Cypress Reports Second Quarter 2002 Results.Business Editors SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--July 18, 2002 Cypress Semiconductor Cypress Semiconductor is a semiconductor design and manufacturing company. It began operations in 1982 and listed publicly in 1986. Two years later, the company shifted over to the New York Stock Exchange under the symbol, (NYSE: CY). Corporation (NYSE NYSE See: New York Stock Exchange :CY) today announced that revenue for the 2002 second quarter, ended June 30, 2002, was $202.1 million, up 5% from 2002 first quarter revenue of $193.2 million and up 9% from year-ago quarter revenue of $185.5 million. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the 2002 second quarter was $6.3 million, resulting in a pro forma loss per share of $0.05, compared with a first quarter 2002 pro forma loss per share of $0.10 and year-ago second quarter pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. of $0.01 per diluted share. Including acquisition-related costs, restructuring or non-recurring charges, and credits, Cypress posted a net loss of $28.1 million for the second quarter, resulting in a loss per share of $0.23, compared with a first quarter 2002 loss per share of $0.33. Cypress CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. T.J. Rodgers said, "We are pleased to have achieved our third sequential quarterly growth in revenue and continued improvement in earnings to a five-cent loss, closing in on our goal to break even in the third quarter. Bookings grew 9% to $219.9 million, resulting in a book-to-bill of 1.09, providing a modest increase in backlog, also for the third consecutive quarter. However, we still need bookings in the September quarter to reach our break even target." Rodgers continued, "Our gross margin improved nicely from 39% last quarter to 45% in the second quarter, due to a better product mix, slower price erosion, and the initial cost reduction benefit from our 0.15-micron conversion. The company also successfully sold some fully reserved inventory, which contributed approximately 3 percentage points to our gross margin. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were relatively flat as a percentage of sales with incremental spending driven largely by technology and product-design-related depreciation." MARKET SEGMENTS Wide Area Network and Storage Area Network (WAN/SAN) Revenue from the WAN/SAN segments, which accounted for 33% of second quarter revenue, increased 6% quarter-to-quarter. The WAN/SAN segment posted a gross margin of 57% in the second quarter. We expect continued modest recovery in the WAN/SAN segment in the third quarter, aided by incremental new product revenue and market share gain. Segment highlights for the quarter include: -- Cypress shipped first revenue on its POSIC POSIC Partially-Connected Ordered Successive-Interference Cancellation 2GVC GVC Grand View College (Des Moines, IA) GVC Gruppo Volontariato Civile GVC Global Value Chain GVC Gastrovascular Cavity GVC Global Visibility Capability GVC Goddard Voice Control (TM) Packet-Over-SONET (POSIC) device, the industry's most advanced 2.5-Gbps SONET/SDH framer. The device provides virtual concatenation Virtual concatenation (VCAT) is an inverse multiplexing technique used to split SONET/SDH bandwidth into logical groups, which may be transported or routed independently. Alternate SONET/SDH concatenation techniques are contiguous concatenation and arbitrary concatenation. to dynamically allocate up to 16 channels of voice and data, providing right-sized, secure, and dedicated bandwidth for high-speed data networks. Its support for generic framing procedure Generic Framing Procedure (GFP) is defined by ITU-T G.7041. This allows mapping of variable length, higher-layer client signals over a transport network like SDH/SONET. The client signals can be protocol data unit (PDU) oriented (like IP/PPP or Ethernet Media Access Control) or can (GFP GFP Green Fluorescent Protein GFP Generic Framing Procedure GFP Government Furnished Property GFP Generic Frame Protocol GFP General Framing Procedure GFP Global Functional Plane GFP Global Field Power GFP Grandmothers for Peace GFP Glutton for Punishment ) makes it possible to transport any protocol over SONET/SDH, including Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. , Fibre Channel, Enterprise System Connection (ESCON (Enterprise Systems CONnection) An IBM S/390 fiber-optic channel that transfers 17 Mbytes/sec over distances up to 60 km depending on connection type. ESCON allows peripheral devices to be located across large campuses and metropolitan areas. (R)), and Digital Video Broadcast (DVB (Digital