Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic second quarter fiscal year 2009 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will open the call for questions. Instructions for Q&A will be provided at that time. As reminder, this conference call is being recorded for replay purposes. I would now like to turn the conference call over to Mr. Thurman Case, Chief Financial Officer. Mr. Case, you may 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'll make projections and other forward-looking statements regarding, among other things, our estimates for our third quarter fiscal year 2009 revenues, gross margin levels, operating expense, amortization of acquired intangibles, and share-based compensation expense, as well as our estimates and assumptions regarding our future revenue growth, market share 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 29th, 2008, as well as other filings made with the Securities and Exchange Commission for an 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…

Thank you, Thurman. I'm proud of our performance in the September quarter. As Thurman noted, we grew revenue by 13% on a year-over-year basis and we continue to manage operating expense towards our long-term model, as we achieved 17% non-GAAP operating profit. We achieved both year-over-year and sequential revenue growth, driven primarily by growth in revenue from portable audio products. With a combination of these improvements, innovative new products and a continued focus on our strategic plan, we are making progress towards our long-term financial goals of 15% year-over-year revenue growth and 20% operating profit. We are excited about the long-term opportunities from an aggressive line up of new products that are being introduced this month that target multiple audio and industrial applications. We are focusing on improving our financial results and despite uncertain global economic conditions we are forecasting continued year-over-year revenue growth in fiscal Q3. Let me give you a brief update on our products, beginning with the industrial category. Our primary focus within this category is on energy related products. Revenue from industrial products in the September quarter came in at $22.7 million, which is up by 20% compared to the September quarter a year ago. Revenue from industrial products continues to provide a stable foundation for the Company's bottom line while contributing to strong gross margins. This past quarter, we named Tom Stein as Vice President and General Manager of our Industrial Products division. Tom joined Cirrus in 1995 and has held a variety of leadership positions within both marketing and sales. Tom has been a strong advocate for our key accounts programs and has been instrumental in driving our growth in portable audio. That leadership and experience makes Tom a great fit to lead our industrial products team as we focus on expanding our opportunities…

(Operator Instructions). Our first question is from the line of Dan Morris from Oppenheimer & Company. Please go ahead. Dan Morris - Oppenheimer & Company: Hey, guys, nice quarter.

Thanks. Dan Morris - Oppenheimer & Company : Just looking at the two segments there, it looks like audio account forward pretty much all the incremental growth this quarter. How much of that was the portable audio ramp?

We don't early break it out and there are a number of moving parts and there are some pieces that are up and some pieces that are down. But obviously the portable segment of audio is the fastest growing thing within the Company. We are pretty well on our way to -- I think as we said earlier in the year we would be real disappointed if we didn't have -- what did we say? 20% -- sorry, 10% of $200 million served segment. We'd be real disappointed if we didn't achieve that and we are well on our way to doing so. So again without getting into breaking out exact dollar amounts, certainly the fastest growing piece. Dan Morris - Oppenheimer & Company: Okay. And with that kind of mix shift towards portable audio I thought gross margins certainly held in there extremely well. Could you talk a little bit more about why that was?

Sure. We put a pretty strong focus and an increasing focus on managing the supply chain and really trying to drive margins across the Board on a product by product basis. But to be completely honest, the overall margins being higher than what we had forecasted, and as you indicated where you were thinking it was going to go, really was due to a mix within industrial within the quarter. A little more industrial than we had -- than we had been counting on and then within industrial, a mix towards higher margin set of products even within industrial. And that actually was pretty -- we had some orders within seismic that we have talked about before have been -- that business has always been pretty lumpy. It comes in fairly significant chunks at one time or another and we had some orders come in that we were sort of expecting to be more in the Q3 timeframe and came in Q2 and that drove the margins up quite a bit. Dan Morris - Oppenheimer & Company: Okay, great. And then just looking at your guidance. When we look compared -- I suppose to this time last quarter is the backlog coverage changed much? Maybe if you could comment on where that is and maybe how orders have trended through the last quarter into the first few weeks of this month.

