Attached files
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| 8-K - PMC-SIERRA, INC. 8-K - PMC SIERRA INC | a50045858.htm |
Exhibit 99.1
PMC-Sierra Reports Third Quarter 2011 Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--October 27, 2011--PMC-Sierra, Inc., (Nasdaq:PMCS) or PMC, the semiconductor innovator transforming storage, optical and mobile networks, today reported results for the third quarter ended October 2, 2011.
Net revenues in the third quarter of 2011 were $173.3 million, a sequential increase of 1% compared with $171.0 million in the second quarter of 2011, and 7% higher than net revenues of $162.3 million in the third quarter of 2010.
In the third quarter of 2011, the Company reported GAAP net income of $47.3 million, or $0.20 per diluted share, compared with GAAP net income in the second quarter of 2011 of $16.7 million, or $0.07 per diluted share. Non-GAAP net income in the third quarter of 2011 was $42.1 million, or $0.18 per diluted share, compared with non-GAAP net income of $40.2 million, or $0.17 per diluted share, in the second quarter of 2011.
“Our third quarter results were solid given the difficult economic environment,” said Greg Lang, president and chief executive officer of PMC. “While macro concerns impact our near-term outlook, PMC is well-positioned to deliver the infrastructure required to support explosive traffic growth on storage, mobile and optical networks.”
Net income on a non-GAAP basis in the third quarter of 2011 excludes the following items: (i) $7.0 million stock-based compensation expense; (ii) $0.6 million acquisition-related costs; (iii) $3.0 million asset impairment; (iv) $11.0 million amortization of purchased intangible assets; (v) $29.4 million gain on liability for contingent consideration; (vi) $3.2 million foreign exchange gain on foreign tax liabilities; (vii) $0.9 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; (viii) $0.4 million accretion of liability for contingent consideration; and (ix) $4.6 million income tax related amounts.
For a full reconciliation of GAAP net income to non-GAAP net income, please refer to the schedules 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.
In the third quarter of 2011, PMC announced:
- A new family of Tachyon® 6Gb/s SAS/SATA controller-based encryption solutions for securing cloud storage. The SPCve controllers integrate line-rate data encryption into the existing data flow, providing a central, scalable and cost-effective means to secure and manage stored data. PMC’s controller-based encryption architecture is agnostic to drive type or vendor, allowing OEMs and cloud providers to mix and match HDDs and SSDs, and to encrypt their deployed storage infrastructure.
- The Adaptec Series 6Q RAID controller with maxCache 2.0 SSD caching designed to accelerate data center and cloud computing application performance. PMC’s second-generation SSD caching solution, maxCache 2.0, adds support for write caching to expand the application workloads that can benefit from this technology. The Series 6Q with maxCache 2.0 improves quality of service, offers up to 13 times improvement in I/O operations per second (IOPS) and a 13 times reduction in application latency. PMC also released the Series 6T with recessed top-mounted connectors that enable maximum installation flexibility in dense form-factor servers.
Third Quarter 2011 Conference Call
Management will review the third quarter 2011 results and share its outlook for the fourth quarter of 2011 during a conference call at 1:30 pm Pacific Time/4:30 pm Eastern Time on Thursday, October 27, 2011. 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 416-640-5926 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 4676276. A replay of the webcast will be available for five business days.
Safe Harbor Statement
This release contains forward-looking statements that involve risks and uncertainties. The Company’s SEC filings describe the risks associated with the Company’s business, including PMC’s limited revenue visibility due to variable customer demands, market segment growth or decline, orders with short delivery lead times, customer concentration, changes in inventory, and other items such as foreign exchange rates and volatility in global financial markets.
About PMC
PMC (Nasdaq:PMCS) is the semiconductor innovator transforming networks that connect, move and store digital content. Building on a track record of technology leadership, we are driving innovation across storage, optical and mobile networks. Our highly integrated solutions increase performance and enable next-generation services to accelerate the network transformation. For more information, visit www.pmc-sierra.com.
