Ladies and gentlemen, thank you for standing by. Welcome to Cirrus Logic Fourth Quarter and Full Fiscal 2014 Financial Results Q&A Session. At this time, all participants are in a listen-only mode. After a brief statement, we will open up the call for questions from analysts. Instructions for queuing up will be provided at that time.

As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the conference call over to Mr. Thurman Case, Chief Financial Officer. Mr. Case, you may begin..

Thank you and good afternoon. Joining me on today’s call is Jason Rhode, Cirrus Logic’s President and Chief Executive Officer; and Chelsea Heffernan, from our Investor Relations organization. Today, we announced our financial results for the fourth quarter and full fiscal year 2014 at approximately 4 p.m. Eastern.

The shareholder letter discussing our financial results, the earnings press release, including a reconciliation of non-GAAP financial information to the most directly comparable GAAP information, along with the webcast of this Q&A session, are all available at the customers -- the company’s Investor Relations website, at investor.cirrus.com.

This call will feature questions from the analysts covering our company, as well as questions submitted to us via e-mail at investor.relations@cirrus.com.

Please note that during this session, we may make projections and other forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from projections.

By providing this information, the company undertakes no obligation to update or revise any projections or forward-looking statements, whether as a result of new developments or otherwise.

Please refer to the press release issued today, which is available on the Cirrus Logic website, the latest Form 10-K and 10-Q, as well as other corporate filings made with the Securities and Exchange Commission for additional discussion of risk factors that could cause actual results to differ materially from current expectations.

Now I’d like to turn the call over to Jason Rhode, our President and Chief Executive Officer.

Jason?.

Thank you, Thurman. Before we begin taking questions, I’d like to make a few comments. For a detailed account of our financial results please read the shareholder letter posted on our Investor Relations website.

We believe Cirrus Logic is uniquely positioned to be a leader in the portable audio market given our expertise and analog and mixed-signal processing, extensive intellectual property portfolio and ultra-low power components.

Further, the company’s ability to deliver innovative products and effectively manage its supply chain has helped build and maintain excellent relationships with some of the best companies in the world.

With cutting edge hardware and our embedded SoundClear software, we are leveraging our engineering expertise to develop custom and general market audio subsystems that intelligently solve system design issues, resulting in a reliable and compelling user experience This past year the company expended its footprint in portable audio with the addition of several leading international smartphone OEMs.

With an extensive pipeline of advanced node products focused on audio and voice applications, and strong customer relationship across the portable audio market. We are poised to capitalize on these exciting opportunities over the next 12 to 18 months.

I would also like to note that while we understand there is intense interest related to largest customer in accordance with our policy we do not discussed specifics about our business relationship. Operator, we are now ready to take questions..

Thank you. (Operator Instructions) Our first question comes from Vernon Essi of Needham & Company. Your line is now opened..

Thank you very much and congrats on the strong results here.

I wanted to just switch gears a little bit off of portable audio and Jason, obviously, a lot of development work taking place there? In the past, you’ve discussed other opportunities for voices and interface, and you always brought up adjustment lifestyle and whatnot? And there have been a couple of high profile products that have been launched in the last couple of months, particularly one specifically out of Amazon? And wondering, seeing some other completive technologies in those products? I am wondering from your perspective are these designs that you are actively pursuing or how should we think about your success rate in that market going forward and if there's any milestone we can look to in the next couple of years in that market?.

Yeah. We'll certainly try to talk about anything that we’ve got going on this real exciting in that space, of course, we acquired the Acoustic Technologies folks last fall, which has just been a great acquisition for us. They fit right in with what we are doing. They’ve helped us differentiate their products via software.

And they really expanded our relationship with our customers to kind of a higher level feature relationship, which is quite cool.

So they came along with business that was already in the works with number of different products, a lot of the things that they were shipping in today are kind of Bluetooth speakers, et cetera, the things that they’ve got in the work today’s, they were actively promoting heavily our things that are more like noise suppression for phones, you saw some products we launched not that long ago.

So that’s fairly new. And then some of the technology that we are really shopping around and in development with today is sort of the noise suppression that’s specifically deigned for speech recognition.

So in contrast with noise suppression where the people on both end of the phones are in fact, people, this would be more geared towards the one, somebody speaking to the phone and there is speech recognition on the other end.

