- Revenue of $184.1 million and non-GAAP earnings per share of $0.13 met guidance
- 2014 non-GAAP operating expenses at a 15-year low
- 2014 non-GAAP earnings per share increased 33% year-over-year
- Free cash flow increased by $19 million sequentially
- Announced a $4 billion merger with Spansion that is expected to achieve $135 million in annual cost synergies over three years
Fellow shareholders:
Our revenue and earnings for the quarter are given below, compared with those of the prior quarter and prior year:
(In thousands, except per-share data)
NON-GAAP GAAP
---------------------------- ----------------------------
Q4 2014 Q3 2014 Q4 2013 Q4 2014 Q3 2014 Q4 2013
-------- -------- -------- -------- -------- --------
Revenue $184,097 $187,516 $167,776 $184,097 $187,516 $167,776
Gross margin 52.4% 53.5% 51.0% 50.9% 51.7% 45.6%
Pretax margin 12.6% 15.0% 9.4% 2.7% 7.4% -7.0%
Net income
(loss) $ 22,056 $ 26,538 $ 14,992 $ 3,503 $ 12,840 $(14,209)
Diluted EPS
(loss) $ 0.13 $ 0.16 $ 0.09 $ 0.02 $ 0.08 $ (0.09)
Our revenue and earnings for the fiscal year are given below, compared with those of the prior year:
(In thousands, except per-share data)
NON-GAAP GAAP
------------------ ------------------
FY 2014 FY 2013 FY 2014 FY 2013
-------- -------- -------- --------
Revenue $725,497 $722,693 $725,497 $722,693
Gross margin 52.6% 52.2% 50.1% 46.9%
Pretax margin 12.6% 9.1% 2.1% -7.7%
Net income (loss) $ 87,291 $ 63,221 $ 17,936 $(48,241)
Diluted EPS (loss) $ 0.52 $ 0.39 $ 0.11 $ (0.32)
Our fourth-quarter revenue was $184.1 million and our non-GAAP earnings per share was $0.13. We continued to execute on our operating expense management initiatives, which led to a year-over-year 33% increase to $0.52 in 2014 non-GAAP earnings per share. We thus are prepared to deliver strong operating leverage as we grow in 2015.
Our planned merger with Spansion has cleared review by the government agencies in the U.S. and Germany. We remain confident that the post-merger company will position us as a leading global provider of microcontrollers, flash and SRAM memories, and automotive components required for today's embedded systems.
BUSINESS REVIEW
+ Our non-GAAP consolidated gross margin for the fourth quarter was 52.4%, down 1.1 percentage points from the previous quarter, primarily due to product and customer mix. Excluding our Emerging Technologies Division, our core semiconductor gross margin was 54.6%.
+ Net inventory at the end of the fourth quarter was $88.2 million, down 0.6% from the third quarter.
+ Cypress announced that its Board of Directors approved a quarterly cash dividend of $0.11 per share, payable to holders of record of the company's common stock as of the close of business on December 26, 2014. This dividend was paid on January 15, 2015.
NET SALES SUMMARY
(In thousands, except percentages)
(Unaudited)
THREE MONTHS ENDED
--------------------------------
Dec. 28, Sept. 28, Dec. 29, Sequential Year-over-
Business Unit 2014 2014 2013 Change Year Change
---------- ---------- ---------- ---------- -----------
PSD(1) $ 70,433 $ 68,750 $ 67,746 2% 4%
MPD(1) $ 88,803 $ 92,179 $ 79,890 -4% 11%
DCD(1) $ 17,709 $ 19,091 $ 16,482 -7% 7%
ETD (2) $ 7,152 $ 7,496 $ 3,658 -5% 96%
---------- ---------- ---------- ---------- -----------
Total $ 184,097 $ 187,516 $ 167,776 -2% 10%
---------- ---------- ---------- ---------- -----------
Geographic
China and ROW 60% 60% 64% 0% -6%
Americas 16% 17% 14% -6% 14%
Europe 14% 14% 12% 0% 17%
Japan 10% 9% 10% 11% 0%
---------- ---------- ---------- ---------- -----------
Total 100% 100% 100% 0% 0%
---------- ---------- ---------- ---------- -----------
Channel
Distribution 71% 68% 69% 4% 3%
Direct 29% 32% 31% -9% -6%
---------- ---------- ---------- ---------- -----------
Total 100% 100% 100% 0% 0%
---------- ---------- ---------- ---------- -----------
1. PSD, Programmable Systems Division; DCD, Data Communications Division;
MPD, Memory Products Division.
