PMC-Sierra Reports Third Quarter 2009 Results
Q3’09 net income of $0.15 per share (non-GAAP); revenues increase 6% sequentially to $130.9 million
- Press Release
- Source: PMC-Sierra, Inc.
- On 4:05 pm EDT, Thursday October 22, 2009
SANTA CLARA, Calif.--(BUSINESS WIRE)--PMC-Sierra, Inc. (Nasdaq:PMCS - News), the premier Internet infrastructure semiconductor solution provider, today reported results for the third quarter ended September 27, 2009.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| PMCS | 8.10 | 0.00 |
Net revenues in the third quarter of 2009 were $130.9 million, an increase of 6 percent compared to $123.2 million in the second quarter of 2009 and 6 percent lower than net revenues of $139.4 million reported in the third quarter of 2008.
Net income in the third quarter of 2009 on a GAAP basis was $27.8 million (GAAP diluted earnings per share of $0.12) compared with net income of $7.8 million (GAAP diluted earnings per share of $0.03) in the second quarter of 2009 and net income of $4.5 million (GAAP diluted earnings per share of $0.02) in the third quarter of 2008.
Non-GAAP net income in the third quarter of 2009 was $34.5 million (non-GAAP diluted earnings per share of $0.15), an increase of 16 percent compared to $29.7 million (non-GAAP diluted earnings per share of $0.13) in the second quarter of 2009, and two cents per share above the non-GAAP diluted earnings per share of $0.13 achieved in the third quarter of 2008 when revenues reached $139.4 million.
“In the third quarter of 2009, we benefited from improved demand in our Storage business, led by the continued ramp in our new 6Gb/s SAS RAID-on-Chip device at H-P, as well as growth in our Microprocessor business,” said Greg Lang, president and chief executive officer of PMC-Sierra. “This past quarter, we achieved the highest level of non-GAAP operating income in the last nine years on revenue that was 6 percent below peak quarterly revenue last year.”
Net income on a non-GAAP basis in the third quarter of 2009 excludes the following items: (i) $5.1 million stock-based compensation expense; (ii) $0.3 million recovery of previously accrued termination costs; (iii) $9.8 million amortization of purchased intangible assets; (iv) $0.2 million restructuring costs; (v) $0.8 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; (vi) $1.0 million foreign exchange loss on foreign tax liabilities; and (vii) $9.9 million income tax recovery.
For a full reconciliation of GAAP net income to non-GAAP net income, please refer to the schedule included with this release. The Company believes the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses the non-GAAP measures internally to evaluate its in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company’s core operating results. In addition, the measures are used to plan for the Company’s future periods. However, non-GAAP measures are neither stated in accordance with, nor are they a substitute for, GAAP measures.
The Company made the following announcements in Q3 2009:
- We introduced the META 20G device that enables Carrier Ethernet Switch and Router (CESR) equipment to seamlessly connect to emerging Metro Optical Transport Networks (OTN). The META 20G enables a converged OTN infrastructure across IP and optical equipment with unified end-to-end network management. The device integrates Carrier Ethernet mapping and framing of 10GE LAN and WAN, and OTN mapping of IP-services such as Storage Area Networks (SAN) and Video protocols, while maintaining Packet over SONET/SDH service. The META 20G is the latest addition to PMC-Sierra’s OTN product portfolio, which includes the HyPHY 20G and HyPHY 10G for Packet Optical Transport Platforms (P-OTP) and Multi-Service Provisioning Platforms (MSPP). The portfolio provides a chipset solution for end-to-end integration of OTN across metro networks.
- In Q3, we announced the volume production of our maxSAS™ end-to-end chipset for 6Gb/s SAS enterprise storage systems. PMC-Sierra’s complete 6Gb/s SAS chipset—which includes the Tachyon® SPC 8x6G SAS protocol controller, SXP 36x6GSec 36-port and SXP 24x6GSec 24-port SAS Expanders, and system management firmware—is shipping in volume to multiple leading storage and server OEMs.
