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, fair value adjustments on acquired fixed assets, write off of equipment, goodwill impairment, restructuring charge, establishment of a deferred tax asset valuation allowance, note receivable write off, a tax provision on intercompany transactions 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, amortization of fair value adjustments on acquired fixed assets, write off of equipment, goodwill impairment, restructuring charge, establishment of a deferred tax valuation allowance, note receivable write off, a tax provision on intercompany transactions and the corresponding tax effects 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.
We use the non-GAAP financial measures that exclude these items to make strategic decisions, forecast future results and evaluate the Company's current operating performance. We believe that the presentation of non-GAAP financial measures that exclude these items is useful to investors because we do not consider these charges either part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that are used to evaluate the Company's operating performance.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Safe Harbor Statement
This press release contains forward-looking statements as defined under The Securities Litigation Reform Act of 1995. Forward-looking statements in this release include the statements under the captions "Fiscal Q1 2014 Outlook", which regard the anticipated revenues, gross margin, operating expenses, other income, and effective tax rate in the first fiscal quarter of 2014, and statements from our CEO regarding expanding our customer base and other future expectations. The Company's actual results could differ materially from what is set forth in such forward-looking statements due to a variety of risk factors, including softness in demand for our products, price erosion for certain of our products, unexpected difficulties in developing new products, customer decisions to reduce inventory, economic or financial difficulties experienced by our customers, or technological and market changes. All forward-looking statements included in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and Pericom assumes no obligation to update any forward-looking statements. Parties receiving this release are encouraged to review our annual report on Form 10-K for the year ended June 30, 2012, subsequent quarterly reports on Form 10-Q, and in particular, the risk factors sections contained in those reports.
Pericom Semiconductor Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
----------------------------- ---------------------
June 29, March 30, June 30, June 29, June 30,
2013 2013 2012 2013 2012
--------- -------- -------- --------- ----------
Net revenues $ 31,707 $ 30,366 $ 37,944 $ 129,255 $ 137,135
Cost of revenues 19,791 19,521 24,396 81,388 88,484
--------- -------- -------- --------- ----------
Gross profit 11,916 10,845 13,548 47,867 48,651
Operating expenses:
Research and
development 5,320 5,277 5,460 21,017 21,722
Selling, general and
administrative 7,217 7,193 8,135 29,581 29,648
Goodwill impairment 16,899 - - 16,899 -
--------- -------- -------- --------- ----------
Total operating
expenses 29,436 12,470 13,595 67,497 51,370
--------- -------- -------- --------- ----------
Income (loss) from
operations (17,520) (1,625) (47) (19,630) (2,719)
Interest and other
income, net 1,277 1,318 1,059 4,024 3,614
--------- -------- -------- --------- ----------
Income (loss) before
income taxes (16,243) (307) 1,012 (15,606) 895
Income tax expense
(benefit) 573 395 2,974 6,223 3,097
--------- -------- -------- --------- ----------
Net income (loss) from
consolidated
companies (16,816) (702) (1,962) (21,829) (2,202)
Equity in net income
of unconsolidated
affiliates 30 21 51 215 134
--------- -------- -------- --------- ----------
Net income (loss) $ (16,786) $ (681) $ (1,911) $ (21,614) $ (2,068)
========= ======== ======== ========= ==========
Basic income (loss)
per share $ (0.74) $ (0.03) $ (0.08) $ (0.93) $ (0.09)
========= ======== ======== ========= ==========
Diluted income (loss)
per share $ (0.74) $ (0.03) $ (0.08) $ (0.93) $ (0.09)