2. ETD, Emerging Technologies Division includes businesses outside our core
semiconductor businesses outlined in Footnote 1. Includes subsidiaries
AgigA Tech Inc., Deca Technologies Inc., and our foundry business unit.
TWELVE MONTHS ENDED
----------------------
Dec. 28, Dec. 29, Year-over-
Business Unit 2014 2013 Year Change
---------- ---------- -----------
PSD(1) $ 283,206 $ 292,707 -3%
MPD(1) $ 347,903 $ 338,986 3%
DCD(1) $ 70,378 $ 79,410 -11%
ETD (2) $ 24,010 $ 11,590 107%
---------- ---------- -----------
Total $ 725,497 $ 722,693 0.4%
---------- ---------- -----------
Geographic
China and ROW 61% 66% -8%
Americas 16% 14% 14%
Europe 14% 11% 27%
Japan 9% 9% 0%
---------- ---------- -----------
Total 100% 100% 0%
---------- ---------- -----------
Channel
Distribution 69% 73% -5%
Direct 31% 27% 15%
---------- ---------- -----------
Total 100% 100% 0%
---------- ---------- -----------
1. PSD, Programmable Systems Division; DCD, Data Communications Division;
MPD, Memory Products Division.
2. ETD, Emerging Technologies Division includes businesses outside our core
semiconductor businesses outlined in Footnote 1. Includes subsidiaries
AgigA Tech Inc., Deca Technologies Inc., and our foundry business unit.
FOURTH-QUARTER 2014 HIGHLIGHTS
+ Cypress and Spansion announced a definitive agreement to merge in an all-stock, tax-free transaction valued at approximately $4 billion. The merger is expected to achieve more than $135 million in cost synergies on an annualized basis over three years and to be accretive to non-GAAP earnings within the first full year after the transaction closes. The combined company will continue to pay $0.11 per share in quarterly dividends to shareholders.
+ Cypress introduced two highly integrated, single-chip Bluetooth® Low Energy (BLE) solutions that simplify the design of low-power, sensor-based systems for the Internet of Things (IoT) and other applications. The new PSoC® 4 BLE Programmable System-on-Chip delivers unprecedented ease of use and integration to applications for the IoT, home automation, healthcare equipment, sports and fitness monitors, and other wearable devices. The PRoC™ BLE Programmable Radio-on-Chip provides a cost-effective, turnkey solution for wireless human interface devices, remote controls and applications that require wireless connectivity.
+ Cypress announced the qualification of its BLE solutions under the Bluetooth 4.1 specification, which is designed to coexist with faster 4G cellular technologies, such as LTE, and to deliver better connections and data transfer. The qualification further simplifies customer Bluetooth Low Energy designs.
+ Cypress introduced its TrueTouch® Gen5 TMA568 capacitive touchscreen controller for large-screen smartphones, tablets and e-readers with advanced features: gloved-finger tracking, 1-mm passive stylus support and hover functionality that enlarges touchscreen content to improve ease of use.
+ Casio selected Cypress's TrueTouch capacitive touchscreen controller and low-power SRAM products for its wearable EX-FR10 camera. TrueTouch provides best-in-class waterproofing, while MoBL® (More Battery Life™) asynchronous SRAMs enable fast throughput and fluid image buffering.
+ Yota Devices announced production of its next-generation YotaPhone with Cypress's TrueTouch Gen5 touchscreen controllers in the smartphone's two displays. The premium Android phone uses the TMA568 controller for advanced multitouch functionality in its standard display and the TMA545 controller for its "electronic paper" display.
