Company: CRUS
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0000772406-25-000034
Chunk: 13

Company: CIRRUS LOGIC, INC.
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 2
Chunk 13
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 unfavorably impacted by U.S. tax rules related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, that reduce the amount of foreign tax credits available to offset GILTI.  

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law.  The OBBBA includes a broad range of tax reform provisions, including the permanent elimination of the requirement to capitalize and amortize U.S. R&D expenditures, modifications to international tax provisions, and the permanent extension of certain expiring provisions initially established by the Tax Cuts and Jobs Act of 2017.  The OBBBA has multiple effective dates, with certain provisions effective in fiscal year 2026 and others effective in fiscal year 2027.  We are assessing the legislation and its effect on our consolidated financial statements, which we expect to begin reflecting in the second quarter of fiscal year 2026.  

19

Liquidity and Capital Resources 

We require cash to fund our operating expenses and working capital requirements, including outlays for inventory, capital expenditures, share repurchases, 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 available borrowings under our $300 million Revolving Credit Facility. 

Cash generated from our operating activities is net income adjusted for certain non-cash items and changes in working capital.  Cash generated from operations was $116.1 million for the first three months of fiscal year 2026 versus $87.2 million generated for the corresponding period of fiscal year 2025.  The cash flow from operations during the first three months of fiscal year 2026 was related to the cash components of our net income and a $27.4 million favorable change in working capital, primarily as a result of decreases in inventory, increases in prepaid wafer usage (related to the Capacity Reservation Agreement) and income taxes payable, partially offset by decreases in accounts payable and other accrued liabilities.  The cash flow from operations during the corresponding period of fiscal year 2025 was related to the cash components of our net income and a $16.1 million favorable change in working capital, primarily as a result of increases in income taxes payable, accounts payable and other accrued liabilities and prepaid wafer usage (related to the Capacity Reservation Agreement), partially offset by increases in accounts receivables.       

Net cash used in investing activities