Audience Announces Fourth Quarter and Full Year 2014 Financial Results

Non-GAAP financial information is adjusted for a tax rate equal to our three year annual estimated tax rate on non-GAAP income. Our three year estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenues and expenses and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.

Audience has provided these measures in addition to GAAP financial results because management believes these non-GAAP measures help provide a consistent basis for comparison between quarters and annual growth rates that are not influenced by certain non-cash charges and therefore are helpful in understanding Audience's underlying operating results. These non-GAAP measures are some of the primary measures Audience's management uses for planning and forecasting. These measures are not in accordance with, or an alternative to, GAAP and these non-GAAP measures may not be comparable to information provided by other companies. Reconciliations of the GAAP to non-GAAP results are presented at the end of this press release.

Cautionary Note Concerning Forward-Looking Statements
Statements in the press release and certain matters to be discussed on the fourth quarter conference call regarding Audience, Inc., which are not historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as believe, expect, may, will, provide, could and should and the negative of these terms or other similar expressions. These statements, including statements relating to expectations of adoption of Audience's latest generation Advanced Voice and Continuous VoiceQ activation capabilities by ZTE, Meizu and Coolpad and adoption of Audience's motion and sensor technologies, future revenue, net income and operating margin performance, future success for various products and our leadership position in the market, and the demand for our solutions including continued demand by customers upon whom we are substantially dependent, are based on current expectations and assumptions that are subject to risks and uncertainties. Our actual results could differ materially from those we anticipate as a result of various factors, including: completion of our December 31, 2014 audit by our independent auditors, and potential fluctuations in the company's quarterly and annual operating results and financial condition, including but not limited to matters related to tax; our dependence on a single OEM, Samsung Electronics Co. Ltd., for a substantial portion of our revenue; weak demand for high end smartphones integrating our products and the impact on our business; our need to maintain and expand our existing relationships with our OEMs, including Samsung and leading Chinese OEMs, and to establish relationships with new OEMs in order to maintain and increase our revenue; our ability to sustain profitable operations due to our history of losses and accumulated deficit; quarterly fluctuations in our results due to factors such as the timing of OEM product launches and customer purchasing behavior in light of anticipated mobile phone launches; our assessments of whether we have excess or obsolete inventory; increasing competition and new entrants in the market for our products; our need to diversify our sources of revenue; our ability to successfully integrate Sensor Platforms' team and technology; our ability to enter new end user product markets, as well as new geographic markets; pressure on the average selling prices for our products; our lengthy sales cycle and the lack of certainty as to whether any given OEM's products will achieve market acceptance; our OEMs' lengthy and expensive process to qualify our products; our ability to develop new or enhanced products, including codecs, Advanced Voice and Continuous VoiceQ products, in a timely manner that achieve market acceptance; our reliance on third parties to manufacture, assemble and test our products; increased defects that may be present in our products as we scale our manufacturing processes; the impact of future intellectual property litigation and claims for indemnification; changes in tax laws or our ability to utilize our tax structure and net operating losses and other risks inherent in fabless semiconductor businesses. For a discussion of these and other related risks, please refer to "Risk Factors" in our most recent Quarter Report on Form 10-Q for the three months ended September 30, 2014, which is available on the SEC's website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date made. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

                                                                            
                                                                            
                               Audience, Inc.                               
                   Condensed Consolidated Balance Sheets                    
                               (in thousands)                               
                                                                            
                                                                            
                                        December 31,        December 31,    
                                            2014              2013 (1)      
                                          ------------------    ------------------  
                                                                                  (unaudited)                                                
Assets                                                                                                                                            
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents                    $                      46,184    $                    124,691  
    Short-term  investments                                                    8,999                            14,855  
    Restricted  cash                                                                  4,200                                  170  
    Accounts  receivable,  net                                                2,789                              5,670  
    Inventories                                                                        27,999                            13,422  
    Prepaid  expenses  and  other  current                                                                                
      assets                                                                                  3,880                              4,676  
                                                                          ------------------    ------------------  
        Total  current  assets                                                  94,051                          163,484  
                                                                                                                                                        
Property  and  equipment,  net                                            11,634                            13,533  
Intangibles  assets,  net                                                      6,317                                      -  
Other  noncurrent  assets                                                      2,840                              2,402  
                                                                          ------------------    ------------------  
        Total  assets                                          $                    114,842    $                    179,419  
                                                                          ==================    ==================  
                                                                                                                                                        
Liabilities  and  stockholders'  equity                                                                                
Current  liabilities:                                                                                                                
    Accounts  payable                                      $                        1,582    $                        6,304  
    Accrued  and  other  current                                                                                                  
      liabilities                                                                      12,064                            10,673  
    Deferred  credits  and  income                                              725                                  265  
                                                                          ------------------    ------------------  
        Total  current  liabilities                                        14,371                            17,242  
                                                                                                                                                        
Income  taxes  payable  -  noncurrent                                  1,114                                  935  
Other  liabilities  -  noncurrent                                        2,074                              1,861  
                                                                          ------------------    ------------------  
        Total  liabilities                                                        17,559                            20,038  
                                                                          ------------------    ------------------  
                                                                                                                                                        
