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| CYPRESS SEMICONDUCTOR CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| December 29, | December 30, | |||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Cash, cash equivalents and short-term investments | $ | 104,462 | $ | 117,210 | ||||
| Accounts receivable, net | 81,084 | 82,920 | ||||||
| Inventories (a) | 100,612 | 127,596 | ||||||
| Property, plant and equipment, net | 258,585 | 274,427 | ||||||
| Goodwill and other intangible assets, net | 106,523 | 113,410 | ||||||
| Other assets | 113,707 | 116,066 | ||||||
| Total assets | $ | 764,973 | $ | 831,629 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Accounts payable | $ | 47,893 | $ | 58,704 | ||||
| Deferred margin on sales to distributors | 122,578 | 131,192 | ||||||
| Income tax liabilities | 29,001 | 47,454 | ||||||
| Other liabilities | 159,866 | 185,418 | ||||||
| Long-term revolving credit facility | 227,000 | 232,000 | ||||||
| Total liabilities | 586,338 | 654,768 | ||||||
| Total Cypress stockholders' equity | 183,109 | 180,900 | ||||||
| Noncontrolling interest | (4,474 | ) | (4,039 | ) | ||||
| Total equity | 178,635 | 176,861 | ||||||
| Total liabilities and equity | $ | 764,973 | $ | 831,629 | ||||
|
(a) |
Inventories include $5.3 million and $2.8 million of capitalized inventories related to stock-based compensation expense, as of December 29, 2013 and December 30, 2012, respectively. |
| CYPRESS SEMICONDUCTOR CORPORATION | |||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
| ON A GAAP BASIS | |||||||||||||||||||||
| (In thousands, except per-share data) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
| December 29, | September 29, | December 30, | December 29, | December 30, | |||||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
|
|
|||||||||||||||||||||
| Revenues | $ | 167,776 | $ | 188,723 | $ | 180,282 |
|
$ | 722,693 | $ | 769,687 | ||||||||||
| Cost of revenues | 91,328 | 97,070 | 96,088 | 384,121 | 376,887 | ||||||||||||||||
| Gross margin | 76,448 | 91,653 | 84,194 | 338,572 | 392,800 | ||||||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Research and development | 42,343 | 50,429 | 47,075 | 190,906 | 189,897 | ||||||||||||||||
| Selling, general and administrative | 43,623 | 45,533 | 52,183 | 182,671 | 211,959 | ||||||||||||||||
| Amortization of acquisition-related intangibles | 1,850 | 1,987 | 1,826 | 7,833 | 3,996 | ||||||||||||||||
| Restructuring charges | (469 | ) | 3,693 | 2,976 | 15,357 | 4,258 | |||||||||||||||
| Loss on divestiture | - | - | 1,605 | - | 1,605 | ||||||||||||||||
| Total operating expenses, net | 87,347 | 101,642 | 105,665 | 396,767 | 411,715 | ||||||||||||||||
| Operating income (loss) | (10,899 | ) | (9,989 | ) | (21,471 | ) | (58,195 | ) | (18,915 | ) | |||||||||||
| Interest and other income (expense), net | (805 | ) | 427 | (1,749 | ) | 2,225 | (2,745 | ) | |||||||||||||
| Income (loss) before income taxes | - |
|
(9,562 | ) | (23,220 | ) | (55,970 | ) | (21,660 | ) | |||||||||||
| Income tax provision (benefit) | 2,210 | (774 | ) | 417 | (7,761 | ) | 2,324 | ||||||||||||||
| Income (loss), net of taxes | (13,914 | ) | (8,788 | ) | (22,803 | ) | (48,209 | ) | (23,984 | ) | |||||||||||
| Adjust for net loss attributable to noncontrolling interest | 337 | 430 | 584 | 1,845 | 1,614 | ||||||||||||||||
| Net income (loss) attributable to Cypress | $ | (13,577 | ) | $ | (8,358 | ) | $ | (22,219 | ) | $ | (46,364 | ) | $ | (22,370 | ) | ||||||
