[October 27, 2014] |
|
PMC Reports Third Quarter 2014 Results
SUNNYVALE, Calif. --(Business Wire)--
PMC-Sierra, Inc. (PMC®) (Nasdaq: PMCS), the semiconductor and software
solutions innovator transforming networks that connect, move and store
big data, today reported results for the third quarter ended
September 27, 2014.
Net revenues in the third quarter of 2014 totaled $135.5 million,
an increase of 7 percent from $126.8 million in the second quarter of
2014 and an increase of 6 percent, compared to $128.4 million in the
third quarter of 2013.
GAAP net income in the third quarter of 2014 totaled $5.5
million or $0.03 per diluted share, compared to a GAAP net loss in the
second quarter of 2014 of $3.5 million or a $0.02 loss per share.
Non-GAAP net income in the third quarter of 2014 totaled $22.5
million or $0.11 per diluted share, compared to non-GAAP net income of
$18.3 million or $0.09 per diluted share in the second quarter of 2014.
"Our Storage business performed exceedingly well this past quarter with
double-digit growth across all of its product lines," said PMC president
and chief executive officer, Greg Lang. "PMC remains well-positioned for
continued growth into FY2015, as we expect to see increasing demand for
our 12Gb/s SAS I/O controllers and expanders, advanced DIGI OTN
processors, Flashtec™ NVMe controllers and our new RF Remote Radio Head
products."
Net income on a non-GAAP basis in the third quarter of 2014
excludes the following items: (i) $9.9 million amortization of purchased
intangible assets; (ii) $5.2 million stock-based compensation expense,
(iii) $1.0 million of acquisition-related costs and other adjustments as
described in the accompanying GAAP to non-GAAP reconciliation table.
For a full reconciliation of each non-GAAP item used herein to the most
directly comparable GAAP financial measure, 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.
THIRD QUARTER 2014 HIGHLIGHTS
The Company made the following third quarter announcements:
-
On Sept. 17, PMC announced it was first to ship 16-port 12Gb/s SAS and
16-port 6Gb/s SATA I/O controller solutions. PMC's data center I/O
products enable OEMs and ODMs to design cost-effective customized
server hardware for hyperscale deployments, such as Open Compute,
Windows Cloud Servers, OpenStack and Project Scorpio. The devices have
the industry's highest port density, lowest power and are capable of
more than 1,000,000 I/Os per second (IOPS) to support the most
demanding cloud software applications.
-
On Sept. 16, Heng Liao, fellow in PMC's Chief Strategy and Technology
Office, presented "Storage Optimization for the Hyperscale Data
Center" at the Huawei Cloud Congress.
-
On Sept. 10, PMC announced it received Huawei's Supplier Quality
Award, which recognizes PMC's product quality, technical support and
product delivery through a score card system to evaluate supplier
performance on all quality assurance-related procedures. PMC
consistently earned an "A" rating on all items delivered in 2013.
-
On Sept. 4, PMC announced that the Company executed an agreement with
HP to license core HP Smart Array software, firmware and management
technology. PMC will leverage this technology to provide more system
value to new and existing server storage and data center customers.
This transaction also positions PMC as the supplier of key storage
solution components across HP ProLiant Gen9 and beyond.
-
On Aug. 26, PMC introduced the industry's first 12Gb/s SAS expander
card to enable density-optimized servers, the fastest growing segment
of the worldwide server market according to IDC. The Adaptec® 12Gb/s
SAS expander card enables flexible, high-density server architectures
that can expand as data center storage needs grow. It provides 36
ports in a PCI Express® (PCIe®) low-profile form factor.
-
On Aug. 12, PMC announced it received the prestigious Excellent
Partner Award from Hitachi, Ltd. The award recognizes the superior
product technology, service and support that PMC provides to Hitachi.
-
On Aug. 5, PMC established a new ultra-fast storage class memory tier
to accelerate critical applications in scale-out storage and all-flash
arrays. The PMC Flashtec™ NVRAM Drives combine the speed and endurance
of DRAM with the persistency of NAND flash to deliver ten times higher
performance than the fastest Solid State Drive (SSD), at more than 10
million IOPS, with sub-microsecond latency. Leveraging PCIe® 3.0, the
Flashtec NVRAM Drives connect directly to the host to optimize CPU
utilization and maximize overall system performance.
-
On Aug. 5, Derek Dicker, vice president of PMC's NVM Solutions Group,
presented a keynote, "Software Defined Flash Solutions Herald an Era
of Choice" at Flash Memory Summit. PMC storage experts also presented
on the latest trends in PCIe®, NVM Express (NVMe) and error correction
that are shaping next-generation SSDs in forum sessions during the
conference.
