Delaware | 1–10079 | 94-2885898 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No. | Description | |||
99.1 |
Date: | January 31, 2019 | CYPRESS SEMICONDUCTOR CORPORATION | ||
By: | /s/ Thad Trent | |||
Thad Trent | ||||
Executive Vice President, Finance and Administration | ||||
and Chief Financial Officer |
Exhibit No. | Description | |||
99.1 |
• | Record fiscal year revenue of $2.48 billion representing 6.7% year-over-year growth |
• | Automotive fiscal year revenue grew 13% year-over-year |
• | Fourth quarter revenue was $604.5 million and GAAP and non-GAAP gross margins were 37.3% and 47.8%, respectively |
• | Fourth quarter GAAP and non-GAAP diluted EPS were 72 cents and 35 cents, respectively |
• | Fiscal year 2018 cash from operations of $471.7 million increased 16.9% year-over-year |
GAAP¹ | NON-GAAP2 | |||||||||||||||||||||||
Q4 2018 | Q3 2018 | Q4 2017 | Q4 2018 | Q3 2018 | Q4 2017 | |||||||||||||||||||
Revenue | $ | 604,474 | $ | 673,035 | $ | 597,547 | $ | 604,474 | $ | 673,035 | $ | 597,547 | ||||||||||||
Gross margin | 37.3 | % | 38.6 | % | 37.2 | % | 47.8 | % | 47.0 | % | 45.4 | % | ||||||||||||
Operating margin | 0.5 | % | 11.2 | % | 7.0 | % | 24.5 | % | 24.7 | % | 20.2 | % | ||||||||||||
Net income (loss) | $ | 267,114 | $ | 50,695 | $ | (34,014 | ) | $ | 130,990 | $ | 152,725 | $ | 104,684 | |||||||||||
Diluted EPS (loss) | $ | 0.72 | $ | 0.14 | $ | (0.10 | ) | $ | 0.35 | $ | 0.40 | $ | 0.28 |
GAAP¹ | NON-GAAP2 | |||||||||||||||
FY 2018 | FY 2017 | FY 2018 | FY 2017 | |||||||||||||
Revenue | $ | 2,483,840 | $ | 2,327,771 | $ | 2,483,840 | $ | 2,327,771 | ||||||||
Gross margin | 37.5 | % | 33.6 | % | 46.8 | % | 42.2 | % | ||||||||
Operating margin | 6.6 | % | 3.4 | % | 22.8 | % | 16.8 | % | ||||||||
Net income (loss) | $ | 354,592 | $ | (80,915 | ) | $ | 508,975 | $ | 324,257 | |||||||
Diluted EPS (loss) | $ | 0.95 | $ | (0.24 | ) | $ | 1.36 | $ | 0.89 |
1. | In 2018, certain expenses were reclassified as part of cost of revenue. Historical results have been conformed with the 2018 presentation. |
2. | See “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” tables (“Non-GAAP Results” tables) included below. |
Three Months Ended | |||||||||||||||||
December 30, 2018 | September 30, 2018 | December 31, 2017 | Sequential Change | Year-over-year Change | |||||||||||||
Business Unit1 | |||||||||||||||||
MCD | $ | 355,793 | $ | 413,413 | $ | 357,247 | (13.9 | )% | (0.4 | )% | |||||||
MPD | $ | 248,681 | $ | 259,622 | $ | 240,300 | (4.2 | )% | 3.5 | % | |||||||
Total | $ | 604,474 | $ | 673,035 | $ | 597,547 | (10.2 | )% | 1.2 | % |
Three Months Ended | ||||||||
December 30, 2018 | September 30, 2018 | December 31, 2017 | ||||||
End Market | ||||||||
Industrial | 20.0 | % | 19.6 | % | 17.5 | % | ||
Automotive | 35.5 | % | 31.0 | % | 30.2 | % | ||
Consumer | 25.2 | % | 32.0 | % | 32.1 | % | ||
Enterprise | 19.4 | % | 17.4 | % | 20.1 | % | ||
Total | 100 | % | 100 | % | 100 | % |
1. | The Microcontroller and Connectivity Division ("MCD") includes microcontroller, automotive and connectivity products and the Memory Products Division ("MPD") includes RAM, Flash and AgigA Tech products. |
GAAP¹ | Non-GAAP | |
Revenue | $520 million to $550 million | |
Gross Margin | 36.0% - 37.0% | 46.0% - 46.5% |
Diluted EPS | $0.00 to $0.04 | $0.22 to $0.26 |
1. | GAAP outlook does not include any impact from the planned disposition of our NAND business to the joint venture with SK Hynix system ic Inc., which is expected to occur in the second quarter of 2019. |
