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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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