| Net income (loss) per share attributable to Cypress: | |||||||||||||||||||||
| Basic | $ | (0.09 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.31 | ) | $ | (0.15 | ) | ||||||
| Diluted | $ | (0.09 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.31 | ) | $ | (0.15 | ) | ||||||
| Cash dividend declared per share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.44 | $ | 0.44 | |||||||||||
| Shares used in net income (loss) per share calculation: | |||||||||||||||||||||
| Basic | 151,580 | 149,679 | 143,605 | 148,558 | 149,266 | ||||||||||||||||
| Diluted | 151,580 | 149,679 | 143,605 | 148,558 | 149,266 | ||||||||||||||||
| CYPRESS SEMICONDUCTOR CORPORATION | |||||||||||||||||||||
| RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (a) | |||||||||||||||||||||
| (In thousands, except per-share data) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
| December 29, | September 29, | December 30, | December 29, | December 30, | |||||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| GAAP gross margin | $ | 76,448 | $ | 91,653 | $ | 84,194 | $ | 338,572 | $ | 392,800 | |||||||||||
| Stock-based compensation expense | 3,088 | 2,804 | 2,195 | 12,789 | 18,519 | ||||||||||||||||
| Acquisition-related expense | 5,562 | 6,849 | 3,545 | 24,805 | 3,545 | ||||||||||||||||
| Changes in value of deferred compensation plan | 136 | 265 | (66 | ) | 854 | 372 | |||||||||||||||
| Impairment of assets and other | 269 | (64 | ) | 2,137 | 241 | 3,581 | |||||||||||||||
| Patent license fee | - | - | - | - | 7,100 | ||||||||||||||||
| (Gain) loss on divestiture | - | - | 776 | - | 776 | ||||||||||||||||
| Non-GAAP gross margin | $ | 85,503 | $ | 101,507 | $ | 92,781 | $ | 377,261 | $ | 426,693 | |||||||||||
| GAAP research and development expenses | $ | 42,343 | $ | 50,429 | $ | 47,074 | $ | 190,906 | $ | 189,897 | |||||||||||
| Stock-based compensation expense | (7,356 | ) | (6,806 | ) | (2,345 | ) | (26,042 | ) | (19,800 | ) | |||||||||||
| Acquisition-related expense | - | (19 | ) | (2,703 | ) | (252 | ) | (2,703 | ) | ||||||||||||
| Non-cash compensation | - | - | (433 | ) | - | (433 | ) | ||||||||||||||
| Changes in value of deferred compensation plan | (282 | ) | (548 | ) | 155 | (1,744 | ) | (568 | ) | ||||||||||||
| (Gain) loss on divestiture | - | - | (306 | ) | - | (307 | ) | ||||||||||||||
| Impairment of assets and other | 1,368 | (1,078 | ) | - | (1,104 | ) | - | ||||||||||||||
| Non-GAAP research and development expenses | $ | 36,074 | $ | 41,978 | $ | 41,442 | $ | 161,764 | $ | 166,086 | |||||||||||
| GAAP selling, general and administrative expenses | $ | 43,623 | $ | 45,533 | $ | 52,182 | $ | 182,671 | $ | 211,959 | |||||||||||
| Stock-based compensation expense | (10,432 | ) | (9,701 | ) | (2,724 | ) | (34,187 | ) | (36,013 | ) | |||||||||||
| Acquisition-related expense | (148 | ) | (366 | ) | (6,545 | ) | (1,168 | ) | (9,095 | ) | |||||||||||
| Non-cash compensation | - | - | (500 | ) | - | (500 | ) | ||||||||||||||
| Changes in value of deferred compensation plan | (607 | ) | (1,181 | ) | 306 | (3,795 | ) | (1,710 | ) | ||||||||||||
| Impairment of assets and other | (244 | ) | 131 | (220 | ) | (450 | ) | (173 | ) | ||||||||||||
| (Gain) loss on divestiture | - | - | (664 | ) | - | (664 | ) | ||||||||||||||
| Non-GAAP selling, general and administrative expenses | $ | 32,192 | $ | 34,416 | $ | 41,835 | $ | 143,071 | $ | 163,804 | |||||||||||
| GAAP operating income (loss) | $ | (10,899 | ) | $ | (9,989 | ) | $ | (21,470 | ) | (58,195 | ) | $ | (18,915 | ) | |||||||
