Q4’09 Net Income of $0.17 Per Share (Non-GAAP); Q4’09 Revenues Increase 15.4% Year over Year
SANTA CLARA, Calif. — (BUSINESS WIRE) — January 28, 2010 — PMC-Sierra, Inc. (Nasdaq: PMCS), the premier Internet infrastructure semiconductor solution provider, today reported results for the fourth quarter and year ended December 27, 2009.
Net revenues in the fourth quarter of 2009 were $139.5 million, compared with $120.8 million in the fourth quarter of 2008 and $130.9 million reported in the third quarter of 2009. Revenues in the fourth quarter of 2009 increased 15.4% year over year and 6.6% sequentially.
Net income in the fourth quarter of 2009 on a GAAP basis was $15.1 million (GAAP diluted net income per share of $0.06). This compares with GAAP net income of $8.8 million (GAAP diluted net income per share of $0.04) in the fourth quarter of 2008 and GAAP net income of $27.8 million (GAAP diluted net income per share of $0.12) in the third quarter of 2009.
Non-GAAP net income in the fourth quarter of 2009 was $39.2 million (non-GAAP diluted net income per share of $0.17). This compares with non-GAAP net income in the fourth quarter of 2008 of $16.8 million (non-GAAP diluted net income per share of $0.08) and non-GAAP net income in the third quarter of 2009 of $34.5 million (non-GAAP diluted net income per share of $0.15).
Non-GAAP net income for the fourth quarter of 2009 excludes the following items: (i) $5.2 million in stock-based compensation expense; (ii) $9.8 million in amortization of purchased intangible assets; (iii) $0.1 million in restructuring costs; (iv) $2.4 million foreign exchange loss on foreign tax liabilities; (v) $0.8 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and (vi) a $5.8 million income tax provision.
“In the fourth quarter of 2009, our quarterly revenues returned to the peak levels achieved in 2008 based on strong growth in our Enterprise Storage and Microprocessor businesses,” said Greg Lang, president and chief executive officer of PMC-Sierra.
For the year ended December 27, 2009, net revenues were $496.1 million compared with $525.1 million for the year ended December 28, 2008, a decrease of 5.5% year over year.
GAAP net income in 2009 was $46.9 million (GAAP diluted net income per share of $0.20), compared with GAAP net income of $128.3 million (GAAP diluted net income per share of $0.57) for the prior year. Non-GAAP net income in 2009 was $115.8 million (non-GAAP diluted net income per share of $0.50), compared with the prior year’s non-GAAP net income of $99.4 million (non-GAAP diluted net income per share of $0.44).
For a full reconciliation of GAAP net income to non-GAAP net income, 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.
The Company announced the following in the fourth quarter of 2009:
- PROMISE Technology selected PMC-Sierra’s PM8011 SRC 8x6G 6Gb/s SAS RAID-on-Chip for its SuperTrak 6G SAS RAID controller cards targeted at OEM, SMB and entry-level storage markets.
- PMC-Sierra achieved interoperability between its 10G EPON ONT chipset and Alloptic’s edge10™ OLT, providing a fully interoperable EPON system that is ready for the mass MSO market.
- Aztech, a broadband equipment manufacturer based in Singapore, selected PMC-Sierra’s PAS7401 SoC for its GPON Optical Network Terminal (ONT) design. Aztech’s GPON 200E4 - 4 Port Gigabit Bridge ONT targets residential and SOHO deployments in fast-growing Asia Pacific FTTH markets where maximum performance and multiple GbE interfaces are required.
- PMC-Sierra’s HyPHY 20G was named to EDN’s annual Hot 100 Electronic Products list for 2009, among only six outstanding product introductions chosen in the Communications and Networking category. The International Engineering Consortium (IEC) also selected HyPHY 20G and 10G as finalists for its 2010 DesignVision award in the Semiconductor Components and ICs category.
