Thurman Case - VP and CFO Jason Rhode - President and CEO

Dan Morris - Oppenheimer & Company Heidi Poon - Thomas Weisel Partners Vernon Essi - Needham & Company Jay Srivatsa - Roth Capital Partners Adam Benjamin - Jefferies & Company Ian Gilson - Zacks Investmnent Research

Welcome to the Cirrus Logic first quarter fiscal year 2009 financial results conference call. (Operator Instructions) I would now like to turn the call over to Mr. Thurman Case, Chief Financial Officer. Mr. Case, you may now begin.

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 are reminded that during the course of this conference call, we will make projections and other forward-looking statements regarding, among other things, our estimates for our second quarter fiscal year 2009 revenues, gross margin levels, operating expenses, amortization of acquired intangibles and share-based compensation expense, as well as our estimates and assumptions regarding our future revenue growth and profitability. 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 at cirrus.com, 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 our financial statements and on 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 a substitute for the results prepared in accordance with GAAP. Net revenues in the June quarter was $44 million, up 77% from $41.1 million in the quarter a year ago, and down slightly from $44.8 million in the March quarter. Shipments during the quarter were in line with our expectations, despite challenging market conditions. I would like to note that revenue during the quarter included approximately $700,000 in product shipments related to Caretta Integrated Circuits, which we closed during the fourth quarter of fiscal 2008. Individually, sales of Audio Products contributed $22 million in revenue, compared to $22.5 million a year ago and down slightly from $22.3 million in the March quarter. Industrial shipments generated $22 million, up from $18.6 million in the quarter a year ago and down from $22.5 million in the March quarter. Historical revenue breakdowns are also available on our website for these product categories. We continue to have a diversified and deep customer base, with no OEM customers representing more than 10% of revenue, while one distributor, Avnet, represented approximately 33% of our revenue during the quarter. Gross margin for the June quarter was 56% compared to 59% a year ago and 55% in the March quarter. Total GAAP operating expenses were $23.6 million, compared to $37.7 million for the previous quarter. Operating expenses during the quarter included approximately $1.5 million in stock-based compensation expense, $350,000 in acquisition-related amortization of intangibles, and $250,000 in facility-related charges. Non-GAAP operating expenses excluding these items was $21.5 million for the quarter, a reduction of $1.2 million compared to $22.7 million in non-GAAP operating expenses during the March quarter. This expense reduction highlights our focus on driving overall operational expenses towards our long-term model, while continuing to invest in strategic programs. We reported GAAP net income for the quarter of $2.1 million, or $0.03 a share, based on $67.2 million diluted shares. Excluding the charges previously mentioned, non-GAAP net income for the quarter was $3.7 million, or $0.06 per share. Interest and other income for the first fiscal quarter was $1.1 million, down from $2.3 million in the previous quarter. The decrease is primarily due to a lower cash balance as a result of our stock buyback program. We ended the June quarter with 472 employees compared to 473 at the end of the March quarter. Looking at our balance sheet, we ended the June quarter with $21.6 million in net receivables, down slightly from $22.7 million at the end of the March quarter. Ending net inventory increased by $1.5 million in the June quarter to $24 million, as we ramped inventory to support our Q2 backlog. Capital expenditures for the June quarter were $600,000, compared to $2.4 million in the March quarter. Depreciation and amortization expense in the June quarter was $2.1 million. We ended the quarter with $103 million in total cash and marketable securities, a decrease of $84 million from $187 million at the end of March. Cash decrease this quarter was due mainly to the execution and completion of our stock buyback program. During the quarter, we repurchased and retired approximately 11.2 million shares at a total cost of $78.9 million. Total cash used in the first fiscal quarter related to this program was $87.2 million, which includes approximately $8.3 million that was payable as of the end of fiscal year 2008. We expect that the nearly 30% reduction in our outstanding share count due to the completion of the buyback program will enhance long-term shareholder value and add to our earnings per share going forward. We expect our average outstanding share count to be approximately 66 million shares going forward. We continue to generate cash on a quarterly basis, and we believe that we are well capitalized to continue investing in our strategic programs. And now, I'd like to turn the call over to Jason to discuss our business operations and guidance for the upcoming September quarter.