Stockholders'  equity:                                                                                                              
    Common  stock                                                                              23                                    22  
    Additional  paid-in  capital                                        195,351                          183,840  
    Accumulated  other  comprehensive                                                                                      
      income  (loss)                                                                            -                                    (1)
    Accumulated  deficit                                                      (98,091)                        (24,480)
                                                                          ------------------    ------------------  
        Total  stockholders'  equity                                      97,283                          159,381  
                                                                          ------------------    ------------------  
Total  liabilities  and  stockholders'                                                                                  
  equity                                                            $                    114,842    $                    179,419  
                                                                          ==================    ==================  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
Note  1:  The  condensed  consolidated  balance  sheet  has  been  derived  from            
  audited  consolidated  financial  statements.                                                                  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                              Audience,  Inc.                                                              
                            Condensed  Consolidated  Statements  of  Operations                              
                                      (in  thousands,  except  per  share  data)                                        
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                        Three  months  ended                Twelve  months  ended      
                                                              December  31,                            December  31,              
                                                  ------------------------    ------------------------  
                                                          2014                  2013                  2014              2013  (1)    
                                                  -----------    -----------    -----------    -----------  
                                                  (unaudited)    (unaudited)    (unaudited)                            
Revenue:                                                                                                                                        
  Hardware                                $        15,037    $        31,109    $      104,123    $      150,010  
  Licensing                                          2,171                2,032                9,217              10,121  
                                                  -----------    -----------    -----------    -----------  
                                                                                                                                                        
    Total  revenue                              17,208              33,141            113,340            160,131  
                                                                                                                                                        
Cost  of  revenue                              10,129              15,806              56,572              71,267  
                                                  -----------    -----------    -----------    -----------  
                                                                                                                                                        
  Gross  profit                                    7,079              17,335              56,768              88,864  
                                                                                                                                                        
Operating  expenses:                                                                                                                  
  Research  and  development          11,468              11,958              50,613              43,256  
  Selling,  general  and                                                                                                              
    administrative                              9,581              10,279              46,153              41,346  
  Impairment  of  goodwill                                                                                                          
    and  intangible  assets              31,336                        -              31,336                        -  
                                                  -----------    -----------    -----------    -----------  
Total  operating  expenses            52,385              22,237            128,102              84,602  
                                                  -----------    -----------    -----------    -----------  
                                                                                                                                                        
Income  (loss)  from                                                                                                                    
  operations                                    (45,306)            (4,902)          (71,334)              4,262  
                                                                                                                                                        
Interest  income,  net                              5                      29                      38                    157  
Other  expense,  net                            (201)                  (71)                (347)                (280)
                                                  -----------    -----------    -----------    -----------  
                                                                                                                                                        
Income  (loss)  before                                                                                                                
  income  taxes                                (45,502)            (4,944)          (71,643)              4,139  
Income  tax  provision                                                                                                                
  (benefit)                                                15              (2,023)              1,968                2,069  
                                                  -----------    -----------    -----------    -----------  
                                                                                                                                                        
Net  income  (loss)                        (45,517)  $        (2,921)  $      (73,611)  $          2,070  
                                                  ===========    ===========    ===========    ===========  
                                                                                                                                                        
Net  income  (loss)  per                                                                                                              
  share:                                                                                                                                          
  Basic                                      $          (1.96)  $          (0.13)  $          (3.25)  $            0.10  
                                                  ===========    ===========    ===========    ===========  
  Diluted                                  $          (1.96)  $          (0.13)  $          (3.25)  $            0.09  
                                                  ===========    ===========    ===========    ===========  
                                                                                                                                                        
Weighted  average  shares                                                                                                          
  used  in  computing  net                                                                                                            
income  (loss)  per  share:                                                                                                        
  Basic                                                23,173              22,012              22,683              21,467  
                                                  ===========    ===========    ===========    ===========  
  Diluted                                            23,173              22,012              22,683              23,197  
                                                  ===========    ===========    ===========    ===========  
                                                                                                                                                        
                                                                                                                                                        
Note  1:  The  condensed  consolidated  statement  of  operations  has  been  derived  
  from  audited  consolidated  financial  statements.                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                              Audience,  Inc.                                                              
                              Computation  of  GAAP  net  income  (loss)  per  share                            
                                (in  thousands,  except  for  per  share  amounts)                                
                                                                                                                                                        
                                                                                                                                                        
                                                          Three  months  ended              Twelve  months  ended      
                                                                December  31,                            December  31,            
                                                    ------------------------    ------------------------
                                                            2014                  2013                  2014              2013  (1)  
                                                    -----------    -----------    -----------    -----------
                                                    (unaudited)    (unaudited)    (unaudited)                          
Computation  of  GAAP  net                                                                                                          
  income  (loss)  per  share:                                                                                                      
                                                                                                                                                        
GAAP  net  income  (loss)        $      (45,517)  $        (2,921)  $      (73,611)  $          2,070
                                                    ===========    ===========    ===========    ===========
                                                                                                                                                        
Weighted  average  shares                                                                                                          
  used  in  computing  net                                                                                                            
  income  (loss)  per  share:                                                                                                      
  Basic                                                  23,173              22,012              22,683              21,467
                                                    ===========    ===========    ===========    ===========
  Diluted                                              23,173              22,012              22,683              23,197
                                                    ===========    ===========    ===========    ===========
                                                                                                                                                        
Net  income  (loss)  per                                                                                                              
  share:                                                                                                                                          
  Basic                                        $          (1.96)  $          (0.13)  $          (3.25)  $            0.10
                                                    ===========    ===========    ===========    ===========
  Diluted                                    $          (1.96)  $          (0.13)  $          (3.25)  $            0.09
                                                    ===========    ===========    ===========    ===========
                                                                                                                                                        
                                                                                                                                                        
Note  1:  The  computation  of  GAAP  net  income  (loss)  per  share  has  been  derived
  from  audited  consolidated  financial  statements.                                                        
                                                                                                                                                        
                                                                                                                                                        
 

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