CYPRESS SEMICONDUCTOR CORPORATION
RECONCILIATION OF KEY NON-GAAP CONSOLIDATED FINANCIAL METRICS TO LEGACY
CYPRESS METRICS
(In Thousands)
(Unaudited)
Reconciliation of key non-GAAP consolidated financial
metrics to Legacy Cypress metrics
Three months ended March 29, 2015
-----------------------------------------------
Impact of
the merger
and
Spansion Legacy
Consolidated operations Cypress
------------- ------------- -------------
Revenue $ 209,137 $ 35,245.0 $ 173,892
Non-GAAP gross margin $ (2,669) $ (91,093) (1) $ 88,424
Non-GAAP gross margin % -1.3% -52.1% 50.8%
Non-GAAP net loss $ (87,857) (105,277) 17,420
Non-GAAP diluted earnings
per share $ (0.45) $ 0.10
Shares used in non-GAAP
earnings per share
calculation 196,471 175,130
(1) Non-GAAP gross margin for Spansion operations included $107 million of
one-time, merger-related inventory adjustment.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
-------------- --------------
March 29, December 28,
2015 2014
-------------- --------------
ASSETS
Cash, cash equivalents and short-term
investments $ 157,167 $ 118,812
Accounts receivable, net 192,136 75,984
Inventories, net (a) 389,022 88,227
Property, plant and equipment, net 561,296 237,763
Goodwill and other intangible assets, net 2,707,698 99,615
Other assets 230,189 122,880
------------- -------------
Total assets $ 4,237,508 $ 743,281
============= =============
LIABILITIES AND EQUITY
Accounts payable $ 195,017 $ 42,678
Deferred margin on sales to distributors 128,464 95,187
Income tax liabilities 60,417 21,494
Other liabilities 575,495 155,057
Long-term revolving credit facility 350,000 227,000
------------- -------------
Total liabilities 1,309,393 541,416
------------- -------------
Total Cypress stockholders' equity 2,934,649 207,757
Noncontrolling interest (6,534) (5,892)
------------- -------------
Total equity 2,928,115 201,865
------------- -------------
Total liabilities and equity $ 4,237,508 $ 743,281
=============- =============-
(a) Net inventories include $1.7 million and $2.0 million of capitalized
inventories related to stock compensation expense, as of March 29, 2015
and December 28, 2014, respectively.
CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
ON A GAAP BASIS
(In thousands, except per-share data)
(Unaudited)
---------------------------------------------
Three Months Ended
---------------------------------------------
March 29, December 28, March 30,
2015 2014 2014
-------------- ------------- --------------
Revenues $ 209,137 $ 184,097 $ 170,283
Cost of revenues 250,839 90,395 92,561
-------------- ------------- --------------
Gross margin (41,702) 93,702 77,722
Operating expenses:
Research and development 50,474 39,677 45,330
Selling, general and
administrative 51,074 37,746 42,609
Acquisition costs and
amortization of acquisition-
related intangibles 26,833 8,558 1,833
Restructuring charges 75,715 72 (1,014)
-------------- ------------- --------------
Total operating expenses,
net 204,096 86,053 88,758
-------------- ------------- --------------
Operating income (loss) (245,798) 7,649 (11,036)
Interest and other income
(loss), net (5,597) (2,759) (1,750)
-------------- ------------- --------------
Income (loss) before income
taxes (251,395) 4,890 (12,786)
Income tax provision (benefit) (20,965) 1,813 (4,517)
-------------- ------------- --------------
Income (loss), net of taxes (230,430) 3,077 (8,269)
Adjust for net loss
attributable to noncontrolling
interest 642 426 335
-------------- ------------- --------------
Net income (loss) attributable
to Cypress $ (229,788) $ 3,503 $ (7,934)
============== ============= ==============
Net income (loss) per share
attributable to Cypress:
Basic $ (1.17) $ 0.02 $ (0.05)
Diluted $ (1.17) $ 0.02 $ (0.05)
Shares used in net income
(loss) per share calculation:
