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| Achieves Third Successive Quarter of Revenue Growth and Profit Improvements |
| AUSTIN, Texas--(BUSINESS
WIRE)--April 26, 2000--Cirrus Logic Inc. (Nasdaq:CRUS ) today announced financial results
for the fourth quarter of fiscal 2000, which ended March 25, 2000. Net revenues for the
fourth quarter grew sequentially to $160.2 million, compared to $150.8 million in the
prior quarter. Net income for the fourth quarter was $62.1 million and earnings per share
was $0.99 on basic shares outstanding, and $0.82 on a diluted basis. For the year, net
revenues were $564.4 million compared to $628.1 million for the previous year. The
company's fiscal 2000 net loss per share was $0.77 compared to a net loss per share of
$6.77 reported in fiscal 1999. Included in fourth quarter net income are gains of $42.5 million on the sale of a portion of the marketable securities of Phone.com Inc. (Nasdaq:PHCM), and $15.7 million from the sale of its interest in Ambient Technologies to Intel. On a pro forma basis, income from operations, before net interest expense, would be approximately $6.3 million. Pro forma income from operations excludes certain non-recurring items such as net restructuring credits, the amortization of acquired intangible assets, and asset abandonment charges. On a pro forma basis, after net interest expense, basic earnings per share for the fourth quarter would be approximately $0.06, and diluted earnings per share for the fourth quarter would be approximately $0.05. ``We have now logged three consecutive quarters of increasing revenue and profit improvement,'' said David D. French, president and chief executive officer. He noted that fiscal Q4 revenue growth was driven by robust demand for chip solutions addressing consumer and Internet audio, magnetic and optical storage, and embedded Ethernet communications applications, partially offset by a slowdown in the computer audio business. ``Over the course of fiscal 2000, we established a unified strategy to become the leader in entertainment electronics for the Internet Age. We also expanded upon the strengths in each of our core businesses and fully transitioned to a fabless manufacturing model.'' French confirmed that a number of Cirrus Logic's strategic initiatives have begun to bear fruit during the fourth quarter. ``We successfully ramped production of our Maverick(TM) technology for portable Internet audio players. We also ramped our 3Ci(TM) integration platform for hard disk drive electronics and secured our second major 3Ci customer. Further, we captured our first design win for voice-over-IP phones with our embedded Ethernet solution, which has won broad acceptance by manufacturers of high-speed Internet access units for residential gateways.'' Cirrus Logic is a premier supplier of high-performance analog and DSP chip solutions for Internet entertainment electronics. Building on its global market share leadership in audio integrated circuits and its rich mixed-signal patent portfolio, the company targets high-volume audio, storage and communications applications. Cirrus Logic sells its products under the Crystal (R), Maverick(TM), and 3Ci(TM) brands as well as its own name. Founded in 1984 in Silicon Valley, Cirrus Logic operates from headquarters in Austin, Texas and major sites located in Fremont, California and Broomfield, Colorado 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, customer cancellations of orders, or the failure to place orders consistent with forecasts, unforeseen manufacturing difficulties, or hardware or software deficiencies, or delays in customer qualification of key new products, achieving high utilization of the company's manufacturing resources, final determination of appropriate inventory write-downs based on the outlook at the end of each quarter, actual operational spending, obtaining financing sufficient to meet the company's needs and the risk factors listed in the company's Form 10-K for the year ended March 25, 2000, and in other filings with the Securities and Exchange Commission. Cirrus Logic news releases may be obtained by fax by dialing 1-800-359-6414, or by dialing 510-249-4200 from outside the United States. Summary financial data follows:
CIRRUS LOGIC, INC.
CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Quarter Ended Fiscal Year Ended
Mar. 25 Dec. 25 Mar. 27, Mar. 25, Mar. 27,
2000 1999 1999 2000 1999
--------- --------- --------- --------- ---------
Net sales $ 160,246 $ 150,759 $ 127,423 $ 564,400 $ 628,105
Costs and
expenses:
Cost of sales 105,263 93,435 258,122 349,720 703,029
Research and
development 28,185 28,936 29,575 111,755 130,347
Selling,
general and
administrative 21,369 23,270 21,697 89,949 98,275
Restructuring
costs, gain
on sale of
assets and
other, net (1,599) -- 32,964 125,612 76,517
Acquired
in-process
research and
development
expenses
(Note 1) -- -- -- 8,013 --
Abandonment
of assets
charge
(Note 2) 1,026 11,174 -- 12,201 --
Total costs
and expenses 154,244 156,815 342,358 697,250 1,008,168
Income (loss)
from operations 6,002 (6,056) (214,935) (132,850) (380,063)
Realized gain
on sale of
marketable
equity
securities
(Note 3) 58,169 34,293 -- 92,463 --
Interest income
and (expense),
net (3,395) (3,875) (91) (15,658) (5,551)
Other income
(expense), net
(Note 4) 1,305 3,561 -- 8,949 4,242
Income (loss)
before
provision for
income taxes 62,081 27,923 (215,026) (47,096) (381,372)
Provision
(benefit) for
income taxes -- -- (667) -- 46,031
Net income
(loss) $ 62,081 $ 27,923 $(214,359) $ (47,096) $(427,403)
Net income
(loss) per share:
Basic $ 0.99 $ 0.45 $ (3.55) $ (0.77) $ (6.77)
Diluted
(Note 5) $ 0.82 $ 0.40 $ (3.55) $ (0.77) $ (6.77)
Weighted average
common shares
outstanding:
Basic 62,593 62,134 60,393 61,554 63,149
Diluted
(Note 5) 81,599 80,911 60,393 61,554 63,149
(Note 1) Cirrus Logic incurred a one-time charge of $8.0 million
during the second quarter of fiscal 2000 due to the write-off of
in-process research and development expenses associated with the
acquisition of AudioLogic, Inc.
