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Cypress Reports Third-Quarter 2014 Results

SAN JOSE, CA -- (Marketwired) -- Oct 16, 2014 -- Cypress Semiconductor Corp. (NASDAQ: CY) today announced its third-quarter 2014 results, which included the remarks below from its president and CEO, T.J. Rodgers. Highlights for the quarter included:

Fellow shareholders:

Our revenue and earnings for the quarter are given below, compared with those of the prior quarter and prior year:

(In thousands, except per-share data)

                                                                            
                           NON-GAAP                        GAAP             
                 ----------------------------  ---------------------------- 
                  Q3 2014   Q2 2014   Q3 2013   Q3 2014   Q2 2014   Q3 2013 
                 --------  --------  --------  --------  --------  -------- 
Revenue          $187,516  $183,601  $188,723  $187,516  $183,601  $188,723 
                                                                            
Gross margin         53.5%     54.0%     53.8%     51.7%     51.9%     48.6%
                                                                            
Pretax margin        15.0%     14.9%     12.5%      7.4%      5.2%     -5.1%
                                                                            
Net income                                                                  
 (loss)          $ 26,538  $ 26,723  $ 22,015  $ 12,840  $  9,527  $ (8,358)
                                                                            
Diluted EPS                                                                 
 (loss per                                                                  
 share)          $   0.16  $   0.16  $   0.14  $   0.08  $   0.06  $  (0.06)
                                                                            

Third-quarter revenue increased 2.1% sequentially, led by growth in our Memory Products Division (MPD) and Emerging Technologies Division (ETD), which is now contributing significantly to Cypress's growth with 40% sequential growth to $7.5 million. All three of our ETD startup businesses grew sequentially and will contribute significantly to revenue growth in 2015. The revenue growth in MPD and ETD was partially offset by ongoing softness in the handset market.

Our non-GAAP pretax profit increased 18.7% year-on-year, partly driven by a 7.0% reduction in non-GAAP operating expenses.

Our cash, cash equivalents and short-term investments increased 5.8% sequentially, demonstrating the fall-through leverage of our current business model.

BUSINESS REVIEW

+ Our non-GAAP consolidated gross margin for the third quarter was 53.5%, down 0.5 percentage points from the previous quarter, primarily due to product mix. Excluding ETD, our core semiconductor gross margin was 55.3%.

+ Net inventory at the end of the third quarter was $88.8 million, flat from the second quarter.

+ Cypress announced that its Board of Directors approved a quarterly cash dividend of $0.11 per share, payable to holders of record of the company's common stock as of the close of business on September 25, 2014. This dividend was paid on October 16, 2014.

                                                                            
                             NET SALES SUMMARY                              
                     (In thousands, except percentages)                     
                                (Unaudited)                                 
                                                                            
                        THREE MONTHS ENDED                                  
                ----------------------------------                          
                                                                            
                 Sept. 28,    Jun. 29,   Sept. 29,  Sequential   Year-over- 
Business Unit      2014        2014        2013       Change    Year Change 
                ----------  ----------  ----------  ----------  ----------- 
PSD(1)          $   68,750  $   74,676  $   78,135          -8%         -12%
MPD(1)          $   92,179      85,582      88,743           8%           4%
DCD(1)          $   19,091      17,989      18,884           6%           1%
ETD(2)          $    7,496       5,354       2,961          40%         153%
                ----------  ----------  ----------  ----------  ----------- 
Total           $  187,516  $  183,601  $  188,723           2%          -1%
                ----------  ----------  ----------  ----------  ----------- 
                                                                            
Geographic                                                                  
China and ROW           60%         62%         64%         -3%          -6%
Americas                17%         17%         14%          0%          21%
Europe                  14%         13%         12%          8%          17%
Japan                    9%          8%         10%         13%         -10%
                ----------  ----------  ----------  ----------  ----------- 
Total                  100%        100%        100%          0%           0%
                ----------  ----------  ----------  ----------  ----------- 
                                                                            
Channel                                                                     
Distribution            68%         68%         74%          0%          -8%
Direct                  32%         32%         26%          0%          23%
                ----------  ----------  ----------  ----------  ----------- 
Total                  100%        100%        100%          0%           0%
                ----------  ----------  ----------  ----------  ----------- 
                                                                            
1. PSD, Programmable Systems Division; DCD, Data Communications Division;   
   MPD, Memory Products Division.                                           
2. ETD, Emerging Technologies Division includes businesses outside our core 
   semiconductor businesses outlined in Footnote 1. Includes subsidiaries   
   AgigA Tech Inc., Deca Technologies Inc., and our foundry business unit.  
                                                                            

THIRD-QUARTER 2014 HIGHLIGHTS

+ Huawei tablet. Huawei designed Cypress's TrueTouch® Gen5 TMA568 capacitive touchscreen controller into its new MediaPad X1 tablet. The controller features industry-leading gloved-finger tracking and hover support.