- PMC-Sierra was named one of the top 10 competitive telecom brands in the optical communications industry in China by the Asia-Pacific Optical Communications Committee and the China Institute of Communications. PMC was the only semiconductor solution provider recognized in the top 10 list, which also included Huawei, FiberHome, ZTE, Alcatel-Lucent and Ericsson.
Fourth Quarter 2009 Conference Call
Management will review the fourth quarter 2009 results and provide guidance for the first quarter of 2010 during a conference call at 1:30 pm Pacific Time/4:30 pm Eastern Time on January 28, 2010. 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 416-642-5213 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 9186424. A replay of the webcast will be available for five business days.
First Quarter 2010 Conference Call
PMC-Sierra is planning to release its results for the first quarter of 2010 on April 22, 2010. A conference call will be held on the day of the release to review the quarter and provide an outlook for the second quarter of 2010.
Safe Harbor Statement
The Company’s SEC filings describe more fully the risks associated with the Company’s business including PMC-Sierra’s limited revenue visibility due to variable customer demands, market segment growth or decline, orders with short delivery lead times, customer concentration, and other items such as foreign exchange rates. Reported results should not be considered as an indication of future performance and the Company does not undertake any obligation to update the forward-looking statements.
About PMC-Sierra
PMC-Sierra®, the premier Internet infrastructure semiconductor solution provider, offers its customers technical and sales support worldwide through a network of offices in North America, Europe, Israel and Asia. PMC-Sierra provides semiconductor solutions for Enterprise Storage, Wide Area Network Infrastructure, Fiber To The Home, and Laser Printer/SMB NAS markets. The Company is publicly traded on the NASDAQ Stock Market under the PMCS symbol. For more information, visit www.pmc-sierra.com.
© Copyright PMC-Sierra, Inc. 2010. All rights reserved. PMC and PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the United States and other countries. Other product and company names mentioned herein may be trademarks of their respective owners.
| PMC-Sierra, Inc. | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (in thousands, except for per share amounts) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 27, | September 27, | December 28, | December 27, | December 28, | ||||||||||||||||
| 2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
| As adjusted * | As adjusted * | |||||||||||||||||||
| Net revenues | $ | 139,497 | $ | 130,876 | $ | 120,840 | $ | 496,139 | $ | 525,075 | ||||||||||
| Cost of revenues | 44,583 | 44,432 | 41,890 | 165,231 | 181,642 | |||||||||||||||
| Gross profit | 94,914 | 86,444 | 78,950 | 330,908 | 343,433 | |||||||||||||||
| Other costs and expenses: | ||||||||||||||||||||
| Research and development | 38,350 | 35,823 | 40,649 | 149,184 | 157,642 | |||||||||||||||
| Selling, general and administrative | 21,088 | 19,743 | 21,578 | 84,942 | 93,532 | |||||||||||||||
| Amortization of purchased intangible assets | 9,836 | 9,836 | 9,836 | 39,344 | 39,344 | |||||||||||||||
| Restructuring costs and other charges | 75 | 175 | 39 | 888 | 824 | |||||||||||||||
| Income from operations | 25,565 | 20,867 | 6,848 | 56,550 | 52,091 | |||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Gain on sale of investment securities | 171 | - | - | 171 | - | |||||||||||||||
| Amortization of debt issue costs | (50 | ) | (50 | ) | (80 | ) | (200 | ) | (412 | ) | ||||||||||