-
On July 29, PMC announced the Company was recognized as an honoree in
the 2013 Total Cost of Ownership (TCOO™) Supplier Award program from
Celestica. Celestica's awards program recognizes suppliers that
support its TCOO strategy and demonstrate excellence in quality,
delivery, technology, service, pricing and flexibility.
-
On July 15, PMC joined AT&T, Ciena and Verizon on a panel at the
Lightwave Optical Summit in Austin, Texas, to discuss the state of
100G OTN networking and deployment readiness, and what is beyond 100G.
The discussion topics included the latest developments in equipment,
optics and OTN processing semiconductors, and software-defined
networking.
Third Quarter 2014 Conference Call
Management will review the third quarter 2014 results and share its
outlook for the fourth quarter of 2014 during a conference call at 1:30
p.m. Pacific Time/4:30 p.m. Eastern Time on October 27, 2014. The
conference call webcast will be accessible under the Financial News and
Events section at http://investor.pmcs.com.
To listen to the conference call by telephone, dial 1 (888) 430-8705 or
1 (719) 325-2362 outside North America with passcode 8686778
approximately ten minutes before the start time. A telephone playback
will be available for 30 business days after the completion of the call
and can be accessed at 1 (888) 203-1112 or 1 (719) 457-0820 outside
North America using passcode 8686778. A replay of the webcast will be
available through November 30, 2014.
PMC will be attending Morgan Stanley's Semiconductor Corporate Access
Day conference next week in Boston, MA at The Boston Harbor Hotel.
Steve Geiser, the company's vice president and chief financial officer,
will be available for one-on-one meetings with investors all day on the 4th
of November during the event.
Safe Harbor Statement
This release contains forward-looking statements that involve risks and
uncertainties. The Company's SEC filings, including the Company's most
recent reports on Form 10-K and Form 10-Q, 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 tax rates, foreign exchange rates
and volatility in global financial markets.
About PMC
PMC (Nasdaq:PMCS) is the semiconductor and software solutions innovator
transforming networks that connect, move and store big data. Building on
a track record of technology leadership, the Company is driving
innovation across storage, optical and mobile networks. PMC's highly
integrated solutions increase performance and enable next-generation
services to accelerate the network transformation. For more information,
visit www.pmcs.com.
Follow PMC on Facebook,
Twitter,
LinkedIn
and RSS.
© Copyright PMC-Sierra, Inc. 2014. All rights reserved. PMC and
PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the United
States and other countries, PMCS is a trademark of PMC-Sierra, Inc. PMC
disclaims any ownership rights in other product and company names
mentioned herein. PMC is the corporate brand of PMC-Sierra, Inc.
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,
|
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$
|
135,462
|
|
|
|
$
|
126,822
|
|
|
|
$
|
128,411
|
|
|
|
$
|
388,752
|
|
|
|
$
|
381,156
|
|
Cost of revenues
|
|
|
|
40,306
|
|
|
|
|
36,824
|
|
|
|
|
36,840
|
|
|
|
|
114,694
|
|
|
|
|
111,864
|
|
Gross profit
|
|
|
|
95,156
|
|
|
|
|
89,998
|
|
|
|
|
91,571
|
|
|
|
|
274,058
|
|
|
|
|
269,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
48,441
|
|
|
|
|
49,388
|
|
|
|
|
50,733
|
|
|
|
|
147,977
|
|
|
|
|
157,038
|
|
Selling, general and administrative
|
|
|
|
29,265
|
|