Basic 196,471 161,864 154,572
Diluted 196,471 169,148 154,572
---------------------------------------------
CYPRESS SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(a)
(In thousands, except per-share data)
(Unaudited)
---------------------------------------------------------
Three Months Ended
---------------------------------------------------------
December March
March 29, % of 28, % of 30, % of
2015 Revenue 2014 Revenue 2014 Revenue
--------- ------- -------- ------- -------- -------
GAAP gross margin
(loss) $ (41,702) -19.9% $ 93,702 50.9% $ 77,722 45.6%
Stock-based
compensation
expense 4,219 2.0% 2,759 1.5% 2,251 1.3%
Ramtron
acquisition
costs and
related
amortization - 0.0% 22 0.0% 2,967 1.7%
Changes in value
of deferred
compensation
plan 189 0.1% (44) 0.0% 218 0.1%
Impairment of
assets,
restructuring
and other 120 0.1% - 0.0% 2,564 1.5%
Impact of
purchase
accounting 34,505 16.5% - - - -
--------- ------- -------- ------- -------- -------
Non-GAAP gross
margin (loss) $ (2,669) -1.3% $ 96,439 52.4% $ 85,722 50.3%
========= ======= ======== ======= ======== =======
GAAP research and
development
expenses $ 50,474 $ 39,677 $ 45,330
Stock-based
compensation
expense (5,750) (2,553) (7,183)
Ramtron
acquisition
costs and
related
amortization - - -
Changes in value
of deferred
compensation
plan (617) 128 (424)
Impairment of
assets,
restructuring
and other (62) (252) -
Impact of
purchase
accounting (130) - -
--------- ------- -------- ------- -------- -------
Non-GAAP research
and development
expenses $ 43,915 $ 37,000 $ 37,723
========= ======= ======== ======= ======== =======
GAAP selling,
general and
administrative
expenses $ 51,074 $ 46,376 $ 42,609
Stock-based
compensation
expense (8,827) (1,436) (7,388)
Ramtron
acquisition
costs and
related
amortization - (8,602) (473)
Changes in value
of deferred
compensation
plan (1,110) 229 (964)
Impairment of
assets,
restructuring
and other - (72) -
Legal and other (654) (1,330) -
Impact of
purchase
accounting (103) - -
--------- ------- -------- ------- -------- -------
Non-GAAP selling,
general and
administrative
expenses $ 40,380 $ 35,165 $ 33,784
========= ======= ======== ======= ======== =======
GAAP operating
income (loss) $(245,798) $ 7,649 $(11,036)
Stock-based
compensation
expense 18,796 6,748 16,822
Ramtron
acquisition
costs and
related
amortization 1,305 8,622 5,274
Changes in value
of deferred
compensation
plan 1,916 (402) 1,606
Impairment of
assets,
restructuring
and other 182 328 1,550
Legal and other 654 1,330 -
Spansion merger
related and
other items 95,202 - - - -
Impact of
purchase
accounting 40,780 - - - -
--------- ------- -------- ------- -------- -------
Non-GAAP operating
income (loss) $ (86,963) $ 24,275 $ 14,216
========= ======= ======== ======= ======== =======
GAAP pretax profit
(loss) (251,395) -120.2% 4,890 2.7% (12,786) -7.5%
Stock-based
compensation
expense 18,796 9.0% 6,748 3.7% 16,822 9.9%
Ramtron
acquisition
costs and
related
amortization 1,305 0.6% 8,622 4.7% 5,274 3.1%
Changes in value
of deferred
compensation
plan 1,242 0.6% (1,048) -0.6% 747 0.4%
Impairment of
assets,
restructuring
and other 455 0.2% 327 0.2% 1,550 0.9%
Legal and other 654 0.3% 1,330 0.7% - 0.0%
Investment
related losses
(gains) 2,728 1.3% 1,495 0.8% (30) 0.0%
Tax related and
other items 869 0.4% (618) -0.3% - 0.0%
Losses from
equity method
investment 1,559 0.7% 1,403 0.8% 913 0.5%
Spansion merger
related and
other items 95,202 45.5% - 0.0% - 0.0%
Impact of
purchase
accounting 40,780 19.5% - - - -
--------- ------- -------- ------- -------- -------
Non-GAAP pretax
profit (loss) $ (87,805) -42.0% $ 23,149 12.6% $ 12,490
========= ======= ======== ======= ======== =======
GAAP net income
(loss)
attributable to
Cypress $(229,787) $ 3,503 $ (7,934)
Stock-based
compensation
expense 18,796 6,748 16,822
