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Continuing Cost Reduction Lowers Pro Forma Revenue Break-Even Point |
| AUSTIN, Texas--(BUSINESS
WIRE)--Oct. 23, 2002--Cirrus Logic Inc. (Nasdaq:CRUS) today announced financial results
for its second quarter of fiscal 2003, ended Sept. 28, 2002. Fiscal second quarter revenue was $73.3 million, down 3.6 percent from $76.0 million reported in the fiscal first quarter, but slightly above the revenue guidance provided on Sept. 30, 2002. Pro forma loss for the second quarter was $7.8 million or a pro forma loss per share of $0.09, versus a pro forma loss of $7.7 million or a pro forma loss per share of $0.09 in the first quarter. Pro forma gross margins for the second quarter were 48 percent, compared with 49 percent in the first quarter. Second quarter pro forma operating expenses were $43.4 million, down from $46.0 million in the prior quarter. Pro forma results exclude restructuring costs, acquisition-related amortization of intangibles and compensation charges, and other various charges. In accordance with generally accepted accounting principles (GAAP), second quarter net loss was $18.4 million, compared with a net loss of $15.8 million in the first quarter. This increase in the net loss was due, in large part, to a $2.3 million change in the second quarter related to our marketable equity securities. The net loss per share was $0.22, compared with a net loss per share of $0.19 in the prior quarter. Second quarter gross margins were 49 percent, compared with 51 percent in the first quarter. Second quarter operating expenses were $53.7 million, down from $55.2 million in the prior quarter. Total cash at the end of the second quarter was $127 million, compared with $145 million at the end of the first quarter. The decline in cash was primarily attributable to the company's operating loss, payments associated with a facilities consolidation and the net change in working capital in the second quarter. The company expects its cash burn rate to decrease substantially over the next quarter as operating losses narrow and the facilities consolidation is completed. "As a result of our cost reduction focus, we have lowered our pro forma break-even revenue point to approximately $80 million to $85 million, down from $105 million at the end of fiscal 2002. We will continue to seek further efficiencies as we strengthen our leadership position in digital entertainment electronics," said David D. French, Cirrus' president and CEO. "Our DVD decoder business grew again in the second quarter as we continued to broaden our customer base overall. We have just announced the most powerful programmable video decoder in the market, our CS98200, and are sampling customers this quarter. This highly integrated solution combines advanced digital audio and video capabilities that allow our mid-range and high-end customers to offer premium features at competitive prices in DVD products targeted for Christmas 2003. We believe our superior breadth of audio, video and systems integration capabilities, along with our strong customer relationships, will enable us to further our success," French said. Video Highlights:
Audio Highlights:
Outlook and Guidance:
Pro Forma Third Quarter FY03 (ending Dec. 28, 2002)
These expected pro forma results exclude restructuring costs, acquisition-related amortization of intangibles and compensation charges of approximately $6 million to $7 million in the fiscal third quarter. GAAP Third Quarter FY03 (ending Dec. 28, 2002)
Conference Call Cirrus Logic management will hold a conference call to discuss these results today, Oct. 23, at 4 p.m. Central Time/5 p.m. Eastern Time. Those wishing to join should dial 712/271-3012 and reference the passcode "Cirrus Logic" at approximately 3:50 p.m. Central Time. A live webcast of the conference call will also be available via the company's Web site at www.cirrus.com. A replay of the call will be available starting one hour after the completion of the call until Oct. 30, 2002. To access the replay, please dial 402/220-3503. About Cirrus Logic Cirrus Logic is a premier supplier of high-performance analog and DSP chip solutions for consumer entertainment electronics that allow people to see, hear, connect, and enjoy digital entertainment. Building on its global market share leadership in audio integrated circuits and its rich mixed-signal patent portfolio, the company targets mainstream audio, video and Internet entertainment applications in the consumer entertainment market. Cirrus Logic 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. Except for historical information contained herein, the matters set forth in this news release, including our estimates of third fiscal quarter revenues, GAAP and pro forma loss per share, GAAP and pro forma operating expense levels, GAAP and pro forma gross margin levels, the cash burn rate for the next quarter, and expectations regarding our growth, are forward-looking statements that are subject