To supplement its consolidated financial results presented in accordance
with GAAP, Cypress uses non-GAAP financial measures which are adjusted
from the most directly comparable GAAP financial measures to exclude
certain items, as described in details below. Management believes that
these non-GAAP financial measures reflect an additional and useful way
of viewing aspects of Cypress’s operations that, when viewed in
conjunction with Cypress’s GAAP results, provide a more comprehensive
understanding of the various factors and trends affecting Cypress’s
business and operations. Non-GAAP financial measures used by Cypress
include:
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Research and development expenses;
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Selling, general and administrative expenses;
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Operating income (loss);
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Diluted net income (loss) per share.
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Cypress uses each of these non-GAAP financial measures for internal
managerial purposes, when providing its financial results and business
outlook to the public, and to facilitate period-to-period comparisons.
Management believes that these non-GAAP measures provide meaningful
supplemental information regarding Cypress’s operational and financial
performance of current and historical results. Management uses these
non-GAAP measures for strategic and business decision making, internal
budgeting, forecasting and resource allocation processes. In addition,
these non-GAAP financial measures facilitate management’s internal
comparisons to Cypress’s historical operating results and comparisons to
competitors’ operating results.
Cypress believes that providing these non-GAAP financial measures, in
addition to the GAAP financial results, are useful to investors because
they allow investors to see Cypress’s results “through the eyes” of
management as these non-GAAP financial measures reflect Cypress’s
internal measurement processes. Management believes that these non-GAAP
financial measures enable investors to better assess changes in each key
element of Cypress’s operating results across different reporting
periods on a consistent basis. Thus, management believes that each of
these non-GAAP financial measures provides investors with another method
for assessing Cypress’s operating results in a manner that is focused on
the performance of its ongoing operations.
There are limitations in using non-GAAP financial measures because they
are not prepared in accordance with GAAP and may be different from
non-GAAP financial measures used by other companies. In addition,
non-GAAP financial measures may be limited in value because they exclude
certain items that may have a material impact upon Cypress’s reported
financial results. Management compensates for these limitations by
providing investors with reconciliations of the non-GAAP financial
measures to the most directly comparable GAAP financial measures. The
presentation of non-GAAP financial information is not meant to be
considered in isolation or as a substitute for the most directly
comparable GAAP financial measures. The non-GAAP financial measures
supplement, and should be viewed in conjunction with, GAAP financial
measures. Investors should review the reconciliations of the non-GAAP
financial measures to their most directly comparable GAAP financial
measures as provided in the accompanying press release.