SOURCE: Pericom Semiconductor Corporation

February 03, 2010 16:05 ET

Pericom Semiconductor Reports Fiscal Q2 2010 Financial Results

SAN JOSE, CA--(Marketwire - February 3, 2010) - Pericom Semiconductor Corporation (NASDAQ: PSEM), a worldwide supplier of high-speed integrated circuits and frequency control products, today announced results for its fiscal second quarter ended December 26, 2009.

Quarterly Summary

--   Net revenues improved 9% sequentially and 17% year-over-year to
     $35.8 million.
--   Gross profits increased $1.5 million sequentially and $2.1 million
     year-over-year.
--   Gross margin of 33.6% improved 166 basis points on a sequential basis
     and 126 basis points year-over-year.
--   Net income increased 86% sequentially and 120% year-over-year to $2.5
     million.
--   Total shares repurchased during the period were 102,551 shares for
     $1,056,399.

Second Quarter 2010 Operating Results

Net revenues for the second quarter were $35.8 million, an increase of 9% from the $33.0 million reported in the first quarter, and up 17% from the $30.7 million reported in the comparable period last year. Gross margin was 33.6%, up from 32.0% last quarter, and up from 32.4% in the comparable period last year. Net revenues for the six-month period ending December 26, 2009 were $68.8 million, down 8% from $74.5 million in the prior year comparable period. Gross margin in the six-month period ending December 26, 2009 was 32.8%, down from 34.8% in the comparable period last year.

Operating expenses in the quarter were $10.4 million, down from $10.9 million in the previous quarter and up from $10.0 million in the comparable period last year. Operating expenses in the six-month period ending December 26, 2009 were $21.3 million, unchanged from the comparable period last year. Share-based compensation expense in the quarter was $933,000, up from $930,000 in the previous quarter and up from $904,000 in the comparable period last year. Stock based compensation expense for the six-month period ended December 26, 2009 was $1,863,000, up from $1,699,000 in the comparable prior year period.

Net income in the quarter was $2.5 million, or $0.10 per diluted share, compared with net income of $1.3 million, or $0.05 per diluted share in the first quarter, and net income of $1.1 million, or $0.04 per diluted share in the comparable period last year. Net income in the six-month period ending December 26, 2009 was $3.8 million, or $0.15 per diluted share, down from $4.8 million, or $0.19 per diluted share in the comparable prior year period.

"We are pleased to report a strong sequential revenue increase of 9%, driven by a pickup in demand from all key market segments that we serve," said Alex Hui, president and CEO of Pericom. "We achieved a sequential improvement in gross margin and a reduction in operating overhead, giving us better operating results. We will continue to drive improvements in these areas going forward."

"We are happy to see the deployment of our serial connectivity and timing solutions beyond the digital video and PC markets that we served in recent years. We initiated the volume shipment of PCIe products into embedded applications such as multi-function printers and wireless routers. We also scored multiple design wins with our signal integrity solution at key networking and server OEMs. With new versions of serial protocols operating at higher data rates, we expect to see an increasing need for our products. With its broad connectivity and timing solutions, Pericom is well positioned to support our key customers in the next phase of growth. We look forward to resuming our revenue growth and delivering better operating results in 2010."

New Products

In the December quarter, we continued to expand our serial connectivity solution with the introduction of 9 new products that work across the Signal Integrity, Timing and Connectivity product areas:

--   Expanding its solutions for high speed serial protocol signal
     integrity, Pericom introduced 2 new ReDriver™ products addressing
     high speed serial SATA (Serial ATA) and DisplayPort protocols. These
     products address volume computing and ultra-mobility market segments.

--   Adding to high speed Connectivity solutions, Pericom introduced 3 new
     switching and connectivity products targeted across PCIe Gen2, HDMI,
     and USB 2.0 protocols. The USB 2.0 product integrates industry leading
     features for ultra-mobility (cell phone) platforms. Other target
     segments include volume computing.