+ iConnectivity, a leading developer of digital audio interfaces for musicians, is using Cypress's CapSense® MBR3 mechanical button replacement solution in its next-generation iConnectAUDIO4+ audio interface system. The easy-to-use MBR3 solution enables the implementation of a dynamic, reliable touch-sensing user interface for this system.
+ Cypress began sampling its EZ-USB® HX3™ hub controller in a 36-mm2 ball grid array (BGA) package. The new package makes the hub controller the industry's smallest, saving board space in Ultrabook™ devices, tablets and other mobile and consumer devices.
+ Cypress and Icron Technologies successfully completed interoperability testing between Cypress's EZ-USB FX3™ USB 3.0 peripheral controller and the EZ-USB CX3™ camera controller and Icron's USB 3.0 Spectra™ 3001-15 active copper extension cable. The Icron cable extends USB 3.0 performance to 15 meters and enables the Cypress controllers to address a broader range of machine vision and industrial applications.
+ Cypress's RadStop™ radiation-hardened 72-Mb QDR-II+ SRAMs and 4-Mbit fast asynchronous SRAMs have met the Qualified Manufacturers List Class V and Class Q standards -- the highest quality and reliability standards for aerospace-grade ICs in satellites and other applications.
+ United Microelectronics Corporation (UMC) licensed Cypress's SONOS (Silicon Oxide Nitride Oxide Silicon) embedded flash memory intellectual property (IP) for its 40-nanometer process technology. UMC had licensed Cypress's 55-nanometer SONOS IP in 2014. This ongoing collaboration strengthens the position of SONOS as the next-generation embedded-flash solution of choice for foundries.
Follow Cypress Online
- Join the Cypress Developer Community.
- Follow @CypressSemi on Twitter.
- Visit us on Facebook and LinkedIn.
- Watch Cypress videos on our Video Library or YouTube.
ABOUT CYPRESS
Cypress delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional system value. Cypress offerings include the flagship PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP programmable system-on-chip families. Cypress is the world leader in capacitive user interface solutions including CapSense touch sensing, TrueTouch touchscreens, and trackpad solutions for notebook PCs and peripherals. Cypress is a world leader in USB controllers, which enhance connectivity and performance in a wide range of consumer and industrial products. Cypress is also the world leader in SRAM and nonvolatile RAM memories. Cypress serves numerous major markets, including consumer, mobile handsets, computation, data communications, automotive, industrial and military. Cypress trades on the NASDAQ Global Select Market under the ticker symbol CY. Visit Cypress online at www.cypress.com.
FORWARD-LOOKING STATEMENTS
Statements herein that are not historical facts and that refer to Cypress or its subsidiaries' plans and expectations for Q1 2015 and the remainder of fiscal year 2015 and beyond are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. We may use words such as "believe," "expect," "future," "plan," "intend" and similar expressions to identify such forward-looking statements that include, but are not limited to, statements related to our expectations regarding the proposed merger with Spansion which include dependence on government regulators and shareholder approval; the semiconductor market; the strength and growth of our proprietary and programmable products; our expectations regarding our revenue growth and earnings leverage; our expectation that our ETD division will significantly contribute to our 2015 revenue growth; as well as our expectations regarding the demand for our products and how our products are expected to perform. Such statements reflect our current expectations, which are based on information and data available to our management as of the date of this release. Our actual results may differ materially due to a variety of uncertainties and risk factors, including, but not limited to, the state of and future of the global economy, business conditions and growth trends in the semiconductor market, whether our products perform as expected, whether the demand for our proprietary and programmable products is fully realized, our ability to manage our business to have strong earnings and significant revenue growth, reduce operating expenses, our ability to effectively implement third party wafer processes, the strength or softness of the markets we serve, our ability to maintain and improve our gross margins and realize our bookings, the seasonality of the markets we serve, the financial performance of our subsidiaries and Emerging Technologies Division, and other risks described in our filings with the Securities and Exchange Commission. We assume no responsibility to update any such forward-looking statements.
