Exhibit 99.1
Cirrus Logic Reports Fiscal Q2 2005 Financial Results
AUSTIN, Texas--(BUSINESS WIRE)--Oct. 20, 2004--Cirrus Logic Inc.
(Nasdaq:CRUS) today announced financial results for the second quarter
of fiscal year 2005, ended Sept. 25, 2004.
The company reported second quarter fiscal year 2005 revenue of
$51.3 million, compared with $59.1 million in the prior quarter and
$50.1 million reported in the second quarter of fiscal year 2004.
Second quarter gross margin was 44.7 percent, compared with 53.6
percent in the prior quarter and 51.9 percent in the second quarter
one year ago. Second quarter gross margin included a net charge of
$3.9 million, for excess and obsolete inventory, which had a 7.6
percent negative impact on gross margin. Second quarter fiscal year
2005 combined research and development and selling, general and
administrative expenses were $31.0 million, compared with $31.2
million in the prior quarter and $32.6 million in the second fiscal
quarter of 2004.
Net loss in the second quarter fiscal year 2005 was $15.1 million,
or a loss of $0.18 per share. The net loss includes $8.0 million of
expense primarily for software write-off, restructuring- and
acquisition-related items. In comparison, the company reported a net
loss of $3.4 million in the prior quarter, which included $5.7 million
of expense for acquisition- and restructuring-related items and a $0.7
million realized gain on the sale of marketable securities. The
company reported net income of $21.1 million in the second quarter of
fiscal year 2004, which included benefits of $31.7 million resulting
from various positive events.
Total cash and marketable securities at the end of the second
quarter of fiscal year 2005 was $178 million, compared with $198
million at the end of the prior quarter. The decline was primarily due
to an increase in inventory levels built in the first half of fiscal
year 2005, and to a lesser extent, a $4.3 million lease buy out in the
September quarter, as well as facility consolidations and expenses
associated with workforce reductions.
"As we indicated in our Sept. 23 press announcement, sales of
audio converters for DVD players, predominantly to Chinese
manufacturers, were lower than we had expected due in part to an
industry-wide inventory correction within the supply chain. Demand for
our video ICs was also lower than we anticipated as the emerging DVD
recorder market, particularly in North America, has taken longer to
develop into a consumer mass market. Despite this slower-than-expected
growth in the DVD recorder market, we are encouraged by a number of
design wins with top-tier accounts, such as LG, Samsung and Sony, that
are now entering volume production," said David D. French, president
and CEO of Cirrus Logic Inc.
Outlook and Guidance
"Our outlook for the December quarter -- typically a strong
quarter -- is cautious. We believe that the audio converter inventory
imbalance at our customers is in part, but not completely, behind us.
To reduce our IC inventories, we have reduced wafer starts across all
of our major product lines and anticipate lower inventory levels at
our company and in the channel this quarter. Looking ahead, we are
encouraged by the long-term demand trends and our customer design-in
activity for our core, high-margin industrial analog products," said
French.
Third Quarter FY 05 (ending Dec. 25, 2004)
-- Revenue is expected to be between $50 million and $55 million,
with revenue contribution from the following product
categories:
-- Analog, which includes the company's audio converter,
industrial analog, and processor product lines, is
expected to range between $43 million and $46 million, and
-- Video is expected to range between $7 million and $9
million.
-- Gross margin is expected to range between 51 percent and 53
percent.
-- Combined R&D and SG&A expenses are expected to range between
$28 million and $29 million.
