Financial: Cirrus Logic Reports Second Quarter Fiscal Year 1999 Results; Company Reports $0.02 Earnings Per Share Excluding Charges - Company Financial Information

Edge: Work-Group Computing Report, Oct 26, 1998

Cirrus Logic, Inc. (Nasdaq:CRUS) Wednesday announced results for the second quarter of fiscal 1999. Net revenues were $170 million and, excluding one time charges related to the restructuring announced on September 24, 1998, net income was $1.1 million and diluted earnings per share were $0.02.

Results From Core Businesses for Fiscal Q2 1999(a) In connection with the recently announced restructuring, the company also announced its intention to phase out certain non-core businesses so that it can more fully concentrate on its profitable precision linear and mixed-signal positions in the mass storage, audio and high-precision data conversion markets. Revenues from these core businesses totaled $133 million for the second fiscal quarter, with operating margins of $9 million and diluted earnings per share of $0.10.

Core Business Results         Q2 FY 1999
Revenues                      $ 133 million
Gross Profit Margins            42 percent
Operating Margins             $ 9 million
Diluted EPS                   $ 0.10
(a)  (includes contributions from core and ongoing businesses only)

Operating Results Including Restructuring Charges Including restructuring charges totaling $123 million, the company reported a net loss of $121 million and a diluted per share loss of $1.90. Pursuant to the previously announced restructuring charge of up to $500 million, the second quarter's charges include $46 million of deferred tax assets, $48 million of inventory write downs and other manufacturing charges included in cost of sales, and $29 million of direct restructuring charges. The company reported that its cash balance remains strong with a quarter end balance of $335 million.

Cirrus Logic is a premier supplier of precision linear circuits and advanced mixed-signal system-level chip solutions, the latter of which demand high-performance mixed-signal processing, embedded DSP, algorithms and firmware. The company's products, sold under its own name and the Crystal product brand, enable high-volume applications in mass storage, communications, consumer electronics and industrial markets. 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         Two Quarters Ended
                      Sept. 26,   Sept. 27,   Sept. 26,  Sept.27,
                        1998        1997        1998        1997
Net sales             $169,689    $223,960    $347,620   $425,583
Costs and expenses and
 gain on sale of assets:
  Cost of sales        155,611     135,047     273,430    257,518
  Research and
   development          34,145      44,644      69,667     88,826
  Selling, general
   and administrative   26,810      28,373      53,900     57,900
  Restructuring costs,
   gain on sale of
   assets and other, net28,522          --      25,516         --
   Total costs and
    expenses, and gain
    on sale of assets  245,088     208,064     422,513    404,244
Income (loss) from
 operations            (75,399)     15,896     (74,893)    21,339
Interest and other
 (expense)
 income, net               792     (3,128)       1,098    (5,028)
Income (loss)
 before provision
 for income taxes     (74,607)      12,768     (73,795)    16,311
Provision for
 income taxes           46,402       3,830      46,698      4,893
  Net income (loss) ($121,009)      $8,938   ($120,493)   $11,418
Net income (loss)
 per share:
     Basic             ($1.90)       $0.13     ($1.85)      $0.17
     Diluted           ($1.90)       $0.13     ($1.85)      $0.17
Weighted average
 common shares
 outstanding:
     Basic              63,748      67,232      65,199     66,824
     Diluted            63,748      70,549      65,199     69,237
Amounts in thousands, except per share amounts
                       CIRRUS LOGIC, INC.
            CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
                           (Unaudited)
CONDENSED BALANCE SHEETS
                                             Sept. 26,   March28,
                                                1998        1998
Current assets:
   Cash and cash equivalents                  $245,550   $347,421
   Short-term investments                       89,651    125,378
   Accounts receivable, net                    106,731    103,073
   Inventories                                  63,378    103,703
   Other current assets                        110,444    136,618
     Total current assets                      615,754    816,193
Property and equipment, net                     82,070     99,364
Manufacturing agreements, net
 and investment in joint ventures              158,069    166,953
Deposits and other assets                       37,097     55,032
    Total assets                              $892,990 $1,137,542
Current liabilities:
Accounts payable and accrued liabilities      $213,755   $275,432
   Obligations under equipment loans and
    capital leases, current                     26,570     26,554
   Income taxes payable                         30,064     38,053
     Total current liabilities                 270,389    340,039
Long-term obligations and convertible
 subordinated notes                            335,812    341,160
Shareholders' equity:
   Capital stock                               342,586    366,914
   Retained earnings (accumulated deficit)     (55,797)    89,429
     Total shareholders' equity                286,789    456,343
       Total liabilities and
        shareholders' equity                  $892,990 $1,137,542
Amounts in thousands