Cirrus Logic Reports Fiscal Q3 2003 Financial Results; Lowers Quarterly Pro Forma Revenue Break-even to $65 million-$69 million.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas--(BUSINESS WIRE)--Jan. 22, 2003 Cirrus Logic (company) Cirrus Logic - A manufacturer of integrated circuits including the Advanced RISC Machine and display interface processors and cards for use as Windows accelerators (requiring dedicated driver software). http://cirrus.com/. Inc. (Nasdaq:CRUS crus (krus) pl. cru´ra [L.] 1. leg (1). 2. a leglike part. crus ce´rebri ) 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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See 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 Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $46.5 million, an improvement of 13 percent from $53.7 million in the prior quarter. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase 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 restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs and acquisition-related amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. 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 Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). holiday sell-through sell-through Adjective of the sale of prerecorded video cassettes, without their first being for hire only was not going to materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. as they had previously thought, we saw across the board softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. of demand for our audio and video products," said David D. French, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Cirrus Logic Inc. Over the last two months, Cirrus reduced its worldwide workforce by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 demo - /de'moh/ 1. A demonstration of a product, often of an early version or prototype. A demo is a far more effective way of inducing bugs to manifest themselves than any number of test runs, especially when important people are watching. 2. demo version. 3. suites at the Consumer Electronics Show (CES) earlier this month, and the reaction was very positive," said French. Cirrus products featured at CES included: -- The semiconductor industry's most comprehensive, feature-rich and cost-effective DVD+RW recording platform solution. This fully functional reference platform, which is based upon Cirrus Logic's flagship DVD processor, the CS98200, and its leadership video encoding solution, the CS92288 MPEG A/V codec, is designed to help consumer electronics manufacturers accelerate widespread adoption of DVD+RW recording products. -- An exciting new Personal Video Recording (PVR) platform. Our PVR solution allows manufacturers to build video recording devices that play DVDs and record video content onto a hard drive. Our compression technology provides customers higher picture quality at a lower bill of materials cost by compressing and storing more hours of video on smaller capacity hard drives. The Cirrus PVR platform supports a "time-shifting" feature so users can begin playback of recorded content, such as a television program, while it is still being recorded. -- A new family of six- and eight-channel, highly integrated, cost-effective surround-sound codecs. These audio solutions are designed to give OEMs a range of surround sound codecs that will deliver multi-channel 192 kHz DVD-Audio capability while helping manufacturers accelerate their time to market in a wide-range of digital consumer electronics markets such as A/V receivers, DVD receivers, home-theater systems and other audio systems. -- The "CES Innovations" award-winning CS7410. This product is optimized for CD/MP3-based portable audio systems, including portable CD players and boom boxes. It includes a 32-bit RISC core and a 16-bit audio DSP. Cirrus also recently announced: -- Apex Digital Apex Digital, Inc. is an American electronics manufacturer based in City of Industry, California. They manufacture mainly budget-priced consumer electronics such as televisions and DVD players. , North America's sales leader for DVD players A stand-alone device that plays DVDs. It contains a DVD drive and the electronics to decode the digital video. The device may play only manufactured DVDs, or it may be able to play DVD-R, DVD-RW and DVD+RW discs. DVD players are cabled to a TV or home theater system for display. , has selected Cirrus' CS92288 A/V (1) (Audio/Video) Refers to equipment and applications that deal with sound and sight. The A/V world includes microphones, tape recorders, audio mixers, still and video cameras, film projectors, slide projectors, VCRs, CD and DVD players/recorders, amplifiers and codec (1) (enCOder/DECoder) A hardware circuit that performs analog-to-digital conversion (ADC) and digital-to-analog (DAC) conversion. When analog signals are entered into a computer, cellphone or other device via a microphone or video source such as VHS tape or analog TV, as the MPEG (Moving Pictures Experts Group) An ISO/ITU standard for compressing digital video. Pronounced "em-peg," it is the universal standard for digital terrestrial, cable and satellite TV, DVDs and digital video recorders (DVRs). audio and video encoding See encode. solution for its new combination DVD player and hard drive-based digital video recorder See DVR. , the Apex PVR-1000. -- ADS Technologies selected Cirrus to power its popular new Instant DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. line of consumer digital video recording products. -- Mustek, a Taiwanese consumer electronics supplier, unveiled its first DVD recording device using Cirrus' DVD+RW (DVD+Read Write) A rewritable (re-recordable) DVD disc for both movies and data from the DVD+RW Alliance. DVD+RW media can be read on DVD-Video players and computer DVD-ROM drives. recording platform. -- Marantz Marantz is a company that develops and sells upper-mid range to high-end audio products.[1] The first Marantz audio product was designed and built by Saul B. Marantz in his home in Kew Gardens, New York. America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. selected Cirrus to power its series of high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" audio/video receivers. -- Starlight star·light n. The light from the stars. starlight Noun the light that comes from the stars Noun 1. Electronics, a manufacturer of high-quality, value-priced consumer electronics products, selected Cirrus to power its portable MP3 player A digital music player that supports the MP3 format, which was the audio format that started a revolution in online music downloads and distribution. All portable music players, the iPod being the most popular, support MP3 along with one or more other audio formats. aimed at the U.S. market. 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) -- Revenue is expected to be $52 million-$56 million -- Gross margins are expected to be 48-50 percent -- R&D and SG&A expenses are expected to total $38 million-$40 million Pro Forma Fourth Quarter FY03 (ending Mar. 29, 2003) -- Revenue is expected to be $52 million-$56 million -- Gross margins are expected to be 48-50 percent -- R&D and SG&A expenses are expected to total $33 million-$35 million 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 To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. additional restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc work force 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 Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges related to certain intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible 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 web cast of the conference call will also be available via the company's Web site at www.cirrus.com. Cirrus Logic Inc. Cirrus Logic is a premier supplier of high-performance analog and DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive 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 Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. and its rich mixed-signal patent portfolio, the company targets mainstream audio, video and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the entertainment applications in the consumer entertainment market. Cirrus Logic operates from headquarters in Austin, Texas with offices in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , 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, 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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. Summary financial data follows:
CIRRUS LOGIC INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
(not prepared in accordance with GAAP)
Quarter Ended
-----------------------------
Dec. 28 Sept. 28, Dec. 29,
2002 2002 2001
-------- -------- ---------
Net sales $60,516 $73,314 $73,254
Costs and expenses:
Cost of sales (Note 1) 30,204 38,390 42,565
Research and development (Note 2) 21,507 24,655 26,556
Selling, general and administrative
(Note 3) 17,020 18,792 21,614
Restructuring costs (Note 4) - - -
-------- -------- ---------
Total costs and expenses 68,731 81,837 90,735
-------- -------- ---------
Income (loss) from operations (8,215) (8,523) (17,481)
Realized gain (loss) on marketable
equity securities (Note 5) - - -
Interest income and (expense), net 542 541 926
Other income (expense), net (Note 6) 214 (354) (300)
-------- -------- ---------
Income (loss) before income taxes and
loss from discontinued operations (7,459) (8,336) (16,855)
Provision (benefit) for income taxes
(Note 7) (488) (558) (1,926)
-------- -------- ---------
Income (loss) from continuing operations (6,971) (7,778) (14,929)
Loss from discontinued operations
(Note 8) - - -
-------- -------- ---------
Net income (loss) $(6,971) $(7,778) $(14,929)
======== ======== =========
Basic earnings (loss) per share $(0.08) $(0.09) $(0.19)
Diluted earnings (loss) per share $(0.08) $(0.09) $(0.19)
Weighted average common shares
outstanding:
Basic 83,487 83,413 79,207
Diluted 83,487 83,413 79,207
See notes to Pro Forma Consolidated Condensed Statement of Operations
CIRRUS LOGIC INC.
