CIRRUS LOGIC, INC., 10-K filed on 5/21/2021
Annual Report
v3.21.1
Cover - USD ($)
12 Months Ended
Mar. 27, 2021
May 19, 2021
Sep. 26, 2020
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Mar. 27, 2021    
Current Fiscal Year End Date --03-27    
Document Transition Report false    
Entity File Number 0-17795    
Entity Registrant Name CIRRUS LOGIC, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 77-0024818    
Entity Address, Address Line One 800 W. 6th Street    
Entity Address, City or Town Austin,    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 78701    
City Area Code (512)    
Local Phone Number 851-4000    
Title of 12(g) Security Common stock, $0.001 par value    
Trading Symbol CRUS    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Smaller Reporting Company false    
Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 2,238,559,321
Entity Common Stock, Shares Outstanding (in shares)   57,525,391  
Documents Incorporated by Reference Certain information contained in the registrant’s proxy statement for its annual meeting of stockholders to be held July 30, 2021 is incorporated by reference in Part II – Item 5 and Part III of this Annual Report on Form 10-K.    
Amendment Flag false    
Entity Central Index Key 0000772406    
Document Fiscal Year Focus 2021    
Document Fiscal Period Focus FY    
v3.21.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 27, 2021
Mar. 28, 2020
Current assets:    
Cash and cash equivalents $ 442,164 $ 292,119
Marketable securities 55,697 22,008
Accounts receivable, net 108,712 153,998
Inventories 173,263 146,725
Prepaid assets 37,576 23,594
Other current assets 25,107 11,752
Total current assets 842,519 650,196
Long-term marketable securities 312,759 283,573
Right-of-use lease assets 133,548 141,274
Property and equipment, net 154,942 158,244
Intangibles, net 22,031 34,430
Goodwill 287,518 287,088
Deferred tax assets 9,977 10,052
Other assets 67,320 27,820
Total assets 1,830,614 1,592,677
Current liabilities:    
Accounts payable 102,744 78,412
Accrued salaries and benefits 54,849 42,439
Software license agreements 28,006 10,888
Current lease liabilities 14,573 13,580
Other accrued liabilities 13,438 13,318
Total current liabilities 213,610 158,637
Long-term liabilities:    
Software license agreements 36,096 3,806
Non-current income taxes 64,020 71,143
Non-current lease liabilities 127,883 129,312
Total long-term liabilities 227,999 204,261
Stockholders’ equity:    
Preferred stock, 5.0 million shares authorized but unissued 0 0
Common stock, $0.001 par value, 280,000 shares authorized, 57,652 shares and 58,242 shares issued and outstanding at March 27, 2021 and March 28, 2020, respectively 58 58
Additional paid-in capital 1,498,761 1,434,871
Accumulated deficit (112,689) (201,681)
Accumulated other comprehensive income (loss) 2,875 (3,469)
Total stockholders’ equity 1,389,005 1,229,779
Total liabilities and stockholders’ equity $ 1,830,614 $ 1,592,677
v3.21.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 27, 2021
Mar. 28, 2020
Statement of Financial Position [Abstract]    
Preferred stock, shares authorized but unissued (in shares) 5,000,000.0 5,000,000.0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 280,000,000 280,000,000
Common stock, shares issued (in shares) 57,652,000 58,242,000
Common stock, shares outstanding (in shares) 57,652,000 58,242,000
v3.21.1
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Mar. 27, 2021
Mar. 28, 2020
Mar. 30, 2019
Income Statement [Abstract]      
Net sales $ 1,369,230 $ 1,281,124 $ 1,185,524
Cost of sales 661,929 606,957 588,027
Gross profit 707,301 674,167 597,497
Operating expenses      
Research and development 342,759 347,647 375,139
Selling, general and administrative 127,008 131,115 126,502
Restructuring costs 352 21,925 0
Gain on sale of assets 0 0 (4,913)
Total operating expenses 470,119 500,687 496,728
Income from operations 237,182 173,480 100,769
Interest income 6,281 10,458 8,017
Interest expense (1,057) (1,057) (1,057)
U.K. pension settlement 0 0 (13,768)
Other income (expense) 2,840 (1,615) (217)
Income before income taxes 245,246 181,266 93,744
Provision for income taxes 27,902 21,768 3,753
Net income $ 217,344 $ 159,498 $ 89,991
Basic earnings per share (in dollars per share) $ 3.74 $ 2.74 $ 1.50
Diluted earnings per share (in dollars per share) $ 3.62 $ 2.64 $ 1.46
Basic weighted average common shares outstanding (in shares) 58,106 58,317 60,116
Diluted weighted average common shares outstanding (in shares) 60,060 60,462 61,583
v3.21.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Mar. 27, 2021
Mar. 28, 2020
Mar. 30, 2019
Statement of Comprehensive Income [Abstract]      
Net income $ 217,344 $ 159,498 $ 89,991
Other comprehensive income (loss), before tax      
Foreign currency translation gain (loss) 1,862 68 (3,125)
Unrealized gain (loss) on marketable securities 5,673 (2,803) 2,823
U.K. pension settlement 0 0 13,814
Cumulative effect of adoption of ASU 2018-02 0 (257) 0
Benefit (provision) for income taxes (1,191) 589 (3,217)
Comprehensive income $ 223,688 $ 157,095 $ 100,286
v3.21.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Mar. 27, 2021
Mar. 28, 2020
Mar. 30, 2019
Cash flows from operating activities:      
Net income $ 217,344 $ 159,498 $ 89,991
Adjustments to net cash provided by operating activities:      
Depreciation and amortization 47,083 68,237 79,826
Stock-based compensation expense 56,762 53,757 49,689
Deferred income taxes (5,581) (5,888) 1,717
(Gain) loss on retirement or write-off of long-lived assets 371 379 (2,713)
Charges for defined benefit pension plan 0 0 11,189
Other non-cash (gains) / charges (622) 697 429
MEMS restructuring charges 352 21,925 0
Net change in operating assets and liabilities:      
Accounts receivable, net 45,286 (33,082) (14,316)
Inventories (26,538) 17,765 40,636
Other assets 843 1,379 965
Accounts payable 21,104 27,626 (21,965)
Accrued salaries and benefits 12,410 11,470 (6,432)
Income taxes payable (18,185) (9,809) (7,974)
Other accrued liabilities (1,684) (18,139) (14,348)
Net cash provided by operating activities 348,945 295,815 206,694
Cash flows from investing activities:      
Maturities and sales of available-for-sale marketable securities 168,328 170,818 70,840
Purchases of available-for-sale marketable securities (225,528) (249,463) (98,864)
Purchases of property, equipment and software (18,253) (15,656) (31,615)
Investments in technology (2,222) (5,920) (4,143)
Proceeds from the sale of assets 0 0 9,120
Net cash used in investing activities (77,675) (100,221) (54,662)
Cash flows from financing activities:      
Issuance of common stock, net of shares withheld for taxes 7,128 18,635 1,616
Repurchase of stock to satisfy employee tax withholding obligations (18,367) (18,280) (13,083)
Repurchase and retirement of common stock (109,986) (120,002) (159,997)
Net cash used in financing activities (121,225) (119,647) (171,464)
Net increase (decrease) in cash and cash equivalents 150,045 75,947 (19,432)
Cash and cash equivalents at beginning of period 292,119 216,172 235,604
Cash and cash equivalents at end of period 442,164 292,119 216,172
Cash payments during the year for:      
Income taxes 28,988 22,321 20,617
Interest $ 610 $ 457 $ 612
v3.21.1
Consolidated Statements of Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Deficit
Cumulative Effect, Period of Adoption, Adjustment
Accumulated Other Comprehensive Income / (Loss)
Accumulated Other Comprehensive Income / (Loss)
Cumulative Effect, Period of Adoption, Adjustment
Balance (in shares) at Mar. 31, 2018     61,960          
Balance at Mar. 31, 2018 $ 1,161,728   $ 62 $ 1,312,372 $ (139,345)   $ (11,361)  
Net income 89,991       89,991      
Change in unrealized gain (loss) on marketable securities, net of tax 2,231           2,231  
Change in defined benefit pension plan liability, net of tax 11,189           11,189  
Change in foreign currency translation adjustments (3,125)           (3,125)  
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (in shares)     964          
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (11,466)   $ 1 1,616 (13,083)      
Repurchase and retirement of common stock (in shares)     (3,970)          
Repurchase and retirement of common stock (159,997)   $ (4)   (159,993)      
Amortization of deferred stock compensation 49,689     49,689        
Balance (in shares) at Mar. 30, 2019     58,954          
Balance at Mar. 30, 2019 1,140,240   $ 59 1,363,677 (222,430)   (1,066)  
Balance (Accounting Standards Update 2016-02) at Mar. 30, 2019   $ (726)       $ (726)    
Balance (Accounting Standards Update 2018-02) at Mar. 30, 2019   $ 0       $ 257   $ (257)
Net income 159,498       159,498      
Change in unrealized gain (loss) on marketable securities, net of tax (2,214)           (2,214)  
Change in foreign currency translation adjustments 68           68  
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (in shares)     1,418          
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes 355   $ 1 18,634 (18,280)      
Repurchase and retirement of common stock (in shares)     (2,130)          
Repurchase and retirement of common stock (120,002)   $ (2)   (120,000)      
Amortization of deferred stock compensation 52,560     52,560        
Balance (in shares) at Mar. 28, 2020     58,242          
Balance at Mar. 28, 2020 1,229,779   $ 58 1,434,871 (201,681)   (3,469)  
Net income 217,344       217,344      
Change in unrealized gain (loss) on marketable securities, net of tax 4,482           4,482  
Change in foreign currency translation adjustments 1,862           1,862  
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (in shares)     862          
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes (11,238)   $ 1 7,128 (18,367)      
Repurchase and retirement of common stock (in shares)     (1,452)          
Repurchase and retirement of common stock (109,986)   $ (1)   (109,985)      
Amortization of deferred stock compensation 56,762     56,762        
Balance (in shares) at Mar. 27, 2021     57,652          
Balance at Mar. 27, 2021 $ 1,389,005   $ 58 $ 1,498,761 $ (112,689)   $ 2,875  
v3.21.1
Description of Business
12 Months Ended
Mar. 27, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business Description of Business
Description of Business
Cirrus Logic, Inc. (“Cirrus Logic,” “We,” “Us,” “Our,” or the “Company”) is a leader in low-power, high-precision mixed-signal processing solutions that create innovative user experiences for the world’s top mobile and consumer applications.
We were incorporated in California in 1984, became a public company in 1989, and were reincorporated in the State of Delaware in February 1999. Our primary facility housing engineering, sales and marketing, and administration functions is located in Austin, Texas. We also have offices in various other locations in the United States, United Kingdom, and Asia, including the People’s Republic of China, Hong Kong, South Korea, Japan, Singapore, and Taiwan. Our common stock, which has been publicly traded since 1989, is listed on the NASDAQ's Global Select Market under the symbol CRUS.
Basis of Presentation
We prepare financial statements on a 52- or 53-week year that ends on the last Saturday in March. Fiscal years 2021, 2020 and 2019 were 52-week years.
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Reclassifications
Certain reclassifications have been made to prior year balances in order to conform to the current year’s presentation of financial information.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires the use of management estimates. These estimates are subjective in nature and involve judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at fiscal year-end and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.
v3.21.1
Summary of Significant Accounting Policies
12 Months Ended
Mar. 27, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of money market funds, commercial paper, and U.S. Government Treasury and Agency instruments with original maturities of three months or less at the date of purchase.
Inventories
We use the lower of cost or net realizable value to value our inventories, with cost being determined on a first-in, first-out basis. One of the factors we consistently evaluate in the application of this method is the extent to which products are accepted into the marketplace. By policy, we evaluate market acceptance based on known business factors and conditions by comparing forecasted customer unit demand for our products over a specific future period, or demand horizon, to quantities on hand at the end of each accounting period.
On a quarterly and annual basis, we analyze inventories on a part-by-part basis. Product life cycles and the competitive nature of the industry are factors considered in the evaluation of customer unit demand at the end of each quarterly accounting period. Inventory on-hand in excess of forecasted demand is considered to have reduced market value and, therefore, the cost basis is adjusted to the lower of cost or net realizable value. Typically, market values for excess or obsolete inventories are considered to be zero. Inventory charges recorded for excess and obsolete inventory, including scrapped inventory, were $1.2 million and $2.8 million, in fiscal year 2021 and 2020, respectively. Inventory charges in fiscal year 2021 and 2020 related to a combination of quality issues and inventory exceeding demand.
Inventories were comprised of the following (in thousands):
 
