified award. This ASU is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The standard should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the financial statement impact of this ASU.

3. Marketable Securities

The Company’s investments that have original maturities greater than 90 days have been classified as available-for-sale securities in accordance with U.S. GAAP.  Marketable securities are categorized on the consolidated condensed balance sheet as short- and long-term marketable securities, as appropriate.

The following table is a summary of available-for-sale securities at December 30, 2017 (in thousands):

																
As of December 30, 2017	Amortized
Cost	 	Gross
Unrealized
Gains	 	Gross
Unrealized
Losses	 	Estimated
Fair Value
(Net Carrying
Amount)	
Corporate debt securities	$	174,603		 	$	5		 	$	(787	)	 	$	173,821		
Non-US government securities	11,819		 	—		 	(58	)	 	11,761		
Certificates of deposit	500		 	—		 	—		 	500		
Agency discount notes	459		 	—		 	(2	)	 	457		
Total securities	$	187,381		 	$	5		 	$	(847	)	 	$	186,539		
    
The Company typically invests in highly-rated securities with original maturities generally ranging from one to three years. The Company's specifically identified gross unrealized loss of $847 thousand related to securities with total amortized cost of approximately $181.0 million at December 30, 2017 .   No securities have been in a continuous unrealized loss position for more than 12 months as of December 30, 2017 . 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 December 30, 2017 , the Company does not consider any of its investments to be other-than-temporarily impaired.   

The following table is a summary of available-for-sale securities at March 25, 2017 (in thousands):
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8

	
																
As of March 25, 2017	Amortized
Cost	 	Gross
Unrealized
Gains	 	Gross
Unrealized
Losses	 	Estimated
Fair Value
(Net Carrying
Amount)	
Corporate debt securities	33,350		 	$	—		 	$	(20	)	 	$	33,330		
Commercial paper	66,518		 	—		 	(35	)	 	66,483		
Total securities	$	99,868		 	$	—		 	$	(55	)	 	$	99,813		

The Company’s specifically identified gross unrealized losses of $55 thousand related to securities with total amortized cost of approximately $99.9 million at March 25, 2017 . Four securities had been in a continuous loss position for more than 12 months as of March 25, 2017 .  The gross unrealized loss on these securities was less than one percent of the position value.  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 25, 2017 , 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 securities by contractual maturities were as follows (in thousands):
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	December 30, 2017	 	March 25, 2017	
	Amortized	 	Estimated	 	Amortized	 	Estimated	
	Cost	 	Fair Value	 	Cost	 	Fair Value	
Within 1 year	$	12,846		 	$	12,822		 	$	99,868		 	$	99,813		
After 1 year	174,535		 	173,717		 	—		 	—		
Total	$	187,381		 	$	186,539		 	$	99,868		 	$	99,813		

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4. 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, investment portfolio, pension plan assets / liabilities and contingent consideration.  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 (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 investment portfolio assets consist of debt securities, money market funds, and commercial paper and are reflected on our consolidated condensed balance sheets under the headings cash and cash equivalents, marketable securities, and long-term marketable securities.  The Company determines the fair value of its investment portfolio assets 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.

In connection with one of the Company’s prior acquisitions accounted for as a business combination, the Company reported contingent consideration based upon achievement of certain milestones.  This liability is classified as Level 3 and

9

valued using a discounted cash flow model.  The assumptions used in preparing the discounted cash flow include discount rate estimates and cash flow amounts.  See additional details below. 

Prior to paying off the Company’s long-term revolving facility in the first quarter of the current fiscal year, interest was applied at a base rate plus applicable margin or LIBOR plus applicable margin and the fair value of the revolving facility approximated carrying value.

As of  December 30, 2017 and March 25, 2017 , the Company classified all investment portfolio and pension plan assets and liabilities as Level 1 or Level 2 assets and liabilities.  The only Level 3 liability is the contingent consideration described above and below.  The Company has no Level 3 assets.  There were no transfers between Level 1, Level 2, or Level 3 measurements for the three months ending  December 30, 2017 . 

The following summarizes the fair value of our financial instruments at December 30, 2017 , exclusive of pension plan assets and liabilities (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	$	186,393		 	$	—		 	$	—		 	$	186,393		
 	 	 	 	 	 	 	 	
Available-for-sale securities	 		 	 		 	 		 	 		
Corporate debt securities	$	—		 	$	173,821		 	$	—		 	$	173,821		
Non-US government securities	—			11,761			—			11,761		
Certificates of deposit	—			500			—			500		
Agency discount notes	—			457			—			457		
﻿	$	—		 	$	186,539		 	$	—		 	$	186,539		
Liabilities:	 		 	 		 	 		 	 		
Other accrued liabilities	 		 	 		 	 		 	 		
Contingent consideration	$	—		 	$	—		 	$	671		 	$	671		

໿
The following summarizes the fair value of our financial instruments at March 25, 2017 , exclusive of pension plan assets and liabilities (in thousands):

10

	
																
﻿	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	$	313,982		 	$	—		 	$	—		 	$	313,982		
 	 	 	 	 	 	 	 	
Available-for-sale securities	 		 	 		 	 		 	 		
Corporate debt securities	$	—		 	$	33,330		 	$	—		 	$	33,330		
Commercial paper	 	 	66,483		 	—		 	66,483		
 	$	—		 	$	99,813		 	$	—		 	$	99,813		
Liabilities:	 		 	 		 	 		 	 		
Other accrued liabilities	 		 	 		 	 		 	 		
Contingent consideration	$	—		 	$	—		 	$	4,695		 	$	4,695		

