Pericom Semiconductor Reports Fiscal First Quarter 2014 Financial Results

Marketwired

MILPITAS, CA--(Marketwired - Oct 29, 2013) -  Pericom Semiconductor Corporation (NASDAQ: PSEM)

  • Net revenues increased 3% sequentially, driven by new product shipments into wireless mobile.
  • Exceeded Q1 guidance for gross margin and operating profit.
  • Achieved 39.3% gross margin (40.9% non-GAAP), and sequential increase of 170 bps.

Pericom Semiconductor Corporation (NASDAQ: PSEM), a worldwide supplier of high performance connectivity and timing solutions, today announced results for its fiscal 2014 first quarter ended September 28, 2013.

Net revenues for the first quarter were $32.6 million, an increase of 2.8% from the $31.7 million reported in the fourth quarter of fiscal 2013, and down 11.3% from the $36.7 million reported in the comparable period last year. The revenue increase from the prior quarter is primarily due to volume increases in the consumer and embedded end-market segments. GAAP gross margin was 39.3% in the first quarter, an increase from 37.6% last quarter and from 37.9% in the comparable period last year. On a non-GAAP basis, gross margin was 40.9% in the first quarter, which reflects exclusion of share-based compensation, amortization of intangible assets and amortization of fair value adjustments on acquired fixed assets. The comparable non-GAAP gross margins were 39.3% last quarter and also in the comparable period last year. 

GAAP net income for the first quarter was $374,000, or $0.02 per diluted share, compared with net loss of $16.8 million, or $0.74 per diluted share last quarter, and net income of $1.2 million, or $0.05 per diluted share in the comparable period last year. GAAP net income for all periods included share-based compensation, amortization of intangible assets and amortization of fair value adjustments, and the current quarter also included $522,000 of lease restructuring and moving costs and a tax provision of $15,000 on an intercompany transaction. Excluding these items, non-GAAP net income for the first quarter was $1.9 million, or $0.08 per diluted share, compared with non-GAAP net income of $1.6 million or $0.07 per diluted share in the prior quarter, and non-GAAP net income of $2.5 million, or $0.10 per diluted share in the comparable period last year. 

The balance sheet remained very strong with cash and investments in marketable securities of $116.2 million or $5.06 per diluted share at the end of the first quarter. At quarter-end, working capital was $102.3 million and the current ratio was 5.9.

"We were pleased to deliver operating results better than our previous guidance, driven by shipment of new products with better gross margin," said Alex Hui, President and CEO of Pericom. "We continue to focus on the execution of our strategy to grow business in networking, cloud computing and embedded applications with our broad serial connectivity and timing solutions. During the quarter, we shipped several million units of our USB 3.0 signal integrity product to a tier one wireless mobile customer, which further endorses our leadership position in signal integrity solutions."

New Products 

In the first quarter of fiscal 2014, Pericom introduced a total of 21 new products in our Signal Integrity, Connectivity/Switching, and Timing product areas. All of these products are targeted to our focus market segments, and were sampled to key customers during the quarter.

We introduced 12 new products across our Connectivity/Switching product families which included power management USB chargers, video decoders and universal voltage level shifters.

We also expanded our Timing solutions for next generation platforms with 6 new products including high performance clock generators and clock buffers.

For Signal Integrity, we introduced 3 new products targeting 10Gb Ethernet, 12Gb SAS3 and HDMI applications.

Share Repurchase Update

On April 26, 2012 the Board authorized a repurchase program for up to $25 million of shares of our common stock. Pursuant to this authorization, the Company repurchased 106,645 shares in the three months ended September 28, 2013 for an aggregate cost of $765,000 and an average per share purchase price of $7.17. The remaining balance of potential share repurchases under the authorization is approximately $17.2 million. Shares may be repurchased from time to time in the open market or through private transactions, at the discretion of Pericom management. As of October 8, 2013, Pericom had approximately 22.8 million shares of common stock outstanding.

Fiscal Q2 2014 Outlook

The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.

  • Revenues are expected to be in the range of $31.6 million to $33.6 million.