• | Non-GAAP gross profit; |
• | Non-GAAP gross margin; |
• | Non-GAAP cost of revenues; |
• | Non-GAAP interest and other expense, net; |
• | Non-GAAP research and development expenses; |
• | Non-GAAP selling, general and administrative expenses; |
• | Adjusted EBITDA; |
• | Non-GAAP income tax provision (benefit); |
• | Non-GAAP pre-tax profit; |
• | Non-GAAP pre-tax profit margin; |
• | Non-GAAP operating income (loss); |
• | Non-GAAP operating margin; |
• | Non-GAAP net income (loss); |
• | Non-GAAP diluted earnings (loss) per share; and |
• | Free cash flow. |
• | Amortization of purchased intangibles, including purchased technology, patents, customer relationships, trademarks, backlog and non-compete agreements; |
• | Amortization of step-up in value of inventory recorded as part of purchase price accounting; and |
• | One-time charges associated with the completion of an acquisition including items such as contract termination costs, severance and other acquisition-related restructuring costs; costs incurred in connection with integration activities; and legal and accounting costs. |
• | Revenue from an intellectual property license, |
• | Changes in value of deferred compensation plan assets and liabilities, |
• | Investment-related gains or losses, including equity method investments, |
• | Restructuring and related costs, |
• | Loss on extinguishment of debt, |
• | Amortization of debt issuance costs, discounts and imputed interest related to the equity component of convertible debt, |
• | Asset impairments, |
• | Tax effects of non-GAAP adjustments, |
• | Income tax adjustment related to the use of the net operating loss, non-cash impact of not asserting indefinite reinvestment on earnings of our foreign subsidiaries, deferred tax expense not affecting taxes payable (i.e. release of valuation allowance), and non-cash expense (benefit) related to uncertain tax positions |
• | Certain other expenses and benefits, and |
• | Diluted weighted average shares non-GAAP adjustment - for purposes of calculating non-GAAP diluted earnings per share, the GAAP diluted weighted average shares outstanding is adjusted to include the impact of non-GAAP adjustments on the number of diluted shares underlying stock- |
December 30, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Cash, cash equivalents and short-term investments | $ | 285,720 | $ | 151,596 | ||||
Accounts receivable, net | 324,274 | 295,991 | ||||||
Inventories | 292,093 | 272,127 | ||||||
Assets held for sale | 13,510 | — | ||||||
Property, plant and equipment, net | 282,986 | 289,554 | ||||||
Goodwill and other intangible assets, net | 1,864,340 | 2,154,592 | ||||||
Other assets | 630,292 | 373,190 | ||||||
Total assets | $ | 3,693,215 | $ | 3,537,050 | ||||
LIABILITIES AND EQUITY | ||||||||
Accounts payable | $ | 210,715 | $ | 213,101 | ||||
Income tax liabilities | 53,469 | 52,006 | ||||||
Revenue reserves, deferred margin and other liabilities | 437,757 | 497,838 | ||||||
Revolving credit facility and long-term debt | 874,235 | 956,513 | ||||||
Total liabilities | 1,576,176 | 1,719,458 | ||||||
Total Cypress stockholders' equity | 2,115,734 | 1,816,536 | ||||||
Non-controlling interest | 1,305 | 1,056 | ||||||
Total equity | 2,117,039 | 1,817,592 | ||||||
Total liabilities and equity | $ | 3,693,215 | $ | 3,537,050 |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 30, 2018 | September 30, 2018 | December 31, 2017 | December 30, 2018 | December 31, 2017 | ||||||||||||||||