© Copyright PMC-Sierra, Inc. 2011. All rights reserved. PMC, PMC-SIERRA, “Enabling connectivity. Empowering people.” and Tachyon are registered trademarks of PMC-Sierra, Inc. in the United States and other countries, PMCS is a trademark of PMC-Sierra, Inc. Other product and company names mentioned herein may be trademarks of their respective owners.
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PMC-Sierra, Inc. |
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||||
| (in thousands, except for per share amounts) | |||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
| October 2, | June 26, | September 26, | October 2, | September 26, | |||||||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||
| Net revenues | $ | 173,299 | $ | 171,018 | $ | 162,335 | $ | 501,751 | $ | 475,830 | |||||||||||||||||||||
| Cost of revenues | 52,640 | 52,663 | 53,813 | 164,464 | 152,882 | ||||||||||||||||||||||||||
| Gross profit | 120,659 | 118,355 | 108,522 | 337,287 | 322,948 | ||||||||||||||||||||||||||
| Other costs and expenses: | |||||||||||||||||||||||||||||||
| Research and development | 59,669 | 56,421 | 50,180 | 170,589 | 135,893 | ||||||||||||||||||||||||||
| Selling, general and administrative | 29,981 | 29,366 | 25,567 | 91,556 | 73,148 | ||||||||||||||||||||||||||
| Amortization of purchased intangible assets | 11,031 | 11,031 | 5,884 | 33,083 | 22,536 | ||||||||||||||||||||||||||
| Restructuring costs and other charges | - | - | 66 | - | 322 | ||||||||||||||||||||||||||
| Income from operations | 19,978 | 21,537 | 26,825 | 42,059 | 91,049 | ||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||
| Gain on liability for contingent consideration | 29,376 | - | - | 29,376 | - | ||||||||||||||||||||||||||
| Gain (loss) on sale of investment securities | 222 | 167 | 220 | 559 | (79 | ) | |||||||||||||||||||||||||
| Amortization of debt issue costs | (50 | ) | (50 | ) | (50 | ) | (150 | ) | (150 | ) | |||||||||||||||||||||
| Foreign exchange gain (loss) | 3,635 | (623 | ) | (707 | ) | 1,538 | (1,622 | ) | |||||||||||||||||||||||
| Interest (expense) income, net | (477 | ) | (571 | ) | 68 | (1,972 | ) | (78 | ) | ||||||||||||||||||||||
| Income before provision for income taxes | 52,684 | 20,460 | 26,356 | 71,410 | 89,120 | ||||||||||||||||||||||||||
| Provision for income taxes | (5,428 | ) | (3,725 | ) | (11,201 | ) | (15,076 | ) | (16,872 | ) | |||||||||||||||||||||
| Net income | $ | 47,256 | $ | 16,735 | $ | 15,155 | $ | 56,334 | $ | 72,248 | |||||||||||||||||||||
| Net income per common share - basic | $ | 0.20 | $ | 0.07 | $ | 0.07 | $ | 0.24 | $ | 0.31 | |||||||||||||||||||||
| Net income per common share - diluted | $ | 0.20 | $ | 0.07 | $ | 0.06 | $ | 0.24 | $ | 0.31 | |||||||||||||||||||||
| Shares used in per share calculation - basic | 232,590 | 234,993 | 231,966 | 233,880 | 230,922 | ||||||||||||||||||||||||||
| Shares used in per share calculation - diluted | 233,647 | 237,506 | 234,292 | 236,236 | 234,290 | ||||||||||||||||||||||||||
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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 income taxes, operating expenses, operating income, operating margin percentage, net income, and basic and diluted net income per share. |
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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. | |||||||||||||||||||||||||||||||
| 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 Income Taxes, Operating Expenses, Operating Income, | |||||||||||||||||||||||||||||||
| Operating Margin Percentage, Net Income, and Basic and Diluted Net Income Per Share | |||||||||||||||||||||||||||||||
| (in thousands, except for per share amounts) | |||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
| October 2, | June 26, | September 26, | October 2, | September 26, | |||||||||||||||||||||||||||