========= ======== ======== ========= ==========
Shares used in
computing basic
income (loss) per
share 22,783 23,162 23,611 23,251 24,094
========= ======== ======== ========= ==========
Shares used in
computing diluted
income (loss) per
share 22,783 23,162 23,611 23,251 24,094
========= ======== ======== ========= ==========
Pericom Semiconductor Corporation
Condensed Consolidated Statements of Operations
(In thousands)
(unaudited)
Three Months Ended Twelve Months Ended
----------------------------- -------------------
June 29, March 30, June 30, June 29, June 30,
2013 2013 2012 2013 2012
--------- --------- --------- --------- ---------
Share-based compensation
Cost of revenues $ 41 $ 51 $ 50 $ 187 $ 211
Research and development 309 317 335 1,282 1,434
Selling, general and
administrative 447 474 518 1,871 2,091
--------- --------- --------- --------- ---------
Share-based
compensation expense $ 797 $ 842 $ 903 $ 3,340 $ 3,736
Amortization of intangible
assets
Cost of revenues $ 486 $ 482 $ 477 $ 1,926 $ 1,596
Research and development 50 51 57 206 585
Selling, general and
administrative 245 242 243 972 966
--------- --------- --------- --------- ---------
Amortization of
intangible assets $ 781 $ 775 $ 777 $ 3,104 $ 3,147
Pericom Semiconductor Corporation
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(In thousands)
(unaudited)
Three Months Ended Twelve Months Ended
----------------------------- -------------------
June 29, March 30, June 30, June 29, June 30,
2013 2013 2012 2013 2012
--------- -------- -------- --------- --------
GAAP net income (loss) $ (16,786) $ (681) $ (1,911) $ (21,614) $ (2,068)
Reconciling items:
Share-based
compensation expense 797 842 903 3,340 3,736
Amortization of
intangible assets 781 775 777 3,104 3,147
Write off of equipment 184 - - 184 -
Fair value adjustment
to depreciation
expense on acquired
fixed assets 51 50 50 201 200
Goodwill impairment 16,899 - - 16,899 -
Restructuring charge - - - - 460
Establishment of
deferred tax asset
valuation allowance - - 2,751 - 2,751
Write off of note
receivable - - 556 - 556
Tax on intercompany
transaction 118 382 - 5,487 -
Tax effect of
adjustments (420) (403) (625) (1,633) (1,816)
--------- -------- -------- --------- --------
Total reconciling
items 18,410 1,646 4,412 27,582 9,034
--------- -------- -------- --------- --------
Non-GAAP net income $ 1,624 $ 965 $ 2,501 $ 5,968 $ 6,966
========= ======== ======== ========= ========
Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
(unaudited)
Diluted net income
(loss) per share:
GAAP diluted income
(loss) per share $ (0.74) $ (0.03) $ (0.08) $ (0.93) $ (0.09)
Adjustments:
Share-based
compensation expense 0.03 0.04 0.04 $ 0.15 0.15
Amortization of
intangible assets 0.04 0.03 0.04 0.13 0.13
Write off of equipment 0.01 - - 0.01 -
Fair value adjustment
to depreciation
expense on acquired
fixed assets 0.01 - - 0.01 0.01
Goodwill impairment 0.72 - - 0.72 -
Restructuring charge - - - - 0.02
Establishment of
deferred tax asset
valuation allowance - - 0.11 - 0.11
Write off of note
receivable - - 0.02 - 0.02
Tax on intercompany
transaction 0.01 0.02 - 0.23 -
Tax effect of
adjustments (0.02) (0.02) (0.03) (0.07) (0.07)
Difference in share
count 0.01 - - - -
--------- -------- -------- --------- --------
Total adjustments 0.81 0.07 0.18 1.18 0.37
--------- -------- -------- --------- --------
Non-GAAP diluted
income per share $ 0.07 $ 0.04 $ 0.10 $ 0.25 $ 0.28
========= ======== ======== ========= ========
Shares used in diluted
net income (loss) per
share calculation:
GAAP 22,783 23,162 23,611 23,251 24,094
Change in diluted
shares from GAAP
net loss to non-
GAAP net income 117 99 182 139 123
Exclude the benefit
of share-based
compensation
expense (1) 467 523 379 451 376
--------- -------- -------- --------- --------
Non-GAAP 23,367 23,784 24,172 23,841 24,593
========= ======== ======== ========= ========
(1) For purposes of calculating non-GAAP diluted net income per share, the
GAAP diluted weighted average shares outstanding is adjusted to exclude
the benefits of unamortized stock compensation costs that are treated as
proceeds assumed to be used to repurchase shares under the GAAP treasury
stock method.