Thanks, Thurman. I'm pleased with our performance in the June quarter. As Thurman noted, we grew revenue on a year-over-year basis and we continue to manage our operating expenses towards our long-term model. Q1 results highlight our first step in improving our expected financial performance for the remainder of the year. We foresee accelerated revenue growth, even in the midst of challenging market conditions. This growth is being fueled by strong demand and market share gains for our line of portable audio products, which has raised our expectations above $50 million in revenue for the next quarter for the first time in several years. We also continue to make progress on several critical programs that are key to our long-term success. Operationally, we have introduced a new sales management tool designed to improve our ability to drive the sales channel, we strengthened our supply chain organization with new leadership, and we successfully reached volume production of ultra small wafer level chip scale packaging for a new line of portable audio ICs. We've also made significant strides in Japan, including new hires for key positions as well as design wins with tier-1 customers for our new line of audio clocking chips. We are excited about our outlook for the second half of this year. We have confidence in our plan. We are committed to stay focused as we continue to invest in strategic programs that will drive future growth. With the return to meaningful growth and a strong focus on managing expenses, we continue to make progress towards our long-term goals, including the financial goal of 15% year-over-year revenue growth and 20% operating margins. Let me give you a brief update on our products, beginning with the Industrial category. These products include integrated circuits designed for a variety of utility metering, high power, precision measurement, energy exploration, and communications applications, as well as our line of ARM processors. At this point, our primary focus is on the energy-related products within this category. Revenue from industrial products in the June quarter came in at $22 million, which is up by nearly 18% compared to the June quarter a year ago. Revenue from industrial products continues to provide a stable foundation for the company's bottomline, while contributing strong gross margins. We began volume shipments to Itron in the June quarter, and we continue to achieve design wins with key energy measurement customers. We are also excited about the great customer feedback we've received from several energy measurement seminars that we recently hosted in China. In the next few months, we have an exciting lineup of public product launches for key energy measurement and high-power applications. Longer term we continue to invest in other energy-related applications in which our analog and digital signal processing solutions will provide value to customers and drive long-term growth. Turning now to Audio Products, components in this category include data converters, Class D amplification products, audio processors and interface circuits; products that are used in a wide variety of consumer, portable, professional and automotive audio applications. This product category contributed $22 million of our revenue for the June quarter, down slightly compared to the June quarter a year ago. Revenue from our line of portable products is serving as the engine for overall company revenue growth during the second half of this year, as we take market share in portable applications. We continue to win tier-1 and tier-2 customers in portable media player applications in multiple regions, and we are expanding this base to include applications such as portable gaming and navigational devices. As portable products become a more significant contributor to our overall revenue, going forward you can expect greater seasonality as products in this category typically have much stronger demand in our second and third fiscal quarters. Revenue from products used in the automotive applications remains generally solid despite tough market conditions for the automotive industry in general, and a growing base of automotive design wins gives us confidence in this longer term investment. Additionally, we are beginning to see solid demand for our new line of clocking products we introduced late last year. We remain optimistic about the opportunity for growth in our new audio DSP products, and we have introduced new easy to use, graphical programming tools that are being adopted by tier-1 customers, allowing them to write their own code on Cirrus Logic DSPs. These new tools give us an improved competitive position to gain new customers and increase market share. Overall, in spite of a relatively weak market this year, we are growing our revenue in audio products, driven by strong demand from our line of portable products. This fall we plan to introduce several new products across a wide variety of applications that we expect will continue to drive long-term revenue opportunities. Now let me review our guidance for the second quarter of fiscal year 2009. Our overall expectations are as follows: Revenue is expected to range between $50 million and $54 million; gross margin is expected to be between 53% and 55%; and combined R&D and SG&A expenses are expected to range between $23 million and $25 million, which includes approximately $2 million in share-based compensation and amortization of acquisition-related intangibles expenses. To recap, we're excited about our outlook for meaningful revenue growth and operating margin improvements, driven by strong demand for our new products. We feel that our ability to take market share in portable applications will help us maintain growth even though the overall consumer market is somewhat soft. While the margin for portable products is below the corporate average, we believe that gross margin for the company will remain around 55% in the long-term. We are making progress towards our long-term target of 20% operating margins, and we're excited about our outlook for significant revenue growth this year. And now, let's take your questions.