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2011 (1) |
2011 (2) |
2010 (3) |
2011 (4) |
2010 (5) |
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| GAAP cost of revenues | $ | 52,640 | $ | 52,663 | $ | 53,813 | $ | 164,464 | $ | 152,882 | |||||||||||||||||||||
| Stock-based compensation | (220 | ) | (260 | ) | (162 | ) | (703 | ) | (609 | ) | |||||||||||||||||||||
| Acquisition related costs | (23 | ) | (41 | ) | (72 | ) | (9,128 | ) | (145 | ) | |||||||||||||||||||||
| Non-GAAP cost of revenues | $ | 52,397 | $ | 52,362 | $ | 53,579 | $ | 154,633 | $ | 152,128 | |||||||||||||||||||||
| GAAP gross profit | $ | 120,659 | $ | 118,355 | $ | 108,522 | $ | 337,287 | $ | 322,948 | |||||||||||||||||||||
| Stock-based compensation | 220 | 260 | 162 | 703 | 609 | ||||||||||||||||||||||||||
| Acquisition related costs | 23 | 41 | 72 | 9,128 | 145 | ||||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 120,902 | $ | 118,656 | $ | 108,756 | $ | 347,118 | $ | 323,702 | |||||||||||||||||||||
| Non-GAAP gross profit % | 70 | % | 69 | % | 67 | % | 69 | % | 68 | % | |||||||||||||||||||||
| GAAP research and development expense | $ | 59,669 | $ | 56,421 | $ | 50,180 | $ | 170,589 | $ | 135,893 | |||||||||||||||||||||
| Stock-based compensation | (3,041 | ) | (2,927 | ) | (2,283 | ) | (8,665 | ) | (6,628 | ) | |||||||||||||||||||||
| Acquisition related costs | (90 | ) | (97 | ) | - | (378 | ) | - | |||||||||||||||||||||||
| Asset impairment | (3,029 | ) | - | (4,882 | ) | (3,029 | ) | (4,882 | ) | ||||||||||||||||||||||
| Non-GAAP research and development expense | $ | 53,509 | $ | 53,397 | $ | 43,015 | $ | 158,517 | $ | 124,383 | |||||||||||||||||||||
| GAAP selling, general and administrative expense | $ | 29,981 | $ | 29,366 | $ | 25,567 | $ | 91,556 | $ | 73,148 | |||||||||||||||||||||
| Stock-based compensation | (3,708 | ) | (3,859 | ) | (2,856 | ) | (10,962 | ) | (9,078 | ) | |||||||||||||||||||||
| Acquisition related costs | (525 | ) | (1,051 | ) | (773 | ) | (2,735 | ) | (2,226 | ) | |||||||||||||||||||||
| Lease exit costs | - | - | - | (3,392 | ) | - | |||||||||||||||||||||||||
| Non-GAAP selling, general and administrative expense | $ | 25,748 | $ | 24,456 | $ | 21,938 | $ | 74,467 | $ | 61,844 | |||||||||||||||||||||
| GAAP amortization of purchased intangible assets | $ | 11,031 | $ | 11,031 | $ | 5,884 | $ | 33,083 | $ | 22,536 | |||||||||||||||||||||
| Amortization of purchased intangible assets | (11,031 | ) | (11,031 | ) | (5,884 | ) | (33,083 | ) | (22,536 | ) | |||||||||||||||||||||
| Non-GAAP amortization of purchased intangible assets | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
| GAAP restructuring costs and other charges | $ | - | $ | - | $ | 66 | $ | - | $ | 322 | |||||||||||||||||||||
| Restructuring costs and other charges | - | - | (66 | ) | - | (322 | ) | ||||||||||||||||||||||||
| Non-GAAP restructuring costs and other charges | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
| GAAP other income (expense) | $ | 32,706 | $ | (1,077 | ) | $ | (469 | ) | $ | 29,351 | $ | (1,929 | ) | ||||||||||||||||||
| Gain on liability for contingent consideration | (29,376 | ) | - | - | (29,376 | ) | - | ||||||||||||||||||||||||
| Foreign exchange (gain) loss on foreign tax liabilities | (3,226 | ) | 260 | 281 | (2,013 | ) | 1,259 | ||||||||||||||||||||||||
| Accretion of debt discount related to senior convertible notes | 888 | 871 | 820 | 2,612 | 2,412 | ||||||||||||||||||||||||||
| Accretion of liability for contingent consideration | 372 | 334 | - | 1,182 | - | ||||||||||||||||||||||||||
| Interest expense related to short-term loan | - | - | - | 258 | - | ||||||||||||||||||||||||||
| Non-GAAP other income | $ | 1,364 | $ | 388 | $ | 632 | $ | 2,014 | $ | 1,742 | |||||||||||||||||||||