March 27, 2021March 28, 2020
Work in process$92,073 $82,494 
Finished goods81,190 64,231 
$173,263 $146,725 
Property, Plant and Equipment, net
Property, plant and equipment is recorded at cost, net of depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over estimated economic lives, ranging from 3 to 39 years. Leasehold improvements are depreciated over the shorter of the term of the lease or the estimated useful life. Furniture, fixtures, machinery, and equipment are all depreciated over a useful life of 3 to 10 years, while buildings are depreciated over a period of up to 39 years. In general, our capitalized software is amortized over a useful life of 3 years, with capitalized enterprise resource planning software being amortized over a useful life of 10 years. Gains or losses related to retirements or dispositions of fixed assets are recognized in the period incurred. Additionally, if impairment indicators exist, the Company will assess the carrying value of the associated asset. In the fourth quarter of fiscal year 2019, the Company sold the Edinburgh, Scotland property for a $4.9 million gain presented separately in the Consolidated Statements of Income as "Gain on sale of assets". The Company recorded $0.1 million and $9.6 million of equipment disposal charges, during fiscal year 2021 and the fourth quarter of fiscal year 2020, respectively, related to the MEMS restructuring. See Note 11 — Restructuring Costs for further detail.
Property, plant and equipment was comprised of the following (in thousands):
 
