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Projects 5-6 Percent Revenue Growth in Both FQ1 and FQ2Expects Pro Forma Profit in December Quarter |
| AUSTIN,
Texas--(BUSINESS WIRE)--May 1, 2002--Cirrus Logic Inc. (Nasdaq:CRUS -
news) today announced financial results for its fourth quarter and
fiscal year 2002, ended March 30, 2002.
Fiscal fourth quarter revenue was $83.6 million, up nine percent over the $77.0 million reported for the prior quarter. Pro forma net loss for fiscal Q4 was $10.0 million, versus the pro forma net loss of $15.1 million in the prior quarter. Pro forma loss per share was $0.12 on 83 million shares outstanding, compared with a pro forma loss per share of $0.19 on 79 million shares outstanding in the prior quarter. Fourth quarter pro forma gross margins were 47 percent, up 600 basis points from the 41 percent gross margins the company reported in the third fiscal quarter. The significantly higher margins were primarily a result of improved wafer costs as well as a favorable product mix. Fourth quarter pro forma operating expenses were $50.7 million versus $49.1 million in Q3. In accordance with generally accepted accounting principles (GAAP), fourth quarter net loss was $80.8 million, and the GAAP net loss per share was $0.98 on 83 million shares outstanding. As previously announced, included in the GAAP loss was a non-cash charge of $73.3 million to reserve disputed magnetic storage receivables from Western Digital and Fujitsu Ltd. If Cirrus is successful in collecting these receivables through the ongoing litigation, the company will record an equivalent reduction in GAAP operating expense. The company also took a $3.5 million non-cash charge for costs associated with consolidation of facilities, and a $6.8 million charge for amortization of intangibles and acquisition-related compensation. Partially offsetting these GAAP charges was a $12.9 million benefit from tax refunds and associated interest related to prior years. On a GAAP basis, gross margins were 48.5 percent. Cash at the end of the fourth quarter was $153 million, compared with the $149 million cash balance at the end of Q3. "We are pleased to report our third consecutive quarter of revenue increases in on-going businesses, and are especially proud of the 47 percent gross margins we achieved in Q4," said David D. French, president and CEO of Cirrus Logic. "We are entering the new fiscal year with a very healthy backlog, strong bookings and important design wins in areas key to our continued growth. I believe we can achieve pro forma profitability by the end of this calendar year." "We have established meaningful market share in DVD video decoders, a remarkable achievement considering it has been only six months since we acquired that technology," he said. "In the fourth quarter, we won designs with four of the top Chinese DVD manufacturers, and we have established a new Cirrus division in China, to focus our product development, marketing and sales efforts on achieving significant market share in that important region," Mr. French said. In March, Cirrus began volume shipments of DVD optical controllers to a large manufacturer of consumer DVD player subsystems. In addition, the company said it is on track to launch a CD-based MP3 solution in the first quarter, which can be designed into end products in time for Christmas revenue opportunities. The company also recently began volume shipments for a production of a combination DVD player/video recorder, and has received its first orders for components at the heart of a new mainstream portable DVD player. Highlights:
Fiscal 2002 Results Revenue in fiscal 2002 totaled $417.5 million, of which $289.5 million resulted from ongoing businesses. Ongoing businesses exclude sales of products for magnetic hard disk drives, which the company exited in Q2 of fiscal 2002, and end of life product lines. Pro forma net loss for fiscal 2002 was $32.2 million, or pro forma loss of $0.41 per share (basic and diluted) on 78 million shares outstanding. In accordance with GAAP, fiscal 2002 net loss was $206.1 million. The GAAP net loss per share was $2.66 (basic and diluted). Outlook and Guidance First Quarter FY03 (ending June 2002)
Second Quarter FY03 (ending September 2002)
