Cypress Reports Fourth-Quarter and Record Year-End 2007 Results | Cypress Semiconductor
Cypress Reports Fourth-Quarter and Record Year-End 2007 Results
Cypress Reports Fourth-Quarter and Record Year-End 2007 Results
Click HERE to view Q4-2007 and Year-End Business Unit Summary Financials
Click HERE to view Q4-2007 Quarterly and Year-End Financial Data
- Record annual revenue of $1.60 billion, up 46.2% year-on-year.
- Q4 revenue of $431.2 million, 0.5% below median guidance but up 50.3% year-on-year.
- Fiscal year, fully diluted GAAP EPS increased $2.07 (or 828.0%) year-on-year; non-GAAP> EPS grew $0.31 (or 60.8%) year-on-year.
- PSoC® customer base expanded to 6,301, up from 3,371 customers year-on-year.
SAN JOSE, Calif., January 24, 2008 - Cypress Semiconductor Corp. (NYSE: CY) today announced that revenue for the 2007 fourth quarter was $431.2 million, down 4.1% from $449.5 million for the prior quarter, and up 50.3% from $287.0 million for the year-ago period.
Cypress recorded GAAP net income of $8.0 million in the 2007 fourth quarter, or diluted earnings per share of $0.04. That compares with last quarter's diluted earnings per share of $0.18. GAAP diluted earnings per share in the year-ago fourth quarter was $0.09.
Non-GAAP> net income for the 2007 fourth quarter-earnings that exclude stock-based compensation, acquisition-related charges and other special charges and credits-totaled $46.2 million, or diluted earnings per share of $0.24. That compares with non-GAAP> diluted earnings per share of $0.26 for the prior quarter and $0.15 for the year-ago fourth quarter.
For the fiscal year 2007, Cypress posted total revenue of $1.60 billion, an increase of 46.2% from fiscal year 2006 revenue of $1.09 billion. On a GAAP basis, Cypress's fiscal year 2007 diluted earnings per share was $2.32, compared with diluted earnings per share of $0.25 in 2006. On a non-GAAP> basis, Cypress's fiscal year 2007 diluted earnings per share was $0.82, compared with diluted earnings per share of $0.51 in 2006-an increase of 60.8%.
Cypress President and CEO T.J. Rodgers commented, "The GAAP 2007 earnings figure overstates our true operating earnings by a factor of three due to one-time events. Nonetheless, we are very happy with genuine progress reflected in our non-GAAP> earnings of $0.82, up 60.8% for the year. Continued strong progress with strategic initiatives, such as our effort to refocus on programmable products and our flexible manufacturing initiative, combined with exceptional results from SunPower, resulted in record annual revenue of $1.60 billion and a solid 104.4% increase in non-GAAP> operating income, compared to 2006. Our stock price increased 118.1% in fiscal 2007, exceeding all major indexes by a wide margin for the third consecutive year.
"Cypress remained nicely profitable in a softening semiconductor market in the fourth quarter with non-GAAP> semiconductor gross margin reaching 48.8%. For the year, we claimed a record 4,755 major design wins, driven in large part by our high-margin programmable solutions and the strongest semiconductor product portfolio in our history. Our balance sheet contains not only $1.56 billion in cash and equivalents, but a 90% controlling voting stake in SunPower. It will provide many opportunities for us to drive shareholder value in 2008 and beyond.
"An industrywide consumer-segment slowdown late in the fourth quarter caused us to report an EPS of $0.24, just short of our EPS guidance range of $0.26 to $0.28. We expect normal seasonal, first-quarter softness in our core semiconductor business to be exacerbated by continued macroeconomic uncertainty. Nevertheless, we expect to achieve record consolidated revenue again in 2008.
"Our financial goals are simple: To grow semiconductor revenue faster than the overall market, and to increase profit at a rate far greater than sales."
On a GAAP basis, fourth-quarter consolidated gross margin was 35.1%. Semiconductor gross margin for the fourth quarter was 47.3%, up 1.9 percentage points from the previous quarter.
Non-GAAP> consolidated gross margin for the fourth quarter was 36.6%, up 3.4 percentage points from the previous quarter, due mainly to product mix and higher gross margin from SunPower.
Non-GAAP> semiconductor margin for the fourth quarter was 48.8%, up 1.6 percentage points from 47.2% in the previous quarter. Semiconductor gross margin improved in Q4 due to product mix and factory efficiencies.
Consolidated GAAP diluted EPS of $0.04 for the fourth quarter decreased 55.6% year-on-year. Consolidated non-GAAP> diluted EPS of $0.24 increased 60.0% year-on-year.
Semiconductor book-to-bill ratio ended the fourth quarter at 0.88, compared with 1.01 in the 2007 third quarter. We were 76% booked at the beginning of the first quarter of 2008.
