AUSTIN, Texas – Oct. 24, 2001 – Cirrus Logic Inc. (Nasdaq: CRUS) today announced financial results for its second quarter of fiscal 2002, ended September 29, 2001.

Fiscal second quarter revenue was $77.3 million, compared with $179.7 million reported in the prior quarter, in line with previous guidance. Revenue from the company's core Analog and Internet product lines grew 13 percent in the quarter to $67.6 million. The company completed its final planned shipments of magnetic storage products, with revenue of $9.6 million versus $119.8 million in the prior quarter.

Pro forma net loss for fiscal Q2 was $14.6 million, compared with pro forma net income of $7.5 million reported in the prior quarter. Pro forma diluted loss per share was $0.20 on 74.0 million shares outstanding, compared with pro forma diluted earnings per share of $0.10 on 76.9 million shares outstanding reported in the prior quarter. Pro forma results for the current quarter exclude operating profit charges of $2.3 million, which were primarily amortization of acquisition-related expenses. Including these charges, the net loss per share on a GAAP basis was $0.23 per diluted share.

Pro forma operating expenses decreased from $53.3 million to $46.7 million in the fiscal second quarter based on previously announced cost-reduction efforts. The company recently completed a workforce reduction of approximately 300 employees announced October 1, 2001.

Second quarter pro forma gross margins were 39 percent, up significantly from the 32 percent gross margins the company reported in the first fiscal quarter, but lower than the 44-46 percent range it originally expected, as the company continues to work off existing low-margin inventories.

Cash at the end of the second quarter was $177 million up from $162 million at the end of fiscal Q1; the company remains debt-free.

“We were pleased to see double-digit growth in our ongoing business,” said David D. French, president and CEO of Cirrus Logic. “Second quarter design wins increased in every single product line, which we believe is an encouraging indication of our future growth.

“The 14 percent revenue increase in our Analog product line was driven by strength in consumer audio products, especially in DVD player and audio receiver applications. DVD player sales in North America are surpassing earlier industry growth estimates; even in the weeks following September 11, DVD sales were up more than 50 percent over last year. In fact, September was the first month in which sales of DVD players surpassed VCR sales,” he said.

“Our Internet Solutions product line grew 11 percent in Q2, primarily from sales of our optical controllers that are used in game console applications. We expect this ramp to continue in the December quarter. We have made significant progress in transitioning our optical storage technology into the fast-growing DVD player market, achieving design wins from multiple high-volume consumer DVD player manufacturers. We expect to begin volume production late in the March quarter.

“In October, we completed the acquisitions of ShareWave, Inc. and LuxSonor Semiconductors, Inc., which greatly enhance our position as the largest pureplay semiconductor company in consumer entertainment electronics. We are on track with the integration of these two companies, and early meetings with tier-one consumer companies have already highlighted the value of our combined technologies and resources. We expect to conclude the acquisition of Stream Machine Company in December. These companies have leadership positions in their respective markets: wireless home networking, DVD video decoders and MPEG-2 video recording,” Mr. French said.

Outlook and Guidance

Cirrus’ guidance comprises its traditional core Analog and Internet Solutions product lines, plus the recently acquired ShareWave and LuxSonor. The acquisition of Stream Machine Company is expected to close in December and is not included in the current forecast.

Third Quarter FY02 (ending December 2001)

· Revenue from ongoing business will grow from $67.6 million in Q2 to $70 million - $75 million in Q3

· Magnetic Storage revenue will decline from $9.6 million to zero

· Pro forma loss per share is expected to be $0.19 - $0.24 (basic and diluted)

· Pro forma gross margins are expected to be about 40 percent

· Pro forma operating expenses are expected to be in the $47 million - $49 million range

· The company’s cost reduction and expense control measures are expected to result in annualized savings of $25 million to $30 million

· The company expects to take a $5 million cash charge and a one-time non-cash charge of $15 million to $20 million in the December quarter associated with this restructuring

· Share count is expected to be approximately 78 million shares outstanding

Fourth Quarter FY02 (ending March 2002)

· Total revenue is expected to grow in the 5 to 7 percent range

· Pro forma loss per share is expected to be $0.11 - $0.16 (basic and diluted)

· Pro forma gross margins are expected to be 42 percent – 44 percent

· Pro forma operating expenses are expected to be in the $44 million - $46 million range

· Share count is expected to be approximately 79 million shares outstanding

Stream Machine Company

· If the Stream Machine acquisition closes in December as planned, it will have a

dilutive effect of $0.00 to $0.02 per share in both quarters

Conference Call

Cirrus Logic management will hold a conference call to discuss these results today, October 24, at 4 p.m. Central Time. Those wishing to join should dial (712) 271-3858, 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 October 30, 2001. To access the replay, please dial (402) 998-1480.

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 and El Dorado Hills, Calif., Broomfield and Boulder, 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 acquisition of Stream Machine; the ability of the Company to successfully integrate its acquisitions into its operations and realize the anticipated synergies; 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; 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 is a trademark of Cirrus Logic Inc.

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