AUSTIN, Texas – Jan. 25, 2006 – Cirrus Logic Inc. (Nasdaq: CRUS), a leader in high-precision analog, mixed-signal and embedded products for audio and industrial markets, today announced financial results for the third quarter of Fiscal Year 2006, which ended Dec. 24, 2005.
The company reported third quarter Fiscal Year 2006 revenue of $48.3 million compared with $44.0 million in the same period one year ago. All revenue during the third fiscal quarter was analog, mixed-signal and embedded products related. This represents year-over-year growth of 18 percent when compared to revenue of $40.9 million for the same period one year ago, which excludes the revenue related to the digital video-related products of $3.1 million. The second fiscal quarter revenue related to the analog, mixed-signal and embedded products was $48.3 million.
Third quarter gross margin was 55.1 percent compared with 55.4 percent for the analog, mixed-signal and embedded products in the second quarter of fiscal year 2006. Combined research and development (R&D) and selling, general and administrative (SG&A) expenses for the third fiscal quarter were $21.2 million, compared with $26.4 million in the prior quarter. In the second fiscal quarter, R&D and SG&A expense included digital video-related spending of approximately $1.7 million as well as a $3.3 million contingency charge related to excess leased office space. Without these items, R&D and SG&A for the second fiscal quarter was $21.4 million.
Net income for the third fiscal quarter was $12.8 million, or $0.15 per diluted share. In the second quarter, the company reported a net loss of $99,000 or ($0.00) per diluted share. Third fiscal quarter results also included a one-time $5.3 million foreign tax benefit. The second fiscal quarter results also included a $2.3 million net restructuring charge primarily related to the sale of the digital video product line assets and a $207,000 foreign tax benefit. Net income excluding the foreign tax benefit for the third fiscal quarter was $7.6 million or $0.09 per diluted share, compared with net income of $6.8 million or $0.08 per diluted share in the second fiscal quarter, excluding the digital video related items, restructuring charges and the foreign tax benefit.
Total cash and marketable securities at the end of the third fiscal quarter was $233.0 million, compared with $225.1 million at the end of the prior fiscal quarter. Inventories were $17.0 million, approximately the same as at the end of the September quarter.
“The company has begun to deliver profitable year-over-year growth in our analog, mixed-signal and embedded products,” said David D. French, president and chief executive officer, Cirrus Logic. “We achieved 18 percent year-over-year growth in these product categories, we have a strong cash position, and the underlying fundamentals of the business are strong.”
Outlook and Guidance
“As we look to our Fourth Fiscal Quarter, we are forecasting continued strong year-over-year growth of our analog, mixed-signal and embedded product revenues between 12 and 22 percent,” French continued. “However, we are cautious as the March quarter is traditionally our seasonally weakest quarter. Nevertheless, we expect a strong start to our Fiscal Year 2007 as we begin to build incremental inventory in preparation for a higher revenue run rate in Q1 FY 07.”
Fourth Quarter FY 06 (ending March 25, 2006):
Use of Non-GAAP Financial Information
Cirrus Logic reports its financials in accordance with GAAP, which includes non-recurring items. A reconciliation of GAAP to non-GAAP is included in the financial statements portion of this release as well as on our Web site in the Investors section at www.cirrus.com. Non-GAAP results are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. Cirrus Logic management believes that non-GAAP financial information is useful to investors because it can enhance the understanding of the results and trends in our business, and therefore uses non-GAAP reporting internally to evaluate and manage the company’s operations. The criteria for determining non-GAAP results may differ from other companies’ methods. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP.
Conference Call
Cirrus Logic management will hold a conference call to discuss these results today, Jan. 25, 2006 at 5:00 p.m. EST. Those wishing to join should dial (303) 262-2142 (passcode: Cirrus Logic) at approximately 4:50 p.m. EST. A replay of the call will also be available, starting one hour after the completion of the call, until Feb. 8. To access the recording, dial (303) 590-3000 (Passcode: 11050686 #). A live and an archived webcast of the conference call will also be available.
Upcoming Conferences
Cirrus Logic management will be presenting at the following conferences:
Those wishing to listen to these presentations can hear live and archived webcasts of the events.
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.
Safe Harbor Statement
Except for historical information contained herein, the matters set forth in this news release, including our estimates of fourth quarter fiscal year 2006 sales, gross margin, combined research and development and selling, general and administrative expense levels, and expectations regarding our revenue growth, fiscal year 2007 results, anticipated inventory build 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 fourth quarter of fiscal year 2006, as well as customer cancellations of orders, or the failure to place orders consistent with forecasts; overall economic pressures; 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; 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. 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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