Contingent consideration
The following summarizes the fair value of the liability for contingent consideration at December 30, 2017 : 

											
﻿	Maximum Value if Milestones Achieved
(in thousands)	 	Estimated Discount Rate (%)	 	Fair Value
(in thousands)	
Tranche B - 30 month earn out period	$	5,000		 	7.7	%	 	$	671		
The valuation of contingent consideration was initially based on a weighted-average discounted cash flow model.  The fair value is reviewed and estimated on a quarterly basis based on the probability of achieving defined milestones and current interest rates.  Significant changes in any of the unobservable inputs used in the fair value measurement of contingent consideration could result in a significantly lower or higher fair value.  An increase or decrease in the probability of achieving certain milestones within the earn out period would be accompanied by a directionally similar change in the fair value of the recorded liability.  A change in discount rate would be accompanied by a directionally opposite change in fair value.  Changes in the fair value of the recorded liability are reported in research and development expense in the consolidated condensed statements of income.  In the first quarter of the current fiscal year, changes in the probability of achieving certain milestones associated with Tranche B of the earn out were determined following a review of product shipment forecasts within the earn out period.  The revised estimates reduced the fair value of the liability as of December 30, 2017 as shown in the table below. The final amount of the liability will be determined at the end of the earn-out period early in the fourth quarter of the current fiscal year and necessary adjustments will be made at that time.
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﻿	Nine Months Ended	
﻿	December 30,	
﻿	2017	
﻿	(in thousands)	
Beginning balance	$	4,695		
Adjustment to estimates (research and development expense)	(4,049	)	
Fair value charge recognized in earnings (research and development expense)	25		
Ending balance	$	671		

5. Accounts Receivable, net

The following are the components of accounts receivable, net (in thousands):

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﻿	December 30,	 	March 25,	
﻿	2017	 	2017	
Gross accounts receivable	$	218,063		 	$	120,408		
Allowance for doubtful accounts	(444	)	 	(434	)	
Accounts receivable, net	$	217,619		 	$	119,974		
    
The increase in accounts receivable in the third quarter of the current fiscal year is due to the timing of sales and seasonality compared to the fourth quarter of fiscal year 2017.

6. Inventories

Inventories are comprised of the following (in thousands):

								
﻿	December 30,	 	March 25,	
﻿	2017	 	2017	
Work in process	$	102,670		 	$	83,332		
Finished goods	90,297		 	84,563		
﻿	$	192,967		 	$	167,895		

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7. Revolving Credit Facilities

On July 12, 2016, Cirrus Logic entered into an amended and restated credit agreement (the “Amended 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 Amended Credit Agreement provides for a $300 million senior secured revolving credit facility (the “Amended Facility”).  The Amended Facility matures on July 12, 2021.  The Amended Facility is required to be guaranteed by all of Cirrus Logic’s material domestic subsidiaries (the “Subsidiary Guarantors”).  The Amended Facility is secured by substantially all of the assets of Cirrus Logic and any Subsidiary Guarantors, except for certain excluded assets.

Borrowings under the Amended Facility may, at our 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 Amended Credit Agreement contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness to consolidated EBITDA for the prior four fiscal 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 Amended 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  December 30, 2017 , the Company had no amounts outstanding under the Amended Facility and was in compliance with all covenants under the Amended Credit Agreement.  

8. Pension Plan

As a result of the fiscal year 2015 acquisition of Wolfson Microelectronics, the Company now fully funds a defined benefit pension scheme (the “Scheme”), formerly maintained by Wolfson, for some of the employees in the United Kingdom.  The participants in the Scheme no longer accrue benefits and therefore the Company will not be required to make contributions in respect of future accruals. 

The Company elected to make a contribution of £1.5 million based on the latest triennial actuarial valuation in the first quarter of the current fiscal year. As of December 30, 2017 , the Scheme is in a net funded position (included within “ Other assets ” in the consolidated condensed balance sheet).  

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9. Income Taxes
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Our provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items and any applicable credits.

The following table presents the provision for income taxes (in thousands) and the effective tax rates: 

															
﻿	Three Months Ended	Nine Months Ended	
﻿	December 30,	 	December 24,	December 30,	 	December 24,	
﻿	2017	 	2016	2017	 	2016	
Income before income taxes	$	104,740		 	$	145,792		$	243,112		 	$	270,134		
Provision for income taxes	$	70,961		 	$	23,751		$	93,121		 	$	43,983		
Effective tax rate	67.7	%	 	16.3	%	38.3	%	 	16.3	%	
Our income tax expense was $71.0 million and $23.8 million for the third quarter of fiscal year 2018 and 2017 , respectively, resulting in effective tax rates of 67.7% and 16.3% for the third quarter of fiscal year 2018 and 2017 , respectively.  Our income tax expense was $93.1 million and $44.0 million for the first nine  months of fiscal year 2018 and 2017 , respectively, resulting in effective tax rates of 38.3% and 16.3% for the first nine  months of fiscal year 2018 and 2017 , respectively.  Our effective tax rate for the third quarter and first nine months of fiscal year 2018 was higher than the federal statutory rate primarily due to the impact of the legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act") enacted in the current quarter and described below, partially offset by income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and excess tax benefits from stock-based compensation. Our effective tax rate for the third quarter and first nine months of fiscal year 2017 was below the federal statutory rate primarily due to income earned in certain foreign jurisdictions taxed below the federal statutory rate, excess tax benefits from stock-based compensation, and the U.S. R&D tax credit.