To some extent, I mean, we're a lot like -- we are experiencing the same environment everybody else is. I think we are positioned really well for it, but it is definitely a foggy environment, as they say. We came into the quarter with a very strong backlog relative to this set of guidance and we actually still feel pretty good about the overall backlog. But generally across the industry, order rates have slowed within the quarter to a degree, the indications we're getting is that whether or not that is at the end of the day is going to be indicative of buying at the end consumer is a little bit of a question mark still, but our partners in the channel such as [DISTs] and our customers, in particular customers like contract manufacturers are being very, very cautious. [DISTs] are drawing down what are already in our opinion low inventory levels. They are drawing them down even further and CMs are placing orders on an absolute kind of last minute basis. It is conservative guidance to be sure. We view it as we don't ever want to miss. But it's reflective of -- it's certainly reflective of -- we expect to be in there somewhere. We are in good shape relative to backlog. Dan Morris - Oppenheimer & Company: Great. Thank you.

Yes.

Our next question is from the line of Heidi Poon with Thomas Weisel partners. Please go ahead.

Thanks guys. Great quarter. Could you talk a little bit more about the energy measurement product that was launched recently? Should we expect that it would become more meaningful plus second half of next year? Could you give us a sense of timing and also the margin profiles of those products?

Well they're supportive, generally speaking, power meters tends to be all over the map depending on which customers. But it's roughly supportive of the overall Company margin structure from a growth point of view. Yes, it's not a consumer type ramp. And it does tend to take a little longer, because we'll win a design with a customer. They then need to do a pretty intense qualification round with the various different regional customers that they have. And then that slowly grows from there. But yes, certainly by the end of next year -- by the second half of next year, that's a more significant contributor to revenue for us.

Great. In terms of seismic, it seems like it's pretty lumpy this quarter, so should we anticipate that perhaps it falls off a little bit more next quarter? Do you have that visibility at this point?

By next quarter, do you mean Q3?

Yes, December.

Fiscal Q3? No, not really. We're feeling pretty good about it. Like I say, we had one order that moved into Q2 by customer demand and that's fine. It is holding in just fine for us. And it is consistent with the guidance we're giving.

Great. So given all this changing mix, including a possible higher mix of portables next year including the gaming products. So where do you think gross margin long-term target would be? Would it still be within the 55% that you had mentioned before?

Yes, that's still, overall given the mix of businesses we've got, some are lower, some are higher but overall we still feel like that is a pretty good target for us to be aiming at.

Great, thank you.

Thank you, Ma'am. Our next question is from the line of Adam Benjamin with Jefferies & Company. Please go ahead. Adam Benjamin - Jefferies & Company: Hey, guys, nice job. First question just on the portable audio, Jason, you mentioned the seasonality that we should expect going forward for the September and December quarters. Without giving specific -- for this quarter, I'm just trying to get a gauge going forward, what's in your mind the typical seasonality of that consumer portable audio build. Can you give us some finer granularity in addition to the fact that it looks like that consumer build is usually sequentially up in December and then down a fair amount off that base in March. I just want to make sure that's the way you're thinking about it.

Yes. That's about right. And exactly what the March quarter holds, if I knew that I wouldn't do this job, probably. I don't think anybody in this industry has got a real good solid picture of what March is going to look like particularly in any of the consumer sectors. But as a general rule, yes, the Q2 and Q3, Q2 is pretty strong, Q3 is stronger, Q4 is a big drop. And then Q1 signs of life show up again. And we get back to work. Adam Benjamin - Jefferies & Company: Okay. All right. Fair. On the gross margin, just maybe asked a different way. I know you are talking about 55% longer term. If you go back kind of over time, obviously, you have some mixing changes between industrial and audio and then within audio as portable audio comes online, can you give -- is it fair to say that the home audio, the traditional audio business has been relatively stable as well as the industrial from a quarter-to-quarter basis and really the major flux is the mix in the portable audio coming into there?