| GAAP provision for income taxes | $ | 5,428 | $ | 3,725 | $ | 11,201 | $ | 15,076 | $ | 16,872 | |||||||||||||||||||||
| Provision for income taxes | (4,550 | ) | (2,706 | ) | (9,636 | ) | (11,797 | ) | (11,645 | ) | |||||||||||||||||||||
| Non-GAAP provision for income taxes | $ | 878 | $ | 1,019 | $ | 1,565 | $ | 3,279 | $ | 5,227 | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
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October 2, |
June 26, | September 26, | October 2, | September 26, | |||||||||||||||||||||||||||
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2011 (1) |
2011 (2) |
2010 (3) |
2011 (4) |
2010 (5) |
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| GAAP operating expenses | $ | 100,681 | $ | 96,818 | $ | 81,697 | $ | 295,228 | $ | 231,899 | |||||||||||||||||||||
| Stock-based compensation | (6,749 | ) | (6,786 | ) | (5,139 | ) | (19,627 | ) | (15,706 | ) | |||||||||||||||||||||
| Acquisition related costs | (615 | ) | (1,148 | ) | (773 | ) | (3,113 | ) | (2,226 | ) | |||||||||||||||||||||
| Asset impairment | (3,029 | ) | - | (4,882 | ) | (3,029 | ) | (4,882 | ) | ||||||||||||||||||||||
| Lease exit costs | - | - | - | (3,392 | ) | - | |||||||||||||||||||||||||
| Amortization of purchased intangible assets | (11,031 | ) | (11,031 | ) | (5,884 | ) | (33,083 | ) | (22,536 | ) | |||||||||||||||||||||
| Restructuring costs and other charges | - | - | (66 | ) | - | (322 | ) | ||||||||||||||||||||||||
| Non-GAAP operating expenses | $ | 79,257 | $ | 77,853 | $ | 64,953 | $ | 232,984 | $ | 186,227 | |||||||||||||||||||||
| GAAP operating income | $ | 19,978 | $ | 21,537 | $ | 26,825 | $ | 42,059 | $ | 91,049 | |||||||||||||||||||||
| Stock-based compensation | 6,969 | 7,046 | 5,301 | 20,330 | 16,315 | ||||||||||||||||||||||||||
| Acquisition related costs | 638 | 1,189 | 845 | 12,241 | 2,371 | ||||||||||||||||||||||||||
| Asset impairment | 3,029 | - | 4,882 | 3,029 | 4,882 | ||||||||||||||||||||||||||
| Lease exit costs | - | - | - | 3,392 | - | ||||||||||||||||||||||||||
| Amortization of purchased intangible assets | 11,031 | 11,031 | 5,884 | 33,083 | 22,536 | ||||||||||||||||||||||||||
| Restructuring costs and other charges | - | - | 66 | - | 322 | ||||||||||||||||||||||||||
| Non-GAAP operating income | $ | 41,645 | $ | 40,803 | $ | 43,803 | $ | 114,134 | $ | 137,475 | |||||||||||||||||||||
| Non-GAAP operating margin % | 24 | % | 24 | % | 27 | % | 23 | % | 29 | % | |||||||||||||||||||||
| GAAP net income | $ | 47,256 | $ | 16,735 | $ | 15,155 | $ | 56,334 | $ | 72,248 | |||||||||||||||||||||
| Stock-based compensation | 6,969 | 7,046 | 5,301 | 20,330 | 16,315 | ||||||||||||||||||||||||||
| Acquisition related costs | 638 | 1,189 | 845 | 12,241 | 2,371 | ||||||||||||||||||||||||||
| Asset impairment | 3,029 | - | 4,882 | 3,029 | 4,882 | ||||||||||||||||||||||||||
| Lease exit costs | - | - | - | 3,392 | - | ||||||||||||||||||||||||||
| Amortization of purchased intangible assets | 11,031 | 11,031 | 5,884 | 33,083 | 22,536 | ||||||||||||||||||||||||||
| Restructuring costs and other charges | - | - | 66 | - | 322 | ||||||||||||||||||||||||||
| Gain on liability for contingent consideration | (29,376 | ) | - | - | (29,376 | ) | - | ||||||||||||||||||||||||
| Foreign exchange (gain) loss on foreign tax liabilities | (3,226 | ) | 260 | 281 | (2,013 | ) | 1,259 | ||||||||||||||||||||||||
| Accretion of debt discount related to senior convertible notes | 888 | 871 | 820 | 2,612 | 2,412 | ||||||||||||||||||||||||||
| Accretion of liability for contingent consideration | 372 | 334 | - | 1,182 | - | ||||||||||||||||||||||||||
| Interest expense related to short-term loan | - | - | - | 258 | - | ||||||||||||||||||||||||||
| Provision for income taxes | 4,550 | 2,706 | 9,636 | 11,797 | 11,645 | ||||||||||||||||||||||||||
