Cypress Reports Third-Quarter 2012 Results

Cypress Semiconductor Corp. (NASDAQ: CY) today announced its third-quarter 2012 results, which included the following highlights and remarks from its president and CEO, T.J. Rodgers.

• Revenue and earnings came in at high end of guidance
• EPS grew sequentially: Non-GAAP EPS increased 11%; GAAP EPS increased 200%
• Cash from operations totaled $58 million, a 34% sequential increase
• Cypress repurchased 7.3 million shares, or 5% of outstanding shares
• Dividend yield was 4.1%, and offered tax-deferred treatment

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 2012					Q2 2012					Q3 2011					Q3 2012					Q2 2012					Q3 2011
Revenue			$203,015					$201,300					$264,743					$203,015					$201,300					$264,743
Gross margin			57.1%					57.0%					57.9%					54.2%					53.0%					56.3%
Pretax margin			16.7%						15.3	%			26.7%					6.8%					2.6%					16.5%
Net income			$32,322					$30,298					$69,237					$14,332					$4,977					$39,981
Diluted EPS			$0.20					$0.18					$0.37					$0.09					$0.03					$0.22

We had a good quarter in tough times. Our gross and pretax margins held up, due to our continued efforts on expense control. But the world economy—and thus the semiconductor industry and our business—were below seasonal norms. The combination of historically low lead times and increasing global macroeconomic concerns, which have now impacted China, has driven our distributors and customers to lower bookings across all geographies and end markets. At the end of Q3, our book-to-bill was 0.81, down from 0.87 in Q2, with all divisions and major product lines below unity. As such, our revenue will be down next quarter, but our margins will again be reasonable. We continue to enjoy strong design win activity and market share gains, but each of those wins tends to bring in less revenue than during better times.

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