The Tax Act was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate income tax rate from 35.0% to 21.0% , restricts the deductibility of certain business expenses, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred and creates new taxes on certain foreign sourced earnings, among other provisions. The reduction in the U.S. federal corporate income tax rate is effective January 1, 2018. The rate change is administratively effective at the beginning of our fiscal year 2018 , resulting in a blended U.S. federal corporate income tax rate of 31.6% for the annual period. This reduction in the statutory U.S. tax rate, when coupled with changes in the deductibility of certain business expenses that are also effective in fiscal year 2018 , resulted in an immaterial change to the estimated annual effective tax rate as of the third quarter of fiscal year 2018 . The discrete tax effects of the enactment of the Tax Act are described below.
As of the end of the third quarter of fiscal year 2018 , we have not completed our accounting for, and have made a reasonable estimate of, the income tax effects of the Tax Act. We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21.0% . We are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the measurement of these balances or give rise to new deferred tax amounts. The provisional amount recorded as a discrete component of income tax expense in the current quarter related to the remeasurement of our deferred tax balances was $6.1 million of tax expense. In addition, we recorded a provisional amount of $51.8 million for our one-time transition tax liability as a discrete component of income tax expense. The one-time transition tax is based on our total post-1986 earnings and profits (E&P) that were previously deferred from U.S. income taxes, and is based in part on the amount of those earnings held in cash and other specified assets. The amount may change when we finalize the calculation of E&P and finalize the amounts held in cash or other specified assets on the applicable measurement date.
The Company records unrecognized tax benefits for the estimated risk associated with tax positions taken on tax returns.  At  December 30, 2017 , the Company had unrecognized tax benefits of $36.2 million , all of which would impact the effective tax rate if recognized.  The Company recorded a gross decrease of $2.3 million due to the lapse of the statute of limitations in the first quarter of fiscal year 2018 applicable to a tax deduction claimed on a prior year tax return, as well as gross increases to its current year unrecognized tax benefits of $2.2 million , $2.8 million , and $2.6 million for the first, second and third quarters of fiscal year 2018 , respectively. The Company believes it is reasonably possible that the gross unrecognized tax benefits could decrease by approximately $1.1 million in the next 12 months due to the lapse of the statute of limitations

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applicable to a tax position taken on a prior year tax return. The Company’s total unrecognized tax benefits are classified as “ Other long-term liabilities” in the consolidated condensed balance sheets.
 
The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes.  As of  December 30, 2017 , the balance of accrued interest and penalties, net of tax, was $0.8 million . 

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions.  Fiscal years 2014 through 2017 remain open to examination by the major taxing jurisdictions to which the Company is subject, although carry forward attributes that were generated in tax years prior to fiscal year 2014 may be adjusted upon examination by the tax authorities if they have been, or will be, used in a future period.  The Company is not currently under an income tax audit in any major taxing jurisdiction.

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10. 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 awards (including restricted stock units and market stock units).

The following table details the calculation of basic and diluted earnings per share for the three and nine months ended  December 30, 2017 and  December 24, 2016 (in thousands, except per share amounts):
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﻿	Three Months Ended	 	Nine Months Ended	
﻿	December 30,	 	December 24,	 	December 30,	 	December 24,	
﻿	2017	 	2016	 	2017	 	2016	
Numerator:	 	 	 	 	 	 	 	
Net income	$	33,779		 	$	122,041		 	$	149,991		 	$	226,151		
Denominator:	 		 	 		 	 		 	 		
Weighted average shares outstanding	63,453		 	63,837		 	63,655		 	63,025		
Effect of dilutive securities	2,104		 	2,911		 	2,722		 	3,353		
Weighted average diluted shares	65,557		 	66,748		 	66,377		 	66,378		
Basic earnings per share	$	0.53		 	$	1.91		 	$	2.36		 	$	3.59		
Diluted earnings per share	$	0.52		 	$	1.83		 	$	2.26		 	$	3.41		

The weighted outstanding shares excluded from our diluted calculation for the three and nine  months ended December 30, 2017 were 824 thousand  and 273 thousand , respectively, as the shares were anti-dilutive. The weighted outstanding shares excluded from our diluted calculation for the three and nine months ended December 24, 2016 were 157 thousand and 208 thousand , respectively, as the shares were anti-dilutive. 

11. Legal Matters
From time to time, we are involved in legal proceedings concerning matters arising in connection with the conduct of our business activities.  We regularly evaluate the status of legal proceedings in which we are involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss or additional loss may have been incurred, and to determine if accruals are appropriate.  We further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made.    

Based on current knowledge, management does not believe that there are any pending matters that could potentially have a material adverse effect on our business, financial condition, results of operations or cash flows.  However, we are engaged in various legal actions in the normal course of business.  There can be no assurances in light of the inherent uncertainties involved in any potential legal proceedings, some of which are beyond our control, and an adverse outcome in any legal proceeding could be material to our results of operations or cash flows for any particular reporting period.

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12. Stockholders’ Equity

Common Stock  
 
The Company issued a net 0.6 million and 1.0 million shares of common stock during the three and nine  month periods ending December 30, 2017 , respectively, primarily pursuant to the Company's 2006 Stock Incentive Plan. The Company issued a net 0.9 million and 2.0 million shares of common stock during the three and nine month periods ending December 24, 2016 , respectively, primarily pursuant to the Company’s 2006 Stock Incentive Plan.     