| Non-GAAP net income | $ | 42,131 | $ | 40,172 | $ | 42,870 | $ | 112,869 | $ | 133,990 | |||||||||||||||||||||
| Non-GAAP net income per share - basic | $ | 0.18 | $ | 0.17 | $ | 0.18 | $ | 0.48 | $ | 0.58 | |||||||||||||||||||||
| Non-GAAP net income per share - diluted | $ | 0.18 | $ | 0.17 | $ | 0.18 | $ | 0.48 | $ | 0.57 | |||||||||||||||||||||
| Shares used to calculate non-GAAP net income per share - basic | 232,590 | 234,993 | 231,966 | 233,880 | 230,922 | ||||||||||||||||||||||||||
| Shares used to calculate non-GAAP net income per share - diluted | 233,647 | 237,506 | 234,292 | 236,236 | 234,290 | ||||||||||||||||||||||||||
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(1) $7.0 million stock-based compensation expense; $0.6 million acquisition related costs; $3.0 million asset impairment; $11.0 million amortization of purchased intangible assets; $29.4 million gain on liability for contingent consideration; $3.2 million foreign exchange gain on foreign tax liabilities; $0.9 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $0.4 million accretion of liability for contingent consideration; and $4.6 million provision for income taxes which includes $1.6 million income tax provision relating to inter-company transactions, $0.8 million net tax expense relating to foreign exchange translation of a foreign subsidiary, $1.9 million sheltered by the benefit of stock option related loss carry-forwards recognized in equity, $0.4 million arrears interest relating to unrecognized tax benefits, $0.2 million income tax recovery for adjustments relating to prior periods, and $0.1 million income tax provision related to stock-based compensation. |
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(2) $7.0 million stock-based compensation expense; $1.2 million acquisition related costs; $11.0 million amortization of purchased intangible assets; $0.3 million foreign exchange loss on foreign tax liabilities; $0.9 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $0.3 million accretion of liability for contingent consideration; and $2.7 million provision for income taxes which includes $1.6 million income tax provision relating to inter-company transactions, $1.2 million net tax expense relating to foreign exchange translation of a foreign subsidiary, $0.9 million reduction of stock option related loss carry-forward benefit recognized in equity, $0.6 million arrears interest relating to unrecognized tax benefits, $0.5 million income tax provision for adjustments relating to prior periods, and $0.3 million income tax recovery related to stock-based compensation. |
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(3) $5.3 million stock-based compensation expense; $0.8 million acquisition related costs; $4.9 million asset impairment; $5.9 million amortization of purchased intangible assets; $0.1 million restructuring costs; $0.3 million foreign exchange loss on foreign tax liabilities; $0.8 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and $9.6 million provision for income taxes which includes $8.0 million sheltered by the benefit of stock option related loss carry-forwards recognized in equity, $2.6 million income tax provision for adjustments relating to prior periods, $0.7 million income tax recovery relating to inter-company transactions, $0.6 million net tax recovery relating to foreign exchange translation of a foreign subsidiary, $0.5 million arrears interest relating to unrecognized tax benefits, and $0.2 million income tax recovery related to stock-based compensation. |
