- Q2 revenues decreased 14% sequentially and 25% year-over-year primarily the result of economic softness and distribution inventory reductions.
- Q2 GAAP gross margin increased by 53 bps sequentially and 254 bps year-over-year.
- Q2 GAAP $335,000 net loss compared with $445,000 and $1.8 million net income the prior quarter and the same quarter the prior year, respectively.
Pericom Semiconductor Corporation (
Net revenues for the second quarter were $30.5 million, a decrease of 14% from the $35.3 million reported in the first quarter of fiscal 2012, and down 25% from the $40.7 million reported in the comparable period last year. The revenue decrease primarily resulted from reduced end user demand due to economic softness of the PC, notebook, and consumer end market segments, as well as lower storage volume attributed to the Thailand flood.
GAAP gross margin was 36.0% in the second quarter, up from 35.5% last quarter and from 33.5% in the comparable period last year. On a non-GAAP basis, gross margin was 37.3% in the second quarter, which reflects exclusion of share-based compensation, amortization of intangible assets, and amortization of fair value adjustments and compensation expense accruals from the PTI acquisition. The comparable non-GAAP gross margins were 36.9% last quarter and 36.3% in the comparable period last year. The improvement in sequential gross margin primarily reflects favorable product mix from lower PC, storage, and consumer end-market shipments.
GAAP net loss for the second quarter was $335,000, or $0.01 per diluted share, compared with net income of $445,000, or $0.02 per diluted share in the first quarter, and net income of $1.8 million, or $0.07 per diluted share in the comparable period last year. GAAP net income for all periods included share-based compensation, amortization of intangible assets, amortization of fair value adjustments, and other PTI acquisition related expenses. Excluding these items, non-GAAP net income for the second quarter was $958,000, or $0.04 per diluted share, compared with non-GAAP net income of $1.8 million or $0.07 per diluted share in the first quarter, and non-GAAP net income of $4.1 million, or $0.16 per diluted share in the comparable period last year.
The balance sheet remained very strong with cash and investments in marketable securities of $124 million or $5.13 per diluted share at the end of the second quarter. Inventory was relatively flat on a sequential basis and trade accounts receivable decreased by $2.9 million as a result of lower volume, and DSO remained steady at 59. At quarter-end, working capital was $104 million and the current ratio was 5.5.
"We were pleased about our second consecutive quarter of sequential gross margin improvement as it reaffirms our strategic initiative to improve our margins by increasing the revenue mixture from server, networking and telecom, and embedded segments," said Alex Hui, President and CEO of Pericom. "We are excited to see many design wins with our industry-leading USB 3.0 signal integrity solution in next generation computing platforms. We also 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 second quarter of fiscal 2012, Pericom introduced a total of 12 new products across the Signal Integrity, Timing, and Connectivity product areas.
- Signal Integrity: We expanded our solutions for serial protocol signal integrity by introducing 4 new ReDriver products for SATA3, SAS2, and the new PCIe 3.0 (8Gb) and USB3 (5Gb SuperSpeed) protocols. These products address server, storage, computing and embedded market segments.
- Connectivity: Adding to our high-speed connectivity solutions, we introduced 3 products supporting PCIe GEN2 packet switching, DDR3 mux switch, and PCIe to USB2 serial bridge. These products target notebook, tablet, embedded, and networking market segments.
- Timing: Expanding our timing solutions for next generation platforms, we introduced 5 new products. These comprised a new XO, a specialized crystal, 2 high performance clock buffers and an ASSP clock generator.
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 authority, the Company repurchased 302,117 shares in the three months ended December 31, 2011 for an aggregate cost of $2,305,564 and an average per share purchase price of $7.63. The remaining balance of potential share repurchases under the 2008 authority is approximately $6.5 million.
Fiscal Q3 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 Q3 2012.
- Revenues in the third fiscal quarter are expected to be in the range of $30.0 million to $34.0 million.
- GAAP gross margins are expected to be between 33.5% and 35.5%, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately 1.5%, non-GAAP gross margins are expected to be in the 35.0% to 37.0% range.
- GAAP operating expenses are expected to be between $12.4 and $12.8 million, and adjusting for share-based compensation, amortization of intangibles, fair value adjustments and restructuring charges that are expected to total approximately $1.9 million, non-GAAP operating expenses are expected to be in the range of $10.5 to $10.9 million.
- Other income is expected to be between $0.5 and $0.7 million on a GAAP basis and on a non-GAAP basis.
- The effective tax rate is expected to be approximately 7-10% on a GAAP basis and 32-34% on a non-GAAP basis.
The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time on January 31, 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, February 7th. To listen to the replay, dial toll-free (855) 859-2056 and reference conference ID 45480663.
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, 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.
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 the fair value adjustments related to acquired inventory, acquisition related expenses, the gain on the previously held interest in PTI, and the corresponding tax effect because we do not consider them to be related to our core operating performance.