As filed with the Securities and Exchange Commission on March 21, 2000
Registration No. ___________________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------------
CIRRUS LOGIC, INC.
(Exact name of Registrant as specified in its charter)
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Delaware 77-0024818
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
3100 W. Warren Ave.
Fremont, California 94538
(510) 623-8300
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
-------------------------------------------------------
DAVID D. FRENCH
Chief Executive Officer
Cirrus Logic, Inc.
3100 W. Warren Ave.
Fremont, California 94538
(510) 623-8300
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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Copies to:
Paul R. Tobias, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
8911 Capital of Texas Highway
Westech 360, Suite 3350
Austin, TX 78759
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are offered pursuant
to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate
Amount Price Offering Amount of
Title of Each Class of to be Per Security Price Registration
Securities to be Registered Registered (1) (1) Fee
- ------------------------------ --------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 3,562,364 shares $8.9828 $32,000,000 $8,448
====================================================================================
(1) The price of $8.9828 per share, which was the twenty-day average of the closing
prices of the Registrant's Common Stock on the Nasdaq National Market between
June 18, 1999 and July 16, 1999, is set forth solely for the purposes of calculating
the registration fee in accordance with Rule 457(c) of the Securities Act of
1933, as amended.
====================================================================================
</TABLE>
<PAGE>
INFORMATION CONTAINED IN THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OR THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion
CIRRUS LOGIC, INC.
3,562,364 Shares of Common Stock
--------------------------------
The selling stockholder listed on page 14 of this prospectus may sell
or distribute the shares through underwriters, dealers, brokers or
other agents, or directly to one or more purchasers. The price
may be the market price prevailing at the time of sale.
We will not receive any of the proceeds from the sale of the shares.
However, we will pay substantially all expenses incident to
their registration.
-----------------
Our common stock is quoted on the Nasdaq National Market
under the symbol "CRUS". On March 20, 2000, the last
reported sale price of our common stock was $18.50 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" LOCATED ON PAGE 1 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OUR COMMON STOCK TO BE ISSUED IN CONNECTION WITH
THIS PROSPECTUS OR DETERMINED WHETHER THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this prospectus is March 21, 2000.
<PAGE>
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with different information.
We are not making an offer of these securities in any jurisdiction where
the offer or sale is not permitted. You should not assume that the
information contained in this prospectus is accurate as of any other date
other than the date of this prospectus.
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. We have based these forward-looking statements largely on
our current expectations and projections about future events and financial
trends affecting the financial condition of our business. These forward-
looking statements are subject to a number of risks, uncertainties and
assumptions about us, including, among other things:
- Our expectations and estimates concerning future financial
performance, financing plans and the impact of competition,
- General economic and business conditions, both nationally and in
our markets,
- Anticipated trends in our business,
- Existing and future regulations affecting our business.
- Our acquisition opportunities, and
- Other risk factors set forth under "Risk Factors" in this
prospectus.
In addition, in this prospectus, the words "believe," may," "will,"
"estimate," "continue," "anticipate," "intend," "expect" and similar
expressions, as they relate to us, our business or our management, are
intended to identify forward-looking statements.
We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events
or otherwise. In light of these risks and uncertainties, the forward-
looking events and circumstances discussed in this prospectus may not occur
and actual results could differ materially from those anticipated or
implied in the forward-looking statements.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy and information
statements and other information with the Securities and Exchange
Commission. You can inspect and copy these reports, proxy and information
statements and other information concerning us at the Commission's public
reference facilities at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549; and at the Commission's regional offices at Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661 and Seven World Trade Center, New
York, New York 10048. Information on the operation of the Public Reference
Room is available by calling the Commission at 1-800-SEC-0330. The SEC
also maintains a site on the World Wide Web at http://www.sec.gov that
contains reports, proxy and information statements and other information
about us.
This prospectus is part of the Registration Statement on Form S-3
that we filed with the commission to register shares of our common stock.
This prospectus does not contain all of the information contained in the
Registration Statement. Parts of documents are incorporated by reference
into this prospectus. You should read these documents in their entirety
rather than relying just on the parts incorporated by reference. Some of
these documents are exhibits to the Registration Statement. The
Registration Statement together with its exhibits can be inspected and
copied at the public reference facilities and regional offices of the
Commission referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Commission pursuant to
the Exchange Act are incorporated by reference in this Prospectus:
1. Our Annual Report on Form 10-K for the year ended March 27,
1999;
2. Our Quarterly Report on Form 10-Q for the quarter ended December
25, 1999;
3. Our Current Reports on Forms 8-K filed on August 3, 1999 and
September 3, 1999;
4. The description of our Common Stock contained in our
Registration Statement on Form 8-A filed on May 1, 1989,
including any amendments or reports filed for the purpose of
updating such description; and
5. All documents filed by us pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this
Prospectus but prior to the termination of the offering.
