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
Dec. 28,
2002
Net sales
$
Costs and expenses:
Cost of sales (Note 1)
Research and development (Note 2)
Selling, general and administrative (Note 3)
Restructuring costs (Note 4)
60,516
Sept. 28,
2002
$
73,314
Dec. 29,
2001
$
73,254
30,204
21,507
17,020
-
38,390
24,655
18,792
-
42,565
26,556
21,614
-
68,731
81,837
90,735
Income (loss) from operations
(8,215)
(8,523)
(17,481)
Realized gain (loss) on marketable equity securities (Note 5)
Interest income and (expense), net
Other income (expense), net (Note 6)
Income (loss) before income taxes and loss from discontinued operations
Provision (benefit) for income taxes (Note 7)
542
214
(7,459)
(488)
541
(354)
(8,336)
(558)
926
(300)
(16,855)
(1,926)
Income (loss) from continuing operations
(6,971)
(7,778)
(14,929)
-
-
-
Total costs and expenses
Loss from discontinued operations (Note 8)
Net income (loss)
$
(6,971)
$
(7,778)
$
(14,929)
Basic earnings (loss) per share
$
(0.08)
$
(0.09)
$
(0.19)
Diluted earnings (loss) per share
$
(0.08)
$
(0.09)
$
(0.19)
Weighted average common shares outstanding:
Basic
Diluted
83,487
83,487
See notes to Pro Forma Consolidated Condensed Statement of Operations
83,413
83,413
79,207
79,207
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) Q3 FY'03 - Pro Forma cost of sales excludes the benefit of $0.8 million in reserves released on product sold during the
quarter. Q2 FY'03 - Pro Forma cost of sales excludes the benefit of $0.8 million in reserves released on product sold during the
quarter and $0.4 million related to the reversal of a portion of a prior year charge recorded in conjunction with our exit from the
magnetic storage product line. Q3 FY'02 - Pro Forma cost of sales excludes $25.3 million in inventory charges associated with our
restructuring and exit from the magnetic storage product line.
(Note 2) Q3 FY'03 - Pro Forma research and development expense excludes $4.4 million related to the amortization of acquired
intangible assets and $0.4 million related to acquisition bonus and deferred compensation expense. Q2 FY'03 - Pro Forma research
and development expense excludes $4.7 million related to the amortization of acquired intangible assets and $1.3 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, LuxSonor and
Stream Machine. Pro Forma research and development also excludes $4.0 million related to the amortization of acquired intangible
assets, $0.5 million related to write-off of redundant or unused equipment and software and $0.4 million related to acquisition bonus
and deferred compensation expense.
(Note 3) Q3 FY'03 - Pro Forma selling, general and administrative expense excludes $0.4 million related to legal costs associated
with our exit from the magnetic storage product line, $0.3 million related to facility exit costs and $0.2 million related to acquisition
bonus and deferred compensation expense. Q2 FY'03 - Pro Forma selling, general and administrative expense excludes $1.0 million
related to acquisition bonus and deferred compensation expense and $0.1 million related to legal costs associated with our exit from
the magnetic storage product line. 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.
(Note 4) Q3 FY'03 - Pro Forma restructuring costs exclude $2.2 million related to additional charges for facilities consolidation and
costs associated with our workforce reduction. Q2 FY'03 - Pro Forma restructuring costs exclude $3.1 million related to costs
associated with our workforce reduction and charges to fully expense certain intangibles and fixed assets that will no longer be used as
a result of our workforce reduction. Q3 FY'02 - Pro Forma restructuring costs exclude $5.5 million related to costs associated with
our workforce reduction and facilities consolidation.
(Note 5) Q2 FY'03 - Pro Forma realized gain (loss) on marketable equity securities excludes $0.9 million in realized losses due to
other than temporary declines in the value of our investment in certain public companies.
(Note 6) Q3 FY'03 - Pro Forma other income (expense), net excludes $2.1 million related to the settlement of patent infringement
claims. Q3 FY'02 - Pro Forma other income (expense), net excludes $1.0 million related to write-offs and write-downs of investments
in private companies.
(Note 7) Q3 FY'03 - Pro Forma benefit for income taxes excludes a $4.5 million benefit resulting from the reversal of $4.0 million of
prior year state tax liabilities and a $0.5 million Federal income tax refund generated by our ability, under current tax law, to carryback
losses five years. Pro Forma benefit for income taxes includes a $0.5 million benefit resulting from reclaiming a portion of the FY'01
Pro Forma income tax expense. Q2 FY'03 - Pro Forma benefit for income taxes includes a $0.6 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 includes a $1.9
million benefit resulting from reclaiming a portion of the FY'01 Pro Forma income tax expense.
(Note 8) Q3 FY'02 - The Pro Forma financial statements exclude the $0.1 million loss from discontinued operations of eMicro
Corporation ("eMicro"). During Q1 FY'03, the shareholders of eMicro voted to dissolve eMicro, a joint venture in which we own a
75% interest.
