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. In the March quarter a year ago, we reported non-GAAP net income of 5.2 million or $0.06 per share. Moving to our employee headcount, we ended the March quarter with 479 employees, up from 473 employees at the end of the December quarter. The additional hires reflect our view that the current economic situation represents a great opportunity for us to hire outstanding engineers. Moving to our balance sheet, we ended the March quarter with 13.3 million in net receivables, down from 15.6 million at the end of the December quarter. Our days sales outstanding remains consistent and as we have stated before we will continue to actively manage are credit risk. Ending net inventory also decreased 3.5 million or 15% in the March quarter to 19.9 million. We ended the quarter with a 120.2 million in total cash and marketable securities, an increase of 2.7 million from a 117.5 million at the end of December. As you recall last quarter, a $20 million stock repurchase program was approved. We've not completed any stock repurchases under this program to date. Capital expenditures for the March quarter were 2.3 million, compared to 1.4 million in the December quarter. The increased expenditures are related to the purchase of certain computer aided design tools, highlighting a continued investment in our engineering capabilities for strategic programs. Depreciation and amortization expense in the March quarter was 2.1 million. And now, I'd like to turn the call over to Jason discuss our business operations and guidance for the upcoming June quarter. Jason?

Thank you, Thurman. FY09, FY 2009 was a tough one for the semiconductor industry as a whole and Cirrus certainly felt the impact of the recession along with the rest of the industry over the past two quarters. That said, I am pleased with the progress we've made on initiatives that are under our control. We have a strong financial position highlighted by a healthy balance sheet with no debt. We continue to manage our operating expenses closely. And more importantly, we remain committed to our vision of being a preferred supplier of analog and digital signal processing components for the audio and the energy markets. In FY09, we significantly grew our market share in portable audio from 5% in FY08 to approximately 15% in FY09. Revenue from portable audio product was $30 million, well beyond our initial target of 20 million. In FY10, we are looking forward to advancing our leadership in portable audio as we continue to serve Tier 1 customers and expand in the new markets such as smartphones. Our success in portable audio along with numerous key customer programs currently ramping a new production and disclose our ability to identify exciting markets and execute a successful strategy to take market share. Our portable audio strategy service is a blueprint for success in our energy control and audio DSP initiatives. We launched more new products in FY09 than any year in recent history which together with upcoming launches of our new PFC family and our ultra powerful new audio DSP family are expected to drive continued growth in our revenue from new products. We believe that these difficult financial times represent an excellent opportunity for us to grow our market share and we will remain committed to doing so. Let me give you a brief update on our products beginning with the energy category. These products include integrated circuits designed for a variety of energy exploration, measurement and control applications. In the March quarter, revenue came in at $14.7 million, which is down by 35% compared to the March quarter a year ago. Q4 performance represents general weakness across our product lines due to the global economic recession. While we anticipate continued near term weak performance from our energy products, longer term we are optimistic about our energy control strategic initiative that we expect to serve as a strong component of our overall company growth. Demand for energy exploration products was especially impacted and we anticipate continued weakness for the foreseeable future due to depressed state of global oil exploration. In energy control products, I am pleased to report that our SA306 motor control IC which we introduced last fall received the top award in its category from the editors of Trade Publication EDI magazine. Longer term, we're excited about kicking off our first power factor correction or PFC Chip. In the previous quarter, we discussed these chips early promising lab results. This quarter, I'm pleased to report that we have been demonstrating our PFC to key potential customers and the feedback has been even more positive than we anticipated. We estimate the current PFC market opportunity at about $400 million and growing. This is a market that has been traditionally dominated by analog solutions. We believe that we bring unique digital signal processing technology to this market that will enable more efficient, smaller power supply products that eliminate the need for numerous passive components. Additionally, our PFC maintains high efficiency across the full range of load, which is a key differentiating factor going forward in this market. While economic conditions will continue to have an impact on near term quarterly earnings, we view energy control as a key driver of our long term growth opportunities. Turning now to our audio products which include integrated circuits that are used in a wide variety of consumer, portable, professional and automotive applications. Revenue from these products contributed 18.8 million of our revenue for the March quarter, down 16% compared to the March quarter a year ago. Revenue from portable audio products was a continued highlight this past quarter and bookings for portable audio products continue to accelerate as key new design wins are ramping this quarter. We believe that we'll continue to grow our market share in FY10 as we are on track to breaking the smartphone applications as well as other consumer applications such as camcorders and portable gaming devices. Current economic conditions are causing market weakness across home and automotive audio product lines. Despite this weakness, this quarter we anticipate growing revenue in these audio products despite, driven by new revenue in new sockets. For example, several Blu-ray displays in our features Cirrus Logic ICs and we continue to obtain design wins in the new sound bar market. In fact, several Tier 1 sound bar customers such as Samsung and Vivio have new products that are available now on retail shops and they are getting their reviews. Sound bar is an application, in which we provide both mix signal converted ICs as well as audio processors. I'm also proud to announced that we're recently taped out our first 65 nanometer audio DSP which when introduced later this year, we expect will be the most powerful audio processor in the world for home and automotive audio applications. With our strong portfolio of new products, this quarter we expect to buck general industry demand trends as well as our own recent historical Q4 to Q1 demand patterns by delivering growing revenue from audio products. Now, let me review our guidance for the first quarter of fiscal year 2010. Our overall expectations are as follows. Revenue is expected to the range between 36 million and $40 million. Gross margin is expected to be between 52 and 54% and combined R&D and SG&A expenses are expected to range between 22 and $24 million which include approximately $22 million in share based compensation and amortization of acquisition related intangibles expenses. While we continue to actively manage our supply change costs, the sequential decline in our forecast of gross margin is due to product mix changes as we continue to see growth of our new product revenue from our audio products. Relative to last quarter, our guidance of operating expenses during the first quarter includes more new product tape outs, including our new 65 nanometer audio DSP. While global economic conditions remain challenging, Cirrus Logic continues to be positioned for long term success. Revenue from new products such as portable audio continues to be the highlight for the company and we are eagerly anticipating our first major venture into the high volume energy control market through new PFC products. The fundamentals of our business remain sound. We continue to have a strong balance sheet, outstanding engineering talent, a great line of the new products and some of the best customers in the world. We are confident that our continued focus on core growth strategies puts us in a position to emerge from this economic uncertainty even stronger and we remain committed to our vision of being the preferred supplier of analog and digital signal processing components for the audio and energy markets. Operator, we're now ready to take questions.