Third Quarter 2009 Conference Call
Management will review the results for the third quarter of 2009 and provide an outlook for the fourth quarter of 2009 during a conference call at 2:30 pm Pacific Time/5:30 pm Eastern Time on October 22, 2009. The conference call webcast will be accessible under the Financial Events and Calendar section at http://investor.pmc-sierra.com/. To listen to the conference call live by telephone, dial 416-640-3404 approximately ten minutes before the start time. A telephone playback will be available after the completion of the call and can be accessed at 647-436-0148 using the access code 6475519. A replay of the webcast will be available for five business days.
Fourth Quarter 2009 Conference Call
PMC-Sierra is planning to release its results for the fourth quarter of 2009 in late January 2010. A conference call will be held on the day of the release to review the quarter and provide an outlook for the first quarter of 2010.
Safe Harbor Statement
PMC-Sierra’s forward-looking statements are subject to risks and uncertainties. Actual results may differ from these projections, and reported results should not be considered as an indication of future performance. The Company’s SEC filings describe more fully the risks associated with the Company’s business including PMC-Sierra’s limited revenue visibility due to variable customer demands, uncertainty in the financial and credit markets, market segment growth or decline, orders with short delivery lead times, customer concentration, and other items such as foreign exchange rates. The Company does not undertake any obligation to update the forward-looking statements.
About PMC-Sierra
PMC-Sierra®, the premier Internet infrastructure semiconductor solution provider, offers its customers technical and sales support worldwide through a network of offices in North America, Europe, Israel and Asia. PMC-Sierra provides semiconductor solutions for Enterprise Storage, Wide Area Network Infrastructure, Fiber To The Home, and Laser Printer/SMB NAS markets. The Company is publicly traded on the NASDAQ Stock Market under the PMCS symbol. For more information, visit www.pmc-sierra.com.
© Copyright PMC-Sierra, Inc. 2009. All rights reserved. PMC and PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the United States and other countries. Other product and company names mentioned herein may be trademarks of their respective owners.
| PMC-Sierra, Inc. | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
| (in thousands, except for per share amounts) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 27, | June 28, | September 28, | September 27, | September 28, | |||||||||||||||
| 2009 | 2009 | 2008 | 2009 |
2008 |
|||||||||||||||
| Restated * | Restated * | ||||||||||||||||||
| Net revenues | $ | 130,876 | $ | 123,194 | $ | 139,356 | $ | 356,642 | $ | 404,235 | |||||||||
| Cost of revenues | 44,432 | 39,413 | 47,373 | 120,648 | 139,752 | ||||||||||||||
| Gross profit | 86,444 | 83,781 | 91,983 | 235,994 | 264,483 | ||||||||||||||
| Other costs and expenses: | |||||||||||||||||||
| Research and development | 35,823 | 36,383 | 39,688 | 110,834 | 116,993 | ||||||||||||||
| Selling, general and administrative | 19,743 | 22,222 | 23,565 | 63,854 | 71,954 | ||||||||||||||
| Amortization of purchased intangible assets | 9,836 | 9,836 | 9,836 | 29,508 | 29,508 | ||||||||||||||
| Restructuring costs and other charges | 175 | 303 | (259 | ) | 813 | 785 | |||||||||||||
| Income from operations | 20,867 | 15,037 | 19,153 | 30,985 | 45,243 | ||||||||||||||
| Other income (expense): | |||||||||||||||||||
| Foreign exchange gain (loss) | (1,094 | ) | (2,867 | ) | 873 | 109 | 2,965 | ||||||||||||