Share Repurchase Program    
    
Since inception, $139.8 million of the Company’s common stock has been repurchased under the Company’s 2015  $200 million share repurchase program, leaving $60.2 million available for repurchase under this plan as of December 30, 2017 .  During the three and nine  months ended December 30, 2017 , respectively, the Company repurchased 0.4 million shares of its common stock, for $20.0 million , at an average cost of $55.01 per share and 2.0 million shares of its common stock, for $115.6 million , at an average cost of $58.89 per share.  All of these shares were repurchased in the open market and were funded from existing cash.  All shares of our common stock that were repurchased were retired as of December 30, 2017 .

13. Segment Information

We determine our operating segments in accordance with FASB guidelines.  Our Chief Executive Officer (“CEO”) has been identified as the chief operating decision maker under these guidelines. 

The Company operates and tracks its results in one reportable segment, but reports revenue performance in two product lines, Portable Audio and Non-Portable Audio and Other.  Our CEO receives and uses enterprise-wide financial information to assess financial performance and allocate resources, rather than detailed information at a product line level.  Additionally, our product lines have similar characteristics and customers.  They share support functions such as sales, public relations, supply chain management, various research and development and engineering support, in addition to the general and administrative functions of human resources, legal, finance and information technology.  Therefore, there is no complete, discrete financial information maintained for these product lines.
Revenues from our product lines are as follows (in thousands): 

																
﻿	Three Months Ended	 	Nine Months Ended	
﻿	December 30,	 	December 24,	 	December 30,	 	December 24,	
﻿	2017	 	2016	 	2017	 	2016	
Portable Audio Products	$	438,650		 	$	483,712		 	$	1,101,099		 	$	1,083,190		
Non-Portable Audio and Other Products	44,091		 	39,317		 	127,914		 	127,886		
﻿	$	482,741		 	$	523,029		 	$	1,229,013		 	$	1,211,076		

14. Subsequent Event

In January 2018, the Board of Directors authorized the repurchase of up to an additional  $200 million of the Company’s common stock, in addition to the  $60.2 million remaining from the Board’s previous share repurchase authorization in October 2015, described above in Note 12.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read along with the unaudited consolidated condensed financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended March 25, 2017, contained in our fiscal year 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on May 24, 2017.  We maintain a website at  investor.cirrus.com , which makes available free of charge our most recent annual report and all other filings we have made with the Commission. 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and certain information incorporated herein by reference contain forward-looking statements within the meaning of the Private Securities Litigation

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Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements are based on current expectations, estimates, forecasts and projections and the beliefs and assumptions of our management.  In some cases, forward-looking statements are identified by words such as “expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “estimates,” “intend,” and variations of these types of words and similar expressions which are intended to identify these forward-looking statements.  In addition, any statements that refer to our plans, expectations, strategies or other characterizations of future events or circumstances are forward-looking statements.  Readers are cautioned that these forward-looking statements are predictions and are subject to risks, uncertainties and assumptions that are difficult to predict.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see “Item 1A – Risk Factors” in our 2017 Annual Report on Form 10-K filed with the Commission on May 24, 2017, and in Part II, Item 1A “ Risk Factors ” within this quarterly report on Form 10-Q.  Readers should carefully review these risk factors, as well as those identified in other documents filed by us with the Commission. 

Overview

Cirrus Logic, Inc. (“Cirrus Logic,” “We,” “Us,” “Our,” or the “Company”) is a leader in high-performance, low-power integrated circuits (“ICs”) for audio and voice signal processing applications.  Cirrus Logic’s products span the entire audio signal chain, from capture to playback, providing innovative products for the world’s top smartphones, tablets, digital headsets, wearables and emerging smart home applications.

Critical Accounting Policies

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the unaudited consolidated condensed financial statements included in this report, which have been prepared in accordance with U.S. GAAP.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts.  We evaluate the estimates on an on-going basis.  We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions and conditions. 

There were no material changes in the first nine months of fiscal year 2018 to the information provided under the heading “ Critical Accounting Policies ” included in our fiscal year 2017 Annual Report on Form 10-K for the fiscal year ended March 25, 2017. 

Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606) .  The purpose of this ASU is to converge revenue recognition requirements per U.S. GAAP and International Financial Reporting Standards (“IFRS”).  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date  after public comment supported a proposal to delay the effective date of this ASU to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period.  The Company is currently in the process of reviewing our customers’ contracts in respect of performance obligation identification and satisfaction, pricing, warranties, and return rights, among other considerations. The process is substantially complete and the Company currently expects no material modifications to its financial statements upon adoption of this ASU. The standard may be adopted by full retrospective method, which applies retrospectively to each prior period presented, or by modified retrospective method with the cumulative effect adjustment recognized in beginning retained earnings as of the date of adoption. We anticipate using the modified retrospective adoption method.

     In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The FASB issued this update to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key leasing arrangement details .   Lessees would recognize operating leases on the balance sheet under this ASU — with the 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 would be recognized over the lease term.  For terms less than twelve months, a lessee would be permitted to make an

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accounting policy election to recognize lease expense for such leases generally on a straight-line basis over the lease term.  This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  The Company is currently evaluating the impact of this ASU on our financial statements.
    
In June 2016, the FASB issued ASU 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 the adoption of this ASU on our financial statements. 
    
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory .  This ASU relates to income tax consequences of non-inventory intercompany asset transfers.  This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods.  Early adoption is permitted, as of the beginning of an annual reporting period.  The guidance requires companies to apply a modified retrospective approach with a cumulative catch-up adjustment to beginning retained earnings in the period of adoption.  The Company early adopted this ASU in the first quarter of fiscal year 2018 with a $0.7 million impact to beginning retained earnings. 

