Cypress Reports First-Quarter 2013 Results
Cypress Reports First-Quarter 2013 Results
SAN JOSE, Calif.--(BUSINESS WIRE)-- Cypress Semiconductor Corp. (NAS: CY) today announced its first-quarter 2013 results, which included the following highlights and remarks from its president and CEO, T.J. Rodgers.
- Revenue and earnings exceeded guidance
- Book-to-bill was above 1.0 after four consecutive sub-unity quarters in 2012
- Inventory decreased 14% sequentially
- Dividend yield was 4% with a favorable tax treatment
Our revenue and earnings for the quarter are shown below, compared with those of the prior quarter and prior year:
(In thousands, except per-share data)
Net income (loss)
Diluted EPS (loss per share)
First quarter revenue declined 4% sequentially, a rate slightly less than our normal seasonal decline. Our book-to-bill was 1.04, which marked the first time it has been above unity in a year. All divisions and major product lines increased book-to-bill sequentially. We thus expect solid sequential revenue growth in the second quarter for all divisions—the first quarter of 2013 was the bottom of the 2012 semiconductor slump for us.
As we have committed to shareholders, our entire company has managed operating expenses very tightly, resulting in a 3% opex decline in the first quarter, which normally has higher expenses due to higher payroll taxes. Given that attention to cost control, we now expect to grow operating income at a rate greater than revenue for the remainder of 2013.
+ Our non-GAAP4 consolidated gross margin for the first quarter was 50.7%, down 0.8 percentage points from the previous quarter as expected due mainly to factory under-utilization and Ramtron one-time, inventory-related charges. Our GAAP first-quarter consolidated gross margin was 45.8%.
+ Net inventory at the end of the first quarter was $109.2 million, down $18.4 million or 14% from the fourth quarter. This figure includes $38.5 million of inventory acquired from Ramtron.
+ Cash and investments for the first quarter totaled $101.6 million, a decrease of $15.6 million from the prior quarter. During the quarter we used $15.6 million to pay certain one-time final Ramtron-related items and $15.8 million to pay our regular quarterly dividend.
|NET SALES SUMMARY|
(In thousands, except percentages)
|THREE MONTHS ENDED|
|December 30,||April 1,||Sequential||Year-over-|
|China and ROW||64||%||68||%||60||%||-4||%||4||%|
PSD, Programmable System Division; DCD, Data Communications Division; MPD, Memory Products Division: ETD, Emerging Technology Division.
"Emerging Technology" includes businesses outside our core semiconductor businesses outlined in footnote 1. Includes subsidiaries AgigA Tech Inc., Deca Technologies Inc., and our foundry-support business.
FIRST-QUARTER 2013 HIGHLIGHTS
+ Cypress featured its new PSoC® 4 programmable system-on-chip architecture on the cover of the Annual Report. PSoC 4 combines an ARM Cortex™-M0 32-bit processor with PSoC's programmable precision analog circuitry, programmable digital blocks, fully routable I/Os, and our CapSense® capacitive touch technology for $1. It is the most important chip Cypress has ever brought to market.
+ Toyota has selected Cypress's PSoC-powered TrueTouch® and CapSense controllers for the capacitive touchscreen and capacitive buttons and sliders in the 2013 Toyota Avalon. Toyota uses TrueTouch to drive the 7-inch touchscreen, the navigation system, and the infotainment controls in the Avalon's center stack. CapSense also runs the capacitive buttons and sliders for the Avalon's audio and climate control systems.
+ Cypress and Newark element14 announced that customers can pre-order the new PSoC 4 Pioneer Development Kit from the element14 website (www.newark.com/element14). The powerful new kit costs only $25 and enables designers to discover the capabilities of the new PSoC 4 architecture. The kit is highly expandable via daughter cards that enable customers to select from a variety of third-party expansion boards.
+ Cypress introduced the PSoC Creator™ 2.2 Integrated Design Environment (IDE) for its PSoC 3 and PSoC 5LP programmable system-on-chip families. Creator 2.2 enables the concurrent hardware and firmware design of systems using PSoC. The software includes seven new PSoC Components™— free "Virtual Chips" used to integrate multiple ICs and system interfaces into one PSoC device. The software release simplifies and accelerates designs, and it enables designers to generate their own system chips with custom datasheets.
+ Cypress introduced its next-generation Gen5 TrueTouch touchscreen controller. Gen5 shatters industry standards for immunity to the electrical noise generated by cell phone chargers and other accessories that literally can render a cell phone non-functional. This unprecedented noise immunity enables handset designers to leverage innovative manufacturing techniques for touch products, such as the integration of touch sensors directly into displays. Gen5 also delivers the industry's best waterproofing and the ability to track touches even through gloves.