March 27, 2021March 28, 2020
Land$23,853 $23,853 
Buildings63,803 63,803 
Furniture and fixtures23,733 23,059 
Leasehold improvements52,041 51,525 
Machinery and equipment160,400 159,201 
Capitalized software26,152 25,942 
Construction in progress and other950 892 
Total property, plant and equipment350,932 348,275 
Less: Accumulated depreciation and amortization(195,990)(190,031)
Property, plant and equipment, net$154,942 $158,244 
Depreciation and amortization expense on property, plant, and equipment for fiscal years 2021, 2020, and 2019 was $24.9 million, $31.9 million, and $32.0 million, respectively.
Goodwill and Intangibles, net
Intangible assets include purchased technology licenses and patents that are reported at cost and are amortized on a straight-line basis over their useful lives, generally ranging from 1 to 10 years. Acquired intangibles include existing technology, core technology or patents, license agreements, in-process research & development, trademarks, tradenames, customer relationships, non-compete agreements, and backlog. These assets are amortized on a straight-line basis over lives ranging from 1 to 15 years.
Goodwill is recorded at the time of an acquisition and is calculated as the difference between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. The Company tests goodwill and indefinite lived intangibles for impairment on an annual basis or more frequently if the Company believes indicators of impairment exist. Impairment evaluations involve management’s assessment of qualitative factors to determine whether it is more likely than not that goodwill and other intangible assets are impaired. If management concludes from its assessment of qualitative factors that it is more likely than not that impairment exists, then a quantitative impairment test will be performed involving management estimates of asset useful lives and future cash flows. Significant management judgment is required in the forecasts of future operating results that are used in these evaluations. If our actual results, or the plans and estimates used in future impairment analyses, are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges in a future period. The Company has recorded no goodwill impairments in fiscal years 2021, 2020, and 2019. During the fourth quarter of fiscal year 2020, the Company recorded $10.0 million of intangible asset
impairment charges related to the MEMS restructuring. See Note 11 — Restructuring Costs for further detail. There were no material intangible asset impairments in fiscal years 2021 or 2019.
Long-Lived Assets
We test for impairment losses on long-lived assets and definite-lived intangibles used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. We measure any impairment loss by comparing the fair value of the asset to its carrying amount. We estimate fair value based on discounted future cash flows, quoted market prices, or independent appraisals.
Foreign Currency Translation
Some of the Company's subsidiaries utilize the local currency as the functional currency. The Company’s main entities, including the entities that generate the majority of sales and employ the majority of employees, are U.S. dollar functional.
Concentration of Credit Risk
Financial instruments that potentially subject us to material concentrations of credit risk consist primarily of cash equivalents, marketable securities, long-term marketable securities, and trade accounts receivable. We are exposed to credit risk to the extent of the amounts recorded on the balance sheet. By policy, our cash equivalents, marketable securities, and long-term marketable securities are subject to certain nationally recognized credit standards, issuer concentrations, sovereign risk, and marketability or liquidity considerations.
In evaluating our trade receivables, we perform credit evaluations of our major customers’ financial condition and monitor closely all of our receivables to limit our financial exposure by limiting the length of time and amount of credit extended. In certain situations, we may require payment in advance or utilize letters of credit to reduce credit risk. By policy, we establish a reserve for trade accounts receivable based on the type of business in which a customer is engaged, the length of time a trade account receivable is outstanding, and other knowledge that we may possess relating to the probability that a trade receivable is at risk for non-payment.
We had one contract manufacturer, Henan Fuchi, who represented 25 percent of our consolidated gross trade accounts receivable as of the end of fiscal year 2021. Hongfujin Precision and Pegatron represented 29 percent and 20 percent, respectively of our consolidated gross trade accounts receivable as of the end of fiscal year 2020. No other distributor or customer had receivable balances that represented more than 10 percent of consolidated gross trade accounts receivable as of the end of fiscal year 2021 and 2020.
Since the components we produce are largely proprietary and generally not available from second sources, we consider our end customer to be the entity specifying the use of our component in their design. These end customers may then purchase our products directly from us, from a distributor, or through a third-party manufacturer contracted to produce their end product. For fiscal years 2021, 2020, and 2019, our ten largest end customers represented approximately 93 percent, 93 percent, and 91 percent, of our sales, respectively. For fiscal years 2021, 2020, and 2019, we had one end customer, Apple Inc., who purchased through multiple contract manufacturers and represented approximately 83 percent, 79 percent, and 78 percent, of the Company’s total sales, respectively. No other customer or distributor represented more than 10 percent of net sales in fiscal years 2021, 2020, or 2019.
Revenue Recognition
We recognize revenue upon the transfer of promised goods or services to customers, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services.
Performance Obligations
The Company’s single performance obligation is the delivery of promised goods to the customer. The promised goods are explicitly stated in the customer contract and are comprised of either a single type of good or a series of goods that are substantially the same, have the same pattern of transfer to the customer, and are neither capable of being distinct nor separable from the other promised goods in the contract. This performance obligation is satisfied upon transfer of control of the promised goods to the customer, as defined per the shipping terms within the customer’s contract. The vast majority of the Company’s contracts with customers have an original expected term of one year or less. As allowed by ASC 606, the Company has not disclosed of the value of any unsatisfied performance obligations related to these contracts.
The Company’s products typically include a warranty period of one to three years. These warranties qualify as assurance-type warranties, as goods can be returned for product non-conformance and defect only. As such, these warranties are accounted for under ASC 460, Guarantees, and are not considered a separate performance obligation.
Contract balances
Payments are typically due within 30 to 60 days of invoicing and terms do not include a significant financing component or noncash consideration. There have been no material impairment losses on accounts receivable. There are no material contract assets or contract liabilities recorded on the consolidated balance sheets.
Transaction price
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods to the customer. Fixed pricing is the consideration that is agreed upon in the customer contract. Variable pricing includes rebates, rights of return, warranties, price protection and stock rotation. Rebates are granted as a customer account credit, based on agreed-upon sales thresholds. Rights of return and warranty costs are estimated using the "most likely amount" method by reviewing historical returns to determine the most likely customer return rate and applying materiality thresholds. Price protection includes price adjustments available to certain distributors based upon established book price and a stated adjustment period. Stock rotation is also available to certain distributors based on a stated maximum of prior billings.
The Company estimates all variable consideration at the most likely amount which it expects to be entitled. The estimate is based on current and historical information available to the Company, including recent sales activity and pricing. Variable consideration is only included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company defers all variable consideration that does not meet the revenue recognition criteria.
Warranty Expense
We warrant our products and maintain a provision for warranty repair or replacement of shipped products. The accrual represents management’s estimate of probable returns. Our estimate is based on an analysis of our overall sales volume and historical claims experience. The estimate is re-evaluated periodically for accuracy.
Shipping Costs
Our shipping and handling costs are included in cost of sales for all periods presented in the Consolidated Statements of Income.
Advertising Costs
Advertising costs are expensed as incurred. Advertising costs were $0.9 million, $0.9 million, and $1.0 million, in fiscal years 2021, 2020, and 2019, respectively.
Stock-Based Compensation
Stock-based compensation is measured at the grant date based on the grant-date fair value of the awards and is recognized as an expense, on a ratable basis, over the vesting period, which is generally between 0 and 4 years. Determining the amount of stock-based compensation to be recorded requires the Company to develop estimates used in calculating the grant-date fair value of stock options and performance awards (also called market stock units). The Company calculates the grant-date fair value for stock options and market stock units using the Black-Scholes valuation model and the Monte Carlo simulation, respectively. The use of valuation models requires the Company to make estimates of assumptions such as expected volatility, expected term, risk-free interest rate, expected dividend yield, and forfeiture rates. The grant-date fair value of restricted stock units is the market value at grant date multiplied by the number of units.
Income Taxes
We are required to calculate income taxes in each of the jurisdictions in which we operate. This process involves calculating the actual current tax liability as well as assessing temporary differences in the recognition of income or loss for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheet. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The Company evaluates the ability to realize its deferred tax assets based on all the facts and circumstances, including projections of future taxable income and expiration dates of carryover tax attributes.
The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules and the potential for future adjustment of our uncertain tax positions by the Internal Revenue Service or other taxing jurisdiction. We recognize liabilities for uncertain tax positions based on the required two-step process. The first step requires us to determine if the weight of available evidence indicates that the tax position has met the threshold for recognition; therefore, we must evaluate whether it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step requires us to measure the tax benefit of the tax position taken, or expected to be taken, in an income tax return as the largest amount that is more than 50 percent likely of being realized upon
ultimate settlement. We reevaluate the uncertain tax positions each quarter based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, expirations of statutes of limitation, effectively settled issues under audit, and new audit activity. A change in the recognition step or measurement step would result in the recognition of a tax benefit or an additional charge to the tax provision in the period.
Although we believe the measurement of our liabilities for uncertain tax positions is reasonable, we cannot assure that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. If additional taxes are assessed as a result of an audit or litigation, it could have a material effect on our income tax provision and net income in the period or periods for which that determination is made. We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues which may require an extended period of time to resolve and could result in additional assessments of income tax. We believe adequate provisions for income taxes have been made for all periods.
Net Income Per Share
Basic net income per share is based on the weighted effect of common shares issued and outstanding and is calculated by dividing net income by the basic weighted average shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares used in the basic net income per share calculation, plus the equivalent number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. These potentially dilutive items consist primarily of outstanding stock options and restricted stock grants.
The following table details the calculation of basic and diluted earnings per share for fiscal years 2021, 2020, and 2019, (in thousands, except per share amounts):
 
