Cypress Reports Second Quarter 2019 Results

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ADDITIONAL INFORMATION AND WHERE TO FIND IT

This press release may be deemed to be solicitation material in respect of the proposed Merger. This press release does not constitute an offer to sell or the solicitation of an offer to buy our securities or the solicitation of any vote or approval. The proposed Merger will be submitted to Cypress’ stockholders for their consideration. In connection with the proposed transaction, Cypress has filed a definitive proxy statement with the SEC on July 16, 2019 and other relevant materials with the SEC in connection with the solicitation of proxies in connection with the proposed transaction. The definitive proxy statement has been mailed to Cypress’ stockholders. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, INVESTORS AND STOCKHOLDERS OF CYPRESS SEMICONDUCTOR CORPORATION ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement, any amendments or supplements thereto and other relevant materials, and any other documents filed by Cypress with the SEC, may be obtained once such documents are filed with the SEC free of charge at the SEC’s website at www.sec.gov.

In addition, Cypress’ stockholders may obtain free copies of the documents we file with the SEC through the Investors portion of Cypress’ website at investors.cypress.com under the link “Financials & Filings” and then under the link “SEC Filings” or by contacting Cypress’ Investor Relations Department by (a) mail at Cypress Semiconductor Corporation, Attention: Investor Relations, 198 Champion Ct., San Jose, CA 95134, (b) telephone at (408) 943-2600, or (c) e-mail at Email Contact.

PARTICIPANTS IN SOLICITATION

Cypress and certain of its executive officers, directors, other members of management and employees may, under the rules of the SEC, be deemed to be “participants” in the solicitation of proxies from Cypress’ stockholders in connection with the proposed transaction. Information regarding the persons who may be considered “participants” in the solicitation of proxies is set forth in Cypress’ definitive proxy statement filed with the SEC on July 16, 2019 and other relevant documents to be filed with the SEC in connection with the proposed transaction, each of which can be obtained free of charge from the sources indicated above when they become available. Information regarding certain of these persons and their beneficial ownership of Cypress’ common stock is also set forth in Cypress’ definitive proxy statement on Schedule 14A for its 2019 annual meeting of stockholders filed on March 15, 2019 with the SEC, which can be obtained free of charge from the sources indicated above.

CYPRESS SEMICONDUCTOR CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

June 30, 2019

 

December 30, 2018

 

 

 

 

 

ASSETS

 

 

 

 

Cash, cash equivalents and short-term investments

 

$

372,180

 

 

$

285,720

 

Accounts receivable, net

 

267,763

 

 

324,274

 

Inventories

 

335,251

 

 

292,093

 

Assets held for sale

 

 

 

13,510

 

Property, plant and equipment, net

 

268,723

 

 

282,986

 

Goodwill and other intangible assets, net

 

1,760,564

 

 

1,864,340

 

Other assets

 

643,995

 

 

630,292

 

Total assets

 

$

3,648,476

 

 

$

3,693,215

 

LIABILITIES AND EQUITY

 

 

 

 

Accounts payable

 

$

182,826

 

 

$

210,715

 

Income tax liabilities

 

50,385

 

 

53,469

 

Revenue reserves, deferred margin and other liabilities

 

451,955

 

 

437,757

 

Revolving credit facility and long-term debt

 

854,304

 

 

874,235

 

Total liabilities

 

1,539,470

 

 

1,576,176

 

Total Cypress stockholders' equity

 

2,107,706

 

 

2,115,734

 

Non-controlling interest

 

1,300

 

 

1,305

 

Total equity

 

2,109,006

 

 

2,117,039

 

Total liabilities and equity

 

$

3,648,476

 

 

$

3,693,215

 

CYPRESS SEMICONDUCTOR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

ON A GAAP BASIS

(In thousands, except per-share data)

(Unaudited)

 

 

Three Months Ended

 

Six Months ended

 

June 30, 2019

 

March 31, 2019

 

July 1, 2018

 

June 30, 2019

 

July 1, 2018

Revenues

$

532,221

 

 

$

539,004

 

 

$

624,090

 

 

$

1,071,225

 

 

