(Source: Business Wire)
PMC-Sierra, Inc. (Nasdaq:PMCS), the premier Internet infrastructure
semiconductor solution provider, today reported results for the third
quarter ended September 27, 2009.
Net revenues in the third quarter of 2009 were $130.9 million, an
increase of 6 percent compared to $123.2 million in the second quarter
of 2009 and 6 percent lower than net revenues of $139.4 million reported
in the third quarter of 2008.
Net income in the third quarter of 2009 on a GAAP basis was $27.8
million (GAAP diluted earnings per share of $0.12) compared with net
income of $7.8 million (GAAP diluted earnings per share of $0.03) in the
second quarter of 2009 and net income of $4.5 million (GAAP diluted
earnings per share of $0.02) in the third quarter of 2008.
Non-GAAP net income in the third quarter of 2009 was $34.5 million
(non-GAAP diluted earnings per share of $0.15), an increase of 16
percent compared to $29.7 million (non-GAAP diluted earnings per share
of $0.13) in the second quarter of 2009, and two cents per share above
the non-GAAP diluted earnings per share of $0.13 achieved in the third
quarter of 2008 when revenues reached $139.4 million.
"In the third quarter of 2009, we benefited from improved demand in our
Storage business, led by the continued ramp in our new 6Gb/s SAS
RAID-on-Chip device at H-P, as well as growth in our Microprocessor
business," said Greg Lang, president and chief executive officer of
PMC-Sierra. "This past quarter, we achieved the highest level of
non-GAAP operating income in the last nine years on revenue that was 6
percent below peak quarterly revenue last year."
Net income on a non-GAAP basis in the third quarter of 2009 excludes the
following items: (i) $5.1 million stock-based compensation expense; (ii)
$0.3 million recovery of previously accrued termination costs; (iii)
$9.8 million amortization of purchased intangible assets; (iv) $0.2
million restructuring costs; (v) $0.8 million of non-cash interest
expense for the accretion of the debt discount related to the senior
convertible notes; (vi) $1.0 million foreign exchange loss on foreign
tax liabilities; and (vii) $9.9 million income tax recovery.
For a full reconciliation of GAAP net income to non-GAAP net income,
please refer to the schedule included with this release. The Company
believes the additional non-GAAP measures are useful to investors for
the purpose of financial analysis. Management uses the non-GAAP measures
internally to evaluate its 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 to plan for the Company's future periods. However, non-GAAP
measures are neither stated in accordance with, nor are they a
substitute for, GAAP measures.
The Company made the following announcements in Q3 2009:
We introduced the META 20G device that enables Carrier Ethernet Switch
and Router (CESR) equipment to seamlessly connect to emerging Metro
Optical Transport Networks (OTN). The META 20G enables a converged OTN
infrastructure across IP and optical equipment with unified end-to-end
network management. The device integrates Carrier Ethernet mapping and
framing of 10GE LAN and WAN, and OTN mapping of IP-services such as
Storage Area Networks (SAN) and Video protocols, while maintaining
Packet over SONET/SDH service. The META 20G is the latest addition to
PMC-Sierra's OTN product portfolio, which includes the HyPHY 20G and
HyPHY 10G for Packet Optical Transport Platforms (P-OTP) and
Multi-Service Provisioning Platforms (MSPP). The portfolio provides a
chipset solution for end-to-end integration of OTN across metro
networks.
In Q3, we announced the volume production of our maxSAS end-to-end
chipset for 6Gb/s SAS enterprise storage systems. PMC-Sierra's
complete 6Gb/s SAS chipsetwhich includes the Tachyon® SPC 8x6G SAS
protocol controller, SXP 36x6GSec 36-port and SXP 24x6GSec 24-port SAS
Expanders, and system management firmwareis shipping in volume to
multiple leading storage and server OEMs.
Third Quarter 2009 Conference Call
Management will review the results for the third quarter of 2009 and
provide an outlook for the fourth quarter of 2009 during a conference
call at 2:30 pm Pacific Time/5:30 pm Eastern Time on October 22, 2009.
The conference call webcast will be accessible under the Financial
Events and Calendar section at http://investor.pmc-sierra.com/.
To listen to the conference call live by telephone, dial 416-640-3404
approximately ten minutes before the start time. A telephone playback
will be available after the completion of the call and can be accessed
at 647-436-0148 using the access code 6475519. A replay of the webcast
will be available for five business days.
Fourth Quarter 2009 Conference Call
PMC-Sierra is planning to release its results for the fourth quarter of
2009 in late January 2010. A conference call will be held on the day of
the release to review the quarter and provide an outlook for the first
quarter of 2010.
Safe Harbor Statement
PMC-Sierra's forward-looking statements are subject to risks and
uncertainties. Actual results may differ from these projections, and
reported results should not be considered as an indication of future
performance. The Company's SEC filings describe more fully the risks
associated with the Company's business including PMC-Sierra's limited
revenue visibility due to variable customer demands, uncertainty in the
financial and credit markets, market segment growth or decline, orders
with short delivery lead times, customer concentration, and other items
such as foreign exchange rates. The Company does not undertake any
obligation to update the forward-looking statements.
About PMC-Sierra
PMC-Sierra®, the premier Internet infrastructure
semiconductor solution provider, offers its customers technical and
sales support worldwide through a network of offices in North America,
Europe, Israel and Asia. PMC-Sierra provides semiconductor solutions for
Enterprise Storage, Wide Area Network Infrastructure, Fiber To The Home,
and Laser Printer/SMB NAS markets. The Company is publicly traded on the
NASDAQ Stock Market under the PMCS symbol. For more information, visit www.pmc-sierra.com.
