Cirrus Logic Reports Fiscal Q2 2008 Financial Results
AUSTIN, Texas--Cirrus Logic Inc. , a leader in high-precision analog and digital signal processing components, today announced financial results for the second quarter fiscal year 2008, which ended Sept. 29, 2007.
The company reported second quarter fiscal year 2008 revenue of $47.0 million, compared with $41.1 million in the previous quarter, and $48.2 million during the second quarter of fiscal year 2007. Second quarter gross margin was 57.0 percent compared to 58.5 percent for the second quarter of fiscal year 2007. Operating expenses for the quarter were $30.3 million and include a $3.7 million impairment charge to the company’s remaining investment in Magnum Semiconductor, a $1.8 million charge associated with the in-process R&D related to the acquisition of Apex Microtechnology, approximately $555,000 in stock-based compensation expense, $175,000 in legal fees related to current activities associated with the concluded stock option review, and approximately $300,000 in the amortization of intangibles related to acquisitions. The net loss for the second quarter on a GAAP basis was approximately $300,000.
Total cash and marketable securities at the end of the second fiscal quarter was $245 million, compared with $278 million at the end of the prior fiscal quarter. Cirrus generated approximately $9 million, excluding approximately $42 million used for the Apex acquisition.
“We made great progress in Q2 towards our goal of rebuilding the foundation of Cirrus Logic and positioned ourselves well to achieve our long-term growth and profitability goals,” said Jason Rhode, Cirrus Logic president and chief executive officer. “We closed on the acquisition of Apex Microtechnology, which we expect to strengthen our future EPS and diversify our industrial business. We saw revenues from new products more than double versus Q1, driven by products in several of our target markets and multiple new tier one customers. Also on the product front, we released several new products to full production status, and four new first revision products were sent to our foundry partners.
“We added Tim Turk as the leader of our sales team, and he has already had a significant impact on his organization’s effectiveness. We were also extremely pleased to announce yesterday that Scott Anderson has joined us to lead the Mixed Signal Audio Division. Scott will be a great leader for MSA, and his wealth of experience will be a great resource for the whole company.
“I am excited about the progress we’ve made in Q2, and I am confident that we are taking the right steps to establish Cirrus as the first-choice supplier of analog and digital signal processing components.”
Outlook for Third Quarter FY 2008 (ending December 29, 2007):
- Revenue is expected to range between $47 million and $51 million;
- Gross margin is expected to be between 56 percent and 59 percent; and
- Combined GAAP operating expenses are expected to range between $26 million and $28 million, including approximately $1.8 million in share-based compensation and amortization of acquisition-related intangibles expenses.
Conference Call
Cirrus Logic management will hold a conference call to discuss the company’s results for the second quarter of fiscal year 2008, on Oct. 24, 2007, at 5:00 p.m. EDT. Those wishing to join should call 303-262-2193 (passcode: Cirrus Logic) at approximately 4:50 p.m. EDT. A replay of the conference call will also be available beginning one hour after the completion of the call, until Oct. 31, 2007. To access the recording, call 303-590-3000 (passcode: 11098789#). A live and an archived webcast of the conference call will also be available via the company’s Web site at www.cirrus.com.
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 and signal-processing patent portfolio, Cirrus Logic delivers highly optimized products for consumer and commercial audio, automotive entertainment, and industrial and aerospace applications. The company operates from headquarters in Austin, Texas, with offices in Tucson, Ariz., Europe, Japan and Asia. More information about Cirrus Logic is available at www.cirrus.com.
