Cirrus Logic Reports Fiscal Q2 2008 Financial Results

Cirrus Logic Inc. (Nasdaq:CRUS), a leader in high-precision analog and digital signal processing components, today announced financial results for the second quarter fiscal year 2008, which ended Sept. 29, 2007. The company reported second quarter fiscal year 2008 revenue of $47.0 million, compared with $41.1 million in the previous quarter, and $48.2 million during the second quarter of fiscal year 2007. Second quarter gross margin was 57.0 percent compared to 58.5 percent for the second quarter of fiscal year 2007. Operating expenses for the quarter were $30.3 million and include a $3.7 million impairment charge to the company’s remaining investment in Magnum Semiconductor, a $1.8 million charge associated with the in-process R&D related to the acquisition of Apex Microtechnology, approximately $555,000 in stock-based compensation expense, $175,000 in legal fees related to current activities associated with the concluded stock option review, and approximately $300,000 in the amortization of intangibles related to acquisitions. The net loss for the second quarter on a GAAP basis was approximately $300,000. Total cash and marketable securities at the end of the second fiscal quarter was $245 million, compared with $278 million at the end of the prior fiscal quarter. Cirrus generated approximately $9 million, excluding approximately $42 million used for the Apex acquisition. "We made great progress in Q2 towards our goal of rebuilding the foundation of Cirrus Logic and positioned ourselves well to achieve our long-term growth and profitability goals,” said Jason Rhode, Cirrus Logic president and chief executive officer. "We closed on the acquisition of Apex Microtechnology, which we expect to strengthen our future EPS and diversify our industrial business. We saw revenues from new products more than double versus Q1, driven by products in several of our target markets and multiple new tier one customers. Also on the product front, we released several new products to full production status, and four new first revision products were sent to our foundry partners. "We added Tim Turk as the leader of our sales team, and he has already had a significant impact on his organization’s effectiveness. We were also extremely pleased to announce yesterday that Scott Anderson has joined us to lead the Mixed Signal Audio Division. Scott will be a great leader for MSA, and his wealth of experience will be a great resource for the whole company. "I am excited about the progress we’ve made in Q2, and I am confident that we are taking the right steps to establish Cirrus as the first-choice supplier of analog and digital signal processing components.” Outlook for Third Quarter FY 2008 (ending December 29, 2007): Revenue is expected to range between $47 million and $51 million; Gross margin is expected to be between 56 percent and 59 percent; and Combined GAAP operating expenses are expected to range between $26 million and $28 million, including approximately $1.8 million in share-based compensation and amortization of acquisition-related intangibles expenses. Conference Call Cirrus Logic management will hold a conference call to discuss the company’s results for the second quarter of fiscal year 2008, on Oct. 24, 2007, at 5:00 p.m. EDT. Those wishing to join should call 303-262-2193 (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 Oct. 31, 2007. To access the recording, call 303-590-3000 (passcode: 11098789#). 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 and signal-processing patent portfolio, Cirrus Logic delivers highly optimized products for consumer and commercial audio, automotive entertainment, and industrial and aerospace applications. The company operates from headquarters in Austin, Texas, with offices in Tucson, Ariz., 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 contain forward-looking statements, including our estimates of third quarter fiscal year 2008 revenue, 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: our ability to successfully integrate our recent acquisitions into our business; 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 third quarter of fiscal year 2008, 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; expenses associated with the Company’s stock option investigation, and related ongoing litigation and administrative proceedings; and the risk factors listed in our Form 10-K for the year ended March 31, 2007, as updated on July 30, 2007 in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2007, 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: CIRRUS LOGIC, INC.CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS(unaudited)(in thousands, except per share data)       Quarter Ended Sept. 29,2007 June 30,2007 Sept. 23,2006   Net revenue $ 47,034 $ 41,124 $ 48,179 Cost of sales   20,213     16,759     20,014   Gross Margin   26,821     24,365     28,165   Gross Margin Percentage 57.0 % 59.2 % 58.5 %   Operating expenses: Research and development 12,051 10,913 10,103 Selling, general and administrative 12,819 12,981 12,389 Restructuring and other costs - - (428 ) Impairment of non-marketable securities 3,657 - - Acquired in process R&D   1,761     -     -   Total operating expenses   30,288     23,894     22,064     Income (loss) from operations (3,467 ) 471 6,101   Interest income, net 3,180 3,507 3,154 Other income (expense), net   (30 )   26     (25 ) Income (loss) before income taxes (317 ) 4,004 9,230 Provision (benefit) for income taxes   15     15     (97 ) Net income (loss) $ (332 ) $ 3,989   $ 9,327     Basic income per share: $ - $ 0.05 $ 0.11 Diluted income per share: $ - $ 0.04 $ 0.11     Basic weighted average common shares outstanding 88,998 88,490 87,553 Diluted weighted average common shares outstanding 88,998 89,669 88,499   Prepared in accordance with Generally Accepted Accounting Principles CIRRUS LOGIC, INC.CONSOLIDATED CONDENSED BALANCE SHEETunaudited; in thousands         Sept. 29,2007 June 30,2007 Sept. 23,2006 ASSETS Current assets Cash and cash equivalents $ 53,211 $ 97,566 $ 96,140 Restricted investments 5,755 5,755 5,755 Marketable securities 174,490 174,242 158,817 Accounts receivable, net 23,814 19,428 21,924 Inventories 19,450 17,512 21,427 Other current assets   14,490     14,138     5,949   Total Current Assets 291,210 328,641 310,012   Long-term marketable securities 11,490 - 992 Property and equipment, net 20,720 10,508 12,845 Intangibles, net 31,718 11,246 2,894 Goodwill 12,655 6,461 - Investment in Magnum Semiconductor - 3,657 7,947 Other assets   2,190     1,900     3,347   Total Assets $ 369,983   $ 362,413   $ 338,037     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 14,551 $ 11,643 $ 10,824 Accrued salaries and benefits 7,873 6,565 7,038 Other accrued liabilities 10,537 9,890 9,565 Deferred income on shipments to distributors 6,946 5,362 6,427 Income taxes payable   8     6     2,079   Total Current Liabilities 39,915 33,466 35,933   Long-term restructuring accrual 2,674 2,995 3,621 Other long-term obligations 10,126 9,664 9,155   Stockholders' equity: Capital stock 933,824 932,689 922,086 Accumulated deficit (615,948 ) (615,616 ) (631,923 ) Accumulated other comprehensive loss   (608 )   (785 )   (835 ) Total Stockholders' Equity   317,268     316,288     289,328   Total Liabilities and Stockholders' Equity $ 369,983   $ 362,413   $ 338,037     Prepared in accordance with Generally Accepted Accounting Principles