© Copyright PMC-Sierra, Inc. 2009. All rights reserved. PMC and
PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the United
States and other countries. Other product and company names mentioned
herein may be trademarks of their respective owners.
PMC-Sierra, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 27, June 28, September 28, September 27, September 28,
2009 2009 2008 2009 2008
Restated * Restated *
Net revenues $ 130,876 $ 123,194 $ 139,356 $ 356,642 $ 404,235
Cost of revenues 44,432 39,413 47,373 120,648 139,752
Gross profit 86,444 83,781 91,983 235,994 264,483
Other costs and expenses:
Research and development 35,823 36,383 39,688 110,834 116,993
Selling, general and administrative 19,743 22,222 23,565 63,854 71,954
Amortization of purchased intangible assets 9,836 9,836 9,836 29,508 29,508
Restructuring costs and other charges 175 303 (259 ) 813 785
Income from operations 20,867 15,037 19,153 30,985 45,243
Other income (expense):
Foreign exchange gain (loss) (1,094 ) (2,867 ) 873 109 2,965
Gain on repurchase of senior convertible notes, net - - - - 4,931
Amortization of debt issue costs (50 ) (50 ) (94 ) (150 ) (332 )
Loss on subleased facilities - - - (538 ) -
Interest income (expense), net (487 ) (841 ) 181 (2,139 ) 622
Recovery on investments, net - - 400 - 400
Loss on investment securities - - (11,790 ) - (11,790 )
Income before provision for income taxes 19,236 11,279 8,723 28,267 42,039
Recovery of (provision) for income taxes 8,583 (3,430 ) (4,266 ) 3,484 77,445
Net income $ 27,819 $ 7,849 $ 4,457 $ 31,751 $ 119,484
Net income per common share - basic $ 0.12 $ 0.03 $ 0.02 $ 0.14 $ 0.54
Net income per common share - diluted $ 0.12 $ 0.03 $ 0.02 $ 0.14 $ 0.53
Shares used in per share calculation - basic 227,123 224,861 222,335 225,276 221,091
Shares used in per share calculation - diluted 231,863 227,883 225,803 228,172 223,573
* Effective December 29, 2008, the Company retrospectively adopted Financial Accounting Standards Board Accounting Standards Codification 470, the Debt Topic for the accounting of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlements). Accordingly, the comparative condensed consolidated financial statements have been restated.
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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, selling, general and administrative expense, amortization of purchased intangible assets, restructuring costs and other charges, other income (expense), provision for (recovery of) income taxes, operating expenses, operating income, net income, and basic and diluted net income per share.
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.
PMC-Sierra, Inc.
Adjustments to GAAP Cost of Revenues, Gross Profit, Gross Profit Percentage, Research and Development Expense,
Selling, General and Administrative Expense, Amortization of Purchased Intangible Assets, Restructuring Costs and Other Charges,
Other Income (Expense), Provision for (Recovery of) Income Taxes, Operating Expenses, Operating Income,
Net Income, and Basic and Diluted Net Income Per Share
(in thousands, except for per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 27, June 28, September 28, September 27, September 28,
2009 (1) 2009 (2) 2008 (3) 2009 (4) 2008 (5)
Restated * Restated *
GAAP cost of revenues $ 44,432 $ 39,413 $ 47,373 $ 120,648 $ 139,752
Stock-based compensation (149 ) (226 ) (233 ) (580 ) (958 )
Non-GAAP cost of revenues $ 44,283 $ 39,187 $ 47,140 $ 120,068 $ 138,794
GAAP gross profit $ 86,444 $ 83,781 $ 91,983 $ 235,994 $ 264,483
Stock-based compensation 149 226 233 580 958
Non-GAAP gross profit $ 86,593 $ 84,007 $ 92,216 $ 236,574 $ 265,441
Non-GAAP gross profit % 66 % 68 % 66 % 66 % 66 %
GAAP research and development expense $ 35,823 $ 36,383 $ 39,688 $ 110,834 $ 116,993
Stock-based compensation (2,173 ) (2,062 ) (2,425 ) (6,566 ) (8,807 )
Exclusion of termination costs 129 - - (1,039 ) -
Non-GAAP research and development expense $ 33,779 $ 34,321 $ 37,263 $ 103,229 $ 108,186
GAAP selling, general and administrative expense $ 19,743 $ 22,222 $ 23,565 $ 63,854 $ 71,954
Stock-based compensation (2,798 ) (3,343 ) (2,699 ) (9,066 ) (9,954 )
Exclusion of termination costs 147 - - (624 ) -
Non-GAAP selling, general and administrative expense $ 17,092 $ 18,879 $ 20,866 $ 54,164 $ 62,000
GAAP amortization of purchased intangible assets $ 9,836 $ 9,836 $ 9,836 $ 29,508 $ 29,508
Exclusion of amortization of purchased intangible assets (9,836 ) (9,836 ) (9,836 ) (29,508 ) (29,508 )
Non-GAAP amortization of purchased intangible assets $ - $ - $ - $ - $ -
GAAP restructuring costs and other charges $ 175 $ 303 $ (259 ) $ 813 $ 785
Exclusion of restructuring costs and other charges (175 ) (303 ) 259 (813 ) (785 )
Non-GAAP restructuring costs and other charges $ - $ - $ - $ - $ -
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