+ Samsung Galaxy S5 Mini smartphone. A teardown by analytics firm TechInsights found Cypress's TrueTouch Gen5 TMA545 touchscreen controller in the new Samsung Galaxy S5 Mini smartphone. The smartphone employs Gen5's advanced features, including gloved-finger tracking and hover support. The teardown noted that the TrueTouch controller replaced competing touch controllers used in the previous-generation Galaxy S4 Mini and S3 Mini smartphones.

+ Low-cost touchscreen sensors and controllers. The TrueTouch Gen4X touchscreen controller family now supports Cypress's Single-Layer Independent Multi-touch (SLIM®) sensor structures, which reduce multi-layer sensor costs by as much as 50%. The Gen4X TMA445 and TMA445A controllers also support gloved-finger tracking and a face-detection feature that prevents hang-ups.

+ CapSense buttons for 2.5 cents. Cypress announced that designers can now replace mechanical buttons for just 2.5 cents apiece using its CY8CMBR3110 CapSense® controllers. The mechanical button replacement (MBR) family enables the quick implementation of sleek, reliable capacitive touch-sensing user interfaces with advanced features such as water tolerance and proximity sensing.

+ A $49 kit to implement USB 3.0. Cypress introduced a new, low-cost, easy-to-use USB 3.0 SuperSpeed Explorer Kit based on its programmable EZ-USB® FX3™ peripheral controller, the undisputed leader for USB 3.0-compatible devices. The development platform enables designers to add 5-Gbps USB 3.0 data throughput to virtually any system quickly and cheaply.

+ Cypress-Lattice kit. Cypress collaborated with Lattice Semiconductor to bring 5-Gbps data throughput to the Lattice USB 3.0 Video Bridge Development Kit. The kit uses the Cypress EZ-USB FX3 controller to simplify the integration of USB 3.0 audio and high-definition (HD) video.

+ Raytrix camera. Raytrix GmbH selected Cypress's EZ-USB CX3™ USB 3.0 camera controller for its next-generation 3-D camera. The CX3's 5-Gbps USB 3.0 throughput enables the innovative R42 3-D Light Field Camera to create images with extended depth-of-field, allowing for precise focusing later in software.

+ Nonvolatile DDR4 DIMMs. Cypress subsidiary AgigA Tech began sampling the industry's first DDR4 Nonvolatile DIMM (NVDIMM) to key OEMs and development partners. The NVDIMM preserves data during power outages, while still operating as a full-performance DIMM. The device targets next-generation, Intel-based server platforms.

+ Ultra-high-reliability SRAM. Cypress expanded its family of asynchronous SRAMs with a new 16 Mb MoBL® (More Battery Life™) low-power SRAM that includes embedded, on-chip Error-Correcting Code (ECC). On-chip ECC makes these SRAMs 1,000 times more reliable than standard SRAMs and eliminates the need for additional error correction chips.

+ Foundry technology deal. Cypress and Chinese wafer foundry licensee Shanghai Huali Microelectronics Corp. (HLMC) developed functioning memory cells using Cypress's SONOS (Silicon Oxide Nitride Oxide Silicon) embedded flash memory intellectual property (IP) at the 55-nanometer process technology node. The nonvolatile memory cells are designed for use in smartcards and embedded-flash microcontrollers.

+ Access to 60,000 technical documents. Cypress introduced a document management tool that helps customers quickly search Cypress online technical content. The Cypress Document Manager tool allows users to search and locate more than 60,000 Cypress technical documents.