$

1,206,331

 

Cost of revenue

333,463

 

 

336,595

 

 

389,952

 

 

670,058

 

 

759,801

 

Gross profit

198,758

 

 

202,409

 

 

234,138

 

 

401,167

 

 

446,530

 

Research and development

93,639

 

 

88,606

 

 

96,693

 

 

182,245

 

 

189,926

 

Selling, general and administrative

91,633

 

 

81,987

 

 

86,599

 

 

173,620

 

 

169,996

 

Total operating expenses

185,272

 

 

170,593

 

 

183,292

 

 

355,865

 

 

359,922

 

Operating income

13,486

 

 

31,816

 

 

50,846

 

 

45,302

 

 

86,608

 

Interest and other expense, net

(12,003

)

 

(9,244

)

 

(14,143

)

 

(21,246

)

 

(32,297

)

Income before income taxes, share in net loss of equity method investee and non-controlling interest

1,483

 

 

22,572

 

 

36,703

 

 

24,056

 

 

54,311

 

Income tax provision

18,189

 

 

730

 

 

(5,154

)

 

18,919

 

 

(10,211

)

Share in net loss and impairment of equity method investees

(32,405

)

 

(3,590

)

 

(3,755

)

 

(35,995

)

 

(7,216

)

Net (loss) income

(12,733

)

 

19,712

 

 

27,794

 

 

6,980

 

 

36,884

 

Net gain attributable to non-controlling interests

4

 

 

2

 

 

(88

)

 

5

 

 

(100

)

Net (loss) income attributable to Cypress

$

(12,729

)

 

$

19,714

 

 

$

27,706

 

 

$

6,985

 

 

$

36,784

 

Net (loss) income per share attributable to Cypress:

 

 

 

 

 

 

 

 

 

Basic

$

(0.03

)

 

$

0.05

 

 

$

0.08

 

 

$

0.02

 

 

$

0.10

 

Diluted

$

(0.03

)

 

$

0.05

 

 

$

0.07

 

 

$

0.02

 

 

$

0.10

 

Cash dividend declared per share

$

0.11

 

 

$

0.11

 

 

$

0.11

 

 

$

0.22

 

 

$

0.22

 

Shares used in net (loss) income per share calculation:

 

 

 

 

 

 

 

 

 

Basic

365,600

 

 

363,700

 

 

358,577

 

 

364,842

 

 

356,123

 

Diluted

365,600

 

 

373,131

 

 

371,967

 

 

377,195

 

 

370,402

 

CYPRESS SEMICONDUCTOR CORPORATION

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per-share data)

(Unaudited)

 
 

Table A: GAAP to non-GAAP reconciling items: Three Months Ended Q2 2019

 

 

 

 

Cost of revenues

 

Research and
development

 

Selling, general
and
administrative

 

Interest and other
expense, net

GAAP [i]

 

$

333,463

 

 

$

93,639

 

 

$

91,633

 

 

$

(44,408

)

[1] Stock-based compensation

 

2,817

 

 

12,304

 

 

15,359

 

 

 

[2] Changes in value of deferred compensation plan

 

130

 

 

632

 

 

627

 

 

(1,145

)

[3] Share in net loss and impairment of equity method investees 1

 

 

 

 

 

 

 

32,405

 

[4] Imputed interest on convertible debt, equity component amortization on convertible debt and others

 

 

 

 

 

 

 

3,276

 

[5] Amortization of debt issuance costs

 

 

 

 

 

 

 

929

 

[6] Amortization of acquisition-related intangible assets and other

 

47,293

 

 

 

 

4,304

 

 

 

[7] Restructuring charges

 

1,018

 

 

1,362

 

 

641

 

 

 

[8] Merger-related expenses

 

 

 

 

 

8,409

 

 

 

[9] Other income and expenses

 

 

 

 

 

32

 

 

(103

)

Non - GAAP [ii]

 

$

282,205

 

 

$

79,341

 

 

$

62,261

 

 

$

(9,046

)

Impact of reconciling items [ii - i]

 

$

(51,258

)

 

$

(14,298

)

 

$

(29,372

)

 

$

35,362

 

1.

