Good morning and welcome to the Cypress Semiconductor Second Quarter 2011 Earnings Release Conference Call. Today's conference is being recorded. If you have any objections, you may disconnect your lines at this time. I would now like to turn the call over to Mr. T.J. Rodgers, President and CEO of Cypress Semiconductor. Sir, you may begin.
T. Rodgers
Good morning. We're here to report second quarter of 2011. I will start out with our CFO, Brad Buss, with the numbers.
Brad Buss
Thanks, T.J. Thanks everybody for attending. Just a couple of quick housekeeping things. As you know, these are preliminary, unaudited results. We obviously encourage you to go through our 10-Q in excruciating detail when it's filed in August. And as usual, everything is forward-looking. There's a ton of risk factors. We encouraged you to look through that, and we don't have a duty to update them.
And I also just want to say today is a historic day at Cypress, in that we actually paid our first dividend. It was $0.09 per common share outstanding, and we just gave $15.3 million to you. So we encourage you to spend it on a lot of Cypress touch products in the U.S. or enjoy a holiday in Greece and help everybody out.
I'll go through Q2 results, and then I'll take a look at the items. So we have really good revenue in Q2. We came in at the top end of the range at $255 million. That was a 9% sequential increase. It was actually 14% sequential -- or 13%, I should say, sequential increase, if you strip out the Image Sensor business that was partially in Q1 that we sold. So obviously, a very strong growth rate for us and probably one of the best that you'll see, I'm sure, in our semiconductor peers.
Our handset revenue grew 32% sequentially, and we also had a really big increase in tablet revenues. We saw increases in our wireless- and consumer-end markets, and we saw a slight decreases as though -- as expected in wireline and our computation-end market. We really don't see any end market being in trouble at all, and -- however, we continue to monitor the macro and inventory positions, and Chris can talk further on that later.
If you look at it by division, our MPD decreased 5% as expected, due to the Image Sensor business sale that I talked about. If you adjusted Image Sensor out of MPD, they actually increased 4% sequentially, slightly better than our normal seasonal expectations. And then, we saw growth in SRAM and in our auto business actually. In DCD, we saw a 4% revenue decrease, really driven by our legacy com business and West Bridge.
CCD had record revenue in Q1. They increased 22% sequentially. Obviously, TrueTouch hit another new revenue record, and they grew a whopping 52% sequentially and over 350% year-on-year. Again, due to handset growth at Tier 1 customers and significantly higher revenues in tablets. Just a side note, CCD is now our largest division by revenue, and they crossed the 50% mark for the first time and ended up at 51%. And just to put in perspective, that's up from 39% in 2010. TrueTouch is also our largest individual product family. It surpassed our synchronous SRAM business unit, and we have a bunch of ton of great design wins, which I'm sure Chris and Norm will talk on further.
If you look at handsets as an end market, which again, in early 2008, we really didn't even participate to any degree, it grew 32% sequentially, almost 200% year-on-year. And handsets are now our largest end market, and that accounted for 29% of our revenue.
So just winding back to TrueTouch real quick. Our guidance for 2011 has to more than double versus 2010. So that yielded an implied revenue range of around $180 million to $200 million. So based on our strong first half results, a very strong design pipeline and obviously, some increased tablet revenues, I was really glad to see that Chris and Norm are ponying up even higher revenue. And we're going to increase the guidance by $50 million and now expect a range of $230 million to $250 million for fiscal 2011.
On a GAAP basis, we had net income of almost $41 million. We had a $17 million tax benefit, and that was -- yielded us $0.21 per share, and that was more than double from the prior year. Our non-GAAP net income was $63 million. That yielded fully diluted EPS of $0.32, and that was at the higher end of our guidance and again, was at the highest level since 2000. This is a EPS growth of 33% year-on-year at a rate that's 2.3x faster than the sales growth. We enjoyed 100% fall-through of the incremental GP dollars, and we also generated lower OpEx, which gave us that big increase. If you strip out the Emerging Tech business and just look at the core business, it yielded $0.36 in EPS, PBT of $70 million in -- on a PBT percent of 29%. So we continue to execute very well in both of our core and our Emerging Tech areas.
The non-GAAP gross margin was 57.2% went down from 58.1%, mostly due to standard product and customer mix. We had some higher depreciation from our assay fab expansion that we talked about and then a couple of odds and ends in inventory and cost. Our core semiconductor gross margin, without Emerging Tech, was 58.2%. Our average utilization in our one fab in Minnesota was 89%, up from the high 70s in Q1, and I would expect to see utilization remain relatively stable in Q3. Wafers from our foundry partners were almost 50%, and again, I'd expect that to increase into 2012. Our average corporate ASPs remained healthy, and they increased slightly to $1.49.
The non-GAAP OpEx was down as I expected, and it actually was a little lower than my guidance. We came in at $83 million, and again, remember Q1 was slightly elevated due to some litigation expense with wrapping up the SRAM. We had a worldwide sales conference for the first time in many moons and the standard seasonally higher payroll taxes. Headcount remained relatively flat, even after we made substantial additions in our PSoC and TrueTouch business groups, and we're extremely focused on OpEx, continuing to look to drive our model. And I think you'll see us out probably the lowest OpEx percent of revenue in over a decade, which we're quite proud of.
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