Cypress, the Cypress logo, PSoC, TrueTouch, CapSense, EZ-USB and MoBL are registered trademarks and PRoC, More Battery Life, HX3, FX3, CX3 and RadStop are trademarks of Cypress Semiconductor Corp. All other trademarks or registered trademarks are the property of their respective owners.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
------------- -------------
December 28, December 29,
2014 2013
------------- -------------
ASSETS
Cash, cash equivalents and short-term
investments $ 118,812 $ 104,462
Accounts receivable, net 75,984 81,084
Inventories, net (a) 88,227 100,612
Property, plant and equipment, net 237,763 258,585
Goodwill and other intangible assets, net 99,615 106,523
Other assets 122,880 113,707
------------- ------------
Total assets $ 743,281 $ 764,973
============= =============
LIABILITIES AND EQUITY
Accounts payable $ 42,678 $ 47,893
Deferred margin on sales to distributors 95,187 122,578
Income tax liabilities 21,494 29,001
Other liabilities 155,057 159,866
Long-term revolving credit facility 227,000 227,000
------------- -------------
Total liabilities 541,416 586,338
------------- -------------
Total Cypress stockholders' equity 208,320 183,109
Noncontrolling interest (6,455) (4,474)
------------- -------------
Total equity 201,865 178,635
------------- -------------
Total liabilities and equity $ 743,281 $ 764,973
============= =============
(a) Net inventories include $2.0 million and $3.2 million of capitalized
inventories related to stock compensation expense, as of December 28,
2014 and December 29, 2013, respectively.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
ON A GAAP BASIS
(In thousands, except per-share data)
(Unaudited)
----------------------------------- -----------------------
Three Months Ended Twelve Months Ended
---------------------------------- ----------------------
December September December December December
28, 29, 29, 28, 29,
2014 2014 2013 2014 2013
---------- ---------- ---------- ---------- ----------
Revenues $ 184,097 $ 187,516 $ 167,776 $ 725,497 $ 722,693
Cost of revenues 90,395 90,633 91,328 361,820 384,121
---------- ---------- ---------- ---------- ----------
Gross margin 93,702 96,883 76,448 363,677 $ 338,572
Operating
expenses:
Research and
development 39,677 38,626 42,343 164,560 190,906
Selling,
general and
administrative 37,746 41,119 43,623 163,488 182,671
Acquisition
costs 7,253 - - 7,253 -
Amortization of
acquisition-
related
intangibles 1,305 1,701 1,850 6,683 7,833
Restructuring
charges 72 (238) (469) (1,180) 15,357
---------- ---------- ---------- ---------- ----------
Total
operating
expenses,
net 86,053 81,208 87,347 340,804 396,767
---------- ---------- ---------- ---------- ----------
Operating income
(loss) 7,649 15,675 (10,899) 22,873 (58,195)
Interest and
other income,
net (2,759) (1,890) (1,437) (7,528) 348
---------- ---------- ---------- ---------- ----------
Income (loss)
before income
taxes 4,890 13,785 (12,336) 15,345 (57,847)
Income tax
benefit
(provision) (1,814) (1,231) (2,210) 1,173 7,761
---------- ---------- ---------- ---------- ----------
Income (loss),
net of taxes 3,076 12,554 (14,546) 16,518 (50,086)
Adjust for net
loss
attributable to
noncontrolling
interest 426 286 337 1,418 1,845
---------- ---------- ---------- ---------- ----------
Net Income
(loss)
attributable to
Cypress $ 3,502 $ 12,840 $ (14,209) $ 17,936 $ (48,241)
========== ========== ========== ========== ==========
Net Income
(loss) per
share
attributable to
