AUSTIN, Texas – July. 20, 2005 – Cirrus Logic Inc. (Nasdaq: CRUS) today announced financial results for the first quarter of fiscal year 2006 which ended June 25, 2005.
The company reported first quarter, fiscal year 2006 revenue of $52.8 million compared with $40.4 million in the prior fiscal quarter ended March 25, 2005. The revenue for the first fiscal quarter included $43.7 million related to its core analog, mixed-signal and embedded product integrated circuits (ICs), an increase of 19 percent over the $36.8 million in revenue related to these core products during the prior quarter. First quarter gross margin was 51.7 percent, compared with 53.1 percent in the prior quarter. The gross margin for its core products was 56.3 percent. Combined research and development (R&D) and selling, general and administrative (SG&A) expenses for the quarter were $28.0 million, compared with $25.2 million in the prior quarter. Combined R&D and SG&A expense included approximately $5.4 million for video product line related expenses plus $1.1 million for a contingency related to excess leased office space.
Net income in the first fiscal quarter was $26.0 million, or $0.30 per diluted share. In the prior quarter, the company reported a net income of $2.5 million, or $0.03 per diluted share. The first fiscal quarter included a $24.8 million net gain related to a legal settlement. First fiscal quarter net income also included interest income of $1.1 million, a $388,000 gain on the sale of marketable securities and a $302,000 foreign tax benefit.
Total cash and marketable securities at the end of the first fiscal quarter were $214.5 million, compared with $179.7 million at the end of the prior fiscal quarter. Inventories were $19.5 million, down 27 percent, or $7.1 million, from the end of the March quarter.
“We are pleased to have exceeded our financial expectations for the quarter and to have successfully reduced our inventory levels,” said David D. French, president and chief executive officer, Cirrus Logic. “We recently introduced our latest low-power stereo codec for applications such as MP3 players, smart phones and digital camcorders, which demonstrates our commitment to drive revenue growth in one of the hottest-growing market segments. We also anticipate that with the increased focus on our core analog and mixed-signal products, Cirrus Logic is already well on its way to achieving consistent revenue growth and profitability.”
On June 30, 2005, Cirrus Logic announced the completion of the sale of its digital video product line assets to Magnum Semiconductor in exchange for a non-controlling interest in that company. First fiscal quarter revenue and expenses for the digital video product line were approximately $9.1 million and $11.8 million, respectively. The sale of the digital video product line assets excluded related inventories of $1.6 million and receivables of $5.0 million.
“We are encouraged that we have started our fiscal year with strong momentum,” said French. “We have an excellent balance sheet with roughly $215 million in cash, no debt and our inventory balances are in line with our expectations. All of these factors help position Cirrus Logic for profitability and growth within its broad, expanding customer base for analog, mixed-signal and embedded products.”
Outlook and Guidance
“After solid growth of 19 percent within our core analog and mixed-signal product lines in the first fiscal quarter, we are forecasting continued growth in the second quarter,” said French. “Nevertheless, I remain somewhat cautious in terms of our outlook recognizing that the industry continues to face challenges.”
Second Quarter FY 06 (ending September 24, 2005):
Conference Call
Cirrus Logic management will hold a conference call to discuss these results today, July 20, 2005 at 5:00 p.m. EDT. Those wishing to join should dial (201) 689-8044 at approximately 4:50 p.m. EDT. A replay of the call will be available starting one hour after the completion of the call, through Aug. 3, 2005. To access the replay, dial (201) 612-7415 (account #: 2445; conference #: 159444). A live and an archived webcast of the conference call will also be available.
Upcoming Conferences
Cirrus Logic management will be presenting at the Silicon Valley Bank Tech Investors Forum Sept. 7-8, 2005 in San Francisco. Those wishing to listen to the presentation can hear a live and an archived webcast of the event.
Cirrus Logic Inc.
Cirrus Logic develops high-precision, analog and mixed-signal integrated circuits for a broad range of consumer and industrial markets. Building on its diverse analog mixed-signal patent portfolio, Cirrus Logic delivers highly optimized products for consumer and commercial audio, automotive entertainment and industrial applications. The company operates from headquarters in Austin, Texas, with offices in Colorado, Europe, Japan and Asia.
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Safe Harbor Statement
Except for historical information contained herein, the matters set forth in this news release, including our estimates of second quarter fiscal year 2006 sales, gross margin, combined research and development and selling, general and administrative expense levels, restructuring and other charges, gain on the sale of the video related assets, and expectations regarding our revenue growth and increased cash position are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and assumptions and are subject to certain risks and uncertainties that could cause actual results to differ materially from our current expectations, estimates and assumptions and the forward-looking statements made in this press release. These risks and uncertainties include, but are not limited to, the following: overall conditions in the semiconductor market; our ability 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 results of any potential and pending litigation matters; the level of orders and shipments during the second quarter of fiscal year 2006, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; pricing pressures; hardware or software deficiencies; our dependence on subcontractors for assembly, manufacturing, packaging and testing functions; our ability to make continued substantial investments in research and development; foreign currency fluctuations; the retention of key employees; the impact of restructuring and other costs, such as work force reductions and facility consolidations; and the risk factors listed in our Form 10-K for the year ended March 26, 2005, and in other filings with the Securities and Exchange Commission. Certain income statement reclassifications have been made to the fiscal year 2005 financial statements to conform to the fiscal year 2006 presentation. These reclassifications had no effect on the results of operations or stockholders’ equity. The foregoing information concerning our business outlook represents our outlook as of the date of this news release, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.
Cirrus Logic and Cirrus are trademarks of Cirrus Logic Inc.
Summary financial data follows:
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Thurman Case Chief Financial Officer (512) 851-4125 |
Mary McGowan Summit IR Group (408) 404-5401 |
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