Thank you. We will now begin the question and answer session. (Operator Instructions). Our first question comes from the line of Tore Svanberg from Thomas Weisel Partners. Please go ahead. Evan Wang - Thomas Weisel Partners: Yes, hi. This is Evan Wang calling in for Tore Svanberg. Thank you for taking my call.

Sure. Evan Wang - Thomas Weisel Partners: I would like to ask you, if you could clarify your gross margin guidance. I understand that it's due to mix shift, but do you expect this to last beyond the 1Q?

Well, we certainly expect some overlap with that range going forward. We're obviously managing our expense, or managing our supply chain as closely as possible. We've done a significant ramp in, as we said new products and new applications. a then as well, compared to year ago, a significant amount of revenue that has been pretty weak from the seismic product line. So the combination of those two has pushed margins down a little bit. We're certainly working to get those to drive those back up going forward. Evan Wang - Thomas Weisel Partners: I think your revenue is expected to -- it is guided (ph) much higher and could you add some color on the revenue guidance as well? In particular, could talk about the smartphone and what kind of ramp you're looking at for the coming quarter?

I don't want to get in to too much detail on it. But we do have backlog for a smartphone application at this point that we expect to ship in Q1. So that's a significant part of that guidance. Broadly, there's a couple of things going on. That is -- it's a pretty significant bump up from Q4 which is counter cyclical for us in normally Q1 in the last few years at least has been down from Q4. So that's good news. Partially, we are seeing the overall market get a little bit better and when we talk to the foundries that we work with, when we talk to the assembly sides and test sides and all that, they're definitely booking up. And it's kind of -- it seems like, it's coming back sector-by-sector. And it's certainly not anything turning around, turning on a dime, it's along slow recovery I suspect. But things are improving slowly. So that's part of it and then the other part and frankly, the bigger piece is this new revenue coming from new products and new sockets, one of those being smartphone. Evan Wang - Thomas Weisel Partners: Okay. That's good. Could you us just to help us understand the revenue guidance a little bit more. Could you talk a little bit about your backlog and your bookings trend?

Well, in general terms, our bookings are strong relative to that revenue guidance. We go through the same procedure every quarter, where we look at the billings plus backlog call chart at the time we release guidance and have laid some historical trends on top of that and project where we're going to come out or if anything ahead of the curve relative to where we would normally expect to be. So it reflects a little bit of cautious nature given the overall environment which I think is prudent. So -- but we're not expecting any exorbitant amount of terms business or any thing like that. Evan Wang - Thomas Weisel Partners: So could you talk about, could you give the coverage number at all, what part of that guidance is covered by backlog?