Third Quarter FY03 (ending December 2002) The company expects to be profitable on a pro forma basis The company expects GAAP charges that consist of acquisition-related amortization of intangibles and compensation charges to total approximately $6 million to $7 million each quarter for the remainder of fiscal 2003. Conference Call Cirrus Logic management will hold a conference call to discuss these results today, May 1, at 4 p.m. Central Time. Those wishing to join should dial 212/287-1615, passcode "Cirrus Logic" at approximately 3:45 p.m. A live webcast of the conference call will also be available via the company's Web site at www.cirrus.com. A replay of the call will be available starting one hour after the completion of the call until May 8, 2002. To access the replay, please dial 402/998-0951. 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 the ability of the Company to successfully integrate its acquisitions into its operations and realize the anticipated synergies; the ability of the Company to deliver products that perform as anticipated; the successful resolution of the Company's litigation with Western Digital and Fujitsu; overall conditions in the semiconductor market; the rate of consumer electronics market adoption of new products; and the risk factors listed in the company's Form 10-K for the year ended March 31, 2001, 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
-------------------------------------
Mar. 30, Dec. 29, Mar. 31,
2002 2001 2001
----------- ----------- -----------
Net sales $ 83,610 $ 76,970 $ 199,725
Costs and expenses:
Cost of sales (Note 1) 44,340 45,336 143,183
Research and development
(Note 2) 27,912 27,184 27,424
Selling, general and
administrative (Note 3) 22,796 21,900 26,417
Restructuring costs and
other, net (Note 4) -- -- --
----------- ----------- -----------
Total costs and expenses 95,048 94,420 197,024
Income (loss) from operations (11,438) (17,450) 2,701
Realized gain on sale of
marketable equity securities
(Note 5) -- -- --
Interest income and (expense),
net (Note 6) 574 939 4,132
Other expense (Note 7) (292) (521) (1,897)
----------- ----------- -----------
Income (loss) before provision
for income taxes (11,156) (17,032) 4,936
Provision (benefit) for income
taxes (Note 8) (924) (1,926) 580
Minority interest in loss of
eMicro 211 44 252
----------- ----------- -----------
Net income (loss) $ (10,021) $ (15,062) $ 4,608
=========== =========== ===========
Basic income (loss) per share $ (0.12) $ (0.19) $ 0.06
=========== =========== ===========
Diluted income (loss) per
share $ (0.12) $ (0.19) $ 0.06
=========== =========== ===========
Weighted average common shares
outstanding:
Basic 82,748 79,207 79,447
Diluted 82,748 79,207 83,034
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) Q4 FY'02 -- Pro Forma cost of sales excludes the benefit
of $1.3 million in reserves released on product sold during the
quarter. Q3 FY'02 -- Pro Forma cost of sales excludes $25.3 million in
inventory charges associated with our restructuring and the exit from
our magnetic storage product line.
(Note 2) Q4 FY'02 -- Pro Forma research and development expense
excludes $4.8 million related to the amortization of acquired
intangible assets and $0.9 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 ($14.4 million), LuxSonor ($8.6 million) and Stream Machine
($6.4 million). Pro Forma research and development expense also
excludes $4.0 million related to the amortization of acquired
intangible assets, $0.5 million related to the write-off of redundant
or unused equipment and software and $0.4 million related to
acquisition bonus and deferred compensation expense. Q4 FY'01 -- Pro
Forma research and development expense excludes $0.7 million related
to the amortization of acquired intangible assets.
(Note 3) Q4 FY'02 -- Pro Forma selling, general and administrative
expense excludes a $73.3 million charge to reserve disputed magnetic
storage receivables from Western Digital and Fujitsu Ltd., $1.1
million related to acquisition bonus and deferred compensation expense
and $0.2 million related to legal costs associated with magnetic
storage products. 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. Q4 FY'01 Pro Forma selling, general and
administrative expense excludes $0.5 million related to merger and
acquisition activities.
(Note 4) Q4 FY'02 -- Pro Forma restructuring costs and other, net
excludes $3.5 million related to costs associated with consolidation
of our facilities. Q3 FY'02 -- Pro Forma restructuring costs and
other, net excludes $5.5 million related to workforce reductions and
costs associated with consolidation of our facilities.
(Note 5) Q4 FY'01 -- Pro Forma realized gain on sale of marketable
equity securities excludes a gain of $1.1 million related to the sale
of call options in Openwave Systems Inc. common stock (formerly known
as Phone.com) and a net gain of $1.2 million related to the sale of
investments.
(Note 6) Q4 FY'02 -- Pro Forma interest income and (expense), net
excludes $2.4 million related to interest received on income tax
refunds for prior years.
