Cypress Reports Third-Quarter 2010 Results | Cypress Semiconductor
Cypress Reports Third-Quarter 2010 Results
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- PSoC® family and TrueTouch™ touchscreen controller achieved record revenue
- Gross margin at record levels
- Highest non-GAAP1 pretax margin since Q4 2000
- Cash and investment balance increased by $115.4 million sequentially
- $600 million share repurchase authorization approved by board of directors
SAN JOSE, Calif., October 21, 2010 — Cypress Semiconductor Corp. (Nasdaq: CY) today announced that revenue for the 2010 third quarter was $231.9 million, up 4.0% from $223.0 million for the prior quarter, and up 29.8% from $178.7 million for the year-ago period.
Non-GAAP1 net income for the 2010 third quarter—excluding stock-based compensation, acquisition-related charges, restructuring and other special charges and credits—totaled $53.4 million, or diluted earnings per share of $0.28, which compares to non-GAAP1 diluted earnings per share of $0.24 for the prior quarter and diluted earnings per share of $0.10 for the year-ago third quarter.
“Our business was impacted by manufacturing limitations in our SRAM business, and slowing order rates in PC end markets and our distribution channel. Nonetheless, revenue was up 4% sequentially led by a 21% gain in our CCD division, which achieved record revenues for both our PSoC and TrueTouch product families.
Rodgers continued, “We have seen a backlog decrease as lead times in the industry begin to shrink to normal six-week levels from 12-plus weeks. Our book-to-bill at the end of Q3 decreased to 0.86, in line with normal seasonality and shrinking leadtimes, with MID down the most, and PSoC well above parity.
“Our PSoC and TrueTouch families continue to deliver strong new design wins and customer production ramps; we expect these businesses to outperform seasonal trends and again set record revenues in Q4. Overall, we estimate our total revenue to decrease sequentially in Q4, mostly due to the softer market for SRAM and legacy products.”
On a GAAP basis, third-quarter consolidated gross margin was 58.1%, up 2.1 percentage points from the previous quarter.
Non-GAAP1 consolidated gross margin for the third quarter was 60.2%, up 0.9 percentage points from the previous quarter and setting a new record high. The primary difference between GAAP and non-GAAP gross margins is that stock compensation estimates are counted both in gross margin and as valued inventory in the GAAP system.
Net inventory at the end of the third-quarter increased to 83 days, up 10.1% quarter-on-quarter, and 1.7% year-on-year. The increase was all in CCD to support expected PSoC and TrueTouch revenue ramps.
Cash and investments for the third quarter increased $115.4 million to $424.1 million, or $2.60 per outstanding share.
Additional third-quarter data and comparisons relevant to
BUSINESS UNIT SUMMARY FINANCIALS (UNAUDITED)
THIRD-QUARTER 2010 HIGHLIGHTS
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Statements herein that are not historical facts and that refer to Cypress or its subsidiaries’ plans and expectations for the remainder of fiscal year 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 strength and growth of our proprietary and programmable products, including TrueTouch and PSoC families, our expectations regarding our Q410 revenue and earnings, our expectations regarding our SRAM market share, our expected customer production ramps, 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 2010, 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, 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, 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, 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 and QDR are registered trademarks of Cypress Semiconductor Corp. Programmable System-on-Chip, TrueTouch, CapSense Express, SmartSense, and PSoC Creator are trademarks of Cypress Semiconductor Corp. PowerGEM is a trademark of AgigA Tech Corp. Spartan is registered trademark of Xilinx Inc. All other trademarks or registered trademarks are the property of their respective owners.