 Fiscal Years Ended
March 27, 2021March 28, 2020March 30, 2019
Numerator:
Net income$217,344 $159,498 $89,991 
Denominator:
Weighted average shares outstanding58,106 58,317 60,116 
Effect of dilutive securities1,954 2,145 1,467 
Weighted average diluted shares60,060 60,462 61,583 
Basic earnings per share$3.74 $2.74 $1.50 
Diluted earnings per share$3.62 $2.64 $1.46 
The weighted outstanding shares excluded from our diluted calculation for the years ended March 27, 2021, March 28, 2020, and March 30, 2019 were 187 thousand, 543 thousand, and 872 thousand, respectively, as the exercise price of certain outstanding stock options exceeded the average market price during the period.
Accumulated Other Comprehensive Loss
Our accumulated other comprehensive loss is comprised of foreign currency translation adjustments, unrealized gains and losses on investments classified as available-for-sale and, in fiscal year 2019, the settlement of our defined benefit pension plan assets. See Note 17 — Accumulated Other Comprehensive Income (Loss) for additional discussion.
Recently Issued Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  This ASU requires credit losses on available-for-sale debt securities to be presented as an allowance rather than a write-down. Unlike current U.S. GAAP, the credit losses could be reversed with changes in estimates, and recognized in current year earnings.  This ASU is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods.  The Company adopted this ASU in the first quarter of fiscal year 2021, with no material impact to the financial statements.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.  This ASU eliminates step two of the goodwill impairment test.  An impairment charge is to be recognized for the amount by which the recorded book value exceeds the fair value. This ASU is effective for annual periods beginning after December 15, 2019, including interim periods.  The Company adopted this ASU in the first quarter of fiscal year 2021, with no material impact to the financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This ASU adjusts current required disclosures related to fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The Company adopted this ASU in the first quarter of fiscal year 2021, with no material impact to the financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU provides guidance on the accounting for implementation costs related to a cloud computing arrangement that is a service contract. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The Company adopted this ASU in the first quarter of fiscal year 2021, with prospective application and no material impact to the financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption in the first quarter of fiscal year 2022.
In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321) - Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies the interaction of the accounting for equity securities, investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption in the first quarter of fiscal year 2022.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU, effective immediately for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., LIBOR) with a new alternative reference rate. The guidance is applicable to investment securities, receivables, debt, leases, hedging relationships and other contractual arrangements. The Company adopted this ASU in the first quarter of fiscal year 2021, with no material impact to the financial statements.
v3.21.1
Marketable Securities
12 Months Ended
Mar. 27, 2021
Marketable Securities [Abstract]  
Marketable Securities Marketable Securities
The Company’s investments have been classified as available-for-sale securities in accordance with U.S. GAAP. Marketable securities are categorized on the Consolidated Balance Sheet as “Marketable securities” within the short-term or long-term classification, as appropriate.
The following table is a summary of available-for-sale securities (in thousands):
 
As of March 27, 2021Amortized
Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Estimated Fair Value
(Net Carrying Amount)
Corporate debt securities$348,971 $3,403 $(313)$352,061 
Non-U.S. government securities13,462 172 (1)13,633 
Agency discount notes2,759 (1)2,762 
Total securities$365,192 $3,579 $(315)$368,456 
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 losses of $0.3 million related to securities with total amortized costs of approximately $92.0 million at March 27, 2021. There were no securities that have been in a continuous unrealized loss position for more than 12 months as of March 27, 2021. 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.  The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for 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 27, 2021, the Company does not consider any of its investments to be impaired.
 
As of March 28, 2020Amortized
Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Estimated Fair Value
(Net Carrying Amount)
Corporate debt securities$286,668 $1,157 $(3,993)$283,832 
Non-U.S. government securities12,483 260 — 12,743 
U.S. Treasury securities8,839 167 — 9,006 
Total securities$307,990 $1,584 $(3,993)$305,581 
The Company’s specifically identified gross unrealized losses of $4.0 million related to securities with total amortized costs of approximately $172.9 million at March 28, 2020. There were no securities that had been in a continuous unrealized loss position for more than 12 months as of March 28, 2020. As of March 28, 2020, the Company did not consider any of its investments to be impaired.
The cost and estimated fair value of available-for-sale investments by contractual maturity were as follows:
 
 March 27, 2021March 28, 2020
Amortized
Cost
Estimated
Fair Value
Amortized
Cost
Estimated
Fair Value
Within 1 year$54,895 $55,698 $22,012 $22,008 
After 1 year310,297 312,758 285,978 283,573 
Total$365,192 $368,456 $307,990 $305,581 
v3.21.1
Fair Value of Financial Instruments
12 Months Ended
Mar. 27, 2021
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
The Company has determined that the assets and liabilities in the Company’s financial statements that are required to be measured at fair value on a recurring basis are the Company’s cash equivalents and marketable securities portfolio. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company’s cash equivalents and marketable securities portfolio consist of money market funds, debt securities, non-U.S government securities, U.S Treasury securities, and securities of U.S. government-sponsored enterprises, and are reflected on our Consolidated Balance Sheet under the headings cash and cash equivalents, marketable securities, and long-term marketable securities. The Company determines the fair value of its marketable securities portfolio by obtaining non-binding market prices from its third-party pricing providers on the last day of the quarter, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.
The Company’s long-term revolving facility, described in Note 8, bears interest at a base rate plus applicable margin or LIBOR plus applicable margin.  As of March 27, 2021, there are no amounts drawn under the facility and the fair value is zero.
As of March 27, 2021 and March 28, 2020, the Company has no material Level 3 assets or liabilities. There were no transfers between Level 1, Level 2, or Level 3 measurements for the years ending March 27, 2021 and March 28, 2020.
The following summarizes the fair value of our financial instruments at March 27, 2021 (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$405,819 $— $— $405,819 
Available-for-sale securities
Corporate debt securities$— $352,061 $— $352,061 
Non-U.S. government securities— 13,633 — 13,633 
Agency discount notes— 2,762 — 2,762 
$— $368,456 $— $368,456 

The following summarizes the fair value of our financial instruments at March 28, 2020 (in thousands):
 
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
Significant
Other
Observable
Inputs
Level 2
Significant
Unobservable
Inputs
Level 3
Total
Assets:
Cash equivalents
Money market funds$237,714 $— $— $237,714 
Available-for-sale securities
Corporate debt securities$— $283,832 $— $283,832 
Non-U.S. government securities— 12,743 — 12,743 
U.S. Treasury securities9,006 — — 9,006 
$9,006 $296,575 $— $305,581 
v3.21.1
Derivative Financial Instruments
12 Months Ended
Mar. 27, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Foreign Currency Forward Contracts
Beginning in fiscal year 2020, the Company began using foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-functional currency balance sheet exposures. The Company recognizes both the gains and losses on foreign currency forward contracts and the gains and losses on the remeasurement of non-functional currency assets and liabilities within "Other income (expense)" in the consolidated statements of income. The Company does not apply hedge accounting to these foreign currency derivative instruments.
As of March 27, 2021, the Company held one foreign currency forward contract denominated in British Pound Sterling with a notional value of $13.6 million. The fair value of this contract was not material as of March 27, 2021.