NOTES TO PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited - quarterly)
This pro forma presentation reflects the historical financial results
adjusted for the following non-recurring or unusual items:
(Note 1) Q3 FY'03 - Pro Forma cost of sales excludes the benefit of
$0.8 million in reserves released on product sold during the quarter.
Q2 FY'03 - Pro Forma cost of sales excludes the benefit of $0.8
million in reserves released on product sold during the quarter and
$0.4 million related to the reversal of a portion of a prior year
charge recorded in conjunction with our exit from the magnetic storage
product line. Q3 FY'02 - Pro Forma cost of sales excludes $25.3
million in inventory charges associated with our restructuring and
exit from the magnetic storage product line.
(Note 2) Q3 FY'03 - Pro Forma research and development expense
excludes $4.4 million related to the amortization of acquired
intangible assets and $0.4 million related to acquisition bonus and
deferred compensation expense. Q2 FY'03 - Pro Forma research and
development expense excludes $4.7 million related to the amortization
of acquired intangible assets and $1.3 million related to acquisition
bonus and deferred compensation expense. Q3 FY'02 - Pro Forma research
and development expense excludes $29.4 million related to the
write-off of in-process research and development associated with the
acquisition of ShareWave, LuxSonor and Stream Machine. Pro Forma
research and development also excludes $4.0 million related to the
amortization of acquired intangible assets, $0.5 million related to
write-off of redundant or unused equipment and software and $0.4
million related to acquisition bonus and deferred compensation
expense.
(Note 3) Q3 FY'03 - Pro Forma selling, general and administrative
expense excludes $0.4 million related to legal costs associated with
our exit from the magnetic storage product line, $0.3 million related
to facility exit costs and $0.2 million related to acquisition bonus
and deferred compensation expense. Q2 FY'03 - Pro Forma selling,
general and administrative expense excludes $1.0 million related to
acquisition bonus and deferred compensation expense and $0.1 million
related to legal costs associated with our exit from the magnetic
storage product line. Q3 FY'02 - Pro Forma selling, general and
administrative expense excludes $1.9 million related to the write-off
of a module of our enterprise resource planning software that we no
longer plan to use and $0.3 million related to acquisition bonus and
deferred compensation expense.
(Note 4) Q3 FY'03 - Pro Forma restructuring costs exclude $2.2 million
related to additional charges for facilities consolidation and costs
associated with our workforce reduction. Q2 FY'03 - Pro Forma
restructuring costs exclude $3.1 million related to costs associated
with our workforce reduction and charges to fully expense certain
intangibles and fixed assets that will no longer be used as a result
of our workforce reduction. Q3 FY'02 - Pro Forma restructuring costs
exclude $5.5 million related to costs associated with our workforce
reduction and facilities consolidation.
(Note 5) Q2 FY'03 - Pro Forma realized gain (loss) on marketable
equity securities excludes $0.9 million in realized losses due to
other than temporary declines in the value of our investment in
certain public companies.
(Note 6) Q3 FY'03 - Pro Forma other income (expense), net excludes
$2.1 million related to the settlement of patent infringement claims.
Q3 FY'02 - Pro Forma other income (expense), net excludes $1.0 million
related to write-offs and write-downs of investments in private
companies.
(Note 7) Q3 FY'03 - Pro Forma benefit for income taxes excludes a $4.5
million benefit resulting from the reversal of $4.0 million of prior
year state tax liabilities and a $0.5 million Federal income tax
refund generated by our ability, under current tax law, to carryback
losses five years. Pro Forma benefit for income taxes includes a $0.5
million benefit resulting from reclaiming a portion of the FY'01 Pro
Forma income tax expense. Q2 FY'03 - Pro Forma benefit for income
taxes includes a $0.6 million benefit resulting from reclaiming a
portion of the FY'01 Pro Forma income tax expense. Q3 FY'02 - Pro
Forma benefit for income taxes includes a $1.9 million benefit
resulting from reclaiming a portion of the FY'01 Pro Forma income tax
expense.