Revenues | $ | 604,474 | $ | 673,035 | $ | 597,547 | $ | 2,483,840 | $ | 2,327,771 | ||||||||||
Cost of revenues¹ | 379,264 | 413,320 | 375,162 | 1,552,385 | 1,545,837 | |||||||||||||||
Gross profit | 225,210 | 259,715 | 222,385 | 931,455 | 781,934 | |||||||||||||||
Research and development¹ | 82,379 | 91,691 | 94,566 | 363,996 | 362,931 | |||||||||||||||
Selling, general and administrative¹ | 140,091 | 92,943 | 86,125 | 403,031 | 340,910 | |||||||||||||||
Total operating expenses | 222,470 | 184,634 | 180,691 | 767,027 | 703,841 | |||||||||||||||
Operating income (loss) | 2,740 | 75,081 | 41,694 | 164,428 | 78,093 | |||||||||||||||
Interest and other expense, net | (20,489 | ) | (15,059 | ) | (21,563 | ) | (67,845 | ) | (75,947 | ) | ||||||||||
(Loss) income before income taxes and non-controlling interest | (17,749 | ) | 60,022 | 20,131 | 96,583 | 2,146 | ||||||||||||||
Income tax benefit (provision) | 331,447 | (5,618 | ) | 2,773 | 315,618 | (11,157 | ) | |||||||||||||
Share in net loss and impairment of equity method investees | (46,497 | ) | (3,657 | ) | (56,930 | ) | (57,370 | ) | (71,772 | ) | ||||||||||
Net income (loss) | 267,201 | 50,747 | (34,026 | ) | 354,831 | (80,783 | ) | |||||||||||||
Net (gain) loss attributable to non-controlling interests | (87 | ) | (52 | ) | 12 | (239 | ) | (132 | ) | |||||||||||
Net income (loss) attributable to Cypress | $ | 267,114 | $ | 50,695 | $ | (34,014 | ) | $ | 354,592 | $ | (80,915 | ) | ||||||||
Net income (loss) per share attributable to Cypress: | ||||||||||||||||||||
Basic | $ | 0.74 | $ | 0.14 | $ | (0.10 | ) | $ | 0.99 | $ | (0.24 | ) | ||||||||
Diluted | $ | 0.72 | $ | 0.14 | $ | (0.10 | ) | $ | 0.95 | $ | (0.24 | ) | ||||||||
Cash dividend declared per share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.44 | $ | 0.44 | ||||||||||
Shares used in net income (loss) per share calculation: | ||||||||||||||||||||
Basic | 361,616 | 361,631 | 343,011 | 359,324 | 333,451 | |||||||||||||||
Diluted | 369,638 | 374,266 | 343,011 | 372,178 | 333,451 |
1. | In 2018, certain expenses were reclassified as part of cost of revenue and operating expenses. Historical results have been conformed with the 2018 presentation. |
Table A: GAAP to Non-GAAP reconciling items: Three Months Ended Q4 2018 | ||||||||||||||||
Cost of revenues | Research and development | Selling, general and administrative | Interest and other expense, net | |||||||||||||
GAAP [i] | $ | 379,264 | $ | 82,379 | $ | 140,091 | $ | (66,986 | ) | |||||||
[1] Stock based compensation | 3,842 | 6,395 | 9,166 | — | ||||||||||||
[2] Changes in value of deferred compensation plan | (468 | ) | (2,377 | ) | (2,726 | ) | 5,401 | |||||||||
[3] Loss on assets held for sale¹ | 10,869 | — | 65,722 | — | ||||||||||||
[4] Share in net loss and impairment of equity method investees² | — | — | — | 46,496 | ||||||||||||
[5] Imputed interest on convertible debt, equity component amortization on convertible debt and others | — | — | — | 3,338 | ||||||||||||
[6] Amortization of debt issuance costs | — | — | — | 908 | ||||||||||||
[7] Amortization of intangible assets | 49,583 | — | 4,310 | — | ||||||||||||
[8] Litigation settlement and other | — | (309 | ) | (159 | ) | 159 | ||||||||||
[9] Restructuring charges | 135 | 944 | 437 | — | ||||||||||||
Non - GAAP [ii] | $ | 315,303 | $ | 77,726 | $ | 63,341 | $ | (10,684 | ) | |||||||
Impact of reconciling items [ii - i] | $ | (63,961 | ) | $ | (4,653 | ) | $ | (76,750 | ) | $ | 56,302 |