Video Broadcasting) An international digital television (DTV) standard that is the European and Far Eastern counterpart of the North American ATSC standard. ). The POSIC2GVC framer is ideal for metropolitan area network (MAN) and wide area network (WAN) carrier-class routers, switches, add/drop multiplexers (ADMs), and dense wave-division multiplexing (DWDM (Dense WDM) The term given to wavelength division multiplexing (WDM) when significantly more channels were being added. Since WDM is increasingly more "dense" all the time, both terms are used synonymously. See WDM. DWDM - wavelength division multiplexing ) communication systems. -- Cypress sampled its first OC-192, 10-Gbps framer: the POSIC10G(TM) device, a single-chip framer that makes it possible to extend 10 Gigabit Ethernet (10 GbE) local area networks (LANs) over standard SONET/SDH networks. The POSIC10G framer reduces network and linecard complexity while enabling networking and telecommunications carriers to offer cost competitive 10 GbE services over MAN/WAN networks. The framer is a product of Cypress's recent acquisition of Silicon Packets Inc. -- Cypress announced production samples of an OC-48, 2.5-Gbps SONET/SDH serializer-deserializer (SERDES See serializer/deserializer. ) device fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: using Cypress's internally developed Silicon Germanium (SiGe) A semiconductor material made from silicon and germanium. Germanium is very similar to silicon, but when one layer is grown on top of the other to form the base of the transistor, the resulting transistor can switch faster and yield higher performance. (SiGe) process. The CYS25G0102DX is Cypress's first SiGe device, integrating a serializer, deserializer, clock and data recovery, clock synthesis, and a limiting amplifier into a single chip, allowing one device to take the place of to be substituted for. - Berkeley. See also: Place two or more devices in many existing designs. This device consumes less than half the power (0.6W) and occupies less than half the board space (11 mm x 11 mm) of competing solutions. -- Cypress introduced the Ayama(TM) family of network search engines (NSEs), including a pair of devices capable of searching 512K, 36-bit IP entries with the industry's lowest power and highest performance specifications. NSEs offload some of the packet classification and forwarding functions of network processors, optimizing performance in voice and data transmission. Both the Ayama 10000 and Ayama 20000 versions are capable of performing 233 million lookups per second (MLPS MLPS Modern Languages in the Primary School (Scottish primary education) MLPS Manual Lever Position Sensor MLPS Martin Luther Preparatory School (Prairie du Chien, Wisconsin) ). The Ayama 10000 line targets customers who use ASIC-based network processors -- the largest segment of the network processor market. The Ayama 20000 line meets the needs of the growing number of customers who use commercial network processors from companies such as Intel, AMCC AMCC Applied Micro Circuits Corporation AMCC Air Mobility Control Center AMCC Ashore Mobile Contingency Communications AMCC Advanced Materials Commercialization Center AMCC allied movement coordination center (US DoD) , Motorola, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , and Vitesse. Cypress provides the industry's broadest NSE NSE - Network Software Environment: a proprietary CASE framework from Sun Microsystems. portfolio. -- Cypress sampled a 256K NSE device, the latest entry of its existing NSE 70000 family. The low-power CYNSE70256 features a 1.5V core voltage and performance as fast as 83 MLPS. This device is ideal for applications requiring large routing tables and wirespeed processing at OC-48 (2.5 Gbps), OC-192 (10 Gbps), and beyond. Internet traffic Internet traffic is the flow of data around the Internet. It includes web traffic, which is the amount of that data that is related to the World Wide Web, along with the traffic from other major uses of the Internet, such as electronic mail and peer-to-peer networks. growth, as well as the increasing number of services offered over the web, has created a demand for very large entry devices such as the CYNSE70256, which can perform layer 3-7 searches at line rates of up to 10 Gbps. -- Cypress sampled a Zero Delay Buffer (ZDB ZDB Zeitschriftendatenbank (States Library Berlin; specialized database for international serial titles) ZDB Zimbabwe Development Bank ZDB Zero Delay Buffer ZDB Zeta Data Base ZDB Zero Downtime Backup ZDB Zero Byte Data Base ) with a Total Timing Budget(TM) (TTB TTB Alcohol and Tobacco Tax and Trade Bureau (US Department of the Treasury) TTB