The things that you want to do to a noise suppression algorithm in that environment are pretty different than the intelligibility and sort of a subjective view of intelligibility that humans have. It’s a different beast. So that’s kind of the stuff that we’ve got in the works.

I don’t have any comment on specific design wins and whatnot that are in the market. But the product line has continued to exceed our expectations, plus the acquisition and the integration efforts with the rest of the company have, I would say have done the same thing as well.

It’s also a real nice benefit to us as a company to have an outfit that is inside the company that is effectively a customer within the company for both our chips and our tools that I would say has really sharpened our skills.

And they have been able to hold us accountable as an overall company to provide better tools, provide better suites of software in libraries and things like that. So I would say that that one has been a big win all the way around..

Again just a kind of, maybe, I’m -- I appreciate the answer by the way. I guess, looking at the market that how you see that channel develop in terms of the living room, let’s just call it that.

Are you under the impression that perhaps the smartphone still is your ultimate interface there or do you -- it's a sort of a thought process how that might evolve, taking the other products like Sonos, which uses a smartphone now basically to operate their own network at home.

I’m just curious if behind the scene that the thought process, where this might be heading or will there literally be to use your sort of analogy on the microphone and a toaster so to speak.

Will it be sort of a gateway approach? So do you have any thoughts on this? I might just jump back?.

Yeah. I think it’s going to take just about every form imaginable. Certainly there is a lot of things out there to which the right interface is going to be some how via the smartphone. But at the same time, there is going to be things out there that are the interface to the smartphone. So you don’t have to pull it out of your pocket or whatnot.

And there is a whole category of things that may have some connection with smartphone but it’s awfully nice. I don’t know if you’ve installed any of these light bulbs that are connected either via Zigbee or Z-wave or whatnot. And then you can turn your light bulb on and off with your smartphone. That’s great.

It sounds cool and then you play with it for little while and you realize it’s a complete gimmick. And there is no way that you are going to convince everyone in your household to go find their phone to turn the light off to understanding right next to what used to be the light switch.

So I think there is a real fusion of applications where these technologies come together and it provides a great opportunity for a lot of the kind of voice signal processing that we think we’re very good at whether it’s in a phone, in a device or in something bigger like a car.

The automotive, audio and voice experience even on very expensive automobiles today is really not all that satisfactory. So we think that’s something that we can play a roll on ironing out our return..

And you stepped into my second question. By the way, I can't even get my family members to turn off the light switch when it's right in front of them. So I switch of the light. So I'll never succeed.

But automotive, and that was my next question, what does that channel look like from your perspective and how that's going to develop? I mean obviously, some big announcements out of your major customer in that area with some an ecosystem around that.

Is that a sell that goes in both directions there, or are you still approaching the traditional vendors to get your technology into the automotive platforms.

Yeah. I mean, I don’t have any specific comment on that announcement.

I mean, generally speaking our customers are folks like Bose and Harman and people – Continental for example, people that make these audio subsystems that go in the car, that type of technology that we provide is really not an OS level -- OS level design and I guess would say in those cases..

Okay. All right. Thank you, Jason..

These are traditional channels that we usually use with our automotive business switch for many years. We felt like there is good opportunity for us. So we’re really excited to see electronics -- enhanced audio electronics push down further in the pretty much every automaker's product line..

Okay. All right. Thanks..

Thanks Ron..

Thank you. Our next question comes from Andrew Huang of Sterne Agee. Your line is now open..

Thanks for taking the question. This is John Shen in for Andrew..

Hi John..

Hey, can you talk about the opportunities within the wearables market for your product portfolio?.

Sure. I mean, I think that market is still in its infancy. I think there’s a lot of things you don’t have much of an interface at all like Vernon suggested. Most everybody seems like is wearing a fitness band and hey, this probably are perfectly good.

It’s probably perfectly sufficient to have it connect up with an app on your phone and control it that way. But over time, I think that a lot of these applications are going to have a need or an opportunity for voice-based interaction either in the device itself or whether the device is a gateway.

There is something else like a phone or a WiFi router or whatnot. So it’s a new market. It’s in his infancy but certainly people are talking about how all the various different ways that one might interface to it as a person. And I think that’s a good opportunity for us in the long run..

Got it..

But to be specific, for us, the meaningful impact is still, we expect it to be quite a ways out there. That market hasn’t developed yet..

Okay. And for LED lighting, switching gears a bit. It seems like on the shareholder letter you are deemphasizing it a bit.