1. | Relates to our entry into a definitive agreement to divest the NAND business |
2. | Includes $41.5 million impairment charge recorded for the investment in Deca Technologies Inc. |
Table B: GAAP to Non-GAAP reconciling items: Three Months Ended Q3 2018 | ||||||||||||||||
Cost of revenues | Research and development | Selling, general and administrative | Interest and other expense, net | |||||||||||||
GAAP [i] | $ | 413,320 | $ | 91,691 | $ | 92,943 | $ | (18,716 | ) | |||||||
[1] Stock-based compensation | 5,120 | 8,206 | 10,869 | — | ||||||||||||
[2] Changes in value of deferred compensation plan | 136 | 667 | 768 | (1,108 | ) | |||||||||||
[3] Share in net loss of equity method investees | — | — | — | 3,657 | ||||||||||||
[4] Imputed interest on convertible debt, equity component amortization on convertible debt and others | — | — | — | 6,782 | ||||||||||||
[5] Amortization of acquisition-related intangible assets and other | 51,565 | — | 4,310 | — | ||||||||||||
[6] Restructuring charges | (340 | ) | 516 | 9,815 | — | |||||||||||
[7] Litigation settlement and other | — | — | (486 | ) | (1,286 | ) | ||||||||||
Non - GAAP [ii] | $ | 356,839 | $ | 82,302 | $ | 67,667 | $ | (10,671 | ) | |||||||
Impact of reconciling items [ii - i] | $ | (56,481 | ) | $ | (9,389 | ) | $ | (25,276 | ) | $ | 8,045 |
Table C: GAAP to Non-GAAP reconciling items: Three Months Ended Q4 2017 | ||||||||||||||||
Cost of revenues | Research and development | Selling, general and administrative | Interest and other expense, net | |||||||||||||
GAAP [i] | $ | 375,162 | $ | 94,566 | $ | 86,125 | $ | (78,493 | ) | |||||||
[1] Stock based compensation | 3,000 | 8,050 | 12,014 | — | ||||||||||||
[2] Changes in value of deferred compensation plan | 92 | 389 | 617 | (1,210 | ) | |||||||||||
[3] Merger, integration, related costs and adjustments related to assets held for sale | 1,334 | — | (135 | ) | 11 | |||||||||||
[4] Share in net loss and impairment of equity method investees1 | — | — | — | 56,930 | ||||||||||||
[5] Imputed interest on convertible debt, equity component amortization on convertible debt and others | — | — | — | 3,378 | ||||||||||||
[6] Loss on extinguishment of Spansion convertible notes | — | — | — | 4,250 | ||||||||||||
[7] Amortization of debt issuance costs | — | — | — | 1,011 | ||||||||||||
[8] Amortization of intangible assets | 44,199 | — | 5,025 | — | ||||||||||||
[9] Settlement charges and other | — | — | (1,000 | ) | 151 | |||||||||||
[10] Restructuring charges | 317 | 3,205 | 2,097 | — | ||||||||||||
Non - GAAP [ii] | $ | 326,220 | $ | 82,922 | $ | 67,507 | $ | (13,972 | ) | |||||||
Impact of reconciling items [ii - i] | $ | (48,942 | ) | $ | (11,644 | ) | $ | (18,618 | ) | $ | 64,521 |
Table D: GAAP to Non-GAAP reconciling items: Twelve Months Ended Q4 2018 | ||||||||||||||||
Cost of revenues | Research and development | Selling, general and administrative | Interest and other expense, net | |||||||||||||
GAAP [i] | $ | 1,552,385 | $ | 363,996 | $ | 403,031 | $ | (125,215 | ) | |||||||
[1] Stock based compensation, including costs related to modification of equity awards | 16,531 | 35,115 | 44,319 | — | ||||||||||||
[2] Changes in value of deferred compensation plan | (169 | ) | (971 | ) | (1,036 | ) | 2,904 | |||||||||
[3] Share in net loss and impairment of equity method investees¹ | — | — | — | 57,369 | ||||||||||||
[4] Amortization of intangible assets | 200,024 | — | 18,125 | — | ||||||||||||
