As a supplement to the Company's condensed consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company provides additional non-GAAP measures for cost of revenues, gross profit, gross profit percentage, research and development expense, net, selling, general and administrative expense, amortization of purchased intangible assets, other income (expense), provision for income taxes, operating expenses, operating income (loss), operating margin, net income (loss), and net income per share - basic and diluted.
A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The Company believes that the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses these measures internally to evaluate the Company's in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company's core operating results. In addition, the measures are used for planning and forecasting of the Company's future periods. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.
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PMC-Sierra, Inc. |
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Adjustments to GAAP Cost of Revenues, Gross Profit, Gross Profit Percentage, Research and Development Expense, net, Selling, General and Administrative Expense, Amortization of Purchased Intangible Assets, Other Income (Expense), Provision for Income Taxes, Operating Expenses, Operating Income (Loss), Net Income (Loss), and Basic and Diluted Net Income (Loss) Per Share |
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| (in thousands, except for per share amounts) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 28, | December 27, | March 29, | |||||||||||||
| 2015 | 2014 | 2014 | |||||||||||||
| GAAP cost of revenues | $ | 39,980 | $ | 40,702 | $ | 37,564 | |||||||||
| Stock-based compensation | (271 | ) | (285 | ) | $ | (241 | ) | ||||||||
| Termination expense recoveries | - | - | $ | 9 | |||||||||||
| Non-GAAP cost of revenues | $ | 39,709 | $ | 40,417 | $ | 37,332 | |||||||||
| GAAP gross profit | $ | 93,091 | $ | 96,149 | $ | 88,904 | |||||||||
| Stock-based compensation | 271 | 285 | 241 | ||||||||||||
| Termination expense recoveries | - | - | (9 | ) | |||||||||||
| Non-GAAP gross profit | $ | 93,362 | $ | 96,434 | $ | 89,136 | |||||||||
| Non-GAAP gross profit % | 70.2 | % | 70.5 | % | 70.5 | % | |||||||||
| GAAP research and development expense, net | $ | 48,866 | $ | 50,942 | $ | 50,148 | |||||||||
| Stock-based compensation | (2,844 | ) | (2,880 | ) | (2,647 | ) | |||||||||
| Acquisition-related costs | (106 | ) | (423 | ) | (800 | ) | |||||||||
| Termination expense recoveries | 38 | 8 | 58 | ||||||||||||
| Reversal of accruals | - | 342 | - | ||||||||||||
| Lease exit recoveries | - | 29 | - | ||||||||||||
| Non-GAAP research and development expense, net | $ | 45,954 | $ | 48,018 | $ | 46,759 | |||||||||
| GAAP selling, general and administrative expense | $ | 30,051 | $ | 29,411 | $ | 29,340 | |||||||||
| Stock-based compensation | (3,578 | ) | (3,682 | ) | (3,303 | ) | |||||||||
| Acquisition-related costs | (171 | ) | (261 | ) | (61 | ) | |||||||||
| Lease exit recoveries (costs) | 11 | (5 | ) | (142 | ) | ||||||||||
| Termination and separation costs | (507 | ) | (645 | ) | (3 | ) | |||||||||
| Asset impairments | - | - | (477 | ) | |||||||||||
| Other expenses | - | - | (58 | ) | |||||||||||
| Non-GAAP selling, general and administrative expense | $ | 25,806 | $ | 24,818 | $ | 25,296 | |||||||||
| GAAP amortization of purchased intangible assets | $ | 9,317 | $ | 10,994 | $ | 12,329 | |||||||||
| Amortization of purchased intangible assets | (9,317 | ) | (10,994 | ) | (12,329 | ) | |||||||||