Includes a $29.5 million impairment charge recorded for the investment in Deca Technologies, Inc.

Table B: GAAP to non-GAAP reconciling items: Three Months Ended Q1 2019

 

 

 

 

Cost of revenues

 

Research and
development

 

Selling, general
and
administrative

 

Interest and other
expense, net

GAAP [i]

 

$

336,595

 

 

$

88,606

 

 

$

81,987

 

 

$

(12,834

)

[1] Stock-based compensation

 

2,684

 

 

6,680

 

 

11,031

 

 

 

[2] Changes in value of deferred compensation plan

 

471

 

 

2,204

 

 

2,259

 

 

(4,334

)

[3] Loss on assets held for sale

 

2,017

 

 

 

 

1,515

 

 

 

[4] Share in net loss of equity method investee

 

 

 

 

 

 

 

3,590

 

[5] Imputed interest on convertible debt, equity component amortization on convertible debt and others

 

 

 

 

 

 

 

3,368

 

[6] Amortization of debt issuance costs

 

 

 

 

 

 

 

929

 

[7] Amortization of acquisition-related intangible assets and other

 

48,217

 

 

 

 

4,310

 

 

 

[8] Restructuring charges and other

 

(49

)

 

 

 

98

 

 

 

[9] Other income and expenses

 

 

 

57

 

 

448

 

 

303

 

Non - GAAP [ii]

 

$

283,255

 

 

$

79,665

 

 

$

62,326

 

 

$

(8,978

)

Impact of reconciling items [ii - i]

 

$

(53,340

)

 

$

(8,941

)

 

$

(19,661

)

 

$

3,856

 

Table C: GAAP to Non-GAAP reconciling items: Three Months Ended Q2 2018

 

 

 

 

Cost of revenues

 

Research and
development

 

Selling, general
and
administrative

 

Interest and other
expense, net

GAAP [i]

 

$

389,952

 

 

$

96,693

 

 

$

86,599

 

 

$

(17,898

)

[1] Stock-based compensation

 

3,986

 

 

13,800

 

 

16,121

 

 

 

[2] Changes in value of deferred compensation plan

 

102

 

 

467

 

 

572

 

 

(1,123

)

[3] Share in net loss of equity method investees

 

 

 

 

 

 

 

3,755

 

[4] Imputed interest on convertible debt, equity component amortization on convertible debt and others

 

 

 

 

 

 

 

4,415

 

[5] Amortization of acquisition-related intangible assets and other

 

49,438

 

 

 

 

4,355

 

 

 

[6] Gain on sale of cost method investment

 

 

 

 

 

(1,521

)

 

 

[7] Restructuring charges and other

 

1,589

 

 

33

 

 

(383

)

 

(377

)

Non - GAAP [ii]

 

$

334,837

 

 

$

82,393

 

 

$

67,455

 

 

$

(11,228

)

Impact of reconciling items [ii - i]

 

$

(55,115

)

 

$

(14,300

)

 

$

(19,144

)

 

$

6,670

 

Table D: GAAP to non-GAAP reconciling items: Six Months Ended Q2 2019

 

 

 

 

Cost of revenues

 

Research and
development

 

Selling, general
and
administrative

 

Interest and other
expense, net

GAAP [i]

 

$

670,058

 

 

$

182,245

 

 

$

173,620

 

 

$

(57,241

)

[1] Stock-based compensation

 

5,501

 

 

18,984

 

 

26,390

 

 

 

[2] Changes in value of deferred compensation plan

 

601

 

 

2,836

 

 

2,886

 

 

(5,479

)

[3] Loss on assets held for sale

 

2,017

 

 

 

 

1,515

 

 

 

[4] Share in net loss and impairment of equity method investees 1

 

 

 

 

 

 

 

35,995

 

[5] Imputed interest on convertible debt, equity component amortization on convertible debt and others

 

 

 

 

 

 

 

6,644

 

[6] Amortization of debt issuance costs

 

 

 

 

 

 

 

1,858

 

[7] Amortization of acquisition-related intangible assets and other

 

95,510

 

 

 

 

8,614

 

 

 

[8] Restructuring charges and other

 

969

 

 

1,362

 

 

739

 

 

 

[9] Merger-related expenses

 

 

 

 

 

8,409

 

 

 

[10] Other income and expenses

 

 

 

57

 

 

480

 

 

200

 

Non - GAAP [ii]

 

$

565,460

 

 

$

159,006

 

 

$

124,587

 

 

$

(18,023

)

Impact of reconciling items [ii - i]

 

$

(104,598

)

 

$

(23,239

)

 

$

(49,033

)

 

$

39,218

 

1.