You may request a copy of any and all of the documents or information
referred to above that has been or may be incorporated by reference in this
prospectus (excluding exhibits to such documents unless such exhibits are
specifically incorporated by reference). Requests should be directed in
writing or by phone to:
Cirrus Logic, Inc.
Glenn Jones, Secretary
3100 W. Warren Ave.
Fremont, California 94538
Telephone Number: (510) 623-8300
We will provide these documents and information to you without charge.
<PAGE>
CIRRUS LOGIC
We design and manufacture integrated circuits that employ precision
linear and advanced mixed-signal processing technologies. Our products,
sold under our own name and the Crystal product brand, enable system-level
applications in mass storage (magnetic and optical), audio (consumer,
professional and personal computer), precision data conversion
(data acquisition and communications), and embedded processor markets.
We serve a broad customer base in the markets of mass storage,
industrial, and audio markets. Key customers among these markets include
Apple, Creative Technology, Dell, Fujitsu, Hewlett Packard, Hitachi, IBM,
Sony, Trigem, and Western Digital.
We target large existing markets, as well as emerging markets that
derive value from our expertise in advanced mixed-signal processing,
embedded processors and application-specific algorithms. We apply our
analog, digital, and mixed-signal design capabilities, systems-level
engineering and software expertise to create integrated solutions that
enable our customers to differentiate their products and reduce their time
to market. These solutions are implemented primarily in integrated
circuits, or ICs, and related software, but may also include subsystem
modules or system equipment designs and related software.
Within the major markets currently served, represented by mass
storage, audio and industrial electronics, our products address key system-
level applications including magnetic and optical mass storage, consumer
audio and industrial measurement and control, and to a lesser extent
product areas addressing multimedia (graphic, video, and audio), wide area
and local area networking, handheld and portable computing and
communication devices, and power measurement.
In the second quarter of fiscal 1999, we launched a major initiative
to refine our business strategy and revitalize growth through concentration
on our leadership positions in embedded applications for mass storage,
audio and precision data conversion markets. This initiative included the
phasing out of certain non-profitable and non-strategic businesses along
with reducing our total fixed wafer fabrication capacity by approximately
70%. We have since divested elements of our communications product line
and the PC Modem business in addition to outsourcing our PC graphics support.
Further, our future intention is to de-emphasize new product developments
targeted primarily for the PC motherboard and emphasize non-PC motherboard
market opportunities in mass storage, audio, precision data conversion, and
embedded processor products. However, sales of many of our products will
continue to depend largely on the sales of PCs.
We were reincorporated in the state of Delaware on February 17, 1999.
Prior to this date, we had been incorporated in California since February
3, 1984, as the successor to a research corporation which had been
incorporated in Utah in 1981. Our principal executive offices are located
at 3100 W. Warren Ave., Fremont, California 94538. Our telephone number at
that address is (510) 623-8300.
During the first quarter of fiscal 2000, we substantially completed
the remaining restructuring activities previously announced in the second
quarter of fiscal 1999. We finalized negotiations with International
Business Machines Corporation ("IBM") to restructure our interest in the
MiCRUS joint venture and also finalized negotiations with Lucent
Technologies, Inc. ("Lucent") to terminate our interest in the Cirent joint
venture. In connection with the finalization of these two agreements, we
recorded restructuring charges of $128.2 million during the first quarter
of fiscal 2000, $1 million of which is included in cost of sales. The
restructuring charge includes $135 million in direct payments, $32 million
in contributed common stock, $4.8 million for the fair value of a related
embedded stock derivative, $9.3 million of lease buyout costs and
$16.4 million of equipment write-offs. These charges were offset by the
reversal of approximately $71.9 million of previously accrued wafer
purchase commitment charges that were eliminated due to the
renegotiated terms of our purchase commitments with former partners.
<PAGE>
RISK FACTORS
You should carefully consider the risk factors below in addition to
the other information in or incorporated by reference in this prospectus.
Each of these risk factors could adversely affect our business, financial
condition and operating results, as well as harm the value of an investment
in our common stock.
WE HAVE HISTORICALLY EXPERIENCED FLUCTUATIONS IN OUR OPERATING RESULTS AND
EXPECT THESE FLUCTUATIONS TO CONTINUE WHICH MAY CAUSE OUR COMMON STOCK PRICE
TO DECLINE.