(Note 8) Q3 FY'02 - The Pro Forma financial statements exclude the
$0.1 million loss from discontinued operations of eMicro Corporation
("eMicro"). During Q1 FY'03, the shareholders of eMicro voted to
dissolve eMicro, a joint venture in which we own a 75% interest.
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Quarter Ended
------------------------------
Dec. 28, Sept. 28, Dec. 29,
2002 2002 2001
--------- --------- ---------
Net sales $60,516 $73,314 $73,254
Costs and expenses:
Cost of sales (Note 1) 29,361 37,227 67,885
Research and development (Note 2) 26,342 30,616 60,912
Selling, general and administrative
(Note 3) 17,909 19,939 23,834
Restructuring costs (Note 4) 2,208 3,102 5,460
--------- --------- ---------
Total costs and expenses 75,820 90,884 158,091
--------- --------- ---------
Income (loss) from operations (15,304) (17,570) (84,837)
Realized gain (loss) on marketable
equity securities (Note 5) - (947) -
Interest income and (expense), net 542 541 926
Other income (expense), net (Note 6) (1,886) (354) (1,323)
--------- --------- ---------
Income (loss) before income taxes and
loss from discontinued operations (16,648) (18,330) (85,234)
Provision (benefit) for income taxes
(Note 7) (4,435) 29 -
--------- --------- ---------
Income (loss) from continuing
operations (12,213) (18,359) (85,234)
Loss from discontinued operations
(Note 8) - - (133)
--------- --------- ---------
Net income (loss) $(12,213) $(18,359) $(85,367)
========= ========= =========
Basic earnings (loss) per share:
From continuing operations $(0.15) $(0.22) $(1.08)
Discontinued operations - - -
--------- --------- ---------
Basic earnings (loss) per share $(0.15) $(0.22) $(1.08)
========= ========= =========
Diluted earnings (loss) per share:
From continuing operations $(0.15) $(0.22) $(1.08)
Discontinued operations - - -
--------- --------- ---------
Diluted earnings (loss) per share $(0.15) $(0.22) $(1.08)
========= ========= =========
Weighted average common shares
outstanding:
Basic 83,487 83,413 79,207
Diluted 83,487 83,413 79,207
See notes to Pro Forma Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles
CIRRUS LOGIC INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
(not prepared in accordance with GAAP)
Nine Months Ended
-----------------------
Dec. 28, Dec. 29,
2002 2001
----------- -----------
Net sales $209,854 $328,207
Costs and expenses:
Cost of sales (Note 1) 107,608 210,308
Research and development (Note 2) 73,376 78,408
Selling, general and administrative
(Note 3) 54,599 67,725
Restructuring costs (Note 4) - -
----------- -----------
Total costs and expenses 235,583 356,441
----------- -----------
Income (loss) from operations (25,729) (28,234)
Realized gain (loss) on marketable
equity securities (Note 5) - -
Interest income and (expense), net
(Note 6) 1,698 5,141
Other income (expense), net (Note 7) (66) 388
----------- -----------
Income (loss) before income taxes and
loss from discontinued operations (24,097) (22,705)
Provision (benefit) for income taxes
(Note 8) (1,605) (1,926)
----------- -----------
Income (loss) from continuing
operations (22,492) (20,779)
Loss from discontinued operations
(Note 9) - -
----------- -----------
Net income (loss) $(22,492) $(20,779)
=========== ===========
Basic earnings (loss) per share:
From continuing operations $(0.27) $(0.27)
Discontinued operations - -
----------- -----------
Basic earnings (loss) per share $(0.27) $(0.27)
=========== ===========
Diluted earnings (loss) per share:
From continuing operations $(0.27) $(0.27)
Discontinued operations - -
----------- -----------
Diluted earnings (loss) per share $(0.27) $(0.27)
=========== ===========
Weighted average common shares
outstanding:
Basic 83,306 75,820
Diluted 83,306 75,820
See notes to Pro Forma Consolidated Condensed Statement of
Operations
CIRRUS LOGIC INC.