I was wondering if you can provide more color on market traction and if there have been any changes in strategic direction?.

In a sense, I mean, the real takeaway is that we felt the need that we needed to overemphasize or increase our emphasis on the audio products.

We go through a process kind of quarterly and annually where we really like to have divisions that have got their individual missions and we try not to mess with them too much because I think it is the most productive way to manage a group of people to go achieve a goal.

But at the same time, we do have to have an overlay on top of that ensures that we are staffing our best opportunities over company and not the best opportunities within a division.

And it was pretty clear to most of us inside the company as we went through the most recent around of strategic reviews that our biggest opportunities in our audio division or even some of our smaller opportunities in our audio product lines were significantly bigger than some of the opportunities we were pursuing in lighting.

So we felt like we needed to take the step to move some folks over to fully staff those efforts.

We have felt like in the company one of the most important things we’ve done over the past five or seven years is maintain a real rigorous process of ensuring that whatever we decide to do, we are going to focus on with enough resources that we can do it extremely well, do it quickly and drive success from that.

So this was really more of a recognition of the fact that audio, we’ve just really got our hands full with a number of opportunities really across the board. So it is a great thing from that perspective. On LED, we’ve come out with some good products. The product line is experiencing some good growth.

So from a business perspective this year, we certainly see some positive traction on the financial side.

So we will continue to promote the products there and the team is always actively investing -- investigating what do we do next and certainly one of the backdrops in that market though was, it’s a challenging entity mile-wide market, even though to the extent the market is growing really quickly, it is a lot of individual design wins that you have to aggregate up to make a meaningful jump revenue, which again is one of the reasons that some of our opportunities in audio appear to be more meaningful.

So all that is kind of what you read in the letter and like I say, we are still interested in the LED lighting market and we still have people that are busy working on it. But we have to allocate some of the folks who were doing that previously over the bigger opportunities in audio..

Got it. Thank you very much..

Sure..

(Operator Instructions) Our next question comes from Blayne Curtis with Barclays. Your line is now open..

Thanks very much. This is Chris Hemmelgarn on for Blayne. Congrats on good quarter and actually strong results and guide. I guess just kind of long-term strategic question. You’ve talked about a few of those in your comments already. But -- I mean, you’ve been pursuing LED and other interaction outside of your largest customer for a while.

You’ve had some success but nothing that’s really move the dial overall for the company.

I guess, could you just talk a bit about the challenges you face thus far and what changes you're making going forward to try to drive greater success in those other areas?.

Well, our goal as a company is to grow and be really profitable and so we’ve done a pretty good job of both those of things by staffing our best opportunities.

And as it happened, there was a good long period were the bulk of those were pretty concentrated in one area and internally I have remarked a number of times that it wasn't so much that we were successful over those years as it was that we survived them, because there is not a lot of companies that have experienced the kind of growth that we were able to achieve during that period.

And certainly you’ve seen examples of companies that grew so faster and then collapsed under their way. So we were pretty rigorous and careful to make sure that that didn’t happened to us and that we maintained our focus on the customers that got us where we are today. We take that obligation very seriously.

So the great news though is over the past year or so, where that growth has led up a little bit is allowed our resources and our hiring to catch up with where our revenue is which wasn’t the case previously and that’s allowed us to staff a lot more broad market, general market kind of products and go explore the new initiatives with new customers.

And so at this point, we’ve got one new products going for the broad market then ever. And I think if you look back over the past couple of years if you are paying close attention to the company, you will recognize there is a fairly sparse population in new products that have been out there, that are on the general markets.

So, I think you’ll see a lot more of that especially in audio over the next couple of years as these additional resources we brought on really get traction and it’s just worth noting that this industry is much as the financial community would like to believe, it’s quarter-on-quarter kind of a thing, if not. It’s a very long-term endeavor.

It takes years to build anything meaningful and we are just now kind of getting into the sweet spot where some of those development efforts are likely to really start paying off.

We are really excited about the opportunities that the advanced geometry, the 55-nanometer processes bring us, taking our product line and moving say a stereo codec from a 180-nanometer to 55-nanometer doesn’t do anything other than make it expensive.

So the reason for us to move into the advanced node like 55 is that we’ve found things that we can add to our products to make them massively more valuable, add more value for our customers to differentiate them further.