|
|
|
28,991
|
|
|
|
|
26,383
|
|
|
|
|
87,596
|
|
|
|
|
85,002
|
|
Amortization of purchased intangible assets
|
|
|
|
9,948
|
|
|
|
|
9,948
|
|
|
|
|
13,138
|
|
|
|
|
32,225
|
|
|
|
|
34,698
|
|
Income (loss) from operations
|
|
|
|
7,502
|
|
|
|
|
1,671
|
|
|
|
|
1,317
|
|
|
|
|
6,260
|
|
|
|
|
(7,446
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on investment securities and other investments
|
|
|
|
12
|
|
|
|
|
46
|
|
|
|
|
1,762
|
|
|
|
|
87
|
|
|
|
|
1,776
|
|
Amortization of debt issue costs
|
|
|
|
(51
|
)
|
|
|
|
(51
|
)
|
|
|
|
(30
|
)
|
|
|
|
(153
|
)
|
|
|
|
(30
|
)
|
Foreign exchange gain (loss)
|
|
|
|
899
|
|
|
|
|
(789
|
)
|
|
|
|
(1,898
|
)
|
|
|
|
642
|
|
|
|
|
1,680
|
|
Interest income, net
|
|
|
|
198
|
|
|
|
|
114
|
|
|
|
|
230
|
|
|
|
|
321
|
|
|
|
|
824
|
|
Income (loss) before provision for income taxes
|
|
|
|
8,560
|
|
|
|
|
991
|
|
|
|
|
1,381
|
|
|
|
|
7,157
|
|
|
|
|
(3,196
|
)
|
Provision for income taxes
|
|
|
|
(3,087
|
)
|
|
|
|
(4,471
|
)
|
|
|
|
(4,613
|
)
|
|
|
|
(9,405
|
)
|
|
|
|
(13,379
|
)
|
Net income (loss)
|
|
|
$
|
5,473
|
|
|
|
$
|
(3,480
|
)
|
|
|
$
|
(3,232
|
)
|
|
|
$
|
(2,248
|
)
|
|
|
$
|
(16,575
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share - basic
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.02
|
)
|
|
|
$
|
(0.02
|
)
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.08
|
)
|
Net income (loss) per common share - diluted
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.02
|
)
|
|
|
$
|
(0.02
|
)
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation - basic
|
|
|
|
197,613
|
|
|
|
|
196,114
|
|
|
|
|
205,377
|
|
|
|
|
196,305
|
|
|
|
|
204,638
|
|
Shares used in per share calculation - diluted
|
|
|
|
200,744
|
|
|
|
|
196,114
|
|
|
|
|
205,377
|
|
|
|
|
196,305
|
|
|
|
|
204,638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, other income (expense),
(provision for) recovery of income taxes, operating expenses, operating
income (loss), operating margin percentage, net income (loss), and basic
and diluted net income (loss) 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, Other (Expense) Income, (Provision for)
Recovery of Income Taxes, Operating Expenses, Operating Income
(Loss), Operating Margin Percentage, Net Income (Loss), and Basic
and Diluted Net Income (Loss) 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,
|
|
|
|
2014 (1)
|
|
|
2014 (2)
|
|
|
2013 (3)
|
|
|
2014 (4)
|
|
|
2013 (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenues
|
|
|
$
|
40,306
|
|
|
|
$
|
36,824
|
|
|
|
$
|
36,840
|
|
|
|
$
|
114,694
|
|
|
|
$
|
111,864
|
|
Stock-based compensation
|
|
|
|
(226
|
)
|
|
|
|
(214
|
)
|
|
|
|
(190
|
)
|
|
|
|
(681
|
)
|
|
|
|
(643
|
)
|
Acquisition-related costs
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(777
|
)
|
|
|
|
-
|
|
|
|
|
(795
|
)
|
Termination recoveries
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
9
|
|
|
|
|
-
|
|
Reversal of accruals
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,300
|
|
|
|
|
-
|
|
|
|
|
2,300
|
|
Non-GAAP cost of revenues
|
|
|
$
|
40,080
|
|
|
|
$
|
36,610
|
|
|
|
$
|
38,173
|
|
|
|
$
|
114,022
|
|
|
|
$
|
112,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
$
|
95,156
|
|
|
|
$
|
89,998
|
|
|
|
$
|
91,571
|
|
|
|
$
|
274,058
|
|
|
|
$
|
269,292
|
|
Stock-based compensation
|
|
|
|
226
|
|
|
|
|
214
|
|
|
|
|
190
|
|
|
|
|
681
|
|
|
|
|
643
|
|
Acquisition-related costs
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
777
|
|
|
|
|
-
|
|
|
|
|
795
|
|
Termination recoveries
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(9