(Note 7) Q3 FY'02 -- Pro Forma other expense excludes $1.0 million
related to write-offs and write-downs of investments in private
companies. Q4 FY'01 -- Pro Forma other expense excludes a $1.9 million
charge related to a litigation settlement.
(Note 8) Q4 FY'02 -- Pro Forma benefit for income taxes excludes
$10.6 million related to income tax refunds for prior years. Pro Forma
benefit for income taxes includes a $0.9 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 is a $1.9 million
benefit resulting from reclaiming a portion of the FY'01 Pro Forma
income tax expense. Q4 FY'01 -- Pro Forma provision for income taxes
differs from the GAAP provision for income taxes by the tax effect of
the Pro Forma adjustments detailed above.
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Quarter Ended
-------------------------------------
Mar. 30, Dec. 29, Mar. 31,
2002 2001 2001
----------- ----------- -----------
Net sales $ 83,610 $ 76,970 $ 199,725
Costs and expenses:
Cost of sales (Note 1) 43,042 70,656 143,183
Research and development
(Note 2) 33,598 61,540 28,105
Selling, general and
administrative (Note 3) 97,468 24,120 26,907
Restructuring costs and
other, net (Note 4) 3,544 5,460 --
----------- ----------- -----------
Total costs and expenses 177,652 161,776 198,195
Income (loss) from operations (94,042) (84,806) 1,530
Realized gain on sale of
marketable equity securities
(Note 5) -- -- 2,322
Interest income and (expense),
net (Note 6) 2,958 939 4,132
Other expense (Note 7) (292) (1,544) (3,776)
----------- ----------- -----------
Income (loss) before provision
for income taxes (91,376) (85,411) 4,208
Provision (benefit) for income
taxes (Note 8) (10,370) -- 508
Minority interest in loss of
eMicro 211 44 252
----------- ----------- -----------
Net income (loss) $ (80,795) $ (85,367) $ 3,952
=========== =========== ===========
Basic income (loss) per share $ (0.98) $ (1.08) $ 0.05
=========== =========== ===========
Diluted income (loss) per
share $ (0.98) $ (1.08) $ 0.05
=========== =========== ===========
Weighted average common shares
outstanding:
Basic 82,748 79,207 79,447
Diluted 82,748 79,207 83,034
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)
Year to Date
----------------------
Mar. 30, Mar. 31,
2002 2001
--------- ---------
Net sales (Note 1) $ 417,529 $ 768,039
Costs and expenses:
Cost of sales (Note 2) 259,073 480,803
Research and development (Note 3) 108,054 123,210
Selling, general and administrative (Note 4) 91,711 107,641
Restructuring costs and other, net (Note 5) -- --
--------- ---------
Total costs and expenses 458,838 711,654
Income (loss) from operations (41,309) 56,385
Realized gain on sale of marketable equity
securities (Note 6) -- --
Interest income and (expense), net (Note 7) 5,790 5,160
Other expense (Note 8) (107) (2,550)
--------- ---------
Income (loss) before provision for income taxes (35,626) 58,995
Provision (benefit) for income taxes (Note 9) (2,850) 6,003
Minority interest in loss of eMicro 611 297
--------- ---------
Income (loss) before accounting change and
extraordinary gain (32,165) 53,289
Cumulative effect of change in accounting
principle (Note 10) -- --
Extraordinary gain, net of tax (Note 11) -- --
--------- ---------
Net income (loss) $ (32,165) $ 53,289
========= =========
Basic income (loss) per share:
Before accounting change and extraordinary
gain $ (0.41) $ 0.74
Accounting change -- --
Extraordinary gain -- --
--------- ---------
Basic $ (0.41) $ 0.74
========= =========
Diluted income (loss) per share:
Before accounting change and extraordinary
gain $ (0.41) $ 0.70
Accounting change -- --
Extraordinary gain -- --
--------- ---------
Diluted (Note 12) $ (0.41) $ 0.70
========= =========
Weighted average common shares outstanding:
Basic 77,552 71,698
Diluted (Note 12) 77,552 76,264
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'02 -- Pro Forma and GAAP revenue includes $9.6 million
related to non-recurring revenue in Q1. FY'01 -- Pro Forma revenue
excludes $10.6 million in revenue recognized due to accounting changes
implemented in Q1. During Q1, Cirrus Logic adopted the Securities and
Exchange Commission's Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" and changed the timing of revenue
recognition on international shipments. Additionally, during Q1, we
changed our estimate of the amount of revenue that is deferred on
certain distributor transactions under agreements with only limited
rights of return.
