CRUS Cirrus Logic Inc

Cirrus Logic Inc. (Nasdaq: CRUS), a leader in high-precision analog and digital signal processing components, today announced financial results for the first quarter of fiscal year 2009, which ended June 28, 2008. The company reported first quarter fiscal year 2009 revenue of $44.0 million, compared with $41.1 million during the first quarter of fiscal year 2008 and $44.8 million in the previous quarter. Gross margin for the quarter was 56 percent compared with 59 percent for the first quarter of fiscal year 2008 and 55 percent in the previous quarter. These first quarter results included approximately $700,000 of revenue and approximately $200,000 in costs of sales associated primarily with the shipment of end of life products from Caretta Integrated Circuits. Total GAAP operating expenses for the quarter were $23.6 million, which included stock-based compensation, acquisition-related amortization of intangibles, and vacated facility-related charges of approximately $2.1 million. Cirrus Logic reported first quarter GAAP net income of $2.1 million, or $0.03 per share based on 67.2 million average diluted shares outstanding. Excluding the items noted above, non-GAAP net income was $3.7 million, or $0.06 earnings per share. Total cash and marketable securities at the end of the first fiscal quarter was $103 million, compared with $187 million at the end of the prior fiscal quarter. As previously announced, during the first quarter the company completed its $150 million share repurchase program. Outlook for Second Quarter FY 2009 (ending September 27, 2008): Revenue is expected to range between $50 million and $54 million; Gross margin is expected to be between 53 percent and 55 percent; and Combined R&D and SG&A expenses are expected to range between $23 million and $25 million, which include approximately $2.0 million in share-based compensation and amortization of acquisition-related intangibles expenses. �We�re pleased with our financial performance in Q1, especially in light of current challenging market conditions. Revenues were up year over year and we continue to drive operating expenses down,� said Jason Rhode, president and chief executive officer.��Our guidance for the September quarter reflects our expectation for meaningful revenue growth in the second half of this calendar year, driven by strong demand for our portable audio products.� Conference Call Cirrus Logic management will hold a conference call to discuss the company�s results for the first quarter of fiscal year 2009, on July 23, 2008, at 5:00 p.m. EDT. Those wishing to join should call 303-205-0066 (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 July 30, 2008. To access the recording, call 303-590-3000 (passcode: 11117098#). A live and an archived webcast of the conference call will also be available via the investor section of 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. Use of non-GAAP Financial Information To supplement Cirrus Logic's financial statements presented on a GAAP basis, Cirrus has provided non-GAAP net earnings, and non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter is included in the tables below. Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because management believes such information is useful to our investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. As a note, the non-GAAP financial information used by Cirrus Logic may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. Safe Harbor Statement Except for historical information contained herein, the matters set forth in this news release contain forward-looking statements, including our projections for revenue growth and market share gains, and estimates of second quarter fiscal year 2009 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 �expect,� �anticipate,� �target,� �project,� �believe,� �goals,� �opportunity,� �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 economic pressures and general market and economic conditions; 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 2009, 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 sufficient investments in research and development; foreign currency fluctuations; the retention of key employees; expenses associated with on-going litigation related to the Company�s stock option program; and the risk factors listed in our Form 10-K for the year ended March 29, 2008, 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 � Jun. 28, Mar. 29, Jun. 30, 2008 2008 2007 � Net revenue $ 44,011 $ 44,822 $ 41,124 Cost of sales � 19,360 � 20,115 � 16,759 Gross Margin � 24,651 � 24,707 � 24,365 Gross Margin Percentage 56.0% 55.1% 59.2% � Operating expenses: Research and development 11,605 12,326 10,913 Selling, general and administrative 12,003 13,304 12,981 Restructuring and other costs � - � 12,095 � - Total operating expenses � 23,608 � 37,725 � 23,894 � Income (loss) from operations 1,043 (13,018) 471 � Interest income, net 936 2,411 3,507 Other income (expense), net � 195 � (73) � 26 Income (loss) before income taxes 2,174 (10,680) 4,004 Provision for income taxes � 36 � 3,005 � 15 Net income (loss) $ 2,138 � $ (13,685) $ 3,989 � Basic income (loss) per share: $ 0.03 $ (0.16) $ 0.05 Diluted income (loss) per share: $ 0.03 $ (0.16) $ 0.04 � � Basic weighted average common shares outstanding 66,622 85,310 88,490 Diluted weighted average common shares outstanding 67,213 85,310 89,669 � Prepared in accordance with Generally Accepted Accounting Principles CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in thousands � � � � Jun. 28, � Mar. 29, � Jun. 30, 2008 2008 2007 ASSETS Current assets Cash and cash equivalents $ 41,405 $ 56,614 $ 97,566 Restricted investments 5,755 5,755 5,755 Marketable securities 55,747 125,129 174,242 Accounts receivable, net 21,554 22,652 19,428 Inventories 24,006 22,464 17,512 Other current assets � 8,973 � 10,041 � 14,138 Total Current Assets 157,440 242,655 328,641 � Property and equipment, net 20,332 20,961 10,508 Intangibles, net 25,212 26,044 11,246 Goodwill 6,194 6,194 6,461 Investment in Magnum Semiconductor - - 3,657 Other assets � 2,393 � 2,452 � 1,900 Total Assets $ 211,571 $ 298,306 $ 362,413 � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 15,235 $ 16,164 $ 11,643 Accrued salaries and benefits 6,159 7,085 6,565 Other accrued liabilities 8,686 18,081 9,890 Deferred income on shipments to distributors 5,809 6,584 5,362 Income taxes payable � 84 � 76 � 6 Total Current Liabilities 35,973 47,990 33,466 � Long-term restructuring accrual 1,554 1,818 2,995 Other long-term obligations 7,321 7,563 9,664 � Stockholders' equity: Capital stock 940,702 937,716 932,689 Accumulated deficit (773,288) (696,557) (615,616) Accumulated other comprehensive loss � (691) � (224) � (785) Total Stockholders' Equity � 166,723 � 240,935 � 316,288 Total Liabilities and Stockholders' Equity $ 211,571 $ 298,306 $ 362,413 � Prepared in accordance with Generally Accepted Accounting Principles CIRRUS LOGIC, INC. RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION (unaudited, in thousands, except per share data) (not prepared in accordance with GAAP) � We use these Non-GAAP financial numbers to assist us in the management of the Company because we believe that this information provides a more consistent and complete understanding of the underlying results and trends of the ongoing business due to the uniqueness of these charges. � � � � � � Quarter Ended � Jun. 28, 2008 Net Income Reconciliation GAAP net income $ 2,138 Non-GAAP adjustments: Adjust: Stock compensation expense 1,538 Amortization of acquisition intangibles 364 Facility and other related adjustments 261 Net revenue impact related to Caretta (692) Costs of sales associated with Caretta during the quarter 132 � Non-GAAP net income $ 3,741 � EPS Reconciliation GAAP diluted earnings per share $ 0.03 Non-GAAP adjustments: Effect of stock compensation expense 0.03 Effect of amortization of acquisition intangibles 0.01 Effect of facility and other related adjustments - Effect of revenue impact related to Caretta (0.01) Effect of cost of sales related to Caretta - � Non-GAAP diluted earnings per share $ 0.06 � Operating Expense Reconciliation GAAP Operating Expenses $ 23,608 Non-GAAP adjustments: Less: Stock compensation expense 1,473 Amortization of acquisition intangibles 364 Facility adjustments on subleases 261 � Non-GAAP Operating Expenses $ 21,510