CY » Topics » Cypress Reports 2007 First-Quarter Results

This excerpt taken from the CY 8-K filed Apr 26, 2007.

Cypress Reports 2007 First-Quarter Results



Q1 2007 consolidated revenue increased 19% sequentially and 38% year-on-year.



Q1 2007 fully diluted adjusted-GAAP EPS increased 129% year-on-year.



PSoC™ revenue exceeded expectations; design wins and new customer traction remain very strong and ahead of plan.



The West Bridge™ Antioch™ peripheral handset controller began production and secured another major OEM design win.



Cypress repurchased 25.2 million shares in late March under a recently announced Accelerated Share Repurchase program. A total of 28 million to 30 million shares are expected to be repurchased under the program.

SAN JOSE, Calif., April 26, 2007 — Cypress Semiconductor Corp. (NYSE: CY) today announced that revenue for the 2007 first quarter was $342.9 million, up 19.5% from prior-quarter revenue of $287.0 million and up 37.7% from year-ago first-quarter revenue of $249.1 million.

Adjusted-GAAP net income for the 2007 first quarter—earnings that exclude charges for stock-based compensation, acquisition-related charges, divestiture gains and other special charges and credits—totaled $28.2 million5, or diluted earnings per share of $0.161. This compares with the prior quarter’s diluted earnings per share of $0.151. Diluted earnings per share in the year-ago first quarter was $0.071.


Cypress recorded a GAAP net loss of $2.0 million in the 2007 first quarter, or a diluted net loss per share of $0.01. This was impacted by first-time charges associated with the PowerLight acquisition as follows: $10 million for in-process R&D, $9 million for stock-based compensation charges, and $6 million for amortization of intangibles offset by a tax benefit of $7 million and a related minority interest adjustment of $6 million, totaling approximately $0.07 per share. This compares with last quarter’s diluted earnings per share of $0.09. Diluted earnings per share in the year-ago first quarter was $0.05 per share.

Consolidated gross margin on an adjusted-GAAP basis4 for the first quarter was 40.2%, down 2.3% from the previous quarter due to a higher revenue mix from SunPower. On a GAAP basis, gross margin was 38.6%, down 3.0% from the prior quarter. Semiconductor margin on an adjusted-GAAP basis4 for the first quarter was 48.2%, consistent with the previous quarter. Semiconductor margin4 was up 1.3% from 46.9% in the year-ago first quarter and up 8.5% from 39.7% in the 2005 first quarter.

Cypress President and CEO T.J. Rodgers said, “Revenue for Q1 exceeded our guidance due to the strong execution of our SunPower division, which included consolidated revenue from the PowerLight acquisition for the first time. Revenue from our semiconductor business was in line with our expectation, driven by continued robust demand for Cypress’s PSoC solutions.

“Overall, Cypress continues to focus on generating revenue from its higher-margin programmable solutions. Led by PSoC, revenue from these solutions accounted for 41% of semiconductor revenue in Q1 2007, up from 28% in Q4 2004. Direct margins remain strong. ASPs increased sequentially—more than 20% year-on-year—in part due to our focus on programmable products.”

Rodgers continued, “Our semiconductor book-to-bill ratio ended the first quarter at 1.03, and our second quarter semiconductor revenue is currently 87% booked. We anticipate that some of the softness we experienced in Q1 in the wireless and communications markets will continue, but we do not expect a major slowdown, and we remain optimistic about our growth prospects in the second half of 2007.”

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