--   Expanding its timing solutions for next generation platforms, Pericom
     introduced 4 new products in the past quarter -- 2 advanced crystal
     oscillators (XO) and 2 clock generator/buffers -- all targeting next
     generation networking and ultra-mobility market segments.

Share Repurchase Update

On April 29, 2008, our Board of Directors authorized the repurchase of an additional $30 million of our common stock. Pursuant to the 2008 authority, the Company repurchased 102,551 shares in the three months ended December 26, 2009 for an aggregate cost of $1,056,399 and an average per share purchase price of $10.30. The remaining balance of potential share repurchases under the 2008 authority is approximately $25.4 million.

Fiscal Q3 Outlook

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

--   Revenues in the third fiscal quarter are expected to be in the
     range of $34.0 million to $36.0 million.

--   Gross margins are expected to be in the 33% to 35% range.

--   Operating expenses are expected to be in the range of $9.8 to $10.4
     million, which include stock-based compensation expense of
     approximately $1.0 million.

--   Other income is expected to be approximately $1.1 million.

--   Net income from unconsolidated affiliates PTI and JCP is expected
     to be approximately $0.4 million.

--   The effective tax rate is expected to be approximately 33%.

Conference Call

The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time. To listen to the call, dial (888) 278-8459 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.

A taped replay of the conference call will be made available for five business days. To listen to the replay, dial (888) 203-1112 and reference conference number 5436348. 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.

About Pericom

Pericom Semiconductor Corporation (NASDAQ: PSEM) enables serial connectivity with the industry's most complete solutions for the computing, communications and consumer market segments. Pericom's analog, digital and mixed-signal integrated circuits, along with its SaRonix-eCERA 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 San Jose, California, with design centers and technical sales and support offices globally. http://www.pericom.com.

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 caption 'Fiscal Q3 Outlook', which regard the anticipated revenues, gross margin, operating expenses, other income and tax rate in the third fiscal quarter, and statements regarding continuing to drive improvements in gross margin and operating overhead, an increasing need for our products, Pericom being well positioned for the next phase of growth, resuming revenue growth and delivering better operating results in 2010. 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 27, 2009, and, in particular, the risk factors section contained therein.

- See Attached Tables -


                    Pericom Semiconductor Corporation
                  Condensed Consolidated Balance Sheets
                              (In thousands)
                                (unaudited)


                                                As of           As of
                                             Dec 26, 2009    Jun 27, 2009
                                            --------------- ---------------
          Assets

Current Assets:

    Cash & cash equivalents                 $        31,547 $        37,321
    Restricted cash                                   3,141           3,200
    Short-term investments                           74,075          75,471
    Accounts receivable - trade                      22,068          22,875
    Inventories                                      18,994          16,340
    Prepaid expenses and other current
     assets                                           3,769           3,738
    Deferred income taxes                             2,700           2,433
                                            --------------- ---------------
          Total current assets                      156,294         161,378

Property, plant and equipment-net                    49,372          47,238
Investments in unconsolidated affiliates             11,903          10,826
Deferred income taxes non current                     3,710           4,657
Long-term investments in marketable
 securities                                          20,439          11,780
Goodwill                                              1,681           1,673
Intangible assets                                     1,617           1,764
Other assets                                          7,159           6,742
                                            --------------- ---------------
          Total assets                      $       252,175 $       246,058
                                            =============== ===============


          Liabilities and Shareholders'
           Equity

Current liabilities:

    Accounts payable                        $        12,359 $        10,824
    Accrued liabilities                              13,589          15,118
    Current portion of long-term debt                   122              60
                                            --------------- ---------------
          Total current liabilities                  26,070          26,002

Long-term debt                                        1,582           1,610
Industrial development subsidy                        4,198           3,718
Other long-term liabilities                           1,287           1,287
                                            --------------- ---------------
          Total liabilities                          33,137          32,617

