AUSTIN, Texas – Jan. 22, 2003 – Cirrus Logic, Inc. (Nasdaq: CRUS), today announced financial results for its third quarter of fiscal 2003, ended Dec. 28, 2002, which were in line with the company’s Dec. 12, 2002 guidance.
Fiscal third quarter revenue in accordance with generally accepted accounting principles (GAAP) was $60.5 million, down 17 percent from $73.3 million reported in the second quarter.
The third quarter GAAP net loss was reduced to $12.2 million, compared with $18.4 million in the second quarter; net loss per share was $0.15, compared with $0.22 per share in the prior quarter. Third quarter GAAP gross margin improved to 51 percent, compared with 49 percent in the second quarter. Third quarter GAAP operating expenses were $46.5 million, an improvement of 13 percent from $53.7 million in the prior quarter.
Pro forma net loss for the third quarter was $7.0 million, or an $0.08 net loss per share, compared with a pro forma net loss of $7.8 million, or $0.09 per share, in the second quarter. Pro forma gross margin for the third quarter improved to 50 percent, compared with 48 percent in the second quarter.
Third quarter pro forma operating expenses were $38.5 million, an improvement of 11 percent from $43.4 million in the prior quarter. Pro forma operating expenses exclude $7.9 million, consisting primarily of restructuring costs and acquisition-related amortization of intangibles and compensation charges.
Total cash at the end of the third quarter was $125 million, compared with $127 million at the end of the second quarter.
“As we previously announced, we saw a number of customer push-outs and cancellations of orders toward the end of the quarter. As our customers began to realize that the anticipated Christmas holiday sell-through was not going to materialize as they had previously thought, we saw across the board softening of demand for our audio and video products,” said David D. French, president and CEO, Cirrus Logic.
Over the last two months, Cirrus reduced its worldwide workforce by approximately 150 people, or 15 percent. The company lowered its expected revenue break-even on a pro forma basis to $65 million to $69 million per quarter, down from the $80 million to $85 million at the end of the second quarter.
Cirrus Strengthens Video and Audio Product
Portfolio
“We demonstrated our leading-edge products to more than
200 current and prospective customers in our demo suites at the
Consumer Electronics Show (CES) earlier this month, and the
reaction was very positive,” said French.
Cirrus products featured at CES included:
Cirrus also recently announced:
Outlook and Guidance
“Many of our customers and distributors remain cautious and
are closely managing their inventory levels. As a result, we expect
revenue in the March quarter, a seasonally slower sales period, to
range between $52 million and $56 million,” said French.
“We will be working with our customers to help them bring
their exciting new products to volume production. The successful
introduction of these new products with Cirrus components will be
key to our revenue growth opportunities in the second half of
calendar 2003.”
GAAP Fourth Quarter FY03 (ending Mar. 29, 2003)
Pro Forma Fourth Quarter FY03 (ending Mar. 29, 2003)
Total Pro Forma R&D and SG&A expenses exclude approximately $5 million of acquisition-related amortization of intangibles and compensation charges.
The company will incur additional restructuring charges, relating to workforce reductions and facility consolidations, during the fourth quarter, the full amount of which cannot be quantified at this time. In addition, the company may incur possible non-cash impairment charges related to certain intangible assets, as well as goodwill impairment in accordance with FAS 142, that cannot be quantified at this time. Any potential FAS 142 charge would not be expected to have any impact on the company’s operations or growth prospects.
Conference Call
Cirrus Logic management will hold a conference call to discuss
these results today, Jan. 22, at 4 p.m. Central Time. Those wishing
to join should dial (617) 801-9702 (pass code "Cirrus
Logic") at approximately 3:50 p.m. Central Time. A replay of
the call will be available starting one hour after the completion
of the call until Jan. 29, 2003. To access the replay, dial (617)
801-6888. A
live webcast of the conference call will also be
available.
Cirrus Logic, Inc.
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 fourth
fiscal quarter revenues, GAAP and pro forma research and
development and selling, general and administrative expense levels;
GAAP and pro forma gross margin levels; and expectations regarding
our revenue growth opportunities 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; 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;
the level of orders and shipments during the fourth fiscal quarter
of 2003, as well as customer cancellations of orders, or the
failure to place orders consistent with forecasts; 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; the impact of restructuring charges,
such as work force reductions and facility consolidations; asset
impairment charges; and a possible impairment of goodwill in
accordance with FAS 142; 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.