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business .  The update states that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business, and should be treated as an asset acquisition instead. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods.  Early adoption is permitted under specific circumstances, including in an interim period, with prospective application. The Company adopted this ASU and applied the related guidance to an asset acquisition in the first quarter of fiscal year 2018.

In January 2017, the FASB issued ASU 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. 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, which will be applied prospectively.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU applies to any company that changes the terms or conditions of a share-based award, considered a modification. Modification accounting would be applied unless certain conditions were met related to the fair value of the award, the vesting conditions and the classification of the modified award. This ASU is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The standard should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the financial statement impact of this ASU.

Results of Operations  
Our fiscal year is the 52- or 53-week period ending on the last Saturday in March. Fiscal year 2018 included 53 weeks, with the extra week included in the third quarter. Fiscal year 2017 was a 52-week fiscal year.
    
The following table summarizes the results of our operations for the third quarter and first nine months of fiscal years  2018 and 2017 , respectively, as a percentage of net sales.  All percentage amounts were calculated using the underlying data in thousands, unaudited:  
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﻿	Three Months Ended	 	Nine Months Ended	
﻿	December 30,	 	December 24,	 	December 30,	 	December 24,	
﻿	2017	 	2016	 	2017	 	2016	
Net sales	100	%	 	100	%	 	100	%	 	100	%	
Gross margin	49	%	 	49	%	 	49	%	 	49	%	
Research and development	20	%	 	15	%	 	22	%	 	19	%	
Selling, general and administrative	8	%	 	6	%	 	7	%	 	8	%	
Income from operations	21	%	 	28	%	 	20	%	 	22	%	
Interest income	0	%	 	0	%	 	0	%	 	0	%	
Interest expense	0	%	 	0	%	 	0	%	 	0	%	
Other expense	0	%	 	0	%	 	0	%	 	0	%	
Income before income taxes	21	%	 	28	%	 	20	%	 	22	%	
Provision for income taxes	14	%	 	5	%	 	8	%	 	3	%	
Net income	7	%	 	23	%	 	12	%	 	19	%	

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Net Sales 

Net sales for the third quarter of fiscal year 2018 decreased $40.3 million , or 8 percent, to $482.7 million from $523.0 million in the third quarter of fiscal year 2017 .  Net sales from our portable audio products decreased $45.1 million , primarily due to a lower average selling price ("ASP") for components at a key Android original equipment manufacturer ("OEM") and ASP reductions on certain other portable audio products.  Non-portable audio and other product sales increased $4.8 million for the quarter versus the comparable period in the prior fiscal year.

Net sales for the first nine months of fiscal year 2018 increased $17.9 million , or 1 percent, to $1.23 billion from $1.21 billion for the first nine months of fiscal year 2017 .  Net sales from our portable audio products increased $17.9 million , or 2  percent, primarily due to increases in volumes on a number of portable audio components, partially offset by the ASP reductions, described above.  Non-portable audio and other product sales were relatively flat for the first nine months versus the comparable period in the prior fiscal year.

Sales outside of the Americas, including sales to U.S.-based customers that manufacture products overseas, either through foreign subsidiaries or third parties principally located in Asia, were approximately 98 percent of net sales for each of the third quarters of fiscal year 2018 and 2017 and 97 percent for each of the first nine months of fiscal year 2018 and 2017 .  Our sales are denominated primarily in U.S. dollars.  No foreign currency hedging contracts were entered into in the first nine months of fiscal year 2018 or 2017 .    

Since the components we produce are largely proprietary, we consider our end customer to be the entity specifying the use of our component in their design. These end customers may purchase our products directly from us, from an external sales representative or distributor, or through a third-party manufacturer contracted to produce their designs.  For each of the third quarters of fiscal years 2018 and 2017 , our ten largest end customers represented approximately 94 percent of our net sales. For the first nine months of fiscal years 2018 and 2017 , our ten largest customers represented approximately 93 percent and 92 percent of our net sales, respectively.           

We had one end customer, Apple Inc., that purchased through multiple contract manufacturers and represented approximately 86 percent and 85 percent of the Company’s total net sales for the third  quarter of fiscal years 2018 and 2017 , respectively.  This same customer represented approximately 82 percent and 79 percent of the Company's total net sales for the first nine months of fiscal years 2018 and 2017 . 
 
No other end customer or distributor represented more than 10 percent of net sales for the three and nine months ending December 30, 2017 and December 24, 2016 .

For more information, please see Part II—Item 1A—Risk Factors— “We depend on a limited number of customers and distributors for a substantial portion of our sales, and the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor could significantly reduce our sales and our profitability.”

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Gross Margin

Gross margin was 48.7 percent in the third quarter of fiscal year 2018 , down from 48.8 percent in the third quarter of fiscal year 2017 . The decrease was primarily driven by higher scrap and reserve expense in the current fiscal quarter, mostly offset by favorable mix.    

Gross margin was 49.5 percent for the first nine months of fiscal year 2018 up from 49.0 percent for the first nine months of fiscal year 2017 . The increase was primarily due to supply chain efficiencies.

Research and Development Expense

Research and development expense for the third quarter of fiscal year 2018 was $97.0 million , an increase of $20.9 million , or 27 percent, from $76.1 million in the third quarter of fiscal year 2017 .  The primary drivers for this increase were related to salary and employee-related expenses, including facilities-related costs, following a 14 percent increase in headcount, the absence of a sales tax refund that occurred in the third quarter of fiscal year 2017, increased amortization of acquisition-related intangibles and higher product development costs, including tape-outs .