Shareholders' equity:
    Common stock and paid in capital                135,013         133,162
    Retained earnings and other
     comprehensive income                            84,025          79,046
                                            --------------- ---------------
          Total Pericom shareholders'
           equity                                   219,038         212,208
    Noncontrolling interests in
     consolidated subsidiaries                            -           1,233
                                            --------------- ---------------
          Total equity                              219,038         213,441
                                            --------------- ---------------

          Total liabilities and equity      $       252,175 $       246,058
                                            =============== ===============




                    Pericom Semiconductor Corporation
            Condensed Consolidated Statements of Operations
                  (In thousands, except per share data)
                              (unaudited)




                               Three Months Ended        Six Months Ended
                          ----------------------------  ------------------
                           Dec 26    Sep 26    Dec 27    Dec 26    Dec 27
                            2009      2009      2008      2009      2008
                          --------  --------  --------  --------  --------

Net revenues              $ 35,805  $ 32,952  $ 30,732  $ 68,757  $ 74,530

Cost of revenues            23,762    22,416    20,785    46,178    48,590
                          --------  --------  --------  --------  --------

    Gross profit            12,043    10,536     9,947    22,579    25,940

Operating expenses:

    Research and
     development             4,336     4,046     4,363     8,382     8,584

    Selling, general and
     administrative          6,035     6,828     5,453    12,863    12,354

    Restructuring charge         -         -       217         -       217
                          --------  --------  --------  --------  --------

          Total
           operating
           expenses         10,371    10,874    10,033    21,245    21,155
                          --------  --------  --------  --------  --------

Income from operations       1,672      (338)      (86)    1,334     4,785

Interest and other income    1,288     1,643     1,264     2,931     2,370

Other than temporary
 decline in value of
 investment                      -         -         -         -      (458)
                          --------  --------  --------  --------  --------

Income before income
 taxes                       2,960     1,305     1,178     4,265     6,697

Income tax expense           1,002       475       (46)    1,477     1,884
                          --------  --------  --------  --------  --------

Income from consolidated
 companies                   1,958       830     1,224     2,788     4,813

Equity in net income
 (loss) of unconsolidated
 affiliates                    536       527       (71)    1,063        46
                          --------  --------  --------  --------  --------

Net income                   2,494     1,357     1,153     3,851     4,859

Net income attributable
 to noncontrolling
 interests                      (6)      (22)      (23)      (28)      (68)
                          --------  --------  --------  --------  --------

Net income attributable
 to Pericom shareholders  $  2,488  $  1,335  $  1,130  $  3,823  $  4,791
                          ========  ========  ========  ========  ========

Basic income per share to
 Pericom shareholders     $   0.10  $   0.05  $   0.04  $   0.15  $   0.19
                          ========  ========  ========  ========  ========

Diluted income per share
 to Pericom shareholders  $   0.10  $   0.05  $   0.04  $   0.15  $   0.19
                          ========  ========  ========  ========  ========

Shares used in computing
 basic income per share     25,543    25,509    25,418    25,526    25,549
                          ========  ========  ========  ========  ========

Shares used in computing
 diluted income per share   25,911    25,678    25,496    25,795    25,868
                          ========  ========  ========  ========  ========




                    Pericom Semiconductor Corporation
                         Share-Based Compensation
                              (In thousands)
                                (unaudited)



                                               Three Months Ended
                                     --------------------------------------
                                       Dec 26       Jun 27       Dec 27
                                         2009         2009         2008
                                     ------------ ------------ ------------

Manufacturing                        $         65 $         67 $         63

Research & development                        342          354          352

Selling, general & administrative             526          467          489
                                     ------------ ------------ ------------

                                     $        933 $        888 $        904
                                     ============ ============ ============

Contact Information

  • Contact:
    Robert Strickland
    Pericom Semiconductor
    Tel: 408 435-0800
    Email Contact