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Quarter Ended
Dec. 28,
2002
Net sales
$
Costs and expenses:
Cost of sales (Note 1)
Research and development (Note 2)
Selling, general and administrative (Note 3)
Restructuring costs (Note 4)
60,516
Sept. 28,
2002
$
73,314
Dec. 29,
2001
$
73,254
29,361
26,342
17,909
2,208
37,227
30,616
19,939
3,102
67,885
60,912
23,834
5,460
75,820
90,884
158,091
Income (loss) from operations
(15,304)
(17,570)
(84,837)
Realized gain (loss) on marketable equity securities (Note 5)
Interest income and (expense), net
Other income (expense), net (Note 6)
Income (loss) before income taxes and loss from discontinued operations
Provision (benefit) for income taxes (Note 7)
542
(1,886)
(16,648)
(4,435)
(947)
541
(354)
(18,330)
29
926
(1,323)
(85,234)
-
Income (loss) from continuing operations
(12,213)
(18,359)
(85,234)
-
-
Total costs and expenses
Loss from discontinued operations (Note 8)
Net income (loss)
Basic earnings (loss) per share:
From continuing operations
Discontinued operations
Basic earnings (loss) per share
Diluted earnings (loss) per share:
From continuing operations
Discontinued operations
Diluted earnings (loss) per share
Weighted average common shares outstanding:
Basic
Diluted
(133)
$
(12,213)
$
(18,359)
$
(85,367)
$
(0.15)
(0.15)
$
(0.22)
(0.22)
$
(1.08)
(1.08)
(0.22)
(0.22)
$
$
$
$
(0.15)
(0.15)
$
$
$
83,487
83,487
See notes to Pro Forma Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles
83,413
83,413
$
$
(1.08)
(1.08)
79,207
79,207
CIRRUS LOGIC, INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
(not prepared in accordance with GAAP)
Nine Months Ended
Dec. 28,
2002
Net sales
$
Costs and expenses:
Cost of sales (Note 1)
Research and development (Note 2)
Selling, general and administrative (Note 3)
Restructuring costs (Note 4)
209,854
Dec. 29,
2001
$
328,207
107,608
73,376
54,599
-
210,308
78,408
67,725
-
235,583
356,441
Income (loss) from operations
(25,729)
(28,234)
Realized gain (loss) on marketable equity securities (Note 5)
Interest income and (expense), net (Note 6)
Other income (expense), net (Note 7)
Income (loss) before income taxes and loss from discontinued operations
Provision (benefit) for income taxes (Note 8)
1,698
(66)
(24,097)
(1,605)
5,141
388
(22,705)
(1,926)
Income (loss) from continuing operations
(22,492)
(20,779)
-
-
Total costs and expenses
Loss from discontinued operations (Note 9)
Net income (loss)
Basic earnings (loss) per share:
From continuing operations
Discontinued operations
Basic earnings (loss) per share
Diluted earnings (loss) per share:
From continuing operations
Discontinued operations
Diluted earnings (loss) per share
$
(22,492)
$
(20,779)
$
(0.27)
(0.27)
$
(0.27)
(0.27)
$
$
$
Weighted average common shares outstanding:
Basic
Diluted
See notes to Pro Forma Consolidated Condensed Statement of Operations
(0.27)
(0.27)
83,306
83,306
$
$
$
(0.27)
(0.27)
75,820
75,820
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'03 - Pro Forma cost of sales excludes the benefit of $2.8 million in reserves released on product sold year to date and $0.8
million related to the reversal of a portion of a prior year charge recorded in conjunction with our exit from the magnetic storage product
line. FY'02 - Pro Forma cost of sales excludes a net inventory charge of $61.5 million associated with our restructuring and our exit
from the magnetic storage product line.
(Note 2) FY'03 - Pro Forma research and development expense excludes $13.8 million related to the amortization of acquired intangible
assets and $2.4 million related to acquisition bonus and deferred compensation expense. 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, $6.3 million related to the amortization of acquired intangible assets, a $0.7 million Q2
charge to write off a license related to the magnetic storage product line, $0.5 million related to the Q3 write-off of redundant or unused
equipment and software and $0.4 million related to acquisition bonus and deferred compensation expense.
(Note 3) FY'03 - Pro Forma selling, general and administrative expense excludes $2.1 million related to acquisition bonus and deferred
compensation expense, $0.8 million related to facility exit costs, $0.7 million related to legal costs associated with our exit from the
magnetic storage product line and $0.1 million related to merger and acquisition activities. FY'02 - Pro Forma selling, general and
administrative expense excludes $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, $0.7 million related to merger and acquisition activities, $0.3 million related to acquisition bonus and deferred
compensation expense and $0.2 million related to legal costs associated with our exit from the magnetic storage product line.