Includes a $29.5 million impairment charge recorded for the investment in Deca Technologies, Inc.

Table E: GAAP to non-GAAP reconciling items: Six Months Ended Q2 2018

 

 

 

 

Cost of revenues

 

Research and
development

 

Selling, general
and
administrative

 

Interest and other
expense, net

GAAP [i]

 

$

759,801

 

 

$

189,926

 

 

$

169,996

 

 

$

(39,513

)

[1] Stock-based compensation

 

7,569

 

 

20,514

 

 

24,283

 

 

 

[2] Changes in value of deferred compensation plan

 

163

 

 

739

 

 

922

 

 

(1,389

)

[3] Equity in net loss and impairment of equity method investees

 

 

 

 

 

 

 

7,216

 

[4] Imputed interest on convertible debt, equity component amortization on convertible debt and others

 

 

 

 

 

 

 

7,846

 

[5] Loss on extinguishment of Spansion convertible notes and debt issuance cost write off due to refinancing

 

 

 

 

 

 

 

3,258

 

[6] Amortization of debt issuance costs

 

 

 

 

 

 

 

1,073

 

[7] Amortization of acquisition-related intangible assets and others

 

98,876

 

 

 

 

9,505

 

 

 

[8] Gain on sale of cost method investment

 

 

 

 

 

(1,521

)

 

 

[9] Restructuring charges and other

 

3,476

 

 

325

 

 

1,533

 

 

16

 

Non - GAAP [ii]

 

$

649,717

 

 

$

168,348

 

 

$

135,274

 

 

$

(21,493

)

Impact of reconciling items [ii - i]

 

$

(110,084

)

 

$

(21,578

)

 

$

(34,722

)

 

$

18,020

 

Table F: Non-GAAP gross profit

 

Three Months Ended

 

Six Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

Q2'19

 

Q2'18

GAAP gross profit

 

$

198,758

 

 

$

202,409

 

 

$

234,138

 

 

$

401,167

 

 

$

446,530

 

Impact of reconciling items on cost of revenues (see Table A, B, C, D and E)

 

51,258

 

 

53,340

 

 

55,115

 

 

104,598

 

 

110,084

 

Non-GAAP gross profit

 

$

250,016

 

 

$

255,749

 

 

$

289,253

 

 

$

505,765

 

 

$

556,614

 

GAAP gross margin (GAAP gross profit/revenue)

 

37.3

%

 

37.6

%

 

37.5

%

 

37.4

%

 

37.0

%

Non-GAAP gross margin (Non-GAAP gross profit/revenue)

 

47.0

%

 

47.4

%

 

46.3

%

 

47.2

%

 

46.1

%

Table G: Non-GAAP operating income

 

Three Months Ended

 

Six Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

Q2'19

 

Q2'18

GAAP operating income [i]

 

$

13,486

 

 

$

31,816

 

 

$

50,846

 

 

$

45,302

 

 

$

86,608

 

Impact of reconciling items on cost of revenues (see Table A, B, C, D and E)

 

51,258

 

 

53,340

 

 

55,115

 

 

104,598

 

 

110,084

 

Impact of reconciling items on R&D (see Table A, B, C, D and E)

 

14,298

 

 

8,941

 

 

14,300

 

 

23,239

 

 

21,578

 

Impact of reconciling items on SG&A (see Table A, B, C, D and E)

 

29,372

 

 

19,661

 

 

19,144

 

 

49,033

 

 

34,722

 

Non-GAAP operating income [ii]

 

$

108,414

 

 

$

113,758

 

 

