AUSTIN, Texas – May 2, 2001 – Cirrus Logic Inc. (Nasdaq: CRUS) today announced financial results for its fourth quarter and fiscal year 2001, ended March 31, 2001.

Fiscal fourth quarter revenues were $199.7 million, compared with the $208.0 million reported in the prior quarter, and up 25 percent from the $160.2 million reported in the fourth fiscal quarter a year ago. Revenues from core businesses were $195.4 million in the fourth fiscal quarter, compared with $200.6 million in the third fiscal quarter and with $136.5 million a year ago. Core revenues exclude revenues from end-of-life products.

Pro forma net income for fiscal Q4 was $4.6 million, compared with pro forma net income of $22.4 million reported in the prior quarter, and with $3.7 million reported in the same quarter a year ago. During the fourth quarter, the company took a $17.4 million inventory charge, primarily to reserve inventory that is excess of the current short-term forecast. On a pro forma basis, diluted earnings per share were $0.06 on 83.0 million diluted shares outstanding. Excluding the inventory charge, fourth quarter pro forma diluted EPS was $0.24. This compares with $0.28 on 80.4 million diluted shares outstanding reported in the prior quarter and with $0.05 on 69.2 million diluted shares outstanding in the same quarter a year ago. Pro forma results for the fiscal fourth quarter exclude investment gains, settlement of a litigation dispute, and the amortization of acquisition-related expenses.

Strong sales in the magnetic storage division were offset by lower-than-expected revenues in Analog and Internet solutions, primarily due to inventory corrections in the PC marketplace. This mix shift to the lower-margin magnetic sales resulted in overall gross margins of 37 percent, excluding the inventory charge, versus 40 percent in the prior quarter.

Fiscal Year 2001 Results

Pro forma revenues for fiscal year 2001 were $768.0. Core revenues for the year were $732.1 million, up 50 percent from core revenue of $488.0 reported a year ago.

Pro forma net income for fiscal year 2001 was $53.3 million, or pro forma earnings of $0.70 per diluted share on 76.2 million diluted shares outstanding. This represents an 835 percent increase over pro forma net income of $5.7 million, or pro forma earnings of $0.09 per diluted share on 66.2 million diluted shares outstanding, in fiscal year 2000.

Net shareholder equity improved to a surplus of $432.5 million from a deficit of $15.7 million at the end of FY2000. Cash and marketable securities net of long-term debt improved from negative $55.6 million one year ago to positive $265.4 million at year-end.

“We are proud of the progress we made in fiscal 2001. We delivered a 50 percent core revenue increase over fiscal 2000 and significantly improved our balance sheet by eliminating virtually all of our long-term debt,” said David D. French, president and CEO of Cirrus Logic. “We strengthened our position as the leading supplier of analog and DSP technologies to the rapidly growing entertainment-electronics marketplace. Our design win activity remains strong and we believe that we have positioned the company to capitalize on this leadership in FY02 and beyond,” he said.

Magnetic Storage

“As we evaluate the current economic environment, the fab over-capacity situation, the growth of the consumer and electronics markets, and our best prospects for profitable growth, we believe it is in the best interest of all our shareholders to move toward the higher growth and higher margin entertainment electronics business,” said Mr. French. “We will continue to support ongoing magnetic storage customers; in fact, we expect to continue to see strong revenue from these customers, including Fujitsu, over the next few quarters. We will continue to look for ways to optimize shareholder return from this business."

“It is difficult to predict a specific rate of decline in our magnetic storage revenues, but we would currently expect them to decline 20 percent in the June quarter,” he said. “By refining our focus, Cirrus Logic will be the semiconductor industry’s largest pure play in consumer entertainment electronics, with exceptional strength in analog and DSP technologies,” said Mr. French.

New Business Model

“This transition away from magnetic storage will allow us to work toward a new business model, which includes improving our profitability rates over the next two years,” Mr. French said. “Assuming a recovery in the semiconductor industry by early next year, we believe we can achieve our new business model targets by the end of next fiscal year.” These are:

• Gross margins: 50 percent, up from 44 – 46 percent
• Research and Development: 16 percent, from 14 – 16 percent
• Sales, General and Administrative: 14 percent from 10 – 12 percent
• Operating Profit: 20 percent from 16 – 18 percent

Outlook and Guidance

“As we move into Fiscal 2002, design-win activity is at record levels across all of our analog and Internet solutions businesses,” said Mr. French. “But in the short term, as with most everyone else in the industry, visibility is limited and we will manage our expenses and resources carefully. As always, Cirrus Logic is committed to making the necessary adjustments to balance its resources and bring expenses in line with current revenue expectations while maintaining leadership positions in our target markets.”

First Quarter FY02

• We expect fiscal Q1 total revenues will be down 10 to 15 percent from Q4 levels, with the decline coming from Magnetic Storage
• Revenues from higher margin Analog and Internet Solutions businesses are expected to grow slightly in Q1, which would result in a sequential improvement in gross margins due to favorable mix
  
  
• Operating expenses will grow in absolute dollars in the June quarter versus March
  
  
• Pro forma diluted earnings per share are expected to be $0.10 to $0.15
  
  

Fiscal Year 2002

• Revenues in the Analog and Internet Solutions businesses are expected to resume 40 percent annual growth rates during the September quarter
• Revenues in Magnetic Storage will decline sequentially throughout the year
  
  
• Operating expenses are expected to be down each quarter after the June quarter
• Gross margins are expected to increase to 44-to-46 percent by Q4

Conference Call

Cirrus Logic management will hold a conference call to discuss these results today, May 2 at 4:00 p.m. Central Time. Those wishing to join should dial (212) 547-0138, 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 May 9, 2002. To access the replay, please dial (402) 220-3001.

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, video 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; the rate of consumer electronics market adoption of new products; customer cancellations of orders, or the failure to place orders consistent with forecasts; unforeseen manufacturing difficulties; hardware or software deficiencies; 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; 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.

Cirrus Logic, Crystal(R) and Maverick (TM) are trademarks of Cirrus Logic Inc.