- Q3 revenues increased 10% sequentially and decreased 16% year-over-year.
- Q3 GAAP gross margin decreased by 129 bps sequentially and increased 346 bps year-over-year.
- Q3 GAAP $267,000 net loss compared with $335,000 net loss the prior quarter and $531,000 net income for the same quarter of the prior year.
Pericom Semiconductor Corporation (
Net revenues for the third quarter were $33.4 million, an increase of 10% from the $30.5 million reported in the second quarter of fiscal 2012, and down 16% from the $39.6 million reported in the comparable period last year. The revenue increase from the prior quarter reflects stabilization of distribution inventory levels and modestly improving economic conditions, as seen by a quarterly book-to-bill ratio of greater than 1.0.
GAAP gross margin was 34.7% in the third quarter, a decline from 36.0% last quarter and an increase from 31.3% in the comparable period last year. On a non-GAAP basis, gross margin was 36.2% in the third quarter, which reflects exclusion of share-based compensation, amortization of intangible assets, restructuring charges and amortization of fair value adjustments from the PTI acquisition. The comparable non-GAAP gross margins were 37.3% last quarter and 32.6% in the comparable period last year.
GAAP net loss for the third quarter was $267,000, or $0.01 per diluted share, compared with net loss of $335,000, or $0.01 per diluted share in the second quarter, and net income of $531,000, 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, restructuring charges, amortization of fair value adjustments, and other PTI acquisition related expenses. Excluding these items, non-GAAP net income for the third quarter was $1.7 million, or $0.07 per diluted share, compared with non-GAAP net income of $1.0 million or $0.04 per diluted share in the second quarter, and non-GAAP net income of $2.5 million, or $0.10 per diluted share in the comparable period last year.
The balance sheet remained very strong with cash and investments in marketable securities of $125 million or $5.20 per diluted share at the end of the third quarter. Inventory decreased $1.1 million on a sequential basis to $17.2 million, the sixth consecutive quarter of declines. Inventory has decreased 44.5% from $31.0 million during this period, and current levels represent 73 days of supply. Trade accounts receivable increased by $1.6 million sequentially as a result of higher revenues, while DSO declined from 59 to 58 days. At quarter-end, working capital was $124 million and the current ratio was 6.3.
"We were pleased about our third quarter revenue improvement as it suggests an improving demand situation and reaffirms our strategic initiative to increase our focus on server, networking and telecom, and embedded segments," said Alex Hui, President and CEO of Pericom. "Sequentially, our server and storage revenue increased 11%, networking and telecom remained strong growing 11%, and embedded also grew double-digits at 10%. We are also excited about the design win activity for our industry-leading USB 3.0 signal integrity solution in next generation Ivy Bridge computing platforms. Also we expect to see deployment of our PCIe Gen 3 product solution in next generation servers in the latter part of this calendar year."
In the third quarter of fiscal 2012, Pericom introduced a total of seven new products in our Connectivity and Timing product areas.
- Connectivity: Adding to our high-speed connectivity solutions, we introduced 6 products supporting PCIe GEN2, DisplayPort 1.2, and PCIe GEN3. Three of the products are PCIe GEN2 packet switches with high integration and advanced power management features, two of the products are new additions to our PCIe GEN3 signal switch family, and one product is a DisplayPort 1.2 signal switch. These products target notebook, tablet, embedded, HPC server and storage, and networking market segments. All of these products were sampled to key customers during the quarter.
- Timing: Expanding our timing solutions for next generation platforms, we introduced a new multiple output clock generator specifically designed for application frequencies within the embedded segment.
Share Repurchase Update
On April 29, 2008, our Board of Directors authorized the repurchase of $30 million of our common stock. Pursuant to the 2008 authorization, the Company repurchased 425,766 shares in the three months ended March 31, 2012 for an aggregate cost of $3,418,925 and an average per share purchase price of $8.03. The remaining balance of potential share repurchases under the 2008 authorization is approximately $3.1 million. As Pericom has nearly completed the repurchase of shares pursuant to the 2008 authorization, the Board of Directors has authorized another repurchase program for up to an additional $25 million of shares of our common stock. Shares may be repurchased from time to time in the open market or through private transactions, at the discretion of Pericom management. As of April 27, 2012, Pericom had approximately 23.6 million shares of common stock outstanding.
In addition, the Board established minimum equity ownership requirements for the CEO and outside directors.
Fiscal Q4 2012 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 Q4 2012.
- Revenues in the fourth fiscal quarter are expected to be in the range of $35.0 million to $37.0 million.
- GAAP gross margins are expected to be between 33.8% and 35.8%, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately 1.2%, non-GAAP gross margins are expected to be in the 35.0% to 37.0% range.
- GAAP operating expenses are expected to be between $12.2 million and $12.8 million, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately $1.3 million, non-GAAP operating expenses are expected to be in the range of $10.9 million to $11.5 million.
- Other income is expected to be between $0.6 million and $0.8 million on a GAAP basis and on a non-GAAP basis.
- The effective tax rate is expected to be approximately 20-22% on a GAAP basis and 22-26% on a non-GAAP basis.
The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time on May 1, 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, May 8th. To listen to the replay, dial toll-free (855) 859-2056 and reference conference ID 74275051.
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, restructuring charges, fair value adjustments of acquired inventory, acquisition-related expenses, a one-time gain on the previously held interest in PTI, and the effects of excluding share-based compensation upon the number of diluted shares used in calculating non-GAAP earnings per share.