(Note 2) FY'02 -- Pro Forma cost of sales excludes $60.2 million
in inventory charges associated with our restructuring and the exit
from our magnetic storage product line. FY'01 -- Pro Forma cost of
sales excludes $5.5 million in cost of sales recognized due to
accounting changes implemented in Q1. See Note 1 for a discussion of
those accounting changes.
(Note 3) 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, $11.2 million related to the
amortization of acquired intangible assets, $1.2 million related to
acquisition bonus and deferred compensation expense, a $0.7 million Q2
charge to write-off a license related to the magnetic storage product
line and $0.5 million related to the Q3 write-off of redundant or
unused equipment and software. FY'01 -- Pro Forma research and
development expense excludes $3.4 million related to the amortization
of acquired intangible assets and $1.0 million in additional
compensation paid in Q2 in connection with the acquisition of
AudioLogic Inc.
(Note 4) FY'02 -- Pro Forma selling, general and administrative
expense excludes a $73.3 million charge to reserve disputed magnetic
storage receivables from Western Digital and Fujitsu Ltd., $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, $1.4 million
related to acquisition bonus and deferred compensation expense, $0.7
million related to merger and acquisition activities and $0.4 million
related to legal costs associated with the non-core products. FY'01 --
Pro Forma selling, general and administrative expense excludes $1.5
million in additional compensation paid in Q2 in connection with the
acquisition of AudioLogic Inc. and $0.5 million related to merger and
acquisition activities.
(Note 5) FY'02 -- Pro Forma restructuring costs and other, net
excludes $10.9 million related to Q1 and Q3 workforce reductions and
Q3 and Q4 costs associated with consolidation of our facilities. FY'01
-- Pro Forma restructuring costs and other, net excludes $1.8 million
in income due to the final resolution of the MiCRUS restructuring
agreement in Q2 and restructuring gains of $12.5 million in Q1 related
to the receipt of payment for two previously reserved notes from Basis
Communications.
(Note 6) FY'02 -- The Pro Forma realized gain on sale of
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. FY'01 -- The Pro Forma realized gain on sale of
marketable equity securities excludes a Q1 gain of $78.5 million
related to the sale of marketable equity securities, a $7.1 million
gain related to the sale of call options in Openwave Systems Inc.
common stock and $1.2 million related to the sale of investments.
(Note 7) FY'02 -- Pro Forma interest income and (expense), net
excludes $2.4 million related to interest received in Q4 on income tax
refunds for prior years. FY'01 -- Pro Forma interest income and
(expense), net excludes $1.3 million of Q1 interest income related to
interest received on two previously reserved notes from Basis
Communications.
(Note 8) FY'02 -- Pro Forma other expense excludes $1.0 million
related to Q3 write-offs and write-downs of investments in private
companies. FY'01 -- Pro Forma other expense excludes a $1.9 million
charge related to a Q4 litigation settlement and a Q3 $0.5 million
write-off of an investment in a private company.
(Note 9) FY'02 -- Pro Forma benefit for income taxes excludes
$10.6 million related to income tax refunds for prior years. Pro Forma
benefit for income taxes includes a $2.8 million benefit resulting
from reclaiming a portion of the FY'01 Pro Forma income tax expense.
FY'01 -- Pro Forma provision for income taxes differs from the GAAP
provision for income taxes by the tax effect of the Pro Forma
adjustments detailed above.
(Note 10) FY'01 -- The Pro Forma financial statements exclude a
$1.7 million cumulative effect of change in accounting principle
recognized in Q1 due to Cirrus Logic's adoption of the Securities and
Exchange Commission's Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements."
(Note 11) FY'01 -- The Pro Forma financial statements exclude the
extraordinary gain of $2.5 million recognized during Q1 related to the
early retirement of $28.1 million par value of our 6% convertible
notes.
