Cypress Reports Second Quarter 2004 Results.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. -- 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 2004 second quarter was $264.3 million, up 4% from prior-quarter revenue of $254.4 million and up 30% from year-ago second-quarter revenue of $203.1 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 income for the 2004 second quarter was $35.9 million, resulting in diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.23, compared with prior-quarter diluted earnings per share of $0.19 and year-ago second-quarter diluted earnings per share of $0.03. Gross margin for the 2004 second quarter increased to 53%, up from 52% in the prior quarter and 48% in the year-ago second quarter. Including amortization of intangibles and other acquisition-related, restructuring and special charges and credits, Cypress posted GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income of $22.0 million for the 2004 second quarter, resulting in diluted earnings per share of $0.13, compared with prior-quarter diluted earnings per share of $0.16 and a year-ago second-quarter loss per share of $0.10. Cypress President and 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, "This quarter marked our sixth sequential improvement in revenue and profitability. Our results would have been better if not for a worse-than-typical bookings slowdown in June. Our beginning-of-quarter backlog is the best we have seen in two years and consistent with analysts' projections for a seventh consecutive quarter of revenue and profit growth in the third quarter." MARKET SEGMENTS Wide Area Networks and Storage Area Networks (WAN/SAN) Revenue from the WAN/SAN segment, which accounted for 31% of second-quarter revenue, decreased 3% from the prior quarter, slightly below our expectation of flat revenue. The gross margin for the segment was 55%. In the third quarter, we expect a modest increase in WAN/SAN revenue. Segment highlights include: + Cypress attained the 2.5-million-unit mark in network search engine (NSE NSE - Network Software Environment: a proprietary CASE framework from Sun Microsystems. ) sales. Cypress NSE sales increased 140% year-on-year in 2003 as demand expanded from traditional enterprise switching and core/edge router applications into new applications such as storage switches, security and wireless infrastructure and access systems. Wireless Terminals and Wireless Infrastructure (WIT/WIN) Revenue from the WIT/WIN segment, which accounted for 35% of second-quarter revenue, increased 19% from the prior quarter, exceeding our expectation. The gross margin for the segment was 48%. We expect moderate growth in the segment in the third quarter. Segment highlights include: + Cypress agreed to acquire FillFactory NV, a Belgium-based leader in CMOS image sensors A CMOS-based chip that records the intensities of light as variable charges similar to a CCD chip. Although initially used in less expensive digital cameras, the quality of CMOS sensors has improved steadily. CMOS sensors have advantages over CCDs. -- essentially cameras on a chip made with CMOS memory (1) A small, battery-backed memory bank in a computer that holds configuration settings. See BIOS setup. (2) Memory made of CMOS. See CMOS. process technology -- for $100 million in cash. The demand for CMOS image sensors is growing rapidly, driven by a swift expansion of the market for digital still cameras (DSCs) and cell phone cameras. FillFactory image sensors are expected to enable Cypress to double its sales into the cell phone market, where it is already a leading supplier of low-power memories. FillFactory sensors are also expected to expand Cypress sales into DSCs, where it currently sells clock chips. The new products, which are based on a FillFactory patented pixel architecture, include a 13.85-megapixel sensor for a new Kodak line of professional digital cameras; a 100 x 135 mm sensor for mammography mammography, diagnostic procedure that uses low-dose X rays to detect abnormalities in the breasts. The early diagnosis of breast cancer made possible by the routine use of mammography for screening women increases a woman's treatment alternatives and improves her applications that takes up an entire eight-inch wafer and is one of the world's largest sensors; radiation-tolerant sensors for aerospace applications such as star trackers and sun sensors; and active-pixel sensors that combine a true snapshot synchronous shutter with very high readout (1) A small display device that typically shows only a few digits or a couple of lines of data. (2) Any display screen or panel. rates for use in high-speed scientific image analysis. In addition to being a strategic fit for Cypress in the cell phone and digital still camera market, FillFactory is also a manufacturing fit for Cypress: FillFactory's first Cypress-manufactured product will be