You are here

Cypress Reports Fourth-Quarter and Year-End 2009 Results | Cypress Semiconductor

Cypress Reports Fourth-Quarter and Year-End 2009 Results

Last Updated: January 28, 2010

 CLICK HERE TO DOWNLOAD PRESS RELEASE FINANCIAL TABLES

 

  • Q4 results exceeded guidance and current Street consensus

  • Gross margin percentage at highest level since the fourth quarter of 2000

  • Cash from operations totaled $75.3 million

  • TrueTouch™ touchscreen controller results continue to exceed expectations

  • Q1 revenue expected to exceed current Street consensus and internal plan

 

SAN JOSE, Calif., January 28, 2010 — Cypress Semiconductor Corp. (NASDAQ: CY) today announced that revenue for the 2009 fourth quarter was $194.0 million, up 8.5% from $178.7 million for the prior quarter, and up 17.5% from $165.1 million for the year-ago period.

 

Cypress recorded GAAP net income of $2.9 million in the 2009 fourth quarter, or diluted earnings per share of $0.02. This compares with last quarter’s diluted net loss per share of $0.13 and a diluted net loss per share in the year-ago fourth quarter of $2.88.

 

Non-GAAP1 net income for the 2009 fourth quarter—excluding stock-based compensation, acquisition-related charges, restructuring and other special charges and credits—totaled $31.7 million, or diluted earnings per share of $0.16. That compares with non-GAAP1 diluted earnings per share of $0.10 for the prior quarter and a diluted net loss per share of $0.08 for the year-ago fourth quarter.

 

For the fiscal year 2009, Cypress posted total revenue of $667.8 million, a decrease of 12.8% from fiscal year 2008 revenue of $765.7 million. On a GAAP basis, Cypress’s fiscal year 2009 diluted net loss per share was $1.03, compared with a diluted net loss per share of $1.89 in 2008. On a non-GAAP1 basis, Cypress’s fiscal year 2009 diluted earnings per share was $0.10, compared with diluted earnings per share of $0.20 in 2008. 

 

Cypress President and CEO T.J. Rodgers said, “We are pleased to report a strong sequential revenue increase of 8.5% in what is seasonally a down quarter. The growth occurred in all core divisions. We exceeded the upper end of our guidance due to both strong growth in our PSoC®-based touchscreen products and strength in our high-performance SRAM business. We continue to achieve significant design wins with our proprietary products—especially our TrueTouch™ touchscreen products.

 

“Customers are providing increased booking visibility into Q1 and Q2, and our semiconductor book-to-bill ended Q4 at 1.13—a significant milestone since we rarely have a positive book-to-bill entering Q1 due to consumer seasonality. Lead times have not increased and we see no signs of double ordering.

 

“Fiscal year 2009 was unprecedented. The semiconductor industry and Cypress did not emerge unscathed. However, we are proud that our focus on programmable products and our financial discipline have allowed us to exceed our internal plan for gross profit margin, operating expenses, net income, earnings per share and cash flow. Our stock performance has responded by increasing 136% in 2009 and outperforming all major market indexes by at least 2x. We enter 2010 with zero debt and $333 million in cash equivalents and investments.

 

“While we can’t predict where the economy will go in 2010, we are seeing positive signs from our customer base, increased bookings and backlog, strong design wins, low levels of inventory and a very rational supply chain.

 

“We enter 2010 with the strongest new product portfolio in the company’s history, led by our flagship PSoC family and by strength in our industry-leading SRAM and USB families. In addition, investments in our Emerging Technology Division3 will begin to realize increased revenue in the second half of 2010. Customer acceptance of our new products remains very strong, and we are pleased with the high-profile design wins that we are booking in the handset market and other end markets served by our touchscreen controllers. Our next-generation PSoC family, comprising the revolutionary PSoC 3 and PSoC 5 embedded solutions, are off to a strong start with robust initial design wins. Together these new families significantly expand Cypress’s addressable market 10x from $1.5 billion for PSoC 1 to more than $15 billion for PSoC 1, PSoC 3 and PSoC 5. The new architectures offer powerful precision analog, as well as unparalleled programmable analog and digital integration, allowing us to drive many years of increased sales.

