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 statements by our CEO concerning future business and revenue growth and margin improvement and the statements under the captions "Fiscal Q3 2014 Outlook", which regard the anticipated revenues, gross margin, operating expenses, other income, and effective tax rate in the third 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, our quarterly report on Form 10-Q for the quarter ended September 28, 2013, and in particular, the risk factors sections contained in those reports.
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Pericom Semiconductor Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
------------------------------- --------------------
December September December December December
28, 28, 29, 28, 29,
2013 2013 2012 2013 2012
--------- --------- --------- --------- ---------
Net revenues $ 32,040 $ 32,608 $ 30,433 $ 64,648 $ 67,182
Cost of revenues 19,820 19,800 19,239 39,620 42,077
--------- --------- --------- --------- ---------
Gross profit 12,220 12,808 11,194 25,028 25,105
Operating expenses:
Research and
development 5,274 5,045 5,097 10,319 10,420
Selling, general and
administrative 7,126 7,687 7,532 14,813 15,171
--------- --------- --------- --------- ---------
Total operating
expenses 12,400 12,732 12,629 25,132 25,591
--------- --------- --------- --------- ---------
Income (loss) from
operations (180) 76 (1,435) (104) (486)
Interest and other
income, net 1,047 486 795 1,533 1,430
--------- --------- --------- --------- ---------
Income (loss) before
income taxes 867 562 (640) 1,429 944
Income tax expense
(benefit) (331) 231 4,756 (100) 5,256
--------- --------- --------- --------- ---------
Net income (loss) from
consolidated
companies 1,198 331 (5,396) 1,529 (4,312)
Equity in net income
of unconsolidated
affiliate 27 43 57 70 165
--------- --------- --------- --------- ---------
Net income (loss) $ 1,225 $ 374 $ (5,339) $ 1,599 $ (4,147)
========= ========= ========= ========= =========
Basic income (loss)
per share $ 0.05 $ 0.02 $ (0.23) $ 0.07 $ (0.18)
========= ========= ========= ========= =========
Diluted income (loss)
per share $ 0.05 $ 0.02 $ (0.23) $ 0.07 $ (0.18)
========= ========= ========= ========= =========
Shares used in
computing basic
income (loss) per
share 22,800 22,794 23,515 22,797 23,529
========= ========= ========= ========= =========
Shares used in
computing diluted
income (loss) per
share 23,019 22,951 23,515 22,985 23,529
========= ========= ========= ========= =========
----------------------------------------------------------------------------
Pericom Semiconductor Corporation
Condensed Consolidated Statements of Operations
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
----------------------------------- -----------------------
December September December December December
28, 28, 29, 28, 29,
2013 2013 2012 2013 2012
----------- ----------- ----------- ----------- -----------
Share-based
compensation
Cost of
revenues $ 50 $ 36 $ 43 $ 86 $ 95
Research and
development 313 297 333 610 655
Selling,
general and
administrative 388 396 484 784 951
----------- ----------- ----------- ----------- -----------
Share-based
compensation
expense $ 751 $ 729 $ 860 $ 1,480 $ 1,701
Amortization of
intangible
assets
Cost of
revenues $ 481 $ 488 $ 481 $ 969 $ 958
Research and
development 17 50 49 67 105
Selling,
general and
administrative 249 247 242 496 485
----------- ----------- ----------- ----------- -----------
Amortization
of
intangible
assets $ 747 $ 785 $ 772 $ 1,532 $ 1,548
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Pericom Semiconductor Corporation
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
----------------------------------- ----------------------
December September December December December
28, 28, 29, 28, 29,
2013 2013 2012 2013 2012
---------- ----------- ---------- ---------- ----------
GAAP net income
(loss) $ 1,225 $ 374 $ (5,339) $ 1,599 $ (4,147)
Reconciling
items:
Share-based
compensation
expense 751 729 860 1,480 1,701
Amortization
of intangible
assets 747 785 772 1,532 1,548
Fair value
adjustment to
depreciation
expense on
acquired
fixed assets 51 51 50 102 100
Restructuring
charge 95 - - 95 -
Write off of
fixed asset
and release
of tax
reserves (531) - - (531) -
Tax on
intercompany
transaction - 15 4,987 15 4,987
Lease
restructuring
and moving
costs - 522 - 522 -
Tax effect of
adjustments (452) (543) (408) (995) (810)
---------- ----------- ---------- ---------- ----------
Total
reconciling
items 661 1,559 6,261 2,220 7,526
---------- ----------- ---------- ---------- ----------
Non-GAAP net
income $ 1,886 $ 1,933 $ 922 $ 3,819 $ 3,379
========== =========== ========== ========== ==========
Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
(unaudited)
Diluted net
income (loss)
per share:
GAAP diluted
income (loss)
per share $ 0.05 $ 0.02 $ (0.23) $ 0.07 $ (0.18)
Adjustments:
Share-based
compensation
expense 0.03 0.03 0.04 0.06 0.08
Amortization
of intangible
assets 0.03 0.03 0.03 0.06 0.06
Fair value
adjustment to
depreciation
expense on
acquired
fixed assets - - - - -
Restructuring
charge 0.01 - - 0.01 -
Write off of
fixed asset
and release
of tax
reserves (0.02) - - (0.02) -
Tax on
intercompany
transaction - - 0.21 - 0.21
Lease
restructuring
and moving
costs - 0.02 - 0.02 -
Tax effect of
adjustments (0.02) (0.02) (0.02) (0.04) (0.04)
Difference in
share count - - 0.01 - 0.01
---------- ----------- ---------- ---------- ----------
Total
adjustments 0.03 0.06 0.27 0.09 0.32
---------- ----------- ---------- ---------- ----------
Non-GAAP
diluted
income per
share $ 0.08 $ 0.08 $ 0.04 $ 0.16 $ 0.14
========== =========== ========== ========== ==========
Shares used in
diluted net
income (loss)
per share
calculation:
GAAP 23,019 22,951 23,515 22,985 23,529
Change in
diluted
shares from
GAAP net loss
to non-GAAP
net income - - 141 - 169
Exclude the
benefit of
share-based
compensation
expense (1) 426 390 507 408 408
---------- ----------- ---------- ---------- ----------
Non-GAAP 23,445 23,341 24,163 23,393 24,106
========== =========== ========== ========== ==========
(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.