[5] Imputed interest on convertible debt, equity component amortization on convertible debt and others | — | — | — | 17,966 | ||||||||||||
[6] Amortization of debt issuance cost | — | — | — | 1,981 | ||||||||||||
[7] Settlement charges and other | — | (309 | ) | (645 | ) | (1,111 | ) | |||||||||
[8] Restructuring charges | 3,271 | 1,785 | 11,785 | — | ||||||||||||
[9] Loss on extinguishment of Spansion convertible notes | — | — | — | 3,258 | ||||||||||||
[10] Loss on assets held for sale² | 10,869 | — | 65,722 | — | ||||||||||||
[11] Gain on sale on cost method investment | — | — | (1,521 | ) | — | |||||||||||
Non - GAAP [ii] | $ | 1,321,859 | $ | 328,376 | $ | 266,282 | $ | (42,848 | ) | |||||||
Impact of reconciling items [ii - i] | $ | (230,526 | ) | $ | (35,620 | ) | $ | (136,749 | ) | $ | 82,367 |
1. | Includes $41.5 million impairment charge recorded for the investment in Deca Technologies Inc. |
2. | Relates to our entry into a definitive agreement to divest the NAND business |
Table E: GAAP to Non-GAAP reconciling items: Twelve Months Ended Q4 2017 | ||||||||||||||||
Cost of revenues | Research and development | Selling, general and administrative | Interest and other expense, net | |||||||||||||
GAAP [i] | $ | 1,545,837 | $ | 362,931 | $ | 340,910 | $ | (147,720 | ) | |||||||
[1] Stock based compensation, including costs related to modification of equity awards | 15,605 | 36,804 | 39,172 | — | ||||||||||||
[2] Changes in value of deferred compensation plan | 602 | 2,826 | 3,936 | (6,087 | ) | |||||||||||
[3] Merger, integration, related costs and adjustments related to assets held for sale | 5,357 | (96 | ) | (1,057 | ) | 10 | ||||||||||
[4] Inventory Step-up related to acquisition accounting | 3,736 | — | — | — | ||||||||||||
[5] Share in net loss and impairment of equity method investees¹ | — | — | — | 71,772 | ||||||||||||
[6] Amortization of intangible assets | 174,981 | — | 20,274 | — | ||||||||||||
[7] Imputed interest on convertible debt and others | — | — | — | 20,538 | ||||||||||||
[8] Settlement charges and other | — | — | 2,500 | 844 | ||||||||||||
[9] Restructuring charges | 548 | 5,915 | 2,625 | — | ||||||||||||
[10] Loss on extinguishment of Spansion convertible notes | — | — | — | 4,250 | ||||||||||||
Non - GAAP [ii] | $ | 1,345,008 | $ | 317,482 | $ | 273,460 | $ | (56,393 | ) | |||||||
Impact of reconciling items [ii - i] | $ | (200,829 | ) | $ | (45,449 | ) | $ | (67,450 | ) | $ | 91,327 |
Table F: Non-GAAP gross profit | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | Q4'18 | Q4'17 | ||||||||||||||||
GAAP gross profit | $ | 225,210 | $ | 259,715 | $ | 222,385 | $ | 931,455 | $ | 781,934 | ||||||||||
Impact of reconciling items on cost of revenues (Table A, B, C, D and E) | 63,961 | 56,481 | 48,942 | 230,526 | 200,829 | |||||||||||||||
Non-GAAP gross profit | $ | 289,171 | $ | 316,196 | $ | 271,327 | $ | 1,161,981 | $ | 982,763 | ||||||||||
GAAP gross margin (GAAP gross profit/revenue) | 37.3 | % | 38.6 | % | 37.2 | % | 37.5 | % | 33.6 | % | ||||||||||
Non-GAAP gross margin (Non-GAAP gross profit/revenue) | 47.8 | % | 47.0 | % | 45.4 | % | 46.8 | % | 42.2 | % |
Table G: Non-GAAP operating income | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | Q4'18 | Q4'17 | ||||||||||||||||
GAAP operating income [i] | $ | 2,740 | $ | 75,081 | $ | 41,694 | $ | 164,428 | $ | 78,093 | ||||||||||
Impact of reconciling items on cost of revenues (see Table A, B, C, D, E) | 63,961 | 56,481 | 48,942 | 230,526 | 200,829 | |||||||||||||||