 

BUSINESS REVIEW

 

            Non-GAAP1 consolidated gross margin for the fourth quarter was 53.9%, up 2.0 percentage points from the previous quarter. The increase was due mainly to increased manufacturing efficiencies and product mix. Excluding Emerging Technologies3, our Core Semiconductor4 non-GAAP gross margin was 55.2%, up 1.5 percentage points sequentially.

 

On a GAAP basis, fourth-quarter consolidated gross margin was 48.9%, up 1.6 percentage points from the previous quarter. Our Core Semiconductor4 gross margin on a GAAP basis was 51.6%.

 

Fourth-quarter net inventory increased slightly quarter-on-quarter, as expected due to stronger than expected revenue estimates for Q1 and included $5.6 million of stock-based compensation capitalized in inventory. Net inventory decreased 20.6% on a year-over-year basis.

 

            Cash and investments totaled $333 million, or $2.15 per basic share.

 

Additional fourth-quarter and annual data and comparisons relevant to Cypress’s business units are presented below:

 BUSINESS UNIT SUMMARY FINANCIALS (UNAUDITED)

 
THREE MONTHS ENDED
January 3, 2010
 
CCD2
DCD2
MID2
Core Semi4
Emerging Tech.3
Consolidated
REVENUE ($M)
81.7
25.6
84.3
191.6
2.4
194.0
Percentage of total revenues
42.1%
13.2%
43.5%
98.8%
1.2%
100%
 
 
 
 
 
 
 
GROSS MARGIN (%)
 
 
 
 
 
 
On a GAAP basis
54.2%
61.7%
46.1%
51.6%
<166.4%>
48.9%
On a non-GAAP1 basis
57.8%
65.3%
49.7%
55.2%
<52.9%>
53.9%
  
THREE MONTHS ENDED
September 27, 2009
   
CCD2
DCD2
MID2
Core Semi4
Emerging Tech.3
Consolidated
REVENUE ($M)
78.8
25.1
71.7
175.6
3.1
178.7
Percentage of total revenues
44.1%
14.0%
40.1%
98.2%
1.8%
100.0%
 
 
 
 
 
 
 
GROSS MARGIN (%)
 
 
 
 
 
 
On a GAAP basis
49.5%
64.2%
43.4%
49.1%
(53.1%)
47.3%
On a non-GAAP1 basis
54.1%
68.8%
48.0%
53.7%
(48.5%)
51.9%
 
TWELVE MONTHS ENDED
January 3, 2010
 
CCD2
DCD2
MID2
Core Semi4
Emerging Tech.3
Consolidated
REVENUE ($M)
274.9
96.6
288.2
659.7
8.1
667.8
Percentage of total revenues
41.2%
14.5%
43.2%
98.8%
1.2%
100%
 
 
 
 
 
 
 
GROSS MARGIN (%)
 
 
 
 
 
 
On a GAAP basis
45.7%
57.1%
34.2%
42.4%
<110.4%>
40.5%
On a non-GAAP1 basis
51.7%
63.3%
40.7%
48.6%
<72.6%>
47.1%
  
TWELVE MONTHS ENDED
December 28, 2008
   
CCD2
DCD2
MID2
Core Semi4
Emerging Tech.3
Consolidated
REVENUE ($M)
315.7
129.9
312.4
758.0
7.7
765.7
Percentage of total revenues
41.2%
17.0%
40.8%
99.0%
1.0%
100%
 
 
 
 
 
 
 
GROSS MARGIN (%)
 
 
 
 
 
 
On a GAAP basis
43.9%
64.0%
37.3%
44.6%
14.6%
44.3%
On a non-GAAP1 basis
48.7%
67.9%
41.6%
49.1%
16.0%
48.7%
  
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.
3.       “Emerging Technologies” – Business outside our core semiconductor businesses outlined in footnote 4. Includes wholly owned subsidiaries Cypress Envirosystems, AGIGA Tech and other.
4.       “Core Semiconductor” – Includes CCD, DCD and MID divisions and excludes “Emerging Technologies.”
 