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(4) $20.3 million stock-based compensation expense; $12.2 million acquisition related costs; $3.0 million asset impairment; $3.4 million lease exit costs; $33.1 million amortization of purchased intangible assets; $29.4 million gain on liability for contingent consideration; $2.0 million foreign exchange gain on foreign tax liabilities; $2.6 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $1.2 million accretion of liability for contingent consideration; $0.3 million interest related to short-term loan; and $11.8 million provision for income taxes which includes $3.1 million sheltered by the benefit of stock option related loss carry-forwards recognized in equity, $6.9 million income tax provision relating to inter-company transactions, $0.1 million net tax expense relating to foreign exchange translation of a foreign subsidiary, $1.6 million arrears interest relating to unrecognized tax benefits, $0.4 million income tax provision for adjustments relating to prior periods, and $0.3 million income tax recovery related to stock-based compensation. |
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(5) $16.3 million stock-based compensation expense; $2.4 million acquisition related costs; $4.9 million asset impairment; $22.5 million amortization of purchased intangible assets; $0.3 million restructuring costs; $1.3 million foreign exchange loss on foreign tax liabilities; $2.4 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and $11.6 million provision for income taxes which includes $8.0 million income tax provision relating to the benefit of stock option related loss carry-forwards recognized in equity, $2.9 million income tax provision relating to inter-company transactions, $2.6 million income tax provision for adjustments relating to prior periods, $2.5 million net tax recovery relating to foreign exchange translation of a foreign subsidiary, $1.5 million arrears interest relating to unrecognized tax benefits, $0.6 million deferred tax recovery related to non-deductible intangible asset amortization, and $0.3 million income tax recovery related to stock-based compensation. |
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| PMC-Sierra, Inc. | |||||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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| (in thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| October 2, | December 26, | ||||||||||||
| 2011 | 2010 | ||||||||||||
| ASSETS: | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 145,019 | $ | 293,355 | |||||||||
| Short-term investments | 98,850 | 54,801 | |||||||||||
| Accounts receivable, net | 64,514 | 69,263 | |||||||||||
| Inventories, net | 40,760 | 51,133 | |||||||||||
| Prepaid expenses and other current assets | 21,114 | 21,559 | |||||||||||
| Income tax receivable | 4,471 | 4,554 | |||||||||||
| Deferred tax assets | 19,451 | 12,162 | |||||||||||
| Total current assets | 394,179 | 506,827 | |||||||||||
| Investment securities | 230,459 | 235,369 | |||||||||||
| Investments and other assets | 4,252 | 10,687 | |||||||||||
| Prepaid expenses | 18,423 | 22,987 | |||||||||||
| Property and equipment, net | 19,062 | 18,367 | |||||||||||
| Goodwill | 520,899 | 523,712 | |||||||||||
| Intangible assets, net | 168,325 | 202,265 | |||||||||||
| Deferred tax assets | 2,392 | 1,187 | |||||||||||
| Deposits for wafer fabrication capacity | - | 5,145 | |||||||||||
| $ | 1,357,991 | $ | 1,526,546 | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||||||||
| Current liabilities: | |||||||||||||
| Short-term loan | $ | - | $ | 180,991 | |||||||||
| Accounts payable | 28,439 | 32,048 | |||||||||||
| Accrued liabilities | 67,484 | 76,566 | |||||||||||
| Liability for unrecognized tax benefit | 44,036 | 40,300 | |||||||||||
| Income taxes payable | 499 | - | |||||||||||
| Deferred income taxes | 2,450 | 2,823 | |||||||||||
| Accrued restructuring costs | 191 | 1,604 | |||||||||||
| Deferred income | 15,536 | 18,231 | |||||||||||
| Total current liabilities | 158,635 | 352,563 | |||||||||||