Our quarterly and annual operating results are affected by a wide
variety of factors that could materially and adversely affect our net
sales, gross margins and operating income. These factors include:
- the volume and timing of orders received;
- changes in the mix of our products sold;
- market acceptance of our products and the products of our
customers;
- competitive pricing pressures;
- our ability to expand manufacturing output to meet increasing
demand;
- our ability to introduce new products on a timely basis;
- fixed costs associated with minimum purchase commitments under
supply contracts if demand decreases;
- the timing and extent of our research and development expenses;
- cyclical semiconductor industry conditions;
- the failure to anticipate changing customer product requirements;
- fluctuations in manufacturing costs;
- disruption in the supply of wafers or assembly services;
- the ability of customers to make payments to us;
- increases in material costs;
- certain production and other risks associated with using
independent manufacturers; and
- product obsolescence, price erosion and other competitive factors.
Historically in the integrated circuit industry, average selling
prices of products have decreased over time. If we are unable to introduce
new products with higher margins or reduce manufacturing costs to offset
anticipated decreases in the prices of our existing products, our operating
results will be adversely affected. Our business is characterized by
short-term orders and shipment schedules, and customer orders typically can
be canceled or rescheduled without penalty to the customer. In addition,
because of fixed costs in the integrated circuit industry, we are limited
in our ability to reduce costs quickly in response to any revenue
shortfalls. As a result of the foregoing or other factors, we may
experience material adverse fluctuations in our future operating results on
a quarterly or annual basis.
OUR SUCCESS DEPENDS ON OUR ABILITY TO INTRODUCE NEW PRODUCTS
ON A TIMELY BASIS.
Our success depends upon our ability to develop new precision linear
and mixed-signal circuits for new and existing markets, to introduce such
products in a timely manner, and to have such products gain market
acceptance. The development of new precision linear and mixed-signal
circuits is highly complex and from time to time we have experienced delays
in developing and introducing new products. Successful product development
and introduction depends on a number of factors, including:
- proper new product definition,
- timely completion of design and testing of new products,
- achievement of acceptable manufacturing yields and
- market acceptance of our products and the products of our
customers.
Although we seek to design products that have the potential to
become industry standard products, we cannot assure you that any products
introduced by us will be adopted by such market leaders, or that any
products initially accepted by our customers that are market leaders will
become industry standard products. Both revenues and margins may be harmed
quickly if new product introductions are delayed or if our products are not
designed into successive generations of our customers' products. We cannot
assure you that we will be able to meet these challenges or adjust to
changing market conditions as quickly and cost-effectively as necessary to
compete successfully. Our failure to develop and introduce new products
successfully could harm our business and operating results.
Moreover, successful product design and development is dependent on
our ability to attract, retain and motivate qualified design engineers, of
which there is a limited number. Due to the complexity and variety of
precision linear and mixed-signal circuits, the limited number of qualified
circuit designers and the limited effectiveness of computer-aided design
systems in the design of such circuits, we cannot assure you that we will
be able to successfully develop and introduce new products on a timely
basis.
OUR PRODUCTS ARE COMPLEX AND COULD CONTAIN DEFECTS, WHICH COULD REDUCE SALES
OF THOSE PRODUCTS OR RESULT IN CLAIMS AGAINST US.
Product development in the markets we serve is becoming more focused
on the integration of functionality on individual devices. There is a
general trend towards increasingly complex products. The greater
integration of functions and complexity of operations of our products
increase the risk that latent defects or subtle faults could be discovered
by our customers or end users after volumes of product have been shipped.
This could result in:
- material recall and replacement costs for product warranty and
support;
- our customer relationships could also be adversely impacted by the
recurrence of significant defects;
- delay in recognition or loss of revenues, loss of market share or
failure to achieve market acceptance; and
- diversion of the attention of our engineering personnel from our
product development efforts.
The occurrence of any of these problems could result in the delay or loss
of market acceptance of our products and would likely harm our business.
In addition, any defects or other problems with our products could result
in financial or other damages to our customers who could seek damages from
us for their losses. A product liability claim brought against us, even if
unsuccessful, would likely be time consuming and costly to defend.
THE INTEGRATED CIRCUIT INDUSTRY IS VERY CYCLICAL AND AN INDUSTRY DOWNTURN
WOULD ADVERSELY AFFECT OUR BUSINESS.
The integrated circuit industry is characterized by:
- rapid technological change;
- cyclical market patterns;
- significant price erosion;
- periods of over-capacity and production shortages;
- variations in manufacturing costs and yields; and
- significant expenditures for capital equipment and product
development.
