Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic third quarter fiscal year 2009 financial results conference call. (Operator Instructions) I would now turn the conference call over to Mr. Thurman Case, Chief Financial Officer. Mr. Case, please go ahead.

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, among other things, our estimates for our fourth 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 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 at cirrus.com, our latest Form 10-K for the fiscal year ending March 29th, 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…

Thanks, Thurman. Though we end our Q3 with a strong backlog and high expectations for continued year-over-year growth, third quarter revenue reflects the sudden decrease in new order booking midway through the quarter, direct result for the global economic recession. As we approach the fourth quarter, we believe the weak global economic conditions will continue and our near term revenue expectations reflective on going conditions. This despite the weakness in Q3 and our immediate expectations for Q4, it’s important to note that relatively speaking we believe that Cirrus Logic is weathering these challenges other than many of our peers. Our continued strength in revenue from new products gives us confidence moving forward as we continue to invest in key growth initiatives in portable audio and energy control applications. In addition, our balance sheet remains healthy. We have no debt and we’re managing our operating expenses closely. In fact, Q3 operating expenses were approximately $4 million lower than the same quarter a year ago. We believe if we continue the investment today in our key strategic programs will allow the company to expand our market share during this tough time. When the economy recovers we expect Cirrus Logic will be in a strong position and ready for growth. Let me give you an update on our products beginning with the energy category, which includes integrated circuits for design for a variety of energy explorations, energy measuring, and energy control application. In the December quarter revenue came in at $17.9 million which is down by 17% compared to the December quarter a year ago. Q3 performance reflects general (inaudible) across our product lines due to the global economic recession. While we anticipated continued near term weak performance, longer term we’re optimistic about our energy controls strategic initiative that we expect to serve…

Thank you, sir. Ladies and gentlemen, at this time we will begin our question-and-answer session. (Operator instructions) Our first question is from the line of Vernon Essi with Needham & Company. Vernon Essi – Needham & Company: Thank you very much. First off, Thurman, good job on the balance sheet on the asset management side. I'm wondering specifically what steps you took to keep the inventory in such control while everything was getting slammed on the brakes around in the industry. Anything particularly you'd highlight that you did to – you're definitely separating from a lot of other companies on that front, so I'm just curious what you did.

It's a normal course for us to manage our inventory levels, and not only recently but over the last few years, we've taken a lot of steps in improving our supply chain management tools and organization and it's paying off. And knowing that there was some weakness in the industry, we really watched that on a week-to-week basis and made sure that we kept it under control the best that we could.

And Vern, I appreciate the question because the goal that we had internally for that was about that at the beginning of the quarter when we thought revenue was going to be a lot higher, but especially appreciative of the supply chain team that did an outstanding job keeping that under control. Vernon Essi - Needham & Company: This is the obvious questions we're all going to have, but how do you feel – I didn't hear a lot of color on the channel too much – but where do you feel you're at in terms of channel inventories and what sort of supply you see going into the post-Lunar New Year?

We're in pretty good shape. Obviously in my opinion that was a pretty significant portion of our issue last quarter, and I think we actually said this at some point that contract manufacturers, really any manufacturer as well as especially distributors – and keep in mind we're on a POP basis in Asia – they were all being extremely cautious with inventory. They were all in a position of trying to drawdown their inventory during the quarter as well. So actually when we look at it, we're an aggregate at the distributors particularly in Asia, we're an aggregate somewhere in the six to seven turns around. We don't feel too bad about that. Obviously you're always working that issue and you've always got some guys that are a little higher and some guys that are a little lower. But overall we feel very comfortable with our position in the channel with respect to inventory. Vernon Essi - Needham & Company: Okay. And then I don't know if I see the data anywhere here, Thurman, but on the stock compensation, what is the split between the R&D and SG&A roughly?

Hold on a second.

Specifically the split in share-based compensation between ... Vernon Essi - Needham & Company: Dollar terms, yes.

Yes, the share-based compensation for SG&A was about $733,000. For the R&D piece of that, it was about $522,000 and we had another $55,000 that hits the cost of sales. Vernon Essi - Needham & Company: Okay, and any news on this – this is sort of an off question here – but the litigation side, do you have that derivative suit? Any update on that or anything we should be thinking about from a modeling perspective?

Yes, unfortunately we really can't comment on ongoing litigation. I can't really put any specifics on that one for you. Vernon Essi – Needham & Company: Okay, and then lastly, on the portable audio side I just wanted to make a clarification here. You said that the revenue grew quarter-to-quarter. Was that on a percentage basis or dollar basis?

Both.

From both. Just to clarify, it was not a lot. In absolute dollar basis, it was right on about there, but obviously in percentage is a significant amount of growth. Vernon Essi - Needham & Company: Sure. And then finally do you have any milestones you want to share with us for 2009?