Research and development expense for the first nine months of fiscal year 2018 was $270.9 million , an increase of $45.2 million , or 20 percent, from $225.7 million for the first nine months of fiscal year 2017 . Driving the increase were higher salary and employee-related expenses following increases in headcount. The increased headcount also drove corresponding facilities-related costs higher for the period. Amortization of acquisition-related intangibles, product development expenses, including tape-outs, and the absence of a sales tax refund that occurred in the third quarter of fiscal year 2017 also contributed to the increase.
 
Selling, General and Administrative Expense

Selling, general and administrative expense for the third quarter of fiscal year 2018 was $34.6 million , an increase of $1.7 million , or 5  percent, from $32.9 million in the third quarter of fiscal year 2017 , primarily due to increased employment expenses for the period due to a 6 percent increase in headcount from third quarter fiscal year 2017 to third quarter fiscal year 2018.  

Selling, general and administrative expense for the first nine months of fiscal year 2018 was $95.5 million , representing no material change from $95.5 million for the first nine months of fiscal year 2017 .  
 
Interest Income
The Company reported interest income of $1.2 million and $3.1 million for the three and nine months ended December 30, 2017 , respectively, and $0.4 million and $1.0 million for the three and nine months ended December 24, 2016 , respectively. Interest income increased in the current fiscal year due to higher average cash, cash equivalents and marketable securities balances for the periods presented.

Interest Expense
The Company reported interest expense of $0.3 million and $0.9 million for the three and nine months ended December 30, 2017 , respectively, and $0.8 million and $3.0 million for the three and nine months ended December 24, 2016 , respectively.  Interest expense decreased in the current fiscal year due to the repayment of the revolving credit facility described in Note 7.

Other Income (Expense)
For each of the three and nine months ended December 30, 2017 , the Company reported $0.3 million in other income and $0.8 million in other expense, and less than $0.1 million and $0.2 million , respectively, in other expense for the three and nine months ended December 24, 2016 , primarily related to remeasurement on foreign currency denominated monetary assets and liabilities.     

19

Income Taxes
Our provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items and any applicable credits. 

The following table presents the provision for income taxes (in thousands) and the effective tax rates:

																
﻿	Three Months Ended	 	Nine Months Ended	
﻿	December 30,	 	December 24,	 	December 30,	 	December 24,	
﻿	2017	 	2016	 	2017	 	2016	
Income before income taxes	$	104,740		 	$	145,792		 	$	243,112		 	$	270,134		
Provision for income taxes	$	70,961		 	$	23,751		 	$	93,121		 	$	43,983		
Effective tax rate	67.7	%	 	16.3	%	 	38.3	%	 	16.3	%	
Our income tax expense was $71.0 million and $23.8 million for the third quarter of fiscal year 2018 and 2017 , respectively, resulting in effective tax rates of 67.7% and 16.3% for the third quarter of fiscal year 2018 and 2017 , respectively.  Our income tax expense was $93.1 million and $44.0 million for the first nine  months of fiscal year 2018 and 2017 , respectively, resulting in effective tax rates of 38.3% and 16.3% for the first nine  months of fiscal year 2018 and 2017 , respectively.  Our effective tax rate for the third quarter and first nine months of fiscal year 2018 was higher than the federal statutory rate primarily due to the impact of the Tax Act enacted in the current quarter, offset in part by income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and excess tax benefits from stock-based compensation. Our effective tax rate for the third quarter and first nine months of fiscal year 2017 was below the federal statutory rate primarily due to income earned in certain foreign jurisdictions taxed below the federal statutory rate, excess tax benefits from stock-based compensation, and the U.S. R&D tax credit.

The Tax Act was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate income tax rate from 35.0% to 21.0% , restricts the deductibility of certain business expenses, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred and creates new taxes on certain foreign sourced earnings, among other provisions. The reduction in the U.S. federal corporate income tax rate is effective January 1, 2018. The rate change is administratively effective at the beginning of our fiscal year 2018 , resulting in a blended U.S. federal corporate income tax rate of 31.6% for the annual period. This reduction in the statutory U.S. tax rate, when coupled with changes in the deductibility of certain business expenses that are also effective in fiscal year 2018 , resulted in an immaterial change to the estimated annual effective tax rate as of the third quarter of fiscal year 2018 . In addition, we recorded $57.9 million of income tax expense in the third quarter of fiscal year 2018 as a provisional estimate of the discrete tax effects of the Tax Act.  See Note 9, Income Taxes.

Liquidity and Capital Resources 

We require cash to fund our operating expenses and working capital requirements, including outlays for inventory, capital expenditures, share repurchases, investments in marketable securities, and strategic acquisitions.  Our principal sources of liquidity are cash on hand, cash generated from operations, cash generated from the sale and maturity of marketable securities, and borrowings under our $300 million senior secured revolving credit facility. 

Cash generated by operating activities is net income adjusted for certain non-cash items and changes in working capital.  Cash flow from operations was $213.0 million for the first nine months of fiscal year 2018 as compared to $244.9 million generated from operations for the corresponding period of fiscal year 2017 .  The cash flow from operations during the current period of fiscal year 2018 was related to the cash components of our net income, offset by a $42.4 million unfavorable change in working capital, primarily as a result of increases in accounts receivable and inventories, partially offset by increases in accounts payable and taxes payable.  The cash flow from operations during the corresponding period of fiscal year 2017 was related to the cash components of our net income, partially offset by a $61.1 million unfavorable change to working capital, primarily as a result of increases in accounts receivable and inventories, partially offset by an increase in accounts payable.       