made directly on our RAM8(TM) process. Cypress's MicroPower(TM) processes are very well suited for image sensors. FillFactory is currently $1.3 million profitable on only $6.0 million in quarterly sales, despite using expensive foundry wafers, as a consequence of its business plan to make the highly differentiated niche products described above. Once FillFactory manufactures its products in Cypress fabs, Cypress expects that its niche products will become more profitable, and it will be able to profitably enter high-volume consumer markets such as cell phones, digital cameras and automotive sensors. The acquisition is expected to close in the third quarter. + Cypress ramped production of 2-Mbit and 4-Mbit versions of its one-transistor (1T) Pseudo-SRAM (PSRAM PSRAM Pseudo-Static Random Access Memory PSRAM Pseudo Static Ram ) family, rounding out its 1T portfolio following the ramp of its 8-Mbit and 16-Mbit versions. The new chips, which target the mobile handset market, offer higher density than conventional SRAMs at a lower cost. Cypress has now shipped 43 million 1T PSRAMs into the cellular market. + Cypress announced that it has become a supporting member of the Open Base Station Architecture Initiative. Cypress's involvement in OBSAI demonstrates its commitment to design products that support next-generation mobile communications systems. Computation and Consumer Revenue from the computation and consumer segment, which accounted for 30% of second-quarter revenue, decreased 4% from the prior quarter, falling short of our expectation. The gross margin for the segment was 54%. We anticipate flat revenue in the third quarter. Segment highlights include: + Cypress has designed its WirelessUSB(TM) products into the top three PC mouse manufacturers in the world and closed the second quarter with a total of 28 design wins, indicating broad market acceptance of its 2.4-GHz solution. WirelessUSB is the industry's most affordable 2.4-GHz radio system on a chip. Priced under $2 in volume, it is cheaper and provides more robust transmission than Bluetooth(R), ZigBee(TM) and proprietary 27-MHz solutions. + Cypress and Atmel Corp. jointly announced that Atmel will manufacture and sell chips based on WirelessUSB technology. We believe this second-source agreement is an important step toward the open standardization and market expansion of WirelessUSB technology. WirelessUSB chips -- which are currently used in low-data-rate wireless devices such as PC keyboards IBM introduced three generations of keyboards that drove touch typists batty and continue to do so decades later. The last IBM keyboard was superseded by Microsoft's Windows keyboard, which added three keys for activating Windows functions. , mice and video game controllers -- are also being designed into a wider array of applications, including remote controls, toys and sensors. + Cypress and Unigen announced the availability of WirelessUSB 2.4-GHz RF modules, simplifying point-to-point and multipoint-to-point wireless device design. Unigen's WirelessUSB modules are fully tested, come in a variety of configurations and packages, and are Federal Communications Committee (FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. ) and European Telecommunications Standards Institute (body) European Telecommunications Standards Institute - (ETSI) A European version of the ITU-T(?). certified, significantly cutting time to market for the designers of low-cost wireless products. + Cypress shipped its TetraHub(TM) USB hub A device that increases the number of USB ports on a PC. However, since the hub plugs into one of the USB ports on the computer, the total number of additional ports is minus one. For example, a four-port hub adds three new ports. controller chips into a four-port hub designed by IOGEAR. Described as "the world's thinnest USB hub" by the manufacturer, the 3.5 x 1.5 x 0.5-inch, four-port MicroHub(TM) (GUH GUH Georgetown University Hospital (Washington, DC) 274) takes advantage of TetraHub's space-saving quad-flat no-lead (QFN QFN Quad Flat No-Lead QFN Queen Fan Newsletter (rock band) QFN Quad Flat No Leads ) package, which is about the size of a kernel of corn. The TetraHub controller uses "transaction translator" circuitry in each port, providing each connected full-speed 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. peripheral with a full 12 megabits per second (unit) megabits per second - (Mbps, Mb/s) Millions of bits per second. A unit of data rate. 1 Mb/s = 1,000,000 bits per second (not 1,048,576). E.g. Ethernet can carry 10 Mbps. (Mbps) of bandwidth. Competing multiport mul·ti·port adj. Having, relating to, or being a system of multiple ports for injecting fuel separately into each cylinder of an engine. hubs require connected peripherals such as digital cameras and multimedia devices to share a single 12-Mbps data channel, bottlenecking data and limiting