| Loss on subleased facilities | - | - | - | (538 | ) | - | ||||||||||||||
| Foreign exchange gain (loss) | (2,480 | ) | (1,094 | ) | 5,103 | (2,371 | ) | 8,068 | ||||||||||||
| Interest expense, net | (372 | ) | (487 | ) | (1,379 | ) | (2,511 | ) | (757 | ) | ||||||||||
| Gain on repurchase of senior convertible notes, net | - | - | 10,049 | - | 14,980 | |||||||||||||||
| Recovery on investments | - | - | - | - | 400 | |||||||||||||||
| Asset impairment | - | - | (4,300 | ) | - | (4,300 | ) | |||||||||||||
| Loss on investment securities | - | - | - | - | (11,790 | ) | ||||||||||||||
| Income before (provision for) recovery of income taxes | 22,834 | 19,236 | 16,241 | 51,101 | 58,280 | |||||||||||||||
| (Provision for) recovery of income taxes | (7,708 | ) | 8,583 | (7,428 | ) | (4,224 | ) | 70,017 | ||||||||||||
| Net income | $ | 15,126 | $ | 27,819 | $ | 8,813 | $ | 46,877 | $ | 128,297 | ||||||||||
| Net income per common share - basic | $ | 0.07 | $ | 0.12 | $ | 0.04 | $ | 0.21 | $ | 0.58 | ||||||||||
| Net income per common share - diluted | $ | 0.06 | $ | 0.12 | $ | 0.04 | $ | 0.20 | $ | 0.57 | ||||||||||
| Shares used in per share calculation - basic | 229,070 | 227,123 | 223,363 | 226,225 | 221,659 | |||||||||||||||
| Shares used in per share calculation - diluted | 233,751 | 231,863 | 224,029 | 229,567 | 223,687 | |||||||||||||||
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* Effective December 29, 2008, the Company retrospectively adopted Financial Accounting Standards Board Accounting Standards Codification 470, the Debt Topic for the accounting of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlements). Accordingly, the comparative condensed consolidated financial statements have been adjusted. |
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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 (recovery of) 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. | |||||||||||||||||||
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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 (Recovery of) Income Taxes, Operating Expenses, Operating Income, Operating Margin Percentage, Net Income, and Basic and Diluted Net Income Per Share |
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| (in thousands, except for per share amounts) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 27, | September 27, | December 28, | December 27, | December 28, | |||||||||||||||
|
2009(1) |
2009(2) |
2008(3) |
2009(4) |
2008(5) |
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| As adjusted * | As adjusted * | ||||||||||||||||||
| GAAP cost of revenues | $ | 44,583 | $ | 44,432 | $ | 41,890 | $ | 165,231 | $ | 181,642 | |||||||||
| Stock-based compensation | (199 | ) | (149 | ) | (165 | ) | (779 | ) | (1,123 | ) | |||||||||
| Non-GAAP cost of revenues | $ | 44,384 | $ | 44,283 | $ | 41,725 | $ | 164,452 | $ | 180,519 | |||||||||
| GAAP gross profit | $ | 94,914 | $ | 86,444 | $ | 78,950 | $ | 330,908 | $ | 343,433 | |||||||||
| Stock-based compensation | 199 | 149 | 165 | 779 | 1,123 | ||||||||||||||
| Non-GAAP gross profit | $ | 95,113 | $ | 86,593 | $ | 79,115 | $ | 331,687 | $ | 344,556 | |||||||||
| Non-GAAP gross profit % | 68 | % | 66 | % | 65 | % | 67 | % | 66 | % | |||||||||
| GAAP research and development expense | $ | 38,350 | $ | 35,823 | $ | 40,649 | $ | 149,184 | $ | 157,642 | |||||||||
| Stock-based compensation | (2,099 | ) | (2,173 | ) | (2,369 | ) | (8,665 | ) | (11,176 | ) | |||||||||
| Exclusion of termination costs | - | 129 | - | (1,039 | ) | - | |||||||||||||
| Non-GAAP research and development expense | $ | 36,251 | $ | 33,779 | $ | 38,280 | $ | 139,480 | $ | 146,466 | |||||||||
| GAAP selling, general and administrative expense | $ | 21,088 | $ | 19,743 | $ | 21,578 | $ | 84,942 | $ | 93,532 | |||||||||