$

139,405

 

 

$

222,172

 

 

$

252,992

 

Impact of reconciling items on operating income [ii - i]

 

$

94,928

 

 

$

81,942

 

 

$

88,559

 

 

$

176,870

 

 

$

166,384

 

GAAP operating margin (GAAP operating income / revenue)

 

2.5

%

 

5.9

%

 

8.1

%

 

4.2

%

 

7.2

%

Non-GAAP operating margin (Non-GAAP operating income / revenue)

 

20.4

%

 

21.1

%

 

22.3

%

 

20.7

%

 

21.0

%

Table H: Non-GAAP pre-tax profit

 

Three Months Ended

 

Six Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

Q2'19

 

Q2'18

GAAP income before income taxes and non-controlling interest ("Pre-tax income")

 

$

1,483

 

 

$

22,572

 

 

$

36,703

 

 

$

24,056

 

 

$

54,311

 

Share in net loss and impairment of equity method investees 1

 

(32,405

)

 

(3,590

)

 

(3,755

)

 

(35,995

)

 

(7,216

)

Impact of reconciling items on operating income (see Table G)

 

94,928

 

 

81,942

 

 

88,559

 

 

176,870

 

 

166,384

 

Impact of reconciling items on interest and other expense, net (see Table A, B, C, D and E)

 

35,362

 

 

3,856

 

 

6,670

 

 

39,218

 

 

18,020

 

Non-GAAP pre-tax profit

 

$

99,368

 

 

$

104,780

 

 

$

128,177

 

 

$

204,149

 

 

$

231,499

 

GAAP pre-tax profit margin (GAAP pre-tax income/revenue)

 

0.3

%

 

4.2

%

 

5.9

%

 

2.2

%

 

4.5

%

Non-GAAP pre-tax profit margin (Non-GAAP pre-tax profit/revenue)

 

18.7

%

 

19.4

%

 

20.5

%

 

19.1

%

 

19.2

%

1.

The three and six months ended Q2'19 include a $29.5 million impairment charge recorded for the investment in Deca Technologies, Inc.

Table I: Non-GAAP income tax expense

 

Three Months Ended

 

Six Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

Q2'19

 

Q2'18

GAAP income tax provision [i]

 

(18,189

)

 

(730

)

 

5,154

 

 

(18,919

)

 

10,211

 

[1] Tax impact of non-GAAP adjustments* relating to:

 

 

 

 

 

 

 

 

 

 

[a] Stock-based compensation

 

6,401

 

 

4,283

 

 

7,121

 

 

10,684

 

 

10,997

 

[b] Changes in value of deferred compensation plan

 

51

 

 

126

 

 

3

 

 

177

 

 

91

 

[c] Share in net loss and impairment of equity method investees

 

6,805

 

 

754

 

 

788

 

 

7,559

 

 

1,515

 

[d] Imputed interest on convertible debt, equity component amortization on convertible debt and others

 

688

 

 

707

 

 

927

 

 

1,395

 

 

1,648

 

[e] Amortization of debt issuance costs

 

195

 

 

195

 

 

 

 

390

 

 

225

 

[f] Amortization of acquisition-related intangible assets and other

 

10,835

 

 

11,031

 

 

11,297

 

 

21,866

 

 

22,760

 

[g] Restructuring charges and other

 

620

 

 

21

 

 

260

 

 

641

 

 

1,120

 

[h] Other (income) and expenses

 

 

 

159

 

 

 

 

159

 

 

 

[i] Loss on extinguishment of convertible notes

 

 

 

 

 

 

 

 

 

684

 

[j] Loss on assets held for sale

 

 

 

742

 

 

 

 

742

 

 

 

[k] Gain on sale of cost method investment

 

 

 

 

 

(319

)

 

 

 

(319

)

[l] Merger-related expenses

 

1,766

 

 

 

 

 

 

1,766

 

 

 

[2] Uncertain tax positions

 

2,621

 

 

297

 

 

(1,348

)

 

2,918

 

 

(2,710

)

[3] Valuation allowance release, utilization of NOL including excess tax benefits, and other items**

 

(9,662

)

 

(14,907

)

 

(20,758

)

 

(24,569

)

 

(40,083

)

Non-GAAP income tax expense [ii]*

 

$

2,131

 

 

$

2,678

 

 

$

3,125

 

 

$

4,809

 

 

$

6,139

 

Impact of reconciling items on income tax provision [i - ii]

 

(20,320

)

 

(3,408

)

 

2,029

 

 

(23,728

)

 

4,072

 

*Tax impact of Non-GAAP adjustments is calculated by using the federal statutory rate of 21%.