|
)
|
|
|
|
-
|
|
Reversal of accruals
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,300
|
)
|
|
|
|
-
|
|
|
|
|
(2,300
|
)
|
Non-GAAP gross profit
|
|
|
$
|
95,382
|
|
|
|
$
|
90,212
|
|
|
|
$
|
90,238
|
|
|
|
$
|
274,730
|
|
|
|
$
|
268,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit %
|
|
|
|
70
|
%
|
|
|
|
71
|
%
|
|
|
|
70
|
%
|
|
|
|
71
|
%
|
|
|
|
70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expense
|
|
|
$
|
48,441
|
|
|
|
$
|
49,388
|
|
|
|
$
|
50,733
|
|
|
|
$
|
147,977
|
|
|
|
$
|
157,038
|
|
Stock-based compensation
|
|
|
|
(1,990
|
)
|
|
|
|
(1,903
|
)
|
|
|
|
(2,541
|
)
|
|
|
|
(6,540
|
)
|
|
|
|
(8,241
|
)
|
Acquisition-related costs
|
|
|
|
(356
|
)
|
|
|
|
(794
|
)
|
|
|
|
(1,200
|
)
|
|
|
|
(1,950
|
)
|
|
|
|
(1,741
|
)
|
Termination recoveries (costs)
|
|
|
|
28
|
|
|
|
|
(342
|
)
|
|
|
|
(178
|
)
|
|
|
|
(256
|
)
|
|
|
|
(1,448
|
)
|
Reversal of accruals
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,890
|
|
Non-GAAP research and development expense
|
|
|
$
|
46,123
|
|
|
|
$
|
46,349
|
|
|
|
$
|
46,814
|
|
|
|
$
|
139,231
|
|
|
|
$
|
148,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling, general and administrative expense
|
|
|
$
|
29,265
|
|
|
|
$
|
28,991
|
|
|
|
$
|
26,383
|
|
|
|
$
|
87,596
|
|
|
|
$
|
85,002
|
|
Stock-based compensation
|
|
|
|
(3,012
|
)
|
|
|
|
(2,798
|
)
|
|
|
|
(3,143
|
)
|
|
|
|
(9,113
|
)
|
|
|
|
(10,577
|
)
|
Acquisition-related costs
|
|
|
|
(669
|
)
|
|
|
|
(3
|
)
|
|
|
|
(5
|
)
|
|
|
|
(733
|
)
|
|
|
|
(1,083
|
)
|
Lease exit costs
|
|
|
|
(31
|
)
|
|
|
|
(4
|
)
|
|
|
|
-
|
|
|
|
|
(177
|
)
|
|
|
|
-
|
|
Termination recoveries (costs)
|
|
|
|
254
|
|
|
|
|
(1,295
|
)
|
|
|
|
(41
|
)
|
|
|
|
(1,044
|
)
|
|
|
|
(502
|
)
|
Asset impairment
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(477
|
)
|
|
|
|
(1,575
|
)
|
Other expenses
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(58
|
)
|
|
|
|
-
|
|
Non-GAAP selling, general and administrative expense
|
|
|
$
|
25,807
|
|
|
|
$
|
24,891
|
|
|
|
$
|
23,194
|
|
|
|
$
|
75,994
|
|
|
|
$
|
71,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP amortization of purchased intangible assets
|
|
|
$
|
9,948
|
|
|
|
$
|
9,948
|
|
|
|
$
|
13,138
|
|
|
|
$
|
32,225
|
|
|
|
$
|
34,698
|
|
Amortization of purchased intangible assets
|
|
|
|
(9,948
|
)
|
|
|
|
(9,948
|
)
|
|
|
|
(13,138
|
)
|
|
|
|
(32,225
|
)
|
|
|
|
(34,698
|
)
|
Non-GAAP amortization of purchased intangible assets
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other (expense) income
|
|
|
$
|
1,058
|
|
|
|
$
|
(680
|
)
|
|
|
$
|
64
|
|
|
|
$
|
897
|
|
|
|
$
|
4,250
|
|
Foreign exchange (gain) loss on foreign tax liabilities
|
|
|
|
(1,081
|
)
|
|
|
|
976
|
|
|
|
|
1,390
|
|
|
|
|
(984
|
)
|
|
|
|
(2,133
|
)
|
Gain on disposal of investment
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,762
|
)
|
Non-GAAP other income (expense)
|
|
|
$
|
(23
|
)
|
|
|
$
|
296
|
|
|
|
$
|
1,454
|
|
|
|
$
|
(87
|
)
|
|
|
$
|
355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for income taxes
|
|
|
$
|
3,087
|
|
|
|
$
|
4,471
|
|
|
|
$
|
4,613
|
|
|
|
$
|
9,405
|
|
|
|
$
|
13,379
|
|
Provision for income tax matters
|
|
|
|
(2,178
|
)
|
|
|
|
(3,550
|
)
|
|
|
|
(4,578
|
)
|
|
|
|
(6,839
|
)
|
|
|
|
(13,636
|
)
|
Non-GAAP provision for (recovery of) income taxes
|
|
|
$
|
909
|
|
|
|
$
|
921
|
|
|
|
$
|
35
|
|
|
|
$
|
2,566
|
|
|
|
$
|
(257
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
|
$
|
87,654
|
|
|
|
$
|
88,327
|
|
|
|
$
|
90,254
|
|
|
|
$
|
267,798
|
|
|
|
$
|