(Operator Instructions). Our first question comes from the line of Dan Morris with Oppenheimer & Company. Please go ahead. Dan Morris - Oppenheimer & Company: Hi. I'm just calling in for Rick Schafer. First of all, the revenue guidance was pretty robust, basically looking at around 18% sequential growth at the midpoint, could you talk a little bit about your visibility there, maybe, in terms of backlog or turns requirements?

Yes, sure, that's a good question. Yeah, the backlog coverage of that number is very good. We don't give out a specific percentage, but it's actually higher typically than we would see this normal at this time of the year relative to revenue higher than it was same time of the quarter one quarter ago. If anything, I would say, that the revenue guidance was tampered a little bit relative to the backlog just in light of the overall economic conditions and all that in. And also, recognize we're enjoying and preparing for a pretty significant ramp in revenue this fall. So, that always makes you a little bit nervous when it's all brand new stuff and there's a lot of exciting stuff happening there. So in any event, the visibility into that revenue is very good from our perspective. Dan Morris - Oppenheimer & Company: Okay. So I guess what you are saying is that the incremental growth there is mainly coming from the newer products, like portable audio specifically?

Yes. Dan Morris - Oppenheimer & Company: And I know you talked about portable audio ramping with multiple tier-1s, is that also included in this next quarter?

Yes. We have got backlog for a couple of new customers and on new products. So it's pretty exciting from that product line. That team continues to execute very well, all the way across the board from engineering, all of the different functions, and marketing and sales. It's definitely a very good effort that these guys are putting forward. Dan Morris - Oppenheimer & Company: Okay. So I mean, you’ve talked about $20 million as being kind of a revenue target for portable audio in fiscal '09. Is that still a good number? Is that looking a little more conservative there?

I'd say it's probably on the conservative side. Dan Morris - Oppenheimer & Company: Okay. And then turning to the gross margins, it looks like guidance -- those margins are coming down meaningfully. How much of that is just a mix shift towards portable audio? Or is there any impact from, say, pricing pressure?

Well, I don't think we're feeling anything completely unusual on general pricing pressure. Certainly, I guess, portable is a bit lower than the corporate average which has an impact, but we're growing some business out in some of the other product lines as well. So the overall margin is kind of a mix. It's a little bit of the portable story. It's also a little bit of the decline in product lines like the audio DACs, for example, has also been impacted there. There is also a mix as well. And I should say too, that some of the range is due, again, we're experiencing a pretty significant ramp on some brand new stuff. If things go real well, we could very easily be at the higher end of that range. But the reason you give a range is because not everything necessarily goes well. So for us, this isn't exactly just business as usual, as it's been for the last few years, where the bulk of the revenue is coming from products we've built for a very long time and we have had everything's, I guess, the test programs are all dialed in real well and all that. We feel very comfortable in supporting that ramp. But every now and again, you can learn new things as you are ramping new products into full production. So we probably give ourselves a little bit more margin for error on the bottom side because of that. Actually, I was very, very pleased with where that came in. Dan Morris - Oppenheimer & Company: Great. Thank you very much.

Thank you. Our next question comes from the line of Heidi Poon from Thomas Weisel Partners. Please go ahead. Heidi Poon - Thomas Weisel Partners: Hi, guys. Great execution in a difficult environment. I just wanted to dig a little bit deeper in the gross margin. So, could we expect that in the seasonally slower quarters for portable audio for your gross margin to be back to the 56% level, if we are to maintain the overall 55% range long-term target?

It would certainly be higher, yeah. Heidi Poon - Thomas Weisel Partners: Okay, great. Also, you mentioned you have a growing base of automotive design wins, are those already kicking in this year? Or would it be more of a next year event in terms of product?

We have got some stuff that’s kicking in this year that's new. We have got further ramp on some things that we started with last year. And then, there is an ever increasing number of new applications that are coming online with our stuff. We're penetrating some customers that we have been really targeting for quite a long time. Automotive industry does not move at lightning speed, for sure. And I think even in the areas where the products that we're getting designed into, you know, we're making progress, I think this year, for the stuff that's kind of in the design-in phase, some of that's been slowed down a little bit, I think, as the car makers kind of rescrub their plans about exactly what models they are going to do and all of that. And so even though one of the suppliers like a Bose or whoever might have already designed in our product, some of the ramp for us maybe gets delayed a little bit as the automakers kind of scrub their models and whatnot. But anyway, so I am not expecting like a real sharp uptick in automotive, the way we have had with portable here. But it's just kind of a base that we're going to continue to build upon. Heidi Poon - Thomas Weisel Partners: Great. So it seems like maybe it'll be more than 10% next year? Is that the way to look at it, or--?

