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Cypress Reports Third-Quarter 2012 Results

BUSINESS REVIEW

+ Non-GAAP 1 consolidated gross margin for Q3 was 57.1%, up slightly from the previous quarter.

+ Net inventory at the end of Q3 was $89.3 million, down 2% from Q2. This was equivalent to 93 days, down three days from the prior quarter. We expect inventory to decrease slightly in Q4. Distributor weeks of inventory, which includes in-transit inventory, increased from 6.2 weeks to 7.0 weeks.

+ Cash and investments for Q3 totaled $219 million, an increase of $8.6 million from Q2. During Q3, we repurchased 7.3 million shares for $81.6 million, or an average of $11.20 per share. From September 2011, when we announced our $400 million stock-repurchase program, through September 30, 2012, we repurchased 19.9 million shares. We have approximately $120.7 million remaining under the authorized repurchase program.

+ Long-term debt under our revolving credit facility increased by $45 million to $198 million as we finished the preparations to fund the cash payments required under the Ramtron tender offer.

Our divisional revenue and gross margins are detailed below:

                       

BUSINESS UNIT SUMMARY FINANCIALS (UNAUDITED)

 
 

THREE MONTHS ENDED

September 30, 2012

 

Core

Emerging

PSD 1

MPD 1

DCD 1

Semi 2

Tech. 3

Consolidated

REVENUE ($M)

93.6

88.3

18.8

200.7

2.3

203.0

Percentage of total revenues

46.1

%

43.5

%

9.3

%

98.9

%

1.1

%

100.0

%

 

GROSS MARGIN (%)

On a non-GAAP 4 basis

53.5

%

64.0

%

50.0

%

57.8

%

-2.7

%

57.1

%

On a GAAP basis

50.6

%

61.1

%

47.1

%

54.9

%

-5.5

%

54.2

%

 

THREE MONTHS ENDED

July 1, 2012

 

Core

Emerging

PSD 1

MPD 1

DCD 1

Semi 2

Tech. 3

Consolidated

REVENUE ($M)

96.1

83.0

20.4

199.5

1.8

201.3

Percentage of total revenues

47.8

%

41.2

%

10.1

%

99.1

%

0.9

%

100.0

%

 

GROSS MARGIN (%)

On a non-GAAP 4 basis

54.1

%

64.2

%

53.9

%

58.3

%

-77.7

%

57.0

%

On a GAAP basis

50.3

%

60.3

%

50.0

%

54.4

%

-98.6

%

53.0

%

 
 
1. PSD – Programmable Systems Division; DCD – Data Communications Division; MPD – Memory Products Division.
 
2. “Core Semiconductor” – Includes PSD, DCD and MPD and excludes “Emerging Technology.”
 
3. “Emerging Technology” – Businesses outside our core semiconductor businesses outlined in footnote 2. Includes subsidiaries Cypress Envirosystems Inc., AgigA Tech Inc., Deca Technologies Inc., and our foundry-support business.
 
4. Refer to “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” and “Notes to Non-GAAP Financial Measures” following this press release for a detailed discussion of management’s use of non-GAAP financial measures, as well as reconciliations of all non-GAAP financial measures presented in this press release to the most directly comparable GAAP financial measures.
 

THIRD-QUARTER 2012 HIGHLIGHTS

+ Cypress shipped its one-billionth capacitive touch-sensing unit. These shipments include TrueTouch ® touchscreen controllers, CapSense ® controllers for mechanical button and slider replacement, and trackpad units for cursor navigation in laptop computers. These units have shipped into a variety of end products, such as high-volume mobile handsets, tablets, automotive applications, consumer electronics, white goods, and industrial products. Cypress holds 47 touch-related patents and has 200 more in process.

+ Tesla Motors selected Cypress’s TrueTouch automotive touchscreen solution for the infotainment system in the Model S, the world’s first premium electrically powered sedan. The 17-inch touchscreen in the Model S is the largest in an automobile to date, and it is the first to integrate all functional controls.

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