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| Sequential Growth in Net Revenues and Operating Profit |
| FREMONT, Calif.--(BUSINESS
WIRE)--Jan. 19, 2000--Cirrus Logic Inc. (Nasdaq: CRUS ) today announced financial results
for the third quarter of fiscal 2000, which ended December 25, 1999. Net revenues grew to
$150.8 million, approximately 13 percent over the prior quarter. Net income was $27.9
million compared to a net loss of $9.4 million in the prior quarter. Diluted net earnings
per share was $0.40 compared to a diluted per share loss of $0.15 in the prior quarter. Included in net income was a $34.3 million gain on the partial sale of the company's investment in marketable securities of Phone.com Inc. (Nasdaq: PHCM). On a pro forma basis, income from operations, before net interest expense, would be approximately $6.0 million compared to $3.2 million, on a comparable basis in the prior quarter. Pro forma income from operations excludes the amortization of acquired intangible assets, asset abandonment charges, and acquired in-process R&D. On a pro forma basis, after net interest expense, the net income would be approximately $0.05 per share. ``We're pleased once again to report sequential growth, further demonstrating the early success of the new Cirrus Logic,'' said David D. French, president and chief executive officer. ``Thanks to the continuing expansion of our bookings and backlog during the December-ended quarter, we continue to be positive about the progress we have achieved, as we set our sights on being the leading provider of high-performance analog and DSP solutions for entertainment appliances.'' French noted that the fiscal Q3 revenue increase was fueled by record demand for the company's market-leading Crystal (R) audio products as well as a ramp to high-volume shipments of its highly integrated 3Ci chip for hard disk drives and record shipments of its encoder/decoder chips for CD-RW drives. Cirrus Logic is a premier supplier of high-performance analog circuits and advanced mixed-signal chip solutions. The company's products, sold under its own name and the Crystal® product brand, enable system-level applications in mass storage, audio and precision data conversion. Additional information about Cirrus Logic is available at www.cirrus.com. Except for historical information contained herein, the matters set forth in this news release are forward-looking statements that are dependent on certain risks and uncertainties including such factors, among others, as overall conditions in the semiconductor market, customer cancellations of orders, or the failure to place orders consistent with forecasts, unforeseen manufacturing difficulties, or hardware or software deficiencies, or delays in customer qualification of key new products, achieving high utilization of the company's manufacturing resources, final determination of appropriate inventory write-downs based on the outlook at the end of each quarter, actual operational spending, obtaining financing sufficient to meet the company's needs and the risk factors listed in the company's Form 10-K for the year ended March 27, 1999, and in other filings with the Securities and Exchange Commission. Cirrus Logic news releases may be obtained by fax by dialing 1-800-359-6414, or by dialing 510-249-4200 from outside the United States. Summary financial data follows: CIRRUS LOGIC, INC.
CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF OPERATIONS
Unaudited
(in thousands, except per share data)
Quarter Ended Three Quarters
Ended
Dec. 25, Sept. 25, Dec. 26, Dec. 25, Dec. 26,
1999 1999 1998 1999 1998
Net sales $150,759 $132,842 $153,062 $404,154 $500,682
Costs and expenses:
Cost of sales 93,435 79,637 171,477 244,458 444,907
Research and
development 28,936 27,940 31,105 83,571 100,772
Selling, general and
administrative 23,270 22,647 22,678 68,580 76,578
Restructuring costs,
gain on sale of
assets and other,
net - - 18,037 127,211 43,553
Acquired in-process
research and
development
expenses (Note 1) - 8,013 - 8,013 -
Abandonment of assets
charge (Note 2) 11,174 - - 11,174 -
Total costs
and expenses 156,815 138,237 243,297 543,007 665,810
Income (loss) from
operations (6,056) (5,395) (90,235) (138,853)(165,128)
Realized gain on sale
of marketable equity
securities (Note 3) 34,293 - - 34,293 -
Interest income and
(expense), net (3,875) (4,648) (2,965) (12,263) (5,763)
Other income (expense),
net (Note 4) 3,561 689 649 7,646 4,545
Income (loss) before
provision for
income taxes 27,923 (9,354) (92,551) (109,177)(166,346)
Provision for
income taxes - - - - 46,698
Net income (loss) 27,923 $(9,354)$(92,551)$(109,177)$(213,044)
Net income (loss)
per share:
Basic $ 0.45 $ (0.15) $ (1.50) $ (1.78) $ (3.33)
Diluted (Note 5) $ 0.40 $ (0.15) $ (1.50) $ (1.78) $ (3.33)
Weighted average
common shares
outstanding:
Basic 62,134 61,353 61,807 61,219 64,068
Diluted (Note 5) 80,911 61,353 61,807 61,219 64,068
(Note 1) Cirrus Logic incurred a one-time charge of $8.0 million
during the second quarter of fiscal 2000 due to the write-off of
in-process research & development expenses associated with the
acquisition of AudioLogic, Inc.
(Note 2) Cirrus Logic recognized $10.2 million in charges related to
our decision to discontinue a management information system project
and write-off the capitalized costs of the project. Also included in
this charge is $0.9 million related to the disposition of certain
assets between the Company and a spin-out company.
(Note 3) Cirrus Logic recognized a $34.3 million gain on the sale of
marketable equity securities during the third quarter of fiscal 2000
relating to the Company's investment in Phone.com, Inc. (Nasdaq: PHCM).
(Note 4) In Q3 of fiscal 2000, Cirrus Logic recognized a credit of
approximately $2.4 million for a reduction of a liability previously
accrued in connection with the sale of a technology license and a
credit of approximately $1.7 million to reflect the change in fair
value of a derivative liability established in connection with the
shares placed in escrow in Q1 of fiscal 2000 for the fab
restructurings. ¶ Cirrus Logic also recorded a $0.6 million charge to
write-down certain investments.
(Note 5) Diluted earnings per share for the third quarter of fiscal
2000 include an adjustment to increase net income by $4.5 million,
which is the after-tax interest savings associated with the
convertible debt.
CIRRUS LOGIC, INC.
CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
CONDENSED BALANCE SHEETS
(Unaudited)
(in thousands)
Dec. 25, March 27,
1999 1999
--------------- --------------
--------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 56,620 $ 144,457
Restricted cash 58,378 86,277
Short-term investments - 74,616
Marketable equity securities (Note 6) 72,162 -
Accounts receivable, net 81,985 66,063
Inventories, net 53,418 40,262
Other current assets 34,825 19,039
--------------- --------------
Total current assets 357,388 430,714
Property and equipment, net 36,728 48,024
Investment in joint venture - 14,000
Deposits and other assets 52,194 39,892
=============== ==============
$ 446,310 $ 532,630
=============== ==============
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
Accounts payable and
accrued liabilities $ 113,589 $ 207,033
Current maturities of long-term debt
and capital lease obligations 14,616 23,076
Income taxes payable 37,002 36,593
--------------- --------------
Total current liabilities 165,207 266,702
Long term obligations and
convertible subordinated notes 311,129 323,648
Net capital deficiency:
Capital stock 391,404 326,185
Unrealized gain on marketable
equity securities 71,652 -
Accumulated deficit (493,082) (383,905)
--------------- --------------
Total net capital deficiency (30,026) (57,720)
--------------- --------------
=============== ==============
$ 446,310 $ 532,630
=============== ==============
(Note 6) Investment in marketable equity securities primarily
relates to the Company's investment in Phone.com, Inc. (Nasdaq: PHCM - news)
SUPPLEMENTAL TABLE - EARNINGS BEFORE ACQUISITION
CHARGES AND OTHER ITEMS
(in thousands, except per share data)
Summary Financial Highlights:
Actual Results
Q3 FY '00 Q2 FY '00 Q3 FY '99
--------- --------- ----------
Net revenues $ 150,759 $ 132,842 $ 153,062
Income (loss)
from operations $ (6,056) $ (5,395) $ (90,235)
Net income
(loss) $ 27,923 $ (9,354) $ (92,551)
Common shares
outstanding 62,134 61,353 61,807
Common shares
outstanding
assuming dilution 80,911 61,353 61,807
Basic income
(loss) per share $ 0.45 $ (0.15) $ (1.50)
Diluted income
(loss) per share $ 0.40 $ (0.15) $ (1.50)
Pro Forma Results (1)
Q3 FY '00 Q2 FY '00 Q3 FY '99
--------- --------- ----------
Net revenues $ 150,759 $ 132,842 $ 153,062
Income (loss)
from operations $ 6,020 $ 3,225 $ (77,235)
Net income
(loss) $ 3,325 $ (734) $ (79,551)
Common shares
outstanding 62,134 61,353 61,807
Common shares
outstanding
assuming dilution 62,134 61,353 61,807
Basic income
(loss) per share $ 0.05 $ (0.01) $ (1.29)
Diluted income
(loss) per share $ 0.05 $ (0.01) $ (1.29)
(1) Pro forma results exclude acquired in-process research and
development expenses, amortization charges associated with
acquired intangible assets, restructuring charges, asset
abandonment charges, realized gains from the sale of stock in
Phone.com, Inc., and the Q3 FY 2000 adjustment of $2.4 million
relating to the reduction of a liability previously accrued in
connection with the sale of a technology license. This
information is not prepared in accordance with generally accepted
accounting principles.
Contact: Cirrus Logic, Inc.
Glenn Jones, 510/226-2257 (VP, Chief Financial Officer)
invest@corp.cirrus.com
Tom Rigoli, 510/226-2259 (VP, Corporate Communications)
trigoli@corp.cirrus.com
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