  • GAAP gross margins are expected to be between 37.4% and 39.4%, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately 1.6%, non-GAAP gross margins are expected to be in the 39.0% to 41.0% range.

  • GAAP operating expenses are expected to be between $11.9 million and $12.3 million, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately $1.1 million, non-GAAP operating expenses are expected to be in the range of $10.8 million to $11.2 million.

  • Other income is expected to be between $0.5 million and $0.7 million on a GAAP basis and on a non-GAAP basis.

  • The effective tax rate is expected to be approximately 34-38% on a GAAP basis and 24-28% on a non-GAAP basis.

Conference Call

The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time on October 29, 2013. To listen to the call, dial (877) 377-7103 and reference "Pericom". A slide presentation will accompany the conference call. To view the slides, please visit the investor relations section of www.pericom.com.

The Pericom financial results conference call will be available via a live webcast on the investor relations section of the web site at http://www.pericom.com. Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the web site for approximately 90 days.

A taped replay of the conference call will be made available for the period from this evening through midnight on Wednesday, November 6th. To listen to the replay, dial toll-free (855) 859-2056 and reference conference ID 89036087.

About Pericom

Pericom Semiconductor Corporation (NASDAQ: PSEM) enables serial connectivity with the industry's most complete solutions for the computing, communications, consumer and embedded market segments. Pericom's analog, digital and mixed-signal integrated circuits, along with its frequency control products are essential in the timing, switching, bridging and conditioning of high-speed signals required by today's ever-increasing speed and bandwidth demanding applications. Company headquarters is in Milpitas, California, with design centers and technical sales and support offices globally. Pericom and the Pericom logo are trademarks or registered trademarks of Pericom Semiconductor Corp in the U.S. and/or other countries. Our website is http://www.pericom.com.

Non-GAAP Financial Information 

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), this announcement of operating results contains non-GAAP financial measures that exclude the income statement effects of share-based compensation, amortization of intangible assets, fair value adjustments on acquired fixed assets, write off of equipment, goodwill impairment, a tax provision on intercompany transactions and the effects of excluding share-based compensation upon the number of diluted shares used in calculating non-GAAP earnings per share.

We have excluded share-based compensation expense in calculating these non-GAAP financial measures. These expenses are non-cash in nature and rely on valuations of the future market price of our common stock that is difficult to predict and is affected by market factors that are largely not within the control of management. We have excluded amortization of intangible assets, amortization of fair value adjustments on acquired fixed assets, write off of equipment, goodwill impairment, a tax provision on intercompany transactions and the corresponding tax effects because we do not consider them to be related to our core operating performance. We also use non-GAAP data in calculating certain metrics such as non-GAAP cost of goods sold in computing inventory days of supply.

We use the non-GAAP financial measures that exclude these items to make strategic decisions, forecast future results and evaluate the Company's current operating performance. We believe that the presentation of non-GAAP financial measures that exclude these items is useful to investors because we do not consider these charges either part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that are used to evaluate the Company's operating performance.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Safe Harbor Statement

This press release contains forward-looking statements as defined under The Securities Litigation Reform Act of 1995. Forward-looking statements in this release include the statements under the captions "Fiscal Q2 2014 Outlook", which regard the anticipated revenues, gross margin, operating expenses, other income, and effective tax rate in the second fiscal quarter of 2014. The Company's actual results could differ materially from what is set forth in such forward-looking statements due to a variety of risk factors, including softness in demand for our products, price erosion for certain of our products, unexpected difficulties in developing new products, customer decisions to reduce inventory, economic or financial difficulties experienced by our customers, or technological and market changes. All forward-looking statements included in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and Pericom assumes no obligation to update any forward-looking statements. Parties receiving this release are encouraged to review our annual report on Form 10-K for the year ended June 29, 2013, and in particular, the risk factors sections contained in that report.