Conference Call
Cirrus Logic management will hold a conference call to discuss
these results today, Oct. 20, at 4:00 p.m. Central Time. Those wishing
to join should dial 201-689-8044 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 Nov. 3, 2004. To access the replay,
dial 201-612-7415 (account #: 2445; conference #: 119505). 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 Conferences
Cirrus Logic management will be presenting at several upcoming
conferences -- the Silicon Hills Summit in Austin, Texas on Oct. 28;
the AeA Classic Financial Conference in Monterey, Calif., on Nov. 8-9;
Deutsche Bank 2004 Global Semiconductor and Semi Capital Equipment
Conference on Nov. 10 in Las Vegas; and the Lehman Brothers "T4 --
Technology and Telecom Trends for Tomorrow" Conference in San
Francisco on Dec. 8-10. Those wishing to listen to management's
presentation can hear a live and/or an archived web cast of these
available events 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 third
quarter fiscal year 2005 revenues, combined research and development
and selling, general and administrative expense levels, gross margin,
and expectations regarding our revenue growth 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 results of any
potential and pending litigation matters; the level of orders and
shipments during the third quarter of fiscal year 2005, as well as
customer cancellations of orders, or the failure to place orders
consistent with forecasts; 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 27, 2004, 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
------------------------------
Sept. 25, Jun. 26, Sept. 27,
2004 2004 2003
--------- --------- ----------
Net sales $51,332 $59,117 $50,130
Cost of sales 28,404 27,444 24,132
--------- --------- ----------
Gross Margin 22,928 31,673 25,998
--------- --------- ----------
Gross Margin Percentage 44.7% 53.6% 51.9%
Operating expenses:
Research and development 17,793 18,707 20,427
Selling, general and administrative 13,162 12,494 12,203
Restructuring and other costs 4,148 1,723 395
Amortization of acquired intangibles 3,419 3,419 3,778
Patent infringement settlements, net - - (14,402)
--------- --------- ----------
Total operating expenses 38,522 36,343 22,401
--------- --------- ----------
Total operating expenses as a
percent of revenue 75.0% 61.5% 44.7%
Income (loss) from operations (15,594) (4,670) 3,597
Operating income (loss) as a percent of
revenue (30.4%) (7.9%) 7.2%
Realized gain on marketable equity
securities - 669 10,080
Interest income and other, net 599 630 255
--------- --------- ----------
Income (loss) before income taxes and
loss from discontinued operations (14,995) (3,371) 13,932
Provision (benefit) for income taxes 66 24 (7,122)
--------- --------- ----------
Net income (loss) $(15,061) $(3,395) $21,054
========= ========= ==========
Basic and diluted income (loss) per
share $(0.18) $(0.04) $0.25
Basic weighted average common shares
outstanding 84,671 84,419 83,946
Diluted weighted average common
shares outstanding 84,671 84,419 85,556
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Six Months Ended
---------------------
Sept. 25, Sept. 27,
2004 2003
---------- ----------
Net sales $110,449 $90,854
Cost of sales 55,848 45,121
---------- ----------
Gross Margin 54,601 45,733
---------- ----------
Gross Margin Percentage 49.4% 50.3%
Operating expenses:
Research and development 36,500 41,073
Selling, general and administrative 25,656 24,720
Restructuring and other costs 5,871 8,035
Amortization of acquired intangibles 6,838 7,556
Patent infringement settlements, net - (14,402)
---------- ----------
Total operating expenses 74,865 66,982
---------- ----------
Total operating expenses as a percent of
revenue 67.8% 73.7%
Loss from operations (20,264) (21,249)
Operating loss as a percent of revenue (18.3%) (23.4%)
Realized gain on marketable equity securities 669 10,080
Interest income and other, net 1,229 805
---------- ----------
Loss before income taxes (18,366) (10,364)
Provision (benefit) for income taxes 90 (7,101)
---------- ----------
Net loss $(18,456) $(3,263)
========== ==========
Basic and diluted loss per share $(0.22) $(0.04)
Basic and diluted weighted average common shares
outstanding 84,545 83,855
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited)
(in thousands)
Sept. 25, Jun. 26, Sept. 27,
2004 2004 2003
--------- --------- ---------
ASSETS
Current assets
Cash and cash equivalents $100,050 $168,976 $119,059
Restricted cash 7,184 8,159 8,265
Marketable securities 45,435 18,438 1,654
Accounts receivable, net 28,677 27,927 21,860
Inventories 42,582 40,988 25,130
Other current assets 5,372 8,597 19,243
--------- --------- ---------
Total Current Assets 229,300 273,085 195,211
Long-term marketable securities 25,053 2,112 -
Property and equipment, net 21,843 22,982 25,317
Intangibles, net 19,923 24,929 37,035
Other assets 2,862 2,912 5,220
--------- --------- ---------
Total Assets $298,981 $326,020 $262,783
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $22,407 $32,347 $14,296
Accrued salaries and benefits 9,355 10,027 10,444
Other accrued liabilities 18,257 18,389 24,155
Deferred revenue 7,869 5,962 4,447
Income taxes payable 30,299 30,124 30,319
--------- --------- ---------
Total Current Liabilities 88,187 96,849 83,661
Long-term restructuring accrual 3,515 7,610 7,498
Other long-term obligations 10,389 9,915 9,089
Stockholders' equity:
Capital stock 873,634 873,319 869,238
Accumulated deficit (675,865) (660,804) (707,175)
Accumulated other comprehensive
income (loss) (879) (869) 472
--------- --------- ---------
Total Stockholders' Equity 196,890 211,646 162,535
--------- --------- ---------
Total Liabilities and
Stockholders' Equity $298,981 $326,020 $262,783
========= ========= =========
CONTACT: Cirrus Logic Inc., Austin
David H. Allen, 512-851-4122
david.allen@cirrus.com