| Stock-based compensation | (2,886 | ) | (2,798 | ) | (2,585 | ) | (11,952 | ) | (12,539 | ) | |||||||||
| Exclusion of termination costs | - | 147 | - | (624 | ) | - | |||||||||||||
| Non-GAAP selling, general and administrative expense | $ | 18,202 | $ | 17,092 | $ | 18,993 | $ | 72,366 | $ | 80,993 | |||||||||
| GAAP amortization of purchased intangible assets | $ | 9,836 | $ | 9,836 | $ | 9,836 | $ | 39,344 | $ | 39,344 | |||||||||
| Exclusion of amortization of purchased intangible assets | (9,836 | ) | (9,836 | ) | (9,836 | ) | (39,344 | ) | (39,344 | ) | |||||||||
| Non-GAAP amortization of purchased intangible assets | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||
| GAAP restructuring costs and other charges | $ | 75 | $ | 175 | $ | 39 | $ | 888 | $ | 824 | |||||||||
| Exclusion of restructuring costs and other charges | (75 | ) | (175 | ) | (39 | ) | (888 | ) | (824 | ) | |||||||||
| Non-GAAP restructuring costs and other charges | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||
| GAAP other income (expense) | $ | (2,731 | ) | $ | (1,631 | ) | $ | 9,393 | $ | (5,449 | ) | $ | 6,189 | ||||||
| Loss on subleased facilities | - | - | - | 538 | - | ||||||||||||||
| Foreign exchange loss (gain) on foreign tax liabilities | 2,403 | 978 | (4,541 | ) | 2,694 | (8,165 | ) | ||||||||||||
| Accretion of the debt discount related to the senior convertible notes | 772 | 757 | 1,137 | 2,999 | 5,617 | ||||||||||||||
| Gain on repurchase of senior convertible notes, net | - | - | (10,049 | ) | - | (14,980 | ) | ||||||||||||
| Recovery of investment loss | - | - | - | - | (400 | ) | |||||||||||||
| Asset impairment | - | - | 4,300 | - | 4,300 | ||||||||||||||
| Loss on investment securities | - | - | - | - | 11,790 | ||||||||||||||
| Non-GAAP other income | $ | 444 | $ | 104 | $ | 240 | $ | 782 | $ | 4,351 | |||||||||
| GAAP provision for (recovery of) income taxes | $ | 7,708 | $ | (8,583 | ) | $ | 7,428 | $ | 4,224 | $ | (70,017 | ) | |||||||
| (Provision for) recovery of income tax matters | (5,837 | ) | 9,884 | (2,152 | ) | 567 | 92,058 | ||||||||||||
| Non-GAAP provision for income taxes | $ | 1,871 | $ | 1,301 | $ | 5,276 | $ | 4,791 | $ | 22,041 | |||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 27, | September 27, | December 28, | December 27, | December 28, | |||||||||||||||
|
2009(1) |
2009(2) |
2008(3) |
2009(4) |
2008(5) |
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| As adjusted * | As adjusted * | ||||||||||||||||||
| GAAP operating expenses | $ | 69,349 | $ | 65,577 | $ | 72,102 | $ | 274,358 | $ | 291,342 | |||||||||
| Stock-based compensation | (4,985 | ) | (4,971 | ) | (4,954 | ) | (20,617 | ) | (23,715 | ) | |||||||||
| Exclusion of termination costs | - | 276 | - | (1,663 | ) | - | |||||||||||||
| Exclusion of amortization of purchased intangible assets | (9,836 | ) | (9,836 | ) | (9,836 | ) | (39,344 | ) | (39,344 | ) | |||||||||
| Exclusion of restructuring costs and other charges | (75 | ) | (175 | ) | (39 | ) | (888 | ) | (824 | ) | |||||||||
| Non-GAAP operating expenses | $ | 54,453 | $ | 50,871 | $ | 57,273 | $ | 211,846 | $ | 227,459 | |||||||||
| GAAP operating income | $ | 25,565 | $ | 20,867 | $ | 6,848 | $ | 56,550 | $ | 52,091 | |||||||||
| Stock-based compensation | 5,184 | 5,120 | 5,119 | 21,396 | 24,838 | ||||||||||||||
| Exclusion of termination costs | - | (276 | ) | - | 1,663 | - | |||||||||||||
| Exclusion of amortization of purchased intangible assets | 9,836 | 9,836 | 9,836 | 39,344 | 39,344 | ||||||||||||||
| Exclusion of restructuring costs and other charges | 75 | 175 | 39 | 888 | 824 | ||||||||||||||