Safe Harbor Statement
Except for historical information contained herein, the matters set forth in this news release contain forward-looking statements, including our estimates of third quarter fiscal year 2008 revenue, gross margin, combined research and development and selling, general and administrative expense levels, and share-based compensation expense. In some cases, forward-looking statements are identified by words such as we “expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “estimates,” and “intend,” variations of these types of words and similar expressions are intended to identify these forward-looking statements. In addition, any statements that refer to our plans, expectations, strategies or other characterizations of future events or circumstances 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. These risks and uncertainties include, but are not limited to, the following: our ability to successfully integrate our recent acquisitions into our business; 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 level of orders and shipments during the third quarter of fiscal year 2008, 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 sufficient investments in research and development; foreign currency fluctuations; the retention of key employees; expenses associated with the Company’s stock option investigation, and related ongoing litigation and administrative proceedings; and the risk factors listed in our Form 10-K for the year ended March 31, 2007, as updated on July 30, 2007 in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2007, and in our other filings with the Securities and Exchange Commission, which are available at www.sec.gov. 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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CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited) (in thousands, except per share data) |
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| Quarter Ended | ||||||||||||
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Sept. 29, |
June 30, |
Sept. 23, |
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| Net revenue | $ | 47,034 | $ | 41,124 | $ | 48,179 | ||||||
| Cost of sales | 20,213 | 16,759 | 20,014 | |||||||||
| Gross Margin | 26,821 | 24,365 | 28,165 | |||||||||
| Gross Margin Percentage | 57.0 | % | 59.2 | % | 58.5 | % | ||||||
| Operating expenses: | ||||||||||||
| Research and development | 12,051 | 10,913 | 10,103 | |||||||||
| Selling, general and administrative | 12,819 | 12,981 | 12,389 | |||||||||
| Restructuring and other costs | - | - | (428 | ) | ||||||||
| Impairment of non-marketable securities | 3,657 | - | - | |||||||||
| Acquired in process R&D | 1,761 | - | - | |||||||||
| Total operating expenses | 30,288 | 23,894 | 22,064 | |||||||||
| Income (loss) from operations | (3,467 | ) | 471 | 6,101 | ||||||||
| Interest income, net | 3,180 | 3,507 | 3,154 | |||||||||
| Other income (expense), net | (30 | ) | 26 | (25 | ) | |||||||
| Income (loss) before income taxes | (317 | ) | 4,004 | 9,230 | ||||||||
| Provision (benefit) for income taxes | 15 | 15 | (97 | ) | ||||||||
| Net income (loss) | $ | (332 | ) | $ | 3,989 | $ | 9,327 | |||||
| Basic income per share: | $ | - | $ | 0.05 | $ | 0.11 | ||||||
| Diluted income per share: | $ | - | $ | 0.04 | $ | 0.11 | ||||||
| Basic weighted average common shares outstanding | 88,998 | 88,490 | 87,553 | |||||||||
| Diluted weighted average common shares outstanding | 88,998 | 89,669 | 88,499 | |||||||||
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Prepared in accordance with Generally Accepted Accounting Principles |
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CIRRUS LOGIC, INC. CONSOLIDATED CONDENSED BALANCE SHEET unaudited; in thousands |
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Sept. 29, |
June 30, |
Sept. 23, |
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| ASSETS | |||||||||||||
| Current assets | |||||||||||||
| Cash and cash equivalents | $ | 53,211 | $ | 97,566 | $ | 96,140 | |||||||
| Restricted investments | 5,755 | 5,755 | 5,755 | ||||||||||
| Marketable securities | 174,490 | 174,242 | 158,817 | ||||||||||
| Accounts receivable, net | 23,814 | 19,428 | 21,924 | ||||||||||
| Inventories | 19,450 | 17,512 | 21,427 | ||||||||||
| Other current assets | 14,490 | 14,138 | 5,949 | ||||||||||
| Total Current Assets | 291,210 | 328,641 | 310,012 | ||||||||||
| Long-term marketable securities | 11,490 | - | 992 | ||||||||||
| Property and equipment, net | 20,720 | 10,508 | 12,845 | ||||||||||
| Intangibles, net | 31,718 | 11,246 | 2,894 | ||||||||||
| Goodwill | 12,655 | 6,461 | - | ||||||||||
| Investment in Magnum Semiconductor | - | 3,657 | 7,947 | ||||||||||
| Other assets | 2,190 | 1,900 | 3,347 | ||||||||||
| Total Assets | $ | 369,983 | $ | 362,413 | $ | 338,037 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Current liabilities | |||||||||||||
| Accounts payable | $ | 14,551 | $ | 11,643 | $ | 10,824 | |||||||
| Accrued salaries and benefits | 7,873 | 6,565 | 7,038 | ||||||||||
| Other accrued liabilities | 10,537 | 9,890 | 9,565 | ||||||||||
| Deferred income on shipments to distributors | 6,946 | 5,362 | 6,427 | ||||||||||
| Income taxes payable | 8 | 6 | 2,079 | ||||||||||
| Total Current Liabilities | 39,915 | 33,466 | 35,933 | ||||||||||
| Long-term restructuring accrual | 2,674 | 2,995 | 3,621 | ||||||||||
| Other long-term obligations | 10,126 | 9,664 | 9,155 | ||||||||||
| Stockholders' equity: | |||||||||||||
| Capital stock | 933,824 | 932,689 | 922,086 | ||||||||||
| Accumulated deficit | (615,948 | ) | (615,616 | ) | (631,923 | ) | |||||||
| Accumulated other comprehensive loss | (608 | ) | (785 | ) | (835 | ) | |||||||
| Total Stockholders' Equity | 317,268 | 316,288 | 289,328 | ||||||||||
| Total Liabilities and Stockholders' Equity | $ | 369,983 | $ | 362,413 | $ | 338,037 | |||||||
| Prepared in accordance with Generally Accepted Accounting Principles | |||||||||||||