The industry has from time to time experienced depressed business
conditions. Although the semiconductor industry in recent periods has
experienced increased demand and production capacity constraints, we cannot
assure you that these conditions will continue. In addition, we cannot
assure you that any future downturn in the industry will not be severe or
that any such downturn will not have a material adverse effect on our
business and results of operations. We cannot assure you that we will not
experience substantial period-to-period fluctuations in operating costs due
to general semiconductor industry conditions or other factors.
ANY DOWNTURN IN THE MARKETS WE SERVE WOULD HARM OUR BUSINESS.
A majority of our products are incorporated into products such as
personal computers, mass storage, audio and industrial electronics, and
embedded processor products. These markets may from time to time
experience cyclical, depressed business conditions, often in connection
with, or in anticipation of, a decline in general economic conditions.
Such industry downturns have resulted in reduced product demand and
declining average selling prices. Our business would be harmed by any
future downturns in the markets that we serve.
The following sections detail the risks associated
with serving these various markets
THERE ARE RISKS ASSOCIATED WITH OUR DEPENDENCE ON THE PC MARKET.
The following are risks associated with our involvement in the PC
markets:
- greatly pronounced demand fluctuations characteristic of our role
as a component supplier to PC original equipment manufacturers, or
OEMs, and to peripheral device manufacturers;
- our involvement in the consumer PC market, the most volatile
segment of the PC market;
- increased competition from other IC makers, including Intel
Corporation, who plan to incorporate features into or with their
microprocessor products which replicate those of our products;
- loss of customer base as we refocus on non-PC markets; and
- as a supplier to manufacturers at different levels of the
production chain, our potential dependence on the success of a
particular PC OEM due to our inability to accurately identify end-
users of our product.
THERE ARE RISKS ASSOCIATED WITH SERVING THE MASS STORAGE MARKET.
The following are risks associated with serving the mass storage
market:
- historically dramatic supply and demand fluctuations in the
magnetic disk drive market, which is closely linked to growth in
the PC market;
- direct correlation between the competitive nature of the disk
drive industry and the price of disk drive components;
- our dependence on the success of certain 3.5 inch magnetic disk
drive products that incorporate our products into their design;
- our dependence on the successful introduction by our customers of
new disk drive products that in turn can be impacted by the timing
of customers' transition to new disk drive products;
- reduced demand for our mass storage products due to recent efforts
by certain of our customers to develop their own ICs for mass
storage products;
- our ability to respond effectively to the market trend of
integrating hard disk controllers with microcontrollers; and
- our ability to successfully compete with other firms with greater
resources to accomplish the technical obstacles of integration and
greater access to the advanced technologies necessary to provide
integrated HDD electronic components.
THERE ARE RISKS RELATED TO SERVING THE AUDIO PRODUCTS MARKETS.
In the audio products market, we have the potential to experience
decreased revenues due to
- decreased average selling prices in the audio IC market due to the
PC industry's transition to the AC-link codecs attached to core
logic using the multimedia features of the processor and single
chip solution;
- in the PC audio products market, the transition to core logic
connected audio and by the introduction of cheaper, fully-
integrated, single-chip audio ICs;
- aggressive competitive pricing pressures in the audio ICs market; and
- the inability of our audio products to meet cost or performance
requirements of the three-dimensional, spatial-effects audio
market.
THERE ARE RISKS RELATED TO SERVING THE PRECISION DATA CONVERSION MARKET.
Decreased revenues from sales to the precision mixed-signal products
market could be caused by the following:
- our inability to establish broad sales channels and our failure to
develop and maintain a sufficiently broad competitive product
line;
- customer delays in their product development and introductions ;
- our inability to reach the marketplace due to the technical
complexity of our products and the time requirements for their
development; and
- our inability to attract, hire, and retain scarce analog
engineering talent necessary for rapid product development in this
market.
THERE ARE RISKS RELATED TO SERVING THE EMBEDDED PROCESSOR PRODUCTS MARKET.
We could experience decreased revenues from sales of our embedded
processor products due to the following factors:
- increased competition from other semiconductor manufacturers now
entering the market due to the increased popularity of consumer
goods incorporating embedded processor products, such as portable
digital audio players, smart cellular phones, set top internet and
e-mail access boxes, and personal digital appliances;
- our inability to meet embedded processor products requirements of
an industry that has yet to define product standards;
- customer delays in their product development and introductions;
and
- price competition from over 30 other embedded processor products
manufacturers who have licensed ARM Ltd. CPU cores, the same CPU
core we license, and who will likely produce products around these
cores which are very similar to ours.
SHIFTS IN INDUSTRY-WIDE CAPACITY MAY CAUSE OUR RESULTS TO FLUCTUATE AND
SUCH SHIFTS HAVE RESULTED AND COULD IN THE FUTURE RESULT IN SIGNIFICANT
INVENTORY WRITEDOWNS.