| Non-GAAP operating income | $ | 40,660 | $ | 35,722 | $ | 21,842 | $ | 119,841 | $ | 117,097 | |||||||||
| Non-GAAP operating margin % | 29 | % | 27 | % | 18 | % | 24 | % | 22 | % | |||||||||
| GAAP net income | $ | 15,126 | $ | 27,819 | $ | 8,813 | $ | 46,877 | $ | 128,297 | |||||||||
| Stock-based compensation | 5,184 | 5,120 | 5,119 | 21,396 | 24,838 | ||||||||||||||
| Exclusion of termination costs | - | (276 | ) | - | 1,663 | - | |||||||||||||
| Exclusion of amortization of purchased intangible assets | 9,836 | 9,836 | 9,836 | 39,344 | 39,344 | ||||||||||||||
| Exclusion of restructuring costs and other charges | 75 | 175 | 39 | 888 | 824 | ||||||||||||||
| Loss on subleased facilities | - | - | - | 538 | - | ||||||||||||||
| Foreign exchange loss (gain) on foreign tax liabilities | 2,403 | 978 | (4,541 | ) | 2,694 | (8,165 | ) | ||||||||||||
| Accretion of the debt discount related to the senior convertible notes | 772 | 757 | 1,137 | 2,999 | 5,617 | ||||||||||||||
| Gain on repurchase of senior convertible notes, net | - | - | (10,049 | ) | - | (14,980 | ) | ||||||||||||
| Recovery of investment loss | - | - | - | - | (400 | ) | |||||||||||||
| Asset impairment | - | - | 4,300 | - | 4,300 | ||||||||||||||
| Loss on investment securities | - | - | - | - | 11,790 | ||||||||||||||
| Provision for (recovery of) income tax matters | 5,837 | (9,884 | ) | 2,152 | (567 | ) | (92,058 | ) | |||||||||||
| Non-GAAP net income | $ | 39,233 | $ | 34,525 | $ | 16,806 | $ | 115,832 | $ | 99,407 | |||||||||
| Non-GAAP net income per share - basic | $ | 0.17 | $ | 0.15 | $ | 0.08 | $ | 0.51 | $ | 0.45 | |||||||||
| Non-GAAP net income per share - diluted | $ | 0.17 | $ | 0.15 | $ | 0.08 | $ | 0.50 | $ | 0.44 | |||||||||
| Shares used to calculate non-GAAP net income per share - basic | 229,070 | 227,123 | 223,363 | 226,225 | 221,659 | ||||||||||||||
| Shares used to calculate non-GAAP net income per share - diluted | 233,751 | 231,863 | 224,029 | 229,567 | 223,687 | ||||||||||||||
| Non-GAAP adjustments | |||||||||||||||||||
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(1) $5.2 million stock-based compensation expense; $9.8 million amortization of purchased intangible assets; $0.1 million restructuring costs; $2.4 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 $5.8 million income tax provision which includes $1.9 million net deferred tax provision relating to foreign exchange translation of a foreign subsidiary, $1.8 million tax effect on inter-company transactions, $1.8 million year-end tax adjustments including those based on completed filings and assessments received from tax authorities, $0.5 million arrears interest relating to unrecognized tax benefits, and $0.2 million income tax recovery related to the adjustments above. |
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(2) $5.1 million stock-based compensation expense; $0.3 million recovery of previously accrued termination costs; $9.8 million amortization of purchased intangible assets; $0.2 million restructuring costs; $1.0 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 $9.9 million income tax recovery which includes $9.4 million net deferred tax recovery relating to foreign exchange translation of a foreign subsidiary, $0.3 million arrears interest relating to unrecognized tax benefits, $1.0 million tax effect on inter-company transactions, $0.8 million tax adjustments based on completed filings and assessments received from tax authorities, and $1.0 million income tax recovery related to the adjustments above. |