Net cash used in investing activities was $149.2 million during the first nine months of fiscal year 2018 as compared to $26.4 million used in investing activities during the first nine months of fiscal year 2017 .  The cash used in investing activities in the current period is primarily related to net purchases of marketable securities of $87.3 million , and capital expenditures and technology investments of $41.7 million .  In addition, the Company purchased certain tangible and intangible assets for $20.2 million as part of a technology acquisition. The cash used in investing activities in the corresponding period in

20

fiscal year 2017 was primarily related to net maturities and sales of marketable securities of $8.9 million , and capital expenditures and technology investments of $35.3 million .

Net cash used in financing activities was $188.3 million during the first nine months of fiscal year 2018 .  The cash used during the first nine months of fiscal year 2018 was primarily associated with stock repurchases of $115.6 million and $60.0 million in payments against the long-term revolver.  The cash used in financing activities was $76.9 million for the first nine months of fiscal year 2017 .  The use of cash was primarily associated with  $60.4 million in payments against the Company's Amended Facility described below, stock repurchases during the period of $15.4 million , and debt issuance costs of $2.2 million .

Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies and the expansion of our sales and marketing activities. While we expect our offshore cash to represent a greater portion of our total cash over time, we believe our expected future cash earnings, existing cash, cash equivalents, investment balances, and available borrowings under our Amended Facility will be sufficient to meet our capital requirements both domestically and internationally, through at least the next 12 months, although we could be required, or could elect, to seek additional funding prior to that time.
Revolving Credit Facilities

On July 12, 2016, Cirrus Logic entered into an amended and restated credit agreement (the “Amended Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent, and the Lenders party thereto, for the purpose of refinancing the Credit Facility and providing ongoing working capital.  The Amended Credit Agreement provides for a $300 million senior secured revolving credit facility (the “Amended Facility”).  The Amended Facility matures on July 12, 2021.  Cirrus Logic must repay the outstanding principal amount of all borrowings, together with all accrued but unpaid interest thereon, on the maturity date.  The Amended Facility is required to be guaranteed by all of Cirrus Logic’s material domestic subsidiaries (the “Subsidiary Guarantors”).  The Amended 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 Amended Facility may, at our 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 Amended Credit Agreement contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness to consolidated EBITDA for the prior four fiscal 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 Amended 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 December 30, 2017 , the Company had no amounts outstanding under the Amended Facility and was in compliance with all covenants under the Amended Credit Agreement.  

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks associated with interest rates on our debt securities, currency movements on non-U.S. dollar denominated assets and liabilities, and the effect of market factors on the value of our marketable securities.  We assess these risks on a regular basis and have established policies that are designed to protect against the adverse effects of these and other potential exposures.  For a description of our market risks, see “ Part II – Item 7A – Quantitative and Qualitative Disclosures about Market Risk” in our fiscal year 2017 Annual Report on Form 10-K filed with the Commission on May 24, 2017.  There have been no significant changes to our exposure to market risks since we filed our fiscal year 2017 Annual Report on Form 10-K. 

ITEM 4.  CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures

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As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our chief executive officer (CEO) and chief financial officer (CFO), the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Form 10-Q.  Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Commission rules and forms and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. 
Based upon the evaluation, our management, including our CEO and CFO, has concluded that our disclosure controls and procedures were effective as of December 30, 2017 .
Changes in control over financial reporting

There has been no change in the Company’s internal control over financial reporting during the quarter ended December 30, 2017 , that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Information regarding legal proceedings to which the Company is a party is set forth in Note 11 – Legal Matters to our unaudited consolidated condensed financial statements and is incorporated herein by reference. 

ITEM 1A. RISK FACTORS
In evaluating all forward-looking statements, you should specifically consider risk factors that may cause actual results to vary from those contained in the forward-looking statements.  Various risk factors associated with our business are included in our Annual Report on Form 10-K for the year ended March 25, 2017, as filed with the Commission on May 24, 2017, and available at www.sec.gov.  Other than as set forth below, there have been no material changes to those risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended March 25, 2017.

We depend on a limited number of customers and distributors for a substantial portion of our sales, and the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor could significantly reduce our sales and our profitability.  

While we generate sales from a broad base of customers worldwide, the loss of any of our key customers, or a significant reduction in sales or selling prices to any key customer, or reductions in selling prices made to retain key customer relationships, would significantly reduce our revenue, margins and earnings and adversely affect our business.    For the first nine months of fiscal years 2018 and 2017, our ten largest customers represented approximately 93 percent and 92 percent, respectively, of our net sales.  We had one end customer, Apple Inc. that purchased through multiple contract manufacturers and represented approximately 82 percent and 79 percent of the Company’s total net sales for the first nine months of fiscal years 2018 and 2017, respectively.  
 
We had no distributors that represented more than 10 percent of our sales for the nine month period ending  December 30, 2017 , or December 24, 2016 .  No other end customer or distributor represented more than 10 percent of net sales for the nine month period ending  December 30, 2017 , or December 24, 2016 .

We may not be able to maintain or increase sales to certain of our key customers for a variety of reasons, including the following: 
		
•	most of our customers can stop incorporating our products into their own products with limited notice to us and suffer little or no penalty;	
		
•	our agreements with our customers typically do not require them to purchase a minimum quantity of our products;	
		
•	many of our customers have pre-existing or concurrent relationships with our current or potential competitors that may affect the customers’ decisions to purchase our products;	

22

		
•	our customers face intense competition from other manufacturers that do not use our products; and	
		
•	our customers regularly evaluate alternative sources of supply in order to diversify their supplier base, which increases their negotiating leverage with us and their ability to obtain components from alternative sources.	