FOLLOW CYPRESS ONLINE

ABOUT CYPRESS

Cypress delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional system value. Cypress offerings include the flagship PSoC® 1, PSoC 3, PSoC 4 and PSoC 5LP programmable system-on-chip families. Cypress is the world leader in capacitive user interface solutions including CapSense touch sensing, TrueTouch touchscreens, and trackpad solutions for notebook PCs and peripherals. Cypress is a world leader in USB controllers, which enhance connectivity and performance in a wide range of consumer and industrial products. Cypress is also the world leader in SRAM and nonvolatile RAM memories. Cypress serves numerous major markets, including consumer, mobile handsets, computation, data communications, automotive, industrial and military. Cypress trades on the NASDAQ Global Select Market under the ticker symbol CY. Visit Cypress online at www.cypress.com.

FORWARD-LOOKING STATEMENTS

Statements herein that are not historical facts and that refer to Cypress or its subsidiaries' plans and expectations for Q4 2014 and the remainder of fiscal year 2014 and beyond are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. We may use words such as "believe," "expect," "future," "plan," "intend" and similar expressions to identify such forward-looking statements that include, but are not limited to, statements related to the semiconductor market; the strength and growth of our proprietary and programmable products; our expectations regarding our revenue growth and earnings leverage; our expectation that our ETD division will significantly contribute to our 2014 revenue growth; our expectations regarding the demand for our products and how our products are expected to perform. Such statements reflect our current expectations, which are based on information and data available to our management as of the date of this release. Our actual results may differ materially due to a variety of uncertainties and risk factors, including, but not limited to, the state of and future of the global economy, business conditions and growth trends in the semiconductor market, whether our products perform as expected, whether the demand for our proprietary and programmable products is fully realized, our ability to manage our business to have strong earnings and significant revenue growth, reduce operating expenses, our ability to effectively implement third party wafer processes, the strength or softness of the markets we serve, our ability to maintain and improve our gross margins and realize our bookings, the seasonality of the markets we serve, the financial performance of our subsidiaries and Emerging Technologies Division, and other risks described in our filings with the Securities and Exchange Commission. We assume no responsibility to update any such forward-looking statements.

Cypress, the Cypress logo, PSoC, TrueTouch, SLIM, EZ-USB, MoBL and CapSense are registered trademarks and FX3, CX3 and More Battery Life are trademarks of Cypress Semiconductor Corp. AGIGA is a registered trademark of AgigA Tech, Inc. All other trademarks or registered trademarks are the property of their respective owners.

                                                                            
                     CYPRESS SEMICONDUCTOR CORPORATION                      
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                               (In thousands)                               
                                (Unaudited)                                 
                                                                            
                                               September 28,   December 29, 
                                                    2014           2013     
                                               -------------  ------------- 
                                                                            
ASSETS                                                                      
                                                                            
  Cash, cash equivalents and short-term                                     
   investments                                 $     120,377  $     104,462 
  Accounts receivable, net                           105,853         81,084 
  Inventories, net (a)                                88,790        100,612 
  Property, plant and equipment, net                 244,298        258,585 
  Goodwill and other intangible assets, net          100,970        106,524 
  Other assets                                       116,821        111,617 
                                               -------------  ------------- 
    Total assets                               $     777,109  $     762,884 
                                               =============  ============= 
                                                                            
LIABILITIES AND EQUITY                                                      
                                                                            
  Accounts payable                             $      33,462  $      47,893 
  Deferred margin on sales to distributors           134,726        122,578 
  Income tax liabilities                              22,041         29,865 
  Other liabilities                                  155,073        159,865 
  Long-term revolving credit facility                227,000        227,000 
                                               -------------  ------------- 
    Total liabilities                                572,302        587,201 
                                               -------------  ------------- 
  Total Cypress stockholders' equity                 210,836        180,157 
  Noncontrolling interest                             (6,029)        (4,474)
                                               -------------  ------------- 
    Total equity                                     204,807        175,683 
                                               -------------  ------------- 
      Total liabilities and equity             $     777,109  $     762,884 
                                               =============  ============= 
                                                                            
(a) Net inventories include $3.2 million and $5.3 million of capitalized    
 inventories related to stock compensation expense, as of September 28,     
 2014 and December 29, 2013, respectively.                                  
                                                                            
                                                                            
                                                                            
                     CYPRESS SEMICONDUCTOR CORPORATION                      
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                              ON A GAAP BASIS                               
                   (In thousands, except per-share data)                    
                                (Unaudited)                                 
                                                                            
                                             Three Months Ended             
                                ------------------------------------------- 
                                September 28,     June 29,    September 29, 
                                     2014           2014           2013     
                                -------------  -------------  ------------- 
                                                                            
