Exhibit 99.1
Cirrus Logic Reports 10 Percent Sequential Revenue Growth in Fiscal Q3;
Audio and Video Product Sales Increase, Balance Sheet Strengthens
AUSTIN, Texas--(BUSINESS WIRE)--Jan. 21, 2004--Cirrus Logic Inc.
(Nasdaq:CRUS) today announced financial results for the third quarter
of fiscal 2004, ended Dec. 27, 2003.
The company reported third quarter revenue of $55.3 million, up 10
percent from $50.1 million reported in the prior quarter. Third
quarter gross margins were 52.0 percent, compared with 51.9 percent in
the second quarter. Third quarter combined research and development
and selling, general and administrative expenses were $30.4 million, a
reduction from $32.6 million in the second quarter.
Net income in the third quarter was $39.4 million, or $0.46 per
diluted share, compared with $21.1 million, or $0.25 per diluted
share, in the second quarter. The third quarter net income included a
one-time benefit of $45.0 million, resulting from a favorable
litigation settlement with Western Digital Corporation. The third
quarter results also included $4.1 million of net expense for
acquisition-, legal- and restructuring-related items, primarily
amortization of acquired intangibles.
Total cash at the end of the third quarter increased to $180.0
million, from $127.3 million at the end of the second quarter.
Excluding cash received during the third quarter from two favorable
litigation settlements, the company was cash neutral from operations.
"We were pleased to see an increase in both our audio and video
sales for the second consecutive quarter. Our sequential revenue
growth is a positive indicator of our increased traction in the video
recording market and our continued leadership in the audio market,"
said David D. French, president and CEO of Cirrus Logic Inc. "We were
also pleased that our ongoing cost management efforts have resulted in
reduced combined R&D and SG&A expenses for the seventh consecutive
quarter."
Highlights from the Consumer Electronics Show
-- Cirrus Logic launched a new family of audio digital signal
processors (DSP) that is targeted for the audio/video
receiver, automotive entertainment and other digital
entertainment markets. This advanced DSP family enables new
consumer entertainment devices to support content delivered
from two different sources and automatic room calibration. The
result is a powerful and cost-effective solution for
manufacturers of high-performance digital consumer
entertainment systems.
-- LG Electronics, a world leader in DVD players, selling under
its own brand and the Zenith brand in the U.S., announced a
next-generation DVD recorder based on Cirrus Logic's audio and
video processors, mixed-signal chipsets and software. LG
Electronics' product, expected to be in volume production by
this June, makes them the first Cirrus Logic customer with an
announced DVD recorder with a -RW and +RW product offering.
-- Mustek, a major Cirrus Logic end customer and one of the top
five manufacturers of DVD recorders, announced a
next-generation DVD recorder powered by Cirrus Logic's audio
and video chipsets and software that features the ability to
record digital video to a hard disk drive.
-- Cirrus Logic showcased a number of new customer products based
on its reference designs and chipset solutions, including
digital video recording products from BBK Electronics,
CyberHome, Ellion, GoVideo, LG Electronics, Mustek, Sampo and
Sony. Several of these manufacturers had products available
for the 2003 holiday sales period at leading U.S. retail
outlets, including Wal-Mart, Target and Radio Shack; regional
retailers, including Good Guys and Fry's Electronics; as well
as leading European retailers such as Karstadt and
Media-Markt.
Outlook and Guidance
"Looking ahead to the March quarter, we are evaluating channel and
retail inventory levels and the actual sell-through from the December
holiday season. Although we have design-win momentum and strong
product acceptance, we are approaching the March quarter cautiously
and we're expecting the lower demand that typically follows the
December quarter in consumer electronics for chipmakers," said French.
"We are excited about our prospects for the balance of
calendar-year 2004. We continue to invest in new product development
and to expand our customer support."
Fourth Quarter FY04 (ending Mar. 27, 2004)
-- Revenue is expected to be between $48 million and $52 million.
-- Gross margins are expected to be in the range of 51 percent to
53 percent.