| Gain on repurchase of senior convertible notes, net | - | - | - | - | 4,931 | ||||||||||||||
| Amortization of debt issue costs | (50 | ) | (50 | ) | (94 | ) | (150 | ) | (332 | ) | |||||||||
| Loss on subleased facilities | - | - | - | (538 | ) | - | |||||||||||||
| Interest income (expense), net | (487 | ) | (841 | ) | 181 | (2,139 | ) | 622 | |||||||||||
| Recovery on investments, net | - | - | 400 | - | 400 | ||||||||||||||
| Loss on investment securities | - | - | (11,790 | ) | - | (11,790 | ) | ||||||||||||
| Income before provision for income taxes | 19,236 | 11,279 | 8,723 | 28,267 | 42,039 | ||||||||||||||
| Recovery of (provision) for income taxes | 8,583 | (3,430 | ) | (4,266 | ) | 3,484 | 77,445 | ||||||||||||
| Net income | $ | 27,819 | $ | 7,849 | $ | 4,457 | $ | 31,751 | $ | 119,484 | |||||||||
| Net income per common share - basic | $ | 0.12 | $ | 0.03 | $ | 0.02 | $ | 0.14 | $ | 0.54 | |||||||||
| Net income per common share - diluted | $ | 0.12 | $ | 0.03 | $ | 0.02 | $ | 0.14 | $ | 0.53 | |||||||||
| Shares used in per share calculation - basic | 227,123 | 224,861 | 222,335 | 225,276 | 221,091 | ||||||||||||||
| Shares used in per share calculation - diluted | 231,863 | 227,883 | 225,803 | 228,172 | 223,573 | ||||||||||||||
|
* Effective December 29, 2008, the Company retrospectively adopted Financial Accounting Standards Board Accounting Standards Codification 470, the Debt Topic for the accounting of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlements). Accordingly, the comparative condensed consolidated financial statements have been restated. |
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As a supplement to the Company's condensed consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company provides additional non-GAAP measures for cost of revenues, gross profit, gross profit percentage, research and development expense, selling, general and administrative expense, amortization of purchased intangible assets, restructuring costs and other charges, other income (expense), provision for (recovery of) income taxes, operating expenses, operating income, net income, and basic and diluted net income per share. |
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A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The Company believes that the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses these measures internally to evaluate the Company's in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company's core operating results. In addition, the measures are used for planning and forecasting of the Company's future periods. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results. |
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| PMC-Sierra, Inc. | |||||||||||||||||||
| Adjustments to GAAP Cost of Revenues, Gross Profit, Gross Profit Percentage, Research and Development Expense, | |||||||||||||||||||
| Selling, General and Administrative Expense, Amortization of Purchased Intangible Assets, Restructuring Costs and Other Charges, | |||||||||||||||||||
| Other Income (Expense), Provision for (Recovery of) Income Taxes, Operating Expenses, Operating Income, | |||||||||||||||||||
| Net Income, and Basic and Diluted Net Income Per Share | |||||||||||||||||||
| (in thousands, except for per share amounts) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 27, | June 28, | September 28, | September 27, | September 28, | |||||||||||||||
| 2009 (1) | 2009 (2) | 2008 (3) | 2009 (4) | 2008 (5) | |||||||||||||||
|
Restated * |
Restated * |
||||||||||||||||||
| GAAP cost of revenues | $ | 44,432 | $ | 39,413 | $ | 47,373 | $ | 120,648 | $ | 139,752 | |||||||||
| Stock-based compensation | (149 | ) | (226 | ) | (233 | ) | (580 | ) | (958 | ) | |||||||||