Cypress:
Basic $ 0.02 $ 0.08 $ (0.09) $ 0.11 $ (0.31)
Diluted $ 0.02 $ 0.08 $ (0.09) $ 0.11 $ (0.31)
Cash dividend
per share $ 0.11 $ 0.11 $ 0.11 $ 0.44 $ 0.44
Shares used in
net income
(loss) per
share
calculation:
Basic 161,864 159,759 151,580 159,031 148,558
Diluted 169,148 166,481 151,580 169,122 148,558
----------------------------------- -----------------------
CYPRESS SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(a)
(In thousands, except per-share data)
(Unaudited)
---------------------------------------------------------
Three Months Ended
---------------------------------------------------------
December September December
28, % of 28, % of 29, % of
2014 Revenue 2014 Revenue 2013 Revenue
-------- ------- --------- ------- -------- -------
GAAP gross margin $ 93,702 50.9% $ 96,883 51.7% $ 76,448 45.6%
Stock-based
compensation
expense 2,759 1.5% 3,766 2.0% 3,088 1.8%
Acquisition
costs and
related
amortization 22 0.0% - 0.0% 5,562 3.3%
Changes in value
of deferred
compensation
plan (44) 0.0% 4 0.0% 136 0.1%
Impairment of
assets,
restructuring
and other - 0.0% (303) -0.2% 269 0.2%
Tax and tax-
related items - - - 0.0% - -
-------- ------- --------- ------- -------- -------
Non-GAAP gross
margin $ 96,439 52.4% $ 100,350 53.5% $ 85,503 51.0%
======== ======= ========= ======= ======== =======
GAAP research and
development
expenses $ 39,677 $ 38,626 $ 42,344
Stock-based
compensation
expense (2,553) (2,089) (7,356)
Acquisition
costs and
related
amortization - - -
Changes in value
of deferred
compensation
plan 128 (13) (282)
Impairment of
assets,
restructuring
and other (252) (231) 1,368
-------- ------- --------- ------- -------- -------
Non-GAAP research
and development
expenses $ 37,000 $ 36,293 $ 36,074
======== ======= ========= ======= ======== =======
GAAP selling,
general and
administrative
expenses $ 46,376 $ 41,119 $ 43,623
Stock-based
compensation
expense (1,436) (6,427) (10,432)
Acquisition
costs and
related
amortization (8,602) - (148)
Changes in value
of deferred
compensation
plan 229 (24) (607)
Legal and other (1,330) - -
Impairment of
assets,
restructuring
and other (72) 64 -
-------- ------- --------- ------- -------- -------
Non-GAAP selling,
general and
administrative
expenses $ 35,165 $ 34,732 $ 32,436
======== ======= ========= ======= ======== =======
GAAP operating
income (loss) $ 7,649 $ 15,675 $(10,899)
Stock-based
compensation
expense 6,748 12,282 20,877
Acquisition
costs and
related
amortization 8,622 1,701 7,558
Changes in value
of deferred
compensation
plan (402) 41 1,026
Impairment of
assets,
restructuring
and other 328 (374) (1,324)
Legal and other 1,330 - -
-------- ------- --------- ------- -------- -------
Non-GAAP operating
income $ 24,275 $ 29,325 $ 17,238
======== ======= ========= ======= ======== =======
GAAP pretax profit 4,890 2.7% $ 13,785 7.4% $(12,336) -7.4%
Stock-based
compensation
expense 6,748 3.7% 12,282 6.5% 20,877 12.4%
Acquisition
costs and
related
amortization 8,622 4.7% 1,701 0.9% 7,558 4.5%
Changes in value
of deferred
compensation
plan (1,048) -0.6% 288 0.2% 1,026 0.6%
Legal and other 1,330 0.7% - 0.0% - 0.0%
Impairment of
assets,
restructuring
and other 327 0.2% (374) -0.1% (1,324) -0.8%
Tax related and
other items (618) -0.3% (967) -0.5% (633) -0.4%
Investment
related losses 1,495 0.8% - 0.0% - 0.0%
Losses from
equity method
investment 1,403 0.7% 1,386 0.7% 632 0.4%
-------- ------- --------- ------- -------- -------
Non-GAAP pretax
