Cypress Reports First-Quarter 2008 Results | Cypress Semiconductor
Cypress Reports First-Quarter 2008 Results
Cypress Reports First-Quarter 2008 Results
Click HERE to view Q1-2008 Business Unit Summary Financials
Click HERE to view Q1-2008 Quarterly Financial Data
- Cypress achieved consolidated quarterly revenue of $442.1 million, exceeded guidance and grew 29% year-on-year.
- SunPower achieved record quarterly revenue of $274 million, up 92% year-on-year.
- Our West Bridge™ product family exceeded revenue expectations, growing 44% sequentially.
- Our PSoC® customer base grew to a record 6,991 customers, up from 6,301 in Q407.
- Cypress repurchased 12.6 million shares at an average price of $21.95.
SAN JOSE, Calif., April 17, 2008 - Cypress Semiconductor Corp. (NYSE: CY) today announced that revenue for the 2008 first quarter was $442.1 million, up 2.5% from $431.2 million for the prior quarter, and up 28.9% from $342.9 million for the year-ago period.
Q108 revenue includes a charge of $20.8 million from the planned conversion of Asian distributors to a deferred revenue recognition model. The revenue deferral and associated margin impact is equivalent to a net loss of $10.8 million or approximately $0.07 per share on both a GAAP and non-GAAP1 basis.
Cypress recorded a GAAP net loss of $18.4 million in the 2008 first quarter, or a diluted loss per share of $0.12. That compares with last quarter's diluted earnings per share of $0.01. GAAP diluted net loss per share in the year-ago first quarter was $0.01. GAAP diluted loss per share on a sequential basis was impacted by semiconductor seasonality and higher expenses related to restructuring and asset impairments as well as the distributor revenue deferral described above.
Non-GAAP1 net income for the 2008 first quarter-earnings that exclude stock-based compensation, acquisition-related charges and other special charges and credits-totaled $19.9 million, or diluted earnings per share of $0.12. That compares with non-GAAP1 diluted earnings per share of $0.24 for the prior quarter and $0.16 for the year-ago first quarter.
Cypress's President and CEO T.J. Rodgers said, "Cypress increased revenue and exceeded guidance in a challenging economic environment. On the semiconductor side of our business, despite enduring what we see as the bottom quarter of the current slowdown, we continue to see strong design win penetration for our expanding portfolio of proprietary products, including our PSoC devices and West Bridge family of peripheral controllers. ASPs remained strong across all divisions. Our semiconductor2 book-to-bill ratio ended the first quarter at 1.07, compared with 0.88 in the 2007 fourth quarter. In addition, SunPower had a great quarter with record quarterly revenue."
Rodgers continued, "We remain cautious about the economy, but believe that we will achieve strong sequential revenue growth, driven both by SunPower and our semiconductor business. We expect record consolidated quarterly revenue both in Q2 and for all of fiscal 2008-and we plan to increase profit at a far greater rate than sales."
On a GAAP basis, first-quarter consolidated gross margin was 31.0%. Semiconductor2 gross margin for the first quarter was 47.7%, up 0.3 percentage points from the previous quarter.
Non-GAAP1 consolidated gross margin for the first quarter was 34.2%, down 2.4 percentage points from the previous quarter, due mainly to a higher mix of revenue from SunPower.
Non-GAAP1 semiconductor2 gross margin for the first quarter was 50.7%, up 1.9 percentage points from 48.8% in the previous quarter. Semiconductor2 gross margin improved in Q1 due to revenue mix, higher factory absorption and inventory-related adjustments.
Additional first-quarter data and comparisons relevant to Cypress's business units are presented in the attached Business Unit Summary tables.
FIRST-QUARTER 2008 HIGHLIGHTS
Cypress grew its PSoC customer base to 6,991 for the quarter, up 66.5% year-on-year. Cypress's global PSoC customers include such well-known companies as HP, JVC and Pioneer.
The number of customer engineers that have undergone PSoC training increased from 7,848 in Q107 to 10,118 in Q108. Internet seminars, on-demand training and workshops create awareness and knowledge about Cypress products and solutions and help to accelerate the sales process.
Cypress introduced its CapSense Express™ solution, enabling designers to implement up to 10 capacitive touch-sensing buttons and/or sliders in as little as five minutes with no coding. Highly integrated PSoC-based CapSense™ devices reduce component count and cost in customer systems and accelerate time-to-market. Cypress has replaced more than 2.5 billion buttons and sliders with CapSense technology.
A new college textbook focused on PSoC mixed-signal array design, "Introduction to Mixed-Signal, Embedded Design," is now available."