to certain risks and uncertainties including such factors, among others, as overall conditions in the semiconductor market; the expansion of the consumer digital entertainment electronics market; the ability of the Company to successfully integrate its acquisitions into its operations; the level of orders and shipments during the third fiscal quarter of 2003; anticipated reductions in expenses from reductions in force and other actions; the ability of the Company to introduce new products on a timely basis and to deliver products that perform as anticipated; risks associated with international sales and international operations; customer cancellations of orders, or the failure to place orders consistent with forecasts; rival chip architectures; pricing pressures; hardware or software deficiencies; a shortage of manufacturing capacity; the ability of the Company to make continued substantial investments in research and development; the retention of key employees; and the risk factors listed in the company's Form 10-K for the year ended March 30, 2002, and in other filings with the Securities and Exchange Commission. The foregoing information concerning Cirrus Logic's business outlook represents our outlook as of the date of this news release, and Cirrus Logic undertakes no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise, except as required by law. Cirrus Logic is a trademark of Cirrus Logic Inc. Summary financial data follows: CIRRUS LOGIC INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
(not prepared in accordance with GAAP)
Quarter Ended
----------------------------
Sept. 28, Jun. 29, Sept. 29,
2002 2002 2001
-------- -------- ---------
Net sales $73,314 $76,024 $75,870
Costs and expenses:
Cost of sales (Note 1) 38,390 39,014 45,915
Research and development (Note 2) 24,655 27,214 24,477
Selling, general and administrative
(Note 3) 18,792 18,787 21,173
Restructuring costs (Note 4) -- -- --
-------- -------- ---------
Total costs and expenses 81,837 85,015 91,565
-------- -------- ---------
Income (loss) from operations (8,523) (8,991) (15,695)
Realized gain (loss) on marketable equity
securities (Note 5) -- -- --
Interest income and (expense), net
(Note 6) 541 615 1,394
Other income (expense), net (354) 74 114
-------- -------- ---------
Income (loss) before income taxes and
loss from discontinued operations (8,336) (8,302) (14,187)
Provision (benefit) for income taxes
(Note 7) (558) (559) --
-------- -------- ---------
Income (loss) from continuing operations (7,778) (7,743) (14,187)
Loss from discontinued operations
(Note 8) -- -- --
-------- -------- ---------
Net income (loss) $(7,778) $(7,743) $(14,187)
======== ======== =========
Basic earnings (loss) per share $(0.09) $(0.09) $(0.19)
Diluted earnings (loss) per share $(0.09) $(0.09) $(0.19)
Weighted average common shares
outstanding:
Basic 83,413 83,018 74,000
Diluted 83,413 83,018 74,000
See notes to Pro Forma Consolidated Condensed Statement of Operations
CIRRUS LOGIC INC. NOTES TO PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited -- quarterly) This pro forma presentation reflects the historical financial results adjusted for the following non-recurring or unusual items:
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Quarter Ended
------------------------------
Sept. 28, Jun. 29, Sept. 29,
2002 2002 2001
--------- --------- ---------
Net sales $73,314 $76,024 $75,870
Costs and expenses:
Cost of sales (Note 1) 37,227 37,391 45,515
Research and development (Note 2) 30,616 32,649 26,345
Selling, general and administrative
(Note 3) 19,939 20,471 22,009
Restructuring costs (Note 4) 3,102 2,085 --
--------- --------- ---------
Total costs and expenses 90,884 92,596 93,869
--------- --------- ---------
Income (loss) from operations (17,570) (16,572) (17,999)
Realized gain (loss) on marketable
equity securities (Note 5) (947) 1,400 --
Interest income and (expense), net
(Note 6) 541 740 1,394
Other income (expense), net (354) 74 114
--------- --------- ---------
Income (loss) before income taxes and
loss from discontinued operations (18,330) (14,358) (16,491)
Provision (benefit) for income taxes
(Note 7) 29 29 --
--------- --------- ---------
Income (loss) from continuing
operations (18,359) (14,387) (16,491)
Loss from discontinued operations
(Note 8) -- (1,452) (429)
--------- --------- ---------
Net income (loss) $(18,359) $(15,839) $(16,920)
========= ========= =========
Basic earnings (loss) per share:
From continuing operations $(0.22) $(0.17) $(0.22)
Discontinued operations -- (0.02) (0.01)
--------- --------- ---------
Basic earnings (loss) per share $(0.22) $(0.19) $(0.23)
========= ========= =========
Diluted earnings (loss) per share:
From continuing operations $(0.22) $(0.17) $(0.22)
Discontinued operations -- (0.02) (0.01)
--------- --------- ---------
Diluted earnings (loss) per share $(0.22) $(0.19) $(0.23)
========= ========= =========
Weighted average common shares
outstanding:
Basic 83,413 83,018 74,000
Diluted 83,413 83,018 74,000
