AUSTIN, Texas – Jan. 22, 2003 – Cirrus Logic, Inc. (Nasdaq: CRUS), today announced financial results for its third quarter of fiscal 2003, ended Dec. 28, 2002, which were in line with the company’s Dec. 12, 2002 guidance.

Fiscal third quarter revenue in accordance with generally accepted accounting principles (GAAP) was $60.5 million, down 17 percent from $73.3 million reported in the second quarter.

The third quarter GAAP net loss was reduced to $12.2 million, compared with $18.4 million in the second quarter; net loss per share was $0.15, compared with $0.22 per share in the prior quarter. Third quarter GAAP gross margin improved to 51 percent, compared with 49 percent in the second quarter. Third quarter GAAP operating expenses were $46.5 million, an improvement of 13 percent from $53.7 million in the prior quarter.

Pro forma net loss for the third quarter was $7.0 million, or an $0.08 net loss per share, compared with a pro forma net loss of $7.8 million, or $0.09 per share, in the second quarter. Pro forma gross margin for the third quarter improved to 50 percent, compared with 48 percent in the second quarter.

Third quarter pro forma operating expenses were $38.5 million, an improvement of 11 percent from $43.4 million in the prior quarter. Pro forma operating expenses exclude $7.9 million, consisting primarily of restructuring costs and acquisition-related amortization of intangibles and compensation charges.

Total cash at the end of the third quarter was $125 million, compared with $127 million at the end of the second quarter.

“As we previously announced, we saw a number of customer push-outs and cancellations of orders toward the end of the quarter. As our customers began to realize that the anticipated Christmas holiday sell-through was not going to materialize as they had previously thought, we saw across the board softening of demand for our audio and video products,” said David D. French, president and CEO, Cirrus Logic.

Over the last two months, Cirrus reduced its worldwide workforce by approximately 150 people, or 15 percent. The company lowered its expected revenue break-even on a pro forma basis to $65 million to $69 million per quarter, down from the $80 million to $85 million at the end of the second quarter.

Cirrus Strengthens Video and Audio Product Portfolio
“We demonstrated our leading-edge products to more than 200 current and prospective customers in our demo suites at the Consumer Electronics Show (CES) earlier this month, and the reaction was very positive,” said French.

Cirrus products featured at CES included:

• The semiconductor industry's most comprehensive, feature-rich and cost-effective DVD+RW recording platform solution. This fully functional reference platform, which is based upon Cirrus Logic's flagship DVD processor, the CS98200, and its leadership video encoding solution, the CS92288 MPEG A/V CODEC, is designed to help consumer electronics manufacturers accelerate widespread adoption of DVD+RW recording products.
• An exciting new Personal Video Recording (PVR) platform. Our PVR solution allows manufacturers to build video recording devices that play DVDs and record video content onto a hard drive. Our compression technology provides customers higher picture quality at a lower bill of materials cost by compressing and storing more hours of video on smaller capacity hard drives. The Cirrus PVR platform supports a “time-shifting” feature so users can begin playback of recorded content, such as a television program, while it is still being recorded.
• A new family of six- and eight-channel, highly integrated, cost-effective surround-sound CODECs. These audio solutions are designed to give OEMs a range of surround-sound CODECs that will deliver multichannel 192 kHz DVD-Audio capability while helping manufacturers accelerate their time to market in a wide range of digital consumer electronics markets such as A/V receivers, DVD receivers, home-theater systems and other audio systems.
• The “CES Innovations” award-winning CS7410. This product is optimized for CD/MP3-based portable audio systems, including portable CD players and boom boxes. It includes a 32-bit RISC core and a 16-bit audio DSP.

Cirrus also recently announced:

• Apex Digital, North America's sales leader for DVD players, has selected Cirrus’ CS92288 A/V CODEC as the MPEG audio and video encoding solution for its new combination DVD player and hard drive-based digital video recorder, the Apex PVR-1000.
• ADS Technologies selected Cirrus to power its popular new Instant DVD line of consumer digital video recording products.
• Mustek, a Taiwanese consumer electronics supplier, unveiled its first DVD recording device using Cirrus’ DVD+RW recording platform.
• Marantz America selected Cirrus to power its series of high-performance audio/video receivers.
• Starlight Electronics, a manufacturer of high-quality, value-priced consumer electronics products, selected Cirrus to power its portable MP3 player aimed at the U.S. market.

Outlook and Guidance
“Many of our customers and distributors remain cautious and are closely managing their inventory levels. As a result, we expect revenue in the March quarter, a seasonally slower sales period, to range between $52 million and $56 million,” said French. “We will be working with our customers to help them bring their exciting new products to volume production. The successful introduction of these new products with Cirrus components will be key to our revenue growth opportunities in the second half of calendar 2003.”

GAAP Fourth Quarter FY03 (ending Mar. 29, 2003)

• Revenue is expected to be $52 million - $56 million
• Gross margins are expected to be 48 - 50 percent
• R&D and SG&A expenses are expected to total $38 million - $40 million

Pro Forma Fourth Quarter FY03 (ending Mar. 29, 2003)

• Revenue is expected to be $52 million - $56 million
• Gross margins are expected to be 48 - 50 percent
• R&D and SG&A expenses are expected to total $33 million - $35 million

Total Pro Forma R&D and SG&A expenses exclude approximately $5 million of acquisition-related amortization of intangibles and compensation charges.

The company will incur additional restructuring charges, relating to workforce reductions and facility consolidations, during the fourth quarter, the full amount of which cannot be quantified at this time. In addition, the company may incur possible non-cash impairment charges related to certain intangible assets, as well as goodwill impairment in accordance with FAS 142, that cannot be quantified at this time. Any potential FAS 142 charge would not be expected to have any impact on the company’s operations or growth prospects.

Conference Call
Cirrus Logic management will hold a conference call to discuss these results today, Jan. 22, at 4 p.m. Central Time. Those wishing to join should dial (617) 801-9702 (pass code "Cirrus Logic") at approximately 3:50 p.m. Central Time. A replay of the call will be available starting one hour after the completion of the call until Jan. 29, 2003. To access the replay, dial (617) 801-6888. A live webcast of the conference call will also be available.

View Summary Financial Data

Cirrus Logic, Inc.
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.

Safe Harbor Statement
Except for historical information contained herein, the matters set forth in this news release, including our estimates of fourth fiscal quarter revenues, GAAP and pro forma research and development and selling, general and administrative expense levels; GAAP and pro forma gross margin levels; and expectations regarding our revenue growth opportunities 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; 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; the level of orders and shipments during the fourth fiscal quarter of 2003, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; 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; the impact of restructuring charges, such as work force reductions and facility consolidations; asset impairment charges; and a possible impairment of goodwill in accordance with FAS 142; 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.