Yeah, let me look to that exactly. We don't typically -- that was at the beginning. Yeah, we don't break that out, so. Evan Wang - Thomas Weisel Partners: Okay. Thank you very much.

You bet.

Thank you. Our next question comes from the line of Adam Benjamin from Jefferies. Please go ahead. Adam Benjamin - Jefferies & Company, Inc.: Hi, thanks guys. Jason, just a follow-up on the portable audio ramp, obviously you're talking about a smartphone, I am just curious if you look out, is it singular one phone or one product program ramp that is you're referring to that relates to June quarter and then as you look out the rest of the year, the make up of that portable audio or revenue, it was basically 100% portable media players in 2008, as you look out to this year. How's that split shape out? Is it still mostly PnPs or is there a breakout you can give in terms of headsets as well as gaming devices? And then, you care to give any kind of target that you think is realistic, given that you just did 30 million last year? Thanks.

No, I think we're going to pass on the target setting other than to say that it's a pretty significant amount of growth that we're expecting for the year in the portable space and in other. So I mean, portable media players are pretty big segment. So for the foreseeable future that's probably the biggest piece of it for us. But the phone can be a pretty cool category as well. I think we talked about it on the last call and then we mentioned it in here as well we are expecting some growth in portable gaming as well as smaller number from things like camcorder. So -- Adam Benjamin - Jefferies & Company, Inc.: So is it fair to say Jason that maybe as you look at the mix of the revenue at the end of the year, it will be 70-80% still PnP?

It's probably not quite that high, but it's probably in the universe of correctness. Adam Benjamin - Jefferies & Company, Inc.: Okay. And then just a follow-up on the gross margin. Obviously, you have a mix due to the ramp, the portable audio has been running lower, one thing you've talked about is getting that margin back up to your corporate average of mid 50s. And I just wonder what do you have that you can do there and in terms of the wins that you've been getting there, are you getting those on pricing, performance and should we expect the margin to be lower as portable audio becomes high in the mix (ph)?

Well, our sense for this -- our sense at the moment modeling it is that we still have some opportunities to improve the margins in these newer product lines. It does take a while when you experience this kind of a ramp on a brand new product to get test dialed in, and yields dialed in, work various other opportunities you got to improve margins. So we hope we've got a little bit of potential improvement, that's coming within the portable space as well. So I wouldn't -- we don't anticipate them getting, going down from where we are at today, from the number we're at today.

Well obviously, our customers and competitors are listening. So I don't want to give up too much there, so. Adam Benjamin - Jefferies & Company, Inc.: Just one last question. One last question on the visibility and the backlog coverage that was asked earlier, if you compare your turns that needed to meet the 36 to 40 versus your turns needed last quarter, is it a lower number or a higher number? You seem to indicate lower, but I just want to clarify?

Versus last quarter, at this time it's we're ahead of where we were. Adam Benjamin - Jefferies & Company, Inc.: Okay. Do you care more color in terms of 50% turns you needed or lower numbers on it?

No. It's a lot lower than that, but we don't typically break it out, so. Adam Benjamin - Jefferies & Company, Inc.: Okay. I got it. That's all I have. Nice job.

Thanks, Adam.

Thank you. Our next question comes from the line of Vernon Essi from Needham & Company. Please go ahead. Vernon Essi - Needham & Company: Thank you very much. Just to step into this audio question. If we put the portable bucket revenue on the side and just talk about sort of the core audio, what is the pattern of demand looking like for that some other peer companies have been talking about a decent build rates in some of the consumer electronics markets that those would end up in, are you seeing that trajectory until sort of the June quarter or is the bulk of this growth is portable right now?

The bulk, I mean a fair amount of its portable due to new product ramps, but we've got other products that are ramping as well. So it's broader than just portable. And then to there is an element of just some of the more entity-wide business kind of coming back. It's interesting, if we get our bookings report every morning and it's interesting to see if it shows up on that. And I'll tell you for Q4, the bulk of Q4 it was basically only the big guys have showed up on the list and then last, later a month or so it's been started -- a lot of smaller names and folks you haven't heard from for a long time have started to show backup on the list. So it does feel like, generally speaking the whole contraction we saw for a while there with CMs and DSPs that were drawing down inventory, at least at this point we're seeing the end demand rates reflected in the backlog, which is the bookings which is nice. Vernon Essi - Needham & Company: Okay. And then just sort of follow-on on gross margin question. If you anticipate there being some level of lift year in terms of your orders, where do sort of the pushes involves if you will at the gross margin structure that we can expect to see, do you expect you're going to get any purchasing power going forward or is there any refresh on and new wafers or anything along those lines where you might see some cost advantages or vice-versa for that matter?