Shifts in industry-wide capacity from shortages to oversupply or from
oversupply to shortages may result in significant fluctuations in our
quarterly or annual operating results. We must order wafers and build
inventory well in advance of product shipments. Because the integrated
circuit industry is highly cyclical and is subject to significant downturns
resulting from excess capacity, overproduction, reduced demand or
technological obsolescence, there is a risk that we will forecast
inaccurately and produce excess or insufficient inventories of particular
products. This inventory risk is heightened because many of our customers
place orders with short lead times. Due to the product manufacturing cycle
characteristic of integrated circuit manufacturing and the inherent
imprecision by our customers to accurately forecast their demand, product
inventories may not always correspond to product demand, leading to
shortages or surpluses of certain products. As a result of such inventory
imbalances, future inventory write-downs may occur due to lower of cost
or market accounting, excess inventory or inventory obsolescence.
BECAUSE FOUNDRY CAPACITY IS LIMITED WE MAY BE REQUIRED TO ENTER INTO COSTLY
LONG-TERM SUPPLY ARRANGEMENTS TO SECURE FOUNDRY CAPACITY.
We currently purchase all of our wafers from outside foundries.
Market conditions could result in wafers being in short supply and prevent
us from having adequate supply to meet our customer requirements. Any
prolonged inability to utilize our foundries as a result of fire, natural
disaster or otherwise would have a material adverse effect on our financial
condition and results of operations. If we are not able to obtain
additional foundry capacity as required, our business could be harmed in
the following ways:
- our relationships with our customers would be harmed and
consequently our sales would likely be reduced; and
- we may be forced to purchase wafers or packaging from higher cost
suppliers or to pay expediting charges to obtain additional supply
In order to secure additional foundry capacity, we have entered into
joint ventures and other contracts that commit us to purchase specified
quantities of silicon wafers over extended periods. In fact, during
fiscal 1998 and fiscal 1999, the industry experienced an excess in
production capacity that we believe, in some cases, resulted in our
competitors receiving wafer prices which were lower than our cost of
production from our manufacturing joint ventures.
Consequently, we experienced pressures on our selling prices during fiscal
1998, which harmed our revenues and reduced our margins. In the future, we
may not be able to secure capacity with foundries in a timely fashion or at
all, and such arrangements, if any, may not be on terms favorable to us.
Moreover, if we are able to secure foundry capacity, we may be obligated to
utilize all of that capacity or incur penalties. Such penalties may be
expensive and could harm our financial results.
WE ARE DEPENDENT ON OUR SUBCONTRACTORS IN ASIA TO PERFORM KEY MANUFACTURING
FUNCTIONS FOR US.
We depend on third party subcontractors in Asia for the supply and
packaging of our products. International operations and sales may be
subject to political and economic risks, including political instability,
currency controls, exchange rate fluctuations, and changes in import/export
regulations, tariff and freight rates. Although we seek to reduce our
dependence on our sole and limited source suppliers, this concentration of
suppliers and manufacturing operations in Asia subjects us to the risks of
conducting business internationally, including political and economic
conditions in Asia. Any disruption or termination of any of our supply or
manufacturing could occur, and such disruptions could harm our business and
operating results.
WE HAVE SIGNIFICANT INTERNATIONAL SALES AND RISKS ASSOCIATED WITH OUR
INTERNATIONAL SALES COULD HARM OUR OPERATING RESULTS.
Export sales, principally to Asia, include sales to U.S-based
customers with manufacturing plants overseas, and accounted for
approximately 74% of our net sales in 1999 and 53% of our net sales in
1998. We expect export sales to continue to represent a significant
portion of product sales. This reliance on sales internationally subjects
us to the risks of conducting business internationally, including political
and economic conditions. For example, the financial instability in a given
region, such as Asia, may have an adverse impact on the financial position
of end users in the region which could impact future orders and/or the
ability of such users to pay us or our customers, which could also impact
the ability of such customers to pay us. While we expect to carefully
evaluate the collection risk related to the financial position of customers
and potential customers in structuring the terms of sale, in determining
whether to accept sales orders, and in evaluating the recognition of
revenue, if a region's volatility harms the financial position of our
customers, our results of operations could be harmed. Our international
sales operations involve a number of other risks, including:
- unexpected changes in regulatory requirements;
- changes in diplomatic and trade relationships;
- delays resulting from difficulty in obtaining export licenses for
technology;
- tariffs and other barriers and restrictions; and
- the burdens of complying with a variety of foreign laws.
