- Net revenues increased 1.0% year-over-year to $30.7 million.
- Achieved 40.8% gross margin (42.5% non-GAAP) and year-over-year increase of 505 bps.
- Net income improved to $0.07 per diluted share; $0.08 on a non-GAAP basis.
- Announces a $20 million increase in its share buyback program.
Pericom Semiconductor Corporation (
Net revenues for the third quarter were $30.7 million, a decrease of 4.2% from the $32.0 million reported in the second quarter, and an increase of 1.0% from the $30.4 million reported in the comparable period last year. The revenue increase from the prior year is the result of volume increases in the consumer sector, notably digital media and ultramobility.
GAAP gross margin was 40.8% in the third quarter, an increase from 38.1% last quarter and an increase from 35.7% in the comparable period last year. On a non-GAAP basis, gross margin was 42.5% in the third quarter, which excludes share-based compensation, amortization of intangible assets and amortization of fair value adjustments on acquired fixed assets. The comparable non-GAAP gross margins were 39.8% last quarter and 37.5% in the comparable period last year. The improvement in gross margin primarily reflects improved product mix in target applications.
GAAP net income for the third quarter was $1.6 million, or $0.07 per diluted share, compared with net income of $1.2 million, or $0.05 per diluted share in the second quarter, and net loss of $0.7 million, or $0.03 per diluted share in the comparable period last year. On a non-GAAP basis, net income for all periods excludes share-based compensation, amortization of intangible assets, and amortization of fair value adjustments, and the current quarter also excludes a restructuring charge and the benefit of a release of tax reserves. The resulting non-GAAP net income for the third quarter was $1.8 million, or $0.08 per diluted share, compared with non-GAAP net income of $1.9 million or $0.08 per diluted share in the second quarter, and non-GAAP net income of $1.0 million, or $0.04 per diluted share in the comparable period last year.
The balance sheet remained very strong with cash and cash equivalents and investments in marketable securities of $120.6 million or $5.39 per share outstanding ($5.27 per diluted share) at the end of the third quarter. At quarter-end, working capital was $114.5 million and the current ratio was 6.7.
"The strong improvement in gross margin has been driven by increased shipments into embedded, networking and high-end consumer markets and aligns with our strategy," said Alex Hui, President and CEO of Pericom. "We are introducing a wave of new products in timing, switching and connectivity. We believe these products strengthen our solution to target applications and will contribute significantly to our future revenue growth and margin improvement"
In the third quarter of fiscal 2014, Pericom introduced a total of 18 new products targeted at our focus market segments that were also sampled to key customers during the quarter.
We introduced 10 new products across our Connectivity/Switching product families which included power management, USB chargers, analog switches, video decoders and UART bridges.
We also expanded our Timing solutions for next generation platforms with 3 new products, including high performance clock buffers and a low jitter clock generator.
For Signal Integrity, we introduced 5 new products, including PCIe GEN3 for cloud computing and advanced USB3 redrivers for next generation mobility platforms.
Share Repurchase Update and Additional Authorization
On April 26, 2012, the Board authorized a repurchase program for up to $25 million of shares of our common stock. Pursuant to this authorization, the Company repurchased 443,368 shares in the three months ended March 29, 2014 for an aggregate cost of $3,735,000 and an average per share purchase price of $8.42. The remaining balance of potential share repurchases under the authorization is approximately $11.1 million. 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 24, 2014, Pericom had approximately 22.2 million shares of common stock outstanding.
On April 24, 2014, the Board authorized an additional $20 million of share repurchases. We have had share repurchase programs in place since 2007, and through the quarter ended March 29, 2014 we have repurchased approximately 7.5 million shares under these programs.
Fiscal Q4 2014 Outlook
The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.
- Revenues are expected to be in the range of $31.0 million to $34.0 million.
- GAAP gross margins are expected to be between 38.5% and 41.5%, 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 40.0% to 43.0% range.
- GAAP operating expenses are expected to be between $11.8 million and $12.4 million, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately $1.1 million, non-GAAP operating expenses are expected to be in the range of $10.7 million to $11.3 million.
- Other income is expected to be between $0.5 million and $0.8 million on a GAAP basis and on a non-GAAP basis, and consists of interest income and realized gains on sales of marketable securities, other income and expenses, and currency exchange gains and losses.
- The effective tax rate is expected to be approximately 30-34% on a GAAP basis and 24-28% on a non-GAAP basis.
The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time on April 29, 2014. 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.
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 on acquired fixed assets, write-off of property and equipment, restructuring charge, lease restructuring and moving costs, release of tax reserves, tax provision on intercompany transactions 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 fair value adjustments on acquired fixed assets, write-off of property and equipment, restructuring charge, lease restructuring and moving costs, release of tax reserves, tax provision on intercompany transactions and the corresponding tax effects because we do not consider them to be related to our core operating performance. We also use non-GAAP data in calculating certain metrics such as non-GAAP cost of goods sold in computing inventory days of supply.