AUSTIN, Texas – Oct. 23, 2002 – Cirrus Logic, Inc. (Nasdaq: CRUS), today announced financial results for its second quarter of fiscal 2003, ended Sept. 28, 2002.

Fiscal second quarter revenue was $73.3 million, down 3.6 percent from $76.0 million reported in the fiscal first quarter, but slightly above the revenue guidance provided on Sept. 30, 2002.

Pro forma loss for the second quarter was $7.8 million or a pro forma loss per share of $0.09, versus a pro forma loss of $7.7 million or a pro forma loss per share of $0.09 in the first quarter. Pro forma gross margins for the second quarter were 48 percent, compared with 49 percent in the first quarter. Second quarter pro forma operating expenses were $43.4 million, down from $46.0 million in the prior quarter. Pro forma results exclude restructuring costs, acquisition-related amortization of intangibles and compensation charges, and other various charges.

In accordance with generally accepted accounting principles (GAAP), second quarter net loss was $18.4 million, compared with a net loss of $15.8 million in the first quarter. This increase in the net loss was due, in large part, to a $2.3 million change in the second quarter related to our marketable equity securities. The net loss per share was $0.22, compared with a net loss per share of $0.19 in the prior quarter. Second quarter gross margins were 49 percent, compared with 51 percent in the first quarter. Second quarter operating expenses were $53.7 million, down from $55.2 million in the prior quarter.

Total cash at the end of the second quarter was $127 million, compared with $145 million at the end of the first quarter. The decline in cash was primarily attributable to the company’s operating loss, payments associated with a facilities consolidation and the net change in working capital in the second quarter. The company expects its cash burn rate to decrease substantially over the next quarter as operating losses narrow and the facilities consolidation is completed.

“As a result of our cost reduction focus, we have lowered our pro forma break-even revenue point to approximately $80 million to $85 million, down from $105 million at the end of fiscal 2002. We will continue to seek further efficiencies as we strengthen our leadership position in digital entertainment electronics,” said David D. French, Cirrus’ president and CEO.

“Our DVD decoder business grew again in the second quarter as we continued to broaden our customer base overall. We have just announced the most powerful programmable video decoder in the market, our CS98200, and are sampling customers this quarter. This highly integrated solution combines advanced digital audio and video capabilities that allow our mid-range and high-end customers to offer premium features at competitive prices in DVD products targeted for Christmas 2003. We believe our superior breadth of audio, video and systems integration capabilities, along with our strong customer relationships, will enable us to further our success,” French said.

Video Highlights

• Shipped over two million DVD processors during the last 12 months
• Announced a programmable DVD platform strategy for next-generation DVD markets—players, recorders, receivers and portables
• At the Hong Kong Electronics Fair, demonstrated our next-generation solution and reference design for every major DVD market segment, consistent with our announced platform strategy
• Unveiled the CS98200 processor, a digital video decoder chip that offers highly integrated, advanced digital audio and superior video capabilities for mid-range and high-end customers

Audio Highlights

• Shipped 200 millionth audio digital-to-analog converters (DACs) since 1998, highlighting Cirrus’ position as industry leader in audio IC solutions for consumer, professional, automotive, and portable markets
• Introduced the new CS7410 music processor, which will power portable CD/MP3 audio players and which has generated significant customer interest
• Announced two DACs that enable manufacturers to bring high performance DVD-audio players to the mainstream consumer with superior features
• Announced design wins for the EP7312 processor and CS43L43 converter, which will power the first ever plug-in module that turns the estimated 125 million in-operation Nintendo® Game Boy® devices into affordable MP3/WMA players
  
  

Outlook and Guidance

Pro Forma Third Quarter FY03 (ending Dec. 28, 2002)

• Revenue is expected to be comparable to the second quarter
• Loss per share is expected to be $0.04 - $0.08 (basic and diluted)
• Gross margins are expected to be 47 - 49 percent
• Operating expenses are expected to be $40 million - $42 million

These expected pro forma results exclude restructuring costs, acquisition-related amortization of intangibles and compensation charges of approximately $6 million to $7 million in the fiscal third quarter.

GAAP Third Quarter FY03 (ending Dec. 28, 2002)

• Revenue is expected to be comparable to the second quarter
• Loss per share is expected to be $0.12 - $0.16 (basic and diluted)
• Gross margins are expected to be 47 - 49 percent
• Operating expenses are expected to be $46 million - $49 million

View Financial Tables

Conference Call

Cirrus Logic management will hold a conference call to discuss these results today, Oct. 23, at 4 p.m. Central Time / 5 p.m. Eastern Time. Those wishing to join should dial (712) 271-3012 and reference the passcode “Cirrus Logic” at approximately 3:50 p.m. Central Time. A live webcast of the conference call will also be available. A replay of the call will be available starting one hour after the completion of the call until Oct. 30, 2002. To access the replay, please dial (402) 220-3503.

About Cirrus Logic

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 third fiscal quarter revenues, GAAP and pro forma loss per share, GAAP and pro forma operating expense levels, GAAP and pro forma gross margin levels, the cash burn rate for the next quarter, and expectations regarding our growth, 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; the level of orders and shipments during the third fiscal quarter of 2003; 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; customer cancellations of orders, or the failure to place orders consistent with forecasts; rival chip architectures; 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; 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.