No, I think putting anything out there in this environment is probably not terribly prudent. We do expect a continue to grow market share in the portable space where we have a lot of good things that we feel like are coming in, and that engineering team just continues to just absolutely knock the cover off the ball from an execution point of view. We're hooked up with some pretty good folks in the customer space and we continue to expect good things from that product line.

Thank you, and Rick Schafer with Oppenheimer please go ahead with your question. Carl LeStrange - Oppenheimer & Company: Hey guys, this is Carl LeStrange on Rick's behalf. Just a couple of questions, first on the audio side of things, within portable audio, how much of the percentage increase quarter-to-quarter was owing to new designs wins versus existing designs?

Well I suppose it depends on the timeframe you're referring to. I don't think we saw a lot of new stuff go to production for the first time in Q3. Certainly there was an element of things that probably starting shipping somewhere during Q2, and then we got a full quarter of that in Q3. Of course the portable products, one of the nice properties is it's a hot Christmas item. And unlike other products like AV receivers and things like that, they tend to be smaller. It's easier to get them around the globe a little quicker. For a semiconductor manufacturer, we see revenue later in the December quarter all the way up through Christmas whereas with bigger products and having to get shipped on big giant boats, those tend to be earlier. Carl LeStrange - Oppenheimer & Company: Right, okay; where are you guys right now with portable design wins. Can you quantify how many you have; the number you're maybe moving towards in calendar time?

Well we expect a continued increase. I don't know about how much value there is in characterizing the absolute number because then you have to get into the big or small, all this kind of stuff. But we continue to feel good. Like we said in the script, we feel like we've got an additional number of applications such as games and working on a couple of different camera opportunities, phones, there's a bunch of different stuff that we feel like we've got coming. Carl LeStrange - Oppenheimer & Company: Great, and on the gross margin guidance, can you go into a little detail as to what's going to keep us in that 54 to 57% range in the quarter?

A lot of blood, sweat and tears. It's something that you just have to work on all the time. Like we said (inaudible) that same group in supply chain management that's working the issues really hard. Our customers pressure us of course for cost reductions and everything else, but fortunately this is a pretty good environment to be having that set of discussions with your foundry partners and supply chain as well, you can imagine. So certainly from a plusses and minuses, we feel like we made some progress across the board on that. Minuses obviously (inaudible) not doing as well as it could be. And the overall macroeconomic conditions, that doesn't help, but we feel real comfortable with continuing to hang in there in that (inaudible) range. Carl LeStrange - Oppenheimer & Company: On Seismic, do you guys have any idea – and I know visibility's very clouded across a variety of verticals – but when things might turn around for that business? And I know it's historically been a lumpy business, but any thoughts on when we could see things head the right direction?

Not real soon would be the only color I could really put on it. You're right, it's lumpy. And they could surprise me. As recently, even when we updated our guidance, that set of customers was more rosy than they are now. So that's definitely an area that's going to be soft for the foreseeable future. But at some point, somebody's going to go looking for oil again and we continue to feel like we've got the best solution on the (inaudible) market and we'll make sure to defend that position. Carl LeStrange - Oppenheimer & Company: Okay, great, and then on the metering side of things, in particular residential metering business, any color on that this quarter and what you see in the next quarter, and how that's being affected by the macro picture?

We've got a fair amount of backlog for some of our newest devices, so again it's validation that we're going into good markets and when we develop new products, people are excited about picking them up. (Inaudible) we're looking at a couple of numbers right quick. Overall, it's not (inaudible) experiencing a tremendous amount of growth. But right now, it's hanging in there. Like I said, with these new products kicking in, it's at least hanging in the flattish range in a pretty tough environment. So that speaks to the strength of the product line we're developing I think. Carl LeStrange - Oppenheimer & Company: Great, and then quickly on backlog, where's backlog at the start of the quarter versus where it was exiting the year – I'm sorry, at the start of the previous quarter.

The previous quarter, the beginning backlog – and I think we (inaudible) some color of this on the call – we don't actually give out a specific percentage. But what we said at the last call was a fairly high percentage relative to normal, in the last call. And then literally if you look at the bookings data for us in the period following the call, the rate of growth just came to a real slow crawl pretty quickly thereafter. Our backlog at this point is very consistent with what we normally experience relative to Q4s in the past and really relative to overall – the history that we've had is very consistent with the backlog that we should have at the beginning of the quarter. We're in the period right now where if we extrapolate from our backlog today, we make a very reasonable position for the middle of the range, which we've given, which is why we gave it. If you're wanting to rub your lucky rabbit's foot or cross your fingers or something, Lunar New Year's early this year which hopefully gives us a few more weeks of (inaudible) in the quarter than you normally get. Normally it takes a little while after Lunar New Year gets over for the quarter to pick back up again. Hopefully we'll have some lift from that, but there's nothing really elaborate baked into the numbers from that. We're kind of going from our pretty reasonable set of curves based on our bookings history in the past. Carl LeStrange - Oppenheimer & Company: What's the turns number required to hit the midpoint of the guidance?