+ HUAWEI has chosen Cypress's TrueTouch Gen4 controllers to drive the "Magic Touch" feature in the new Ascend Mate smartphone. Magic Touch lets users accurately navigate the touchscreen even with thick gloves on, solving a persistent problem for customers in cold-weather climates. The Ascend Mate also leverages the TrueTouch solution for outstanding water rejection and unmatched touchscreen performance in the presence of electronic noise sources.
+ China-based ZTE, the world's fourth-leading provider of mobile phones, has selected Cypress's TrueTouch Gen4 solution to implement the dynamic, 5-inch, 1,080-pixel multitouch display for its Nubia Z5 smartphone.
+ Cypress internal startup AgigA Tech, a provider of high-speed, high-density, battery-free non-volatile memory solutions, has been named a finalist in the internationally renowned 2013 Edison Awards™ competition of new high-technology products.
+ Cypress announced that DRS Technologies will transfer its state-of-the-art microbolometer technology to Cypress's wafer fabrication facility in Bloomington, Minnesota. The technology is used for thermal imaging products, which capture low-light images for applications such as night vision security cameras. The exclusive agreement will enable DRS to make its manufacturing more efficient.
+ Cypress announced that its Board of Directors approved a quarterly cash dividend of $0.11 per share, payable to holders of record of the company's common stock as of the close of business on March 28, 2013. This dividend will be paid today, April 18, 2013.
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 1, PSoC 3, PSoC 4, and PSoC 5 programmable system-on-chip families. Cypress is the world leader in capacitive user interface solutions including CapSense touch sensing, TrueTouch touchscreens, and trackpad solutions for notebook PCs and peripherals. Cypress is the world leader in USB controllers, which enhance connectivity and performance in a wide range of consumer and industrial products. Cypress is also the world leader in SRAM and nonvolatile RAM memories. Cypress serves numerous major 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.
Statements herein that are not historical facts and that refer to Cypress or its subsidiaries' plans, expectations for Q2 2013 and the remainder of fiscal year 2013 and beyond 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, our expectations regarding our Q2 2013 financial results, including the solid sequential revenue growth we expect as well as the growth rate of our operating income, as well as our earnings, margins, profit and cash flow; the results of our return on capital strategies and cost-saving measures, including our dividend and stock repurchase programs; our expectations regarding the demand for our products and how our products are expected to perform, as well as our future design win activity and market share gains. 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, our ability to close and successfully integrate Ramtron into our operations, the state of and future of the global economy, business conditions and growth trends in the semiconductor market, whether our products perform as expected, whether the demand for our proprietary and programmable products is fully realized, whether our product and design wins result in increased sales, our ability to manage our business to have strong earnings, reduce operating expenses and cash flow leverage, factory utilization, the strength or softness of the markets we serve, our ability to maintain and improve our gross margins and realize our bookings, the seasonality of the markets we serve, the financial performance of our subsidiaries and Emerging Technology Division, and other risks described in our filings with the Securities and Exchange Commission. We assume no responsibility to update any such forward-looking statements.
Statements made in this release that are not historical in nature and that refer to Cypress plans and expectations for the future, including, but not limited to, the Company's future financial performance and results of operations, design-win penetration, cost-management strategies, competitive position and product offerings, set forth above are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995.Our actual results may differ materially due a variety of factors, including but not limited to the risks identified in this press release as well as in our filings with the Securities and Exchange Commission. All forward-looking statements included in this release are based upon information available to Cypress as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statement.We use words such as "anticipates," "believes," "expects," "future," "look forward," "planning," "intends" and similar expressions to identify such forward-looking statements.
Cypress, the Cypress logo, PSoC, CapSense and TrueTouch are registered trademarks, and PSoC Creator and PSoC Components are trademarks of Cypress Semiconductor Corp. All other trademarks or registered trademarks are the property of their respective owners.
|CYPRESS SEMICONDUCTOR CORPORATION|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|March 31,||December 30,|
Cash, cash equivalents and short-term investments
|Accounts receivable, net||132,640||82,920|
|Inventories, net (a)||109,188||127,596|
|Property, plant and equipment, net||263,127||274,427|
|Goodwill and other intangible assets, net||111,171||113,410|
|LIABILITIES AND EQUITY|
|Deferred margin on sales to distributors||167,411||131,192|
|Income tax liabilities||44,193||47,454|
|Long-term revolving credit facility||232,000||232,000|
|Total Cypress stockholders' equity||157,032||180,900|
|Total liabilities and equity||$||836,094||$||831,629|
Net inventories include $2.4 million and $2.8 million of capitalized inventories related to stock compensation expense, as of March 31, 2013 and December 30, 2012, respectively.
|CYPRESS SEMICONDUCTOR CORPORATION|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|ON A GAAP BASIS|
|(In thousands, except per-share data)|
|Three Months Ended|
|March 31,||December 30,||April 1,|
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