(Note 12) FY'01 -- Diluted earnings per share for FY'01 of $1.86
includes an adjustment to increase net income by $10.8 million and
diluted shares by 6.4 million, which is the after-tax interest savings
and shares which were issued in connection with the convertible debt.
Pro Forma diluted earnings per share for FY'01 of $0.70 does not
include any adjustments to net income or diluted shares as they are
anti-dilutive.
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Year to Date
-----------------------
Mar. 30, Mar. 31,
2002 2001
--------- ---------
Net sales (Note 1) $ 417,529 $ 778,673
Costs and expenses:
Cost of sales (Note 2) 319,280 486,355
Research and development (Note 3) 152,958 127,599
Selling, general and administrative
(Note 4) 169,439 109,629
Restructuring costs and other, net
(Note 5) 10,923 (14,362)
--------- ---------
Total costs and expenses 652,600 709,221
Income (loss) from operations (235,071) 69,452
Realized gain on sale of marketable
equity securities (Note 6) 10,967 86,886
Interest income and (expense), net
(Note 7) 8,174 6,409
Other expense (Note 8) (1,130) (4,928)
--------- ---------
Income (loss) before provision for
income taxes (217,060) 157,819
Provision (benefit) for income taxes
(Note 9) (10,370) 15,715
Minority interest in loss of eMicro 611 297
--------- ---------
Income (loss) before accounting change
and extraordinary gain (206,079) 142,401
Cumulative effect of change in
accounting principle (Note 10) -- (1,707)
Extraordinary gain, net of tax
(Note 11) -- 2,482
--------- ---------
Net income (loss) $(206,079) $ 143,176
========= =========
Basic income (loss) per share:
Before accounting change and
extraordinary gain $ (2.66) $ 1.99
Accounting change -- (0.02)
Extraordinary gain -- 0.03
--------- ---------
Basic $ (2.66) $ 2.00
========= =========
Diluted income (loss) per share:
Before accounting change and
extraordinary gain $ (2.66) $ 1.85
Accounting change -- (0.02)
Extraordinary gain -- 0.03
--------- ---------
Diluted (Note 12) $ (2.66) $ 1.86
========= =========
Weighted average common shares
outstanding:
Basic 77,552 71,678
Diluted (Note 12) 77,552 82,654
See notes to Pro Forma Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles
CIRRUS LOGIC INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)
(in thousands)
Mar. 30, Dec. 29, Mar. 31,
2002 2001 2001
--------- --------- ---------
ASSETS
Current assets
Cash and cash equivalents $ 140,529 $ 136,880 $ 253,136
Restricted cash 12,807 12,293 10,000
Marketable equity securities 2,258 3,297 6,581
Accounts receivable, net 42,158 112,346 136,102
Inventories, net 27,985 31,511 109,161
Other current assets 19,928 20,029 18,217
--------- --------- ---------
Total Current Assets 245,665 316,356 533,197
Property and equipment, net 26,172 29,085 32,340
Intangibles, net 194,660 194,493 12,062
Other assets 15,133 16,057 20,406
--------- --------- ---------
Total Assets $ 481,630 $ 555,991 $ 598,005
========= ========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 75,936 $ 80,522 $ 115,254
Current maturities of
long-term debt and capital
lease obligations 566 739 3,133
Income taxes payable 42,178 40,409 41,053
--------- --------- ---------
Total Current Liabilities 118,680 121,670 159,440
Long term obligations 3,709 2,890 4,319
Minority interest in eMicro 1,092 1,303 1,703
Stockholders' equity:
Capital stock 862,729 852,690 715,790
Accumulated other comprehensive
income 119 1,342 4,578
Accumulated deficit (504,699) (423,904) (287,825)
--------- --------- ---------
Total Stockholders' Equity 358,149 430,128 432,543
--------- --------- ---------
Total Liabilities and
Stockholders' Equity $ 481,630 $ 555,991 $ 598,005
========= ========= =========
Contact: Cirrus Logic Inc., Austin
Craig Ensley, 512/912-3204
invest@corp.cirrus.com
or
Stapleton Communications Inc.
Mary McGowan, 650/470-0200
mary@stapleton.com
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