Professional gaming mouse maker, SteelSeries, selected Cypress's OvationONS™ laser navigation sensor to power its new Ikari laser gaming mouse. The mouse recently received perfect scores from two industry-leading hardware review websites.
Taiwan-based Behavior Tech Computer Corporation selected Cypress's OvationONS sensor, WirelessUSB™ LP 2.4-GHz radio system-on-chip and enCoRe® III microcontroller for a new wireless keyboard. The design highlights Cypress's unique position as a provider of complete solutions for wireless human interface devices.
Cypress's Board of Directors authorized a $300 million addition to the company's stock repurchase program, increasing the size of the program to $600 million. To date under this program, the company spent $277 million to purchase 12.6 million shares of stock at an average price of $21.95.
SunPower signed two long-term polysilicon supply agreements with NorSun that will support 2,500 megawatts of solar cell production. The company also signed a 3,000-megawatt silicon supply agreement with China's Jupiter, Qingdao DTK Industries Co.
SunPower announced plans to build an 8-megawatt solar-electric power plant in Spain for The Naturener Group, a Spanish-based energy firm. The plant will use SunPower's high-efficiency solar tracking systems, which automatically rotate to follow the sun, maximizing system output. In 2007, SunPower contracted with The Naturener Group to build three power plants totaling 21 megawatts.
GE Energy Financial Services will finance five of SunPower's recently announced California solar power projects, including installations at Toyota Motor Sales, HP, Agilent and two county and regional agencies. Separately, MMA Renewable Ventures announced that it will finance SunPower solar-electric systems at 14 Macy's stores. Third-party financing has become a popular option for companies that want to install solar without having to pay up-front installation costs.
- Refer to "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" and "Notes to Non-GAAP Financial Measures" following this press release for a detailed discussion of management's use of non-GAAP financial measures, as well as reconciliations of all non-GAAP financial measures presented in this press release to the most directly comparable GAAP financial measures.
- "Semiconductor" includes all of Cypress's business segments except for SunPower.
- CCD - Consumer and Computation Division; DCD-Data Communications Division; MID-Memory and Imaging Division.
- Q108 semiconductor revenue was reduced by $20.8 million due to the conversion of Asian distributors to a deferred revenue recognition model.
- Q108 semiconductor net income (loss) was reduced (increased) by $10.8 million due to the conversion of Asian distributors to a deferred revenue recognition model.
- Q108 semiconductor diluted net income (loss) per share was reduced (increased) by approximately $0.07 per share due to the conversion of Asian distributors to a deferred revenue recognition model.
Cypress delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional system value. Cypress offerings include the PSoC Programmable System-on-Chip, USB controllers, general-purpose programmable clocks, and memories. Cypress also offers wired and wireless connectivity solutions ranging from its WirelessUSB radio system-on-chip, to West Bridge and EZ-USB FX2LP controllers that enhance connectivity and performance in multimedia handsets. Cypress serves numerous markets, including consumer, computation, data communications, automotive, industrial, and solar power. Cypress trades on the NYSE under the ticker symbol CY. Visit Cypress online at www.cypress.com.
Statements herein that are not historical facts and that refer to Cypress or its subsidiaries' plans and expectations for the second quarter of 2008 and the future are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995." We use words such as "believe," "expect," "future," "plan" and similar expressions to identify such forward-looking statements that include, but are not limited to, statements related to the semiconductor market, the state and future of the economy, our design win penetration, expected revenue growth, bookings and profitability, and the success of SunPower's financing arrangements, supply agreements and solar-electric power plant projects. 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 a variety of uncertainties and risk factors, including but not limited to the economic conditions and growth trends in the semiconductor and solar power industries, the state of the global economy, the actions of our competitors, whether the demand for programmable portfolio of products, including especially, our PSoC and West Bridge products is fully realized, our ability to convert our PSoC marketing and education initiatives into product sales, customer acceptance of Cypress and its subsidiaries' products as evidenced by design wins, factory utilization, the seasonality in the markets we serve, our ability to maintain and improve our gross margins and realize our bookings, the success of SunPower's financing and supply arrangements, SunPower's ability to execute on its plan for a solar-electric power plant and other risks described in our filings, as well as SunPower's filings, with the Securities and Exchange Commission. We assume no responsibility to update any such forward-looking statements.
Cypress, the Cypress logo, PSoC and enCoRe are registered trademarks of Cypress Semiconductor Corporation. West Bridge, CapSense Express, CapSense, OvationONS, Programmable System-on-Chip, and WirelessUSB are trademarks of Cypress Semiconductor Corporation. SunPower is a registered trademark of SunPower Corporation. All other trademarks or registered trademarks are the property of their respective owners.