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MARCH 22, 2004 |
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PROPOSED 1994 STOCK OPTION PLAN
(AS AMENDED)
BRIEF MARKET AND BUSINESS UPDATE
** Non-historical information are Forward Looking Statements **
2 |
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PROPOSED 1994 STOCK OPTION PLAN
(AS AMENDED)
BRIEF MARKET AND BUSINESS UPDATE
** Non-historical information are Forward Looking Statements **
3 |
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RESOLUTIONS FOR THE MEETING
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ELECTION
OF DIRECTORS |
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1994 STOCK OPTION PLAN (AS AMENDED) |
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RATIFICATION OF PRICEWATERHOUSECOOPERS AS INDEPENDENT AUDITORS FOR 2004. |
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4 |
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BACKGROUND
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1994 STOCK OPTION PLAN |
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CREATED APRIL 1994, EXPIRING APR 22, 2004 |
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STOCKHOLDER-APPROVED |
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GRANT OPTIONS TO EMPLOYEES, OFFICERS AND DIRECTORS |
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4.5% EVERGREEN FEATURE |
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APPROX. 5 MILLION SHARES AS OF MARCH 04 |
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1999 STOCK OPTION PLAN |
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CREATED IN 1999 PRIMARILY FOR ACQUISITIONS |
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NON-STOCKHOLDER-APPROVED |
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FOR NON-OFFICERS & NON-DIRECTORS ONLY |
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CYPRESS ACQUIRED 14 COMPANIES IN 99-02 |
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APPROX. 23 MILLION SHARES AS OF MARCH 04 |
5 |
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PROPOSAL - SUMMARY
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1994 STOCK OPTION PLAN AS AMENDED |
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EXTEND PLAN TO 2014 |
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GIVE UP 4.5% EVERGREEN FEATURE |
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INCREASE 1994 PLAN BY 15 MILLION SHARES |
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CANCEL 20 MILLION SHARES FROM THE 1999 STOCK PLAN |
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NO RE-PRICING OR EXCHANGE PROGRAMS WITHOUT STOCKHOLDER APPROVAL |
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ALL FUTURE FUNDING OF THE AMENDED PLAN SUBJECT TO STOCKHOLDER APPROVAL |
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ALLOW FOR GRANT OF PERFORMANCE-BASED RESTRICTED STOCK |
6 |
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Year-end Burn Rate History
BURN RATE IS IMPROVING WITH
<4% TARGET IN THE NEXT 3-5 YRS
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2001 |
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2002 |
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2003 |
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Three-Year |
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Gross Burn Rate |
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17.4 |
% |
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7.9 |
% |
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8.8 |
% |
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11.4 |
% |
Net Burn Rate |
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12.3 |
% |
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5.7 |
% |
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4.0 |
% |
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7.3 |
% |
7 |
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A |
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B |
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C |
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B+C |
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(B+C)/A |
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B/A |
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(B+C)/(A+B+ |
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Shares in Millions |
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Common |
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Options |
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Options |
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Options |
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Fully Diluted |
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Issued |
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ISS |
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As of Dec 28, 2003 |
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120.5 |
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43.74 |
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23.03 |
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66.77 |
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55.4 |
% |
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36.3 |
% |
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35.7 |
% |
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As of Mar 1, 2004 |
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123.0 |
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44.13 |
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27.76 |
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71.89 |
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58.4 |
% |
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35.9 |
% |
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36.9 |
% |
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Adj for Convertible |
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214.4 |
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44.13 |
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27.76 |
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71.89 |
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42.5 |
% |
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26.1 |
% |
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29.8 |
% |
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Adj for |
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214.4 |
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40.23 |
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27.76 |
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67.99 |
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31.7 |
% |
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18.8 |
% |
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24.1 |
% |
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ISSUED OVERHANG TARGET <20% IN NEXT 2-3 YEARS
8 |
CYPRESS HAS OUTPERFORMED
BROAD MARKET INDEX LAST YEAR
9 |
CYPRESS HAS OUTPERFORMED
BROAD MARKET INDEX FOR 5 YEARS
10 |
THE 1994 AMENDED PLANS APPROVAL... |
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IS FUNDAMENTAL TO OUR COMPENSATION POLICY |
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IS CRUCIAL TO OUR ABILITY TO MOTIVATE EMPLOYEES |
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IS ESSENTIAL TO COMPETITIVE RECRUITING OF KEY TALENT AND RETENTION OF SKILLED WORKFORCE |
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ENCOURAGES AND REWARDS EMPLOYEE PERFORMANCE |
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HELPS ALIGN EMPLOYEE INTEREST WITH THOSE OF OUR STOCKHOLDERS |
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PROVIDES CONTINUITY OF OUR STOCK PROGRAMS INCLUDING GRANTS TO OFFICERS & DIRECTORS |
11 |
PROPOSED 1994 STOCK OPTION PLAN
(AS AMENDED)
BRIEF MARKET AND BUSINESS UPDATE
** Non-historical information are Forward Looking Statements **
12 |
LEADING INDICATORS ARE UP
INDUSTRY UTILIZATION AT 90+%
CUSTOMER INVENTORY STABLE
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SEMICONDUCTOR INDUSTRY IS IN RECOVERY PHASE |
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INITIALLY DRIVEN BY PC AND CONSUMER |
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WIRELINE STARTING TO GROW |
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SIA FCST FY04 +25% |
13 |
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Q103 |
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Q203 |
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Q303 |
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Q403 |
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FY03 |
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+3.7 |
% |
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+12.2 |
% |
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+6.6 |
% |
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+9.0 |
% |
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+8.0 |
% |
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SALES |
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181.0 |
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203.1 |
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216.6 |
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236.0 |
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836.8 |
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BOOKINGS |
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189.1 |
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212.1 |
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229.3 |
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264.6 |
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GM% |
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43.5 |
% |
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47.6 |
% |
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48.6 |
% |
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51.2 |
% |
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48.0 |
% |
+10.1% |
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R&D% |
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32.3 |
% |
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29.7 |
% |
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28.2 |
% |
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24.9 |
% |
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28.5 |
% |
-10.1% |
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SG&A% |
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17.1 |
% |
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15.5 |
% |
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15.2 |
% |
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14.5 |
% |
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15.5 |
% |
-3.7% |
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P_EPS |
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$ |
(0.099 |
) |
$ |
0.026 |
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$ |
0.080 |