The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands):
Fiscal Years Ended
March 27, 2021March 28, 2020March 30, 2019Location
Gain (loss) recognized in income
Foreign currency forward contracts$3,212 $(4,226)$— Other income (expense)
v3.21.1
Accounts Receivable, net
12 Months Ended
Mar. 27, 2021
Accounts Receivable, after Allowance for Credit Loss [Abstract]  
Accounts Receivable, net Accounts Receivable, net
The following are the components of accounts receivable, net (in thousands):
 
March 27, 2021March 28, 2020
Gross accounts receivable$108,712 $153,998 
Allowance for doubtful accounts— — 
Accounts receivable, net$108,712 $153,998 
The Company regularly evaluates the collectability of accounts receivable based on age, historical customer payment trends and ongoing customer relations. The following table summarizes the changes in the allowance for doubtful accounts (in thousands):
 
Balance, March 31, 2018$(203)
Bad debt expense, net of recoveries(67)
Balance, March 30, 2019(270)
Bad debt expense, net of recoveries270 
Balance, March 28, 2020— 
Bad debt expense, net of recoveries— 
Balance, March 27, 2021$— 
Recoveries on bad debt were immaterial for the three years presented above.
v3.21.1
Intangibles, net and Goodwill
12 Months Ended
Mar. 27, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangibles, net and Goodwill Intangibles, net and Goodwill
The intangibles, net balance included on the Consolidated Balance Sheet was $22.0 million and $34.4 million at March 27, 2021 and March 28, 2020, respectively.
The following information details the gross carrying amount and accumulated amortization of our intangible assets (in thousands):
 
 March 27, 2021March 28, 2020
Intangible Category / Weighted-Average Amortization
period (in years)
Gross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
Core technology (a)$1,390 $(1,390)$1,390 $(1,390)
License agreement (a)440 (440)440 (440)
Existing technology (7.0)
111,005 (105,870)111,005 (100,145)
In-process research & development (“IPR&D”) (7.5)
70,936 (62,885)70,936 (58,284)
Trademarks and tradename (10.0)
3,037 (2,717)3,037 (2,589)
Customer relationships (10.0)
15,381 (10,346)15,381 (8,808)
Backlog (a)220 (220)220 (220)
Non-compete agreements (a)470 (470)470 (470)
Technology licenses (3.0)
25,945 (22,455)23,820 (19,923)
Total$228,824 $(206,793)$226,699 $(192,269)
 
(a)Intangible assets are fully amortized.
Amortization expense for intangibles in fiscal years 2021, 2020, and 2019 was $14.5 million, $28.3 million, and $47.8 million, respectively. The following table details the estimated aggregate amortization expense for all intangibles owned as of March 27, 2021, for each of the five succeeding fiscal years and in the aggregate thereafter (in thousands):
 
For the year ended March 26, 2022$12,533 
For the year ended March 25, 2023$6,726 
For the year ended March 30, 2024$2,231 
For the year ended March 29, 2025$541 
For the year ended March 28, 2026$— 
Thereafter$— 
The goodwill balance included on the Consolidated Balance Sheet is $287.5 million and $287.1 million at March 27, 2021 and March 28, 2020, respectively.
v3.21.1
Revolving Credit Facility
12 Months Ended
Mar. 27, 2021
Line of Credit Facility [Abstract]  
Revolving Credit Facility Revolving Credit Facility
On July 12, 2016, Cirrus Logic entered into an amended and restated credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent, and the Lenders party thereto, for the purpose of refinancing an existing credit facility and providing ongoing working capital. The Credit Agreement provides for a $300 million senior secured revolving credit facility (the “Credit Facility”). The Credit Facility matures on July 12, 2021.  The Credit Facility is required to be guaranteed by all of Cirrus Logic’s material domestic subsidiaries (the “Subsidiary Guarantors”). The Credit Facility is secured by substantially all of the assets of Cirrus Logic and any Subsidiary Guarantors, except for certain excluded assets.
Borrowings under the Credit Facility may, at Cirrus Logic’s election, bear interest at either (a) a base rate plus the applicable margin (“Base Rate Loans”) or (b) a LIBOR Rate plus the applicable margin (“LIBOR Rate Loans”).  The applicable margin ranges from 0% to 0.50% per annum for Base Rate Loans and 1.25% to 2.00% per annum for LIBOR Rate Loans based on the Leverage Ratio (as defined below). A commitment fee accrues at a rate per annum ranging from 0.20% to 0.30% (based on the Leverage Ratio) on the average daily unused portion of the commitment of the lenders. The Credit Agreement contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness to consolidated EBITDA for the prior four consecutive quarters must not be greater than 3.00 to 1.00 (the “Leverage Ratio”) and (b) the ratio of consolidated EBITDA for the prior four consecutive fiscal quarters to consolidated fixed charges (including amounts paid in cash for consolidated interest expenses, capital expenditures, scheduled principal payments of indebtedness, and income taxes) for the prior four consecutive fiscal quarters must not be less than 1.25 to 1.00 as of the end of each fiscal quarter.  The Credit Agreement also contains negative covenants limiting the Company’s or any Subsidiary’s ability to, among other things, incur debt, grant liens, make investments, effect certain fundamental changes, make certain asset dispositions, and make certain restricted payments.
As of March 27, 2021, the Company had no amounts outstanding under the Credit Facility and was in compliance with all covenants under the Credit Agreement.
v3.21.1
Revenues
12 Months Ended
Mar. 27, 2021
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Disaggregation of revenue
We disaggregate revenue from contracts with customers by product line and ship to location of the customer. During the fourth quarter of fiscal year 2021, we adjusted how we report product line revenue to better represent our business and strategic focus. Sales will be designated in the product line categories of Audio and High-Performance Mixed-Signal.

Total net sales based on the product line disaggregation criteria described above are shown in the table below (in thousands). Prior periods were retrospectively adjusted to conform to the fiscal year 2021 product line categories.
Fiscal Year 2021Portable ProductsNon-Portable and Other ProductsTotal
Audio Products$998,445 $105,615 $1,104,060 
High-Performance Mixed-Signal Products236,053 29,117 265,170 
Total$1,234,498 $134,732 $1,369,230 
Fiscal Year 2020Portable ProductsNon-Portable and Other ProductsTotal
Audio Products$1,009,933 $100,025 $1,109,958 
High-Performance Mixed-Signal Products136,985 34,181 171,166 
Total$1,146,918 $134,206 $1,281,124 
Fiscal Year 2019Portable ProductsNon-Portable and Other ProductsTotal
Audio Products$922,608 $118,258 $1,040,866 
High-Performance Mixed-Signal Products109,441 35,217 144,658 
Total$1,032,049 $153,475 $1,185,524 

The geographic regions that are reviewed are China, the United States, and the rest of the world.
Total net sales based on the geographic disaggregation criteria described are as follows (in thousands):
Fiscal Years Ended
March 27,March 28,March 30,
202120202019
China$1,024,178 $975,090 $922,202 
United States21,708 17,099 26,182 
Rest of World323,344 288,935 237,140 
Total$1,369,230 $1,281,124 $1,185,524 

See Note 2 - Summary of Significant Accounting Policies for additional discussion surrounding revenue recognition considerations.
v3.21.1
Leases
12 Months Ended
Mar. 27, 2021
Leases [Abstract]  
Leases Leases
The Company has operating leases for corporate offices and certain office equipment. Our leases have remaining lease terms of 1 year to 28 years, some of which include options to extend the leases that are considered reasonably certain to be exercised. Our leases generally contain fixed rental payments, with additional variable payments linked to actual common area maintenance costs incurred by the landlord. These variable payments are therefore not included within the lease liability and ROU asset, but are recognized as an expense when incurred. As our leases typically do not provide an implicit rate, the Company determined the Incremental Borrowing Rate ("IBR") for each lease based on the information available at the commencement date, taking into consideration necessary adjustments for collateral, currency, and lease term. There are no residual value guarantees in any of our leases. No restrictions or covenants have been imposed on the Company as a result of the lease agreements in place.
The Company also leases a small portion of our office space to tenants under operating leases, receiving monthly rental payments. Payments are generally fixed, with variable payments linked to actual common area maintenance costs incurred. Total fixed lease payments to be received over the life of the lease are recognized on a straight-line basis over the lease term.
All of the Company’s leases have been classified as operating leases. Operating leases in excess of 12 months are recognized on the balance sheet, with future lease payments recognized as a liability, measured at present value, and the right-of-use asset recognized for the lease term. A single lease cost is recognized in the income statement over the lease term.
The components of net operating lease expense were as follows (in thousands):
Fiscal Years Ended
March 27, 2021March 28, 2020
Operating lease - in excess of 12 months$14,050 $13,518 
Variable lease4,981 4,721 
Short-term lease151 119 
Operating lease income(1,416)(1,296)
Total net operating lease expense$17,766 $17,062 

Other information related to operating leases was as follows:
Fiscal Years Ended
March 27, 2021March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
Operating cash flows from operating leases$14,954 $13,955 
Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands)805 1,107 
Weighted-average remaining lease term - operating leases (in years)1920
Weighted-average discount rate - operating leases%%
As of March 27, 2021, there are no leases that have not yet commenced that would create significant rights and obligations on the Company.