(Note 2) Cirrus Logic recognized $10.2 million and $1.0 million in Q3
and Q4 charges, respectively, related to our decision to
discontinue a management information system project and write-off
the capitalized costs of the project. Also included in the Q3
charge is $0.9 million related to the disposition of certain
assets between the Company and a spin-out company.
(Note 3) Cirrus Logic recognized $34.3 million and $42.5 million in Q3
and Q4 gains, respectively, on the sale of marketable equity
securities relating to the Company's investment in Phone.com, Inc.
(Nasdaq: PHCM - news). Also included in this gain for Q4 is a $15.7
million credit relating to the sale of our interest in Ambient
Technologies.
(Note 4) Cirrus Logic recognized Q4 gains of $1.4 million relating to
the partial release of a derivative liability associated with the
stock previously issued to IBM and $0.6 million relating to the
reduction of a liability previously established in connection with
the sale of a technology license. These gains are partially offset
by a Q4 charge of $0.8 million to write-down certain investments.
(Note 5) Diluted earnings per share for Q3 and Q4 of fiscal 2000
include an adjustment to increase net income by $4.5 million,
which is the quarterly after-tax interest savings associated with
the convertible debt. Diluted shares outstanding are higher than
basic shares outstanding in Q3 & Q4 of FY 00 primarily because of
the dilutive effect of the convertible debt which must considered
in accordance with SFAS 128 as the Company earns profits. This
effect increases dilutive shares outstanding by approximately 12.4
million shares in each of Q3 & Q4 of FY 00.
CIRRUS LOGIC, INC.
CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
CONDENSED BALANCE SHEETS
(Unaudited)
(in thousands)
March 25, March 27,
2000 1999
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 144,034 $ 144,457
Restricted cash 57,173 86,277
Short-term investments -- 74,616
Marketable equity securities (Note 6) 48,077 --
Accounts receivable, net 94,672 66,063
Inventories, net 53,288 40,262
Other current assets 23,421 19,039
Total current assets 420,665 430,714
Property and equipment, net 34,730 48,024
Investment in joint venture -- 14,000
Deposits and other assets 49,437 39,892
--------- ---------
$ 504,832 $ 532,630
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
Accounts payable and accrued liabilities $ 130,567 $ 207,033
Current maturities of long-term debt
and capital lease obligations 12,829 23,076
Income taxes payable 40,193 36,593
Total current liabilities 183,589 266,702
Long term obligations and
convertible subordinated notes 304,945 323,648
Stock issued under the restructuring agreement
with IBM 32,000 --
Net capital deficiency
Capital stock 367,479 326,185
Unrealized gain on marketable equity
securities 47,820 --
Accumulated deficit (431,001) (383,905)
Total net capital deficiency (15,702) (57,720)
--------- ---------
$ 504,832 $ 532,630
(Note 6) Investment in marketable equity securities primarily relates
to the Company's investment in Phone.com.
SUPPLEMENTAL TABLE -
EARNINGS BEFORE ACQUISITION CHARGES AND OTHER ITEMS
---------------------------------------------------
(in thousands, except per share data)
Summary Financial Highlights:
Actual Results
Q4 FY '00 Q3 FY '00 Q4 FY '99
--------------------------------
Net revenues $ 160,246 $ 150,759 $ 127,423
Income (loss) from operations $ 6,002 $ (6,056) $(214,935)
Net income (loss) $ 62,081 $ 27,923 $(214,359)
Common shares outstanding 62,593 62,134 60,393
Common shares outstanding assuming
dilution (2) 81,599 80,911 60,393
Basic income (loss) per share $ 0.99 $ 0.45 $ (3.55)
Diluted income (loss) per share $ 0.82 $ 0.40 $ (3.55)
Pro Forma Results (1)
Q4 FY '00 Q3 FY '00 Q4 FY '99
--------------------------------
Net revenues $ 160,246 $ 150,759 $ 127,423
Income (loss) from operations $ 6,335 $ 6,020 $(181,971)
Net income (loss) $ 3,686 $ 3,325 $(181,395)
Common shares outstanding 62,593 62,134 60,393
Common shares outstanding assuming
dilution (2) 69,211 68,524 60,393
Basic income (loss) per share $ 0.06 $ 0.05 $ (3.00)
Diluted income (loss) per share $ 0.05 $ 0.05 $ (3.00)
(1) Pro forma results exclude amortization charges associated with
acquired intangible assets, restructuring charges, asset
abandonment charges, realized gains and premium income from the
sale of stock in Phone.com, Inc., and FY 2000 adjustments of $2.4
million and $0.6 million for Q3 and Q4, respectively, relating to
the reduction of a liability previously established in connection
with the sale of a technology license. This information is not
prepared in accordance with accounting principles generally
accepted in the United States.
(2) For Pro forma results, excludes the approximate 12.4 million
shares associated with the convertible debt because they would
have an anti-dilutive effect.
Contact: Cirrus Logic, Inc.
Tom Rigoli, 510/226-2259 (Media Contact)
trigoli@corp.cirrus.com
Craig Ensley, 512/912-3204 (Investor Contact)
invest@corp.cirrus.com
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