- See Attached Tables -

 
 
Pericom Semiconductor Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
               
    Three Months Ended
    September 28,   June 29,     September 29,
    2013   2013     2012
                     
Net revenues   $ 32,608   $ 31,707     $ 36,749
                     
Cost of revenues     19,800     19,791       22,838
                     
  Gross profit     12,808     11,916       13,911
                     
Operating expenses:                    
                     
  Research and development     5,045     5,320       5,323
                       
  Selling, general and administrative     7,687     7,217       7,639
                       
  Goodwill impairment     -     16,899       -
                       
    Total operating expenses     12,732     29,436       12,962
                     
Income (loss) from operations     76     (17,520 )     949
                     
Interest and other income, net     486     1,277       635
                     
Income before income taxes     562     (16,243 )     1,584
                     
Income tax expense     231     573       500
                     
Net income (loss) from consolidated companies     331     (16,816 )     1,084
                     
Equity in net income of unconsolidated affiliates     43     30       108
                     
Net income (loss)   $ 374   $ (16,786 )   $ 1,192
                     
Basic income (loss) per share   $ 0.02   $ (0.74 )   $ 0.05
                     
Diluted income (loss) per share   $ 0.02   $ (0.74 )   $ 0.05
                     
Shares used in computing basic income (loss) per share     22,794     22,783       23,543
                     
Shares used in computing diluted income (loss) per share     22,951     22,783       23,740
                     
 
 
Pericom Semiconductor Corporation
Condensed Consolidated Statements of Operations
(In thousands)
(unaudited)
 
    Three Months Ended
    September 28,   June 29,   September 29,
    2013   2013   2012
                   
Share-based compensation                  
  Cost of revenues   $ 36   $ 41   $ 52
  Research and development     297     309     322
  Selling, general and administrative     396     447     467
    Share-based compensation expense   $ 729   $ 797   $ 841
                   
Amortization of intangible assets                  
  Cost of revenues   $ 488   $ 486   $ 477
  Research and development     50     50     56
  Selling, general and administrative     247     245     243
    Amortization of intangible assets   $ 785   $ 781   $ 776
                       
   
   
Pericom Semiconductor Corporation  
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income  
(In thousands)  
(unaudited)  
                   
    Three Months Ended  
    September 28,     June 29,     September 29,  
    2013     2013     2012  
GAAP net income (loss)   $ 374     $ (16,786 )   $ 1,192  
Reconciling items:                        
  Share-based compensation expense     729       797       841  
  Amortization of intangible assets     785       781       776  
  Write off of equipment     -       184       -  
  Fair value adjustment to depreciation expense on acquired fixed assets     51       51       50  
  Goodwill impairment     -       16,899       -  
  Tax on intercompany transaction     15       118       -  
  Lease restructuring and moving costs     522       -       -  
  Tax effect of adjustments     (543 )     (420 )     (402 )
    Total reconciling items     1,559       18,410       1,265  
Non-GAAP net income   $ 1,933     $ 1,624     $ 2,457  
                         
Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
(unaudited)
                         
Diluted net income (loss) per share:                        
  GAAP diluted income per share   $ 0.02     $ (0.74 )   $ 0.05  
  Adjustments:                        
  Share-based compensation expense     0.03       0.03       0.04  
  Amortization of intangible assets     0.03       0.04       0.03  
  Write off of equipment     -       0.01       -  
  Fair value adjustment to depreciation expense on acquired fixed assets     -       0.01       -  
  Goodwill impairment     -       0.72       -  
  Tax on intercompany transaction     -       0.01       -  
  Lease restructuring and moving costs     0.02       -       -  
  Tax effect of adjustments     (0.02 )     (0.02 )     (0.02 )
  Difference in share count     -       0.01       -  
    Total adjustments     0.06       0.81       0.05  
  Non-GAAP diluted income per share   $ 0.08     $ 0.07     $ 0.10  
                         
Shares used in diluted net income per share calculation:                        
  GAAP     22,951       22,783       23,740  
    Change in diluted shares from GAAP net loss to non-GAAP net income     -       117       -  
    Exclude the benefit of share-based compensation expense (1)     390       467       308  
  Non-GAAP     23,341       23,367       24,048  
                         
(1) For purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the benefits of unamortized stock compensation costs that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.  
   