Impact of reconciling items on R&D (see Tables A, B, C, D, E) | 4,653 | 9,389 | 11,644 | 35,620 | 45,449 | |||||||||||||||
Impact of reconciling items on SG&A (see Tables A, B, C, D, E) | 76,750 | 25,276 | 18,618 | 136,749 | 67,450 | |||||||||||||||
Non-GAAP operating income [ii] | $ | 148,104 | $ | 166,227 | $ | 120,898 | $ | 567,323 | $ | 391,821 | ||||||||||
Impact of reconciling items on operating income [ii - i] | $ | 145,364 | $ | 91,146 | $ | 79,204 | $ | 402,895 | $ | 313,728 | ||||||||||
GAAP operating margin (GAAP operating income / revenue) | 0.5 | % | 11.2 | % | 7.0 | % | 6.6 | % | 3.4 | % | ||||||||||
Non-GAAP operating margin (Non-GAAP operating income / revenue) | 24.5 | % | 24.7 | % | 20.2 | % | 22.8 | % | 16.8 | % |
Table H: Non-GAAP pre-tax profit | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | Q4'18 | Q4'17 | ||||||||||||||||
GAAP (loss) income before income taxes and non-controlling interest ("Pre-tax income") | $ | (17,749 | ) | $ | 60,022 | $ | 20,131 | $ | 96,583 | $ | 2,146 | |||||||||
Share in net loss and impairment of equity method investees | (46,497 | ) | (3,657 | ) | (56,930 | ) | (57,370 | ) | (71,772 | ) | ||||||||||
Impact of reconciling items on operating income (see Table G) | 145,364 | 91,146 | 79,204 | 402,895 | 313,728 | |||||||||||||||
Impact of reconciling items on interest and other expense, net (see Table A, B, C, D, E) | 56,302 | 8,045 | 64,521 | 82,367 | 91,327 | |||||||||||||||
Non-GAAP pre-tax profit | $ | 137,420 | $ | 155,556 | $ | 106,926 | $ | 524,475 | $ | 335,429 | ||||||||||
GAAP pre-tax profit margin (GAAP pre-tax income/revenue) | (2.9 | )% | 8.9 | % | 3.4 | % | 3.9 | % | 0.1 | % | ||||||||||
Non-GAAP pre-tax profit margin (Non-GAAP pre-tax profit/revenue) | 22.7 | % | 23.1 | % | 17.9 | % | 21.1 | % | 14.4 | % |
Table I: Non-GAAP income tax expense | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | Q4'18 | Q4'17 | ||||||||||||||||
GAAP income tax (benefit) provision [i] | $ | (331,447 | ) | $ | 5,618 | $ | (2,773 | ) | $ | (315,618 | ) | $ | 11,157 | |||||||
[1] Stock-based compensation | 4,075 | 5,081 | 8,073 | 20,152 | 32,054 | |||||||||||||||
[2] Changes in value of deferred compensation plan | (36 | ) | 97 | (39 | ) | 153 | 447 | |||||||||||||
[3] Merger, integration, related costs and adjustments related to assets held for sale | 57 | — | 424 | 57 | 1,475 | |||||||||||||||
[4] Inventory step-up related to acquisition accounting | — | — | — | — | 1,308 | |||||||||||||||
[5] Share in net loss and impairment of equity method investees | 9,764 | 768 | 19,926 | 12,047 | 25,120 | |||||||||||||||
[6] Imputed interest on convertible debt, equity component amortization on convertible debt and others | 892 | 1,424 | 1,536 | 3,964 | 5,218 | |||||||||||||||
[7] Amortization of debt issuance costs | — | — | — | 225 | 1,971 | |||||||||||||||
[8] Amortization of acquisition-related intangible assets and other | 11,202 | 11,734 | 17,228 | 45,696 | 68,339 | |||||||||||||||
[9] Restructuring charges | 318 | 2,098 | 1,967 | 3,537 | 3,181 | |||||||||||||||
[10] Settlement charges | (6 | ) | — | (350 | ) | (6 | ) | 875 | ||||||||||||
[11] Loss on extinguishment of Spansion convertible notes | 16,084 | — | 1,488 | 16,768 | 1,488 | |||||||||||||||
[12] Gain on sale of cost method investment | — | — | — | (319 | ) | — | ||||||||||||||
[13] Uncertain tax positions | (3,945 | ) | (2,159 | ) | (3,769 | ) | (8,815 | ) | (6,228 | ) | ||||||||||