-- Combined R&D and SG&A expenses are expected to total $30
million to $32 million.
-- Total cash is expected to range between $177 million to $181
million at the end of the fourth quarter.
Conference Call
Cirrus Logic management will hold a conference call to discuss
these results today, Jan. 21st, at 4 p.m. Central Time. Those wishing
to join should dial 617-847-3007 (pass code: Cirrus Logic) at
approximately 3:50 p.m. Central Time. A replay of the call will be
available starting one hour after the completion of the call until
Jan. 28, 2004. To access the replay, dial 617-801-6888 (pass code:
79362223). A live and an archived Web cast of the conference call will
also be available via the company's Web site at www.cirrus.com.
Upcoming Investor Conference
Cirrus Logic management will be presenting at the Thomas Weisel
Partners Technology 2004 Conference in San Francisco on Feb. 3rd.
Those wishing to listen to management's presentation can hear a live
and/or an archived Web cast of this event via the company's Web site
at www.cirrus.com.
Cirrus Logic Inc.
Cirrus Logic is a premier supplier of high-performance analog,
mixed-signal and digital processing solutions for consumer
entertainment electronics, automotive entertainment and industrial
product applications. Building on its global market leadership in
audio ICs and its rich mixed-signal patent portfolio, Cirrus Logic
targets audio, video and precision mixed-signal applications in these
growing markets. The company operates from headquarters in Austin,
Texas, with offices in California, Colorado, Europe, Japan and Asia.
More information about Cirrus Logic is available at www.cirrus.com.
Safe Harbor Statement
Except for historical information contained herein, the matters
set forth in this news release, including our estimates of fourth
fiscal quarter revenues, combined research and development and
selling, general and administrative expense levels, gross margin and
cash levels, expectations regarding our revenue growth opportunities,
including the introduction of new products by other companies
containing our components during the fourth quarter of fiscal year
2004 and calendar year 2004, and our estimates regarding future retail
prices, 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 from our current
expectations, estimates and assumptions and the forward-looking
statements made in this press release. These risks and uncertainties
include, but are not limited to, the following: overall conditions in
the semiconductor market; the expansion of the consumer digital
entertainment electronics 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
fourth quarter of fiscal-year 2004, as well as customer cancellations
of orders, or the failure to place orders consistent with forecasts;
our expectations regarding our potential cost savings; pricing
pressures; hardware or software deficiencies; our dependence on
subcontractors for assembly, manufacturing, packaging and testing
functions; our ability to make continued substantial investments in
research and development; foreign currency fluctuations; the retention
of key employees; the impact of restructuring and other costs, such as
work force reductions and facility consolidations; and the risk
factors listed in our Form 10-K for the year ended March 29, 2003, and
in other filings with the Securities and Exchange Commission. 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. All
other product names noted herein may be trademarks of their respective
holders.