It’s a really exciting time for us because what we know how to do well, we’ve now got processes that lined up really well to enable us to do that. So on the one hand, they hear you, but on the other hand, I feel pretty comfortable with the track record of what we’ve done overall.

And the fact that we’ve been massively successful in one area and less somewhere else is really a reflection of the fact that we are always resource constraint and we have to staff our best opportunity.

So at this point, we’ve got enough resources that we’re staffing a much wider array of opportunities and I think that will bear fruit for us in the future..

That’s helpful. Thanks. And just a quick follow-up, you’ve talked about in the past about, at least on the amp side, how the value really bring to bear is often most visible in smaller devices, whereas larger devices maybe don’t require quite the same level of quality or the amplification that you guys can deliver.

There has been a lot of rumors that your largest customers moving to a large form factor handset this year.

Does that pose a risk at all to that socket in your mind, or I am just kind of interested in your general thoughts?.

Yes, I am not going to talk about that socket at all. So, generally speaking, generally amps are not a huge business for us, but they are important. There is sockets where we can add more value than others when we are able to throw meaningful amounts of signal processing at it.

What I have said in the past is that in general smaller form factors give us more opportunity in specific, because the air cavity that one of our customers is able to provide for the speaker often times just compressed and that gives us more opportunity to throw some signal processing horsepower at it.

But there is a ton of different factors that hints into this sort of thing and being without commenting on any specific opportunities overall, we feel very good about our opportunities to do pretty well this year. We are certainly not forecasting any doom and gloom despite any rumor-mongering that might be out there..

Fair enough. Thanks very much guys..

You bet..

Thank you. Our next question comes from Tom Sepenzis of Northland Capital Markets. Your line is now open..

Hi, congratulations on the good quarter and the guidance..

Thanks, Tom..

I was wondering if there was going to be any major changes with the move to 55-nanometer that we should be expecting in OpEx later this year?.

Well, we likely said on the last call, certainly tape-outs in 55 were significantly more expensive than our 180 and that is -- I am going to add some bumpiness to the expense profile. We’ve got a number of tape-outs this quarter. And it’s not -- overall that’s been a meaningful reason that overall OpEx has increased on a run rate basis.

The tools to develop the stuff with are much more expensive. You need much more sophisticated back end team which we have.

And then the individual quarter by quarter stuff will move around a bit and we will let you know about that when we give guidance for each quarter, but we’ve got a number of them baked into this quarter and we would expect to have a number of baked in next quarter.

I will on OpEx add a little bit of color just in that -- it’s kind of like everything else in life, it would be neat if everything came out paced out nice and steadily over time, but nothing in my life looks that way anyway.

It feels like a whole bunch of developments all came together all at the same time, so we do have a lot of product development expenses in this current quarter that we would expect to see ease up a little bit towards the end of the year.

So I certainly wouldn’t -- as you’re making your model, I wouldn’t look at last quarter’s OpEx and this quarter’s OpEx and I wouldn’t draw straight line up into the right on that and conclude that’s what the rest of the year is going to look like.

We think we’ve got an opportunity to keep that pretty well enhanced through the course of the year as our business stands today. And obviously with G&A we are keeping on pretty tight, tight hand on our viens..

Great, thank you. And then just in terms of the LED business, you had -- it almost sounded like you’re walking away, but then at the end you’ve kind of changed and so you have had -- you made the investments, now you are just kind of waiting for the market to develop.

There has been a number of comments in the last few weeks with some of the smaller Asian manufacturers thinking they are going to have a very good growth actually in that business startiing June.

And I am wondering if you’ve seen anything over the last three to six months that maybe makes you feel that that market is actually starting to come into its own..

I mean, I think as the prices have down, I think that that market has definitely started to grow, but it is absolutely the case that it is very fragmented across a lot of different models.

So as a cheap supplier, you got a -- no matter what the market is doing, you got to lit a lot of models to have it aggregate up into a total reasonable amount of revenue. These are fairly inexpensive devices and despite how much of a role they play in defining the overall system and the performance and the experience the customers have.

It doesn’t just naturally line up with that the people that design our stuff necessarily want to pay us a lot for that. So we have to aggregate up a lot of volume across a lot of models and that takes time. I certainly think, there could be individual folks that manufacture actual light bulbs.