NOTES TO PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited - year-to-date)
This pro forma presentation reflects the historical financial results
adjusted for the following non-recurring or unusual items:
(Note 1) FY'03 - Pro Forma cost of sales excludes the benefit of $2.8
million in reserves released on product sold year to date and $0.8
million related to the reversal of a portion of a prior year charge
recorded in conjunction with our exit from the magnetic storage
product line. FY'02 - Pro Forma cost of sales excludes a net inventory
charge of $61.5 million associated with our restructuring and our exit
from the magnetic storage product line.
(Note 2) FY'03 - Pro Forma research and development expense excludes
$13.8 million related to the amortization of acquired intangible
assets and $2.4 million related to acquisition bonus and deferred
compensation expense. FY'02 - Pro Forma research and development
expense excludes $31.3 million related to the write-off of in-process
research and development related to the acquisition of Peak Audio,
ShareWave, LuxSonor and Stream Machine, $6.3 million related to the
amortization of acquired intangible assets, a $0.7 million Q2 charge
to write off a license related to the magnetic storage product line,
$0.5 million related to the Q3 write-off of redundant or unused
equipment and software and $0.4 million related to acquisition bonus
and deferred compensation expense.
(Note 3) FY'03 - Pro Forma selling, general and administrative expense
excludes $2.1 million related to acquisition bonus and deferred
compensation expense, $0.8 million related to facility exit costs,
$0.7 million related to legal costs associated with our exit from the
magnetic storage product line and $0.1 million related to merger and
acquisition activities. FY'02 - Pro Forma selling, general and
administrative expense excludes $1.9 million related to the Q3 write-
off of a module of our enterprise resource planning software that we
no longer plan to use, $0.7 million related to merger and acquisition
activities, $0.3 million related to acquisition bonus and deferred
compensation expense and $0.2 million related to legal costs
associated with our exit from the magnetic storage product line.
(Note 4) FY'03 - Pro Forma restructuring costs exclude $7.4 million
related to costs associated with our workforce reductions, facilities
consolidation and charges to fully expense certain intangible and
fixed assets that will no longer be used. FY'02 - Pro Forma
restructuring costs excludes $7.4 million related to Q1 and Q3
workforce reductions and costs associated with facilities
consolidation.
(Note 5) FY'03 - Pro Forma realized gain (loss) on marketable equity
securities excludes a Q1 gain of $1.4 million related to the holdback
from the sale of our interest in Basis Communications and $0.9 million
in realized losses in Q2 due to other than temporary declines in the
value of our investment in certain public companies. FY'02 - Pro Forma
realized gain (loss) on marketable equity securities excludes a gain
of $9.8 million related to the sale of our interest in Basis
Communications and $1.2 million related to the sale of call options in
Openwave Systems Inc. common stock, both Q1 gains.
(Note 6) FY'03 - Pro Forma interest income and (expense), net excludes
$0.1 million in interest income associated with the sale of our
interest in Basis Communications.
(Note 7) FY'03 - Pro Forma other income (expense), net excludes $2.1
million related to the settlement of patent infringement claims. FY'02
- Pro Forma other income (expense), net excludes $1.0 million related
to Q3 write-offs and write-downs of investments in private companies.
(Note 8) FY'03 - Pro Forma benefit for income taxes excludes a $4.5
million benefit resulting from the reversal of $4.0 million of prior
year state tax liabilities and a $0.5 million Federal income tax
refund generated by our ability, under current tax law, to carryback
losses five years. Pro Forma benefit for income taxes includes a $1.7
million benefit resulting from reclaiming a portion of the FY'01 Pro
Forma income tax expense. FY'02 - Pro Forma benefit for income taxes
includes a $1.9 million benefit resulting from reclaiming a portion of
the FY'01 Pro Forma income tax expense.