performance. + AJA AJA Adjacent AJA Aj Auxerre (French soccer club) AJA American Jail Association AJA American Journal of Archaeology AJA American Judges Association AJA Americans of Japanese Ancestry Video, an award-winning manufacturer of professional digital video solutions, has selected Cypress's 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) transceiver for its standard- and high-definition serial digital interface This article is about the serial digital interface used in professional video. For serial interfaces in general, see serial port. The Serial Digital Interface (SDI), standardized in ITU-R BT.656 and SMPTE 259M, is a digital video interface used for broadcast-grade video. and conversion products. HOTLink II is the only integrated, single-chip serializer-deserializer (SERDES See serializer/deserializer. ) device to facilitate both Standard Definition Serial Digital Interface (SD-SDI) and High Definition Serial Digital Interface (HD-SDI) video applications. HOTLink II enables designers to configure each of its four channels individually, accommodating not only SD and HD signals, but other video standards such as SMPTE (Society of Motion Picture and Television Engineers, White Plains, NY, www.smpte.org) A professional society for motion picture and TV engineers with more than 9,000 members worldwide. It prepares standards and documentation for TV production. and Digital Video Broadcast, and storage and datacom platforms including 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), Fibre Channel and 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. . + Cypress's CY28410 main system clock has been approved by Intel(R) for use with its Grantsdale chipset and its Pentium(R) 4 "Prescott" microprocessor for desktop applications. The CY28410 generates clocks for PCI Express A high-speed peripheral interconnect from Intel introduced in 2002. Note that although sometimes abbreviated "PCX," PCI Express is not the same as "PCI-X" (see PCI-SIG and PCI-X for comparison). As a result of the confusion, "PCI-E" or "PCIe" is the accepted abbreviation. (TM), legacy PCI (1) (Payment Card Industry) See PCI DSS. (2) (Peripheral Component Interconnect) The most widely used I/O bus (peripheral bus). (TM), USB, serial ATA See SATA. Serial ATA - Serial Advanced Technology Attachment applications and the VESA (Video Electronics Standards Association, Milpitas, CA, www.vesa.org) A membership organization founded in 1989 that sets interface standards for the PC, workstation and computing environments. Note the following VESA standards following this entry. (R) graphics standard. + Cypress sampled two new clock products targeting mobile PC applications -- the first of a family of products to support Intel's Alviso chipset and its Pentium M A family of CPUs from Intel that are part of its Centrino brand for mobile computing. Introduced in 2003 at speeds up to 1.6 GHz, it was formerly code named "Banias." Introduced in 2004, the second-generation Pentium M (code named "Dothan") uses the same chip package but is built with 90 "Dothan" microprocessor. The CY28441 is designed with a dynamic clock enable/disable function that allows users to swap in mobile PC cards on the fly without powering down the system. The new product also generates clocks for PCI Express, legacy PCI and USB devices. Cypress also sampled the CY25823, a spread-spectrum clock generator A clock generator is a circuit that produces a timing signal (known as a clock signal and behaves as such) for use in synchronizing a circuit's operation. It can range from a simple symmetrical square wave to more complex arrangements. used to reduce electromagnetic interference See EMI. (EMI (ElectroMagnetic Interference) An electrical disturbance in a system due to natural phenomena, low-frequency waves from electromechanical devices or high-frequency waves (RFI) from chips and other electronic devices. Allowable limits are governed by the FCC. ) in Alviso-based notebooks. + Cypress sampled the CY25701 programmable spread-spectrum clock generator with an onboard crystal oscillator An oscillator that uses a quartz crystal to generate a frequency. Such devices generally output a fixed frequency, but some can be controlled by a tuning voltage over a small range. Contrast with VCO. . Designers working with the device can circumvent the time-consuming process of matching crystals and clocks while reducing cost, board space and EMI. The CY25701 targets a variety of applications including printers, digital copiers, LCD projectors, high-definition televisions, routers and servers. Cypress Subsidiaries Revenue from Cypress subsidiaries, which accounted for 4% of second-quarter revenue, increased 7% from the prior quarter, in line with our expectation. The gross margin for the segment was 70%. Cypress expects that revenues from its subsidiaries will continue to improve as their new