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Cypress Reports Second-Quarter 2013 Results

Stocks in this article: CY

I am pleased to announce that we achieved first revenue on our new PSoC ® 4 product just 90 days after its launch—making PSoC 4 the fastest overall new product ramp in Cypress’s history. We have also shipped more than 5,000 PSoC 4 development kits, a strong leading indicator of future demand.

We ended the second quarter with a book-to-bill of 1.05 despite having our lowest lead times in five years. We thus expect our revenue to grow again sequentially in the third quarter and with continued strong earnings leverage.

Finally, I am proud to announce that our products won four awards last quarter. Embedded Computing Design magazine named PSoC 4 an “Editor’s Choice Product” in May, and our fourth-generation touchscreen chip, Gen4, won in June. PSoC 4 also won the 19 th annual “Product of the Year” award given by Japan’s Semiconductor Industry News. Finally, Cypress subsidiary AgigA Tech received a gold medal for its nonvolatile memory systems in the renowned Edison Awards.

BUSINESS REVIEW

+ Our non-GAAP consolidated gross margin for the second quarter was 53.1%, up 2.4 percentage points from the previous quarter, due mainly to improvement in factory utilization and product and customer mix. Our second-quarter GAAP consolidated gross margin was 47.3%.

+ Net inventory at the end of the second quarter was $98.6 million, down $10.6 million, or 9.7% from the first quarter, driven down by an active corporate initiative. This figure includes $27.3 million of inventory acquired from Ramtron.

+ Cash and investments for the second quarter totaled $102.0 million, flat from the prior quarter. During the quarter we used $16.1 million to pay our regular quarterly dividend and $9.7 million to pay down debt.

 

NET SALES SUMMARY

(In thousands, except percentages)

(Unaudited)

 

THREE MONTHS ENDED

June 30,

 

March 31,

  July 1,   Sequential   Year-over-

Business Unit

2013

2013

2012

Change

Year Change

PSD 1 $81,320 $65,505 $93,248

 

24% -13%
MPD 1 $88,127 $82,229 $82,949 7% 6%
DCD 1 $21,296 $22,747 $23,273 -6% -8%
ETD 1, 2 $2,723 $2,247 $1,830 21% 49%
Total $193,466 $172,728 $201,300 12% -4%
 

Geographic

China and ROW 69% 64% 65% 5% 4%
Americas 13% 17% 17% -4% -4%
Europe 10% 11% 9% -1% 1%
Japan 8% 8% 9% 0% -1%
Total 100% 100% 100% 0% 0%
 

Channel

Distribution 75% 74% 76% 1% -1%
Direct 25% 26% 24% -1% 1%
Total 100% 100% 100% 0% 0%

 

1.

 

PSD, Programmable Systems Division; DCD, Data Communications Division; MPD, Memory Products Division: ETD, Emerging Technology Division.

2.

“Emerging Technology” includes businesses outside our core semiconductor businesses outlined in Footnote 1. Includes subsidiaries AgigA Tech Inc., Deca Technologies Inc., and our foundry business unit.

 

SECOND-QUARTER 2013 HIGHLIGHTS

+ Cypress introduced the first two product families based on its PSoC 4 programmable system-on-chip architecture: the PSoC 4100 and PSoC 4200 families. The new families provide an entire mixed-signal embedded system chip with a 32-bit ARM ® Cortex™-M0 core for prices as low as $1. The PSoC 4100 family, the lowest-cost ARM-based PSoC, brings PSoC flexibility and integration to cost-sensitive, high-volume applications. The PSoC 4200 family features a faster processor, a 36-button CapSense block, four programmable logic blocks to create custom digital functions, programmable analog blocks for variable-gain amplifiers and configurable filters, programmable serial interfaces, programmable input/output pins, and multiple programmable timers, counters and waveform generators—all on a chip one-tenth the size of an average little fingernail.

+ Cypress’s new PSoC 3 MFi Digital Audio Development Kit helps the designers of MFi (Made for iPod | iPhone | iPad) mobile devices and accessories to accelerate designs that use Apple’s new, all-digital Lightning connector. PSoC-based digital audio solutions ensure bit-perfect audio streaming with no added or dropped audio samples. PSoC is the de facto standard for digital audio in the music industry, providing Cypress with a strong position in the fast-growing, $7 billion MFi accessory market.

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