MILPITAS, CA--(Marketwired - Oct 29, 2013) - Pericom Semiconductor Corporation (
- 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 (
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 (
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 Information:
Contact:
Robert Strickland
Pericom Semiconductor
Tel: 408 232-9100