Revenues                        $     187,516  $     183,601  $     188,723 
Cost of revenues                       90,633         88,231         97,070 
                                -------------  -------------  ------------- 
Gross margin                           96,883         95,370         91,653 
Operating expenses:                                                         
  Research and development             38,626         40,927         50,429 
  Selling, general and                                                      
   administrative                      41,119         42,059         45,533 
  Amortization of acquisition-                                              
   related intangibles                  1,701          1,800          1,987 
  Restructuring charges                  (238)             -          3,693 
                                -------------  -------------  ------------- 
    Total operating expenses,                                               
     net                               81,208         84,786        101,642 
                                -------------  -------------  ------------- 
Operating income (loss)                15,675         10,584         (9,989)
Interest and other income, net         (1,890)        (1,128)           427 
                                -------------  -------------  ------------- 
Income (loss) before income                                                 
 taxes                                 13,785          9,456         (9,562)
Income tax benefit (provision)         (1,231)          (299)           774 
                                -------------  -------------  ------------- 
Income (loss), net of taxes            12,554          9,157         (8,788)
Adjust for net loss                                                         
 attributable to noncontrolling                                             
 interest                                 286            370            430 
                                -------------  -------------  ------------- 
Net Income (loss) attributable                                              
 to Cypress                     $      12,840  $       9,527  $      (8,358)
                                =============  =============  ============= 
                                                                            
Net Income (loss) per share                                                 
 attributable to Cypress:                                                   
  Basic                         $        0.08  $        0.06  $       (0.06)
  Diluted                       $        0.08  $        0.06  $       (0.06)
  Cash dividend per share       $        0.11  $        0.11  $        0.11 
Shares used in net income                                                   
 (loss) per share calculation:                                              
  Basic                               159,759        157,936        149,679 
  Diluted                             166,481        164,460        149,679 
                                -------------  -------------  ------------- 
                                                                            
                                                                            
                                                                            
                     CYPRESS SEMICONDUCTOR CORPORATION                      
  RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES  
                                     (a)                                    
                   (In thousands, except per-share data)                    
                                (Unaudited)                                 
                                                                            
                                       Three Months Ended                   
                     ------------------------------------------------------ 
                     September                            September         
                        28,      % of   June 29,   % of      29,      % of  
                        2014   Revenue    2014   Revenue     2013   Revenue 
                     --------- -------  -------- -------  --------- ------- 
                                                                            
GAAP gross margin    $  96,883    51.7% $ 95,370    51.9% $  91,653    48.6%
  Stock-based                                                               
   compensation                                                             
   expense               3,766     2.0%    4,433     2.4%     2,804     1.5%
  Acquisition-                                                              
   related expense           -     0.0%     (109)    0.0%     6,849     3.6%
  Changes in value                                                          
   of deferred                                                              
   compensation plan         4     0.0%      248     0.1%       265     0.1%
  Impairment of                                                             
   assets and other       (303)   -0.2%      187     0.1%       (64)    0.0%
  Tax and tax-                                                              
   related items             -     0.0%     (925)   -0.5%         -     0.0%
                     --------- -------  -------- -------  --------- ------- 
Non-GAAP gross                                                              
 margin              $ 100,350    53.5% $ 99,204    54.0% $ 101,507    53.8%
                     ========= =======  ======== =======  ========= ======= 
                                                                            
GAAP research and                                                           
 development                                                                
 expenses            $  38,626          $ 40,927          $  50,429         
  Stock-based                                                               
   compensation                                                             
   expense              (2,089)           (4,362)            (6,806)        
  Acquisition-                                                              
   related expense           -                 -                (19)        
  Changes in value                                                          
   of deferred                                                              
   compensation plan       (13)             (483)              (548)        
  Impairment of                                                             
   assets and other       (231)                -             (1,078)        
                     ---------          --------          ---------         
Non-GAAP research                                                           
 and development                                                            
 expenses            $  36,293          $ 36,082          $  41,978         
                     =========          ========          =========         
                                                                            
GAAP selling,                                                               
 general and                                                                
 administrative                                                             
 expenses            $  41,119          $ 42,059          $  45,533         
  Stock-based                                                               
   compensation                                                             
   expense              (6,427)           (5,523)            (9,701)        
  Acquisition-                                                              
   related expense           -              (385)              (366)        
  Changes in value                                                          
   of deferred                                                              
   compensation plan       (24)           (1,097)            (1,181)        
  Impairment of                                                             
   assets and other         64              (877)               131         
                     ---------          --------          ---------         
Non-GAAP selling,                                                           
 general and                                                                
 administrative                                                             
 expenses            $  34,732          $ 34,177          $  34,416         
                     =========          ========          =========         
                                                                            
