Cypress Reports Fourth Quarter and Year-End 2016 Results

 

  1. See "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" tables included below.

Revenue and earnings for the fiscal year are given below, compared with those of the prior year:

 



GAAP



NON-GAAP1



FY 20163


FY 20152



FY 20163


FY 20152

Revenue


$

1,923,108



$

1,607,853




$

1,941,858



$

1,626,603


Margin


35.6%



24.9%




39.0%



35.3%


Pretax profit margin


(35.6)%



(22.6)%




9.4%



4.8%


Net income (loss)


$

(686,251)



$

(378,867)




$

170,471



$

70,532


Diluted EPS (loss)


$

(2.15)



$

(1.25)




$

0.49



$

0.21


 

  1. See "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" tables included below.
  2. 2015 includes results of the merger with Spansion as of March 12, 2015.
  3. 2016 includes results from the IoT business acquired from Broadcom on July 5, 2016.

BUSINESS REVIEW

+ At the Electronica trade show in November, Cypress introduced the all-inclusive, turnkey Wireless Internet Connectivity for Embedded Devices (WICED®) Studio 4 platform, which provides a single development environment for multiple wireless technologies, including Cypress's world-class Wi-Fi®, Bluetooth® and combination solutions for the IoT. This software introduction reinforces the Company's positioning as a leader in the wireless connectivity business with both embedded system solutions and supporting software.

+ For the connectivity business acquired from Broadcom on July 5, 2016, Cypress reported $72.3 million in revenue for the fourth quarter of 2016, above the high end of guidance.

+ Cypress changed its corporate structure from four divisions to two, to align with its go-to-market strategy and enhance operational efficiency. The new Microcontroller and Connectivity Division, or MCD, includes the following:

  • Microcontroller and PSoC® product lines of the former Programmable Systems Division;
  • Wireless Connectivity/IoT and USB product lines of the former Data Communications Division;
  • The foundry business from the former Emerging Technologies Division (ETD);
  • The Intellectual Property Business Unit, which was formerly part of the Memory Products Division.

The Memory Products Division, or MPD, now includes Flash, SRAM and specialty memories, as well as the AgigA Tech subsidiary, which was formerly part of ETD.

+ GAAP and non-GAAP consolidated margins for the fourth quarter of 2016 were 38.1% and 40.1%, respectively, attributable to the Company's margin-enhancing initiatives and favorable product mix. Fab utilization increased to approximately 63% in the fourth quarter as production levels ramped to meet customer demand.  

+ Cash from operations during the fourth quarter was $89.8 million as a result of the Company's focus on working capital improvement.

+ Inventory at the end of the fourth quarter was $287.8 million, up 16.2% from the third quarter of 2016, due to an increase in MCU and connectivity inventory to support end-customer demand. The Company's lean inventory initiative has resulted in a reduction of more than $80 million of excess inventory in 2016 as planned.




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