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(3) $5.1 million stock-based compensation expense; $9.8 million amortization of purchased intangible assets; $4.5 million foreign exchange gain on foreign tax liabilities; $1.1 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $10.0 million gain on repurchase of senior convertible notes, net; $4.3 million asset impairment; and $2.2 million net income tax effects comprised of $0.4 million income tax recovery related to adjustments above, $5.6 million deferred tax expense relating to unrealized gain on foreign exchange translation of a foreign subsidiary, $4.3 million reversal of unrecognized tax benefits and related interest, and $1.3 million tax adjustments based on completed filings and assessments received from tax authorities. |
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(4) $21.4 million stock-based compensation expense; $1.7 million of termination costs; $39.3 million amortization of purchased intangible assets; $0.9 million restructuring costs; $0.5 million loss on subleased facilities; $2.7 million foreign exchange loss on foreign tax liabilities; $3.0 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and $0.6 million income tax recovery which includes $6.5 million net deferred tax recovery relating to foreign exchange translation of a foreign subsidiary, $5.0 million tax effect on intercompany transactions, $1.5 million year end tax adjustments including those based on completed filings and assessments received from tax authorities, $1.5 million arrears interest relating to unrecognized tax benefits, and $2.1 million income tax recovery related to the adjustments above. |
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(5) $24.8 million stock-based compensation expense; $39.3 million amortization of purchased intangible assets; $0.8 million restructuring costs; $8.2 million foreign exchange gain on foreign tax liabilities; $5.6 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $15.0 million gain on the repurchase of senior convertible notes, net; $0.4 million recovery of investment loss; $4.3 million for asset impairment; $11.8 million related to loss on investment securities; and $92.1 million income tax recovery relating to $94.3 million related to the net adjustment to accrual for unrecognized tax benefits, $5.6 million deferred tax expense relating to unrealized gain on foreign exchange translation of a foreign subsidiary, and $3.4 million income tax effect related to the non-GAAP adjustments above. During the second quarter of 2008, the Company reached a settlement on several ongoing foreign tax matters related to prior years for amounts less than had been accrued as unrecognized tax benefits. As part of the settlement, the Company agreed to a cash payment of $18.0 million and utilized $38.1 million in investment tax credits. |
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| PMC-Sierra, Inc. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| December 27, | December 28, | |||||||
| 2009 | 2008 | |||||||
| As adjusted * | ||||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 192,841 | $ | 97,839 | ||||
| Short-term investments | 67,928 | 209,685 | ||||||
| Accounts receivable, net | 50,745 | 40,191 | ||||||
| Inventories, net | 31,531 | 34,003 | ||||||
| Prepaid expenses and other current assets | 14,476 | 9,683 | ||||||
| Deferred tax assets | 3,052 | 3,949 | ||||||
| Total current assets | 360,573 | 395,350 | ||||||
| Property and equipment, net | 13,909 | 15,858 | ||||||
| Investment securities | 192,636 | - | ||||||
| Goodwill | 396,144 | 396,144 | ||||||
| Intangible assets, net | 110,458 | 153,956 | ||||||
| Deferred tax assets | 250 | - | ||||||
| Prepaid expenses | 26,187 | - | ||||||
| Investments and other assets | 10,175 | 3,512 | ||||||
| Deposits for wafer fabrication capacity | 5,145 | 5,145 | ||||||
| $ | 1,115,477 | $ | 969,965 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 22,266 | $ | 17,066 | ||||