GAAP operating                                                              
 income (loss)       $  15,675          $ 10,584          $  (9,989)        
  Stock-based                                                               
   compensation                                                             
   expense              12,282            14,318             19,311         
  Acquisition-                                                              
   related expense       1,701             2,077              9,221         
  Changes in value                                                          
   of deferred                                                              
   compensation plan        41             1,828              1,994         
  Impairment of                                                             
   assets and other       (136)            1,063                883         
  Restructuring                                                             
   charges                (238)                -              3,693         
  Tax and tax-                                                              
   related items             -              (925)                 -         
                     ---------          --------          ---------         
Non-GAAP operating                                                          
 income              $  29,325          $ 28,945          $  25,113         
                     =========          ========          =========         
                                                                            
GAAP pretax profit   $  13,785     7.4% $  9,456     5.2% $  (9,562)   -5.1%
  Stock-based                                                               
   compensation                                                             
   expense              12,282     6.5%   14,318     7.8%    19,311    10.2%
  Acquisition-                                                              
   related expense       1,701     0.9%    2,076     1.1%     9,221     4.9%
  Changes in value                                                          
   of deferred                                                              
   compensation plan       288     0.2%       75     0.0%       (97)    0.0%
  Impairment of                                                             
   assets and other       (137)   -0.1%        -     0.0%       883     0.4%
  Restructuring                                                             
   charges                (238)   -0.1%      156     0.1%     3,693     2.1%
  Tax and tax-                                                              
   related items          (966)   -0.5%        -     0.0%       231     0.0%
  Losses from equity                                                        
   method investment     1,386     0.7%    1,366     0.7%         -     0.0%
                     --------- -------  -------- -------  --------- ------- 
Non-GAAP pretax                                                             
 profit              $  28,101    15.0% $ 27,447    14.9% $  23,680    12.5%
                     ========= =======  ======== =======  ========= ======= 
                                                                            
GAAP net income                                                             
 (loss) attributable                                                        
 to Cypress          $  12,840          $  9,527          $  (8,358)        
  Stock-based                                                               
   compensation                                                             
   expense              12,282            14,318             19,311         
  Acquisition-                                                              
   related expense       1,701             2,075              9,221         
  Changes in value                                                          
   of deferred                                                              
   compensation plan       288                75                (97)        
  Impairment of                                                             
   assets and other       (136)            1,080                883         
  Restructuring                                                             
   charges                (238)                -              3,693         
  Tax and tax-                                                              
   related items        (1,585)           (1,719)            (2,638)        
  Losses from equity                                                        
   method investment     1,386             1,367                  -         
                     ---------          --------          ---------         
Non-GAAP net income                                                         
 attributable to                                                            
 Cypress             $  26,538          $ 26,723          $  22,015         
                     =========          ========          =========         
                                                                            
GAAP net income                                                             
 (loss) per share                                                           
 attributable to                                                            
 Cypress - diluted   $    0.08          $   0.06          $   (0.06)        
  Stock-based                                                               
   compensation                                                             
   expense                0.07              0.09               0.12         
  Acquisition-                                                              
   related expense        0.01              0.01               0.02         
  Changes in value                                                          
   of deferred                                                              
   compensation plan         -                 -                  -         
  Impairment of                                                             
   assets and other          -              0.01               0.05         
  Restructuring                                                             
   charges                   -                 -               0.02         
  Tax and tax-                                                              
   related items         (0.01)            (0.01)             (0.02)        
  Losses from equity                                                        
   method investment      0.01              0.01                  -         
  Non-GAAP share                                                            
   count adjustment          -             (0.01)              0.01         
                     ---------          --------          ---------         
Non-GAAP net income                                                         
 per share                                                                  
 attributable to                                                            
 Cypress - diluted   $    0.16          $   0.16          $    0.14         
                     ---------          --------          ---------         
                                                                            