I would expect automotive to be certainly north of 10% next year, yeah. Heidi Poon - Thomas Weisel Partners: Got it. How do we understand the gross margin for that type of product?

Well, it's really not a type of product. Currently, we sell quite a few DA converters and audio codecs. We have had some DSP design wins with those products in the automotive product line before. But that's a bigger and bigger focus for us as we're winning new designs now. We have a new product that's going to be launched this fall that's really more of an integration of an audio DSP with extremely high performance audio converters in there, as well. And that, in particular, has got automotive. It's kind of really a neat product for automotive application. So, certainly, automotive margins overall, when you take the whole product mix into account, the automotive margins are supportive of the company average, for sure, usually supporting automotive products involves a lot of additional temperature testing, call data, real quick FA turn time and all that kind of thing. And for it to make sense, we got to get paid for it. So it depends to be as automotive business is above the corporate average. Heidi Poon - Thomas Weisel Partners: Got you.

There are obviously exceptions to that. Heidi Poon - Thomas Weisel Partners: Great. Also, could you talk a little bit more about the industrial product lines? It seems like from Itron's results, they were talking about near term, there could be some push outs with some projects. How might that affect your second half industrial business?

We're not counting. I mean relative to that customer, in particular, we're not counting on those. Meaningfully, a big chunk of revenue this year, it's really more notable in the fact that we're getting in there and building up that base of design wins with them. But power meters overall, are doing fairly well for us, And again, if it's a cycle of launches that are a couple of quarters, one way or the other, it's still the right thing for us to be investing in long-term. Overall, industrial, it's an interesting market because it's so broad. Certainly, capital equipment you worry about it a little bit. Seismic, though, continues to hang in there. And if anything is even up a little bit, our outlook is even up a little bit. So, that's certainly good news. Heidi Poon - Thomas Weisel Partners: Great. Thank you.

You bet.

Thank you. Our next question comes from the line of Vernon Essi from Needham & Company. Please go ahead. Vernon Essi - Needham & Company: Thank you, and ditto the comments on the execution here.

Thanks. Vernon Essi - Needham & Company: Jason, I know this is a question that always comes up when you get time to address it. But the long-term model, you're talking about a 15% growth rate and if I'm not mistaken, I guess you're still talking about a 20% operating margin. How do we get there over time? And where do you see the biggest variable to that? I mean, I've always given you guys a hard time about your OpEx. How do we see that tracking over the next year or so relative to the topline? And can you kind of give us some color as to how you're going to get to that?

Well, it will make it a lot easier if the topline continues to do what we expect it to do this quarter. But we're committed to drive towards that model. Again, with the 55% margin target, 15% SG&A and 20% R&D, we feel like that's an achievable goal for us and an achievable model to drop 20% to the bottomline. We are going to continue to drive operation expense as hard as we can in the direction of the model, regardless of what revenue does. And it's just easier to get there if revenue continues to go up. Vernon Essi - Needham & Company: Okay.

You know, it's a lot easier to get there if the topline is going up, but it just means we have got to work harder. Vernon Essi - Needham & Company: Sure. So, we shouldn't expect, in terms of the strategy right now, any material downsizing of the OpEx number or major reductions?

Well, I wish there was a big one in there. But no, it's a lot of little bits and pieces at this point. Vernon Essi - Needham & Company: Okay. And to shift gears here, give us an update, or at least more detail on your Japanese efforts here in terms of how you're developing that channel. And then, also, what sort of products are we talking about in target markets? And then, maybe, just overall, how much of a proportion of sales do you see those being, say, two years out from now?

