AUSTIN, Texas – July 23, 2001 – Cirrus Logic Inc. (Nasdaq: CRUS) today announced financial results for its first quarter of fiscal 2002, ended June 30, 2001.

First fiscal quarter revenue was $179.7 million, compared with $199.7 million reported in the prior quarter.

Pro forma net income for fiscal Q1 was $7.5 million, compared with pro forma net income of $4.6 million reported in the prior quarter. Pro forma diluted earnings per share were $0.10 on 76.9 million diluted shares outstanding, compared with $0.06 on 83.0 million diluted shares outstanding reported in the prior quarter. Pro forma results for the current quarter include an excess inventory charge for ongoing businesses of $12.7 million; excluding this charge, pro forma earnings would have been $0.26 per diluted share. Pro forma results exclude investment gains and special charges.

Including all charges and gains, the net loss on a GAAP basis for the first quarter of 2002 was $23.0 million, and the diluted loss per share was $0.31 on 74.3 million shares outstanding, compared with diluted earnings per share of $0.05 on 83.0 million shares outstanding reported in the prior quarter. During the first fiscal quarter of 2002, the company took a $36.6 million charge associated with the company’s exit from the magnetic storage business, a $1.9 million charge for in-process R&D associated with the Peak Audio acquisition, a $1.9 million charge to cover the costs associated with the May reduction of its workforce, and $1.1 million of amortization of intangible assets related to last year’s acquisition of AudioLogic and the Q1 acquisition of Peak Audio. The company also realized investment gains that totaled $11.0 million.

During the first fiscal quarter, sales in the magnetic storage division declined three percent from the previous quarter, substantially less than the company anticipated. Continued sluggish demand in the personal computer and communications markets resulted in reduced revenue in the company’s Analog business segment. The company’s Internet Solutions business grew approximately 11 percent over Q4 levels.

Pro forma gross margins, excluding reserve actions, were 39 percent versus 37 percent in the prior quarter.

Cash and marketable securities at quarter-end were $173 million; the company remains essentially debt free.

"Overall semiconductor market conditions impacted our performance in Q1, but we believe revenues in our Analog and Internet Solutions businesses will grow approximately 10 percent in Q2,” said David D. French, president and CEO of Cirrus Logic. “We expect revenue from magnetic storage to decline from the $120 million we reported this quarter down to approximately $10 million in Q2, essentially completing our exit from the magnetic storage business. Therefore, we expect Q2 revenue to be approximately $75 to $85 million with a pro forma loss of $0.15-to-$0.20 per share.

"The Q2 revenue forecast does not include revenue associated with non-cancelable Q2 purchase orders totaling $32 million from Western Digital Corporation, which are currently the subject of litigation. The GAAP earnings associated with this additional revenue are approximately $0.23 per share. We are hopeful that an early resolution of this dispute will allow recognition of these amounts in the near future.

"Looking at Q2, our Analog and Internet Solutions business backlog is up over first quarter levels, our book-to-bill ratio is strong and design win activity is high. But in the short term, as with most everyone else in the industry, we remain cautious about the market environment, and we will continue to manage our expenses and resources very carefully.

"We continue to invest in the future with our recent acquisition of Peak Audio and our recently announced pending acquisitions of LuxSonor Semiconductors, Inc. and ShareWave, Inc., which have leadership positions in commercial audio networking, DVD processors and home wireless markets, respectively. These acquisitions, combined with our existing leadership in audio technology, will significantly strengthen our position as the largest pure play semiconductor company in consumer entertainment electronics," said Mr. French.

Highlights:

• Announced the pending acquisition of ShareWave, a leading provider of wireless home networking solutions

• Announced the pending acquisition of LuxSonor, a supplier of world-class video decoders for video solutions

• Completed the acquisition of Peak Audio, the leader in commercial audio network and installed-sound audio markets

• Began mass production of DVD optical controller products, the most integrated DVD front-end solution

• Introduced TrueDigital™ Class D amplifier solutions, a $2 billion market opportunity, that enable manufacturers to develop consumer electronics that save energy, perform multiple functions, deliver concert-quality sound and enable sleeker form factors

• Unveiled a new Maverick™ microprocessor, the EP7409, that will enable manufacturers to double the play time and reduce the price of Internet audio players to below $100 retail

Outlook and Guidance

Second Quarter FY02

• Revenue in the Analog and Internet Solutions businesses is expected to grow approximately 10 percent

• Magnetic Storage revenue, which will be considered end-of-life starting in Q2, is expected to decline from $120 million in Q1 to approximately $10 million

• Total revenue is expected to be in the $75 million to $85 million range

• Pro forma loss per share is expected to be in the $0.15 - $0.20 range

• Pro forma gross margins are expected to be 44 - 46 percent

Additional revenue of $32 million is possible in Q2 or Q3, based on favorable resolution of the contract dispute with Western Digital.

Conference Call

Cirrus Logic management will hold a conference call to discuss these results today, July 23 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 July 31, 2001. To access the replay, please dial (402) 280-1656.

About Cirrus Logic

Cirrus Logic is the 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 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 the ability of the Company to close the pending acquisitions of ShareWave and LuxSonor; the ability of the Company to successfully integrate its acquisitions into its operations and realize the anticipated synergies; the ability of the Company to complete future acquisitions to acquire additional technologies; the resolution of the Company’s litigation with Western Digital; the Company’s shift away from magnetic storage and towards consumer-entertainment electronics; 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; hardware or software deficiencies; delays in customer qualification of key new products; 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 31, 2001, 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, TrueDigital and Maverick are trademarks of Cirrus Logic Inc.

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