Ramtron
acquisition
costs and
related
amortization 1,305 8,622 5,274
Changes in value
of deferred
compensation
plan 1,242 (1,048) 747
Impairment of
assets,
restructuring
and other 455 327 1,550
Legal and other 654 1,330 -
Investment
related losses
(gains) 2,728 1,495 (30)
Tax related and
other items (20,791) (324) (5,367)
Losses from
equity method
investment 1,559 1,403 913
Spansion merger
related and
other items 95,202 - -
Impact of
purchase
accounting 40,780 - -
--------- ------- -------- ------- -------- -------
Non-GAAP net
income (loss)
attributable to
Cypress $ (87,857) $ 22,056 $ 11,975
========= ======= ======== ======= ======== =======
GAAP net income
(loss) per share
attributable to
Cypress - diluted $ (1.17) $ 0.02 $ (0.05)
Stock-based
compensation
expense 0.10 0.04 0.10
Ramtron
acquisition
costs and
related
amortization 0.01 0.05 0.03
Changes in value
of deferred
compensation
plan 0.01 (0.01) 0.00
Impairment of
assets,
restructuring
and other - - 0.01
Legal and other 0.00 0.01 -
Investment
related losses
(gains) 0.01 0.01 (0.00)
Tax related and
other items (0.11) - (0.03)
Losses from
equity method
investment 0.01 0.01 0.01
Spansion merger
related and
other items 0.48 - -
Impact of
purchase
accounting 0.21 - -
--------- ------- -------- ------- -------- -------
Non-GAAP net
income (loss) per
share
attributable to
Cypress - diluted $ (0.45) $ 0.13 $ 0.07
---------------------------------------------------------
(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
--------------------------------------------
March 29, December 28, March 30,
2015 2014 2014
------------- ------------- --------------
Selected Cash Flow Data
(Preliminary):
------------------------------
Net cash provided by
operating activities $ 12,295 $ 25,514 $ 25,191
Net cash provided (used) by
investing activities $ (110,663) $ (13,736) $ 2,063
Net cash used in financing
activities $ 142,216 $ (13,126) $ (9,619)
Other Supplemental Data
(Preliminary):
------------------------------
Capital expenditures $ 6,496 $ 3,769 $ 5,599
Depreciation $ 13,902 $ 10,013 $ 9,485
Payment of dividend $ 17,931 $ 17,728 $ 16,850
Dividend paid per share $ 0.11 $ 0.11 $ 0.11
Dividend yield per share (a) 3.1% 3.0% 4.4%
--------------------------------------------
(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
----------------------------------------------------------
March 29, December 28, March 30,
2015 2014 2014
--------------------- ----------------- ------------------
GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP
---------- -------- -------- -------- -------- --------
Net income (loss)
attributable to
Cypress $(229,788) $(87,857) $ 3,503 $ 22,056 $ (7,934) $ 11,975
--------- -------- -------- -------- -------- --------
Weighted-average
common shares
outstanding
(basic) 196,471 196,471 161,864 161,864 154,572 154,572
Effect of dilutive
securities:
Stock options,
unvested
restricted
stock and other - - 7,284 8,892 - 11,366
--------- -------- -------- -------- -------- --------
Weighted-average
common shares
outstanding for
diluted
computation 196,471 196,471 169,148 170,756 154,572 165,938
--------- -------- -------- -------- -------- --------
Net income (loss)
per share
attributable to
Cypress - basic $ (1.17) $ (0.45) $ 0.02 $ 0.14 $ (0.05) $ 0.08
Net income (loss)
per share
attributable to
Cypress - diluted $ (1.17) $ (0.45) $ 0.02 $ 0.13 $ (0.05) $ 0.07
----------------------------------------------------------
----------------------------------------------------------
March 29, December 28, March 30,
2015 2014 2014
--------------------- ----------------- ------------------
Average stock
price for the
period ended $14.72 $10.77 $10.13
Common stock
outstanding at
period end (in
thousands) 331,015 163,013 156,970
----------------------------------------------------------
