Cypress Reports Second-Quarter 2008 Results | Cypress Semiconductor
Cypress Reports Second-Quarter 2008 Results
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- Achieved record consolidated quarterly revenue of $592.3 million
- Semiconductor1 and SunPower businesses exceeded revenue guidance
- Revenue from programmable and proprietary solutions grew 12.9% sequentially to 76.5% of semiconductor revenue; up 15.4% year-on-year
- PSoC® Programmable System-on-Chip™ and West Bridge™ interface controller solution are expected to achieve quarterly revenue records in Q3
SAN JOSE, Calif., July 17, 2008 - Cypress Semiconductor Corp. (NYSE: CY) today announced that revenue for the 2008 second quarter was $592.3 million, up 34.0% from $442.1 million for the prior quarter, and up 58.9% from $372.8 million for the year-ago period.
Cypress recorded GAAP net income of $23.4 million in the 2008 second quarter, or diluted earnings per share of $0.14. That compares with last quarter's diluted loss per share of $0.11. GAAP diluted earnings per share in the year-ago second quarter was $2.29, derived largely from the sale of 7.5 million shares of SunPower Corporation common stock.
Non-GAAP2 net income for the 2008 second quarter-earnings that exclude stock-based compensation, acquisition-related charges and other special charges and credits-totaled $47.8 million, or diluted earnings per share of $0.28. That compares with non-GAAP2 diluted earnings per share of $0.12 for the prior quarter and $0.16 for the year-ago second quarter.
Cypress's President and CEO T.J. Rodgers said, "Cypress achieved record quarterly revenue and exceeded guidance in both our core semiconductor and SunPower businesses. Despite a very challenging economic environment, our semiconductor business grew solidly across all divisions driven by the strength of our programmable solutions."
"While we remain cautious about the macro economic environment for the second half of 2008, we anticipate strong sequential growth in our semiconductor business, driven mainly by our flagship programmable products, our PSoC® Programmable-System-on-Chip™ solution and by our WestBridge™ peripheral controllers. Both of these products are expected to achieve record quarterly revenues in our seasonally strong Q3."
- On a GAAP basis, second-quarter consolidated gross margin was 33.4%. Semiconductor1 gross margin for the second quarter was 48.5%, up 0.9 percentage points from the previous quarter.
- Non-GAAP2 consolidated gross margin for the second quarter was 35.0%, up 0.8 percentage points from the previous quarter.
- Non-GAAP2 semiconductor1 gross margin for the second quarter was 50.7%, matching the previous quarter.
Additional second-quarter data and comparisons relevant to Cypress's business units are presented in the tables referenced at the top of this press release.
SECOND-QUARTER 2008 HIGHLIGHTS
- Cypress grew its PSoC customer base to 7,846 customers, up 12.2% quarter-on-quarter and 69.8% year-on-year.
- Cypress launched its PSoC-based TrueTouch™ touchscreen solution targeting the touch-sensitive interfaces of many popular new portable consumer electronics devices. TrueTouch can interpret the instructions of up to 10 fingers simultaneously. The solution supports a range of next-generation applications, such as enabling users to play video games on touch-sensitive handheld devices or map multiple points on a GPS system.
- Cypress announced several design wins for its PSoC-based CapSense capacitive touch-sensing solution during the quarter. JVC selected the CapSense™ solution to control the graphic interface on its Everio G Series camcorders. Acer chose CapSense to help drive the media console on its Aspire 6920 and 8920G notebook PCs.
- Cypress unveiled the CY8C23x33, a PSoC device with expanded programmable analog capabilities for motor controls and other industrial applications. The device features an enhanced analog-to-digital converter (ADC) for fast analog sampling and expanded 8 kbytes of Flash memory for complex algorithm processing.
- Cypress introduced ColorLock™ optical feedback technology in its PSoC-based EZ-Color™ high-brightness LED solution. The feature compensates for LED color binning and output degradation caused by time and temperature by sensing color and correcting LED drive signals on the fly.
- Darfon Electronics Corp., a leading global manufacturer of PC peripherals, selected Cypress's PRoC™ LP programmable radio-on-chip to connect its plug-in wireless adapter with its wireless mice. PRoC is a single-chip solution that combines Cypress's enCoRe™ II microcontroller with a 2.4-GHz wireless radio.
- Cypress introduced the OvationONS™ II "mouse on a chip" solution, the first product to combine a high-precision laser navigation sensor with an optical signal processor and a microcontroller on a single chip. The Ovation family targets high-performance mice for gaming and graphic design applications. The new product was selected by Taiwan-based PC peripherals maker Sunrex Technology for use in trackball applications.
- Cypress introduced 2-Mbit and 8-Mbit non-volatile static random access memories (nvSRAMs), extending its nvSRAM portfolio from 16-Kbit to 8-Mbit. Non-volatile SRAMs provide the high-speed access of a standard SRAM, but retain data even without power. The products are ideal for applications requiring critical data retention, such as RAID (Redundant Array of Independent Disks) and other data storage, industrial, military, medical and automotive systems.
- Cypress Systems, a subsidiary of Cypress Semiconductor Corp., introduced wireless sensor solutions for manufacturing plants that wirelessly network instrumentation to eliminate manual monitoring. Cypress Systems recently installed its solution at a Micrel wafer fab, which is expected to generate about $215,000 per year in savings with a seven-month payback.
- Continuing to focus its business on programmable products and solutions, Cypress sold its Silicon Light Machines (SLM) subsidiary to Dainippon Screen Manufacturing of Kyoto, Japan, for $11 million. Cypress will retain and integrate SLM's OvationONS™ optical navigation sensor technology into its core business.
- BusinessWeek magazine named Cypress to its annual InfoTech100 list of top-performing global technology companies. Cypress was the highest-rated U.S. semiconductor company on the list, outperforming its competition over the past four quarters in total revenues, revenue growth percentage, return on equity and shareholder return.
- SunPower extended its technology leadership in photovoltaics with the production of a full-scale prototype solar cell featuring a world-record efficiency of 23.4%.
- Business intelligence software maker SAS selected SunPower and two partners to build a 1-megawatt solar plant at its Cary, N.C., headquarters campus. The plant is scheduled to go online later this year. SunPower also announced a deal to install solar power systems at 14 Macy's department stores throughout California.
- SunPower completed two solar power plants in Spain totaling 8.7 megawatts, and a 1.4-megawatt plant in South Korea. All three installations employ SunPower's patented Tracker technology, which drives panels to follow the sun, generating approximately 30% more power than traditional fixed-tilt systems.
- SunPower announced plans to build its third solar cell manufacturing plant in Malaysia, with production likely to commence in 2010. When fully operational, the plant will have an annual production capacity exceeding one gigawatt. SunPower's first two plants have capacities of 108 megawatts and 466 megawatts respectively.
- "Semiconductor" includes all of Cypress's business segments except for SunPower.
- 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.
- 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 third 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 and solar power markets, the current state and future of the economic environment, the impact of the economy on our businesses, our design win penetration, the seasonality and growth of the markets we serve, expected revenue growth, including specifically the expected growth of our PSoC and Westbridge products, SunPower's plans to build a third solar cell manufacturing plant . 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 business, SunPower's ability to execute on its plan for additional manufacturing plants 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. TrueTouch, CapSense, ColorLock, PRoC, Programmable System-on-Chip, OvationONS and West Bridge 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.