| Non-GAAP cost of revenues | $ | 44,283 | $ | 39,187 | $ | 47,140 | $ | 120,068 | $ | 138,794 | |||||||||
| GAAP gross profit | $ | 86,444 | $ | 83,781 | $ | 91,983 | $ | 235,994 | $ | 264,483 | |||||||||
| Stock-based compensation | 149 | 226 | 233 | 580 | 958 | ||||||||||||||
| Non-GAAP gross profit | $ | 86,593 | $ | 84,007 | $ | 92,216 | $ | 236,574 | $ | 265,441 | |||||||||
| Non-GAAP gross profit % | 66 | % | 68 | % | 66 | % | 66 | % | 66 | % | |||||||||
| GAAP research and development expense | $ | 35,823 | $ | 36,383 | $ | 39,688 | $ | 110,834 | $ | 116,993 | |||||||||
| Stock-based compensation | (2,173 | ) | (2,062 | ) | (2,425 | ) | (6,566 | ) | (8,807 | ) | |||||||||
| Exclusion of termination costs | 129 | - | - | (1,039 | ) | - | |||||||||||||
| Non-GAAP research and development expense | $ | 33,779 | $ | 34,321 | $ | 37,263 | $ | 103,229 | $ | 108,186 | |||||||||
| GAAP selling, general and administrative expense | $ | 19,743 | $ | 22,222 | $ | 23,565 | $ | 63,854 | $ | 71,954 | |||||||||
| Stock-based compensation | (2,798 | ) | (3,343 | ) | (2,699 | ) | (9,066 | ) | (9,954 | ) | |||||||||
| Exclusion of termination costs | 147 | - | - | (624 | ) | - | |||||||||||||
| Non-GAAP selling, general and administrative expense | $ | 17,092 | $ | 18,879 | $ | 20,866 | $ | 54,164 | $ | 62,000 | |||||||||
| GAAP amortization of purchased intangible assets | $ | 9,836 | $ | 9,836 | $ | 9,836 | $ | 29,508 | $ | 29,508 | |||||||||
| Exclusion of amortization of purchased intangible assets | (9,836 | ) | (9,836 | ) | (9,836 | ) | (29,508 | ) | (29,508 | ) | |||||||||
| Non-GAAP amortization of purchased intangible assets | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||
| GAAP restructuring costs and other charges | $ | 175 | $ | 303 | $ | (259 | ) | $ | 813 | $ | 785 | ||||||||
| Exclusion of restructuring costs and other charges | (175 | ) | (303 | ) | 259 | (813 | ) | (785 | ) | ||||||||||
| Non-GAAP restructuring costs and other charges | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||
| GAAP other income (expense) | $ | (1,631 | ) | $ | (3,758 | ) | $ | (10,430 | ) | $ | (2,718 | ) | $ | (3,204 | ) | ||||
| Loss on subleased facilities | - | - | - | 538 | - | ||||||||||||||
| Accretion of the debt discount related to the senior convertible notes | 757 | 742 | 1,300 | 2,227 | 4,480 | ||||||||||||||
| Gain on repurchase of senior convertible notes, net | - | - | - | - | (4,930 | ) | |||||||||||||
| Foreign exchange loss (gain) on foreign tax liabilities | 978 | 2,889 | (784 | ) | 291 | (3,624 | ) | ||||||||||||
| Loss on investment securities | - | - | 11,790 | - | 11,790 | ||||||||||||||
| Recovery of investment loss | - | - | (400 | ) | - | (400 | ) | ||||||||||||
| Non-GAAP other income (expense) | $ | 104 | $ | (127 | ) | $ | 1,476 | $ | 338 | $ | 4,112 | ||||||||
| GAAP provision for (recovery of) income taxes | $ | (8,583 | ) | $ | 3,430 | $ | 4,266 | $ | (3,484 | ) | $ | (77,445 | ) | ||||||
| Recovery of (provision for) income tax matters | 9,884 | (2,450 | ) | 2,034 | 6,404 | 94,210 | |||||||||||||
| Non-GAAP provision for income taxes | $ | 1,301 | $ | 980 | $ | 6,300 | $ | 2,920 | $ | 16,765 | |||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 27, | June 28, | September 28, | September 27, | September 28, | |||||||||||||||
| 2009 (1) | 2009 (2) | 2008 (3) | 2009 (4) | 2008 (5) | |||||||||||||||
|
Restated * |
Restated * |
||||||||||||||||||
| GAAP operating expenses | $ | 65,577 | $ | 68,744 | $ | 72,830 | $ | 205,009 | $ | 219,240 | |||||||||
| Stock-based compensation | (4,971 | ) | (5,405 | ) | (5,124 | ) | (15,632 | ) | (18,761 | ) | |||||||||
| Exclusion of termination costs | 276 | - | - | (1,663 | ) | - | |||||||||||||