Future lease commitments under non-cancellable leases, including extension options reasonably anticipated to be exercised as of March 27, 2021, are as follows (in thousands):

Fiscal YearOperating Lease ExpenseOperating Lease Income
2022$14,852 $1,105 
202314,492 278 
202414,051 — 
202513,514 — 
202611,872 — 
Thereafter139,915 — 
Total$208,696 $1,383 
Less imputed interest(66,240)— 
Total$142,456 $1,383 

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

March 27, 2021March 28, 2020
Current lease liabilities$14,573 $13,580 
Non-current lease liabilities127,883 129,312 
Total operating lease liabilities$142,456 $142,892 
Leases Leases
The Company has operating leases for corporate offices and certain office equipment. Our leases have remaining lease terms of 1 year to 28 years, some of which include options to extend the leases that are considered reasonably certain to be exercised. Our leases generally contain fixed rental payments, with additional variable payments linked to actual common area maintenance costs incurred by the landlord. These variable payments are therefore not included within the lease liability and ROU asset, but are recognized as an expense when incurred. As our leases typically do not provide an implicit rate, the Company determined the Incremental Borrowing Rate ("IBR") for each lease based on the information available at the commencement date, taking into consideration necessary adjustments for collateral, currency, and lease term. There are no residual value guarantees in any of our leases. No restrictions or covenants have been imposed on the Company as a result of the lease agreements in place.
The Company also leases a small portion of our office space to tenants under operating leases, receiving monthly rental payments. Payments are generally fixed, with variable payments linked to actual common area maintenance costs incurred. Total fixed lease payments to be received over the life of the lease are recognized on a straight-line basis over the lease term.
All of the Company’s leases have been classified as operating leases. Operating leases in excess of 12 months are recognized on the balance sheet, with future lease payments recognized as a liability, measured at present value, and the right-of-use asset recognized for the lease term. A single lease cost is recognized in the income statement over the lease term.
The components of net operating lease expense were as follows (in thousands):
Fiscal Years Ended
March 27, 2021March 28, 2020
Operating lease - in excess of 12 months$14,050 $13,518 
Variable lease4,981 4,721 
Short-term lease151 119 
Operating lease income(1,416)(1,296)
Total net operating lease expense$17,766 $17,062 

Other information related to operating leases was as follows:
Fiscal Years Ended
March 27, 2021March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
Operating cash flows from operating leases$14,954 $13,955 
Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands)805 1,107 
Weighted-average remaining lease term - operating leases (in years)1920
Weighted-average discount rate - operating leases%%
As of March 27, 2021, there are no leases that have not yet commenced that would create significant rights and obligations on the Company.

Future lease commitments under non-cancellable leases, including extension options reasonably anticipated to be exercised as of March 27, 2021, are as follows (in thousands):

Fiscal YearOperating Lease ExpenseOperating Lease Income
2022$14,852 $1,105 
202314,492 278 
202414,051 — 
202513,514 — 
202611,872 — 
Thereafter139,915 — 
Total$208,696 $1,383 
Less imputed interest(66,240)— 
Total$142,456 $1,383 

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

March 27, 2021March 28, 2020
Current lease liabilities$14,573 $13,580 
Non-current lease liabilities127,883 129,312 
Total operating lease liabilities$142,456 $142,892 
v3.21.1
Restructuring Costs
12 Months Ended
Mar. 27, 2021
Restructuring and Related Activities [Abstract]  
Restructuring Costs Restructuring CostsIn the fourth quarter of fiscal year 2020, the Company approved a restructuring plan (the “MEMS Restructuring”), including discontinuing efforts relating to the microelectromechanical systems ("MEMS") microphone product line, which
allowed the Company to concentrate our resources on projects with an anticipated larger return on investment. The Company recorded charges of $21.9 million as part of the MEMS Restructuring in fiscal year 2020. The MEMS Restructuring was substantially complete as of the first quarter of fiscal year 2021 with a $0.4 million "Restructuring Costs" charge to the income statement. No additional restructuring charges were incurred during fiscal year 2021.
The following table details the total restructuring charges presented in the Consolidated Statements of Income within the "Restructuring Costs" line item (in thousands):
Fiscal Years Ended
March 27, 2021March 28, 2020
Disposal of equipment, net of recovery from sales (a)
$130 $9,578 
Impairment and write-off of intangible assets— 9,961 
Other exit costs (b)222 1,903 
Personnel-related charges, net of equity cancellations (c)— 483 
Total$352 $21,925 

a.Fiscal year ended March 28, 2020 includes accelerated depreciation of equipment of $11.5 million, net of $1.9 million of recovery from equipment sold during the fourth quarter of fiscal 2020.
b.Fiscal year ended March 28, 2020 includes $0.6 million of accrued exit costs as of March 28, 2020 which are presented in the “Other accrued liabilities” line item of our Consolidated Balance Sheet.
c.Personnel-related charges consist of severance costs of $1.7 million, net of $1.2 million of equity cancellation benefits and includes $0.4 million of accrued severance as of March 28, 2020 which is presented in the “Other accrued liabilities” line item of our Consolidated Balance Sheet.

Restructuring liabilities are presented in the "Other accrued liabilities" line item of our Consolidated Balance Sheet. The activity related to restructuring liabilities is detailed below (in thousands):

Restructuring Liability
Beginning balance as of March 28, 2020$982 
Other exit costs222 
Cash payments(1,204)
Ending balance as of March 27, 2021$— 
v3.21.1
Postretirement Benefit Plans
12 Months Ended
Mar. 27, 2021
Retirement Benefits [Abstract]  
Postretirement Benefit Plans Postretirement Benefit Plans
Defined Benefit Pension Plan
The Company had a defined benefit pension scheme (the “Scheme”), for some individuals in the United Kingdom. On November 30, 2018, the Scheme buy-out was completed and individual policies were established for each member. Completion of the buy-out confirmed full and final settlement of the Scheme, and the unamortized loss previously recorded within AOCI of $13.8 million was recognized within other non-operating expense as "U.K. pension settlement" in the third quarter of fiscal year 2019, with the corresponding tax benefit of $2.6 million being recognized within "Provision for income taxes" in the Consolidated Statements of Income. As the buy-out transaction fully settled, there were no further contributions to the Scheme.
Defined Contribution Plans
We have Defined Contribution Plans (“the Plans”) covering all of our qualifying employees. Under the Plans, employees may elect to contribute any percentage of their annual compensation up to the annual regulatory limits. The Company made matching employee contributions of $7.9 million, $7.5 million, and $7.7 million during fiscal years 2021, 2020, and 2019, respectively.
v3.21.1
Equity Compensation
12 Months Ended
Mar. 27, 2021
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Equity Compensation Equity CompensationThe Company is currently granting equity awards from the 2018 Long Term Incentive Plan (the “Plan”), which was approved by stockholders in August 2018 and subsequently amended on July 31, 2020. The Plan provides for granting of stock
options, restricted stock awards, performance awards, phantom stock awards, and bonus stock awards, or any combination of the foregoing.  To date, the Company has granted stock options, restricted stock awards, phantom stock awards (also called restricted stock units), and performance awards (also called market stock units). Each stock option granted reduces the total shares available for grant under the Plan by one share. Each full value award granted (including restricted stock awards, restricted stock units and market stock units) reduces the total shares available for grant under the Plan by 1.5 shares. Stock options generally vest between one and four years, and are exercisable for a period of ten years from the date of grant.  Restricted stock units are generally subject to vesting from zero to three years, depending upon the terms of the grant. Market stock units are subject to a vesting schedule of three years.
The following table summarizes the activity in total shares available for grant (in thousands):
 