[14] Valuation allowance release, utilization of NOLs including excess tax benefits, and others** | 299,385 | (21,882 | ) | (41,457 | ) | 237,420 | (135,365 | ) | ||||||||||||
Non-GAAP income tax expense [ii]* | $ | 6,343 | $ | 2,779 | $ | 2,254 | $ | 15,261 | $ | 11,040 | ||||||||||
Impact of reconciling items on income tax provision [i - ii] | $ | (337,790 | ) | $ | 2,839 | $ | (5,027 | ) | $ | (330,879 | ) | $ | 117 |
Table J: Non-GAAP net income | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | Q4'18 | Q4'17 | ||||||||||||||||
GAAP net income (loss) attributable to Cypress | $ | 267,114 | $ | 50,695 | $ | (34,014 | ) | $ | 354,592 | $ | (80,915 | ) | ||||||||
Impact of reconciling items on operating income (see Table G) | 145,364 | 91,146 | 79,204 | 402,895 | 313,728 | |||||||||||||||
Impact of reconciling items on interest and other expense, net (see Table A, B, C, D, E) | 56,302 | 8,045 | 64,521 | 82,367 | 91,327 | |||||||||||||||
Impact of reconciling items on income tax provision (see Table I) | (337,790 | ) | 2,839 | (5,027 | ) | (330,879 | ) | 117 | ||||||||||||
Non-GAAP net income | $ | 130,990 | $ | 152,725 | $ | 104,684 | $ | 508,975 | $ | 324,257 |
Table K: Weighted-average shares, diluted | Three Months Ended | |||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | ||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||
Weighted-average common shares outstanding, basic | 361,616 | 361,616 | 361,631 | 361,631 | 343,011 | 343,011 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||||
Stock options, unvested restricted stock and other | 6,482 | 11,709 | 7,096 | 12,468 | — | 14,003 | ||||||||||||
Convertible notes | 1,540 | 1,540 | 5,539 | 3,234 | — | 12,110 | ||||||||||||
Weighted-average common shares outstanding, diluted | 369,638 | 374,865 | 374,266 | 377,333 | 343,011 | 369,124 |
Table L: Weighted-average shares, diluted | Twelve Months Ended | |||||||||||
Q4'18 | Q4'17 | |||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||
Weighted-average common shares outstanding, basic | 359,324 | 359,324 | 333,451 | 333,451 | ||||||||
Effect of dilutive securities: | ||||||||||||
Stock options, unvested restricted stock and other | 7,754 | 13,319 | — | 14,838 | ||||||||
Convertible notes | 5,100 | 2,705 | — | 16,851 | ||||||||
Weighted-average common shares outstanding, diluted | 372,178 | 375,348 | 333,451 | 365,140 |
Table M: Earnings (loss) per share | Three Months Ended | |||||||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | ||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||
Net income (loss) (see Table J) [i] | $ | 267,114 | $ | 130,990 | $ | 50,695 | $ | 152,725 | $ | (34,014 | ) | $ | 104,684 | |||||||||||
Weighted-average common shares outstanding, diluted (see Table K) [ii] | 369,638 | 374,865 | 374,266 | 377,333 | 343,011 | 369,124 | ||||||||||||||||||
Earnings per share - diluted [i/ii] | $ | 0.72 | $ | 0.35 | $ | 0.14 | $ | 0.40 | $ | (0.10 | ) | $ | 0.28 |
Table N: Earnings (loss) per share | Twelve Months Ended | |||||||||||||||
Q4'18 | Q4'17 | |||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||
Net income (loss) (see Table J) [i] | $ | 354,592 | $ | 508,975 | $ | (80,915 | ) | $ | 324,257 | |||||||
Weighted-average common shares outstanding, diluted (see Table L) [ii] | 372,178 | 375,348 | 333,451 | 365,140 | ||||||||||||
Earnings (loss) per share - diluted [i/ii] | $ | 0.95 | $ | 1.36 | $ | (0.24 | ) | $ | 0.89 |