In addition, while we may buy hedging instruments to reduce our
exposure to currency exchange rate fluctuations, our competitive position
can be affected by the exchange rate of the U.S. dollar against other
currencies, particularly the Japanese yen. Consequently, increases in the
value of the dollar would increase the price in local currencies of our
products in foreign markets and make our products relatively more
expensive. We cannot assure you that regulatory, political and other
factors will not adversely affect our operations in the future or require
us to modify our current business practices.
POTENTIAL INTELLECTUAL PROPERTY CLAIMS AND LITIGATION COULD SUBJECT US TO
SIGNIFICANT LIABIILITY FOR DAMAGES AND COULD INVALIDATE OUR PROPIETARY
RIGHTS.
Our success depends on our ability to obtain patents and licenses and
to preserve our other intellectual property rights covering our
manufacturing processes, products and development and testing tools. We
seek patent protection for those inventions and technologies for which we
believe such protection is suitable and is likely to provide a competitive
advantage to us. Notwithstanding our attempts to protect our proprietary
rights, we believe that our future success will depend primarily upon the
technical expertise, creative skills and management abilities of our
officers and key employees rather than on patent and copyright ownership.
We also rely substantially on trade secrets and proprietary technology to
protect our technology and manufacturing know-how, and work actively to
foster continuing technological innovation to maintain and protect our
competitive position.
Although we are not currently a defendant to any material litigation,
the integrated circuit industry is characterized by frequent litigation
regarding patent and other intellectual property rights. We cannot assure
you that any patent owned by us will not be invalidated, circumvented or
challenged, that rights granted thereunder will provide competitive
advantages to us or that any of our pending or future patent applications
will be issued with the scope of the claims sought by us, if at all. In
addition, effective copyright and trade secret protection may be
unavailable or limited in certain foreign countries. We cannot assure you
that steps taken by us to protect our intellectual property will be
adequate or that our competitors will not independently develop or patent
substantially equivalent or superior technologies.
As is typical in the semiconductor industry, we and our customers
have from time to time received, and may in the future receive,
communications from third parties asserting patents, maskwork rights, or
copyrights on certain of our products and technologies. Although we are
not currently a defendant to any material litigation, in the event a third
party were to make a valid intellectual property claim and a license was
not available on commercially reasonable terms, our operating results could
be harmed. Litigation, which could result in substantial cost to us and
diversion of our resources, may also be necessary to defend us against
claimed infringement of the rights of others. An unfavorable outcome in
any such suit could have an adverse effect on our future operations and/or
liquidity.
STRONG COMPETITION IN THE HIGH-PERFORMANCE INTEGRATED CIRCUIT MARKET
MAY HARM OUR BUSINESS.
The high-performance integrated circuit industry is highly
competitive and subject to rapid technological change. Significant
competitive factors in our markets include:
- product features, reliability, performance and price;
- the diversity and timing of new product introductions;
- the emergence of new computer standards and other customer
systems;
- product quality;
- efficiency of production; and
- customer support.
Because of shortened product life cycles and even shorter design-in
cycles, our competitors have increasingly frequent opportunities to achieve
design wins in next generation systems. In the event that competitors
succeed in supplanting our products, our market share may not be
sustainable and net sales, gross margin, and results of operations would be
adversely affected. Our principal competitors include: Analog Devices,
Applied Micro Devices, Atmel, Burr-Brown, Creative Technologies, ESS
Technologies, Intel, Linear Technology, Lucent Technologies, Motorola, ST
Microelectronics, Texas Instruments and Yamaha; many of whom have
substantially greater financial and other resources than we do with which
to pursue engineering, manufacturing, marketing and distribution of their
products. We expect intensified competition from emerging companies and
from customers who develop their own integrated circuit products.
Increased competition could adversely affect our business. We cannot
assure you that we will be able to compete successfully in the future or
that competitive pressures will not adversely affect our financial
condition and results of operations. Competitive pressures could reduce
market acceptance of our products and result in price reductions and
increases in expenses that could adversely affect our business and our
financial condition.
In addition, our future success depends, in part, upon the continued
service of our key engineering, marketing, sales, manufacturing, support,
and executive personnel, and on our ability to continue to attract, retain,
and motivate qualified personnel. The competition for such employees is
intense, and the loss of the services of one or more of these key personnel
could adversely affect our business.
OUR FINANCIAL RESULTS ARE SENSITIVE TO SECURITIES PRICES.
In connection with the restructuring of the MiCRUS joint venture, we
issued $32 million of our common stock into an escrow account during the
second quarter of fiscal 2000. We made certain guarantees to IBM regarding
the market value of that stock in future periods, and as a result, our
earnings would be adversely affected in future periods by declines in the
market price of our stock. As a result of analyzing the fair value of
this derivative liability during the third quarter of fiscal 2000, we
recorded a $1.7 million gain due to appreciation in our stock price,
however, this guarantee to IBM could adversely affect future earnings
if our stock price were to decrease.