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Pericom Semiconductor Corporation
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
----------------------------------- ----------------------
December September December December December
28, 28, 29, 28, 29,
2013 2013 2012 2013 2012
---------- ----------- ---------- ---------- ----------
GAAP gross
margin $ 12,220 $ 12,808 $ 11,194 $ 25,028 $ 25,105
- % of revenues 38.1% 39.3% 36.8% 38.7% 37.4%
Reconciling
items:
Share-based
compensation 50 36 43 86 95
Amortization
of intangible
assets 481 488 481 969 958
Fair value
adjustment to
depreciation
expense on
acquired
fixed assets 10 10 10 20 20
---------- ----------- ---------- ---------- ----------
Total
reconciling
items 541 534 534 1,075 1,073
---------- ----------- ---------- ---------- ----------
Non-GAAP gross
margin $ 12,761 $ 13,342 $ 11,728 $ 26,103 $ 26,178
========== =========== ========== ========== ==========
- % of revenues 39.8% 40.9% 38.5% 40.4% 39.0%
Reconciliation of GAAP R&D Expenses to Non-GAAP R&D Expenses
(unaudited)
GAAP research
and development
expenses $ 5,274 $ 5,045 $ 5,097 $ 10,319 $ 10,420
- % of revenues 16.5% 15.5% 16.7% 16.0% 15.5%
Reconciling
items:
Share-based
compensation (313) (297) (333) (610) (655)
Amortization
of intangible
assets (17) (50) (49) (67) (105)
Fair value
adjustment to
depreciation
expense on
acquired
fixed assets (10) (10) (10) (20) (20)
Restructuring
charge (78) - - (78) -
Write off of
fixed asset (210) - - (210) -
---------- ----------- ---------- ---------- ----------
Total
reconciling
items (628) (357) (392) (985) (780)
---------- ----------- ---------- ---------- ----------
Non-GAAP
research and
development
expenses $ 4,646 $ 4,688 $ 4,705 $ 9,334 $ 9,640
========== =========== ========== ========== ==========
- % of revenues 14.5% 14.4% 15.5% 14.4% 14.3%
Reconciliation of GAAP SG&A Expenses to Non-GAAP SG&A Expenses
(unaudited)
GAAP selling,
general and
administrative
expenses $ 7,126 $ 7,687 $ 7,532 $ 14,813 $ 15,171
- % of revenues 22.2% 23.6% 24.7% 22.9% 22.6%
Reconciling
items:
Share-based
compensation (388) (396) (484) (784) (951)
Amortization
of intangible
assets (249) (247) (242) (496) (485)
Fair value
adjustment to
depreciation
expense on
acquired
fixed assets (31) (31) (30) (62) (60)
Restructuring
charge (17) - - (17) -
Lease
restructuring
and moving
costs - (522) - (522) -
---------- ----------- ---------- ---------- ----------
Total
reconciling
items (685) (1,196) (756) (1,881) (1,496)
---------- ----------- ---------- ---------- ----------
Non-GAAP
selling,
general and
administrative
expenses $ 6,441 $ 6,491 $ 6,776 $ 12,932 $ 13,675
========== =========== ========== ========== ==========
- % of revenues 20.1% 19.9% 22.3% 20.0% 20.4%
----------------------------------------------------------------------------
Pericom Semiconductor Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
As of As of
December 28, 2013 June 29, 2013
----------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 30,270 $ 30,844
Short-term investments 49,648 29,447
Accounts receivable - trade 23,967 22,105
Inventories 13,294 14,844
Prepaid expenses and other current
assets 6,044 5,886
Deferred income taxes 474 585
----------------- -----------------
Total current assets 123,697 103,711
Property, plant and equipment-net 60,550 60,959
Investments in unconsolidated affiliates 2,617 2,525
Deferred income taxes non-current 3,290 3,411
Long-term investments in marketable
securities 37,952 57,392
Intangible assets 8,503 9,944
Other assets 8,319 8,625
----------------- -----------------
Total assets $ 244,928 $ 246,567
================= =================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 8,693 $ 12,184
Accrued liabilities 9,315 8,731
----------------- -----------------
Total current liabilities 18,008 20,915
Industrial development subsidy 6,870 7,263
Deferred tax liabilities 5,799 5,798
Other long-term liabilities 2,767 3,700
----------------- -----------------
Total liabilities 33,444 37,676
Shareholders' equity:
Common stock and paid in capital 119,775 119,591
Retained earnings and other
comprehensive income 91,709 89,300
----------------- -----------------
Total shareholders' equity 211,484 208,891
----------------- -----------------
Total liabilities and shareholders'
equity $ 244,928 $ 246,567
================= =================