Sure. Yeah, thank you for asking that. Nobody ever asks me about Japan and it's about my favorite topic or one of them. Yeah, so, the enhancements we've made are really, you know, in my view, the company hasn't historically been as disciplined as it should about treating Japan like the world's largest audio market, which is in fact what it is. I think, historically, we maybe just looked at it from a cost of sales point of view, and went okay. Well, you have x many million dollars in revenue, so you can afford to have two people covering Japan. There is easily 10 accounts in Japan, where if you put them in any other territory, they would be the largest account managed territory. And in my mind what that says is you have to have a strategy for Japan and recognize it. If you want to be a significant player in audio, you have to be successful there. So with that in mind, we put in a really good guy running sales who has been in the industry for a long time. He has been on board for about six months now. He has hired a couple of meaningful people to be able to expand our footprint there. He has gotten our distributor situation sorted out a little bit, managing those guys a little more closely. In the overall company, we have improved our overall corporate quality department and FA lab, all these things are kind of step one in Japan. Most other countries, you go in there with sales, you win the design and all that, and they never ask you about your quality department until after there is a problem. And in Japan it's pretty common. You bring those guys in on the first meeting. As far as products, one way to look at it is one of our most significant competitors for the longest time has been AKM, Asahi Kasei Microsystems. They have a similar product line to our mixed-signal audio division. It's audio DACs, say, it is interface products. They have a little bit different take on the DSP kind of product line than we do. But it's difficult to get great data on them. They are buried underneath the Asahi Chemical Corporation and all that. They make boats and swimsuits and glass and everything else. But their revenue in Japan is certainly on the order of a couple hundred million dollars there alone, and we have historically been a lot less than that. So I mean, they are Japanese and we're not. It's probably not terribly likely that we're going to go take a 100% of their business, but we can do a lot better than what we've done. And now I really feel like we've got the product line and support staff to go after -- even the automotive sockets there. So it's a big, big upside opportunity for us and we are going to just keep pushing on it as hard as possible until it's successful. Vernon Essi - Needham & Company: And so I assume when you tackle, say, one of the large customer electronics giants over there, it gets into basically all of their products potentially? I mean, you wouldn't be selling into a specific small division of--

That would be a very good description of the desired state. Like, for example, for years we have had multiple announcements over the years about volume shipments and whatnot into the PS2 application. And we've done very well with that segment of that particular customer, and then, not so well in other areas in the very same customer. And that's just an area where, again, that would be three times the size of the largest customer. If you put it in any other territory, it probably justifies two or three sales people sitting in the lobby all day long doing nothing other than calling all of them. And historically, we were thinking distributors -- we are going to do the demand creation there, which is not probably the best way to look at it. The way you described it is exactly the right way to go. And that happens in a lot of our other customers. You win one big design, you get the part approved and in their CAD systems, and on their engineers' minds for how they are going to solve other problems. And yeah, you start winning designs across the board. It's funny, that it gets to the heart of why it sometimes is hard to answer the question about how many units of DACs do you ship into this application or that application. And a lot of times it's very difficult for us to tell in a particular customer where a low cost audio DAC has gone, because they use it in 5 or 10 different products. Vernon Essi - Needham & Company: Okay. And then just my last question here, you mentioned an ultra small wafer scale packaging ramp. I wasn't clear if that's forthcoming or is that already behind you. just give us a little more color --

We're done with qualifying it. We're done with supporting it in production. And we've made shipments off of it. But certainly that's a ramp. It's kind of on its way. Vernon Essi - Needham & Company: Okay. Alright, thank you.

You bet.

Thank you. Our next question comes from the line of Jay Srivatsa from Roth Capital Partners. Please go ahead. Jay Srivatsa - Roth Capital Partners: Yeah, thanks for taking my question. Congratulations on a good quarter and good strong guidance as well. A couple of questions on the product mix, Jason. I mean, you guys were pretty much 50/50 between industrial and audio. As you see the portable products ramp-up, what kind of product mix shift are you seeing? Let's say a quarter out or two quarters out?

Well, I mean, obviously it's pretty significantly more heavily weighted in the audio favor. You can view a pretty good, a large fraction of the growth is coming out of audio. Jay Srivatsa - Roth Capital Partners: Okay. So a 60/40 is not far from where you will be in a couple of quarters?

Right. Jay Srivatsa - Roth Capital Partners: Okay. If that's the case and if audio is lower margin, how comfortable are you with keeping gross margins at 55%?