276,738
|
|
Stock-based compensation
|
|
|
|
(5,002
|
)
|
|
|
|
(4,701
|
)
|
|
|
|
(5,684
|
)
|
|
|
|
(15,653
|
)
|
|
|
|
(18,818
|
)
|
Acquisition-related costs
|
|
|
|
(1,025
|
)
|
|
|
|
(797
|
)
|
|
|
|
(1,205
|
)
|
|
|
|
(2,683
|
)
|
|
|
|
(2,824
|
)
|
Assets impairment
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(477
|
)
|
|
|
|
(1,575
|
)
|
Lease exit costs
|
|
|
|
(31
|
)
|
|
|
|
(4
|
)
|
|
|
|
-
|
|
|
|
|
(177
|
)
|
|
|
|
-
|
|
Termination recoveries (costs)
|
|
|
|
282
|
|
|
|
|
(1,637
|
)
|
|
|
|
(219
|
)
|
|
|
|
(1,300
|
)
|
|
|
|
(1,950
|
)
|
Amortization of purchased intangible assets
|
|
|
|
(9,948
|
)
|
|
|
|
(9,948
|
)
|
|
|
|
(13,138
|
)
|
|
|
|
(32,225
|
)
|
|
|
|
(34,698
|
)
|
Reversal of accruals
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,890
|
|
Other expenses
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(58
|
)
|
|
|
|
-
|
|
Non-GAAP operating expenses
|
|
|
$
|
71,930
|
|
|
|
$
|
71,240
|
|
|
|
$
|
70,008
|
|
|
|
$
|
215,225
|
|
|
|
$
|
219,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27,
|
|
|
June 28,
|
|
|
September 28,
|
|
|
September 27,
|
|
|
September 28,
|
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
|
$
|
7,502
|
|
|
|
$
|
1,671
|
|
|
|
$
|
1,317
|
|
|
|
$
|
6,260
|
|
|
|
$
|
(7,446
|
)
|
Stock-based compensation
|
|
|
|
5,228
|
|
|
|
|
4,915
|
|
|
|
|
5,874
|
|
|
|
|
16,334
|
|
|
|
|
19,461
|
|
Acquisition-related costs
|
|
|
|
1,025
|
|
|
|
|
797
|
|
|
|
|
1,982
|
|
|
|
|
2,683
|
|
|
|
|
3,619
|
|
Assets impairment
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
477
|
|
|
|
|
1,575
|
|
Lease exit costs
|
|
|
|
31
|
|
|
|
|
4
|
|
|
|
|
-
|
|
|
|
|
177
|
|
|
|
|
-
|
|
Termination (recoveries) costs
|
|
|
|
(282
|
)
|
|
|
|
1,637
|
|
|
|
|
219
|
|
|
|
|
1,291
|
|
|
|
|
1,950
|
|
Amortization of purchased intangible assets
|
|
|
|
9,948
|
|
|
|
|
9,948
|
|
|
|
|
13,138
|
|
|
|
|
32,225
|
|
|
|
|
34,698
|
|
Reversal of accruals
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,300
|
)
|
|
|
|
-
|
|
|
|
|
(5,190
|
)
|
Other expenses
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
58
|
|
|
|
|
-
|
|
Non-GAAP operating income
|
|
|
$
|
23,452
|
|
|
|
$
|
18,972
|
|
|
|
$
|
20,230
|
|
|
|
$
|
59,505
|
|
|
|
$
|
48,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
|
17
|
%
|
|
|
|
15
|
%
|
|
|
|
16
|
%
|
|
|
|
15
|
%
|
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
|
$
|
5,473
|
|
|
|
$
|
(3,480
|
)
|
|
|
$
|
(3,232
|
)
|
|
|
$
|
(2,248
|
)
|
|
|
$
|
(16,575
|
)
|
Stock-based compensation
|
|
|
|
5,228
|
|
|
|
|
4,915
|
|
|
|
|
5,874
|
|
|
|
|
16,334
|
|
|
|
|
19,461
|
|
Acquisition-related costs
|
|
|
|
1,025
|
|
|
|
|
797
|
|
|
|
|
1,982
|
|
|
|
|
2,683
|
|
|
|
|
3,619
|
|
Termination costs (recoveries)
|
|
|
|
(282
|
)
|
|
|
|
1,637
|
|
|
|
|
219
|
|
|
|
|
1,291
|
|
|
|
|
1,950
|
|
Reversal of accruals
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,300
|
)
|
|
|
|
-
|
|
|
|
|
(5,190
|
)
|
Assets impairment
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
477
|
|
|
|
|
1,575
|
|
Lease exit costs
|
|
|
|
31
|
|
|
|
|
4
|
|
|
|
|
-
|
|
|
|
|
177
|
|
|
|
|
-
|
|
Amortization of purchased intangible assets
|
|
|
|
9,948
|
|
|
|
|
9,948
|
|
|
|
|
13,138
|
|
|
|
|
32,225
|
|
|
|
|
34,698
|
|
Other expenses
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
58
|
|
|
|
|
-
|
|
Foreign exchange (gain) loss on foreign tax liabilities
|
|
|
|
(1,081
|
)
|
|
|
|
976
|
|
|
|
|
1,390
|
|
|
|
|
(984
|
)
|
|
|
|
(2,133
|
)
|
Gain on disposal of investments
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,762