See notes to Pro Forma Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles
CIRRUS LOGIC INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
(not prepared in accordance with GAAP)
Six Months Ended
-------------------
Sept. 28, Sept. 29,
2002 2001
--------- ---------
Net sales $149,338 $254,953
Costs and expenses:
Cost of sales (Note 1) 77,404 167,743
Research and development (Note 2) 51,869 51,852
Selling, general and administrative (Note 3) 37,579 46,111
Restructuring costs (Note 4) -- --
--------- ---------
Total costs and expenses 166,852 265,706
--------- ---------
Income (loss) from operations (17,514) (10,753)
Realized gain (loss) on marketable equity
securities (Note 5) -- --
Interest income and (expense), net (Note 6) 1,156 4,215
Other income (expense), net (280) 688
--------- ---------
Income (loss) before income taxes and loss from
discontinued operations (16,638) (5,850)
Provision (benefit) for income taxes (Note 7) (1,117) --
--------- ---------
Income (loss) from continuing operations (15,521) (5,850)
Loss from discontinued operations (Note 8) -- --
--------- ---------
Net income (loss) $(15,521) $(5,850)
========= =========
Basic earnings (loss) per share:
From continuing operations $(0.19) $(0.08)
Discontinued operations -- --
--------- ---------
Basic earnings (loss) per share $(0.19) $(0.08)
========= =========
Diluted earnings (loss) per share:
From continuing operations $(0.19) $(0.08)
Discontinued operations -- --
--------- ---------
Diluted earnings (loss) per share $(0.19) $(0.08)
========= =========
Weighted average common shares outstanding:
Basic 83,215 74,238
Diluted 83,215 74,238
See notes to Pro Forma Consolidated Condensed Statement of Operations
CIRRUS LOGIC INC. NOTES TO PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Six Months Ended
-------------------
Sept. 28, Sept. 29,
2002 2001
--------- ---------
Net sales $149,338 $254,953
Costs and expenses:
Cost of sales (Note 1) 74,618 203,928
Research and development (Note 2) 63,265 56,714
Selling, general and administrative (Note 3) 40,410 46,947
Restructuring costs (Note 4) 5,187 1,919
--------- ---------
Total costs and expenses 183,480 309,508
--------- ---------
Income (loss) from operations (34,142) (54,555)
Realized gain (loss) on marketable equity
securities (Note 5) 453 10,967
Interest income and (expense), net (Note 6) 1,281 4,215
Other income (expense), net (280) 688
--------- ---------
Income (loss) before income taxes and loss from
discontinued operations (32,688) (38,685)
Provision (benefit) for income taxes (Note 7) 58 --
--------- ---------
Income (loss) from continuing operations (32,746) (38,685)
Loss from discontinued operations (Note 8) (1,452) (1,232)
--------- ---------
Net income (loss) $(34,198) $(39,917)
========= =========
Basic earnings (loss) per share:
From continuing operations $(0.39) $(0.52)
Discontinued operations (0.02) (0.02)
--------- ---------
Basic earnings (loss) per share $(0.41) $(0.54)
========= =========
Diluted earnings (loss) per share:
From continuing operations $(0.39) $(0.52)
Discontinued operations (0.02) (0.02)
--------- ---------
Diluted earnings (loss) per share $(0.41) $(0.54)
========= =========
Weighted average common shares outstanding:
Basic 83,215 74,238
Diluted 83,215 74,238
See notes to Pro Forma Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)
(in thousands)
Sept. 28, Jun. 29, Sept. 29,
2002 2002 2001
--------- --------- ---------
ASSETS
Current assets
Cash and cash equivalents $114,332 $131,897 $166,757
Restricted cash 12,807 12,807 10,000
Marketable equity securities 526 2,174 4,097
Accounts receivable, net 35,011 28,889 107,522
Inventories, net 28,752 36,591 61,489
Other current assets 16,548 19,593 20,858
--------- --------- ---------
Total Current Assets 207,976 231,951 370,723
Property and equipment, net 36,685 33,816 44,231
Goodwill and intangibles, net 183,300 190,248 17,450
Other assets 4,630 3,445 7,603
--------- --------- ---------
Total Assets $432,591 $459,460 $440,007
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 59,809 $ 68,214 $ 65,074
Current maturities of long-term debt and
capital lease obligations 141 248 --
Income taxes payable 41,530 42,175 40,628
--------- --------- ---------
Total Current Liabilities 101,480 110,637 105,702
Long-term obligations 3,658 3,658 3,198
Minority interest in eMicro 599 599 1,347
Stockholders' equity:
Capital stock 866,531 865,380 665,874
Accumulated deficit (538,897) (520,538) (338,537)
Accumulated other comprehensive income
(loss) (780) (276) 2,423
--------- --------- ---------
Total Stockholders' Equity 326,854 344,566 329,760
--------- --------- ---------
Total Liabilities and
Stockholders' Equity $432,591 $459,460 $440,007
========= ========= =========
Contact: Cirrus Logic Inc., Austin
David Allen, 512/851-4000
InvestorRelations@cirrus.com
or
Stapleton Communications Inc.
Mary McGowan, 650/470-0200
mary@stapleton.com
Source: Cirrus Logic Inc. |
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