| Exclusion of amortization of purchased intangible assets | (9,836 | ) | (9,836 | ) | (9,836 | ) | (29,508 | ) | (29,508 | ) | |||||||||
| Exclusion of restructuring costs and other charges | (175 | ) | (303 | ) | 259 | (813 | ) | (785 | ) | ||||||||||
| Non-GAAP operating expenses | $ | 50,871 | $ | 53,200 | $ | 58,129 | $ | 157,393 | $ | 170,186 | |||||||||
| GAAP operating income | $ | 20,867 | $ | 15,037 | $ | 19,153 | $ | 30,985 | $ | 45,243 | |||||||||
| Stock-based compensation | 5,120 | 5,631 | 5,357 | 16,212 | 19,719 | ||||||||||||||
| Exclusion of termination costs | (276 | ) | - | - | 1,663 | - | |||||||||||||
| Exclusion of amortization of purchased intangible assets | 9,836 | 9,836 | 9,836 | 29,508 | 29,508 | ||||||||||||||
| Exclusion of restructuring costs and other charges | 175 | 303 | (259 | ) | 813 | 785 | |||||||||||||
| Non-GAAP operating income | $ | 35,722 | $ | 30,807 | $ | 34,087 | $ | 79,181 | $ | 95,255 | |||||||||
| GAAP net income | $ | 27,819 | $ | 7,849 | $ | 4,457 | $ | 31,751 | $ | 119,484 | |||||||||
| Stock-based compensation | 5,120 | 5,631 | 5,357 | 16,212 | 19,719 | ||||||||||||||
| Exclusion of termination costs | (276 | ) | - | - | 1,663 | - | |||||||||||||
| Exclusion of amortization of purchased intangible assets | 9,836 | 9,836 | 9,836 | 29,508 | 29,508 | ||||||||||||||
| Exclusion of restructuring costs and other charges | 175 | 303 | (259 | ) | 813 | 785 | |||||||||||||
| Loss on subleased facilities | - | - | - | 538 | - | ||||||||||||||
| Accretion of the debt discount related to the senior convertible notes | 757 | 742 | 1,300 | 2,227 | 4,480 | ||||||||||||||
| Gain on repurchase of senior convertible notes, net | - | - | - | - | (4,930 | ) | |||||||||||||
| Loss on investment securities | - | - | 11,790 | - | 11,790 | ||||||||||||||
| Recovery of investment loss | - | - | (400 | ) | - | (400 | ) | ||||||||||||
| Foreign exchange loss (gain) on foreign tax liabilities | 978 | 2,889 | (784 | ) | 291 | (3,624 | ) | ||||||||||||
| Provision for (recovery of) income tax matters | (9,884 | ) | 2,450 | (2,034 | ) | (6,404 | ) | (94,210 | ) | ||||||||||
| Non-GAAP net income | $ | 34,525 | $ | 29,700 | $ | 29,263 | $ | 76,599 | $ | 82,602 | |||||||||
| Non-GAAP net income per share - basic | $ | 0.15 | $ | 0.13 | $ | 0.13 | $ | 0.34 | $ | 0.37 | |||||||||
| Non-GAAP net income per share - diluted | $ | 0.15 | $ | 0.13 | $ | 0.13 | $ | 0.34 | $ | 0.37 | |||||||||
| Shares used to calculate non-GAAP net income per share - basic | 227,123 | 224,861 | 222,335 | 225,276 | 221,091 | ||||||||||||||
| Shares used to calculate non-GAAP net income per share - diluted | 231,863 | 227,883 | 225,803 | 228,172 | 223,573 | ||||||||||||||
| Non-GAAP adjustments | |||||||||||||||||||
|
(1) $5.1 million stock-based compensation expense; $0.3 million recovery of previously accrued termination costs; $9.8 million amortization of purchased intangible assets; $0.2 million restructuring costs; $0.8 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $1.0 million foreign exchange loss on foreign tax liabilities; and $9.9 million income tax recovery which includes $9.4 million net deferred tax recovery relating to foreign exchange translation of a foreign subsidiary, $0.3 million arrears interest relating to unrecognized tax benefits, $1.0 million tax effect on inter-company transactions, $0.8 million tax adjustments based on completed filings and assessments received from tax authorities, and $1.0 million income tax recovery related to the adjustments above. |