Pericom Semiconductor Corporation
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
(In thousands)
(unaudited)
Three Months Ended Twelve Months Ended
---------------------------- -------------------
June 29, March 30, June 30, June 29, June 30,
2013 2013 2012 2013 2012
-------- -------- -------- -------- ---------
GAAP gross margin $ 11,916 $ 10,845 $ 13,548 $ 47,867 $ 48,651
- % of revenues 37.6% 35.7% 35.7% 37.0% 35.5%
Reconciling items:
Share-based
compensation 41 51 50 187 211
Amortization of
intangible assets 486 482 477 1,926 1,596
Fair value
adjustment to
depreciation expense
on acquired fixed
assets 10 10 10 40 40
Restructuring charge - - - - 78
-------- -------- -------- -------- ---------
Total reconciling
items 537 543 537 2,153 1,925
-------- -------- -------- -------- ---------
Non-GAAP gross margin $ 12,453 $ 11,388 $ 14,085 $ 50,020 $ 50,576
======== ======== ======== ======== =========
- % of revenues 39.3% 37.5% 37.1% 38.7% 36.9%
Reconciliation of GAAP R&D Expenses to Non-GAAP R&D Expenses
(unaudited)
GAAP research and
development expenses $ 5,320 $ 5,277 $ 5,460 $ 21,017 $ 21,722
- % of revenues 16.8% 17.4% 14.4% 16.3% 15.8%
Reconciling items:
Share-based
compensation (309) (317) (335) (1,282) (1,434)
Amortization of
intangible assets (50) (51) (57) (206) (585)
Write off of
equipment (184) - - (184) -
Fair value adjustment
to depreciation
expense on acquired
fixed assets (10) (10) (10) (40) (40)
Restructuring charge - - - - (164)
-------- -------- -------- -------- ---------
Total reconciling
items (553) (378) (402) (1,712) (2,223)
-------- -------- -------- -------- ---------
Non-GAAP research and
development expenses $ 4,767 $ 4,899 $ 5,058 $ 19,305 $ 19,499
======== ======== ======== ======== =========
- % of revenues 15.0% 16.1% 13.3% 14.9% 14.2%
Reconciliation of GAAP SG&A Expenses to Non-GAAP SG&A Expenses
(unaudited)
GAAP selling, general and
administrative expenses $ 7,217 $ 7,193 $ 8,135 $ 29,581 $ 29,648
- % of revenues 22.8% 23.7% 21.4% 22.9% 21.6%
Reconciling items:
Share-based
compensation (447) (474) (518) (1,871) (2,091)
Amortization of
intangible assets (245) (242) (243) (972) (966)
Fair value adjustment
to depreciation
expense on acquired
fixed assets (31) (30) (30) (121) (120)
Restructuring charge - - - - (218)
Write off of note
receivable - - (556) - (556)
-------- -------- -------- -------- ---------
Total reconciling
items (723) (746) (1,347) (2,964) (3,951)
-------- -------- -------- -------- ---------
Non-GAAP selling, general
and administrative
expenses $ 6,494 $ 6,447 $ 6,788 $ 26,617 $ 25,697
======== ======== ======== ======== =========
- % of revenues 20.5% 21.2% 17.9% 20.6% 18.7%
Pericom Semiconductor Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
As of As of
June 29, 2013 June 30, 2012
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 30,844 $ 24,283
Short-term investments 29,447 79,924
Accounts receivable - trade 22,105 24,010
Inventories 14,844 16,604
Prepaid expenses and other current assets 5,886 6,099
Deferred income taxes 585 1,549
------------- -------------
Total current assets 103,711 152,469
Property, plant and equipment-net 60,959 56,102
Investments in unconsolidated affiliates 2,525 2,474
Deferred income taxes non-current 3,411 2,447
Long-term investments in marketable securities 57,392 23,628
Goodwill - 16,797
Intangible assets - net 9,944 12,831
Other assets 8,625 9,058
------------- -------------
Total assets $ 246,567 $ 275,806
============= =============
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $ - $ 1,364
Accounts payable 12,184 14,860
Accrued liabilities 8,731 8,608
------------- -------------
Total current liabilities 20,915 24,832
Industrial development subsidy 7,263 8,577
Deferred tax liabilities 5,798 6,191
Other long-term liabilities 3,700 2,571
------------- -------------
Total liabilities 37,676 42,171
Shareholders' equity:
Common stock and paid in capital 119,591 123,362
Retained earnings and other comprehensive
income 89,300 110,273
------------- -------------
Total shareholders' equity 208,891 233,635
------------- -------------
Total liabilities and shareholders' equity $ 246,567 $ 275,806
============= =============