profit 23,149 12.6% 28,101 15.1% 15,800 9.3%
======== ======= ========= ======= ======== =======
GAAP net income
(loss)
attributable to
Cypress $ 3,503 $ 12,840 $(14,209)
Stock-based
compensation
expense 6,748 12,282 20,877
Acquisition
costs and
related
amortization 8,622 1,701 7,558
Changes in value
of deferred
compensation
plan (1,048) 288 (535)
Investment
related losses
(gains) 1,495 - 930
Impairment of
assets,
restructuring
and other 327 (374) (1,324)
Legal and other 1,330 - -
Tax related and
other items (324) (1,585) 1,063
Losses from
equity method
investment 1,403 1,386 632
-------- ------- --------- ------- -------- -------
Non-GAAP net
income
attributable to
Cypress $ 22,056 $ 26,538 $ 14,992
======== ======= ========= ======= ======== =======
GAAP net income
(loss) per share
attributable to
Cypress - diluted $ 0.02 $ 0.08 $ (0.09)
Stock-based
compensation
expense 0.04 0.07 0.13
Acquisition
costs and
related
amortization 0.05 0.01 0.05
Changes in value
of deferred
compensation
plan (0.01) - (0.01)
Impairment of
assets,
restructuring
and other - - (0.01)
Legal and other 0.01 - -
Tax related and
other items - (0.01) 0.01
Investment
related losses
(gains) 0.01 - 0.01
Non-GAAP share
count
adjustment - - -
Losses from
equity method
investment 0.01 0.01 -
-------- ------- --------- ------- -------- -------
Non-GAAP net
income per share
attributable to
Cypress - diluted $ 0.13 $ 0.16 $ 0.09
=========================================================
-------------------------------------------------
Twelve Months Ended
-------------------------------------------------
December December
29, % of 29, % of
2014 Revenue 2013 Revenue
---------- --------- ---------- ---------
GAAP gross margin $ 363,677 50.1% $ 338,572 46.8%
Stock-based
compensation
expense 13,209 1.8% 12,789 1.8%
Acquisition
costs and
related
amortization (86) 0.0% 24,805 3.4%
Changes in value
of deferred
compensation
plan 427 0.1% 854 0.2%
Impairment of
assets,
restructuring
and other 4,489 0.6% 241 0.0%
Tax and tax-
related items - - - -
---------- --------- ---------- ---------
Non-GAAP gross
margin $ 381,716 52.6% $ 377,261 52.2%
========== ========= ========== =========
GAAP research and
development
expenses $ 164,560 $ 190,906
Stock-based
compensation
expense (16,187) (26,042)
Acquisition
costs and
related
amortization (252)
Changes in value
of deferred
compensation
plan (793) (1,744)
Impairment of
assets,
restructuring
and other (482) (1,104)
---------- --------- ---------- ---------
Non-GAAP research
and development
expenses $ 147,098 $ 161,764
========== ========= ========== =========
GAAP selling,
general and
administrative
expenses $ 176,244 $ 182,671
Stock-based
compensation
expense (20,774) (34,187)
Acquisition
costs and
related
amortization (14,330) (1,168)
Changes in value
of deferred
compensation
plan (1,855) (3,795)
Legal and other (1,330)
Impairment of
assets,
restructuring
and other (97) -
---------- --------- ---------- ---------
Non-GAAP selling,
general and
administrative
expenses $ 137,858 $ 143,521
========== ========= ========== =========
GAAP operating
income (loss) 22,873 $ (58,195)
Stock-based
compensation
expense 50,170 73,020
Acquisition
costs and
related
amortization 14,244 34,056
Changes in value
of deferred
compensation
plan 3,075 6,393
Impairment of
assets,
restructuring
and other 5,067 17,152
Legal and other 1,330 -
---------- --------- ---------- ---------
Non-GAAP operating
income $ 96,759 $ 72,426
========== ========= ========== =========