Well, like I say, I think within the particular quarter there is ways we could end up at the very upper end of the range. And it would have to be something unexpected, but if something unexpected happened we could end up at the lower end. And we work pretty hard to drive even the margins in the lower margin product lines towards at least the corporate average. The guidance is what it is. I don't expect it to be meaningfully different from that going forward. And as we said in response to Heidi's question, certainly, in the quarters where portable is a lower mix in the overall revenue, margins probably bounce back up a little bit. So from an annual margin perspective, 55 still feels about right. And we'll do what we can do keep driving that in the right direction. Jay Srivatsa - Roth Capital Partners: Okay. In terms of the September quarter numbers for portable audio, could you help us understand, is this from a, single customer or are there several customers who ordered in big volumes? Anything you can give clarity that would be helpful.

Well, I mean, it's not something I can get into a whole lot of detail on. But no, there are more than one customer that I consider to be significant as they are making that ramp-up, and more than one product, as well. Jay Srivatsa - Roth Capital Partners: Okay. And then a question for Thurman. What kind of interest income should we be modeling going forward?

Somewhere in the million range or so. Jay Srivatsa - Roth Capital Partners: Okay. Thank you.

You bet.

(Operator Instructions). Our next question comes from the line of Adam Benjamin from Jefferies & Company. Please go ahead. Adam Benjamin - Jefferies & Company: Yeah, thanks guys. Just to continue the gross margin theme. Maybe asked this way, obviously, you do have a mix shift in the September quarter to strength in portable, which has a lower gross margin. I know you don't want to give out that gross margin. But maybe you can lay out the drivers or the puts and takes of what causes the gross margin to get lowered sequentially and maybe rank them in order in terms of why it goes down to the midpoint 54.

Number one and number two is probably the growth in portable, and then, we've got ramps in some of the other products that are also, fall-driven. DA converters are up, that's for sure, and pretty heavily in the mix as well. But those are for sure the big drivers and we are comfortable with that range. Adam Benjamin - Jefferies & Company: Okay. So is it fair to say that, Jason, about half of the decline is due to the mix to portable, or maybe a little bit higher?

Ballpark. And again, it kind of remains to be seen where we end up in there. It's interesting from our perspective looking at it. It is a different prospect when you've got such a significant ramp in a new product line. It's an area where it tends to make you a little more cautious, just because there is a number of new things going on. Adam Benjamin - Jefferies & Company: Got you. Okay. On the industrial side, I mean you guys have talked about kind of ranges 20 to 22 on any given quarter, with it fluctuating. It seems to be kind of trending toward the high-end of that. Can you talk a little about, maybe looking forward, do you think you want to reassess that 20 to 22 range, or kind of stick to it?

We're going to kind of stick to it. I mean, you are right, it's kind of at the higher end of the range. But, again, that industrial product line sells. There's a couple vertical applications like seismic and power meter. And we've some sense of what's going on there, at least in the short-term. But the rest of it is so broad that your data on the market is probably about as good as mine. There's areas that are up, there's areas that are down, and we've got design wins in bigger, we've got revenue coming from things like capital equipment for semiconductor manufacturers and whatnot. And I don't think that market's on fire at the moment. But seismic's doing reasonably well. So it's a mixed bag. We feel pretty comfortable with kind of the range we talked about still. Maybe a little bit closer to the upper end there. But it is hanging in there for us. We feel pretty good about it. Like, we said in the last couple of calls, we really needed industrial to hang in there. And that's kind of a near term statement. We are investing in the energy-related areas. We've got some neat new products that are on their way and industrial will be back at the forefront of the things we're excited about in the not too distant future. Adam Benjamin - Jefferies & Company: Okay. And one last question. Just as you look into managing the supply chain, given the ramp you have in portable audio into the seasonality, we've seen in the past that the end market has seen some significant seasonality into the March quarter. How do you think about managing that, so you don't actually end up with an issue that some of your other colleagues have had with that significant seasonality in the March quarter?