FOURTH-QUARTER 2007 HIGHLIGHTS
Interesting PSoC® design wins for the quarter included two models of the "Baby" line of Gaggia S.p.A. coffee machines, Pioneer Electronics' X-Z7 and X-Z9 Super home audio CD receiver and speaker systems, and Therma Blade Inc.'s hockey skate blades, which are heated using a PSoC-based control circuit. Heating reduces friction between the skate blade and the ice. These products also use the PSoC-based CapSense™ capacitive sensing solution as a replacement for mechanical buttons and sliders.
Cypress is the leader in capacitive sensing for mobile handsets with a market share of more than 70 percent, according to a new report by IMS Research. Cypress has shipped more than 40 million CapSense devices into the handset market in less than two years. Durable and stylish, capacitive sensing interfaces have also become a solution of choice in many cars, PCs, white goods and industrial products.
EDN magazine named Cypress's EZ-Color™ high-brightness LED controller one of its "Hot 100 Products of 2007." The PSoC Express™ visual embedded design tool used with the controllers enables designers to select LED colors with an easy-to-use drag-and-drop interface - without having to write software code. The software also automatically compensates for differences in LED performance characteristics, enabling lighting manufacturers to avoid paying a premium for high-end LED products.
Cypress introduced West Bridge™ Astoria™, a programmable peripheral controller offering the industry's fastest USB transfer rates. Astoria expands the West Bridge family beyond mobile handsets to embedded applications such as portable media players, portable navigation devices and digital cameras. Handsets using the West Bridge solution transfer multimedia files, such as audio and motion pictures, 2.7 times as fast as the second-best solution, according to a recent test by Semiconductor Insights, a leading industry analyst firm. The test results were featured in an article in EE Times, a leading electronics magazine.
Cypress announced that it will close its 0.35-micron semiconductor manufacturing facility in Round Rock, Texas, by the end of 2008. The company is considering options to monetize the equipment, building and land that has become prime real estate since it was purchased 21 years ago.
Cypress launched a business unit in Shanghai to centralize the company's Asia-Pacific design, manufacturing, and sales and marketing operations. Executive Vice President of Manufacturing and China Operations Shahin Sharifzadeh has relocated to manage the business. Cypress's sales in China are expected to triple over the next five years, led by demand for PSoC mixed-signal arrays in electric bicycles, consumer electronics, white goods and handsets.
SunPower announced plans to build five large-scale power plants in Spain totaling 47 megawatts. The company also completed a 14-megawatt system at Nellis Air Force Base-the largest photovoltaic installation in North America. SunPower's commercial installations included a 699-kilowatt solar-electric system at Shiseido America Inc. Projects announced during the quarter included new installations with HP and Toyota totaling more than three megawatts.
SunPower's Korean joint venture, Woongjin Energy Corp., dedicated a 500,000-square-foot solar silicon ingot pulling factory, boosting SunPower's long-term silicon supply pipeline. SunPower also reached a five-year supply agreement with Jiawei SolarChina Co. that will produce more than 900 megawatts of solar cells. Jiawei is a leading manufacturer of solar-LED wireless lighting in China.
SunPower signed agreements with Morgan Stanley and GE Energy Financial Services to provide financing that allows customers to install solar-electric systems with no upfront capital costs. Major customers participating in the program include WalMart, Macy's, HP, Agilent, and Toyota Motor Sales.
SunPower signed a definitive agreement to acquire Solar Solutions, an Italian solar systems integrator and distributor. The acquisition is expected to close during the first quarter.
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 first 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," "intend" 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, the growth of our products, the strength of our programmable product portfolio, especially our proprietary products such as PSoC and West Bridge, our improved factory utilization, the success of our flexible manufacturing initiative to provide factory capacity, expected revenue growth, the demand and growth in the markets we serve, the stability of our ASPs, the effect of our divestitures, our growth, bookings, profit and revenue, and the success of SunPower's current and future 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 business and economic conditions and growth trends in the semiconductor and solar power industries, the state of the global economy, the actions of our competitors, our ability to develop and roll out new products, our ability to execute on our flexible manufacturing plan and maintain lower operating expenses, whether our products perform as expected, our ability to grow our China business unit, whether the demand for our PSoC and West Bridge products is fully realized, customer acceptance of Cypress and its subsidiaries' products as evidenced by design wins, factory utilization, whether the expected growth in the markets we serve materializes, seasonality in the markets we serve, our ability to maintain and improve our gross margins and realize our bookings, the financial performance of our subsidiaries, 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, and PSoC are registered trademarks of Cypress Semiconductor Corporation. PSoC Express, Programmable System-on-Chip, EZ-Color, CapSense, West Bridge and Astoria 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.