GAAP pretax profit 15,345 2.1% (57,847) -8.0%
Stock-based
compensation
expense 50,170 6.9% 73,020 10.1%
Acquisition
costs and
related
amortization 14,244 2.0% 34,056 4.7%
Changes in value
of deferred
compensation
plan 61 0.0% 22 0.0%
Legal and other 1,330 0.2% - 0.0%
Impairment of
assets,
restructuring
and other 3,737 0.5% 17,152 2.4%
Tax related and
other items (263) 0.0% (2,267) -0.3%
Investment
related losses 1,495 0.2% - 0.0%
Losses from
equity method
investment 5,068 0.7% 1,877 (b) 0.3%
---------- --------- ---------- ---------
Non-GAAP pretax
profit 91,187 12.6% 66,013 9.2%
========== ========= ========== =========
GAAP net income
(loss)
attributable to
Cypress $ 17,936 $ (48,241) (b)
Stock-based
compensation
expense 50,170 73,020
Acquisition
costs and
related
amortization 14,244 11,514
Changes in value
of deferred
compensation
plan 61 22
Investment
related losses
(gains) 1,495
Impairment of
assets,
restructuring
and other 3,737 39,694
Legal and other 1,330
Tax related and
other items (6,750) (14,665)
Losses from
equity method
investment 5,068 1,877 (b)
---------- --------- ---------- ---------
Non-GAAP net
income
attributable to
Cypress $ 87,291 $ 63,221
========== ========= ========== =========
GAAP net income
(loss) per share
attributable to
Cypress - diluted $ 0.11 $ (0.32)
Stock-based
compensation
expense 0.30 0.45
Acquisition
costs and
related
amortization 0.08 0.21
Changes in value
of deferred
compensation
plan - 0.01
Impairment of
assets,
restructuring
and other 0.02 0.10
Legal and other 0.01 -
Tax related and
other items (0.04) (0.08)
Investment
related losses
(gains) 0.01 (0.01)
Non-GAAP share
count
adjustment - 0.02
Losses from
equity method
investment 0.03 0.01 (b)
---------- --------- ---------- ---------
Non-GAAP net
income per share
attributable to
Cypress - diluted $ 0.52 $ 0.39
=================================================
(a) Refer to the accompanying "Notes to Non-GAAP Financial Measures" for a
detailed discussion of management's use of non-GAAP financial measures.
(b) Adjusted for impact of investment in equity method investee. See
footnote disclosures related thereto in our 10Q filed on August 6, 2014.
CYPRESS SEMICONDUCTOR CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(In thousands)
(Unaudited)
---------------------------------- ----------------------
Three Months Ended Twelve Months Ended
----------------------------------- -----------------------
December September December December December
28, 28, 29, 28, 29,
2014 2014 2013 2014 2013
---------- ---------- ---------- ---------- ----------
Selected Cash
Flow Data
(Preliminary):
Net cash
provided by
operating
activities $ 25,514 $ 8,322 $ 20,171 $ 103,336 $ 66,696
Net cash
provided by
(used in)
investing
activities $ (13,736) $ (11,173) $ 569 $ (42,156) $ 1,139
Net cash
provided by
(used in)
financing
activities $ (13,126) $ 6,501 $ (11,276) $ (43,453) $ (45,024)
Other
Supplemental
Data
(Preliminary):
Capital
expenditures $ 3,769 $ 5,800 $ 8,750 $ 20,947 $ 36,627
Depreciation $ 10,013 $ 10,093 $ 9,436 $ 39,724 $ 39,572
Payment of
dividend $ 17,728 $ 17,413 $ 16,578 $ 69,248 $ 64,819
Dividend paid
per share $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.44
Dividend yield
per share (a) 3.0% 4.4% 4.3% 3.0% 4.3%
----------------------------------- -----------------------
(a) Dividend yield per share is calculated based on annualized dividend
paid per share divided by the common stock share price at the end of the
period.