   
   
Pericom Semiconductor Corporation  
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin  
(In thousands)  
(unaudited)  
                   
    Three Months Ended  
    September 28,     June 29,     September 29,  
    2013     2013     2012  
 GAAP gross margin   $ 12,808     $ 11,916     $ 13,911  
  -% of revenues     39.3 %     37.6 %     37.9 %
Reconciling items:                        
  Share-based compensation     36       41       52  
  Amortization of intangible assets     488       486       477  
  Fair value adjustment to depreciation expense on acquired fixed assets     10       10       10  
    Total reconciling items     534       537       539  
Non-GAAP gross margin   $ 13,342     $ 12,453     $ 14,450  
  -% of revenues     40.9 %     39.3 %     39.3 %
                         
Reconciliation of GAAP R&D Expenses to Non-GAAP R&D Expenses
(unaudited)
                         
GAAP research and development expenses   $ 5,045     $ 5,320     $ 5,323  
  -% of revenues     15.5 %     16.8 %     14.5 %
Reconciling items:                        
  Share-based compensation     (297 )     (309 )     (322 )
  Amortization of intangible assets     (50 )     (50 )     (56 )
  Write off of equipment     -       (184 )     -  
  Fair value adjustment to depreciation expense on acquired fixed assets     (10 )     (10 )     (10 )
    Total reconciling items     (357 )     (553 )     (388 )
Non-GAAP research and development expenses   $ 4,688     $ 4,767     $ 4,935  
  -% of revenues     14.4 %     15.0 %     13.4 %
                         
Reconciliation of GAAP SG&A Expenses to Non-GAAP SG&A Expenses
(unaudited)
                         
GAAP selling, general and administrative expenses   $ 7,687     $ 7,217     $ 7,639  
  -% of revenues     23.6 %     22.8 %     20.8 %
Reconciling items:                        
  Share-based compensation     (396 )     (447 )     (467 )
  Amortization of intangible assets     (247 )     (245 )     (243 )
  Fair value adjustment to depreciation expense on acquired fixed assets     (31 )     (31 )     (30 )
  Lease restructuring and moving costs     (522 )     -       -  
    Total reconciling items     (1,196 )     (723 )     (740 )
Non-GAAP selling, general and administrative expenses   $ 6,491     $ 6,494     $ 6,899  
  -% of revenues     19.9 %     20.5 %     18.8 %
                           
 
 
Pericom Semiconductor Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
 
    As of   As of
    September 28, 2013   June 29, 2013
Assets        
         
Current assets:            
             
  Cash and cash equivalents   $ 24,963   $ 30,844
  Short-term investments     52,129     29,447
  Accounts receivable - trade     24,049     22,105
  Inventories     14,633     14,844
  Prepaid expenses and other current assets     6,654     5,886
  Deferred income taxes     570     585
    Total current assets     122,998     103,711
             
Property, plant and equipment-net     61,824     60,959
Investments in unconsolidated affiliates     2,585     2,525
Deferred income taxes non-current     3,283     3,411
Long-term investments in marketable securities     39,121     57,392
Intangible assets     9,220     9,944
Other assets     8,498     8,625
    Total assets   $ 247,529   $ 246,567
             
             
Liabilities and Shareholders' Equity            
             
Current liabilities:            
             
  Accounts payable   $ 11,258   $ 12,184
  Accrued liabilities     9,449     8,731
    Total current liabilities     20,707     20,915
             
Industrial development subsidy     7,074     7,263
Deferred tax liabilities     5,690     5,798
Other long-term liabilities     3,698     3,700
    Total liabilities     37,169     37,676
             
Shareholders' equity:            
  Common stock and paid in capital     119,562     119,591
  Retained earnings and other comprehensive income     90,798     89,300
    Total shareholders' equity     210,360     208,891
                 
    Total liabilities and shareholders' equity   $ 247,529   $ 246,567
                 
                 
Contact:



Robert Strickland


Pericom Semiconductor
Tel: 408 232-9100
Email Contact


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