Thru the Bible TTB Telegraphic Transfer Buying (currency exchange rate) TTB Through-The-Book TTB That's Too Bad (TM)) window of just 200 picoseconds, an industry first. ZDBs replicate a system clock to multiple devices in the same time domain with very low delay. -- Cypress announced production volumes of the Quantum38K(TM) family of complex programmable logic devices (hardware) complex programmable logic device - (CPLD) A programmable circuit similar to an FPGA, but generally on a smaller scale, invented by Xilinx, Inc. (CPLDs). Quantum38K devices target set-top boxes and digital modems, along with enterprise network equipment such as switches, routers and storage systems. The Quantum38K family provides the industry's most cost-effective CPLD (Complex PLD) A programmable logic device that is made up of several simple PLDs (SPLDs) with a programmable switching matrix in between the logic blocks. CPLDs typically use EEPROM, flash memory or SRAM to hold the logic design interconnections. See PLD and SPLD. solution but also provides a multidimensional upgrade path to Cypress's Delta39K(TM) CPLDs, an even more robust family with the industry's broadest feature set. Quantum38K devices seamlessly integrate with the design environments of major third-party providers, including Synplicity and Mentor Graphics Mentor Graphics, Inc (NASDAQ: MENT) is a US-based multinational corporation dealing in electronic design automation (EDA) for electrical engineering and electronics, as of 2004, ranked third in the EDA industry it helped create. , via Cypress's Warp(R) Release 6.3 design software. Wireless Terminals and Wireless Infrastructure (WIT/WIN) Revenue from the WIT/WIN segments, which accounted for 34% of second quarter revenue, increased by 14% from the prior quarter, driven by an increase in cellular handset business and the continued shift toward higher-density memories in cell phones. The WIT/WIN segment posted a gross margin of 38% in the second quarter. We expect WIT/WIN sales to be slightly up in the third quarter of 2002. Segment highlights for the quarter include: -- Cypress introduced three new 3.3V asynchronous Refers to events that are not synchronized, or coordinated, in time. The following are considered asynchronous operations. The interval between transmitting A and B is not the same as between B and C. The ability to initiate a transmission at either end. SRAMs on its 0.15-micron, RAM7(TM) platform: the 16-Mbit CY7C1061, the 4-Mbit CY7C1041, and the 1-Mbit CY7C1021. These parts offer an industry best 8-10 nanosecond (1) One billionth of a second. Used to measure the speed of logic and memory chips, a nanosecond can be visualized by converting it to distance. In one nanosecond, electricity travels approximately a foot in a wire. access time at significantly lower active power then the competition. The 16-Mbit device is sampling now. -- Cypress announced full production of the first four members of the HOTLink hotlink - A mechanism for sharing data between two application programs where changes to the data made by one application appear instantly in the other's copy. Under System 7 on the Macintosh the users establishes a hotlink by doing a "Create Publisher" on the server and II(TM) (High-speed Optical Transceiver Link) family of products, including single-channel, quad-channel, and Gigabit Ethernet/Fibre Channel devices and a Programmable Serial Interface(TM) (PSI(TM)) version with up to 200K gates of logic. These devices, along with dual-channel and frequency-independent versions, make Cypress's HOTLink II family the broadest 1.5-Gbps transceiver family on the market. The "frequency agility" of HOTLink II devices -- their ability to operate at transmission speeds from 200 Mbps to 1.5 Gbps -- makes them ideal for a variety of port and backplane An interconnecting device that has sockets for printed circuit boards to plug into. Passive and Active Although resistors may be used, a "passive" backplane adds no processing in the circuit. applications in wireless basestations, workstations, servers, mass storage, and video transmission equipment. Computation and Other Revenue from the computation and other segment, which accounted for 33% of second quarter revenue, decreased 5% from the prior quarter with cyclically down PC-related clock sales offset by some strength in the consumer market. Gross margins were 41% in the second quarter. We expect this market segment to have slightly higher revenue in the third quarter of 2002. Segment highlights for the quarter include: -- Cypress MicroSystems Cypress MicroSystems (CMS) markets high-performance, field Programmable System-on-a-Chip (PSoC) integrated M8 