FOURTH-QUARTER 2009 HIGHLIGHTS

Programmable and proprietary products accounted for a record 84% of Cypress’s revenue in the fourth quarter, up from 83% of revenue in the third quarter. 

Cypress recorded first revenue on its PSoC 3 architecture and shipped the first samples of its PSoC 5 architecture during the fourth quarter. The 8-bit, 8051-based PSoC 3 product has 7.5 times more computing power than PSoC 1. The 32-bit, ARM Cortex™-M3-based PSoC 5 has 25 times more computing power than PSoC 1. The Analog to Digital Converters on PSoC 3 and PSoC 5 are 256 times more accurate and 10- to 30-times faster than PSoC 1, and there are 10 times more programmable logic gates available.
 
Cypress has seen wide adoption of its new PSoC 3 and PSoC 5 architectures, along with the new revolutionary PSoC Creator™ Integrated Development Environment (IDE), since introducing the new platform in September 2009.  Since then, Cypress has sold more than 2,000 PSoC 3 and PSoC 5 development kits and has had more than 3,000 downloads of the supporting PSoC Creator IDE. This has generated hundreds of active opportunities on the new architectures, and many major design wins that will begin ramp to revenue in late 2010.   
 
EDN Magazine named Cypress’s PSoC 3 and PSoC 5 architectures to its “Hot 100 Products” list for 2009. EDN also named the AGIGARAM™ nonvolatile RAM system from Cypress’s subsidiary, AGIGA Tech, to its list of hot products.
 
Cypress’s TrueTouch touchscreen solution has been designed into the KDDI SH003 touchscreen phone and two SoftBank phones manufactured by Sharp Communication Systems Group, continuing the strong penetration into Top Tier global handset OEMs. Powered by PSoC, TrueTouch is a fully integrated touchscreen solution that allows dozens of gestures to be programmed in software.
 
Cypress introduced a touchscreen device driver supporting Google’s Android™ mobile handset platform. The solution gives handset and notebook PC designers working with the Android OS or other Linux-based operating systems a quick and easy path to high-performance touchscreen interfaces.
 
Cypress has demonstrated a tablet-sized capacitive touchscreen technology with 10-finger tracking capability. A video at www.cypress.com/go/tabletvideo features a demonstration of a user manipulating multiple pictures on the screen simultaneously. The technology is based on Cypress’s industry-leading TrueTouch touchscreen solution and will power touchscreens between 7 and 17 inches with full motion support. The inclusion of multi-touch support in the Windows® 7 operating system has opened up the large laptop, netbook and tablet PC market to touchscreen interfaces.
 
Cypress introduced a new line of low-power, 1.8-volt CapSense® capacitive touch-sensing devices designed to extend battery life in handheld consumer products. CapSense provides a robust user interface with best-in-class noise immunity for thousands of consumer electronics and white goods products.
 
Cypress introduced SmartSense™, an automatic tuning solution for its CapSense capacitive touch-sensing devices. SmartSense dynamically detects and adjusts a system’s capacitive-sensing parameters, eliminating the need for manual tuning, accelerating design cycles and ensuring that manufacturing variations do not impact performance.
 
Cypress introduced the CY8C28xxx, an enhanced version of its PSoC 1 device that enables more advanced mixed-signal and sensing applications, supports faster capacitive touch-sensing interfaces, and offers more sophisticated I2C integration. The device targets industrial control, communications devices and white goods.
 
Cypress introduced the PSoC 3 Precision Analog Voltmeter Demo Kit, highlighting the broad precision analog capabilities of its new PSoC 3 architecture. The kit enables designers to use configurable analog components, including the 20-bit Delta Sigma ADC, in the PSoC Creator IDE to build industrial and consumer sensors, and glucose meters among other analog applications. Cypress also introduced two PSoC 3 evaluation kits to simplify the design of LCD Segment Drive applications.
 