Yeah, for sure we work on all those aspects too. I mean you got to remember where there is an element of fix cost that when we run it at lower volume as we did last quarter and to some extent we're still digging our way out of that. The absorption number is higher than or the absorption percent is high and the margin line is higher than we would like see it. So as we get back to the volumes that helps a little bit. Certainly, negotiating test cost and wafer prices and all that is a part of it. And then continuing to just keep, once you've got a new apart out for new application and you work on your second phase of products for that application, you tend to have more opportunities to really refine exactly what mix of features in, et cetera is in. Your next way of the products, so you get the margins to slowly go up over time. And if I look at the first high volume thing, we shift in the portable media player versus the second, for example, we certainly improved the margins going from product-to-product, for example. Vernon Essi - Needham & Company: Okay. And then finally, just on the OpEx side, you talked about tapping out newer products and I'm just wondering if it raises the question, do we have any one-time lumpiness in the R&D cost that might be going away in the near term, in other words when we expect that R&D number to sort of trend lower later in the year or should we sort of look at that as being relatively fixed run rate right now?

I'd look at it as closer to fixed. I mean, obviously there's -- we're not going to be taping out a 65 nanometer chip every quarter, but and those aren't cheap. Vernon Essi - Needham & Company: You shouldn't at all.

But, no, we don't anticipate it being much lower than it was, kind of, we try to do a diligent job of putting the middle of the range about where we expect things to come in and give ourselves a little bit of room around that. And this last quarter, we did a pretty good job of working it down to the bottom end of the range. So relative to that, we do have a significant number in tape outs this quarter that would make it pretty tough for us to get back down to that 20 that we had in Q4. Vernon Essi - Needham & Company: Okay and I'm sorry. One last question on inventory, of course Thurman doing great job on the working capital side here or at the management rather. I'm just wondering, I know this is kind of like a rearview mirror statistic looking at the days in inventory right now, but what do you feel is kind of an adequate level to maintain going into the summer months? Should we anticipate that to be rising on a dollar basis?

Yeah, well, I mean just because we're expecting to do relatively, seasonally better revenue over the -- on the course of the year, we're going to -- you're certainly going to see some ramps and some other things, but we do expect that inventory to remain relatively flat or slightly up through our more busier months, but you're not going to see any significant builds. Vernon Essi - Needham & Company: Okay, all right. Thank you.

Yeah, just put a little color on that. I think we've have talked about last couple of calls, we've put a pretty strong focus on supply chain management and really installing some further discipline in that whole process. So while we do anticipate a pretty significant ramp on a number of fronts, we're trying real hard to maintain that inventory at a reasonable level and then in the long term really even get towards better turns number then we've been at. So yeah, I agree my hats off to finance and the supply chain folks for a good job of managing that.

Thank you. (Operator Instructions). Your next question comes from the line of Greg Shepherd (ph) from Oppenheimer. Please go ahead.

Hey guys. Just a follow-up on the inventory. How're you feeling in general about inventories on the channel kind of levels that we're right now? I know, I think it was last call you guys talked about I think you mentioned talking about keeping a close eye on Asian DSP, how do you feel about things there may be just in general any commentary you can give us on where channel inventories are? And also part of that may be do you expect inventories to be in that channel, I guess to be kind of flattish in June quarter? Are you planning to kind of see a little bit of a restock there?

I would say, if anything well it's down. We were already thinking it was down. It was getting pretty tight last year and it we definitely had some conversations with talks about it, what is an appropriate turns ratio to -- for the kind of margin we're paying. So, I would anticipate that as people get a little more confident that in fact end demand is really there that the DSP channel should probably see a little bit of a loosening up with some of their inventory, they've been pretty tight fisted about it. That's all.

And could you remind us how big is Asian DSP for you guys just in general?

Asian DSP.

Your exposure, just to how much --

Our overall roughly is in the order of 60% of our total business goes to distribution, something like 30% of that is AVNA (ph), so 30ish then is would be that kind of -- would be the number you're talking about there. May be a little less than that actually because we've have got Digi-Key and some of the catalog guys as well.

Okay, that helps a lot though. Just the second question here, just on portable audio, how big is portable audio as a percent of total audio sales now. And may be give us an idea, even if you want to give the number, may be just some kind of idea that magnitude of the differential between portable audio gross margin versus just audio gross margin?

Yeah I'm going to pass on that last one, if you don't mind, but overall, so we did about 30 million in portable last year. So that's out of whether the total will end up 90ish of total audio last year.