micro-based solutions. CMS is based in Lynnwood, near Seattle, Washington and was established as a subsidiary of Cypress Semiconductor Corporation in the fourth quarter of (CMS (1) See content management system and color management system. (2) (Conversational Monitor System) Software that provides interactive communications for IBM's VM operating system. ), a subsidiary of Cypress Semiconductor Corp., achieved $1 million in backlog for its first product, the Programmable System-on-Chip(TM) (PSoC(TM)) microcontroller. Since its release, the PSoC device has achieved 50 design wins amid broad acceptance in the marketplace. The software-configurable PSoC device enables designers to select from a library of digital and analog IP blocks to instantly create an application-specific microcontroller that can take the place of thousands of custom microcontrollers, speeding time-to-market, reducing the number of chips used in a design, and decreasing overall system cost. -- Cypress announced the availability of the EZ-USB AT2(TM) controller, its fourth-generation mass storage bridge solution. The device offers USB USB in full Universal Serial Bus Type of serial bus that allows peripheral devices (disks, modems, printers, digitizers, data gloves, etc.) to be easily connected to a computer. 2.0-to-ATA/ATAPI support to connect PCs and other information appliances to external storage units such as hard disk, CD, and DVD drives DVD drives come in a variety of speeds and options. The original drive (1x) transferred data at 1.35MB per second. By doubling the spindle speed (RPMs) for 2x drives, the transfer rate increased to 2.7MB/sec and has been increasing ever since. . The EZ-USB AT2 device expands Cypress's No. 1 existing position in the USB 2.0 mass storage market. -- Cypress reinforced its leadership position in the USB-to-storage arena with a flash memory reference design. Cypress shipped its Flash Drive reference design for the portable flash memory market. The design is a small mobile storage device that can be used to replace a floppy disk drive floppy disk drive - disk drive , and provide true "plug-and-play" capability and data portability for PCs. -- Cypress released the VxWorks(R) USB host driver for its SL811HS embedded host/peripheral controller. This driver enables developers using the VxWorks real-time operating system (operating system) Real-Time Operating System - (RTOS) Any operating system where interrupts are guaranteed to be handled within a certain specified maximum time, thereby making it suitable for control of hardware in embedded systems and other time-critical applications. (RTOS (1) (RealTime Operating System) An operating system designed for use in a real time computer system. See real time system, embedded system, process control and OS-9. ) and embedded development platform from WindRiver Systems to add USB host functionality to embedded applications such as cellular phones, MP3 players, network appliances, and PDAs. Cypress also announced that its customers would have access to Jungo Software Technologies' WinDriver(TM) automatic code generator See application generator and macro recorder. for the EZ-USB(R) family through the Cypress Lab CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). . The WinDriver code generator includes libraries customized for the EZ-USB(R) family, further accelerating driver development. -- Cypress received its first production order on a new clock chip created for Apple Computer's iMac(R) desktop computers. All new iMac computers use this Cypress clock chip exclusively to perform all critical timing requirements. The custom chip is the most recent product of an ongoing, five-year relationship between Cypress and Apple. Other Developments -- Silicon Light Machines, a subsidiary of Cypress, announced that its Grating Light Valve(TM) (GLV GLV Grating Light Valve GLV Golovin, AK, USA (Airport Code) GLV General License Limited Value GLV General Law Village (TM)) device -- an optical micro-electromechanical system (MEMS (MicroElectroMechanical Systems) Tiny mechanical devices that are built onto semiconductor chips and are measured in micrometers. In the research labs since the 1980s, MEMS devices began to materialize as commercial products in the mid-1990s. ) component with a variety of applications in the telecommunications and imaging industries -- attained a pair of design wins in the emerging computer-to-plate printing market. Print market leaders, Japan's Dainippon Screen Mfg. and Germany's Agfa are using SLM's patented GLV technology in their next-generation computer-to-plate (CTP CTP (cytidine triphosphate): see cytosine. (1) (Computer-To-Plate) The production