|
)
|
|
|
|
-
|
|
|
|
|
(1,762
|
)
|
Provision for income tax matters
|
|
|
|
2,178
|
|
|
|
|
3,550
|
|
|
|
|
4,578
|
|
|
|
|
6,839
|
|
|
|
|
13,636
|
|
Non-GAAP net income
|
|
|
$
|
22,520
|
|
|
|
$
|
18,347
|
|
|
|
$
|
19,887
|
|
|
|
$
|
56,852
|
|
|
|
$
|
49,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - basic
|
|
|
$
|
0.11
|
|
|
|
$
|
0.09
|
|
|
|
$
|
0.10
|
|
|
|
$
|
0.29
|
|
|
|
$
|
0.24
|
|
Non-GAAP net income per share - diluted
|
|
|
$
|
0.11
|
|
|
|
$
|
0.09
|
|
|
|
$
|
0.10
|
|
|
|
$
|
0.28
|
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to calculate non-GAAP net income per share - basic
|
|
|
|
197,613
|
|
|
|
|
196,114
|
|
|
|
|
205,377
|
|
|
|
|
196,305
|
|
|
|
|
204,638
|
|
Shares used to calculate non-GAAP net income per share - diluted
|
|
|
|
200,744
|
|
|
|
|
199,594
|
|
|
|
|
207,475
|
|
|
|
|
199,548
|
|
|
|
|
206,772
|
|
|
(1) $5.2 million stock-based compensation expense; $1 million
acquisition-related costs; $0.3 million recovery of termination
costs; $9.9 million amortization of purchased intangible assets;
$1.1 million foreign exchange gain on foreign tax liabilities;
$0.1 million lease exit costs; $0.1 million other expenses; and
$2.2 million provision for income taxes which includes $0.9
million income tax provision related to unrecognized tax benefits,
$1.1 million income tax provision related to prepaid tax
amortization, and $0.2 million income tax provision from
adjustments related to prior periods.
|
|
(2) $4.9 million stock-based compensation expense; $0.8 million
acquisition-related costs; $1.6 million of net termination costs;
$9.9 million amortization of purchased intangible assets; $1
million foreign exchange loss on foreign tax liabilities; $0.1
million lease exit costs; and $3.6 million provision for income
taxes which includes $0.8 million income tax provision related to
unrecognized tax benefits, $1.5 million income tax provision
related to prepaid tax amortization, $1.5 million income tax
provision related to tax deductible goodwill and other items, $0.4
million deferred income tax benefit from adjustments related to
prior periods, and $0.2 million income tax provision related to
tax deductible items above.
|
|
(3) $5.9 million stock-based compensation expense; $2 million
acquisition-related costs; $0.2 million termination costs; $13.1
million amortization of purchased intangible assets; $1.4 million
foreign exchange loss on foreign tax liabilities; $1.8 million
gain from disposal of investments; $2.3 million reversal of
accruals; and $4.6 million provision for income taxes which
includes $2.9 million deferred tax provision related to
non-deductible intangible asset amortization, $1.1 million income
tax provision related to unrecognized tax benefits, $0.4 million
tax recovery related to foreign exchange translation of a foreign
subsidiary, and $1 million income tax provision related to tax
deductible items above.
|
|
(4) $16.3 million stock-based compensation expense; $2.7 million
acquisition-related costs; $1.3 million net termination costs;
$32.2 million amortization of purchased intangible assets; $1
million foreign exchange gain on foreign tax liabilities; $0.5
million asset impairment; $0.2 million lease exit costs; $0.1
million other expenses; and $6.8 million provision for income
taxes which includes $2.4 million income tax provision related to
unrecognized tax benefits, $3 million income tax provision related
to prepaid tax amortization, and $1.4 million income tax provision
related to tax deductible goodwill and other items.