We’ve seen a number of examples over the past couple of years where somebody gets a hot model that’s at a relatively low attractive price and it shows up on the right shelf space at a retailer and it goes to the roof. But that doesn’t necessarily translate into success as one of the supplier..

So from real revenue perspective….

Again the rest part of your question, I, yeah, we are definitely not saying we are walking away from that market..

But it looks like its more of a 2015, 2016 before its 10% or more of the overall revenue mix?.

Yeah. I mean, I’m not going to prognosticate about when we cross that line. But we do see some good growth on the revenue side and really the only change we’re making and the only reason we’re making it is, is simply that the opportunities that we’re looking at in audio are bigger and sooner, and more certain, so..

Great. Thanks very much..

You bet. Thank you..

Thank you. Our next question comes from Vernon Essi of Needham & Company. Your line is now opened..

Thank you. Just wanted to revisit a point in the shareholder letter, you talked about shipping into another Tier 1 smartphone customer. I just wanted to go back and ask the obvious question.

Is this now the second or third win you’ve had outside of your major customer just for the housekeeping stuff?.

Yeah. I would say at least the third, yeah, and like we have said on the last couple of calls, they neat things that’s really transpired over the last few years. Obviously, you’ve got the number one and number two guy in the smartphone market.

I think everybody knows where the lay of the land is there, obviously both driving a ton of volume and both represent really attractive opportunities.

The rest of the smartphone market is quite a long list to have 4% and 5% market share and whereas a few years ago, it seems like those customers couldn’t really do anything other than wrap plastic around a reference design.

More and more of those customers are able to do meaningful design on their own and in particular, they are all looking for ways to differentiate from one another’s products and a lot of them have started to do that via audio features. Some of which wouldn’t make any sense in the U.S. at all.

Some of which are kind of perfectly normal from our perspective.

But either way, we have got -- it's an area where our broad product line becomes a benefit again and we’ve got a good team to support customers like that as they design in catalog components and that’s an area where, as I mentioned on the previous question or two ago, that’s an area, where we are seeing increase opportunity for us to broaden our catalog products and have a meaningful opportunity for it.

And obviously winning one of those the 4% or 5% of market share guys doesn’t diversify our revenue base over night but still 4% or 5% of the cell phone market is a big number. So it’s something that especially if we can provide a product that is got a higher level of integration, it could be a pretty meaningful opportunity for us..

Sure. And dovetailing that into sort of another point in the letter about -- I don’t know if it’s necessarily guidance but we see indication that revenue could be flat year-over-year in fiscal ‘15.

I mean, it’s more to put Thurman on the spot, but how do you come about that number and without -- you can be as vague as possible; I realize you're kind of tied into what you can say here, but how should we think about the way you built up to that flat year-over-year estimate?.

I mean, we’ve got an elaborate process, doing forecast internally, taken everything. Our customers are telling us switch, moves around quite a lot. Knowing what we know about design winds and everything else.

And then overall what I get from the industry broadly is that our broad product line should probably see the same thing as everybody else, which is that 2014 looks like a pretty solid year all the way around. And that’s we’re seeing that from all of our suppliers and various folks that we check with.

But I mean, we’ve got a pretty rigorous process of rolling out forecast and we feel quite good about the opportunity to at least stay flat through this year. So, it’s a complicated process.

Its certainly can change and we definitely don’t like to be in a position of trying to guide things that are as far as Q4 but just where our internal model is right now, says roughly flattish..

Okay. That’s fair enough. Thank you, Jason..

Sure. Thanks Vernon..

Thank you (Operator Instructions) At this time, I’m not showing any further question. Now I’d like to turn the call back to management for any further remarks..

Thank you, Operator. The question submitted via email this afternoon were answered during the Q&A. I will now turn the call back to Jason..

In summary, Cirrus Logic is exiting FY ‘14 with the robust roadmap carrying our best-in-class hardware with embedded Sound Clear software. This past year, we strengthened the existing customer relationships and established new relationships with key players in the market we serve, all of which are vital for future growth.

As we move into FY ‘15, we’re excited to introduce new custom and catalog products that are expected to broaden our footprint in the audio market and few long-term growth. But also like to note that we will be attending the Jefferies conference on May 6 in Miami. We hope to see some of you either.

If you have any question that were not addressed, you can submit them to us via the Ask the CEO section of our investor website. I’d like to thank everyone for participating today. Good bye..

Thank you, Mr. Rhode. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone, have a wonderful day..