Summary financial data follows:
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Quarter Ended
-----------------------------
Dec. 27, Sep. 27, Dec. 28,
2003 2003 2002
--------- --------- ---------
Net sales $55,270 $50,130 $60,516
Costs and expenses:
Cost of sales 26,552 24,132 29,361
Research and development 18,224 20,427 21,886
Selling, general and administrative 12,163 12,203 17,909
Restructuring and other costs 896 395 2,208
Amortization of acquired intangibles 3,419 3,778 4,456
Patent infringement settlements, net - (14,402) -
Litigation settlement (45,000) - -
--------- --------- ---------
Total costs and expenses 16,254 46,533 75,820
--------- --------- ---------
Income (loss) from operations 39,016 3,597 (15,304)
Realized gain (loss) on marketable equity
securities - 10,080 -
Interest income (expense), net 450 247 542
Other income (expense), net 58 8 (1,886)
--------- --------- ---------
Income (loss) before income taxes and
loss from discontinued operations 39,524 13,932 (16,648)
Provision (benefit) for income taxes 75 (7,122) (4,435)
--------- --------- ---------
Income (loss) from continuing operations 39,449 21,054 (12,213)
Loss from discontinued operations - - -
--------- --------- ---------
Net income (loss) $39,449 $21,054 $(12,213)
========= ========= =========
Basic income (loss) per share:
From continuing operations $0.47 $0.25 $(0.15)
Discontinued operations - - -
--------- --------- ---------
$0.47 $0.25 $(0.15)
========= ========= =========
Diluted income (loss) per share:
From continuing operations $0.46 $0.25 $(0.15)
Discontinued operations - - -
--------- --------- ---------
$0.46 $0.25 $(0.15)
========= ========= =========
Basic weighted average common shares
outstanding 84,015 83,946 83,487
Diluted weighted average common shares
outstanding 86,440 85,556 83,487
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Nine Months Ended
------------------------
Dec. 27, Dec. 28,
2003 2002
----------- -----------
Net sales $146,124 $209,854
Costs and expenses:
Cost of sales 71,673 103,979
Research and development 59,297 75,804
Selling, general and administrative 36,883 58,319
Restructuring and other costs 8,931 7,395
Amortization of acquired intangibles 10,975 13,803
Patent infringement settlements, net (14,402) -
Litigation settlement (45,000) -
----------- -----------
Total costs and expenses 128,357 259,300
----------- -----------
Income (loss) from operations 17,767 (49,446)
Realized gain (loss) on marketable equity
securities 10,080 453
Interest income (expense), net 1,320 1,823
Other income (expense), net (7) (2,166)
----------- -----------
Income (loss) before income taxes and loss
from discontinued operations 29,160 (49,336)
Provision (benefit) for income taxes (7,026) (4,377)
----------- -----------
Income (loss) from continuing operations 36,186 (44,959)
Loss from discontinued operations - (1,452)
----------- -----------
Net income (loss) $36,186 $(46,411)
=========== ===========
Basic income (loss) per share:
From continuing operations $0.43 $(0.54)
Discontinued operations - (0.02)
----------- -----------
$0.43 $(0.56)
=========== ===========
Diluted income (loss) per share:
From continuing operations $0.42 $(0.54)
Discontinued operations - (0.02)
----------- -----------
$0.42 $(0.56)
=========== ===========
Basic weighted average common shares
outstanding 83,908 83,302
Diluted weighted average common shares
outstanding 85,258 83,302
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands; unaudited)
Dec. 27, Sep. 27, Dec. 28,
2003 2003 2002
--------- --------- ---------
ASSETS
Current assets
Cash and cash equivalents $172,268 $119,059 $111,959
Restricted cash 7,751 8,265 12,844
Marketable equity securities 2,466 1,654 904
Accounts receivable, net 18,710 21,860 27,886
Inventories 26,836 25,130 28,523
Other current assets 11,181 19,243 18,564
--------- --------- ---------
Total Current Assets 239,212 195,211 200,680
Property and equipment, net 23,814 25,317 38,393
Goodwill and intangibles, net 32,663 37,035 178,772
Other assets 4,676 5,220 6,412
--------- --------- ---------
Total Assets $300,365 $262,783 $424,257
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $50,222 $53,342 $56,828
Current maturities of long-term debt
and capital lease obligations - - -
Income taxes payable 30,185 30,319 37,527
--------- --------- ---------
Total Current Liabilities 80,407 83,661 94,355
Long-term obligations 16,114 16,587 13,414
Minority interest in eMicro - - 599
Stockholders' equity:
Capital stock 870,714 869,238 867,519
Accumulated deficit (667,726) (707,175) (551,110)
Accumulated other comprehensive income
(loss) 856 472 (520)
--------- --------- ---------
Total Stockholders' Equity 203,844 162,535 315,889
--------- --------- ---------
Total Liabilities and
Stockholders' Equity $300,365 $262,783 $424,257
========= ========= =========
CONTACT: Cirrus Logic Inc., Austin
David H. Allen, 512-851-4122
david.allen@cirrus.com