| 2.25% senior convertible notes due October 15, 2025, net | 64,216 | 61,605 | |||||||||||
| Liability for contingent consideration | - | 28,194 | |||||||||||
| Long-term obligations | 4,370 | 8,940 | |||||||||||
| Deferred income taxes | 41,095 | 36,549 | |||||||||||
| Liability for unrecognized tax benefit | 17,978 | 17,908 | |||||||||||
|
PMC special shares convertible into 1,029 (2010 - 1,370) shares of common stock |
1,228 | 1,716 | |||||||||||
| Stockholders' equity: | |||||||||||||
| Common stock and additional paid in capital | 1,590,191 | 1,576,201 | |||||||||||
| Accumulated other comprehensive (loss) income | (2,308 | ) | 2,072 | ||||||||||
| Accumulated deficit | (517,414 | ) | (559,202 | ) | |||||||||
| Total stockholders' equity | 1,070,469 | 1,019,071 | |||||||||||
| $ | 1,357,991 | $ | 1,526,546 | ||||||||||
| PMC-Sierra, Inc. | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| (in thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Nine Months Ended | |||||||||||||
| October 2, | September 26, | ||||||||||||
| 2011 | 2010 | ||||||||||||
| Cash flows from operating activities: | |||||||||||||
| Net income | $ | 56,334 | $ | 72,248 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
| Depreciation and amortization | 56,795 | 35,645 | |||||||||||
| Stock-based compensation | 20,330 | 16,315 | |||||||||||
| Unrealized foreign exchange (gain) loss, net | (1,650 | ) | 1,436 | ||||||||||
| Net amortization of premiums/discounts and accrued interest of investments | 3,361 | 3,810 | |||||||||||
| Accrued interest on short-term loan | 589 | - | |||||||||||
| (Gain) loss on disposal of investment securities | (558 | ) | 78 | ||||||||||
| Asset impairment | 3,029 | 4,882 | |||||||||||
| Gain on liability for contingent consideration | (29,376 | ) | - | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable | 4,749 | (17,739 | ) | ||||||||||
| Inventories | 1,361 | 912 | |||||||||||
| Prepaid expenses and other current assets | 1,989 | 2,896 | |||||||||||
| Accounts payable and accrued liabilities | (10,285 | ) | 5,648 | ||||||||||
| Deferred income taxes and income taxes payable | 11,020 | (68 | ) | ||||||||||
| Accrued restructuring costs | (1,418 | ) | (1,739 | ) | |||||||||
| Deferred income | (2,690 | ) | 9,720 | ||||||||||
| Net cash provided by operating activities | 113,580 | 134,044 | |||||||||||
| Cash flows from investing activities: | |||||||||||||
| Acquisition of Channel Storage business from Adaptec, Inc. | - | (34,250 | ) | ||||||||||
| Purchases of property and equipment | (8,142 | ) | (6,847 | ) | |||||||||
| Purchases of intangible assets | (5,620 | ) | (4,287 | ) | |||||||||
| Redemption of short-term investments | - | 4,574 | |||||||||||
| Disposals of investment securities | 116,813 | 133,000 | |||||||||||
| Purchases of investment securities | (160,169 | ) | (303,192 | ) | |||||||||
| Net cash used in investing activities | (57,118 | ) | (211,002 | ) | |||||||||
| Cash flows from financing activities: | |||||||||||||
| Repayment of short-term loan | (180,991 | ) | - | ||||||||||
| Proceeds from issuance of common stock | 16,462 | 15,133 | |||||||||||
| Repurchases of common stock | (39,999 | ) | - | ||||||||||
| Net cash (used in) provided by financing activities | (204,528 | ) | 15,133 | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (270 | ) | 59 | ||||||||||
| Net decrease in cash and cash equivalents | (148,336 | ) | (61,766 | ) | |||||||||
| Cash and cash equivalents, beginning of period | 293,355 | 192,841 | |||||||||||
| Cash and cash equivalents, end of period | $ | 145,019 | $ | 131,075 | |||||||||
CONTACT:
PMC-Sierra, Inc.
Mike Zellner, 1-408-988-1204
Vice
President & CFO
mike_zellner@pmc-sierra.com
or
Suzanne
Craig, 1-415-217-4962
Investor Relations
suzanne_craig@pmc-sierra.com
or
Kimberly
Mason, 1-604-415-6239
Communications
kim_mason@pmc-sierra.com