of printing plates directly from the computer without requiring film as an intermediate step. ) platesetting solutions. CTP products enable commercial printers to produce high-quality print plates by directly "burning" a plastic printing plate with a computer/GLV-controlled laser. -- Cypress received preferred supplier awards from three of its contract electronics manufacturing This article presents a typical manufacturing process of an electronic assembly. Component manufacturing Components such as resistors, capacitors and integrated circuits are generally made by specialized contractors. (CEM CEM contagious equine metritis. CEM selective medium chocolate agar made with Eugon agar and 5% horse blood; used to cultivate Taylorella equigenitalis. ) partners: Celestica Inc., Solectron Corp., and Jabil Circuit Jabil NYSE: JBL is a provider of electronic manufacturing services. Jabil designs and manufactures electronic circuit boards for major OEMs in a diverse group of industries including automotive, computing and storage, consumer products, medical, networking, peripherals and Inc. The awards are handed out periodically by these CEMs to their top-rated suppliers based on criteria such as price competitiveness, delivery, quality, supply-chain integration, and technology. "These top-supplier awards validate Cypress's best-in-class CEM program, which has taken market share in recent months under challenging conditions," said Ralph Schmitt, Cypress VP of sales and marketing. "The awards underscore the success of our commitment to building long-term partnerships with the critical CEM channel, the importance of which has increased dramatically as end-market equipment companies continue to outsource a broad array of design and manufacturing services." -- Cypress successfully implemented world-class manufacturing planning software to drive customer satisfaction and additional efficiency in demand forecasting, supply chain planning, and order-scheduling systems. Cypress's implementation of i2 Technologies, Inc.'s Demand Planning, Master Planning, and Demand Fulfillment systems was deployed during the quarter; Cypress announced plans to implement i2's Factory Planner and Order Management systems. The new systems manage demand and production planning Production planning The function of a manufacturing enterprise responsible for the efficient planning, scheduling, and coordination of all production activities. with high cost-efficiency, optimizing supply and factory utilization to meet customer demand, and reducing design cycle time and inventory. -- Cypress and DuPont Photomasks Inc. signed an agreement to jointly develop advanced photomask technologies supporting the production of high-performance integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. (ICs). The technology agreement calls for the companies to collaborate on the development and qualification of binary and If two conditions are combined by and, they must both be true for the compound condition to be true as well. Likewise, two bits may be combined with and: x y x AND y 0 0 0 0 1 0 1 0 0 1 1 1 I.e. phase-shift photomasks for 0.09- and 0.065-micron technology. -- Cypress announced a technology exchange agreement with NVE NVE see no visible estrus. Corporation under which the companies will gain rights to each other's magnetic random-access memory (storage) random-access memory - (RAM) (Previously "direct-access memory"). A data storage device for which the order of access to different locations does not affect the speed of access. (MRAM (Magnetic RAM) A non-volatile, random access memory technology that is designed to initially replace flash memory and, potentially, DRAM memory. MRAM uses magnetic, thin film elements on a silicon substrate that can be built on the same chip with the logic circuits. ) intellectual property. Dr. Jim Daughton, the Chief Technology Officer of NVE, has joined the Technical Advisory Board of Cypress MRAM subsidiary Silicon Magnetic Systems. -- The company repurchased $12.8 million of its 3.75% convertible debentures due July 2005 through open-market purchases. The purchase netted a pre-tax gain of $1.2 million, which was reported as a one-time event, excluded from pro forma earnings. Conclusion Rodgers concluded, "We have grown in each of the last three quarters. We expect to grow again in the September quarter with continuing increased activity in the wireless and consumer-related markets and a seasonal uptick in the computation market. Our goal is to break even in the September quarter." About Cypress Cypress Semiconductor Corporation (NYSE:CY) is Connecting from Last Mile to First Mile(TM) with high-performance solutions for personal, network access, enterprise, metro switch, and core communications-system applications. Cypress Connects(TM) using wireless, wireline, digital, and optical transmission standards, including Bluetooth, USB, Fibre Channel, SONET/SDH, Gigabit Ethernet, and DWDM. Leveraging its process and system-level expertise, Cypress makes industry-leading physical layer devices, framers, and network search engines, along with a broad portfolio of high-bandwidth memories, timing technology solutions, and programmable microcontrollers. More information about Cypress is accessible online at www.cypress.