As of December 25, 1999, we own approximately 0.6 million shares of
common stock in Phone.com, Inc. with a market value of $71.9 million.
During February of 2000, we sold 0.3 million call options in Phone.com
for a premium of $5.1 million with an average exercise price of $125 per
share. The fair value of our holdings in Phone.com stock and Phone.com
call options will fluctuate as the stock price of Phone.com fluctuates.
<PAGE>
SELLING STOCKHOLDER
The name of the selling stockholder and the number of shares of
common stock registered by this Registration Statement that the selling
stockholder may offer and sell are set out in the table below. All of the
shares offered are issued and outstanding as of the date of this
prospectus. Because the selling stockholder may sell or distribute all or
a portion of the shares at any time and from time to time after the date of
this prospectus, we cannot estimate the number of shares of common stock
that the selling stockholder may have upon completion of this offering.
<TABLE>
<CAPTION>
Shares to be Offered
Selling Stockholder for the Selling Stockholder
- ------------------ ----------------------------
<S> <C>
International Business 3,562,364
Machines Corporation
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
The shares may be sold or distributed from time to time by or for the
account of the selling stockholder. The selling stockholder will act
independently of us in making decisions with respect to these sales.
The selling stockholder may use underwriters, dealers, brokers or
other agents to sell or distribute some or all of the shares or may deal
directly with one or more purchasers. It may use block sales, Nasdaq, the
over-the-counter market, privately negotiated transactions or a combination
of these. These sales may be at the market price at the time of sale, at
prices related to the market price, at privately negotiated prices, or at
fixed prices, which may be changed. Brokers, dealers, agents or
underwriters participating in these sales as agent may receive compensation
in the form of discounts, concessions or commissions from the selling
stockholder. If they act as agent for the purchaser of such shares, they
may also receive compensation from the purchaser.
The selling stockholder and any underwriters, brokers, dealers or
agents that participate in distribution of the shares may be deemed
"underwriters" within the meaning of the Securities Act, and any discounts,
commissions or concessions they receive might be deemed to be underwriting
discounts and commissions under the Securities Act. Neither we nor the
selling stockholder can presently estimate the amount of such compensation.
We do not know of any existing arrangements relating to the sale or
distribution of the shares among the selling stockholder or between the
selling stockholder and any underwriter, broker, dealer or other agent.
We will pay substantially all of the expenses of this offering of the
shares by the selling stockholder other than commissions and discounts of
underwriters, brokers, dealers or agents.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for us
by Wilson Sonsini Goodrich & Rosati, Professional Corporation.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form
10-K for the year ended March 27, 1999, as set forth in their report,
which is incorporated by reference in this Prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of Common Stock by the
selling stockholder.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The fees and expenses incurred by Cirrus in connection with the
offering are payable by Cirrus and, other than filing fees, are estimated
as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fees $8,448
NASDAQ Filing Fee $17,500
Legal Fees and Expenses $15,000
Accounting Fees $10,000
Miscellaneous $2,000
Total $52,948
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICER AND DIRECTORS
Section 145 of the Delaware General Corporation law ("DGCL") empowers
a Delaware corporation to indemnify any persons who are, or are threatened
to be made, parties to any threatened, pending or completed legal action,
suit or proceedings, whether civil, criminal, administrative or
investigative (other than action by or in the right of such corporation),
by reason of the fact that such person was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise.
The indemnity may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding, provided
that such officer or director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best
interest, and, for criminal proceedings, had no reasonable cause to believe
his conduct was illegal. A Delaware corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the
corporation in the performance of his duty. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred
to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
In accordance with the DGCL, Cirrus's Certificate of Incorporation
(the "Certificate"), contains a provision to limit the personal liability
of the directors of the Registrant for violations of their fiduciary duty.
This provision eliminates each director's liability to the Registrant or
its stockholders for monetary damages except (i) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the DGCL
providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions, or (iv) for any transaction from
which a director derived an improper personal benefit. The effect of this
provision is to eliminate the personal liability of directors for monetary
damages for actions involving a breach of their fiduciary duty of care,
including any such actions involving gross negligence.
Article VII of the Company's Certificate of Incorporation and Article
VI, Section 1 of the Company's Bylaws provide for indemnification of the
officers and directors of the Registrant to the fullest extent permitted by
applicable law.
The Registrant has entered into indemnification agreements with each
director and executive officer which provide indemnification to such
directors and executive officers under certain circumstances for acts or
omissions which may not be covered by directors' and officers' liability
insurance.
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------
<S> <C>
2.1 Restructuring Agreement, Dated as of June 21, 1999 among Cirrus
Logic, Inc., International Business Machines Corporation, Cirel,
Inc., Micrus Holdings, Inc., and Micrus, incorporated by reference
to the Registrant's Current Report on Form 8-K, filed with the
Commission on July 19, 1999.
3.1 Certificate of Incorporation of Cirrus Logic, Inc., incorporated
by reference to the Registrant's Definitive Proxy Statement on
Schedule 14A, filed with the Commission on June 19, 1998.
3.2 Bylaws of Cirrus Logic, Inc., incorporated by reference to the
Registrant's Definitive Proxy Statement on Schedule 14A, filed
with the Commission on June 19, 1998.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1).
23.2 Consent of Ernst & Young, LLP, independent auditors.
24.1 Power of Attorney (included on p. II-4 of this registration statement
under the caption "Signatures".
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of a prospectus filed with the Commission
pursuant to Rule 424(b) (Section 230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and (iii) to include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; provided, however, that (i) and (ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by (i)
and (ii) is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
in Item 15 above, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
liabilities (other than the payment of the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Clara, State of California
on this 13th day of March, 2000.
CIRRUS LOGIC, INC.
By:/s/David D. French
David D. French
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David D. French and Glenn C. Jones,
jointly and severally, his attorney-in-fact, with the power of
substitution, for him in any and all capacities, to sign any amendment to
this Registration Statement on Form S-3, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all
that said attorney-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on March 13, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------- ------------------------------------------
<S> <C>
/s/ Michael L. Hackworth
- ----------------------------
Michael L. Hackworth Chairman of the Board and Director
/s/ Suhas S. Patil Chairman Emeritus and Director
- ----------------------------
Suhas S. Patil
/s/ David D. French
- ---------------------------- President, Chief Executive Officer
David D. French and Director
/s/ Glenn C. Jones
- ---------------------------- Vice President, Chief Financial Officer,
Glenn C. Jones Treasurer and Secretary
- ----------------------------
Walden C. Rhines Director
/s/ Robert H. Smith
- ----------------------------
Robert H. Smith Director
/s/ Alfred S. Teo
- ----------------------------
Alfred S. Teo Director
/s/ D. James Guzy
- ----------------------------
D. James Guzy Director
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------
<S> <C>
2.1 Restructuring Agreement, Dated as of June 21, 1999 among Cirrus
Logic, Inc., International Business Machines Corporation, Cirel,
Inc., Micrus Holdings, Inc., and Micrus, incorporated by reference
to the Registrant's Current Report on Form 8-K, filed with the
Commission on July 19, 1999.
3.1 Certificate of Incorporation of Cirrus Logic, Inc., incorporated
by reference to the Registrant's Definitive Proxy Statement on
Schedule 14A, filed with the Commission on June 19, 1998.
3.2 Bylaws of Cirrus Logic, Inc., incorporated by reference to the
Registrants Definitive Proxy Statement on Schedule 14A, filed
with the Commission on June 19, 1998.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1).
23.2 Consent of Ernst & Young, LLP, independent auditors.
24.1 Power of Attorney (included on p. II-4 of this registration statement
under the caption "Signatures".
</TABLE>
EXHIBIT 5.1
8911 CAPITAL OF TEXAS HIGHWAY
WESTECH 360, SUITE 3350
AUSTIN, TX 78759
TELEPHONE 512-338-5400 FACSIMILE 512-338-5499
March 17, 2000
Cirrus Logic, Inc.
3100 W. Warren Ave.
Fremont, CA 94538
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 filed by you
with the Securities and Exchange Commission on or about March 17, 2000 (the
"Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of a total of 3,562,364 shares of your
Common Stock (the "Shares"). We understand that the Shares are to be sold
from time to time on the NASDAQ National Market at prevailing prices or as
otherwise described in the Registration Statement. As legal counsel for
Cirrus Logic, Inc., we have examined the proceedings taken by you in
connection with the sale of the Shares.
It is our opinion that the Shares are legally and validly issued,
fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement and any amendments to it.
Very truly yours,
/s/ Wilson Sonsini Goodrich & Rosati
Professional Corporation
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-3) and related Prospectus of Cirrus
Logic , Inc. for the registration of 3,562,364 shares of its common stock
and to the incorporation by reference therein of our report dated April 21,
1999, with respect to the consolidated financial statements and schedule
of Cirrus Logic, Inc. included in its Annual Report (Form 10-K) for the
year ended March 27, 1999, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
San Jose, California
March 17, 2000
