Cypress Reports Fourth-Quarter and Year-End 2008 Results | Cypress Semiconductor
Cypress Reports Fourth-Quarter and Year-End 2008 Results
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- $2.6 billion SunPower spin-off to stockholders completed September 29, 2008
- PSoC® and West Bridge® achieved record annual revenue
- Strong design win penetration in touchscreen market with TrueTouch™ solution
- Q4 free cash flow of $39.4 million-highest quarterly level in 2008
- Balance sheet: cash and investments, $273 million; debt, $28 million
SAN JOSE, Calif., January 22, 2009 - Cypress Semiconductor Corp. (NYSE: CY) today announced that revenue for the 2008 fourth quarter was $165.6 million, down 26% from $222.7 million for the prior quarter, and down 20% from $206.9 million for the year-ago period.
As a result of the spin-off of SunPower Corp. in the fourth quarter of fiscal 2008, Cypress no longer consolidates SunPower's results, and reports SunPower as discontinued operations for all periods presented in this release.
Cypress recorded a GAAP net loss of $424.4 million in the 2008 fourth quarter, or a diluted net loss per share of $2.94. This includes non-cash charges of $357.0 million for goodwill impairment and $31.1 million for stock-based compensation expenses. This compares with last quarter's diluted net loss per share of $0.16. GAAP diluted earnings per share in the year-ago fourth quarter was $0.01.
Non-GAAP1 net loss for the 2008 fourth quarter--earnings that exclude discontinued operations of SunPower, stock-based compensation, acquisition-related charges, impairment losses, restructuring charges and other special charges and credits--totaled $10.9 million, or a diluted net loss per share of $0.08. That compares with non-GAAP1 diluted earnings per share of $0.15 for the prior quarter and $0.15 for the year-ago fourth quarter.
For the fiscal year 2008, Cypress posted total revenue of $766.3 million, a decrease of 7% from fiscal year 2007 revenue of $821.6 million. On a GAAP basis, Cypress's fiscal year 2008 diluted net loss per share was $2.93, compared with diluted earnings per share of $2.30 in 2007. On a non-GAAP1 basis, Cypress's fiscal year 2008 diluted earnings per share was $0.21, compared with diluted earnings per share of $0.49 in 2007.
Cypress President and CEO T.J. Rodgers commented, "The fourth quarter of 2008 was as difficult as advertised; nonetheless, we achieved record annual revenues for our flagship PSoC product line as well as our West Bridge peripheral controller. We continued to gain significant design wins for our proprietary products--especially PSoC design wins in touchscreen applications.
"Our semiconductor book-to-bill ratio ended Q4 at 0.70, the lowest level since the dotcom crash, but not as bad--at least so far. Customer ordering patterns have yet to stabilize so visibility remains extremely limited, but we continue to see strong customer acceptance of our products in the marketplace. We remain proactive on managing our cost structure and have a solid balance sheet."
- Non-GAAP1 consolidated gross margin for the fourth quarter was 42.8%, down 7.7 percentage points from the previous quarter due mainly to reduced factory utilization as we proactively reduced wafer starts to manage inventory levels to a significantly lowered end-customer demand. Overall corporate average selling price remained flat. Net inventory balances decreased by 5% sequentially.
- On a GAAP basis, fourth-quarter consolidated gross margin was 38.9%, down 5.4 percentage points from the previous quarter due mainly to reduced factory utilization.
- Cypress repurchased 24.5 million shares of common stock in Q4.
FOURTH-QUARTER 2008 HIGHLIGHTS
- Cypress's programmable solutions business continued to grow in the fourth quarter. Its PSoC® customer base-customers who have generated PSoC revenue for Cypress in the last 12 months-increased to 8,826 customers, up 6.9% quarter-on-quarter and 41.9% year-on-year. Programmable and proprietary products accounted for 77% of Cypress's core semiconductor business in the fourth quarter.
- IMS Research named Cypress the market share leader in touch sensors. Cypress has replaced an estimated 2.5 billion buttons in handsets, cars, computers, white goods and consumer electronics.
- Cypress was granted its 750th programmable solutions patent. Overall, Cypress holds more than 1,650 patents and has more than 1,100 patent applications pending.
- Cypress introduced the CyFi™ low-power radio frequency (RF) solution, a reliable, flexible, power-efficient 2.4-GHz wireless control and communications solution with superior range, targeting building automation, remote controls, health and fitness equipment and industrial monitoring. Cypress also expanded its PSoC FirstTouch™ starter kit for the CyFi low-power RF solution. The kit allows quick prototyping and debugging of wireless systems.
- Two Cypress products were named among the industry's best in 2008: Cypress's CyFi low-power RF solution was named to EDN magazine's Hot 100 products list, while its CapSense Express™ touch-sensing solution received the Readers' Choice Award from ECN magazine.
- Enabled by Cypress's West Bridge® Antioch™ peripheral controller-which provides a direct, High-Speed USB 2.0 connection between peripheral devices-the Blackberry Bold delivered the fastest PC-to-phone multimedia file transfers in a recent EE Times 3G mobile handset test. The Blackberry Bold can download a feature-length movie in about two minutes while continuing to operate as a handset. This download rate is three to 18 times faster than competing multimedia phones.
- Cypress and Legend Silicon introduced a first-of-its-kind USB TV dongle reference design bringing high-resolution TV reception to PCs and laptops. The solution targets more than half of the TV viewers in China.
- Cypress's intelligent lighting solutions now support Dragon LEDs from Osram Opto Semiconductors and Power LEDs from Nichia Corp, two of the top five LED producers worldwide. The device specifications and temperature characteristics for both product families are built into Cypress's visual embedded software, enabling users to design complex lighting systems with no coding.
- Cypress subsidiary Cypress Envirosystems has partnered with Honeywell to develop a wireless gauge reader. The solution, to be marketed worldwide by Honeywell, automates meter reading to improve the efficiency of industrial plants.
- The U.S. Department of Justice closed its grand jury investigation into possible antitrust violations in the static random access memory (SRAM) industry. No allegations against Cypress were ever made during the investigation.
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 CyFi low-power RF solution, 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 and industrial. 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 2009 and the future 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 the semiconductor market, the state and future of the economy, the strength and growth of our proprietary and programmable products, especially PSoC and West Bridge, our ability to increase our SRAM market share, the impact of the current economy on our operating results, the stability of the ordering patters of our customers, expected revenue growth, the demand and growth in the markets we serve, visibility in the markets we serve, customer acceptance of our portfolio of products as evidenced by continued design wins, the stability of our ASPs, our bookings, profit and revenue, and our ability to outgrow the market in revenue once the economy recovers. 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 state of and future of the global economy, business conditions and growth trends in the semiconductor market, seasonality in the markets we serve, our ability to achieve lower operating expenses and maintain a solid balance sheet, the actions of our competitors, our ability to develop and roll out new products, our ability to manage our business to have strong earnings and cash flow leverage, factory utilization, whether our products perform as expected, 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, whether the expected growth in the markets we serve materializes, 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 with the Securities and Exchange Commission. We assume no responsibility to update any such forward-looking statements.
Cypress, the Cypress logo, PSoC, and West Bridge are registered trademarks of Cypress Semiconductor Corporation. CyFi, PSoC Express, Programmable System-on-Chip, FirstTouch, PowerPSoC, CapSense, CapSense Express, EZ-USB FX2LP and Antioch 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.
1 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.
2 CCD - Consumer and Computation Division; DCD-Data Communications Division; MID-Memory and Imaging Division.