| Stock-based compensation expense | 20,877 | 19,311 | 7,264 | 73,020 | # | 74,332 | |||||||||||||||
| Acquisition-related expense | 7,558 | 9,221 | 14,618 | 34,056 | 19,337 | ||||||||||||||||
| Non-cash compensation | - | - | 933 | - | 933 | ||||||||||||||||
| Changes in value of deferred compensation plan | 1,026 | 1,994 | (528 | ) | 6,393 | 2,650 | |||||||||||||||
| Impairment of assets and other | (854 | ) | 883 | 2,361 | 1,795 | 3,758 | |||||||||||||||
| Restructuring charges | (470 | ) | 3,693 | 2,975 | 15,357 | 4,258 | |||||||||||||||
| Patent license fee | - | - | - | - | 7,100 | ||||||||||||||||
| (Gain) loss on divestiture and expenses | - | - | 3,351 | - | 3,351 | ||||||||||||||||
| Non-GAAP operating income | $ | 17,238 | $ | 25,113 | $ | 9,504 | $ | 72,426 | $ | 96,804 | |||||||||||
| GAAP net income (loss) attributable to Cypress | $ | (13,577 | ) | $ | (8,358 | ) | $ | (22,219 | ) | $ | (46,364 | ) | $ | (22,370 | ) | ||||||
| Stock-based compensation expense | 20,877 | 19,311 | 7,264 | 73,020 | 74,332 | ||||||||||||||||
| Acquisition-related expense | 7,558 | 9,221 | 14,618 | 34,056 | 19,337 | ||||||||||||||||
| Non-cash compensation | - | - | 933 | - | 933 | ||||||||||||||||
| Changes in value of deferred compensation plan | (535 | ) | (97 | ) | (530 | ) | 22 | (507 | ) | ||||||||||||
| Impairment of assets and other | (854 | ) | 883 | 292 | 1,794 | 3,758 | |||||||||||||||
| Restructuring charges | (470 | ) | 3,693 | 2,975 | 15,357 | 4,258 | |||||||||||||||
| Tax and tax-related items | 1,065 | (2,638 | ) | (555 | ) | (12,398 | ) | (1,502 | ) | ||||||||||||
| Investment-related gains/losses | 930 | - | 2,171 | (2,266 | ) | 2,760 | |||||||||||||||
| Patent license fee | - | - | - | - | 7,100 | ||||||||||||||||
| (Gain) loss on divestiture and expenses | - | - | 3,351 | - | 3,351 | ||||||||||||||||
| Non-GAAP net income attributable to Cypress | $ | 14,994 | $ | 22,015 | $ | 8,300 | $ | 63,221 | $ | 91,450 | |||||||||||
| GAAP net income (loss) per share attributable to Cypress - diluted | $ | (0.09 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.31 | ) | $ | (0.15 | ) | ||||||
| Stock-based compensation expense | 0.13 | 0.12 | 0.04 | 0.45 | 0.45 | ||||||||||||||||
| Acquisition-related expense | 0.05 | 0.02 | 0.08 | 0.21 | 0.12 | ||||||||||||||||
| Impairment of assets and other | (0.01 | ) | 0.05 | - | 0.01 | 0.02 | |||||||||||||||
| Non-cash compensation | - | - | 0.01 | - | - | ||||||||||||||||
| Restructuring charges | - | 0.02 | 0.02 | 0.10 | 0.03 | ||||||||||||||||
| Tax and tax-related items | 0.01 | (0.02 | ) | - | (0.08 | ) | (0.01 | ) | |||||||||||||
| Investment-related gains/losses | 0.01 | - | 0.02 | (0.01 | ) | 0.02 | |||||||||||||||
| Non-GAAP share count adjustment | (0.01 | ) | 0.01 | 0.01 | 0.02 | 0.01 | |||||||||||||||
| Patent license fee | - | - | - | - | 0.04 | ||||||||||||||||
| (Gain) loss on divestiture and expenses | - | - | 0.02 | - | 0.02 | ||||||||||||||||
| Non-GAAP net income per share attributable to Cypress - diluted | $ | 0.09 | $ | 0.14 | $ | 0.05 | $ | 0.39 | $ | 0.55 | |||||||||||
|
(a) |
Refer to the accompanying "Notes to Non-GAAP Financial Measures" for a detailed discussion of management's use of non-GAAP financial measures. |
| CYPRESS SEMICONDUCTOR CORPORATION | |||||||||||||||||||||
| SUPPLEMENTAL FINANCIAL DATA | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