In addition, our dependence on a limited number of key customers may make it easier for key customers to pressure us to reduce the prices of the products we sell to them.  We have experienced pricing pressure from certain key customers, and we expect that the average selling prices for certain of our products will decline, reducing our revenue, our margins, and our earnings.

Our key customer relationships often require us to develop new products that may involve significant technological challenges.  Our customers frequently place considerable pressure on us to meet their tight development schedules.  In addition, we may from time to time enter into customer agreements providing for exclusivity periods during which we may only sell specified products or technologies to that customer.   Accordingly, we may have to devote a substantial amount of resources to strategic relationships, which could detract from or delay our completion of other important development projects or the development of next generation products and technologies. 

The final impacts of the Tax Cuts and Jobs Act could be materially different from our current estimates.

The legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate income tax rate from 35% to 21%, restricts the deductibility of certain business expenses, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred from U.S. tax and creates new U.S. taxes on certain foreign sourced earnings, among other provisions. In the third quarter of fiscal year 2018, which is the period of enactment, we have made a reasonable estimate of the effects of the Tax Act and recognized a provisional amount that is included as a component of income tax expense from continuing operations. This provisional amount is based on management's current knowledge and assumptions. Final amounts could be materially different from current estimates based on further analysis of the tax law changes or on additional guidance from Treasury, the IRS, the Commission, or the FASB.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
The following table provides information about purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the three months ended December 30, 2017 (in thousands, except per share amounts):

														
Monthly Period	Total Number of Shares Purchased	 	Average Price Paid Per Share	 	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	 	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)	
September 24, 2017 -
October 21, 2017	—		 	$	—		 	—		 	$	—		
October 22, 2017 -
November 18, 2017	182		 	55.07		 	182		 	70,227		
November 19, 2017 -
December 30, 2017	182		 	54.96		 	182		 	60,227		
Total	364		 	$	55.01		 	364		 	$	60,227		
(1) The Company currently has one active share repurchase program: the $200 million share repurchase program authorized by the Board of Directors in October 2015. The repurchases are to be funded from existing cash and intended to be effected from time to time in accordance with applicable securities laws through the open market or in privately negotiated transactions. The timing of the repurchases and the actual amount purchased depend on a variety of factors including general market and economic conditions and other corporate considerations. The program does not have an expiration date, does not obligate the Company to repurchase any particular amount of common stock, and may be modified or suspended at any time at the Company's discretion. The Company repurchased 0.4 million shares of its common stock for $20.0 million during the third quarter of fiscal year 2018. All of these shares were repurchased in the open market and were funded from existing cash. All shares of our common stock that were repurchased were retired as of December 30, 2017 .

໿

23

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION
None.

ITEM 6.  EXHIBITS

The following exhibits are filed as part of or incorporated by reference into this Report:

໿

		
3.1	Certificate of Incorporation of Registrant, filed with the Delaware Secretary of State on August 26, 1998.  (1)	
3.2	Amended and Restated Bylaws of Registrant. (2)	
31.1	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
31.2	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
32.1	Certification of Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
32.2	Certification of Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
101.INS	XBRL Instance Document	
101.SCH	XBRL Taxonomy Extension Schema Document	
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	
		
(1)	Incorporated by reference from Registrant’s Report on Form 10-K for the fiscal year ended March 31, 2001, filed with the Commission on June 22, 2001 (Registration No. 000-17795).	
		
(2)	Incorporated by reference from Registrant’s Report on Form 8-K filed with the Commission on September 20, 2013 (Registration No. 000-17795).	

The exhibits required to be filed pursuant to the requirements of Item 601 of Regulation S-K are set forth in the Exhibit Index list noted above and are incorporated herein by reference.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CIRRUS LOGIC, INC.

				
Date:	February 5, 2018	/s/ Thurman K. Case	 	
 	 	 	 	
 	 	Thurman K. Case	 	
 	 	 	 	
 	 	Vice President, Chief Financial Officer and Principal Accounting Officer	

24

CERTIFICATION
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jason P. Rhode, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Cirrus Logic, Inc.;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

				
Date:	February 5, 2018	/s/ Jason P. Rhode	 	
 	 	 	 	
 	 	Jason P. Rhode	 	
 	 	 	 	
 	 	President and Chief Executive Officer	 	

CERTIFICATION
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Thurman K. Case, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Cirrus Logic, Inc.;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

				
Date:	February 5, 2018	/s/ Thurman K. Case	 	
 	 	 	 	
 	 	Thurman K. Case	 	
 	 	 	 	
 	 	Chief Financial Officer and Principal Accounting Officer	 	

Certification Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Cirrus Logic, Inc. (the “Company”) on Form 10-Q for the period ended  December 30, 2017 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thurman K. Case, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d), of the Securities Exchange Act of 1934, as amended; and	

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

				
Date:	February 5, 2018	/s/ Jason P. Rhode	 	
 	 	 	 	
 	 	Jason P. Rhode	 	
 	 	 	 	
 	 	President and Chief Executive Officer	 	

Certification Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Cirrus Logic, Inc. (the “Company”) on Form 10-Q for the period ended  December 30, 2017 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thurman K. Case, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d), of the Securities Exchange Act of 1934, as amended; and	

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

				
Date:	February 5, 2018	/s/ Thurman K. Case	 	
 	 	 	 	
 	 	Thurman K. Case	 	
 	 	 	 	
 	 	Chief Financial Officer and Principal Accounting Officer