Pericom Semiconductor Reports Fiscal Q1 2010 Financial Results

Quarterly Highlights

--  Net revenues grew 10.9% sequentially to $33.0 million
--  Gross margins improved 328 basis points sequentially to 32.0%
--  Net income increased 28.4% sequentially to $1.3 million

First Quarter 2010 Operating Results

Net revenues for the first quarter were $33.0 million, up 10.9% from
the $29.7 million reported in the fourth quarter, and down 24.8% from
the $43.8 million reported in the comparable period last year. Gross
margin was 32.0%, increased from 28.7% last quarter, and down from
36.5% in the comparable period last year. Operating expenses in the
quarter were $10.9 million, up from $9.5 million in the previous
quarter and down from $11.1 million in the comparable period last
year. Operating expenses in the quarter included $1.2 million in
legal and accounting fees related to an accounting review and
financial restatements, in addition to the normal year-end audit.
Stock-based compensation expense in the quarter was $930,000, up from
$888,000 in the previous quarter and $795,000 in the comparable
period last year. Net income in the quarter was $1.3 million, or
$0.05 per diluted share, compared with net income of $1.0 million, or
$0.04 per diluted share in the fourth quarter and net income of $3.7
million, or $0.14 per diluted share, in the same period a year ago.

"Our business has continued to improve with increased billings and
bookings in FYQ1," said Alex Hui, president and CEO of Pericom. "We
also entered the December quarter with higher backlog coverage as
compared to last quarter.

"In the first quarter we saw gross margins recover from the reduced
levels of the previous quarter, a result of increased shipping
volumes, reduced product costs and improved product mix. We expect to
see continued improvement in our gross margins in FYQ2.

"Enabling serial connectivity in computer, communication and consumer
applications remains our primary focus. In FY09, we had a broad
deployment of our serial connectivity and timing solutions in PC
notebook, desktop and digital video applications. As we entered FY10,
we are pleased to see the application base expanding into new areas
including PC servers and embedded systems. We enjoyed very strong
sequential increases in revenue from PCI Express and e-SATA products
in FYQ1, which accounted for 24% of total quarterly revenue. We
expect revenue from these products would further increase in FYQ2 as
we ramp up shipments into embedded applications. We continue to
leverage our core technologies in signal switching and routing,
signal integrity and timing to develop solutions for new serial
protocols. This is exemplified in our recent introduction of five new
products supporting the emerging USB 3.0 Superspeed standard."

New Products

Pericom introduced 15 new products across the Signal Integrity,
Switching, Timing and Connectivity product areas in this quarter.

Expanding its solutions for high-speed serial protocol signal
integrity, Pericom introduced five new ReDriver products. Two of these
products are 'first to market' and address the new USB 'Superspeed' 5
Gigabits/sec protocol, two products address SATA2 and offer slumber
mode, and one product addresses the new DisplayPort video standard.
These products address the volume Consumer and Computer market
segments.

Adding to high speed connectivity solutions, Pericom introduced six
new switching and connectivity products targeted across USB
Superspeed, DisplayPort, and HDMI protocols. One of the products
provides mobile device charging from notebook USB ports. Target
market segments include volume consumer digital video, PC notebook,
desktop, and graphics, and ultra mobility platforms such as cell
phones and PDA.

Expanding its timing solutions for next generation platforms, Pericom
introduced four new products in the past quarter -- two advanced low
jitter clock generators addressing the Gb Ethernet, PCIe Gen2, and USB
Superspeed protocol applications, and two advanced XO (crystal
oscillator) products targeting the networking and computer market
segments.

Fiscal Q2 Outlook

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

--  Revenues in the second fiscal quarter are expected to be in the range
    of $34.0 million to $36.0 million (midpoint up 6.2% sequentially).

--  Gross margins are expected to be in the 32.5% to 34.0% range. Margins
    are influenced by the product mix of turns business and sales, if any, of
    previously reserved inventory.

--  Operating expenses are expected to be in the range of $9.7 to $10.5
    million, which include stock-based compensation expense of approximately
    $1.0 million.

--  Other income is expected to be approximately $0.9 million, consisting
    primarily of interest income.

--  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 32%.

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) 504-7953 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 4192687. 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 | Quote | Chart | News | PowerRating) 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 Q2 Outlook', which regard the anticipated revenues, gross
margin, operating expenses, other income and tax rate in the second
fiscal quarter, and statements regarding end user demand
strengthening, initiatives to reduce product cost and improve mix,
and Pericom being well positioned for long term growth. 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.