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements herein that are not historical facts are "forward-looking statements" involving risks and uncertainties, including but not limited to: the effect of global economic conditions, shifts in supply and demand, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints. Please refer to Cypress's Securities and Exchange Commission filings for a discussion of such risks. Cypress, the Cypress logo, Warp, and EZ-USB are registered trademarks of Cypress Semiconductor Corporation. POSIC2GVC, POSIC10G, Ayama, Total Timing Budget, TTB, Quantum38K, Delta39K, RAM7, HOTLink II, Programmable Serial Interface, PSI, Programmable System-on-Chip, PsoC, EZ-USB AT2, Grating Light Valve, GLV, Connecting from Last Mile to First Mile, and Cypress Connects are trademarks of Cypress Semiconductor Corporation. All other registered trademarks or trademarks are the property of their respective owners.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
Jun 30, Dec 30,
2002 2001
---------- ----------
ASSETS
Current assets:
Cash, short-term and restricted
investments * $ 127,386 $ 205,422
Accounts receivable, net 113,280 97,817
Inventories, net 79,330 73,268
Other current assets 256,439 250,328
---------- ----------
Total current assets 576,435 626,835
Property and equipment, net 537,676 499,795
Long-term investments * 76,394 134,495
Restricted investments * 62,405 74,968
Goodwill 337,437 324,764
Other assets 213,827 225,579
---------- ----------
Total assets $1,804,174 $1,886,436
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 57,899 $ 73,916
Accrued liabilities 175,703 165,037
Deferred income 21,281 14,249
Income taxes payable 1,402 1,300
---------- ----------
Total current liabilities 256,285 254,502
Convertible subordinated notes 468,900 517,700
Deferred income taxes and other tax
liabilities 200,009 203,272
Other long-term liabilities 41,006 42,534
---------- ----------
Total liabilities 966,200 1,018,008
Stockholders' equity ** 837,974 868,428
---------- ----------
Total liabilities and stockholders'
equity $1,804,174 $1,886,436
========== ==========
* Cash and investments at June 30, 2002 and December 30, 2001
totaled $266,185 and $414,885, respectively.
** Common stock, $.01 par value, 650,000 and 650,000 shares
authorized; 139,165 and 139,052 issued; 123,160 and 121,495
outstanding.
CYPRESS SEMICONDUCTOR CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
(Unaudited) (Unaudited)
-------------------------------- --------------------
Jun 30, Jul 1, Mar 31, Jun 30, Jul 1,
2002 2001 2002 2002 2001
-------- -------- -------- -------- --------
Revenues $202,121 $185,546 $193,155 $395,276 $447,809
Cost of
revenues 111,067 102,160 117,296 228,363 227,405
-------- -------- -------- -------- --------
Gross Margin 91,054 83,386 75,859 166,913 220,404
Operating
expenses:
Research
and
development 63,498 56,364 61,587 125,085 112,597
Selling,
general
and
adminis-
trative 34,788 34,826 33,340 68,128 78,774
-------- -------- -------- -------- --------
Total
operating
costs 98,286 91,190 94,927 193,213 191,371
-------- -------- -------- -------- --------
Operating
income
(loss) (7,232) (7,804) (19,068) (26,300) 29,033
Net interest
income
(expense)
and other (1,517) 8,929 1,579 62 18,843
-------- -------- -------- -------- --------
Income (loss)
before
income tax (8,749) 1,125 (17,489) (26,238) 47,876
(Provision)
benefit for
income tax 2,449 (338) 4,897 7,346 (14,363)
-------- -------- -------- -------- --------
Net income
(loss) $ (6,300) $ 787 $(12,592) $(18,892) $ 33,513
======== ======== ======== ======== ========
Pro forma
earnings per
share:
Basic net
income
(loss) per
share $ (0.05) $ 0.01 $ (0.10) $ (0.15) $ 0.27
Diluted net
income
(loss) per
share $ (0.05) $ 0.01 $ (0.10) $ (0.15) $ 0.25
Shares used
in per share
calculations:
Basic 122,964 125,515 122,122 122,543 125,966
Diluted 122,964 130,830 122,122 122,543 131,440
CYPRESS SEMICONDUCTOR CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Following is a reconciliation of our GAAP net loss to our Pro Forma
net income (loss).
