Cirrus Logic, Inc. (CRUS)

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Cirrus Logic, Inc. (CRUS)

F4Q09 (Qtr End 3/28/09) Conference Call

April 29, 2009 5:00 PM ET


Thurman K. Case - Chief Financial Officer, Vice President of Finance and Treasurer

Jason Rhode - President and Chief Executive Officer

Thurman Case


Evan Wang - Thomas Weisel Partners

Adam Benjamin - Jefferies & Company, Inc.

Vernon Essi - Needham & Company

Christopher Longiaru - Sidoti & Company



Welcome to the Cirrus Logic Fourth Quarter Fiscal Year 2009 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, the call will be open for questions. (Operator Instructions).

As a reminder, this conference is being recorded for replay purposes. It is now my pleasure to introduce our host for today, Mr. Thurman Case, Chief Financial Officer. Mr. Case, you may now begin.

Thurman K. Case

Thank you and good afternoon. Joining me on today's call is Jason Rhode, Cirrus Logic's President and Chief Executive Officer.

Before we begin, you're reminded that during the course of this conference call, we will make projections and other forward-looking statements regarding and among other things, our estimates for our first quarter fiscal year 2010 revenues, gross margin levels, combined R&D and SG&A expenses, amortization of acquired intangibles and share-based compensation expense, as well as our estimates and assumptions regarding our future revenue growth and market share growth.

These statements are predictions that are subject to risks and uncertainties that may cause actual results to differ materially from our projections. By providing this information, we undertake no obligation to update or revise any projections or forward-looking statements whether as a result of new developments or otherwise.

Please refer to our press release issued today which is available on our website, our latest Form 10-K for the fiscal year ending March 29, 2008, as well as our other filings made with the Securities and Exchange Commission for additional discussion of risk factors that could cause actual results to differ materially from our current expectations.

I also want to mention before we proceed that all financial numbers are prepared unless noted in accordance with generally accepted accounting principles.

A reconciliation of the non-GAAP financial information provided in today's call to the most directly comparable GAAP information is included in today's press release and in our website in the investor section.

Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because we believe such information is useful to our investors for informational and comparative purposes.

In addition, we use certain non-GAAP financial information internally to evaluate and manage our operations. As a note, the non-GAAP financial information we use may differ from that used by other companies. These non-GAAP measures should be considered in addition to and not as a substitute for the results prepared in accordance with GAAP.

And now, I'd like to discuss our results. Net revenue for the March quarter was 33.5 million, down 25% from

44.8 million in the quarter a year ago and down approximately 24% from 43.8 million in the December quarter.

Individually, sales of audio products contributed 18.8 million in revenue, compared to 22.3 million in the quarter a year ago and down sequentially from 25.9 million in revenue in the December quarter.

Energy product sales generated 14.7 million, down from 22.5 million in the March quarter a year ago and down sequentially from 17.9 million in the December quarter.

While March quarter sales are typically down, sequentially revenue for the March quarter was further impacted by weak demand and as the result of the current global economic recession.

Historical revenue breakdowns by product category are available on our website.

Gross margin on a GAAP basis for the March quarter was 55%, which is unchanged from 55% in both the quarter a year ago and in the December quarter. Gross margin a year ago was impacted by certain charges related to the closure of Caretta Integrated Circuits, a subsidiary based in Shanghai.

Excluding these charges, gross margin a year ago on a non-GAAP basis was 57%. There is no material difference between the GAAP and non-GAAP gross margin in the third and fourth quarters of fiscal year 2009.

Total GAAP operating expenses for the March quarter were 24.2 million, compared to 22 million in the third quarter. GAAP operating expenses in the fourth quarter included a 2.1 million charge associated with the impairment of certain intangible assets.

Additionally, our GAAP operating expenses included stock-based compensation charges of 1.1 million and amortization of acquired related, acquisition related intangible charges of approximately 400,000 as well as certain one-time legal expenses of approximately 400,000 and 100,000 in charges related to a facilities accrual.

Non-GAAP operating expenses excluding these items were approximately 20 million for the quarter, compared to 20.4 million in non-GAAP operating expenses during the December quarter.

The loss from operations on a GAAP basis was 5.7 million. Excluding the charges noted above, the non-GAAP loss from operations was 1.5 million.

We recorded a GAAP net loss for the quarter of 7.8 million, a loss of $0.12 per share based on 65.2 million diluted shares. In the same quarter a year ago, we reported a net loss on a GAAP basis of 13.7 million or $0.16 per share based on 85.3 million diluted shares.

On a non-GAAP basis which excludes the items noted above as well as an additional charge of 2.7 million related to the reduction of our deferred tax asset, we recorded a net loss for the quarter of 900,000 or $0.01 per share.

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