Yes, very carefully. That's a trick we'll work to take inventories down towards the end of the December quarter, of course. We're working our supply chain to keep the lead times as short as possible, so we've got as low as possible inventory exposure. None of the products that we're doing now, we really don't expect any of them to just like disappear at the end of the calendar year. So if it is an issue of having extra a little extra leftover, we don't think it's kind of a permanent deal either. But we're mindful of it. And I can say is probably overshadowed by kind of [heist], you'll have to judge, it's a (inaudible) to and how well we manage the transition. But we're certainly aware that that's a tricky deal, and we've studied other people stumbling on that particular problem, and so hopefully we'll avoid the mistakes of others. Adam Benjamin - Jefferies & Company: Got you. All right, guys, good luck.

Thanks.

Thank you. Our next question comes from Ian Gilson from Zacks Investment Research. Please go ahead. Ian Gilson - Zacks Investmnent Research: Thank you very much. A couple of questions. Could you expand a little bit more on the new activity in the oil patch?

In what? Ian Gilson - Zacks Investmnent Research: In the oil patch.

In the oil. It’s like seismic. Ian Gilson - Zacks Investmnent Research: Yeah. And also, I have a question regarding your auto-related business. Since the automobile year is really a mid-year and not a year end phenomenon for new car introductions, how many new models will you be in the forthcoming, the '09 automobile year versus the '08 automobile year?

Ian, I don't have a lot of visibility into that. It tends to be that our parts will get designed into one particular DSP amp chassis and that will go into a number of different models. So, typically, our customers don't share the full out model details of what they're in with us. And every now and again, if I'm shopping cars or -- well, ask somebody real close to you to find out whether we're in something or not, like to buy products that have our chips in them. As far as the oil is concerned, again it's an area where obviously there is a lot of interest in exploration going on and our chips are not, by far, the limiting factor in the supply chain. So, I think whatever it is that limits that demand is, whether it's boats or crews in the field or whatnot. But, again, that business is, if anything is on a little bit of an uptick again, so, we feel pretty good about that for the foreseeable future. Ian Gilson - Zacks Investmnent Research: Fine. Thank you.

Welcome.

Thank you. We have a follow-up question from the line of Jay Srivatsa from Roth Capital Partners. Please go ahead. Jay Srivatsa - Roth Capital Partners: Yeah, thanks for taking my follow-up. Jason, could you speak to the developments on the TV side? I know you had new products earlier this year on the Dolby Digital Sound and stuff. What's the situation there? When do you start to see that being a little bit material to your numbers?

Well, yeah, the volume technologies in general, I'd say we're poised there to support them. They've taken off a little more slowly than we had hoped. We haven't seen it get as promoted as aggressively as we'd like to have seen by the folks who originated it. But at the same time, we're getting a lot of interest from customers. It just seems kind of like, it hasn't really shaken out yet, who is going to be pushing it and is it going to be necessary to win shelf space and et cetera, for our customers. I think it's a cool enough technology. I think that maybe everybody was excited that it would take off a little more quickly than was going to be logically the case. For us, the long-term story in DSP is really automotive and the broader set of applications that are enabled by our tools. This last quarter, we had multiple customers for products into production, where they literally programmed the chips completed themselves without our help. And we trained them how to use the tools, of course, but it's a big departure from what we've had to do in the past. It used to be a lot of handholding and us doing all the work. And it's really a much better leveraged model for us. And as I talked about, we got this new line of products coming out where we've got integrated high performance audio converters with the pretty high performance DSP as well. And that really opens the doors for a lot of applications. The automotive guys in particular care a lot about the integration from a reliability point of view. So, while in the short-term, the volume stuff hasn't taken off as quickly as it might have, we are ready to support it when the market is ready for it. We're pretty well-positioned with the customers, we have got the right products for it, and we are just keeping our eye on the horizon with respect to the automotive stuff. Jay Srivatsa - Roth Capital Partners: Okay. And a question for Thurman. Could you give us the split on the stock-based comp between R&D and SG&A, Thurman?

Yeah, give me a second here. The stock-based broke out for R&D was about 600K and for SG&A, it was right around 900K. Jay Srivatsa - Roth Capital Partners: Thank you.

Yes.

Thank you. And at this time, we have no further questions in the queue. I'd like to turn it back to you.

All right. Thanks for all your questions and for your interest in Cirrus Logic. We are looking forward to a strong second quarter and we're excited about the opportunities in front of us. Thanks again for participating in the call.

Ladies and gentlemen, this concludes the Cirrus Logic's first quarter fiscal year 2009 financial results conference call. You may now disconnect.