When you say stronger, you mean from a -- I mean, when you say stable, do you mean stable margins or stable size? Adam Benjamin - Jefferies & Company: Stable, forget about the percentage of the mix, but just the pure margin of the traditional audio business has been relatively stable as well as industrial over the last four, five, six quarters.

That's a fair statement. I don't think we're seeing anything totally, anything untoward relative to markets within in a particular product line. Adam Benjamin - Jefferies & Company: Okay. So really going forward it's just a function of how audio and industrial play out in mix. And then the other unknown is how that portable audio gross margin plays out? Is that fair?

Yes, that's fair. I mean we have got our views on how it will play out. But it's generally not something that we want to break out for a variety of reasons. Adam Benjamin - Jefferies & Company: Okay. That's fair, for competitive reasons. And lastly just on OpEx, you guys have done a good job there. Thurman, seems like every quarter you guys come in lower. Is the thought to expect that to continue to remain flat or can you bring it down even further as you move into next year?

I think realistically for this quarter, we are looking at something that is going to be flattish and along the lines of where we have been tracking. So we're not, besides what we've given on the guidance, we don't think that we are going to see significant drops on that as we continue grow the business, but we also don't expect it to be -- Adam Benjamin - Jefferies & Company: I'm sorry, you cut out there at the end.

We also don't expect to be growing OpEx at any significant levels either. Adam Benjamin - Jefferies & Company: Okay, so in the 21 range kind of modeling out is a fair assumption?

Yes, that would be what I would do for the foreseeable future. Adam Benjamin - Jefferies & Company: And then just lastly, Jason, just to clarify, I know you have been talking about 10% for portable audio target of the $200 million. That's a calendar basis, not your fiscal?

What we had given it out as was a fiscal. But we would become increasingly disappointed if we didn't achieve that goal. Adam Benjamin - Jefferies & Company: Yes, that would be pretty bad. That's all I have. Thanks.

Thanks Adam.

Thank you, sir. Our next question is from the line of Vernon Essi with Needham & Company. Please go ahead. Vernon Essi - Needham & Company: Thank you and I echo Adam's points there on OpEx. It's always good to see in this environment. Wanted to just revisit the guidance and I know you touched upon this in an earlier question. Let me ask it another way, I guess. What could go wrong here? Obviously the market's very spotty. What areas do you think you have the least visibility in across your product lines right now in terms of pulling this guidance together?

Well, I mean consumer is probably the least clear about what's going to happen in kind of the December quarter. Like I say, we have got pretty strong backlog. Orders have slowed a little bit. You worry about whether people are going to push out at the end of the quarter in that kind of time frame. And like I say, it's less of a market segment per se than it is. In my opinion -- than it is just a every newspaper you read forecasts the earth is going to swallow us all whole tomorrow. And so therefore [DISTs] and CMs and all that go on an absolute emergency rations kind of an ordering basis and you don't get good visibility from that kind of customers. And that's a pretty good fraction that are ordering through [DISTs] or ordering through contract manufacturers. But you know, I don't think there's -- like I say it's a fairly conservative view. The guidance we're issuing is we think prudent given that the overall circumstances in the market. So, I don't think there is a lot of risk relative to the guidance that we're giving. Vernon Essi - Needham & Company: And sort of following in on a DSO basis there doesn't seem to be any issues, but on a dollar basis the receivables are climbing a little bit here. Are you seeing in general sort of a push out in payment terms with some of your [DISTs] at all or has everyone been pretty -- are they going to buying time a little bit with you or have they been pretty prompt in terms of payments?

No, I think the payments are fine. We don't see any real differences in any of that. Actually the increase is really tracking to what we would expect to see, given our improved performance. So I think -- Vernon Essi - Needham & Company: Right.