(Inaudible) we're looking at it turns in the range of about 3.3, 3.5 or so. Are we talking about inventory turns? Carl LeStrange - Oppenheimer & Company: No, I was talking about top line versus backlog.

On an average quarter, we come in with something a little bit north of (inaudible) on backlog. Again, we don’t' get into those kind of details (inaudible) we're consistent with that.

Heidi Poon with Thomas Weisel, please go ahead with your question. Heidi Poon – Thomas Weisel: Thanks guys. Could you give a little bit more color on the market share in portable audio? Is there initiative in Japan, is there any progress there? And secondly looking the energy control products, do you anticipate that to be a more material segment or would you be breaking out the revenue there at some point?

Well I hope that it gets so big that somebody makes us break it out, but we don't break out anything really other than audio and energy. So for the foreseeable future, it won't be broken out. But it is absolutely something that we're committed to make successful. We think we've got some pretty kickass technology. We're filing a lot of patents in that area and it's something we're expecting to be successful. As far as market share in portable, we have had business in Japan. We continue to work with the customers there. We've seen some good signs pretty recently as far as new developments are concerned. We're pretty excited about some of the new stuff we've got underway at the moment specifically for the Japanese market. So again like I say, pretty much everything that's going on in our portable space is something that we're proud of.

Great. Could you also give us some color on whether there's increased pricing pressure from the channel especially given the current environment (inaudible) about gross margin trends later in the year for instance.

I think there's some flow-in, flow-out on that one. Certainly our customers are always vigilant on their pricing and that continues. The good news like I said is that we've got a fair amount of opportunity in this environment to take that same message back to our suppliers, and we've certainly done a fair amount of that. So it's a good environment for us to be negotiating with (inaudible) and assembly and test and shipping. And there are not a lot of people trying to charge you for freight surcharges right now.

And finally, with the new acquisition, you guys have done a decent job with cutting OpEx over time. In case of the more longer projected loss situation, how much more room do you think you have in terms of cutting OpEx to prevent a larger cash burn?

It would kind of depend on the scenario. Obviously if things got really horrible and we were looking at sustained losses and we didn’t' feel like we were going to be able to turn that around, then yes we would be able to find some room to decrease the OpEx. But at the same time, we feel like we've got a lot of things that are going our way. And as I've said pretty consistently, we're not managing this company for one quarter or two quarters. We're managing it for the long-term. We intend to grow our market share in any of the intended markets, and we're not going to do anything Draconian to our expenses simply to meet very short-term arbitrary expectations. So in short, if things get a lot worse, we've got plenty of things we can go do. We don't feel like any of that's warranted at the moment. We've obviously paying a lot of attention to our expenses; we'll continue to manage that closely. But at the same time, there's a lot of opportunity at the moment to be able to improve our position through things. Whenever I see competitors that make announcements about how they're going to save a lot of money by not traveling, it always makes me scratch my head. That's always struck me as a very curious way to dig yourself out of hole is to not visit your customers as much. But in any event, we're trying to be smart about the way we spend money but we're not going to mortgage our future to satisfy the short-term meter.

But do you anticipate to hold it at roughly this range that you've given this quarter for maybe the next two quarters.

I think you can be confident we're not going to be going completely nuts and spending a lot more money, but we do have – at that level, for example, just to put some specific color on it – in any particular quarter we could have one or two more (inaudible) that could drive half a million dollars worth of expense. So you can see some fluctuations, but we're not looking to add a tremendous amount of expense. And obviously we'll keep working on opportunities to decrease it. That's certainly my goal.

Thank you, ladies and gentlemen. (Operator instructions) We have a follow-up from Rick Schafer. Carl LeStrange - Oppenheimer & Company: Hey guys, just real quick on the tax rate, Thurman, should we expect the NOL secure throughout the rest of the year?

Yes, probably for many, many years. We have a lot. Our NOLs are at a level where we don't expect to pay taxes for some time. Carl LeStrange - Oppenheimer & Company: Okay, great. That's what I thought. Thank you.

All right, thank you. There are no further questions at this time. Management, please continue with any closing comments.

All right. Before we sign off, I'd like to announce that we'll be participating in the Thomas Weisel Partners Technology and Telecom Conference in San Francisco on February 9th and the Fairmont San Francisco Hotel. Thanks for all your questions and you interest in Cirrus Logic and for those on the call.

Ladies and gentlemen, this concludes Cirrus Logic Third Quarter Fiscal Year 2009 Financial Results Conference Call.