And obviously you expect that ratio to continue to favor portable, it sounds like to me.

Yeah in the short-term I would, over the next year I would imagine that portable continues to grow as a percentage of the total audio piece. I mean in longer term I think the DSP businesses has got some pretty significant lags. And it will be nice to have a new arrow in the quiver in terms of the high power DSP coming up, that will help a lot.

Great, and then just one final question on the industrial segment. It didn't sound that you're expecting much more re-bounce in this June quarter from that business, but what about the back half of the year and may be, any specific update to that digital, what's going on with digital metering and with Itron?

Sure.

And all that?

Well, I guess the comment that we're putting on at the moment, relative to industrial would be kind of mixed. We're taking a pretty, just cautious and conservative approach relative to seismic, if anybody has got a good idea about how to forecast seismic, I'd love to hear it. We own, we haven't lost any seismics. We own basically all of the available market that we can get in that space. So it just kind of is what it is with respect to the market. So that's contrasted with continued strength and what we think is a pretty exciting market that you mentioned is the power meter stuff, both on the strength of the relationship we've got with Itron, as well as general positive trends in that market due to the whole smart grade initiative and everything else. So yeah, we would anticipate further strength in the second half of the year on power meters that we're not experiencing this quarter, for example.

So would power meter be big enough to sort of offset, if let's say seismic stays weak this year in the back half of the year. Would it be enough so we could actually see some energy, growth in that energy business in the second half of the calendar year?

Yeah, I don't think its going to quite get to the growth.

Okay.

Part of the curve yet. We are very optimistic about it in longer term, just due to sheer size of the opportunities we're chasing, that's a new stuff. The cool thing about the PFC and the whole energy control initiative is, for one of it's commission of the company very well the vision of what we're actually very good at. And then on top of that, it's a neat way to deploy that sort of technologies into a market that's actually very rapidly growing and very much needs the new technology as opposed to having it, be kind of nice to have. The regulations that are coming in Europe and through ENERGY STAR in California at a slower rate elsewhere in the world, basically are forcing people to get to a performance level in a power factor correction product that you're just not going to be able to get there with analog PFC. So, it's a big market and growing fast and there's a pretty strong technology impetus to push people to a digital PFC once it's available. So, we think that should more than offset in the long-term, the declines with that.

Great, thanks.

You bet.

Thank you. (Operator Instructions). Our next question comes from the line of Christopher Longiaru from Sidoti & Company. Christopher Longiaru - Sidoti & Company: Hi guys. How are you?

We're doing good. Christopher Longiaru - Sidoti & Company: Okay, well. I just wondered, if you could just give us a little update on what's going on with Japan and your efforts there?

Yeah. Let's see. So we definitely, yeah I think we talked about that on couple of calls, where we said out Japan is an area where historically, we've underperformed relative to the size of the market. I don't think in the long ago past, I don't think we had a terribly mature approach to in the sense that we treated a like we've allocated at this much revenues, so you can afford to spend as many people there, which was just enough to fail. So we set it out a couple of years ago, we treated it as an investment in an area where, failure is not an option. We hired some excellent people. It's been significant improvement, the quality of meetings; quality of customer engagements is gone way up. At this point, we're having detailed dialogue with significant customers and applications such as portable, even at a level of incorporating their IP and our products which I think is pretty cool, the good indication of the kind of relationship that those guys are driving. Additionally, the DSP that we talked about the new 65 nanometer part is squarely targeted at lot of the Japanese applications such as AV Receivers and other home and automotive applications. The key thing for an American semiconductor company to do well in Japan is, you probably better show up with a product that not everybody else has. And when we compete against AKM, we compete against a number of different guys and if it's kind of a toss up, they're going to win every time. So we need to have a great sales team and a great focus on the right kind of markets, but we also need to have best-in-class product and the DSP we are bringing out is going to be that -- the power factor correction stuff and all of various vertical markets, if that enables. So I think it's going to sell extremely well in Japan. And I feel actually quite good about the progress we've made with the team there. So overall, it's not going to be lightening pace turnaround, because that market just doesn't work that way. But I think all the initial signs are pointing the right direction for us. Christopher Longiaru - Sidoti & Company: All right, great. Thank you.

Sure.

Thank you. (Operator Instructions). And we have no further questions at this time management. I'd like to turn it back over to you.

All right, well thank you for all your questions and your interest in Cirrus Logic. Thanks again for joining us on the call today.

Ladies and gentlemen that does conclude today's teleconference. Thank you for your participation and for using ACT Conferencing. You may now disconnect and have a great day.