 

** Other items include but are not limited to deferred tax expense not affecting income tax payable.

Table J: Non-GAAP net income

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

Q2'19

 

Q2'18

GAAP net (loss) income attributable to Cypress

 

$

(12,729

)

 

$

19,714

 

 

$

27,706

 

 

$

6,985

 

 

$

36,784

 

Impact of reconciling items on operating income (see Table G)

 

94,928

 

 

81,942

 

 

88,559

 

 

176,870

 

 

166,384

 

Impact of reconciling items on interest and other expense, net (see Table A, B, C, D and E)

 

35,362

 

 

3,856

 

 

6,670

 

 

39,218

 

 

18,020

 

Impact of reconciling items on income tax provision (see Table I)

 

(20,320

)

 

(3,408

)

 

2,029

 

 

(23,728

)

 

4,072

 

Non-GAAP net income

 

$

97,241

 

 

$

102,104

 

 

$

124,964

 

 

$

199,345

 

 

$

225,260

 

Table K: Weighted-average shares, diluted

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

Weighted-average common shares outstanding, basic

 

365,600

 

 

365,600

 

 

363,700

 

 

363,700

 

 

358,577

 

 

358,577

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options, unvested restricted stock units and other

 

 

 

13,937

 

 

6,343

 

 

10,496

 

 

7,837

 

 

14,391

 

Convertible notes

 

 

 

5,187

 

 

3,088

 

 

1,634

 

 

5,553

 

 

3,070

 

Weighted-average common shares outstanding, diluted

 

365,600

 

 

384,724

 

 

373,131

 

 

375,830

 

 

371,967

 

 

376,038

 

Table L: Weighted-average shares, diluted

 

 

 

 

 

 

Six Months Ended

 

 

Q2'19

 

Q2'18

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

Weighted-average common shares outstanding, basic

 

364,842

 

 

364,842

 

 

356,123

 

 

356,123

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

Stock options, unvested restricted stock and other

 

6,913

 

 

12,347

 

 

7,879

 

 

13,071

 

Convertible notes

 

5,440

 

 

3,117

 

 

6,400

 

 

3,916

 

Weighted-average common shares outstanding, diluted

 

377,195

 

 

380,306

 

 

370,402

 

 

373,110

 

Table M: Earnings per share

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

Net (loss) income (see Table J) [i]

 

$

(12,729

)

 

$

97,241

 

 

$

19,714

 

 

$

102,104

 

 

$

27,706

 

 

$

124,964

 

Weighted-average common shares outstanding, diluted (see Table K) [ii]

 

365,600

 

 

384,724

 

 

373,131

 

 

375,830

 

 

371,967

 

 

376,038

 

(Loss) earnings per share - diluted [i/ii]

 

$

(0.03

)

 

$

0.25

 

 

$

0.05

 

 

$

0.27

 

 

$

0.07

 

 

$

0.33

 

Table N: Earnings per share

 

 

 

 

 

 

Six Months Ended

 

 

Q2'19

 

Q2'18

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

Net income (see Table J) [i]

 

$

6,985

 

 

$

199,345

 

 

$

36,784

 

 

$

225,260

 

Weighted-average common shares outstanding, diluted (see Table L) [ii]

 

377,195

 

 

380,306

 

 

370,402

 

 

373,110

 

Earnings per share - diluted [i/ii]

 

$

0.02

 

 

$

0.52

 

 

$

0.10

 

 

$

0.60

 

Table O: Adjusted EBITDA

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

Q2'19

 

Q2'18

GAAP net (loss) income attributable to Cypress

 

$

(12,729

)

