Cirrus Logic Reports Fiscal Q1 2007 Financial Results
Diversification Drives Achievement of 60 Percent Gross Margins
AUSTIN, Texas - July 26, 2006 - Cirrus Logic Inc. (Nasdaq: CRUS), a leader in high-precision analog, mixed-signal and embedded products for audio and industrial markets, today announced financial results for the first quarter of fiscal year 2007, which ended June 24, 2006.
The company reported first quarter fiscal year 2007 revenue of $45.2 million, compared with $42.2 million of total revenue during the fourth quarter of fiscal year 2006. This represents seven-percent growth from the prior quarter. First-quarter gross margin was 60.1 percent compared to 58.1 percent for the fourth quarter of fiscal year 2006. Combined research and development (R&D) and selling, general and administrative (SG&A) expenses for the first fiscal quarter of 2007 were $22.9 million, which included $1.4 million in stock-based compensation expense due to our adoption of SFAS 123(R) at the beginning of this fiscal year.
Net income for the first fiscal quarter was $7.7 million, or $0.09 per diluted share. Non-GAAP net income, excluding the stock-based compensation expense was $9.0M or $0.10 per diluted share.
Total cash and marketable securities at the end of the first fiscal quarter was $251.9 million, compared with $243.5 million at the end of the prior fiscal year.
“I am pleased with our first-quarter results. We achieved higher than expected cash flow and gross margin of 60 percent, reflecting the strengths of our diversified analog and mixed-signal product portfolio,” said David D. French, president and chief executive officer, Cirrus Logic.
Outlook for Second Quarter FY 2007 (ending September 23, 2006):
“We are forecasting modest sequential revenue growth, which should bring further improvement in profitability and operational cash flow,” French continued.
· Revenue is expected to range between $47 million and $51 million;
· Gross margin is expected to be between 58 percent and 60 percent;
· Combined R&D and SG&A expenses are expected to range between $22 million and $24 million, including share-based compensation expense of approximately $1.4 million.
Use of Non-GAAP Financial Information
Cirrus Logic has included in this release certain financial information that has not been prepared in accordance with GAAP. A reconciliation of such non-GAAP financial information to the most comparable GAAP information is included in the financial statements portion of this release, as well as on our Web site in the Investors section at www.cirrus.com. This non-GAAP financial information is not meant as a substitute for the company’s GAAP results, but is included solely for informational and comparative purposes. Cirrus Logic management believes that certain non-GAAP financial information is useful to investors because it can enhance their understanding of the results and trends in the company’s business, and therefore uses this non-GAAP financial information internally to evaluate and manage the company’s operations. The non-GAAP financial information that the company uses may differ from that used by other companies. This non-GAAP financial information should be considered in addition to, and not as a substitute for, the company’s results that were prepared in accordance with GAAP.
Conference Call
Cirrus Logic management will hold a conference call to discuss the company’s results for the first quarter of fiscal year 2007, on July 26, 2006, at 5:00 p.m. EDT. Those wishing to join should call (303) 262-2125 (passcode: Cirrus Logic) at approximately 4:50 p.m. EDT. A replay of the conference call will also be available beginning one hour after the completion of the call, until August 2, 2006. To access the recording, call (303) 590-3000 (passcode: 11064891 #). A live and an archived webcast of the conference call will also be available via the company’s Web site at www.cirrus.com.
Cirrus Logic, Inc.
Cirrus Logic develops high-precision, analog and mixed-signal integrated circuits for a broad range of consumer and industrial markets. Building on its diverse analog mixed-signal patent portfolio, Cirrus Logic delivers highly optimized products for consumer and commercial audio, automotive entertainment and industrial applications. The company operates from headquarters in Austin, Texas, with offices in Colorado, Europe, Japan and Asia. More information about Cirrus Logic is available at www.cirrus.com.
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Safe Harbor Statement
Except for historical information contained herein, the matters set forth in this news release contain forward-looking statements, including our estimates of second quarter fiscal year 2007 sales, gross margin, combined research and development and selling, general and administrative expense levels, and share-based compensation expense. In some cases, forward-looking statements are identified by words such as we “expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “estimates,” and “intend,” variations of these types of words and similar expressions 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. These forward-looking statements are based on our current expectations, estimates and assumptions and are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, the following: overall conditions in the semiconductor market; our ability to introduce new products on a timely basis and to deliver products that perform as anticipated; risks associated with international sales and international operations; the level of orders and shipments during the second quarter of fiscal year 2007, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; overall economic pressures; pricing pressures; hardware or software deficiencies; our dependence on subcontractors for assembly, manufacturing, packaging and testing functions; our ability to make continued sufficient investments in research and development; foreign currency fluctuations; the retention of key employees; and the risk factors listed in our Form 10-K for the year ended March 25, 2006, and in our other filings with the Securities and Exchange Commission, which are available at www.sec.gov. The foregoing information concerning our business outlook represents our outlook as of the date of this news release, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.
Cirrus Logic and Cirrus are trademarks of Cirrus Logic Inc.
Summary financial data follows:
