AUSTIN, Texas – Oct. 18, 2000 – Cirrus Logic Inc. (NASDAQ:CRUS) today announced financial results for its second quarter of fiscal 2001, ended September 23, 2000.

Fiscal second quarter revenues grew to $189.5 million, up 43 percent from the $132.8 million revenues reported in the second fiscal quarter a year ago and up 11 percent from the $170.8 million pro forma revenues reported in the first quarter of fiscal 2001.

Revenues from core businesses were up 53 percent in Q2 year over year. Core revenues exclude revenues from end-of-life products.

Pro forma net income for fiscal Q2 was $16.1 million, an increase of 60 percent from $10.1 million pro forma net income reported in the prior quarter. Pro forma diluted earnings were $0.23 per share, up 53 percent from the pro forma diluted earnings of $0.15 per share reported in the prior quarter. Pro forma results for the second quarter of fiscal 2001 exclude investment gains, restructuring credits and amortization and other expenses related to the acquisition of AudioLogic, Inc.

“I am pleased to report another excellent quarter of revenue growth and continued gross margin improvements. I am revising upward our long-term business model based on our strong performance and expectations of double-digit revenue growth for each of the next two fiscal quarters,” said David French, president and chief executive officer. “Our solid execution and continued momentum have allowed us to initiate a final call of our convertible debt, which is expected to significantly strengthen our balance sheet and leave Cirrus Logic virtually debt-free. As a result, we are well positioned technologically and financially to extend our leadership in creating entertainment electronics for the Internet age.”

Corporate Highlights

• Increased core businesses revenue 53 percent year over year and 10 percent sequentially.
  
  
• Gross margins increased sequentially to 41.7 percent from the first quarter pro forma gross margin of 40.1 percent.
  
  
• After the close of the second quarter, called for the redemption/conversion of all outstanding convertible debt.
  
  

Analog Products Group Highlights

• Maintained worldwide market leadership in audio ICs.
  
  
• Secured a significant VoIP design win with a major Asian customer.
  
  
• Demonstrated patented digital PWM amplifier technology.
  
  

Magnetic Storage Group Highlights

• Entered into a long-term contract with Fujitsu to supply approximately $200 million of 3Ci™ magnetic storage chips.
  
  

Internet Solutions Group

• Achieved record shipments of CD-RW encoder/decoder chips.
  
  
• Shipped more than one million Maverick™ processors after only six months in production, solidifying the company’s lead in portable Internet audio devices.
  
  

Business Outlook

3Q01 (ending Dec. 30, 2000)

• Fiscal 3Q01 core revenues are expected to grow at or above the 10 percent growth rate experienced this quarter. Revenues from end-of-life businesses are expected to decline to about $8 million from $12 million.
  
  
• Pro forma earnings per share are expected to be $0.25 to $0.27.
  
  
• Gross margins are expected to increase sequentially by 50 basis points.
  
  
• R&D is expected to increase in absolute dollars, and as a percentage of sales will remain slightly higher than the company’s long-term model of 14 percent to 16 percent.
  
  
• SG&A is expected to increase in absolute dollars, and will remain higher than the company’s long-term model of 10 percent to 12 percent.
  
  
• Net interest income is expected to be above $2.0 million.
  
  

Fiscal 2001

• Revenues from the core businesses are expected to grow in excess of 50 percent for the year. Revenues from end-of-life products should approximate $35 million to $40 million.
  
  
• Pro forma earnings per share are expected to be $0.90 to $0.94.
  
  

Revised Company Model

Based on its performance and outlook, the company revised its long-term business model upward to the following:

• Gross margins: To the 44 – 46 percent range from 40 – 44 percent
  
  
• Research and Development: Remains at 14 – 16 percent
  
  
• Sales, General and Administrative: Remains at 10 – 12 percent
  
  
• Operating Profit: To the 16 – 18 percent range from 14 – 16 percent
  
  

Conference Call

Cirrus Logic management will hold a conference call to discuss these results today, Oct. 18, at 4:00 p.m. Central Time. Those wishing to join should dial (712) 257-3060, passcode “Cirrus Logic” at approximately 3:45 p.m. A live webcast of the conference call will also be available via the company’s website at www.cirrus.com. A replay of the call will be available starting one hour after the completion of the call until Oct. 25, 2000. To access the replay, please dial (402) 998-1418.

About Cirrus Logic

Cirrus Logic is a premier supplier of high-performance analog and DSP chip solutions for Internet entertainment electronics. Building on its global market share leadership in audio integrated circuits and its rich mixed-signal patent portfolio, the company targets high-volume audio, storage and communications applications. Cirrus Logic sells its products under the Crystal ®, Maverick™, and 3Ci™ brands as well as its own name. Founded in 1984 in Silicon Valley, Cirrus Logic operates from headquarters in Austin, Texas and major sites located in Fremont, California and Broomfield, Colorado as well as offices in 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 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 25, 2000, 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.

Summary financial data follows: