Cirrus Logic Inc (CRUS) 2003 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic second quarter fiscal 2003 financial results conference call. You at this time all participants are in a listen only mode. Later we will open up the call to your questions. Instructions for queuing up will be provided at that time. As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference call over to Mr. Steve Overly, Chief Financial Officer of Cirrus Logic. Sir, you may begin.

Thank you, Operator. Good afternoon and thank you for joining Cirrus Logic's fiscal second quarter financial results conference call. I'm Steve Overly, Chief Financial Officer of Cirrus Logic. Joining me today on call is Dave French, Cirrus President and Chief Executive Officer. Before we begin I would like to remind you that during the course of this conference call we will make projections or other forward-looking statements regarding, among other things, our estimates of third quarter revenue, operating expenses, gross margin levels and loss per share. Our future cash burn rate as well as expectations regarding our growth and future performance. Please keep in mind that these statements are predictions that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to the companies press release dated October 23, 2002, our latest form 10K for the year ended March 30, 2002, our form 10Q for the quarter ended June 29, 2002, 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. Now let me turned the call over to Dave French. Dave?

Thank you, Steve, and thanks to all of you for joining us here today. For those of you who have not yet had a chance to read our press release I will quickly recap our second fiscal quarter. Net revenue were $73.3 million slightly above our revised guidance provided on September 30. The pro forma gross margin was 48%, pro forma net loss was $7.8 million, pro forma net loss per share was 9 cents. On a GAAP basis the gross margin was 49%, the net loss was $18.4 million the loss per share was 22 cents. Before I turn the call over to Steve Overly to discuss the specific financial results in greater detail including the differences between pro forma and GAAP results let me just say I'm pleased to report particularly in these very tough economic times that the Cirrus Logic team has made stellar progress in the second quarter on four particular front: First, our analog product portfolio is getting stronger and now represents over half our company's revenues and is generating some of the most exciting new product introductions. Second, continuing growth in strategic product areas has continued to reduce our reliance on game consoles, which now generate less than 10% of the companies total revenue. Third, we have maintained excellent share in imbedded digital signal processors for home audio application just as surround sound content proliferation in the form of popular DVD movies has driven greater than 50% market growth year over year in this space. And, fourth, new product momentum at Cirrus is at the highest level it's been since I joined the company over four years in spite of a company wide strong emphasis on spending reduction in order to facilitate return of the company to profitability. Now, Steve will give you the detailed analysis of our quarterly financial results. Steve?

Thank you, Dave. Now let's discuss in detail our results for the second quarter of fiscal 2003 which ended September 28. Total second quarter net revenues was $73.3 million, down from $76 million in the first quarter. The reduction was due primarily to decreased demand for our DVD game console components partially offset by growth in video product sales. For the third quarter Cirrus expects revenues to be comparable to those in the second quarter. Based on discussions with many of you and to provide a more clear understanding of our business and the shifts that have occurred over the last several second quarters we are going to describe our revenue going forward in the following three categories: Audio, video and game console. Game console components are now categorized separately as opposed to being in either audio or video. We are no longer separately reporting conductivity. If we had reported conductivity revenues separately this quarter as we did last quarter conductivity sales would have been approximately the same in the second quarter as the $3.3 million reported in the first quarter. Audio revenue in the second quarter was $59.9 million using our new categories. Using the same audio-video and game console categories audio revenue would have been 60.8 million in the first quarter, video revenue in the second quarter was 6.4 million, up from 5.9 million on the first quarter on a comparable basis. Game console revenue in the second quarter was $7 million versus $9.3 million in the first quarter on a comparable basis. While we previously provided gross margin data for each of the main product areas as our strategy of providing integrated solutions accelerates we believe that evaluating gross margin on other than a company-wide basis would be potentially misleading as product assumptions are merged and integrated. pro forma gross margin in the second quarter decreased to 48% from 49% in the prior quarter primarily as a result of small differences in the mix of product fold during the quarter. GAAP gross margin decreased to 49% compared with 51% in the first quarter primarily as a result of the sale of more previously reserved inventory than in the first quarter. For the third quarter Cirrus expects gross margins to continue to be in the 47 to 49% range on both a pro forma and a GAAP basis. Our pro forma operating expenses were $43 million in the second quarter, down from $46 million in the prior quarter. Previously announced cost savings measures, engineering synergies achieved from our recent functional realignment and continued expense management drove this improvement. Pro forma operating expenses have decreased approximately 18% since the beginning of fiscal year 2002. Looking ahead to the third quarter Cirrus expects pro forma operating expenses to be in the range of 40 to $42 million, down roughly another 5% since the beginning of fiscal 2002. GAAP operating expenses decreased to 54 million in the second quarter from 55 million in the first quarter. The GAAP operating expense reduction was partially offset by a higher restructuring charge in the second quarter than in the first quarter. For the third quarter Cirrus expects GAAP operating expenses to be in the range of 46 to $49 million, down approximately 12% from the second quarter. Pro forma loss for each of the first and second quarters was $8 million. Pro forma loss per share for each of the first and second quarters was 9 cents, on 83 million weighted average shares outstanding in each quarter. For the third quarter Cirrus expects it it's pro forma loss per share to improve to a loss of four to 8 cents per share. GAAP loss for the second quarter was 18 million dollars, compared with a loss of $16 million in the first quarter. The GAAP net loss per share was 22 cents, compared with a net loss per share of 19 cents in the prior quarter, both on 83 million weighted average shares outstanding. The higher GAAP loss as outlined in our press release is due in large part to a $2.3 million change in the second quarter related to our marketable equity security. For the third quarter Cirrus expects the GAAP net loss per share to improve to between a loss of 12 and 16 cents per share. Our employee head count at the end of the second quarter was 1024, a 13% decrease from the prior quarter head count of 1181. We entered the second quarter we 127,000,000 in total cash down from the prior quarter balance of $145 million. The decline was primarily attributable to our operating loss, payments associated with a facilities consolidation and a net change in working capital in the quarter. We expect our cash burn rate to decrease substantially over the quarter as operating losses narrow and facilities consolidation is completed. As we have previously reported two years ago we decided to consolidate our Austin operations from four to two buildings so that our engineering, sales and marketing group could work more closely together. In connection with the move, we will incur approximately $12 million in capital expenditures with approximately 2 million paid prior to the second quarter and the balance split evenly between the second and third second quarters. Our net days sales outstanding increased from historical low of 35 days to 43 days. Primarily due to increased sales at the end of the second quarter as opposed to a more linear shipment pattern during the second quarter. Net inventory was $29 million at the close of the second quarter, down from 37 million at the end of the prior quarter. Net inventory turns increased to 5.2 in the second quarter from 4.1 in the first quarter. Capital additions including purchase software and technology licenses totaled $8 million for the second quarter. Capital spending was driven primarily by our facilities consolidation. Depreciation and amortization expense totaled $10 million in the second quarter. Accounts payable and accrued liabilities decreased by 8 million from the prior quarter as inventory levels and operating expenses declined. Stockholders equity at the end of the quarter was $327 million, down from $345 million in the first quarter due to our GAAP loss. Now I will turn the call back to Dave who will cover our business results and the highlights in the quarter. Dave?

Thanks, Steve. As those of you whoever followed Cirrus Logic know over the past few years we have worked to strengthen our proprietary analog portfolio while realigning the company to focus strategically on digital consumer applications, a market that many analysts believe will be the fastest growing segment of the semi-conductor market over the several years. We are building our momentum in the consumer entertainment space on a strong analog product basis that generates now over $150 million in annual revenue with gross margins in excess of 55%. Over the course of the past quarter we have made significant progress in further strengthening our audio leadership position and gaining traction in video. We've accomplished these goals while continuing to achieve cost reduction and achieving a lower revenue break-even point. In particular, let me discuss now some of our recent successes and opportunities in our analog area, our home audio, our personal audio player product line and DVD players and in personal video reporters. With approximately $50 million in sales in the second quarter our audio remains our largest revenue category and continues to give us a strong leadership position from which we are leveraging new growth opportunities. Our analog IC portfolio represents the strongest category in our audio business. Early in the September quarter we introduced a high performance audio deck family that supports high frequency sample rates to service growing demands for high performance DVD audio systems at low consumer prices. In addition, our recent launch of a family of low noise and low drift high performance operational amplifiers illustrates our technology leadership. At the same time it opens up a large and highly lucrative new market opportunity for Cirrus. The amplifier market has traditionally been dominated by leading analog components suppliers such as LTC and Analog Devices and represents a natural expansion opportunity from our high precision analog design skills that form the foundation of our business. Also as a further sign of the growing signing of our analog business I'm pleased to report that we recently announced the achieve of another major milestone by shipping our 200 million audio deck into a highly diverse application and customer community. I would also now like to highlight two specific audio systems market segments, those being home audio and personal audio application. On the home audio front Cirrus is well known for its leadership position in audio-video receivers, or AVR.s, which remain one of the latest revenue generators of all of our target entertainment application. In this segment surround sounds systems represents the fastest growing and also the highest semi-conductor product type. Driving our digital components business to continue sequential growth over each of the past few quarters in spite of very difficult economic conditions. Our new single chip 32 bit audio processing solution which includes a highly optimized DSP as well as critical audio processing firmware is now shipping in production quantities to major Japanese customers and we are aggressively pursuing further designs around the globe. The market for personal compressed audio, or simply MP3 players is expected to grow from about 7 million units this year to over 24 million units by 2006. And Cirrus has product solutions for each of the three popular form factors driving this growth, those being flash base systems, hard disk drive base systems and now CD based MP3 players. The recent introduction of our CS 7410 music processor extends our lead in the personal compressed music player market and establishes Cirrus as an early innovator in the CD based MP3 or Windows Media Player audio media space. From a market perspective this product is also important because it enables manufacturers to target the mainstream retail price for personal audio players at $49. In addition, we continue to see exciting innovation that capitalizes on the flexibility and the cost-effectiveness of this digital entertainment solutions enabled by Cirrus Logic. Today, for example, we announced another design this time for an entirely new category of digital entertainment product. This product is at the first of its kinds, a plug in module that can turn Nintendo game boy devices into highly affordable MP3 players, an easy to use very low power compressed audio player that demonstrates once again the versatility and the value of our technology. The second quarter we also announced design in Taiwan for two new CD based players. The customer is also in production in these cases for Christmas 2002 with availability now in Taiwan, China and Europe. Now shifting the conversation to our video business, the video market represents an excellent growth opportunities over the next several years. I'm pleased to report that we've now shipped over 2 million DVD processors validating our successful entry into this market just over one year ago. We entered this market at that point and we're pleased to have already established ourselves as a credible supplier in this fast growing space. Our strategy has been focused on the creation and penetration of several value added segments within the broad DVD market, capitalizing on our superior breadth of technology and leadership in audio application. Toward that end, we recently unveiled a programmable DVD platform strategy targeting the world's leading manufacturers of consumer electronics. Cirrus platform strategy is focused on providing versatile silicon and software solutions for such markets as DVD players, DVD receivers or home theater teams portable DVD devices, hard drive based personal video recorders and ultimately full DVD recorder devices. Our strategy is to help manufactures get to market more quickly with cost-effective proven DVD enabled solutions which are software upgrade apple. No other DVD chip supplier has yet demonstrating this breadth of credibility as for example embodied in our recently introduced CS 98 200 video processor family. This next generation DVD processor for mid-range and high end solutions has already established itself with targeted brand name customers as a basis for further market share gains in this competitive space. This best of brief product supports all standard video player features and has the further capable to power full DVD audio capability and to provide high performance graphics for advanced on screen display and graphic function like the emerging standards for enhanced DVD, Sometimes also known as interactive DVD. The CS 98200 has been very well received so far. The key customers have begun to take samples. At the recent Hong Kong electronics fair earlier this month an important event that marks the beginning of the 2003 Christmas design end cycle we introduced a reference design with working samples of our first single chip DVD player with integrated front end and back end based on this single scalable architecture. This solution will allow us to drive continuing cost improvement as dictated by the high volume consumer market. We also introduced in Hong Kong new manufacturing kits for DVD receiver or home theater system, integrating our video and our advanced multi channeling audio technology on the same hardware platform and personal video recorders which in great hard disk storage and DVD player capability in a single consumer friendly box. And also we demonstrated in Hong Kong DVD plus RW recorders, recording straight to optical disk media. At the same time events we introduced the industry's first prototype of the integrated enhanced DVD solution based against on our new CS 98200 that was well received at the digital Hollywood conference earlier in September. While we believe at the DVD player market in total remains the largest revenue growth opportunity for Cirrus over the course of the next 18 to 24 months, optimizing both growth and profit opportunities in this space requires close attention to end market segmentation. As noted above, we are highly focused on driving leadership share in integrated DVD refer or home theater solutions. And also in the stand alone DVD player market with a comprehensive cost-effective single chip platform solution which utilized our unique optical servo and video decoder technology along with a complete sweep of enabling advanced consumer features, running on the same scalable entertainment processor hardware platform. Another exciting emerging growth area is the personal video recorder market, which integrates hard drive storage capabilities with full DVD player hardware. Many consumer entertainment analysts see this digital recording as the next big DVD growth segment. Many of our customers also tell us that they expect the combination of PVR and DVD player functions to be a hot product category during 2003. And we believe we have the industry's only complete solution priced to achieve widespread adoption. Our compression technology offers our customers significantly higher picture quality at a lower billable materials cost. By compressing and storing more hours of video on smaller capacity hard drives. Alternatively our customers can also offer their ends customers even more hours of storage using the same capacity hard drive as competitors who don't use Cirrus technology. We are experiencing strong customer interest in our personal video recording reference design which is available now for the current design in season in anticipation of 2003. Our dollar content opportunity in this application class is roughly $25 per box. The SamSung combination personal video recorder DVD players twice which uses our Mpeg audio video encoder chip is now ramping in volume production and will be available in Europe this Christmas, 2002. In addition, just two weeks ago we opened one of the China's most prominent consumer electronics companies. this design center will combine Cirrus technology and SBAs production capabilities so that we can bring together new product for the Chinese market. In general we believe our new product offering and continued strong customer relationship gives us a significant competitive advantage in the high growth digital entertainment market over the coming year. Our ever leaner organizational structure and continuing expense control have resulted in our ability to more quickly respond and market to customer requirements and have yielded greater operational efficiencies at a significantly lower revenue break-even point. Furthermore, we feel that our ongoing profit focus can uncover additional synergies in the months ahead enabling continuing bottom line improvement even in a very difficult market environment. Let me summarize here what Steve said earlier about our pro forma guidance for our fiscal third quarter which is this period ending December 28, 2002. We expect our revenue to be comparable this quarter to last quarter. We expect also that our pro forma loss per share to be reduced to four to 8 cents. We expect our pro forma gross margins once again to be 47 to 49% and we expect to see the improvement in our operating expenses on a pro forma basis to be between 40 to $42 million. And now, Operator, I would like to go ahead and open up the call to questions and answers.

Thank you, sir. At this time we are ready to begin the question and answer session. If you would like to ask a question please press one star one. You will be announced prior to asking your questions. If you would like to withdraw your question press star two. Once again to ask a question, please press star one. Our first question today comes from Eric Gomberg from Thomas Weisel Partners. Sir, you may ask your question.

Thanks, good afternoon. I was wondering if you could talk a little bit about any geographical differences you are seeing right now in terms of demand outlook.

Well, we haven't seen a big change, or a big difference in change in demand in one region versus another. We anticipated since two quarters ago that the holiday selling season in North America would be relatively soft, and that effects actually components in regions even when we ship into Asia oftentimes and in fact most often the end applications are for sale here in North America.

Okay. On the video side it sounds like you're sampling a lot of exciting products. I'm just wondering for modeling purposes whether you think that those would begin selling kind of sequentially throughout calendar '03 or if that's kind of more of a back half calendar '03 story?

We think that product design-ins go to production all through the year so new design-ins will begin to come in even off season so we think that we will again to see some of those new design start generating revenue early in 2003 and some kicking in later somewhere more toward the holiday season here in North America.

Is there some opportunity for sequential growth on the video side?

I would definitely say so, yes.

What's your thought on where channel inventory stands right now in the DVD market?

It's difficult for us to get quantifiable real time data on channel inventories. It's our belief that inventory is not that high except at the very lowest price points for DVD players, which is not the area where most of our penetration has occurred. And our view is that audio inventory in fact is quite low but it's also our view that the retailers would like to keep it that way going into the Christmas season as it's difficult to predict end consumer spending patterns through this trying time.

Great. Thanks very much.

Thanks.

Our next question comes from Mark Grossman from S. G. Cowen.

Great, thanks. Dave, it sounds like you are looking for a flattish December quarter. In terms of either bookings that you have going into the quarter or amount of turns business you need, how does it compare with the previous quarter?

Yeah, coming in fact I can give you the more real time update. At this stage of the quarter a couple weeks in we stand slightly better than we were last quarter in terms of achieving our outlook. That's about probably the most telling input I can give you on that.

Okay. And it sounded like the game player was below 10%. Do you think that will pop up above 10% at some point in the next can couple of quarters or do you think that's permanent?

Well, the reason we broke it out was so that you can get some visibility and we are only really giving guidance in total and even then we are only giving guidance in the coming quarter. We are not forecasting that the game console business should be coming a larger percent of our total business from a general perspective.

Just a clarification on the video, besides Mpeg, encoders and decoders is there anything else in the video.

Only the conactivity piece as it would be integrated into video players but that's very small.

And the last thing, the sounds like you had some CAPEX in December? What do you think the cash level will be at the end of December quarter?

Well, we think cash will go down but it will go down not nearly as much as it went down this past quarter. We don't guide cash but it's fair to say something in the 115 to 120 range is a fair estimate.

Okay. Actually the, any update on the Western Digital Fujitsu controversy?

I will let Steve address that as he best sees fit. I think endings more about that.

Sure. Right now the WD case, we expect to go to trial in the first quarter of calendar 2003, and the Fujitsu case has a trial date the first quarter of 2004. We remain hopeful and confident we are going to succeed in both cases.

Okay. Great, thanks, guys.

Thank you, Mark.

Our next question comes from John Joseph from Solomon Smith Barney.

Good afternoon, gentlemen, this is question for John. Could you give us a quantitative picture of the pricing environment in the audio and the DVD space?

Yes, pricing on our analog components tends to be stable, again that represents over half our business. Pricing on our audio V. S. P. business, surround sound systems, tends also to be quite stable. We go after new designs at a certain price point and that stays pretty much as is through the one to two-year period that it' designed in. Pricing in the DVD arena is probably a little bit more competitive, although we also by staying on higher priced end equipment haven't seen the same sort of competition that our, that many other people have seemed to have experienced in the low ends DVD players. So for instances we are popular in portable players, we are popular in home theater systems and we are popular in European and higher end progressive stand players here now in North America. Those equipment typically sell between $100 and $500 per box and we tend to be the only technology that can serve the end equipment needs. so we tend to be a lot more stable on that front than what some others have reported.

So most of the weaknesses is basically coming from slower units out?

In terms of market growth, yeah, I think that our concerns continue to be consumer spending in total.

And one quick question on the game consoles. Can you provide us with how, what the proportion was at its peak? Either in volume terms or in dollar terms.

Yes, we can. If you go back we've gone back for really all of calendar 2002, if you look at the fourth quarter of FYO 2 which is the first quarter of calendar 2003, the March quarter, game console revenue was 25.8 million. In the June quarter game console revenue was 9.3 million. And then, of course, in the September quarter it was 7 million.

Okay. All right. Thanks very much.

Sure.

Our next question comes from Orin Hershman from Orin Hershman and Company.

How are you?

Good, Orin.

On the game console side there is on most of the parts that goes into the game consoles there's dual suppliers. Do you have any feel to what piece of the business you are getting, if it's dropping or really a matter that the game console business in general there is dropping, and also any undue price pressure because of the fact that the other competitors is a low cost producers or is that a misnomer, really?

I don't want to get too detailed on customer specifics. And in the game console business it's difficult to give much detail without customer proprietary so probably I better not give any more information on that.

Can you say if you think the business has bottomed out here or can it go lower or any thoughts on it?

Obviously it could go lower, it could go a little higher. My anticipation is its not going to shift a heck of a lot from where it is this past quarter.

On the DVD side, someone had mentioned previously a question regarding the pricing and if you've been able to shield yourself because of the high end progressive scan. Can you just repeat that again do you really think you've been able to shield yourself that? Clearly the incumbents are looking to move upstream. Can you stay ahead of them?

We believe very strongly that we can stay ahead of the competitors on that front. We also believe that like the VCR market over the past two decades or so that a substantial percentage of the total unit even as this application has become very high volume will sell at a substantial premium to the lowest priced equipment out on the shelves out there. We believe that we can drive towards 15, 20 or 25% market share while continuing to focus almost exclusively on higher priced equipment, and we think that our software programmable platform which we just introduced is going to allow us to do that much more cost-effectively, much more quickly than any of our competitors. And in addition to that, we think we've already got the added advantages of having those technology in-house, particularly in the odd space after that MPpeg core decode and things like that. So we feel very confident that we have an advantage that we can sustain on the high end.

That's programmable platform includes PVR functionality as well.

We will be able to incorporate some of the early PVR functionality. Some of our early introductions has the encoder as a separate chip.

Steve, a couple of questions. Can you just repeat the depreciation? And can you also indicate in the WD case what some of those possible outcomes are and whether you've reserved anything or insurance coverage, etc.?

Sure, on the depreciation and amortization it was $10 million in the December quarter.

And CAPEX, if you can?

The CAPEX number.

Bear with us.

Sure. Thank you.

Was approximately 8 million. And with regard to WD, there really isn't any insurance claim, the lawsuit is about our claiming that WD accepted some parts and ordered some parts from us that they didn't pay for. Their claim against us is similarly on a breach of contract and their claim equaled effectively our claim, which seems like quite a coincidence to us, but there really isn't any insurance. In terms of all the inventory, we took those reserve some time ago. So that the outcome which we continue to believe is going to be a decision in our favor in an amount equal to about $53 million plus interest and attorney fees and the like, really is more cash impact than anything else.

Positive cash impact.

Positive cash impact.

No down side risks.

One additional follow up, Steve, on the facilities consolidation you indicated there was one more cash payment?

In the September quarter, or December quarter it's going to be a five to $6 million payment comparable to the payment that was in the December quarter.

Okay. Thanks so much.

Sure.

Once again to ask a question please press star one. Our next question comes from Alan Adler and Alan Adler Enterprises.

Hi, David.

Hi, Alan. Can you talk about what products got you excited where you think you can do $20 million in a quarter or $50 million in a year over the next year? In other words, where is the upside, where is the excitement? And, secondly, when do you think best guess you can get to a cash break even?

Two easy questions.

Sure, why not.

A exciting new products let me just turn touch on those once again, the portable or personal odd introductions that allow our customers to get down to the $49 retail price point for MP3 players, is attacking a market that today already sells tens of millions of units and I think that that offers us tremendous upside potential. In addition, I think that our move into more mainstream application with our new programmable platform for DVD players gives us a much wider number of customers that we can service, and in addition we think that we can now service more aggressively the Japanese customer base now that we've successfully penetrated in the early stages through the Chinese market. Also, the personal video recorder market many people think that could be 3 million units or 5 million units or maybe more this coming year. Our content for application is quite high. The advantages of our solution are quite strong. That offers substantial growth opportunity. A little further out the DVD recorder market itself is even bigger than that and we think that we have a substantial lead in terms of bringing our cost-effective products priced for widespread user adoption. so we think that we've got a wide variety of opportunities in the consumer entertainment space and then we also have our analog business which as the economy gets a little bit better we think that that has some natural improvement associated with it and some very exciting new product introductions, for instance, the operational amplifier family that we just introduced, opens up a tremendous opportunity for growth for us over a several quarter period. I think that we have a lot of front that we feel quite enthusiastic about regarding our growth prospects.

Sir, at this time we have no further questions.

Okay. Well, I think that about wraps up the questions. Before we sign off let me say once again thank you for joining us here today. I want to mention that we are quite enthusiastic about our focus on consumer entertainment electronic. We believe that the forecast that many have put out about this being the fastest growing sector in the semi-conductor market have a reasonable likelihood of growing tree and drawing upon our analog strength and our audio product leadership and our expanding new video technology, product and technology, we expect to be winners in this market as it continues to develop. I'm pleased that the Cirrus team continues to take steps to also significantly reduce cost structure and our revenue break-even point. We look forward to talking with you when we report our December quarter financial results scheduled on January 22. And in the meantime we hope to see many of you at the various conferences, which we will continue to attend over the next several months. These includes the A. E. A. Classics Conference in San Diego on November 4 r and 5, the Lehman Brothers semi-conductor consumer systems conference in San Francisco on November 18 and also we would urge you to come attend the consumer electronics show in Las Vegas between January 9 and January 12,2003. If you would like any information about arranging one-on-one meetings at any of these events please contact Stapleton Communications at 650- 470-0200. And again thank you for your continuing interest in Cirrus. And good bye.