Cypress Reports First-Quarter 2011 Results | Cypress Semiconductor
Cypress Reports First-Quarter 2011 Results
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- First-quarter results exceeded guidance
- TrueTouch™ revenue exceeded expectations and hit all-time record
- Repurchased 12.5 million shares of common stock, year-to-date
- Q2 guidance to be better than seasonal
Our revenue and earnings for the quarter are given below, compared with the prior-quarter and prior-year results:
First-quarter revenue grew 3% sequentially, better than our historical seasonal performance and exceeding our guidance. As we expected, our revenue growth was driven by record TrueTouch touchscreen controller shipments. Touchscreen popularity has already extended from smartphones into other high-volume consumer products, such as digital cameras, automotive dashboards, GPS devices, printers, Internet-protocol (IP) phones, e-books and tablet computers. In recent quarters, we have announced TrueTouch design wins in Garmin and TomTom GPS systems, Cisco IP phones, HP printers and a Sony state-of-the-art camera.
During the quarter, the Consumer and Computation Division (CCD), which makes PSoC®, posted 45% year-on-year growth and remained our largest division. It also introduced our first USB 3.0 product, capable of moving data at five gigabits per second, more than 10 times faster than today’s USB 2.0 technology. The Memory Products Division (MPD) continued to be our most-profitable division, contributing 34% PBT in Q1. The Data Communications Division (DCD), grew 8% sequentially due to strong shipments of
Our year-on-year revenue growth of 15.2% was surpassed by our non-GAAP EPS growth of 40.4% due to our continued focus on managing fixed cost and increasing financial leverage. Bookings remained strong in Q2 and Q3, especially for our rapidly growing touchscreen controller and SRAM businesses, providing us with excellent booking visibility. Our book-to-bill ratio at the end of Q1 was 1.07. We have record backlog entering Q2, are 100% booked for the quarter and expect better than seasonal sequential revenue growth.
Our non-GAAP1 consolidated gross margin for the first quarter was 58.1%, down 1.1 percentage points from the previous quarter mainly due to higher factory absorption charges as we proactively reduced SRAM wafer starts to balance the inventory needed for shorter lead-times. We expect to increase capacity significantly in Q2. On a GAAP basis, our first-quarter consolidated gross margin was 55.2%.
Net inventory at the end of the first quarter increased 2% quarter-on-quarter due to planned builds of die bank inventory to support Q2 revenue growth in PSoC and TrueTouch. SRAM inventory decreased as planned during the quarter.
Cash and investments for the first quarter totaled $280 million, or $1.64 per basic share, down $178 million from the prior quarter. We used $245 million during the quarter to repurchase 8.4 million shares and to prepay for an additional 4 million shares in our Yield Enhancement Program (YEP). Since we announced our $600-million stock repurchase program in October 2010, we have repurchased 14.2 million shares through April 20, 2011 and have approximately $324 million remaining under the authorized repurchase program.
Our divisional revenue and gross margins are detailed below:
FIRST-QUARTER 2011 HIGHLIGHTS
Luxury vehicle manufacturer, BMW, has chosen
The QDR® Consortium, which includes
Statements herein that are not historical facts and that refer to Cypress or its subsidiaries’ plans and expectations for the remainder of fiscal year 2011 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 strength and growth of our proprietary and programmable products, including our TrueTouch and PSoC product families, our expectations regarding our Q211 bookings, revenue and earnings, the expected retirement of our YEP shares, our ability to outperform seasonal trends, the demand and growth in the markets we serve, our expectations regarding product and design wins, our expectations for sales and profit throughout 2011, our increased manufacturing capacity in Q211and 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, our ability to enter into new markets with our portfolio of products, whether our products perform as expected, whether the demand for our proprietary and programmable products, including especially our TrueTouch and PSoC products, is fully realized, whether our product and design wins result in increased sales, customer acceptance of Cypress and its subsidiaries’ products, seasonality in the markets we serve, our ability to achieve lower operating expenses and maintain a solid balance sheet, any impact to our operations due to recent events that have taken place in Japan, the actions of our competitors, the behavior of our supply chain, our ability to manage our business to have strong earnings and cash flow leverage, factory utilization, the strength or softness of the markets we serve and whether those markets achieve expected growth, our ability to maintain and improve our gross margins and realize our bookings, our ability to continue to focus on fixed costs, 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, PowerPSoC, West Bridge, EZ-USB and QDR are registered trademarks of Cypress Semiconductor Corp. Programmable System-on-Chip, TrueTouch, SmartSense, Charger Armor, and PSoC Creator are trademarks of Cypress Semiconductor Corp. All other trademarks or registered trademarks are the property of their respective owners.