products reach the marketplace. Segment highlights include: + SunPower Corporation followed the first-quarter inauguration of its new high-volume manufacturing plant near Manila with the delivery of its first yielding solar cell solar cell, semiconductor devised to convert light to electric current. It is a specially constructed diode, usually made of silicon crystal. When light strikes the exposed active surface, it knocks electrons loose from their sites in the crystal. lots, reaching cell efficiencies of 19%. SunPower's target efficiency is 20%-plus. Competing production cells typically are in the 12%-15% range. The second-quarter shipments position SunPower to generate its first production revenue in the third quarter. Phase 1 of the Manila facility is expected to initially turn out 25 megawatts (MW) of high efficiency A-300 solar cells per year. At full capacity, the plant is expected to produce more than 100 MW per year. The current market price for solar panels is about $3.00 per watt. + SunPower introduced a line of high-efficiency photovoltaic modules. The new line, based on SunPower's high-performance A-300 cells, features a rear-contact design that hides unsightly wires, providing a sleek, distinctive all-black appearance. The modules are expected to strengthen SunPower's position in the rapidly growing $2.5-billion module market. + SunPower partnered with a European system integrator, SunTechnics, assigning to it the exclusive rights to sell up to $75 million of SunPower products in Europe through the end of 2005. This contract covers more than 50% of SunPower's planned production in that period. Hamburg-based SunTechnics is Europe's leading installer of photovoltaic The generation of voltage by a material that is exposed to light in the visible and invisible ranges. See photoelectric and photovoltaic cell. systems with a network of more than 120 partners in six countries. + On June 29, 2004, Cypress entered into a reorganization agreement with SunPower, currently a 57% majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. of Cypress. Cypress agreed to purchase SunPower minority interests in a transaction valued at approximately $22 million. The transaction is subject to certain closing conditions and is expected to conclude during the third quarter. Cypress has consolidated SunPower's financial results since the first quarter of 2003. + 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 reached the 10-million-unit mark in shipments of its Programmable System-on-Chip(TM) (PSoC(TM)) mixed-signal array devices to the embedded control market, underscoring broad industry demand for its high-performance, cost-effective integrated platform. Cypress MicroSystems is currently shipping PSoC products to 480 customers in Asia, Europe and the U.S., with 1,010 additional customer designs underway. + Cypress MicroSystems announced the first Cypress products in space. Cypress had previously designed its products into F-14, F-15, F-16 and F-18 jets, but last month four Cypress PSoC devices were used in the instrumentation of the first private manned space flight -- SpaceShipOne -- launched over the Mojave Desert Mojave or Mohave Desert, c.15,000 sq mi (38,850 sq km), region of low, barren mountains and flat valleys, 2,000 to 5,000 ft (610–1,524 m) high, S Calif.; part of the Great Basin of the United States. in California. Other Developments + Cypress restructured its 32-million-share call spread option into two equal parts maturing August 16 and September 30, 2004. The call spread option was initially purchased in June 2003 to reduce potential share dilution in conjunction with Cypress's outstanding $600 million, 1.25% convertible debt obligation. + Cypress announced that it will offer lead-free packages for all of its chip products by the end of the third quarter. Moving forward, the company will use environmentally sound nickel-palladium-gold technology for its leadframe packages. + Cypress appointed Jeffrey Osorio as vice president/controller, reporting to CFO See Chief Financial Officer. Manny Manny may refer to: In nobility:
Conclusion Rodgers concluded, "We have now enjoyed six quarters of growth since the bottom of the 2001-2002 recession. We expect to continue this trend in the coming quarter. We are excited to be adding image sensors to our portfolio of products serving the wireless handset market. Our big SunPower solar cell plant in Manila will ship its first production revenue this quarter. At full capacity, we expect it to add over $300 million to our annual revenue. Our other operations are running well. We expect 2004 to continue to be an excellent year." 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 USB, Fibre Channel, SONET/SDH, Gigabit Ethernet and 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 . 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 reconfigurable mixed-signal arrays. 