Cirrus Logic Updates Guidance; Cost-Reduction Actions to Lower Break-Even Revenue Point.

Business Editors & High-Tech Writers

Cirrus Logic Inc. (Nasdaq:CRUS) announced today that it expects revenue for its fiscal first quarter, ending June 29, 2002, will be $74 million to $77 million, below its original May 1, 2002, guidance of $87 million to $88 million.

The shortfall is due solely to lower demand by Thomson Multimedia, which manufactures DVD subsystems for the Microsoft Xbox. Pro forma loss per share is expected to be between $0.08 and $0.10, still within the company's original guidance of a loss of $0.06 to $0.10 per share.

Improved Q1 Operating Expenses and Gross Margin

Cirrus believes that it will report improved operating expenses and gross margins. Pro forma operating expenses will be in the $47 million to $48 million range, down from the company's previously expected range of $50 million to $52 million. The improvement is due to continued expense management and cost control throughout the company. Gross margins are likely to be approximately 50 percent, up from the previously guided range of 46 percent to 48 percent. The margin improvement is due primarily to a favorable product mix.

Q1 Double-Digit Growth in Non-Xbox Business

"While we are disappointed in the Xbox status, we are pleased to report that we expect double-digit sequential growth in our business excluding Xbox," said David D. French, president and CEO of Cirrus Logic. "We continue to believe we are gaining share in important markets such as analog audio, DVD video controllers and in video compression technology. These are significant accomplishments in our areas of strategic emphasis, given that the June quarter is historically seasonally slow."

Cost Reductions Lower Break-Even Point 

Cirrus also announced that it is taking significant cost-reduction actions which, combined with the ongoing expense control and cost-management efforts already in effect, will result in savings of $15 million to $20 million annually. The additional savings are expected to begin to be realized in the September quarter. These actions will reduce the company's pro forma break-even revenue point to approximately $90 million per quarter, down from the $105 million in revenue per quarter that the company previously estimated.

September Quarter Outlook

"In the September quarter we believe that continued growth of our non-Xbox product lines will offset any continued decline in Xbox-related revenue. September quarter revenues are expected to be approximately the same as the June quarter revenues," said French.

Even on lower September Xbox revenues, Cirrus said it believes that with its continued expense controls and newly announced cost-cutting measures, it can report a pro forma loss per share in the range of $0.06 to $0.10 in the September quarter. The company remains committed to turning profitable on a pro forma basis by the end of this fiscal year.

July 22 Conference Call Information

Cirrus Logic will be releasing its full results for the first quarter fiscal 2003 on Monday, July 22, 2002, after the market close. A conference call will be held following the financial results release at 4:00 p.m. Central Time that day. The live call-in telephone number is 630/395-0021, passcode "Cirrus Logic." A replay will be available by calling 402/220-0357.

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, and major sites located in Fremont and El Dorado Hills, Calif., Broomfield and Boulder, Colo., as well as offices in Europe, 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 are forward-looking statements that are dependent on 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 and realize the anticipated synergies; 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; the successful resolution of the Company's litigation with Western Digital and Fujitsu; 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; final determination of appropriate inventory write-downs based on the outlook at the end of each quarter; actual operational spending; 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.