|
|
(5) $19.5 million stock-based compensation expense; $3.6 million
acquisition-related costs; $2 million termination costs; $1.6
million asset impairment; $5.2 million reversal of accruals; $34.7
million amortization of purchased intangible assets; $2.1 million
foreign exchange gain on foreign tax liabilities; $1.8 million
gain on disposal; and $13.6 million provision for income taxes
which includes$1.7 million arrears interest relating to
unrecognized tax benefits, $8.6 million deferred tax provision
related to non-deductible intangible asset amortization, $0.5
million income tax provision relating to foreign exchange
translation of a foreign subsidiary, $2.7 million tax provision
for adjustments relating to prior period, and $0.1 million
deferred tax provision related to tax deductible items above.
|
|
|
PMC-Sierra, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
September 27,
|
|
|
December 28,
|
|
|
|
|
|
2014
|
|
|
2013
|
ASSETS:
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
89,940
|
|
|
|
$
|
100,038
|
|
Short-term investments
|
|
|
|
|
|
35,419
|
|
|
|
|
10,894
|
|
Cash, cash equivalents and short-term investments
|
|
|
|
|
|
125,359
|
|
|
|
|
110,932
|
|
Accounts receivable, net
|
|
|
|
|
|
57,013
|
|
|
|
|
56,112
|
|
Inventories, net
|
|
|
|
|
|
34,588
|
|
|
|
|
31,074
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
16,304
|
|
|
|
|
19,855
|
|
Income tax receivable
|
|
|
|
|
|
3,673
|
|
|
|
|
2,640
|
|
Prepaid tax expense
|
|
|
|
|
|
2,749
|
|
|
|
|
5,695
|
|
Deferred tax assets (1)
|
|
|
|
|
|
3,328
|
|
|
|
|
43,131
|
|
Total current assets
|
|
|
|
|
|
243,014
|
|
|
|
|
269,439
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
|
|
|
|
|
103,101
|
|
|
|
|
103,391
|
|
Investments and other assets
|
|
|
|
|
|
8,190
|
|
|
|
|
10,750
|
|
Prepaid tax expense
|
|
|
|
|
|
93
|
|
|
|
|
93
|
|
Property and equipment, net
|
|
|
|
|
|
38,730
|
|
|
|
|
39,149
|
|
Goodwill and other intangible assets, net
|
|
|
|
|
|
439,120
|
|
|
|
|
425,823
|
|
Deferred tax assets (1)
|
|
|
|
|
|
1,557
|
|
|
|
|
1,306
|
|
|
|
|
|
|
$
|
833,805
|
|
|
|
$
|
849,951
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
$
|
19,092
|
|
|
|
$
|
23,173
|
|
Accrued liabilities
|
|
|
|
|
|
72,360
|
|
|
|
|
64,257
|
|
Credit facility
|
|
|
|
|
|
-
|
|
|
|
|
30,000
|
|
Income taxes payable
|
|
|
|
|
|
2,983
|
|
|
|
|
632
|
|
Liability for unrecognized tax benefit (1)
|
|
|
|
|
|
21,394
|
|
|
|
|
54,127
|
|
Deferred income taxes
|
|
|
|
|
|
9
|
|
|
|
|
71
|
|
Deferred income
|
|
|
|
|
|
5,501
|
|
|
|
|
7,481
|
|
Total current liabilities
|
|
|
|
|
|
121,339
|
|
|
|
|
179,741
|
|
|
|
|
|
|
|
|
|
|
Long-term obligations
|
|
|
|
|
|
35,982
|
|
|
|
|
11,108
|
|
Deferred income taxes
|
|
|
|
|
|
49,183
|
|
|
|
|
43,143
|
|
Liability for unrecognized tax benefit (1)
|
|
|
|
|
|
18,621
|
|
|
|
|
27,947
|
|
PMC special shares convertible into 1,016 (2013 - 1,019) shares of
common stock
|
|
|
|
|
|
1,180
|
|
|
|
|
1,188
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock and additional paid in capital
|
|
|
|
|
|
1,577,573
|
|
|
|
|
1,550,385
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|
(780
|
)
|
|
|
|
(526
|
)
|
Accumulated deficit
|
|
|
|
|
|
(969,293
|
)
|
|
|
|
(963,035
|
)
|
Total stockholders' equity
|
|
|
|
|
|
607,500
|
|
|
|
|
586,824
|
|
|
|
|
|
|
$
|
833,805
|
|
|
|
$
|
849,951
|
|
|
(1) Effective from the beginning of the first quarter of 2014, the
Company adopted Financial Accounting Standards Board's Accounting
Standards Update ("ASU") No. 2013-11, "Presentation of an
Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a
Similar Tax Loss, or Tax Credit Carryforward Exists." Approximately
$44 million of deferred tax assets of a foreign subsidiary were
derecognized along with the related liability for unrecognized tax
benefits as a result of this presentation adoption, with no impact
to the Condensed Consolidated Statements of Operations.
