- Q1 revenues decreased 3% sequentially and increased 4% year-over-year.
- Q1 non-GAAP gross margin increased by 220 bps sequentially and 240 bps year-over-year.
- Q1 non-GAAP net income decreased 2% sequentially and increased 33% year-over-year.
Pericom Semiconductor Corporation (
Net revenues for the first quarter were $36.7 million, a decrease of 3% from the $37.9 million reported in the fourth quarter of fiscal 2012, and an increase of 4% from the $35.3 million reported in the comparable period last year.
GAAP gross margin was 37.9% in the first quarter, an increase from 35.7% last quarter and an increase from 35.5% in the comparable period last year. On a non-GAAP basis, gross margin was 39.3% in the first quarter, which reflects exclusion of share-based compensation, amortization of intangible assets and amortization of fair value adjustments from the PTI acquisition. The comparable non-GAAP gross margins were 37.1% last quarter and 36.9% in the comparable period last year. The improvement in gross margin primarily reflects favorable product mix from our focus on higher margin opportunities in networking and telecom, server, storage, and embedded end-market segments.
GAAP net income for the first quarter was $1.2 million, or $0.05 per diluted share, compared with net loss of $1.9 million, or $0.08 per diluted share in the fourth quarter, and net income of $0.4 million, or $0.02 per diluted share in the comparable period last year. GAAP net income for all periods included share-based compensation, amortization of intangible assets, and amortization of fair value adjustments, and the fiscal 2012 fourth quarter also included establishment of a $2.8 million deferred tax asset valuation allowance relating to California tax credits that may not be utilized in the future and a $0.6 million note receivable write off. Excluding these items, non-GAAP net income for the first quarter was $2.5 million, or $0.10 per diluted share, compared with non-GAAP net income of $2.5 million or $0.10 per diluted share in the fourth quarter, and non-GAAP net income of $1.8 million, or $0.07 per diluted share in the comparable period last year.
The balance sheet remained very strong with cash and investments in marketable securities of $123 million or $5.20 per diluted share at the end of the first quarter. Inventory increased $0.9 million on a sequential basis to $17.5 million, which represents 72 days of supply based on non-GAAP cost of goods sold. Trade accounts receivable increased by $0.5 million sequentially, which represents DSO of 61 days. At quarter-end, working capital was $135 million and the current ratio was 6.2.
"We were pleased with our first quarter results, especially the significantly higher gross margin driven by market segment and product mix that aligned with our strategic focus," said Alex Hui, President and CEO of Pericom. "The industry continues to face challenging times as the macro situation has not improved. We will continue to tightly manage our discretionary spending and working capital near term, to help ensure we maximize profitability and cash flow."
New Products
In the first quarter of fiscal 2013, Pericom introduced a total of 25 new products in our Connectivity, Timing and Signal Integrity product areas.
We introduced 13 new products across our Connectivity product families targeting networking, server, storage, embedded, notebook/tablet and consumer market segments.
We expanded our Timing solutions for next generation platforms with 9 new products, including embedded clocks, clock buffers, real time clocks ("RTC"), and Hi-Flex clocks. These products target mainly networking and embedded segments.
For Signal Integrity, we introduced 3 new ReDriver products targeting PCIe GEN3 and USB3 applications in notebook, server, storage, and networking segments.
Share Repurchase Update
On April 29, 2008, our Board of Directors authorized the repurchase of $30 million of our common stock, and on April 26, 2012 the Board authorized another repurchase program for up to an additional $25 million of shares. Pursuant to these authorizations, the Company repurchased 87,630 shares in the three months ended September 29, 2012 for an aggregate cost of $708,000 and an average per share purchase price of $8.08. The remaining balance of potential share repurchases under the authorizations is approximately $25 million. Shares may be repurchased from time to time in the open market or through private transactions, at the discretion of Pericom management. As of October 26, 2012, Pericom had approximately 23.5 million shares of common stock outstanding.
Fiscal Q2 2013 Outlook
The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.
Below are the estimates for fiscal Q2 2013.
- Revenues in the second fiscal quarter are expected to be in the range of $30.5 million to $34.5 million.
- GAAP gross margins are expected to be between 34.8% and 36.8%, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately 1.7%, non-GAAP gross margins are expected to be in the 36.5% to 38.5% range.
- GAAP operating expenses are expected to be between $12.7 million and $13.1 million, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately $1.2 million, non-GAAP operating expenses are expected to be in the range of $11.5 million to $11.9 million.
- Other income is expected to be between $0.5 million and $0.7 million on a GAAP basis and on a non-GAAP basis.
- GAAP tax expense will include a one-time, non-recurring amount between $4.5 and $5.0 million primarily associated with the implementation of the Company's new entity structure. The effective tax rate is expected to be approximately 26 to 30% on a non-GAAP basis.
Conference Call
The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time on October 30, 2012. To listen to the call, dial (877) 377-7103 and reference "Pericom". A slide presentation will accompany the conference call. To view the slides, please visit the investor relations section of www.pericom.com.
The Pericom financial results conference call will be available via a live webcast on the investor relations section of the web site at http://www.pericom.com. Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the web site for approximately 90 days.
A taped replay of the conference call will be made available for the period from this evening through midnight on Tuesday, November 6th. To listen to the replay, dial toll-free (855) 859-2056 and reference conference ID 52023573.
About Pericom
Pericom Semiconductor Corporation (
Non-GAAP Financial Information
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), this announcement of operating results contains non-GAAP financial measures that exclude the income statement effects of share-based compensation, amortization of intangible assets, establishment of a deferred tax asset valuation allowance, note receivable write off, fair value adjustments of acquired inventory, and the effects of excluding share-based compensation upon the number of diluted shares used in calculating non-GAAP earnings per share.
We have excluded share-based compensation expense in calculating these non-GAAP financial measures. These expenses are non-cash in nature and rely on valuations of the future market price of our common stock that is difficult to predict and is affected by market factors that are largely not within the control of management. We have excluded amortization of intangible assets, establishment of a deferred tax valuation allowance, note receivable write off, amortization of the fair value adjustments related to acquired inventory, and the corresponding tax effect because we do not consider them to be related to our core operating performance. We also use non-GAAP data in calculating certain metrics such as non-GAAP cost of goods sold in computing inventory days of supply.