                    Pericom Semiconductor Corporation
              Condensed Consolidated Statements of Operations
                  (In thousands, except per share data)
                                (unaudited)
                                                   Three Months Ended
                                              ----------------------------
                                               Sep 26    Jun 27    Sep 27
                                                2009      2009      2008
                                              --------  --------  --------
Net revenues                                  $ 32,952  $ 29,721  $ 43,798
Cost of revenues                                22,416    21,193    27,805
                                              --------  --------  --------
  Gross profit                                  10,536     8,528    15,993
Operating expenses:
  Research and development                       4,046     4,117     4,221
  Selling, general and administrative            6,828     5,343     6,901
  Restructuring charge                               -        74         -
                                              --------  --------  --------
          Total                                 10,874     9,534    11,122
Income (loss) from operations                     (338)   (1,006)    4,871
Interest and other income, net                   1,643     1,677     1,106
Other than temporary decline in value of
 investment                                          -         -      (458)
                                              --------  --------  --------
Income before income taxes                       1,305       671     5,519
Income tax expense                                 475      (135)    1,930
                                              --------  --------  --------
Income from consolidated companies                 830       806     3,589
Equity in income of unconsolidated affiliates      527       256       117
                                              --------  --------  --------
Net income including noncontrolling interests    1,357     1,062     3,706
Noncontrolling interest in net income              (22)      (22)      (45)
                                              --------  --------  --------
Net income                                    $  1,335  $  1,040  $  3,661
                                              ========  ========  ========
Basic income per share                        $   0.05  $   0.04  $   0.14
                                              ========  ========  ========
Diluted income per share                      $   0.05  $   0.04  $   0.14
                                              ========  ========  ========
Shares used in computing basic income
 per share                                      25,509    25,354    25,679
                                              ========  ========  ========
Shares used in computing diluted income
 per share                                      25,678    25,485    26,239
                                              ========  ========  ========
                    Pericom Semiconductor Corporation
                  Condensed Consolidated Balance Sheets
                              (In thousands)
                                (unaudited)
                                                    As of         As of
                                                Sept 26, 2009 Jun 27, 2009
                                                ------------- -------------
          Assets
Current Assets:
    Cash & cash equivalents                     $      43,516 $      37,321
    Restricted cash                                     3,200         3,200
    Short-term investments                             74,578        75,471
    Accounts receivable - trade                        21,791        22,875
    Inventories                                        16,032        16,340
    Prepaid expenses and other current assets           2,975         3,738
    Deferred income taxes                               2,723         2,433
                                                ------------- -------------
          Total current assets                        164,815       161,378
Property and equipment, net                            48,799        47,238
Investments in unconsolidated affiliates               11,319        10,826
Deferred income taxes - non current                     3,708         4,657
Long-term investments in marketable securities          9,108        11,780
Goodwill                                                1,679         1,673
Intangible assets                                       1,696         1,764
Other assets                                            6,900         6,742
                                                ------------- -------------
          Total assets                          $     248,024 $     246,058
                                                ============= =============
          Liabilities and Shareholders' Equity
Current liabilities:
    Accounts payable                            $      11,667 $      10,824
    Accrued liabilities                                12,049        15,118
    Current portion of long-term debt                      91            60
                                                ------------- -------------
          Total current liabilities                    23,807        26,002
Long-term debt                                          1,605         1,610
Industrial development subsidy                          4,217         3,718
Deferred tax liabilities                                    -             -
Other long term liabilities                             1,274         1,287
                                                ------------- -------------
          Total liabilities                            30,903        32,617
Shareholders' equity:
    Common stock                                      134,375       133,162
    Retained earnings and other                        81,492        79,046
                                                ------------- -------------
          Company shareholders' equity                215,867       212,208
                                                ------------- -------------
    Noncontrolling interests                            1,254         1,233
                                                ------------- -------------
          Total equity                                217,121       213,441
                                                ------------- -------------
          Total liabilities and shareholders'
           equity                               $     248,024 $     246,058
                                                ============= =============
                    Pericom Semiconductor Corporation
                         Share-Based Compensation
                              (In thousands)
                                (unaudited)
                                                    Three Months Ended
                                              -----------------------------
                                               Sep 26    Jun 27    Sep 27
                                                2009      2009      2008
                                              --------- --------- ---------
Manufacturing                                 $      63 $      67 $      51
Research & development                              352       354       307
Selling, general & administrative                   515       467       437
                                              --------- --------- ---------
                                              $     930 $     888 $     795
                                              ========= ========= =========

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

SOURCE: Pericom Semiconductor Corporation

http://www2.marketwire.com/mw/emailprcntct?id=F9D183359C1AF626

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