(Note 4) FY'03 - Pro Forma restructuring costs exclude $7.4 million related to costs associated with our workforce reductions, facilities
consolidation and charges to fully expense certain intangible and fixed assets that will no longer be used. FY'02 - Pro Forma
restructuring costs excludes $7.4 million related to Q1 and Q3 workforce reductions and costs associated with facilities consolidation.
(Note 5) FY'03 - Pro Forma realized gain (loss) on marketable equity securities excludes a Q1 gain of $1.4 million related to the
holdback from the sale of our interest in Basis Communications and $0.9 million in realized losses in Q2 due to other than temporary
declines in the value of our investment in certain public companies. FY'02 - Pro Forma realized gain (loss) on 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.
(Note 6) FY'03 - Pro Forma interest income and (expense), net excludes $0.1 million in interest income associated with the sale of our
interest in Basis Communications.
(Note 7) FY'03 - Pro Forma other income (expense), net excludes $2.1 million related to the settlement of patent infringement claims.
FY'02 - Pro Forma other income (expense), net excludes $1.0 million related to Q3 write-offs and write-downs of investments in private
companies.
(Note 8) FY'03 - Pro Forma benefit for income taxes excludes a $4.5 million benefit resulting from the reversal of $4.0 million of prior
year state tax liabilities and a $0.5 million Federal income tax refund generated by our ability, under current tax law, to carryback losses
five years. Pro Forma benefit for income taxes includes a $1.7 million benefit resulting from reclaiming a portion of the FY'01 Pro
Forma income tax expense. FY'02 - Pro Forma benefit for income taxes includes a $1.9 million benefit resulting from reclaiming a
portion of the FY'01 Pro Forma income tax expense.
(Note 9) FY'03 - The Pro Forma financial statements exclude the $1.5 million loss from discontinued operations of eMicro Corporation
("eMicro"). During Q1 FY'03, the shareholders of eMicro voted to dissolve eMicro, a joint venture in which we own a 75% interest.
FY'02 - The Pro Forma financial statements exclude the $1.4 million loss from discontinued operations of eMicro.
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Nine Months Ended
Dec. 28,
2002
Net sales
$
Costs and expenses:
Cost of sales (Note 1)
Research and development (Note 2)
Selling, general and administrative (Note 3)
Restructuring costs (Note 4)
209,854
Dec. 29,
2001
$
328,207
103,979
89,607
58,319
7,395
271,813
117,626
70,781
7,379
259,300
467,599
Income (loss) from operations
(49,446)
(139,392)
Realized gain (loss) on marketable equity securities (Note 5)
Interest income and (expense), net (Note 6)
Other income (expense), net (Note 7)
Income (loss) before income taxes and loss from discontinued operations
Provision (benefit) for income taxes (Note 8)
453
1,823
(2,166)
(49,336)
(4,377)
10,967
5,141
(635)
(123,919)
-
Income (loss) from continuing operations
(44,959)
(123,919)
(1,452)
(1,365)
Total costs and expenses
Loss from discontinued operations (Note 9)
Net income (loss)
Basic earnings (loss) per share:
From continuing operations
Discontinued operations
Basic earnings (loss) per share
Diluted earnings (loss) per share:
From continuing operations
Discontinued operations
Diluted earnings (loss) per share
$
(46,411)
$
(125,284)
$
(0.54)
(0.02)
(0.56)
$
(1.63)
(0.02)
(1.65)
(0.54)
(0.02)
(0.56)
$
$
$
$
Weighted average common shares outstanding:
Basic
Diluted
See notes to Pro Forma Consolidated Condensed Statement of Operations
Prepared in accordance with Generally Accepted Accounting Principles
83,302
83,302
$
$
(1.63)
(0.02)
(1.65)
75,820
75,820
CIRRUS LOGIC, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited)
(in thousands)
Dec. 28,
2002
ASSETS
Current assets
Cash and cash equivalents
Restricted cash
Marketable equity securities
Accounts receivable, net
Inventories, net
Other current assets
Total Current Assets
Property and equipment, net
Goodwill and intangibles, net
Other assets
Total Assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities
Current maturities of long-term debt and capital lease obligations
Income taxes payable
Total Current Liabilities
$
$
$
Long-term obligations
Minority interest in eMicro
Stockholders' equity:
Capital stock
Accumulated deficit
Accumulated other comprehensive income (loss)
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
$
111,959
12,844
904
27,886
28,523
18,564
200,680
38,393
178,772
6,412
424,257
56,828
37,527
94,355
Sept. 28,
2002
$
$
$
114,332
12,807
526
35,011
28,752
16,548
207,976
36,685
183,300
4,630
432,591
59,809
141
41,530
101,480
Dec. 29,
2001
$
$
$
136,880
12,293
3,297
112,346
31,511
20,029
316,356
39,286
194,494
5,855
555,991
80,522
739
40,409
121,670
13,414
3,658
2,890
599
599
1,303
867,519
(551,110)
(520)
315,889
424,257
$
866,531
(538,897)
(780)
326,854
432,591
$
852,690
(423,904)
1,342
430,128
555,991