                                                                            
(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             Nine Months Ended   
                 ----------------------------------  ---------------------- 
                  September               September   September   September 
                     28,      June 29,       29,         28,         29,    
                    2014        2014        2013        2014        2013    
                 ----------  ----------  ----------  ----------  ---------- 
Selected Cash                                                               
 Flow Data                                                                  
 (Preliminary):                                                             
  Net cash                                                                  
   provided by                                                              
   operating                                                                
   activities    $    8,322  $   44,309  $    7,905  $   77,822  $   46,525 
  Net cash                                                                  
   provided by                                                              
   (used in)                                                                
   investing                                                                
   activities    $  (11,173) $  (19,310) $   (2,080) $  (28,420) $      570 
  Net cash                                                                  
   provided by                                                              
   (used in)                                                                
   financing                                                                
   activities    $    6,501  $  (27,209) $      108  $  (30,327) $  (33,748)
                                                                            
Other                                                                       
 Supplemental                                                               
 Data                                                                       
 (Preliminary):                                                             
  Capital                                                                   
   expenditures  $    5,800  $    5,779  $   10,808  $   17,178  $   27,877 
  Depreciation   $   10,093  $   10,133  $    9,745  $   29,711  $   30,136 
  Payment of                                                                
   dividend      $   17,413  $   17,257  $   16,258  $   51,520  $   48,241 
  Dividend paid                                                             
   per share     $     0.11  $     0.11  $     0.11  $     0.33  $     0.33 
  Dividend yield                                                            
   per share (a)        4.4%        4.1%        4.9%        4.4%        4.9%
                 ----------  ----------  ----------  ----------  ---------- 
                                                                            
(a) Dividend yield per share is calculated based on 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                  
                      ------------------------------------------------------
                        September 28,        June 29,        September 29,  
                             2014              2014              2013       
                      ----------------- ----------------- ------------------
                        GAAP   Non-GAAP   GAAP   Non-GAAP   GAAP    Non-GAAP
                      -------- -------- -------- -------- --------  --------
                                                                            
Net income (loss)                                                           
 attributable to                                                            
 Cypress              $ 12,840 $ 26,538 $  9,527 $ 26,723 $ (8,358) $ 22,015
                      -------- -------- -------- -------- --------  --------
                                                                            
Weighted-average                                                            
 common shares                                                              
 outstanding (basic)   159,759  159,759  157,936  157,936  149,679   149,679
Effect of dilutive                                                          
 securities:                                                                
  Stock options,                                                            
   unvested                                                                 
   restricted stock                                                         
   and other             6,722    8,460    6,524    8,761        -    12,525
                      -------- -------- -------- -------- --------  --------
Weighted-average                                                            
 common shares                                                              
 outstanding for                                                            
 diluted computation   166,481  168,219  164,460  166,697  149,679   162,204
                      -------- -------- -------- -------- --------  --------
                                                                            
Net income (loss) per                                                       
 share attributable                                                         
 to Cypress - basic   $   0.08 $   0.17 $   0.06 $   0.17 $  (0.06) $   0.15
Net income (loss) per                                                       
 share attributable                                                         
 to Cypress - diluted $   0.08 $   0.16 $   0.06 $   0.16 $  (0.06) $   0.14
                      -------- -------- -------- -------- --------  --------
                                                                            
                        September 28,        June 29,        September 29,  
                             2014              2014              2013       
                      ----------------- ----------------- ------------------
                                                                            
Average stock price                                                         
 for the period ended       $10.54            $10.13            $11.70      
                                                                            
Common stock                                                                
 outstanding at                                                             
 period end (in                                                             
 thousands)                161,178           158,299            150,833     
                      ----------------- ----------------- ------------------
                                                                            
                                                                            

NOTES TO NON-GAAP FINANCIAL MEASURES

To supplement its consolidated financial results presented in accordance with GAAP, Cypress uses the following non-GAAP financial measures which are adjusted from the most directly comparable GAAP financial measures:

The non-GAAP measures set forth above exclude charges primarily related to stock-based compensation, which represent approximately 60% to 85% of total adjustments for the four most recent quarters, as well as restructuring charges, acquisition-related expenses and other adjustments. 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. 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. Pursuant to the requirements of Regulation G and to make clear to our investors the adjustments we make to GAAP measures, we have provided a reconciliation of the non-GAAP measures to the most directly comparable GAAP financial measures.

Contacts:
Thad Trent
EVP Finance & Administration and CFO
(408) 943-2925

Joseph L. McCarthy
Director, Corporate Communications
(408) 943-2902