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(2) $5.6 million stock-based compensation expense; $9.8 million amortization of purchased intangible assets; $0.3 million restructuring costs; $0.7 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $2.9 million foreign exchange loss on foreign tax liabilities; and $2.5 million income tax provision which includes $1.5 million net deferred tax expense relating to foreign exchange translation of a foreign subsidiary, $0.3 million arrears interest relating to unrecognized tax benefits, $1.2 million tax effect on inter-company transactions, and $0.5 million income tax recovery related to the adjustments above. |
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(3) $5.4 million stock-based compensation expense; $9.8 million amortization of purchased intangible assets; $0.3 million net reversal of restructuring accruals relating to facilities; $1.3 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $11.8 million related to loss on investment securities; $0.4 million recovery of investment loss; $0.8 million foreign exchange gain on foreign tax liabilities; and $2.0 million net income tax recovery relating to $0.7 million tax adjustments based on completed filings and assessments received from tax authorities, $1.6 million income tax effect related to the non-GAAP adjustments above and $0.3 million interest relating to unrecognized tax benefits. |
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(4) $16.2 million stock-based compensation expense; $1.7 million of termination costs; $29.5 million amortization of purchased intangible assets; $0.8 million restructuring costs; $0.5 million loss on subleased facilities; $2.2 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $0.3 million foreign exchange loss on foreign tax liabilities; and $6.4 million income tax recovery which includes $8.4 million net deferred tax recovery relating to foreign exchange translation of a foreign subsidiary, $1.0 million arrears interest relating to unrecognized tax benefits, $3.1 million tax effect on inter-company transactions, $0.1 million tax adjustments based on completed filings and assessments received from tax authorities and $2.0 million income tax recovery related to the adjustments above. |
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(5) $19.7 million stock-based compensation expense; $29.5 million amortization of purchased intangible assets; $0.8 million restructuring costs; $4.5 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $4.9 million gain on the repurchase of senior convertible notes, net; $11.8 million related to loss on investment securities; $0.4 million recovery of investment loss; $3.6 million foreign exchange gain on foreign tax liabilities; and $94.2 million income tax recovery relating to $91.3 million related to the net adjustment to accrual for unrecognized tax benefits and $2.9 million income tax effect related to the non-GAAP adjustments above. |
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| PMC-Sierra, Inc. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| September 27, | December 28, | |||||||
| 2009 | 2008 | |||||||
| Restated * | ||||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 181,044 | $ | 97,839 | ||||
| Short-term investments | 94,019 | 209,685 | ||||||
| Accounts receivable, net | 48,261 | 40,191 | ||||||
| Inventories, net | 26,259 | 34,003 | ||||||
| Prepaid expenses and other current assets | 14,501 | 9,683 | ||||||
| Deferred tax assets | 3,994 | 3,949 | ||||||
| Total current assets | 368,078 | 395,350 | ||||||
| Goodwill | 396,144 | 396,144 | ||||||
| Intangible assets, net | 121,626 | 153,956 | ||||||
| Investment securities | 144,519 | - | ||||||
| Prepaid expenses | 22,751 | - | ||||||
| Property and equipment, net | 14,253 | 15,858 | ||||||
| Investments and other assets | 8,753 | 3,512 | ||||||
| Deposits for wafer fabrication capacity | 5,145 | 5,145 | ||||||
