Cirrus Logic Reports First Quarter Fiscal 2000 Results - Company Financial Information

Cambridge Telcom Report, August 2, 1999

Cirrus Logic Inc. (Nasdaq:CRUS) has announced financial results for the first quarter of fiscal 2000, which ended June 26, 1999.

Net revenues were $120.6 million and, excluding charges related to the restructuring of the joint venture wafer fab agreements with IBM and Lucent Technologies and other charges included in Cost of Sales, net income was $0.5 million and diluted earnings per share were $0.01. Including restructuring and other charges totaling $128.2 million, the company reported a net loss of $127.7 million and a diluted per share loss of $2.12.

"Our first fiscal quarter marks our success in formally reducing joint venture capacity obligations with MiCRUS and Cirent Semiconductor, which supports our re-sized business model of reduced fixed manufacturing costs and operating expenses," said David French, president and chief executive officer of Cirrus Logic. "I believe that virtually all critical actions required to re-engineer Cirrus Logic are now largely behind us, and that our company is well positioned to participate in the next cycle of semiconductor industry growth."

As a result of the agreements to restructure the joint venture wafer fabs, Cirrus Logic has recorded a fiscal Q1 charge of approximately $128.2 million, of which approximately $127.2 million is included in Restructuring Costs, and approximately $1.0 million is included in Cost of Sales. Following are further details related to this restructuring:

* The approximate $128.2 million charge taken in fiscal Q1, when added to the $212.2 million in charges taken in prior periods, brings the total charges relating directly to the joint venture restructuring agreements to about $340.2 million.

* As a result of the restructuring, Cirrus Logic does not anticipate any further significant charges related to capacity underutilization.

* Also related to these restructuring agreements, Cirrus Logic will pay approximately $150 million in cash during fiscal Q2, and to place in escrow Common Stock valued at $32 million in settlement of the agreements.

Cirrus Logic is a premier supplier of high-performance analog circuits and advanced mixed-signal chip solutions. The company's products, sold under its own name and the Crystal product brand, enable system-level applications in mass storage, audio and precision data conversion. Additional information about Cirrus Logic is available at www.cirrus.com.

                          CIRRUS LOGIC, INC.
               CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
                              (Unaudited)

CONDENSED STATEMENTS OF OPERATIONS

                                             Quarter Ended
                                        -----------------------
                                         June 26,      June 27,
                                          1999          1998
                                        ----------   ----------

Net sales                               $ 120,553    $ 177,931

Costs and expenses:
  Cost of sales                            71,386      117,819
  Research and development                 26,694       35,522
  Selling, general and administrative      22,663       27,090
  Restructuring costs, gain on
   sale of assets and other, net          127,210       (3,006)
                                        ---------    ---------
      Total costs and expenses            247,953      177,425

Income (loss) from operations            (127,400)         506
Interest and other
 (expense) income, net                       (346)         306

Income (loss) before provision
 for income taxes                        (127,746)         812
Provision (benefit) for income taxes         --            296

    Net income (loss)                   $(127,746)   $     516
                                        =========    =========
      Net income (loss) per share:
  Basic                                 $   (2.12)   $    0.01
                                        =========    =========
  Diluted                               $   (2.12)   $    0.01
                                        =========    =========
Weighted average common
 shares outstanding:
  Basic                                    60,171      66,650
  Diluted                                  60,171      67,461

Amounts in thousands, except per share amounts


                          CIRRUS LOGIC, INC.
               CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
                              (Unaudited)

CONDENSED BALANCE SHEETS

                                            June 26,    March 27,
                                              1999        1999
                                          ---------   -----------
Current assets:

 Cash, cash equivalents and
  short term investments                  $ 259,135   $ 305,350
 Accounts receivable, net                    67,431      66,063
 Inventories                                 45,409      40,262
 Other current assets                        44,385      19,039
                                          ---------   ---------
     Total current assets                   416,360     430,714

Property and equipment, net                  47,732      48,024
Manufacturing agreements, net
 and investment in joint ventures              --        14,000
Deposits and other assets                    37,278      39,892
                                          ---------   ---------
     Total assets                         $ 501,370   $ 532,630
                                          =========   =========

Current liabilities:
 Accounts payable, accrued liabilities
  and restructuring accrual               $ 310,088   $ 207,033
 Obligations under equipment loans
  and capital leases, current                18,840      23,076
         Income taxes payable                35,980      36,593
                                          ---------   ---------
     Total current liabilities            $ 364,908     266,702

Long term obligations and
 convertible subordinated notes             319,235     323,648

Stockholders' equity (net capital
 deficiency):
 Capital stock                              328,878     326,185
 Retained earnings (accumulated deficit)   (511,651)   (383,905)
                                          ---------   ---------
  Total stockholders' equity
   (net capital deficiency)                (182,773)    (57,720)
                                          ---------   ---------

     Total liabilities and
      stockholders' equity (net
      capital deficiency)                 $ 501,370   $ 532,630
                                          =========   =========
Amounts in thousands