Cypress Semiconductor Corp. (CY) today announced its fourth-quarter 2013 and fiscal year 2013 results, which included the remarks below from its president and CEO, T.J. Rodgers. Highlights for the quarter included:
- Earnings came in at high end of guidance
- Book-to-bill increased to 1.08, its highest level in almost two years
- Non-GAAP operating expenses at a 14-year low
- Dividend yield was 4.3% with favorable tax treatment
Our fourth-quarter revenue of $167.8 million was above the midpoint of our guidance, but down 11% from the $188.7 million in revenue of the prior quarter. All divisions experienced normal seasonal declines. We continued to execute very well on our operating expense management initiatives, enabling us to deliver earnings at the high end of our guidance. We thus are prepared to deliver strong operating leverage as we return to revenue growth in 2014.
We exited 2013 with a book-to-bill ratio of 1.08, a high point since the first quarter of 2012. The book-to-bill ratio of all divisions was above unity with our Programmable Systems Division leading the way at 1.15. Lead times remain low; our distributors decreased their inventories to their lowest levels in three years. As such, we expect less-than-normal seasonal revenue declines in the first quarter of 2014. Our design win pipeline for our new TrueTouch® touchscreen products is finally beginning to recover. We expect our revenue to remain in a seasonal trough in the first quarter and then to increase during the rest of 2014.
Note that we produced $167.8 million in revenue in the fourth quarter of 2013 vs. $180.3 million in the fourth quarter of 2012, down $12.5 million, but that our pretax profit was still up $7.9 million. This was due to record-low operating expenses.
Our non-GAAP consolidated gross margin for the fourth quarter was 51.0%, down 2.8 percentage points from the previous quarter, due primarily to reduced amortization of manufacturing expenses by lower revenue. Excluding our Emerging Technologies Division (ETD), our core semiconductor gross margin was 52.3%. ETD revenue is growing rapidly (see Net Sales Summary table) and will contribute significantly to revenue growth in 2014.
Net inventory at the end of the fourth quarter was $100.6 million, down from the third quarter.
Cypress delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional system value. Cypress offerings include the flagship PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP programmable system-on-chip families. Cypress is the world leader in capacitive user interface solutions including CapSense touch sensing, TrueTouch touchscreens, and trackpad solutions for notebook PCs and peripherals. Cypress is a world leader in USB controllers, which enhance connectivity and performance in a wide range of consumer and industrial products. Cypress is also the world leader in SRAM and nonvolatile RAM memories. Cypress serves numerous major markets, including consumer, mobile handsets, computation, data communications, automotive, industrial and military. Cypress trades on the NASDAQ Global Select Market under the ticker symbol CY. Visit Cypress online at www.cypress.com.