THREE MONTHS ENDED SIX MONTHS ENDED
(Unaudited) (Unaudited)
-------------------------------- --------------------
Jun 30, Jul 1, Mar 31, Jun 30, Jul 1,
2002 2001 2002 2002 2001
-------- -------- -------- -------- --------
GAAP net
loss $(28,061) $(17,856) $(39,791) $(67,852) $(7,399)
======== ======== ======== ======== ========
Acquisition
costs (1) 26,775 28,863 26,600 53,375 55,910
Restructuring
(2) (10,305) -- 1,595 (8,710) --
Gain or loss
on
investments
(3) 2,101 -- -- 2,101 --
Gain on
retirement
of bonds (1,242) -- (4,704) (5,946) --
Tax effects
on pro forma
adjustments 4,432 (10,220) 3,708 8,140 (14,998)
-------- -------- -------- -------- --------
Pro forma net
income
(loss) $ (6,300) $ 787 $(12,592) $(18,892) $ 33,513
======== ======== ======== ======== ========
(1) In-process technology, non-cash stock compensation costs, cash
charges based on the achievement of milestones under acquisition
agreements, the amortization of intangible assets and goodwill (in
2001 only) related to those acquisitions.
(2) In Q2 2002 restructuring largely represents the effect of placing
back into service assets previously written down and held for sale
as part of the 2001 restructuring plan. In Q1 2002 it represents
charges related to additional opportunities identified and
implemented as part of the 2001 restructuring plan.
(3) Includes writedown charges related to investments in two
development stage companies.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
(Unaudited) (Unaudited)
-------------------------------- --------------------
Jun 30, Jul 1, Mar 31, Jun 30, Jul 1,
2002 2001 2002 2002 2001
-------- -------- -------- -------- --------
Revenues $202,121 $185,546 $193,155 $395,276 $447,809
Cost of
revenues 110,852 103,517 118,266 229,118 229,226
-------- -------- -------- -------- --------
Gross Margin 91,269 82,029 74,889 166,158 218,583
Operating
expenses:
Research and
development 80,119 61,509 73,482 153,601 118,933
Selling,
general and
adminis-
trative 35,362 37,644 35,383 70,745 83,936
Restructuring
costs
(credits) (10,305) -- 1,595 (8,710) --
Acquisition
and non-
recurring
costs 9,795 19,543 11,692 21,487 42,591
-------- -------- -------- -------- --------
Total
operating
expenses 114,971 118,696 122,152 237,123 245,460
-------- -------- -------- -------- --------
Operating
loss (23,702) (36,667) (47,263) (70,965) (26,877)
Net interest
income
(expense) and
other (2,376) 8,929 6,283 3,907 18,843
-------- -------- -------- -------- --------
Loss before
income tax (26,078) (27,738) (40,980) (67,058) (8,034)
(Provision)
benefit for
income tax (1,983) 9,882 1,189 (794) 635
-------- -------- -------- -------- --------
Net loss $(28,061) $(17,856) $(39,791) $(67,852) $ (7,399)
======== ======== ======== ======== ========
Basic net
loss per
share $ (0.23) $ (0.14) $ (0.33) $ (0.55) $ (0.06)
Diluted net
loss per
share $ (0.23) $ (0.14) $ (0.33) $ (0.55) $ (0.06)
Shares used
in per share
calculations:
Basic 122,964 125,515 122,122 122,543 125,966
Diluted 122,964 125,515 122,122 122,543 125,966
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