Cypress Semiconductor Corp. (CY, Financial) filed Quarterly Report for the period ended 2009-09-27.
Cypress Semiconductor Corporation designs develops manufactures andmarkets a broad line of high-performance digital and mixed-signal integrated circuits for a range of markets including data communications telecommunications computers and instrumentation systems. The company sells the products to a wide range of customers including Lucent Technologies Inc. Motorola Inc. Nortel Networks Corporation Seagate Technology Inc. Compaq Computer Corporation 3Com Corporation IBM Cisco Systems Inc. and Sony Corporation. Cypress Semiconductor Corp. has a market cap of $1.36 billion; its shares were traded at around $8.77 with and P/S ratio of 1.7.
Revenues from the Consumer and Computation Division decreased approximately $52.9 million in the first three quarters of fiscal 2009, or approximately 21.5%, compared to the same prior-year period. The decrease was primarily attributable to a decrease of approximately $29.5 million in sales of our USB products mainly due to the economic slowdown impacting demand in PC applications and consumer devices and increased competition in the consumer market. The decrease was also attributable to a decrease of $14.9 million in sales of our TSBU resulting from reduced demand from certain large consumer and personal computer customers. Despite the current challenging economic environment, our PSOC product families, including our touchscreen family, continued to gain new design wins, expand their customer base and increase market penetration in a variety of end-market applications.
We recorded restructuring charges of $14.5 million and $12.2 million during the nine months ended September 27, 2009 and September 28, 2008, respectively. The amount recorded during the three months ended September 27, 2009 included a provision of $6.4 million for the Fiscal 2008/9 Restructuring Plan and $1.0 million for the Fiscal 2007 Restructuring Plan. During the nine months ended September 27, 2009 the savings from our actions taken to date was approximately $14.6 million. Upon completion of all of our actions we anticipate our savings in fiscal year 2010 to be approximately $13.6 million per quarter. We estimate the savings will proportionately impact sales general and administrative expense by 25%, cost of goods sold by 41% and research and development expense by 32% although there can be no assurance of this.
The charges in 2009 relate to a restructuring plan which was initiated during the third quarter of fiscal 2008 and was part of a company-wide cost saving initiative aimed to reduce operating costs in response to the economic downturn (Fiscal 2008/9 Restructuring Plan). We recorded a total of $26.2 million under the Fiscal 2008/9 Restructuring Plan, of which $22.6 million was related to personnel costs and $3.6 million was related to other exit costs. The determination of when we accrue for severance costs, and which standard applies, depends on whether the termination benefits are provided under a one-time benefit arrangement as defined by SFAS No. 146 or under an on-going benefit arrangement as described by SFAS No. 112. Restructuring activities related to personnel cost, are summarized as follows:
To date, we recorded total restructuring charges of $10.5 million related to the Fiscal 2007 Restructuring Plan. We recorded $9.9 million of expense in fiscal 2008 and $0.6 million of expense in fiscal 2007. We also recorded a $1.3 million credit in fiscal 2009 which relates to the $2.4 million net gain on the sale of equipment located at our Texas facility partially offset by the $0.5 million workforce reserve. Of the total restructuring charges, $8.0 million was related primarily to personnel costs and $2.5 million was related to property, plant and equipment and other exit costs.
Interest expense was $1.3 million in the first three quarters of fiscal 2009 compared to $30.6 million in the first three quarters of fiscal 2008. The decrease was primarily attributable to the conversion element of the outstanding 1.00% Notes which resulted in the recording of $26.1 million non-cash interest expense in the first three quarters of fiscal 2008.
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Cypress Semiconductor Corporation designs develops manufactures andmarkets a broad line of high-performance digital and mixed-signal integrated circuits for a range of markets including data communications telecommunications computers and instrumentation systems. The company sells the products to a wide range of customers including Lucent Technologies Inc. Motorola Inc. Nortel Networks Corporation Seagate Technology Inc. Compaq Computer Corporation 3Com Corporation IBM Cisco Systems Inc. and Sony Corporation. Cypress Semiconductor Corp. has a market cap of $1.36 billion; its shares were traded at around $8.77 with and P/S ratio of 1.7.
Highlight of Business Operations:
Revenues from the Consumer and Computation Division decreased approximately $21.5 million in the third quarter of fiscal 2009, or approximately 21.4%, compared to the same prior-year period. The decrease was primarily attributable to a decrease of approximately $11.6 million in sales of our USB products mainly due to the economic slowdown impacting demand in PC applications and consumer devices and increased competition in the consumer market. The decrease was also attributable to a decrease of $4.5 million in sales of our timing solutions business unit (TSBU) resulting from reduced demand from certain large consumer and personal computer customers. Despite the current challenging economic environment, our PSOC product families, including our touchscreen family, continued to gain new design wins, expand their customer base and increase market penetration in a variety of end-market applications.Revenues from the Consumer and Computation Division decreased approximately $52.9 million in the first three quarters of fiscal 2009, or approximately 21.5%, compared to the same prior-year period. The decrease was primarily attributable to a decrease of approximately $29.5 million in sales of our USB products mainly due to the economic slowdown impacting demand in PC applications and consumer devices and increased competition in the consumer market. The decrease was also attributable to a decrease of $14.9 million in sales of our TSBU resulting from reduced demand from certain large consumer and personal computer customers. Despite the current challenging economic environment, our PSOC product families, including our touchscreen family, continued to gain new design wins, expand their customer base and increase market penetration in a variety of end-market applications.
We recorded restructuring charges of $14.5 million and $12.2 million during the nine months ended September 27, 2009 and September 28, 2008, respectively. The amount recorded during the three months ended September 27, 2009 included a provision of $6.4 million for the Fiscal 2008/9 Restructuring Plan and $1.0 million for the Fiscal 2007 Restructuring Plan. During the nine months ended September 27, 2009 the savings from our actions taken to date was approximately $14.6 million. Upon completion of all of our actions we anticipate our savings in fiscal year 2010 to be approximately $13.6 million per quarter. We estimate the savings will proportionately impact sales general and administrative expense by 25%, cost of goods sold by 41% and research and development expense by 32% although there can be no assurance of this.
The charges in 2009 relate to a restructuring plan which was initiated during the third quarter of fiscal 2008 and was part of a company-wide cost saving initiative aimed to reduce operating costs in response to the economic downturn (Fiscal 2008/9 Restructuring Plan). We recorded a total of $26.2 million under the Fiscal 2008/9 Restructuring Plan, of which $22.6 million was related to personnel costs and $3.6 million was related to other exit costs. The determination of when we accrue for severance costs, and which standard applies, depends on whether the termination benefits are provided under a one-time benefit arrangement as defined by SFAS No. 146 or under an on-going benefit arrangement as described by SFAS No. 112. Restructuring activities related to personnel cost, are summarized as follows:
To date, we recorded total restructuring charges of $10.5 million related to the Fiscal 2007 Restructuring Plan. We recorded $9.9 million of expense in fiscal 2008 and $0.6 million of expense in fiscal 2007. We also recorded a $1.3 million credit in fiscal 2009 which relates to the $2.4 million net gain on the sale of equipment located at our Texas facility partially offset by the $0.5 million workforce reserve. Of the total restructuring charges, $8.0 million was related primarily to personnel costs and $2.5 million was related to property, plant and equipment and other exit costs.
Interest expense was $1.3 million in the first three quarters of fiscal 2009 compared to $30.6 million in the first three quarters of fiscal 2008. The decrease was primarily attributable to the conversion element of the outstanding 1.00% Notes which resulted in the recording of $26.1 million non-cash interest expense in the first three quarters of fiscal 2008.
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