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 second quarter of fiscal year 2009, which ended Sept. 27, 2008. Revenue for the quarter was $53.3 million and represents a 13 percent increase compared to $47.0 million during the second quarter of fiscal year 2008 and a 21 percent increase compared to $44.0 million in the previous quarter. Gross margin for the quarter was 56 percent, compared with 57 percent for the second quarter of fiscal year 2008 and 56 percent in the previous quarter. Total GAAP operating expenses for the quarter were $24.2 million, which included $1.8 million in legal fees associated with derivative lawsuits related to the Company�s past stock option practices. Additionally, GAAP operating expenses included stock-based compensation and acquisition-related amortization of intangibles charges of approximately $1.5 million. Income from operations on a GAAP basis was $5.8 million, or 11 percent. Excluding the items noted above, the non-GAAP income from operations was $9.1 million or 17 percent. Cirrus Logic reported second quarter GAAP net income of $6.4 million, or $0.10 per share based on 65.3 million average diluted shares outstanding. Excluding the items noted above, non-GAAP net income was $9.7 million, or $0.15 earnings per share. �Q2 represents great progress toward Cirrus Logic�s long-term financial model. Revenues were up 13 percent versus last year driven primarily by strong growth in new product sales. Additionally, expenses were down and we delivered a substantial increase in earnings per share,� said Jason Rhode, president and chief executive officer.��While we are concerned about overall macroeconomic conditions, we believe that our strong financial position, recent product introductions,�and success in portable audio enable�us�to make further progress towards our strategic�objectives�and grow our�overall long-term market share.� Outlook for Third Quarter FY 2009 (ending Dec. 27, 2008): Revenue is expected to range between $51 million and $55 million; Gross margin is expected to be between 54 percent and 56 percent; and Combined R&D and SG&A expenses are expected to range between $22 million and $24 million, which include approximately $2 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 2009, on Oct. 22, 2008, at 5:00 p.m. EDT. Those wishing to join should call 303-205-0033 (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. 29, 2008. To access the recording, call 303-590-3000 (passcode: 11121033#). 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, non-GAAP income from operations, 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 estimates of third quarter fiscal year 2009 revenue, gross margin, combined research and development and selling, general and administrative expense levels, share-based compensation expense, and amortization of acquired intangible expenses. 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; the level of orders and shipments during the third quarter of fiscal year 2009, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; the loss of a key customer; pricing pressures; 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 � Sep. 27, Jun. 28, Sep. 29, � 2008 � 2008 � 2007 � Net revenue $ 53,278 $ 44,011 $ 47,034 Cost of sales � 23,292 � 19,360 � 20,213 Gross Margin � 29,986 � 24,651 � 26,821 Gross Margin Percentage 56.3% 56.0% 57.0% � Operating expenses: Research and development 10,864 11,605 12,051 Selling, general and administrative 11,597 12,003 12,819 Impairment of non-marketable securities - - 3,657 Acquired in process R&D - - 1,761 Litigation settlement, net � 1,771 � - � - Total operating expenses � 24,232 � 23,608 � 30,288 � Income (loss) from operations 5,754 1,043 (3,467) � Interest income, net 637 936 3,180 Other income (expense), net � (52) � 195 � (30) Income (loss) before income taxes 6,339 2,174 (317) Provision (benefit) for income taxes � (16) � 36 � 15 Net income (loss) $ 6,355 $ 2,138 $ (332) � Basic income (loss) per share: $ 0.10 $ 0.03 $ - Diluted income (loss) per share: $ 0.10 $ 0.03 $ - � � Basic weighted average common shares outstanding 64,971 66,622 88,998 Diluted weighted average common shares outstanding 65,317 67,213 88,998 � Prepared in accordance with Generally Accepted Accounting Principles CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in thousands � � � � � Sep. 27, � Jun. 28, � Sep. 29, � 2008 � 2008 � 2007 ASSETS Current assets Cash and cash equivalents $ 55,566 $ 41,405 $ 53,211 Restricted investments 5,755 5,755 5,755 Marketable securities 48,565 55,747 174,490 Accounts receivable, net 25,556 21,554 23,814 Inventories 28,106 24,006 19,450 Other current assets � 7,794 � 8,973 � 14,490 Total Current Assets 171,342 157,440 291,210 � Long-term marketable securities - - 11,490 Property and equipment, net 20,779 20,332 20,720 Intangibles, net 24,559 25,212 31,718 Goodwill 6,194 6,194 12,655 Other assets � 2,301 � 2,393 � 2,190 Total Assets $ 225,175 $ 211,571 $ 369,983 � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 17,620 $ 15,235 $ 14,551 Accrued salaries and benefits 7,552 6,159 7,873 Other accrued liabilities 8,685 8,686 10,537 Deferred income on shipments to distributors 7,751 5,809 6,946 Income taxes payable � (28) � 84 � 8 Total Current Liabilities 41,580 35,973 39,915 � Long-term restructuring accrual 1,285 1,554 2,674 Other long-term obligations 7,093 7,321 10,126 � Stockholders' equity: Capital stock 942,853 940,702 933,824 Accumulated deficit (766,933) (773,288) (615,948) Accumulated other comprehensive loss � (703) � (691) � (608) Total Stockholders' Equity � 175,217 � 166,723 � 317,268 Total Liabilities and Stockholders' Equity $ 225,175 $ 211,571 $ 369,983 � 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 � Sep. 27, 2008 Net Income Reconciliation GAAP net income $ 6,355 Non-GAAP adjustments: Adjust: Stock compensation expense 1,230 Amortization of acquisition intangibles 364 Facility and other related adjustments (34) Provision for litigation expenses � 1,771 � � Non-GAAP net income $ 9,686 � EPS Reconciliation GAAP diluted earnings per share $ 0.10 Non-GAAP adjustments: Effect of stock compensation expense 0.02 Effect of amortization of acquisition intangibles - Effect of facility and other related adjustments - Effect of provision for litigation expenses 0.03 � Non-GAAP diluted earnings per share $ 0.15 � Operating Income Reconciliation GAAP Operating Income $ 5,754 Adjust: Stock compensation expense 1,230 Amortization of acquisition intangibles 364 Facility and other related adjustments (34) Provision for litigation expenses � 1,771 Non-GAAP Operating Income $ 9,085 � Operating Income Percent Reconciliation GAAP Operating Income percent 11% Adjust: Stock compensation expense 2% Amortization of acquisition intangibles 1% Facility and other related adjustments 0% Provision for litigation expenses � 3% Non-GAAP Operating Income � 17% � Operating Expense Reconciliation GAAP Operating Expenses $ 24,232 Non-GAAP adjustments: Less: Stock compensation expense 1,182 Amortization of acquisition intangibles 364 Facility and other related adjustments (34) Provision for litigation expenses 1,771 � Non-GAAP Operating Expenses $ 20,949