 Shares
 Available for
 Grant
Balance, March 31, 20183,065 
Shares added2,509 
Granted(2,371)
Forfeited120 
Balance, March 30, 20193,323 
Shares added248 
Granted(1,686)
Forfeited210 
Balance, March 28, 20202,095 
Shares added3,223 
Granted(1,491)
Forfeited198 
Balance, March 27, 20214,025 

Stock-based Compensation Expense
The following table summarizes the effects of stock-based compensation on cost of goods sold, research and development, sales, general and administrative, pre-tax income, and net income after taxes for shares granted under the Plan (in thousands, except per share amounts):
 
 Fiscal Year
 202120202019
Cost of sales$900 $908 $877 
Research and development37,483 33,859 29,115 
Sales, general and administrative18,379 18,990 19,697 
Effect on pre-tax income56,762 53,757 49,689 
Income Tax Benefit(9,558)(9,336)(5,748)
Total stock-based compensation expense (net of taxes)47,204 44,421 43,941 
Stock-based compensation effects on basic earnings per share$0.81 $0.76 $0.73 
Stock-based compensation effects on diluted earnings per share0.79 0.73 0.71 
The total stock-based compensation expense included in the table above and which is attributable to restricted stock units and market stock units was $53.6 million, $50.0 million, $45.5 million, for fiscal years 2021, 2020, and 2019, respectively. Stock-based compensation expense is presented within operating activities in the Consolidated Statement of Cash Flows.
As of March 27, 2021, there was $105.8 million of compensation costs related to non-vested stock options, restricted stock units, and market stock units granted under the Company’s equity incentive plans not yet recognized in the Company’s financial statements. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.28 years for stock options, 1.57 years for restricted stock units, and 1.33 years for market stock units.
In addition to the income tax benefit of stock-based compensation expense shown in the table above, the Company recognized excess tax benefits of $2.2 million, $4.9 million and $0.9 million in fiscal years 2021, 2020, and 2019 respectively.
Stock Options
We estimate the fair value of each stock option on the date of grant using the Black-Scholes option-pricing model using a dividend yield of zero and the following additional assumptions:
 
March 27, 2021March 28, 2020March 30, 2019
Expected stock price volatility
43.85% - 43.99%
37.17% - 41.61%
38.00% - 38.14%
Risk-free interest rate
0.35% - 0.72%
1.54% - 2.29%
2.57% - 2.94%
Expected term (in years)
4.32 - 4.43
3.81 - 4.55
3.12 - 3.73
The Black-Scholes valuation calculation requires us to estimate key assumptions such as stock price volatility, expected term, risk-free interest rate and dividend yield. The expected stock price volatility is based upon implied volatility from traded options on our stock in the marketplace. The expected term of options granted is derived from an analysis of historical exercises and remaining contractual life of stock options, and represents the period of time that options granted are expected to be outstanding after becoming vested. The risk-free interest rate reflects the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term assumption. Finally, we have never paid cash dividends, do not currently intend to pay cash dividends, and thus have assumed a zero percent dividend yield.
Using the Black-Scholes option valuation model, the weighted average estimated fair values of employee stock options granted in fiscal years 2021, 2020, and 2019, were $33.81, $29.25, and $16.27, respectively.
During fiscal years 2021, 2020, and 2019, we received a net $7.1 million, $18.6 million, and $1.6 million, respectively, from the exercise of 0.2 million, 0.8 million, and 0.1 million, respectively, stock options granted under the Company’s Stock Plan.
The total intrinsic value of stock options exercised during fiscal year 2021, 2020, and 2019, was $10.2 million, $34.0 million, and $2.6 million, respectively. Intrinsic value represents the difference between the market value of the Company’s common stock at the time of exercise and the strike price of the stock option.
Additional information with respect to stock option activity is as follows (in thousands, except per share amounts):
 
 Outstanding Options
NumberWeighted
Average
Exercise Price
Balance, March 31, 20181,740 $31.91 
Options granted280 40.41 
Options exercised(108)15.03 
Options forfeited(38)49.62 
Options expired(9)55.01 
Balance, March 30, 20191,865 $33.68 
Options granted169 66.93 
Options exercised(780)23.90 
Options forfeited(27)50.75 
Options expired(11)55.03 
Balance, March 28, 20201,216 $44.01 
Options granted96 77.23 
Options exercised(236)30.26 
Options forfeited(17)56.27 
Options expired— — 
Balance, March 27, 20211,059 $49.87 
Additional information with regards to outstanding options that are vesting, expected to vest, or exercisable as of March 27, 2021 is as follows (in thousands, except years and per share amounts):
 
Number of
Options
Weighted
Average
Exercise price
Weighted Average
Remaining Contractual
Term (years)
Aggregate
Intrinsic Value
Vested and expected to vest1,048 $49.68 6.22$34,926 
Exercisable737 $44.91 5.27$28,062 
In accordance with U.S. GAAP, stock options outstanding that are expected to vest are presented net of estimated future option forfeitures, which are estimated as compensation costs are recognized. Options with a fair value of $4.8 million, $4.7 million, and $4.1 million, became vested during fiscal years 2021, 2020, and 2019, respectively.
The following table summarizes information regarding outstanding and exercisable options as of March 27, 2021 (in thousands, except per share amounts):
 
 Options OutstandingOptions Exercisable
Weighted Average
Remaining
Contractual Life
Weighted
Average Exercise
NumberWeighted
Average
Range of Exercise PricesNumber(years)PriceExercisableExercise Price
$15.31 - $38.15
177 4.51$30.06 162 $29.36 
$38.34 - $38.99
183 3.0438.81 169 38.85 
$41.49 - $54.65
308 6.7247.51 234 49.39 
$55.72 - $68.43
156 6.7256.35 123 55.72 
$68.56 - $68.56
148 8.6168.56 49 68.56 
$78.00 - $78.00
88 9.9378.00 — — 
1,060 6.25$49.87 737 $44.91 
As of March 27, 2021, March 28, 2020, and March 30, 2019, the number of options exercisable was 0.7 million, 0.8 million, and 1.3 million respectively.
Restricted Stock Units
Commencing in fiscal year 2011, the Company began granting restricted stock units (“RSUs”) to select employees. These awards are valued as of the grant date and amortized over the requisite vesting period. Generally, RSUs vest 100 percent on the first to third anniversary of the grant date depending on the vesting specifications. A summary of the activity for RSUs in fiscal year 2021, 2020, and 2019 is presented below (in thousands, except year and per share amounts):
 
SharesWeighted
Average
Fair Value
March 31, 20182,769 $45.70 
Granted1,416 40.57 
Vested(1,176)33.65 
Forfeited(175)48.15 
March 30, 20192,834 $47.99 
Granted1,014 66.76 
Vested(897)51.20 
Forfeited(271)50.82 
March 28, 20202,680 $53.74 
Granted945 71.44 
Vested(881)52.97 
Forfeited(131)55.36 
March 27, 20212,613 $60.31 
The aggregate intrinsic value of RSUs outstanding as of March 27, 2021, March 28, 2020, and March 30, 2019 was $216.9 million, $165.9 million, and $119.2 million, respectively. Additional information with regards to outstanding RSUs that are expected to vest as of March 27, 2021, is as follows (in thousands, except year and per share amounts):
 