Cypress unveiled 30 new example projects for its PSoC 3 programmable system-on-chip architecture. The example projects—downloadable for free from the Cypress Solutions Library at www.cypress.com/solutions—demonstrate to embedded designers how to integrate a variety of functions into designs more quickly with easily replicated, robust intellectual property (IP) elements. 
 
Cypress’s PowerPSoC® family of integrated power controllers won the European Electronic Industry’s 2009 Elektra Award for “Power Systems Product of the Year.” PowerPSoC is the industry’s first single-chip solution that both drives and controls LEDs.
 
Cypress launched Turbo-MTP™ 2.0, an upgraded West Bridge® MTP module with faster sideloading speeds. Users can transfer a movie from a PC to their handheld device in less than 45 seconds—four times faster than the next-best alternative. West Bridge continues to be the only solution for MTP, which allows a handheld device to auto-sync, eliminating the need for tedious file copying. To see a demo of this sideloading solution with Google’s Android OS, go to www.cypress.com/go/video.
 
Cypress Envirosystems and Adura Technologies will jointly sell an energy-saving solution for commercial buildings that combines Cypress Envirosystems’ Wireless Pneumatic Thermostat for controlling heating and air conditioning systems with the Adura LightPoint System™, which manages building lighting.
 
Cypress Envirosystems and Invensys Operations Management, a maker of technology system software, have formed a technology alliance to ensure interoperability between Cypress Envirosystems’ wireless monitoring and control solutions and Invensys’ Wonderware® plant monitoring software.
 
Cypress began trading its stock on the NASDAQ on November 12, shifting from the New York Stock Exchange.
 
Cypress raised more than $700,000 in donations for the Second Harvest Food Bank’s annual Holiday Food and Fund Drive. Ninety-five percent of donations that the organization receives go toward feeding hungry people in Santa Clara and San Mateo Counties.
 
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 programmable system-on-chip families and derivatives such as PowerPSoC® solutions for high-voltage and LED lighting applications, CapSense® touch sensing and TrueTouch™ solutions for touchscreens. Cypress is the world leader in USB controllers, including the high-performance West Bridge® solution that enhances connectivity and performance in multimedia handsets. Cypress is also a leader in high-performance memories and programmable timing devices. Cypress serves numerous 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 the first quarter of 2010 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 TrueTouch, our expectations regarding our Q110 revenue, our expected increase in our SRAM market share, positive signs gleaned from the ordering patterns of our customers, expected revenue growth, the demand and growth in the markets we serve, visibility in the markets we serve, our expectations regarding design wins, our bookings, profit and revenue, and our expected revenue from our Emerging Technology Division. 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, the behavior of our supply chain, 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 proprietary and programmable products, including especially our PSoC and TrueTouch products, is fully realized, whether our design wins result in increased sales, customer acceptance of Cypress and its subsidiaries’ products, 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 Emerging Technology Division, our ability to outgrow the market in revenue once the economy recovers 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, CapSense and West Bridge are registered trademarks of Cypress Semiconductor Corp. Programmable System-on-Chip, PSoC Creator, PowerPSoC, SmartSense, TrueTouch and Turbo-MTP are trademarks of Cypress Semiconductor Corp. ARM is a registered trademark and Cortex a trademark of ARM Ltd. Android is a trademark of Google Inc. Adura LightPoint System is a trademark of Adura Technologies. Windows is a registered trademark of Microsoft Corp. Wonderware is a registered trademark of Invensys plc, its subsidiaries or affiliates. All other trademarks or registered trademarks are the property of their respective owners.
 
 
 
Type: 
Financial

Additional Resources

Social Media

Follow us on Twitter

Follow us on Facebook

Follow us on LinkedIn

Follow us on Instagram

Follow us on Google+

Follow us on YouTube

Core & Code Blog