 

$

19,714

 

 

$

27,706

 

 

$

6,985

 

 

$

36,784

 

Interest and other expense, net

 

(12,003

)

 

(9,244

)

 

(14,143

)

 

(21,246

)

 

(32,297

)

Income tax provision

 

18,189

 

 

730

 

 

(5,154

)

 

18,919

 

 

(10,211

)

Share in net loss and impairment of equity method investee 1

 

(32,405

)

 

(3,590

)

 

(3,755

)

 

(35,995

)

 

(7,216

)

Net gain (loss) attributable to non-controlling interests

 

4

 

 

2

 

 

(88

)

 

5

 

 

(100

)

GAAP operating income

 

$

13,486

 

 

$

31,816

 

 

$

50,846

 

 

$

45,302

 

 

$

86,608

 

Impact of reconciling items on operating income (see Table G)

 

94,928

 

 

81,942

 

 

88,559

 

 

176,870

 

 

166,384

 

Non-GAAP operating income

 

$

108,414

 

 

$

113,758

 

 

$

139,405

 

 

$

222,172

 

 

$

252,992

 

Depreciation

 

19,394

 

 

19,512

 

 

16,239

 

 

38,906

 

 

33,379

 

Adjusted EBITDA

 

$

127,808

 

 

$

133,270

 

 

$

155,644

 

 

$

261,078

 

 

$

286,371

 

1.

The three and six months ended Q2'19 include a $29.5 million impairment charge recorded for the investment in Deca Technologies, Inc.

Table P: Free cash flow

 

Three Months Ended

 

Six Months Ended

 

 

Q2'19

 

Q1'19

 

Q2'18

 

Q2'19

 

Q2'18

GAAP net cash provided by operating activities

 

$

118,923

 

 

$

61,248

 

 

$

110,734

 

 

$

180,171

 

 

$

142,412

 

Acquisition of property, plant and equipment, net

 

(7,490

)

 

(10,534

)

 

(25,589

)

 

(18,024

)

 

(42,612

)

Free cash flow

 

$

111,433

 

 

$

50,714

 

 

$

85,145

 

 

$

162,147

 

 

$

99,800

 

CYPRESS SEMICONDUCTOR CORPORATION

SUPPLEMENTAL FINANCIAL DATA

(In thousands, except per-share and ratio data)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2019

 

March 31, 2019

 

July 1, 2018

 

June 30, 2019

 

July 1, 2018

Selected Cash Flow Data (Preliminary):

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

118,923

 

 

$

61,248

 

 

$

110,734

 

 

$

180,171

 

 

$

142,412

 

Net cash used in investing activities

 

$

(6,821

)

 

$

(4,376

)

 

$

(7,213

)

 

$

(11,197

)

 

$

(21,386

)

Net cash used in financing activities

 

$

(25,041

)

 

$

(57,473

)

 

$

(97,556

)

 

$

(82,514

)

 

$

(159,904

)

Other Supplemental Data (Preliminary):

 

 

 

 

 

 

 

 

Capital expenditures, net

 

$

7,490

 

 

$

10,534

 

 

$

25,589

 

 

$

18,024

 

 

$

42,612

 

Depreciation

 

$

19,394

 

 

$

19,512

 

 

$

16,239

 

 

$

38,906

 

 

$

33,379

 

Payment of dividend

 

$

40,134

 

 

$

39,748

 

 

$

39,404

 

 

$

79,882

 

 

$

78,145

 

Dividend paid per share

 

$

0.11

 

 

$

0.11

 

 

$

0.11

 

 

$

0.22

 

 

$

0.22

 

Total debt (principal amount)

 

$

908,339

 

 

$

909,549

 

 

$

955,553

 

 

$

908,339

 

 

$

955,553

 

Leverage ratio¹

 

0.88

 

 

0.98

 

 

1.51

 

 

0.88

 

 

1.51

 

Cash Income Tax

 

$

2,131

 

 

$

2,678

 

 

$

3,125

 

 

$

4,809

 

 

$

6,139

 

1.

Total debt (principal amount) less cash / Last 12 months Adjusted EBITDA


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