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 and that refer to Cypress's plans and expectations for the third quarter of 2004 and the future are forward-looking statements about the prospects for Cypress as well as the semiconductor industry more generally, which are based on our current expectations as of the date of the release and could be affected by uncertainties and risk factors, including but not limited to those described in our filings with the Securities and Exchange Commission. Our actual results may differ materially. We assume no responsibility to update any such forward-looking statements. We use words such as "anticipates," "believes," "expects," "future," "look forward," "planning," "intends" and similar expressions to identify forward-looking statements that include statements related to: prices, growth, supply, shipments, new products, profit and revenue. Cypress and the Cypress logo are registered trademarks of Cypress Semiconductor Corporation. RAM8, MicroPower, WirelessUSB, TetraHub, HOTLink II, "Connecting from Last Mile to First Mile" and "Cypress Connects" are trademarks of Cypress Semiconductor Corporation. Quad Data Rate Quad data rate (or quad pumping) is a communication signalling technique wherein data is transmitted at both the rising and falling edges of the clock signal, much the same way DDR technology works, but with two clock signals 90° out of phase from each other, effectively (TM) SRAMs and QDR QDR Quadrennial Defense Review (US DoD) QDR Quad Data Rate (Memory Technology) QDR Quality Deficiency Report QDR Quality, Durability and Reliability (Toyota Motor Company) (TM) SRAMs comprise a new family of products developed by Cypress, IDT IDT Integrated Device Technology, Inc. (Santa Clara, CA, USA) IDT I Don't Think IDT Identity Theft IDT Interrupt Descriptor Table IDT Integrated DNA Technologies IDT Inactive Duty Training IDT Instructional Design & Technology , NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. and Samsung. MicroHub is a trademark of IOGEAR, Inc. ZigBee is a trademark of the ZigBee Alliance. PCI Express and PCI are trademarks of PCI-SIG. Programmable System-on-Chip and PSoC are trademarks of Cypress MicroSystems, Inc. Atmel is a registered trademark of Atmel Corporation. Unigen is a registered trademark of Unigen Corporation. IOGEAR is a registered trademark of IOGEAR, Inc. ESCON is a registered trademark of 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) Corporation. Bluetooth is a registered trademark of the Bluetooth Special Interest Group The Bluetooth Special Interest Group (SIG) is the body that oversees the development of Bluetooth standards and the licensing of the Bluetooth technologies and trademarks to manufacturers. . VESA is a registered trademark of the Video Electronics Standards Association See VESA. (body, standard) Video Electronics Standards Association - (VESA) An industry standards organisation created in 1989 or 1990 mostly(?) concerned with IBM compatible personal computers. . Intel and Pentium are registered trademarks of Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking . All other trademarks or registered trademarks are the property of their respective owners.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
June 27, Dec 28,
2004 2003
--------- --------
ASSETS
Cash, cash equivalents, and
investments(a) $ 473,093 $ 379,868
Accounts receivable, net 152,695 113,568
Inventories 68,789 72,085
Property and equipment, net 432,598 442,887
Goodwill and other intangible assets 362,039 375,483
Other assets 158,345 183,606
---------- ----------
Total assets $1,647,559 $1,567,497
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued
liabilities $ 179,649 $ 155,693
Deferred income 21,714 20,104
Convertible subordinated notes 668,652 668,652
Income tax liabilities 97,492 103,930
Other liabilities 32,144 49,930
---------- ----------
Total liabilities 999,651 998,309
Stockholders' equity(b) 647,908 569,188
---------- ----------
Total liabilities and
stockholders' equity $1,647,559 $1,567,497
========== ==========
(a) Cash, cash equivalents, and investments includes restricted
amounts totaling $63.2 million and $62.8 million as of June 27,
2004 and December 28, 2003, respectively.
(b) Common stock, $.01 par value, 650,000 and 650,000 shares
authorized; 123,673 and 120,483 outstanding as of June 27, 2004
and December 28, 2003, respectively.
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 27 Jun 29 Mar 28 Jun 27 Jun 29
2004 2003 2004 2004 2003
--------- --------- --------- --------- ---------
Revenues $264,269 $203,116 $254,393 $518,662 $384,083
Costs of
revenues 124,804 106,354 123,360 248,164 208,522
-------- -------- -------- -------- --------
Gross margin 139,465 96,762 131,033 270,498 175,561
Operating
expenses:
Research and
development 63,918 60,413 60,391 124,309 118,862
Selling,
general and
administrative 36,818 31,525 36,448 73,266 62,423
