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San Jose, CA, 2009-09-25 - Pericom Semiconductor Corporation (NASDAQ: PSEM), a worldwide supplier of high-speed integrated circuits and frequency control products, today announced results for its fiscal fourth quarter and full year ended June 27, 2009.
Quarterly Highlights
- Net revenues grew 22% sequentially yet declined 31% year-over-year to $29.7 million
- Net income increased 306% sequentially, and decreased 77% year-over-year to $1.0 million
Fiscal Year Highlights
- Net revenues decreased 21% versus the prior year period
- Net income decreased 64% versus the prior year period
- Gross margins declined 318 basis points over the prior year period
- Total share repurchase activity totaled 712,000 shares
Fourth Quarter Operating Results
Net revenues for the fourth quarter were $29.7 million, up 21.8% from
the $24.4 million reported in the third quarter, and down 31.5% from
the $43.4 million reported in the comparable period last year. Gross
margin was 28.7%, down from 35.5% last quarter, and down from 36.0% in
the comparable period last year, mainly due to lower manufacturing volumes
and resulting increased overhead absorption, as well as pricing pressure.
Operating expenses in the quarter were $9.5 million, up from $9.4 million
in the previous quarter and down from $10.6 million in the comparable
period last year. Stock-based compensation expense in the quarter was
$888,000, down from $998,000 in the previous quarter and up from $615,000
in the comparable period last year. Net income in the quarter was $1.0
million, or $0.04 per diluted share, compared with net income of $256,000,
or $0.01 per diluted share in the third quarter and net income of $4.6
million, or $0.17 per diluted share, in the same period a year ago.
FY09 Operating Results
Net revenues for the fiscal year ending June 27, 2009 were $128.6 million,
down 21.4% from $163.7 million in the prior year comparable period. Gross
margin in the year ending June 27, 2009 was 33.5% as compared with 36.7%
in the comparable period last year, reflecting pricing pressure in our
markets and reduced capacity utilization in our operations. Operating
expenses in the year ending June 27, 2009 were $40.1 million, down slightly
from $40.8 million in the comparable period last year. Stock based compensation
expense for the year ended June 27, 2009 was $3.6 million, up from $2.4
million in the comparable prior year period. Net income in the year ending
June 27, 2009 was $6.1 million, or $0.24 per diluted share, down from
$17.0 million, or $0.64 per diluted share in the comparable prior year
period.
"Our fourth quarter confirmed the improved demand we anticipated
at the start of the quarter, and this trend is being sustained into the
first quarter of fiscal 2010.” said Alex Hui, president and CEO
of Pericom."
"Our bookings have continued to grow during the June quarter, and resulted
in our having an improved backlog as we entered the September quarter. We believe
our revenues are now better aligned with end user demand, which we believe
will gradually strengthen in the coming months."
"In the fourth quarter we experienced a reduction in gross margins
resulting from underabsorption of overhead in prior quarters as well
as pricing pressure in competitive markets. As a result, we have
taken steps to improve gross margin through initiatives to reduce product
cost as well as improve product mix."
"Enabling serial connectivity in computer, communication and consumer
applications remains our primary focus. We are encouraged by the increasing
deployment of our serial protocol solution in our focus market segments, with
PCI-e and e-SATA products accounted for 18% of total revenue in FYQ4. Despite
the downturn, we continue to invest in innovation. We are developing connectivity
and timing solutions for next generation serial protocols such as PCI-Express
Gen3, DisplayPort 1.2 and USB 3.0. We believe our comprehensive serial connectivity
and timing solutions position us well for long term growth."
Restated Financials
The Company is also issuing restated financial results for the first
three quarters of fiscal 2009 to correct misstatements involving inventory
reserves and inventory valuation, revenue, cost of goods sold and an
other-than-temporary impairment of a securities investment. These adjustments
reduced Q1 net income by $264K resulting in a restated Q1 net income
of $3,661K or $0.14 per diluted share and reduced Q2 net income by $579K
resulting in a restated Q2 net income of $1,130K or $0.04 per diluted
share. The comparison of the restated first and second quarters with
previously reported results are included in the financial tables section
of this release.
New Products
Pericom introduced 10 new products across the Signal Integrity, Switching,
Timing and Connectivity product areas in this quarter.
Expanding its solutions for high-speed serial protocol signal integrity,
Pericom introduced two new ReDriver products, the first supporting the
6 Gigabits/sec SATA (Serial ATA)/SAS (Serial Attached SCSI) storage media
protocols, and the second supporting the DisplayPort video graphics protocol. Both
ReDrivers target next generation volume notebook and desktop applications
for storage media attachment, and for advanced digital video and graphics.
These products enable transfer of high-speed serial signals across external
cables to end points such as HDD or monitor.
Pericom introduced seven new switching and connectivity products targeted
across USB, DisplayPort, and PCI Express protocols. Target market segments
include volume Consumer digital video, PC notebook, desktop, and graphics,
and Ultra Mobility platforms such as cell phones and PDA.
Finally, Pericom introduced an advanced PCIe Gen 2 (5Gb/s) ‘quad
output’ clock generator featuring extremely low jitter, and targeting
the Networking and PC Peripherals market segment, with applications such
as wireless router and other networking applications, and multi-function
printers.
Fiscal Q1 Outlook
The following statements are based on current expectations. These statements
are forward looking, and actual results may differ materially.
- Revenues in the first fiscal quarter are expected to be in the range of $31.5 million to $32.5 million.
- Gross margins are expected to be in the 31% to 33% range. Margins are influenced by the product mix of turns business and sales, if any, of previously reserved inventory.
- Operating expenses are expected to be in the range of $10.5 to $11.5 million, which include stock-based compensation expense of approximately $0.9 million, year-end/SOX audit fees $0.5M and the additional expenses related to accounting review $1.2M.
- Other income is expected to be approximately $1.3million, consisting primarily of interest income.
- Net income from unconsolidated affiliates PTI and JCP of $0.4 - $0.5M.
- The effective tax rate is expected to be approximately 32%.
Conference Call
The press release will be followed by a conference call beginning at
1:30 p.m. Pacific time. To listen to the call, dial (877) 723-9521 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.
A taped replay of the conference call will be made available for five
business days. To listen to the replay, dial (888) 203-1112 and reference
conference number 6794266. 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.
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 caption ‘Fiscal
Q1 Outlook’, which regard the anticipated revenues, gross margin,
operating expenses, other income and tax rate in the first fiscal quarter,
and statements regarding end user demand gradually strengthening, initiatives
to reduce product cost and improve mix, and Pericom being well positioned.
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 28,
2008, and, in particular, the risk factors section contained therein.
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