Table O: Adjusted EBITDA | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | Q4'18 | Q4'17 | ||||||||||||||||
GAAP net income (loss) attributable to Cypress | $ | 267,114 | $ | 50,695 | $ | (34,014 | ) | $ | 354,592 | $ | (80,915 | ) | ||||||||
Interest and other expense, net | (20,489 | ) | (15,059 | ) | (21,563 | ) | (67,845 | ) | (75,947 | ) | ||||||||||
Income tax provision | 331,447 | (5,618 | ) | 2,773 | 315,618 | (11,157 | ) | |||||||||||||
Share in net loss of and impairment of equity method investees | (46,497 | ) | (3,657 | ) | (56,930 | ) | (57,370 | ) | (71,772 | ) | ||||||||||
Net gain (loss) attributable to non-controlling interests | (87 | ) | (52 | ) | 12 | (239 | ) | (132 | ) | |||||||||||
GAAP operating income | $ | 2,740 | $ | 75,081 | $ | 41,694 | $ | 164,428 | $ | 78,093 | ||||||||||
Impact of reconciling items on operating income (see Table G) | 145,364 | 91,146 | 79,204 | 402,895 | 313,728 | |||||||||||||||
Non-GAAP operating income | $ | 148,104 | $ | 166,227 | $ | 120,898 | $ | 567,323 | $ | 391,821 | ||||||||||
Depreciation | 16,527 | 16,393 | 18,701 | 66,299 | 67,578 | |||||||||||||||
Adjusted EBITDA | $ | 164,631 | $ | 182,620 | $ | 139,599 | $ | 633,622 | $ | 459,399 |
Table P: Free cash flow | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Q4'18 | Q3'18 | Q4'17 | Q4'18 | Q4'17 | ||||||||||||||||
GAAP net cash provided by operating activities | $ | 142,215 | $ | 187,073 | $ | 201,541 | $ | 471,700 | $ | 403,487 | ||||||||||
Acquisition of property, plant and equipment, net | (5,069 | ) | (15,448 | ) | (7,790 | ) | (63,130 | ) | (51,944 | ) | ||||||||||
Free cash flow | $ | 137,146 | $ | 171,625 | $ | 193,751 | $ | 408,570 | $ | 351,543 |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 30, 2018 | September 30, 2018 | December 31, 2017 | December 30, 2018 | December 31, 2017 | ||||||||||||||||
Selected Cash Flow Data (Preliminary): | ||||||||||||||||||||
Net cash provided by operating activities | $ | 142,215 | $ | 187,073 | $ | 201,541 | $ | 471,700 | $ | 403,487 | ||||||||||
Net cash (used in) provided by investing activities | $ | (5,988 | ) | $ | (22,316 | ) | $ | (6,036 | ) | $ | (49,690 | ) | $ | (14,429 | ) | |||||
Net cash (used in) provided by financing activities | $ | (55,252 | ) | $ | (72,730 | ) | $ | (175,472 | ) | $ | (287,886 | ) | $ | (357,634 | ) | |||||
Other Supplemental Data (Preliminary): | ||||||||||||||||||||
Capital expenditures, net | $ | 5,069 | $ | 15,448 | $ | 7,790 | $ | 63,130 | $ | 51,944 | ||||||||||
Depreciation | $ | 16,527 | $ | 16,393 | $ | 18,701 | $ | 66,299 | $ | 67,578 | ||||||||||
Payment of dividend | $ | 39,772 | $ | 39,447 | $ | 36,670 | $ | 157,364 | $ | 144,749 | ||||||||||
Dividend paid per share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.44 | $ | 0.44 | ||||||||||
Total debt (principal amount) | $ | 935,838 | $ | 936,518 | $ | 1,061,414 | $ | 935,838 | $ | 1,061,414 | ||||||||||
Net leverage ratio¹ | 1.03 | 1.20 | 1.98 | 1.03 | 1.98 | |||||||||||||||
Cash Income Tax | $ | 6,343 | $ | 2,779 | $ | 2,254 | $ | 15,261 | $ | 11,040 |
1. | Total debt (principal amount) less cash / Last 12 months Adjusted EBITDA |
Q1'19 GAAP estimate ¹(A) | Adjustments (B) | Q1'19 Non-GAAP estimate (C)=(A)+(B) | ||||||||||||||
Amortization of intangibles | Stock-based compensation expense | Other items | ||||||||||||||
Gross Margin | 36.0% - 37.0% | 8.5% - 9.0% | 0.7% | 0.3% | 46.0% - 46.5% | |||||||||||
Diluted earnings per share | $0.00 to $0.04 | $ | 0.14 | $ | 0.05 | $ | 0.03 | $0.22 to $0.26 |