-------- -------- -------- -------- --------
Total
operating
costs 100,736 91,938 96,839 197,575 181,285
-------- -------- -------- -------- --------
Operating income
(loss) 38,729 4,824 34,194 72,923 (5,724)
Net interest income
(expense) and other (918) (1,461) (1,170) (2,088) (3,303)
-------- -------- -------- -------- --------
Income (loss) before
income tax 37,811 3,363 33,024 70,835 (9,027)
Income tax
(provision) benefit (1,891) - (1,651) (3,542) -
-------- -------- -------- -------- --------
Net income
(loss) $ 35,920 $ 3,363 $ 31,373 $ 67,293 $ (9,027)
======== ======== ======== ======== ========
Basic net income
(loss) per share $ 0.29 $ 0.03 $ 0.26 $ 0.55 $ (0.07)
Diluted net income
(loss) per share $ 0.23 $ 0.03 $ 0.19 $ 0.41 $ (0.07)
Shares used in
calculation:
Basic 123,366 122,941 122,417 122,892 123,973
Diluted 167,467 129,072 171,832 169,649 123,973
Reconciliation of our GAAP
Net Income (Loss) to our Pro
Forma Net Income (Loss):
GAAP Net Income
(Loss) $ 21,980 $(12,438) $ 26,480 $ 48,460 $(45,761)
Adjustments:
Cost of revenues
(acquisition and
stock compensation
expenses) 51 94 - 51 499
Restructuring
costs - (185) (81) (81) 3,175
Amortization of
intangibles 9,607 9,346 10,191 19,798 18,830
Operating expenses
(acquisition,
stock compensation
and damages claim) 4,884 3,924 2,767 7,651 10,012
Employee loan
reserve - 157 (7,752) (7,752) 257
(Gain) loss on
retirement of
bonds - 1,246 - - 1,246
Impairments, asset
write-downs and
other (239) 1,013 (422) (661) 1,013
Tax effects on pro
forma adjustments (363) 206 190 (173) 1,702
-------- -------- -------- -------- --------
Pro Forma Net Income
(Loss) $ 35,920 $ 3,363 $ 31,373 $ 67,293 $ (9,027)
======== ======== ======== ======== ========
To supplement the consolidated financial results prepared under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP"), Cypress uses a non-GAAP conforming, or pro forma, measure of net income that is GAAP net income adjusted to exclude certain costs, expenses and gains. Pro forma net income gives an indication of Cypress's baseline performance before gains, losses or other charges that are considered by management to be outside of the company's core operating results. In addition, pro forma net income (loss) is among the primary indicators management uses as a basis for planning and forecasting future periods. Cypress computes pro forma net income (loss) by adjusting GAAP net income (loss) with the impact of acquisition-related charges (intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. amortization, deferred stock compensation and charges related to milestone achievements), restructuring charges, and other non-recurring charges and gains. Cypress provides pro forma results as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
(Unaudited) (Unaudited)
----------------------------- ------------------
Jun 27 Jun 29 Mar 28 Jun 27 Jun 29
2004 2003 2004 2004 2003
--------- --------- --------- -------- --------
Revenues $264,269 $203,116 $254,393 $518,662 $384,083
Costs of revenues 124,855 106,448 123,360 248,215 209,021
Cost of revenues 124,804 106,354 123,360 248,164 208,522
Acquistion and stock
compensation
expenses 51 94 - 51 499
-------- -------- -------- -------- --------
Gross margin 139,414 96,668 131,033 270,447 175,062
Operating expenses:
Research and
development 63,918 60,413 60,391 124,309 118,862
Selling, general and
administrative 36,818 31,525 36,448 73,266 62,423
Restructuring costs - (185) (81) (81) 3,175
Amortization of
intangibles 9,607 9,346 10,191 19,798 18,830
Acquisition and
stock compensation
expenses 2,884 3,924 2,767 5,651 10,012
Employee loan
reserve - 157 (7,752) (7,752) 257
Damages claim
settlement 2,000 - - 2,000 -
-------- -------- -------- -------- --------
Total
operating
costs 115,227 105,180 101,964 217,191 213,559
-------- -------- -------- -------- --------
Operating income
(loss) 24,187 (8,512) 29,069 53,256 (38,497)
Net interest income
(expense) and other (679) (3,720) (748) (1,427) (5,562)
Gain (loss) on
retirement of bonds - (1,246) - - (1,246)
Impairments, asset
write-downs and
other 239 (1,013) 422 661 (1,013)
Net interest income
(expense) and other (918) (1,461) (1,170) (2,088) (3,303)
-------- -------- -------- -------- --------
Income (loss) before
income tax 23,508 (12,232) 28,321 51,829 (44,059)
Income tax
(provision) benefit (1,528) (206) (1,841) (3,369) (1,702)
-------- -------- -------- -------- --------
Net income (loss) $ 21,980 $(12,438) $ 26,480 $ 48,460 $(45,761)
======== ======== ======== ======== ========
Basic net income
(loss) per share $ 0.18 $ (0.10) $ 0.22 $ 0.39 $ (0.37)
Diluted net income
(loss) per share $ 0.13 $ (0.10) $ 0.16 $ 0.29 $ (0.37)
Shares used in
calculation:
Basic 123,366 122,941 122,417 122,892 123,973
Diluted 167,467 122,941 171,832 169,649 123,973
Prepared in accordance with GAAP
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