CYPRESS SEMICONDUCTOR CORPORATION
CONSOLIDATED DILUTED EPS CALCULATION
(In thousands, except per-share data)
(Unaudited)
------------------------------------------------------
Three Months Ended
------------------------------------------------------
December 29, September 28, December 29,
2014 2014 2013
----------------- ----------------- ------------------
GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP
-------- -------- -------- -------- -------- --------
Net income (loss)
attributable to
Cypress $ 3,502 $ 22,056 $ 12,840 $ 26,538 $(14,209) $ 14,992
-------- -------- -------- -------- -------- --------
Weighted-average
common shares
outstanding (basic) 161,864 161,864 159,759 159,759 151,580 151,580
Effect of dilutive
securities:
Stock options,
unvested
restricted stock
and other 7,284 8,892 6,722 8,460 - 14,224
-------- -------- -------- -------- -------- --------
Weighted-average
common shares
outstanding for
diluted computation 169,148 170,756 166,481 168,219 151,580 165,804
======== ======== ======== ======== ======== ========
Net income (loss) per
share attributable
to Cypress - basic $ 0.02 $ 0.14 $ 0.08 $ 0.17 $ (0.09) $ 0.10
Net income (loss) per
share attributable
to Cypress - diluted $ 0.02 $ 0.13 $ 0.08 $ 0.16 $ (0.09) $ 0.09
------------------------------------------------------
------------------------------------
Twelve Months Ended
------------------------------------
December 28, December 29,
2014 2013
----------------- ------------------
GAAP Non-GAAP GAAP Non-GAAP
-------- -------- -------- --------
Net income (loss)
attributable to
Cypress $ 17,936 $ 87,291 $(48,241) $ 63,221
-------- -------- -------- --------
Weighted-average
common shares
outstanding (basic) 159,031 159,031 148,558 148,558
Effect of dilutive
securities:
Stock options,
unvested
restricted stock
and other 10,091 9,331 - 12,954
-------- -------- -------- --------
Weighted-average
common shares
outstanding for
diluted computation 169,122 168,362 148,558 161,512
======== ======== ======== ========
Net income (loss) per
share attributable
to Cypress - basic $ 0.11 $ 0.55 $ (0.32) $ 0.43
Net income (loss) per
share attributable
to Cypress - diluted $ 0.11 $ 0.52 $ (0.32) $ 0.39
------------------------------------
---------- ---------- ---------- ---------- ----------
December September December December December
28, 28, 29, 28, 29,
2014 2014 2013 2014 2013
---------- ---------- ---------- ---------- ----------
Average stock price
for the period ended $10.77 $10.54 $9.45 $10.18 $10.59
Common stock
outstanding at
period end (in
thousands) 163,013 161,178 153,214 163,013 153,214
---------- ---------- ---------- ---------- ----------
NOTES TO NON-GAAP FINANCIAL MEASURES
To supplement its consolidated financial results presented in accordance with GAAP, Cypress uses the following non-GAAP financial measures which are adjusted from the most directly comparable GAAP financial measures:
- Gross margin
- Research and development expenses
- Selling, general and administrative expenses
- Operating income (loss)
- Net income (loss)
- Diluted net income (loss) per share
The non-GAAP measures set forth above exclude charges primarily related to stock-based compensation, which represented 72% of total adjustments for the year ended December 28, 2014, as well as restructuring charges, acquisition-related expenses and other adjustments. Management believes that these non-GAAP financial measures reflect an additional and useful way of viewing aspects of Cypress's operations that, when viewed in conjunction with Cypress's GAAP results, provide a more comprehensive understanding of the various factors and trends affecting Cypress's business and operations. Management uses these non-GAAP measures for strategic and business decision-making, internal budgeting, forecasting and resource allocation processes. In addition, these non-GAAP financial measures facilitate management's internal comparisons to Cypress's historical operating results and comparisons to competitors' operating results. Pursuant to the requirements of Regulation G and to make clear to our investors the adjustments we make to GAAP measures, we have provided a reconciliation of the non-GAAP measures to the most directly comparable GAAP financial measures.
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Contacts: Thad Trent EVP Finance & Administration and CFO (408) 943-2925 Joseph L. McCarthy Director, Corporate Communications (408) 943-2902