| December 29, | September 29, | December 30, | December 29 | December 30, | |||||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
|
Selected Cash Flow Data (Preliminary): |
|||||||||||||||||||||
| Net cash provided by operating activities | $ | 20,171 | $ | 7,905 | $ | 17,302 | $ | 66,696 | $ | 134,997 | |||||||||||
| Net cash provided by (used in) investing activities | $ | 569 | $ | (2,080 | ) | $ | (95,562 | ) | $ | 1,139 | $ | (113,036 | ) | ||||||||
| Net cash provided by (used in) financing activities | $ | (11,276 | ) | $ | 108 | $ | (20,866 | ) | $ | (45,024 | ) | $ | (58,475 | ) | |||||||
|
Other Supplemental Data (Preliminary): |
|||||||||||||||||||||
| Capital expenditures | $ | 8,750 | $ | 10,808 | $ | 7,809 | $ | 36,627 | $ | 33,013 | |||||||||||
| Depreciation | $ | 9,436 | $ | 9,745 | $ | 11,419 | $ | 39,572 | $ | 44,904 | |||||||||||
| Payment of dividend | $ | 16,578 | $ | 16,258 | $ | 16,057 | $ | 64,819 | $ | 63,227 | |||||||||||
| Dividend paid per share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.44 | $ | 0.44 | |||||||||||
| Dividend yield per share (a) | 4.3 | % | 4.9 | % | 4.2 | % | 4.3 | % | 4.2 | % | |||||||||||
|
(a) |
Dividend yield per share is calculated based on the annualized dividend paid per share divided by the common stock share price at the end of the period. |
| CYPRESS SEMICONDUCTOR CORPORATION | ||||||||||||||||||||||||||||||||||||
| CONSOLIDATED DILUTED EPS CALCULATION | ||||||||||||||||||||||||||||||||||||
| (In thousands, except per-share data) | ||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
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| December 29, | September 29, | December 30, | December 29, | December 30, | ||||||||||||||||||||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | GAAP | Non-GAAP | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||||||||||
| Net income (loss) attributable to Cypress | $ | (13,577 | ) | $ | 14,992 | $ | (8,358 | ) | $ | 22,015 | $ | (22,219 | ) | $ | 8,300 | $ | (46,364 | ) | $ | 63,221 | $ | (22,370 | ) | $ | 91,450 | |||||||||||
| Weighted-average common shares outstanding (basic) | 151,580 | 151,580 | 149,679 | 149,679 | 143,605 | 143,605 | 148,558 | 148,558 | 149,266 | 149,266 | ||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||||||||||||
| Stock options, unvested restricted stock and other | - | 14,224 | - | 12,525 | - | 13,723 | - | 12,954 | - | 16,063 | ||||||||||||||||||||||||||
| Weighted-average common shares outstanding for diluted computation | 151,580 | 165,804 | 149,679 | 162,204 | 143,605 | 157,328 | 148,558 | 161,512 | 149,266 | 165,329 | ||||||||||||||||||||||||||
| Net income (loss) per share attributable to Cypress - basic | $ | (0.09 | ) | $ | 0.10 | $ | (0.06 | ) | $ | 0.15 | $ | (0.15 | ) | $ | 0.06 | $ | (0.31 | ) | $ | 0.43 | $ | (0.15 | ) | $ | 0.61 | |||||||||||
| Net income (loss) per share attributable to Cypress - diluted | $ | (0.09 | ) | $ | 0.09 | $ | (0.06 | ) | $ | 0.14 | $ | (0.15 | ) | $ | 0.05 | $ | (0.31 | ) | $ | 0.39 | $ | (0.15 | ) | $ | 0.55 | |||||||||||
| December 29, | September 30, | December 30, | December 29, | December 30, | ||||||||||||||||||||||||||||||||
| 2013 | 2012 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||
| Average stock price for the period ended | $9.45 | $11.70 | $10.19 | $10.59 | $13.26 | |||||||||||||||||||||||||||||||
| Common stock outstanding at period end (in thousands) | 153,214 | 150,833 | 144,224 | 153,214 | 144,224 | |||||||||||||||||||||||||||||||
Notes to Non-GAAP Financial Measures