It's much more normal in terms of any of the other metrics that we look at. And it's really just a factor of us doing well. Vernon Essi - Needham & Company: And then lastly, you've got, it looks like your CapEx went up a little bit there. Can you discuss the -- maybe it's just you're putting in failure analysis tools. Obviously, it is a differentiating factor, it sounds like, with your customers. Can you talk about that a little bit more?

Yes, for a company our size, I think feedback from customers and actually some of our suppliers, some of whom are the best foundries in the world. The data I've got says for a Company anywhere near our size, we have got the best failure analysis lab in the world. Our team in that group does work for, in particular, automotive customers that continually impress the likes of Bose and everybody else. That's one of the reasons I'm bullish on automotive, because it is something that we can do that is fairly well required by that category of customers and a lot of the other companies our size just flat can't do it. It's being able to get to a root cause within 24 hours and issue meaningful FA reports and all that kind of stuff. It requires expensive equipment like focused ion milling machines and electrobeam, EB probers and everything else. So basically we are just outfitting those guys with a little better equipment here and there. Vernon Essi - Needham & Company : You sound like one of the few companies that is actually spending money on capital equipment out there. Those guys are all having a tough go at it these days. Well, good. Thank you very much and nice quarter.

I appreciate it. It's things like that, that are what I'm referring to when I talk about. It's really, really difficult when times are great and everybody's doing well, it's really difficult to take any kind of market shares. It's tough to hire good people, it's tough to hire or it's tough to make any sort of progress. When times are really tough like this and you are fortunate enough to be in a really strong position, such as we are. We can afford to equip our guys with better equipment, we can afford to hire the best people in the market, we can afford to take market share from our competitors so that's what we're going to do. Vernon Essi - Needham & Company: Thank you.

Thank you, sir. (Operator Instructions) Our next question is from the line of Christopher Longiaru with Sidoti and Company. Please go ahead. Christopher Longiaru - Sidoti & Company: Congratulations, guys. Great quarter.

Thanks. Christopher Longiaru - Sidoti & Company: On the deferred income, it ran up a little bit. I just want to know, with the credit crunch and the economy the way it is globally, are you seeing any difference in order rates from distributors, the way you get paid, anything of that nature? Is it lumpy? Is it flowing through? Do you have any color on that?

Well, order rates, as I said, the orders. New bookings slowed over the past few weeks and I was pretty much echo what I think every semiconductor call I've heard has said on that topic. Fortunately, we came in with real good backlog in the first place, but we are still very confident in our guidance. But, in terms of any sort of payments or that sort of thing from [DISTs] and whatnot, no, we don't have issues with that in our opinion. Christopher Longiaru - Sidoti & Company: Okay. The other thing was, Thurman, the tax rate I think we modeled that was about 5%, is that what we should continue to model going forward?

We really don't have much of a tax rate because of our NOLs are so large that our tax rate is actually less than that. So really kind of model no taxes for the rest of the year. Christopher Longiaru - Sidoti & Company: No taxes the rest of the year. Did you give a share count for the next quarter?

A share count? Christopher Longiaru - Sidoti & Company : Yes.

I think, it's going to be in the between the 65 million, 66 million diluted share range. Christopher Longiaru - Sidoti & Company: Okay, great. Thanks, guys.

Thank you, sir. At this time, I show there are no further questions. I would like to turn it back to management for any closing remarks.

All right. We will thank you for all your questions and your interest in Cirrus Logic. We're looking forward to a strong third quarter and we're excited about the opportunities in front of us. I would like to briefly mention that we will be opening the NASDAQ market on November 7th next month in New York and also we'll be attending the UBS Global Technology and Services Conference in New York on November 20th at the Grand Hyatt in New York. So thanks again for joining us on the call today.

Ladies and gentlemen, that concludes the Cirrus Logic second quarter fiscal year 2009 financial results conference call. Thank you for your participation and for using ACT Teleconferencing. Have a great day. You may now disconnect.