| $ | 1,081,269 | $ | 969,965 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 26,175 | $ | 17,066 | ||||
| Accrued liabilities | 53,139 | 51,390 | ||||||
| Liability for unrecognized tax benefit | 28,565 | 23,398 | ||||||
| Income taxes payable | 3,807 | - | ||||||
| Deferred income taxes | 1,767 | 2,042 | ||||||
| Accrued restructuring costs | 4,565 | 5,938 | ||||||
| Deferred income | 11,958 | 11,200 | ||||||
| Total current liabilities | 129,976 | 111,034 | ||||||
| 2.25% senior convertible notes due October 15, 2025, net | 57,584 | 55,357 | ||||||
| Long-term obligations | 4,578 | 503 | ||||||
| Deferred income taxes | 21,598 | 17,806 | ||||||
| Liability for unrecognized tax benefit | 8,664 | 3,352 | ||||||
|
PMC special shares convertible into 1,648 (2008 - 2,045) shares of common stock |
2,115 | 2,655 | ||||||
| Stockholders' equity | ||||||||
| Common stock and additional paid in capital | 1,512,465 | 1,471,717 | ||||||
| Accumulated other comprehensive income (loss) | 1,779 | (3,218 | ) | |||||
| Accumulated deficit | (657,490 | ) | (689,241 | ) | ||||
| Total stockholders' equity | 856,754 | 779,258 | ||||||
| $ | 1,081,269 | $ | 969,965 | |||||
| PMC-Sierra, Inc. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| Nine Months Ended | |||||||
| September 27, | September 28, | ||||||
| 2009 | 2008 | ||||||
| Restated * | |||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 31,751 | $ | 119,484 | |||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
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| Stock-based compensation | 16,212 | 19,719 | |||||
| Depreciation and amortization | 42,437 | 44,521 | |||||
| Non-cash accretion of investment securities | (419 | ) | - | ||||
| Foreign exchange (gain) loss on tax liability, net | 292 | (3,311 | ) | ||||
| Gain on repurchase of senior convertible notes, net | - | (4,873 | ) | ||||
| Gain on sale of investments and other assets | - | (32 | ) | ||||
| Loss on subleased facilities | 538 | - | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (8,070 | ) | (6,856 | ) | |||
| Inventories | 7,995 | (3,938 | ) | ||||
| Prepaid expenses and other current assets | 2,403 | 4,972 | |||||
| Accounts payable and accrued liabilities | 6,598 | (22,069 | ) | ||||
| Deferred income taxes and income taxes payable | (6,893 | ) | (79,718 | ) | |||
| Accrued restructuring costs | (1,373 | ) | (3,971 | ) | |||
| Deferred income | 758 | 288 | |||||
| Net cash provided by operating activities | 92,229 | 64,216 | |||||
| Cash flows from investing activities: | |||||||
| Purchases of property and equipment | (4,570 | ) | (5,406 | ) | |||
| Purchases of intangible assets | (1,398 | ) | (5,645 | ) | |||
| Redemption of short-term investments | 170,802 | - | |||||
| Disposals of investment securities | 11,142 | - | |||||
| Purchases of investment securities | (209,311 | ) | (119,067 | ) | |||
| Net cash used in investing activities | (33,335 | ) | (130,118 | ) | |||
| Cash flows from financing activities: | |||||||
| Repurchase of senior convertible notes | - | (95,491 | ) | ||||
| Proceeds from issuance of common stock | 24,311 | 16,510 | |||||
| Net cash provided by (used in) financing activities | 24,311 | (78,981 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | - | (658 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 83,205 | (145,541 | ) | ||||
| Cash and cash equivalents, beginning of the period | 97,839 | 364,922 | |||||
| Cash and cash equivalents, end of the period | $ | 181,044 | $ | 219,381 | |||
Contact:
PMC-Sierra, Inc.
Mike Zellner, Vice President & CFO, 1 408-988-1204
or
David Climie, VP Marketing Communications, 1 408-988-8276
or
Susan Shaw, Sr Manager, Communications, 1 408-988-8515
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