(Note 9) FY'03 - The Pro Forma financial statements exclude the $1.5
million loss from discontinued operations of eMicro Corporation
("eMicro"). During Q1 FY'03, the shareholders of eMicro voted to
dissolve eMicro, a joint venture in which we own a 75% interest. FY'02
- The Pro Forma financial statements exclude the $1.4 million loss
from discontinued operations of eMicro.
CIRRUS LOGIC INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Nine Months Ended
--------------------
Dec. 28, Dec. 29,
2002 2001
--------- ----------
Net sales $209,854 $328,207
Costs and expenses:
Cost of sales (Note 1) 103,979 271,813
Research and development (Note 2) 89,607 117,626
Selling, general and administrative (Note 3) 58,319 70,781
Restructuring costs (Note 4) 7,395 7,379
--------- ----------
Total costs and expenses 259,300 467,599
--------- ----------
Income (loss) from operations (49,446) (139,392)
Realized gain (loss) on marketable equity
securities (Note 5) 453 10,967
Interest income and (expense), net (Note 6) 1,823 5,141
Other income (expense), net (Note 7) (2,166) (635)
--------- ----------
Income (loss) before income taxes and loss from
discontinued operations (49,336) (123,919)
Provision (benefit) for income taxes (Note 8) (4,377) -
--------- ----------
Income (loss) from continuing operations (44,959) (123,919)
Loss from discontinued operations (Note 9) (1,452) (1,365)
--------- ----------
Net income (loss) $(46,411) $(125,284)
========= ==========
Basic earnings (loss) per share:
From continuing operations $(0.54) $(1.63)
Discontinued operations (0.02) (0.02)
--------- ----------
Basic earnings (loss) per share $(0.56) $(1.65)
========= ==========
Diluted earnings (loss) per share:
From continuing operations $(0.54) $(1.63)
Discontinued operations (0.02) (0.02)
--------- ----------
Diluted earnings (loss) per share $(0.56) $(1.65)
========= ==========
Weighted average common shares outstanding:
Basic 83,302 75,820
Diluted 83,302 75,820
See notes to Pro Forma Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited)
(in thousands)
Dec. 28, Sept. 28, Dec. 29,
2002 2002 2001
---------- --------- ----------
ASSETS
Current assets
Cash and cash equivalents $111,959 $114,332 $136,880
Restricted cash 12,844 12,807 12,293
Marketable equity securities 904 526 3,297
Accounts receivable, net 27,886 35,011 112,346
Inventories, net 28,523 28,752 31,511
Other current assets 18,564 16,548 20,029
---------- --------- ----------
Total Current Assets 200,680 207,976 316,356
Property and equipment, net 38,393 36,685 39,286
Goodwill and intangibles, net 178,772 183,300 194,494
Other assets 6,412 4,630 5,855
---------- --------- ----------
Total Assets $424,257 $432,591 $555,991
========== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $56,828 $59,809 $80,522
Current maturities of long-
term debt and capital lease
obligations - 141 739
Income taxes payable 37,527 41,530 40,409
---------- --------- ----------
Total Current Liabilities 94,355 101,480 121,670
Long-term obligations 13,414 3,658 2,890
Minority interest in eMicro 599 599 1,303
Stockholders' equity:
Capital stock 867,519 866,531 852,690
Accumulated deficit (551,110) (538,897) (423,904)
Accumulated other
comprehensive income (loss) (520) (780) 1,342
---------- --------- ----------
Total Stockholders' Equity 315,889 326,854 430,128
---------- --------- ----------
Total Liabilities and
Stockholders' Equity $424,257 $432,591 $555,991
========== ========= ==========
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