| Non-GAAP amortization of purchased intangible assets | $ | - | $ | - | $ | - | |||||||||
| GAAP other income | $ | 2,529 | $ | 2,535 | $ | 519 | |||||||||
| Foreign exchange gain on foreign tax liabilities | (2,179 | ) | (2,665 | ) | (879 | ) | |||||||||
| Gain on disposal of investment | - | (26 | ) | - | |||||||||||
| Amortization of discount on short-term and long-term obligations | 210 | 350 | - | ||||||||||||
| Non-GAAP other income (expense) | $ | 560 | $ | 194 | $ | (360 | ) | ||||||||
| GAAP provision for income taxes | $ | 2,731 | $ | 5,007 | $ | 1,847 | |||||||||
| Provision for income tax matters | (1,516 | ) | (3,900 | ) | (1,111 | ) | |||||||||
| Non-GAAP provision for income taxes | $ | 1,215 | $ | 1,107 | $ | 736 | |||||||||
| GAAP operating expenses | $ | 88,234 | $ | 91,347 | $ | 91,817 | |||||||||
| Stock-based compensation | (6,422 | ) | (6,562 | ) | (5,950 | ) | |||||||||
| Acquisition-related costs | (277 | ) | (684 | ) | (861 | ) | |||||||||
| Asset impairments | - | - | (477 | ) | |||||||||||
| Lease exit recoveries (costs) | 11 | 24 | (142 | ) | |||||||||||
| Termination and separation (costs) recoveries | (469 | ) | (637 | ) | 55 | ||||||||||
| Amortization of purchased intangible assets | (9,317 | ) | (10,994 | ) | (12,329 | ) | |||||||||
| Reversal of accruals | - | 342 | - | ||||||||||||
| Other expenses | - | - | (58 | ) | |||||||||||
| Non-GAAP operating expenses | $ | 71,760 | $ | 72,836 | $ | 72,055 | |||||||||
| March 28, | December 27, | March 29, | |||||||||||||
| 2015 | 2014 | 2014 | |||||||||||||
| GAAP operating income (loss) | $ | 4,857 | $ | 4,802 | $ | (2,913 | ) | ||||||||
| Stock-based compensation | 6,693 | 6,847 | 6,191 | ||||||||||||
| Acquisition-related costs | 277 | 684 | 861 | ||||||||||||
| Asset impairments | - | - | 477 | ||||||||||||
| Lease exit (recoveries) costs | (11 | ) | (24 | ) | 142 | ||||||||||
| Termination and separation costs (recoveries) | 469 | 637 | (64 | ) | |||||||||||
| Amortization of purchased intangible assets | 9,317 | 10,994 | 12,329 | ||||||||||||
| Reversal of accruals | - | (342 | ) | - | |||||||||||
| Other expenses | - | - | 58 | ||||||||||||
| Non-GAAP operating income | $ | 21,602 | $ | 23,598 | $ | 17,081 | |||||||||
| Non-GAAP operating margin | 16.2 | % | 17.2 | % | 13.5 | % | |||||||||
| GAAP net income (loss) | $ | 4,655 | $ | 2,330 | $ | (4,241 | ) | ||||||||
| Stock-based compensation | 6,693 | 6,847 | 6,191 | ||||||||||||
| Acquisition-related costs | 277 | 684 | 861 | ||||||||||||
| Termination and separation costs (recoveries) | 469 | 637 | (64 | ) | |||||||||||
| Reversal of accruals | - | (342 | ) | - | |||||||||||
| Asset impairments | - | - | 477 | ||||||||||||
| Lease exit (recoveries) costs | (11 | ) | (24 | ) | 142 | ||||||||||
| Amortization of purchased intangible assets | 9,317 | 10,994 | 12,329 | ||||||||||||
| Other expenses | - | - | 58 | ||||||||||||
| Foreign exchange gain on foreign tax liabilities | (2,179 | ) | (2,665 | ) | (879 | ) | |||||||||
| Amortization of discount on short-term and long-term obligations | 210 | 350 | - | ||||||||||||
| Gain on disposal of investments | - | (26 | ) | - | |||||||||||
| Provision for income taxes | 1,516 | 3,900 | 1,111 | ||||||||||||
| Non-GAAP net income | $ | 20,947 | $ | 22,685 | $ | 15,985 | |||||||||
| Non-GAAP net income per share - basic and diluted | $ | 0.10 | $ | 0.11 | $ | 0.08 | |||||||||
| Shares used to calculate non-GAAP net income per share - basic | 200,249 | 198,625 | 195,188 | ||||||||||||
| Shares used to calculate non-GAAP net income per share - diluted | 205,688 | 201,935 | 198,306 | ||||||||||||