| Accrued liabilities | 52,996 | 51,390 | ||||||
| Liability for unrecognized tax benefit | 31,330 | 23,398 | ||||||
| Income taxes payable | 7,261 | - | ||||||
| Deferred income taxes | 681 | 2,042 | ||||||
| Accrued restructuring costs | 3,994 | 5,938 | ||||||
| Deferred income | 12,498 | 11,200 | ||||||
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Total current liabilities |
131,026 | 111,034 | ||||||
| 2.25% senior convertible notes due October 15, 2025, net | 58,356 | 55,357 | ||||||
| Long-term obligations | 6,211 | 503 | ||||||
| Deferred income taxes | 22,695 | 17,806 | ||||||
| Liability for unrecognized tax benefit | 14,663 | 3,352 | ||||||
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PMC special shares convertible into 1,570 (2008 - 2,045) shares of common stock |
2,003 | 2,655 | ||||||
| Stockholders' equity | ||||||||
| Common stock and additional paid in capital | 1,521,723 | 1,471,717 | ||||||
| Accumulated other comprehensive income (loss) | 1,164 | (3,218 | ) | |||||
| Accumulated deficit | (642,364 | ) | (689,241 | ) | ||||
| Total stockholders' equity | 880,523 | 779,258 | ||||||
| $ | 1,115,477 | $ | 969,965 | |||||
| PMC-Sierra, Inc. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Twelve Months Ended | ||||||||
| December 27, | December 28, | |||||||
| 2009 | 2008 | |||||||
| As adjusted * | ||||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 46,877 | $ | 128,297 | ||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization | 56,577 | 59,796 | ||||||
| Stock-based compensation | 21,396 | 24,838 | ||||||
| Unrealized foreign exchange (gain) loss, net | 2,542 | (8,362 | ) | |||||
| Non-cash accretion of investment securities | (359 | ) | - | |||||
| Asset impairment | - | 4,300 | ||||||
| Gain on repurchase of senior convertible notes, net | - | (14,980 | ) | |||||
| Gain on disposal of property and equipment | - | (32 | ) | |||||
| Loss on subleased facilities | 538 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (10,554 | ) | (829 | ) | ||||
| Inventories | 2,723 | 613 | ||||||
| Prepaid expenses and other current assets | 1,132 | 6,743 | ||||||
| Accounts payable and accrued liabilities | (2,531 | ) | (40,240 | ) | ||||
| Deferred income taxes and income taxes payable | 4,147 | (70,491 | ) | |||||
| Accrued restructuring costs | (2,029 | ) | (4,720 | ) | ||||
| Deferred income | 1,298 | (2,474 | ) | |||||
| Net cash provided by operating activities | 121,757 | 82,459 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (6,215 | ) | (6,802 | ) | ||||
| Proceeds from sale of property and equipment | 31 | - | ||||||
| Purchases of intangible assets | (1,590 | ) | (5,913 | ) | ||||
| Redemption of short-term investments | 186,443 | - | ||||||
| Disposals of investment securities | 59,298 | - | ||||||
| Purchases of investment securities | (295,365 | ) | (209,685 | ) | ||||
| Net cash used in investing activities | (57,398 | ) | (222,400 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repurchase of senior convertible notes | - | (139,341 | ) | |||||
| Proceeds from issuance of common stock | 28,293 | 16,510 | ||||||
| Net cash provided by (used in) financing activities | 28,293 | (122,831 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | 2,350 | (4,311 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 95,002 | (267,083 | ) | |||||
| Cash and cash equivalents, beginning of the year | 97,839 | 364,922 | ||||||
| Cash and cash equivalents, end of the year | $ | 192,841 | $ | 97,839 | ||||
Contact:
PMC-Sierra, Inc.
Vice President & CFO
Mike Zellner,
1-408-988-1204
or
VP Marketing Communications
David
Climie, 1-408-988-8276
or
Sr Manager, Communications
Susan
Shaw, 1-408-988-8515