SharesWeighted
Average
Fair Value
Weighted Average
Remaining Contractual
Term (years)
Expected to vest2,460 $59.95 1.54
RSUs outstanding that are expected to vest are presented net of estimated future forfeitures, which are estimated as compensation costs are recognized. RSUs with a fair value of $46.7 million, $45.9 million, and $39.6 million became vested during fiscal years 2021, 2020, and 2019, respectively. The majority of RSUs that vested in 2021, 2020 and 2019 were net settled such that the Company withheld a portion of the shares to satisfy tax withholding requirements. In fiscal years 2021, 2020, and 2019 the vesting of RSUs reduced the authorized and unissued share balance by approximately 0.9 million and 0.9 million, 1.2 million, respectively. Total shares withheld and subsequently retired out of the Plan were approximately 0.3 million, 0.3 million, and 0.3 million and total payments for the employees’ tax obligations to taxing authorities were $18.4 million, $18.3 million, and $13.1 million for fiscal years 2021, 2020, and 2019, respectively.
Market Stock Units
In fiscal year 2015, the Company began granting market stock units (“MSUs”) to select employees. MSUs vest based upon the relative total shareholder return (“TSR”) of the Company as compared to that of the Philadelphia Semiconductor Index (“the Index”). The requisite service period for these MSUs is also the vesting period, which is three years. The fair value of each MSU granted was determined on the date of grant using the Monte Carlo simulation, which calculates the present value of the potential outcomes of future stock prices of the Company and the Index over the requisite service period. The fair value is based on the risk-free rate of return, the volatilities of the stock price of the Company and the Index, the correlation of the stock price of the Company with the Index, and the dividend yield.
The fair values estimated from the Monte Carlo simulation were calculated using a dividend yield of zero and the following additional assumptions:
 
 Fiscal Years Ended
March 27,
2021
March 28,
2020
March 30,
2019
Expected stock price volatility43.85 %
37.17% - 41.61%
38.00% - 38.14%
Risk-free interest rate0.29 %
1.59% - 2.28%
2.62% - 3.01%
Expected term (in years)3.003.003.00
Using the Monte Carlo simulation, the weighted average estimated fair value of the MSUs granted in fiscal year 2021 was $83.96. A summary of the activity for MSUs in fiscal year 2021, 2020, and 2019 is presented below (in thousands, except year and per share amounts):
 
SharesWeighted
Average
Fair Value
March 31, 2018199 $56.16 
Granted68 53.13 
Vested— — 
Forfeited(101)43.41 
March 30, 2019166 $62.77 
Granted45 95.89 
Vested— — 
Forfeited(58)73.25 
March 28, 2020153 $68.71 
Granted28 83.96 
Vested— — 
Forfeited(48)64.92 
March 27, 2021133 $73.29 
The aggregate intrinsic value of MSUs outstanding as of March 27, 2021, March 28, 2020, and March 30, 2019 was $11.0 million, $9.5 million, and $7.0 million, respectively. Additional information with regard to outstanding MSUs that are expected to vest as of March 27, 2021 is as follows (in thousands, except year and per share amounts):
 
SharesWeighted
Average
Fair Value
Weighted Average
Remaining Contractual
Term (years)
Expected to vest126 $72.71 1.29
No MSUs became vested in fiscal years 2021, 2020 or 2019.
v3.21.1
Commitments and Contingencies
12 Months Ended
Mar. 27, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Facilities and Equipment Under Operating Lease Agreements
We currently own our corporate headquarters and select surrounding properties. We lease certain of our other facilities and certain equipment under operating lease agreements, some of which have renewal options. Certain of these arrangements provide for lease payment increases based upon future fair market rates. As of March 27, 2021, our principal facilities are located in Austin, Texas and Edinburgh, Scotland, United Kingdom.
Total rent expense under operating leases was approximately $19.2 million, $18.4 million, and $12.7 million, for fiscal years 2021, 2020, and 2019, respectively. Rental income was $1.4 million, $1.3 million, and $0.2 million, for fiscal years 2021, 2020, and 2019, respectively.
See Note 10 - Leases for minimum future rental commitments and income under all operating leases as of March 27, 2021.
Wafer, Assembly, Test and Other Purchase Commitments
We rely primarily on third-party foundries for our wafer manufacturing needs. Generally, our foundry agreements do not have volume purchase commitments and primarily provide for purchase commitments based on purchase orders. Cancellation fees or other charges may apply and are generally dependent upon whether wafers have been started or the stage of the manufacturing process at which the notice of cancellation is given. As of March 27, 2021, we had foundry commitments of $220.2 million.
In addition to our wafer supply arrangements, we contract with third-party assembly vendors to package the wafer die into finished products. Assembly vendors provide fixed-cost-per-unit pricing, as is common in the semiconductor industry. We had non-cancelable assembly purchase orders with numerous vendors totaling $4.0 million at March 27, 2021.
Test vendors provide fixed-cost-per-unit pricing, as is common in the semiconductor industry. Our total non-cancelable commitment for outside test services as of March 27, 2021 was $8.1 million.
Other purchase commitments primarily relate to multi-year tool commitments, and were $70.1 million at March 27, 2021.
v3.21.1
Legal Matters
12 Months Ended
Mar. 27, 2021
Loss Contingency, Information about Litigation Matters [Abstract]  
Legal Matters Legal MattersFrom 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 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.
v3.21.1
Stockholders' Equity
12 Months Ended
Mar. 27, 2021
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Stockholders' Equity
Share Repurchase Program
In January 2019, the Company announced that the Board of Directors authorized a share repurchase program of up to $200 million of the Company's common stock. As of March 27, 2021, the Company had repurchased 2.7 million shares at a cost of $190.0 million, or an average cost of $70.50 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 March 27, 2021. Approximately $10.0 million remains available for repurchase under this plan. In January 2021, the Board of Directors authorized the repurchase of up to an additional $350 million of the Company’s common stock. As of March 27, 2021, no shares have been repurchased under the new plan.
Preferred Stock
We have 5.0 million shares of Preferred Stock authorized. As of March 27, 2021, we have not issued any of the authorized shares.
v3.21.1
Accumulated Other Comprehensive Loss
12 Months Ended
Mar. 27, 2021
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss)
Our accumulated other comprehensive income (loss) is comprised of foreign currency translation adjustments, unrealized gains and losses on investments classified as available-for-sale, and cumulative effects of adopting new accounting standards.
The following table summarizes the changes in the components of accumulated other comprehensive income (loss), net of tax (in thousands): 
Foreign
Currency
Unrealized Gains
(Losses) on Securities
Cumulative Effect of Adoption of ASU 2018-02Total
Balance, March 30, 2019$(1,636)$570 $— $(1,066)
Current period foreign exchange translation68 — — 68 
Current period marketable securities activity— (2,803)— (2,803)
Cumulative effect of adoption of ASU 2018-02— — (257)(257)
Tax effect— 589 — 589 
Balance, March 28, 2020$(1,568)$(1,644)$(257)$(3,469)
Current period foreign exchange translation1,862 — — 1,862 
Current period marketable securities activity— 5,673 — 5,673 
Tax effect— (1,191)— (1,191)
Balance, March 27, 2021$294 $2,838 $(257)$2,875 
v3.21.1
Income Taxes
12 Months Ended
Mar. 27, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes consisted of (in thousands): 
 Fiscal Years Ended
March 27,
2021
March 28,
2020
March 30,
2019
U.S.$19,189 $44,154 $41,980 
Non-U.S.226,057 137,112 51,764 
$245,246 $181,266 $93,744