Peregrine Semiconductor Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Nine Months Ended

September 27,

September 28,

2014

2013

Operating activities

Net income (loss)

$

(19,105)

$

2,777

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

5,503

4,825

Loss on disposal of property and equipment

541

—

Stock-based compensation

5,782

4,854

Imputed interest related to deposit arrangements, net

41

(307)

Amortization of premium and discount on investments, net

221

293

Cash received for lease incentives

—

135

Changes in operating assets and liabilities:

Accounts receivable

2,625

(4,956)

Inventories

18,614

4,717

Prepaids and other current and noncurrent assets

(2,552)

3,676

Accounts payable and accrued liabilities

(2,928)

(16,144)

Customer deposits

—

(11,425)

Deferred revenue

4,914

(6,787)

Net cash provided by (used in) operating activities

13,656

(18,342)

Investing activities

Purchase of property and equipment

(2,527)

(5,304)

Purchase of marketable securities

(37,057)

(28,552)

Sale and maturity of marketable securities

24,710

31,607

Proceeds from sale of equipment

483

—

Net cash used in investing activities

(14,391)

(2,249)

Financing activities

Payments on obligations under capital leases

—

(7)

Payments on customer deposit financing arrangement

(916)

(8,046)

Proceeds from exercise of stock options

3,787

1,759

Payments related to net share settlement of equity awards

(281)

—

Net cash provided by (used in) financing activities

2,590

(6,294)

Effect of exchange rate changes on cash and cash equivalents

(63)

(15)

Net change in cash and cash equivalents

1,792

(26,900)

Cash and cash equivalents at beginning of period

16,249

44,106

Cash and cash equivalents at end of period

$

18,041

$

17,206