|
|
|
PMC-Sierra, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 27,
|
|
|
September 28,
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
$
|
(2,248
|
)
|
|
|
$
|
(16,575
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
48,739
|
|
|
|
|
51,731
|
|
Stock-based compensation
|
|
|
|
|
|
16,334
|
|
|
|
|
19,461
|
|
Unrealized foreign exchange gain, net
|
|
|
|
|
|
(2,372
|
)
|
|
|
|
(6,106
|
)
|
Net amortization of premiums and accrued interest of investments
|
|
|
|
|
|
628
|
|
|
|
|
1,353
|
|
Asset impairments
|
|
|
|
|
|
770
|
|
|
|
|
-
|
|
Gain on investment securities and other
|
|
|
|
|
|
(86
|
)
|
|
|
|
(1,767
|
)
|
Excess tax benefits from stock option transactions
|
|
|
|
|
|
-
|
|
|
|
|
(2,274
|
)
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
|
|
(934
|
)
|
|
|
|
1,923
|
|
Inventories, net
|
|
|
|
|
|
(3,514
|
)
|
|
|
|
(7,110
|
)
|
Prepaid expenses and other current assets
|
|
|
|
|
|
4,225
|
|
|
|
|
927
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
(6,699
|
)
|
|
|
|
(8,614
|
)
|
Deferred taxes and income taxes payable
|
|
|
|
|
|
8,608
|
|
|
|
|
11,120
|
|
Deferred income
|
|
|
|
|
|
(1,980
|
)
|
|
|
|
(915
|
)
|
Net cash provided by operating activities
|
|
|
|
|
|
61,471
|
|
|
|
|
43,154
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Business acquisition
|
|
|
|
|
|
(10,000
|
)
|
|
|
|
(96,098
|
)
|
Investment in long term deposits
|
|
|
|
|
|
-
|
|
|
|
|
(1,127
|
)
|
Purchases of property and equipment
|
|
|
|
|
|
(11,175
|
)
|
|
|
|
(11,297
|
)
|
Purchase of intangible assets
|
|
|
|
|
|
(1,167
|
)
|
|
|
|
(2,048
|
)
|
Redemption of short-term investments
|
|
|
|
|
|
4,920
|
|
|
|
|
8,466
|
|
Disposals of investment securities and other investments
|
|
|
|
|
|
37,936
|
|
|
|
|
146,340
|
|
Purchases of investment securities and other investments
|
|
|
|
|
|
(67,727
|
)
|
|
|
|
(172,114
|
)
|
Net cash used in investing activities
|
|
|
|
|
|
(47,213
|
)
|
|
|
|
(127,878
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Payment of debt issuance costs
|
|
|
|
|
|
-
|
|
|
|
|
(928
|
)
|
Proceeds from short-term loan and credit facility
|
|
|
|
|
|
30,000
|
|
|
|
|
-
|
|
Repayment of credit facility
|
|
|
|
|
|
(60,000
|
)
|
|
|
|
-
|
|
Proceeds from issuance of common stock
|
|
|
|
|
|
17,924
|
|
|
|
|
23,476
|
|
Repurchases of common stock
|
|
|
|
|
|
(11,496
|
)
|
|
|
|
(22,544
|
)
|
Excess tax benefits from stock option transactions
|
|
|
|
|
|
-
|
|
|
|
|
2,274
|
|
Net cash (used in) provided by financing activities
|
|
|
|
|
|
(23,572
|
)
|
|
|
|
2,278
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
|
(784
|
)
|
|
|
|
(505
|
)
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(10,098
|
)
|
|
|
|
(82,951
|
)
|
Cash and cash equivalents, beginning of the period
|
|
|
|
|
|
100,038
|
|
|
|
|
169,970
|
|
Cash and cash equivalents, end of the period
|
|
|
|
|
$
|
89,940
|
|
|
|
$
|
87,019
|
|
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|