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$ |
0.159 |
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$ |
0.188 |
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vs -$0.12 |
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Q103 |
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Q203 |
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Q303 |
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Q403 |
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EQUIV GAAP EPS: |
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-$ |
0.27 |
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-$ |
0.10 |
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$ |
0.12 |
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$ |
0.15 |
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GM: |
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43 |
% |
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48 |
% |
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48 |
% |
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57 |
% |
R&D: |
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32 |
% |
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30 |
% |
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29 |
% |
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25 |
% |
SGA: |
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17 |
% |
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16 |
% |
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15 |
% |
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14 |
% |
14 |
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Q103 |
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Q203 |
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Q303 |
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Q403 |
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Q104 |
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Q1Rev |
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+3% Q-Q |
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+5.9% Q-Q |
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SALES |
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181.0 |
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203.1 |
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216.6 |
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236.0 |
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243.0 |
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250.0 |
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BOOKINGS |
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189.1 |
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212.1 |
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229.3 |
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264.6 |
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GM% |
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43.5 |
% |
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47.6 |
% |
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48.6 |
% |
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51.2 |
% |
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R&D% |
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32.3 |
% |
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29.7 |
% |
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28.2 |
% |
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24.9 |
% |
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SG&A% |
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17.1 |
% |
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15.5 |
% |
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15.2 |
% |
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14.5 |
% |
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P_EPS |
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$ |
(0.099 |
) |
$ |
0.026 |
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$ |
0.080 |
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$ |
0.159 |
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$ |
0.170 |
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$ |
0.180 |
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|
Q103 |
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Q203 |
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Q303 |
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Q403 |
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Q104 |
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Q1REV |
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EQUIV GAAP EPS: |
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-$ |
0.27 |
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-$ |
0.10 |
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$ |
0.12 |
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$ |
0.15 |
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$ |
0.10 |
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$ |
0.10 |
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GM: |
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43 |
% |
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48 |
% |
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48 |
% |
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57 |
% |
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R&D: |
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32 |
% |
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30 |
% |
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29 |
% |
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25 |
% |
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SGA: |
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17 |
% |
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16 |
% |
|
15 |
% |
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14 |
% |
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15 |
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Cypress Semiconductor Corporation
Condensed Consolidated Balance Sheet
(in thousands) |
|
Dec. 28, 2003 |
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|
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Cash, cash equivalents and investments |
|
$ |
379,867 |
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SOFT CALL ON |
Accounts Receivable, net |
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|
113,568 |
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Inventories |
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72,085 |
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Property and equipment, net |
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442,887 |
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Goodwill and other intangibles assets |
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|
375,483 |
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Other assets |
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|
183,608 |
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Total Assets |
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$ |
1,567,498 |
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CALL-SPREAD |
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Accounts payable and accrued liabilities |
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$ |
155,693 |
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Deferred income on sales to distributors |
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20,104 |
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Convertible subordinated notes |
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|
668,652 |
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Income tax liabilities |
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|
101,254 |
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Other liabilities |
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|
52,607 |
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Total Liabilities |
|
|
998,310 |
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Stockholders equity |
|
|
569,188 |
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Total Liabilities and stockholders equity |
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$ |
1,567,498 |
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16 |
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DIVISIONS |
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DATA |
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PERSONAL |
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MEMORY |
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TIMING |
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SEGMENTS |
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PRODUCTS VERTICALLY ALIGNED WITH DIVISIONS
COMPETENCIES HORIZONTALLY ALIGNED WITH MARKETS
17 |
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WIRELESS |
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WIRELINE |
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COMPUTATION |
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SUBS |
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Q403: $68.3M |
|
Q403: $81.6 |
|
Q403: $76.6M |
|
Q403: $9.6M |
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HANDSETS |
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INFRASTRUCTURE |
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PC REPLACEMENT |
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PSoC DESIGNS |
18 |
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PRODUCT |
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POSITION |
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COMPETITOR |
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STRATEGY |
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SRAMS |
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2 |
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SAMSUNG |
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1T / MRAM |
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USB |
|
1 |
|
PHILIPS |
|
ARCHITECTURE |
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CLOCKS |
|
2 |
|
ICST |
|
PROGRAMMABLE |
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MULTI PORTS |
|
2 |
|
IDT |
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DENSITY / TTM |
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CAMS |
|
2 |
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IDT |
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PORTFOLIO |
19 |
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OUTLOOK IS GOOD FOR 2004.
WE WILL GROW AND IMPROVE PROFITS IN Q104.
POTENTIAL FOR PROFIT LEVERAGE WITH TIGHT SUPPLY AND ASP IMPROVEMENT.
CYPRESSS MARKET SEGMENTS ARE GROWING.
#1 OR #2 POSITION IMPROVING WITH SHARE GAIN.
OPPORTUNITY TO FURTHER STRENGTHEN OUR BALANCE SHEET WITH SOFTCALL & CALL SPREAD.
WE REQUEST YOUR
FAVORABLE SUPPORT
OF OUR 1994 STOCK OPTION PLAN PROPOSAL
20 |
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THANK YOU |
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