Cypress Semiconductor Corporation (NASDAQ:CY) Q4 2014 Earnings Conference Call - Final Transcript
Jan 22, 2015 • 11:30 am ET
a loss of 1.1 million were nominal interest expense - it's nominal interest income on our cash balance and the standard interest expense from the revolver. Non-GAAP tax expense in Q4 was 1.5 million in line with our expected cash tax expense.So for the non-GAAP net income with 22.1 and results an earnings per share of $0.13 within our guidance range. For 2014, our non-GAAP EPS was $0.52 including 3% increase over 2013.
So turning to the balance sheet, cash and short terms investment totaled 119 million a slight decrease in Q3 and approximately 80% of our cash and investment are onshore. Free cash flow in 2014 increased to 166% year-over-year to 82 million. On inventory, our net inventory was 88 million in line with Q3 and I expect inventory dollars remain flat in going forward.
In the disti channel, inventory decreased 22% in dollars and 19% in units. The decrease was consistent across all geographies with the average weeks of inventory in the channel at seven weeks. This is within our target of six weeks to eight weeks.
Overall, deferred income decreased from $135 million to $95 in Q4. A portion of this decline reflects the impact of the distribution revenue conversion as well as fright adjustments to inventory in the channel. On the accounts receivable, at the end of the third quarter was 76 million, down 30 million from the prior quarter, which reflects the normal seasonal drop in receivable. As a result DFO decreased 13 days to 38 days. The revolver debt remained flat at $227 million. CapEx was $3.8 million and depreciation in the fourth quarter was $10 million.
Turning to the share count, weighted basic shares came in at 151.9 million and fully diluted shares were 170.8 million. We ended the quarter with 163.2 million shares outstanding.So, moving on to guidance. We ended the quarter with a book-to-bill ratio of 0.94. We expect revenue to decline sequentially 2% to 5% in the range of 175 million to 180 million.
We expect continued softness in our handset customers. I estimate consolidated gross margins to be 51% plus or minus as this will vary with utilization, product and customer mix. And we'll continue our focus on OpEx and remain flat at $72 million dollar range. The net interest expense of approximately $1.4 million and minority interest benefit of approximately $300 associated with our subs. We expect the tax expense of approximately $1 million or a 5% effective tax rate.
On the CapEx side, we can expect 7 million and depreciation of approximately $10 million. I anticipate the fully diluted share count to be around 172 million shares. So on an non-GAAP EPS, we expected to be in the range of $0.08 to $0.07 for the quarter.
So before I turn the call over to Dan, I'd like to give a quick update on Spansion merger. We've completed all regulatory filings and receive approvals from the U.S. and Germany. We've also received the initial comments from the SEC on