Q4 and full year 2014 earnings announcement call live on http://investor.pmcs.com at 1:30 p.m. PT
Conference call: 1 (888) 337-8169 or 1 (719) 325-2455 outside North America; passcode 2692388#
Replay available shortly after end of conference call through February 28, 2015
SUNNYVALE, Calif. — (BUSINESS WIRE) — January 29, 2015 — PMC-Sierra, Inc. (PMC®) (Nasdaq: PMCS), the semiconductor and software solutions innovator transforming networks that connect, move and store big data, today reported results for the fourth quarter and full year ended December 27, 2014.
Net revenues in the fourth quarter of 2014 totaled $136.9 million, an increase of one percent from $135.5 million in the third quarter of 2014 and an increase of 7.9 percent, compared to $126.9 million in the fourth quarter of 2013. Storage product revenues in the fourth quarter of 2014 totaled $98.4 million, an increase of 8.3 percent from $90.9 million in the fourth quarter of 2013.
GAAP net income in the fourth quarter of 2014 totaled $2.3 million or $0.01 per diluted share, compared to a GAAP net income in the third quarter of 2014 of $5.5 million or $0.03 per diluted share.
Non-GAAP net income in the fourth quarter of 2014 totaled $22.7 million or $0.11 per diluted share, compared to non-GAAP net income of $22.5 million or $0.11 per diluted share in the third quarter of 2014.
“Due to strong Storage and record OTN revenues in the fourth quarter, we grew revenue eight percent over the same quarter last year,” said Greg Lang, PMC president and chief executive officer. “And each of our four major growth drivers started contributing revenue in 2014, positioning PMC for continued growth in 2015.”
Net income on a non-GAAP basis in the fourth quarter of 2014 excludes the following items: (i) $6.8 million stock-based compensation expense, (ii) $11 million amortization of purchased intangible assets; (iii) $2.7 million foreign exchange gain on foreign tax liabilities; (iv) $3.9 million provision for income tax matters; and (v) $1.3 million other adjustments as described in the accompanying GAAP to non-GAAP reconciliation table.
For the full year ended December 27, 2014, net revenues were $525.6 million, compared to $508.0 million for the year ended December 28, 2013, an increase of 3.5 percent year over year. GAAP operating income for the full year 2014 was $11.1 million compared to GAAP operating loss of $13.2 million reported in the year ended December 28, 2013. Non-GAAP operating income for the full year 2014 was $83.1 million compared to non-GAAP operating income of $68.4 million the prior year. GAAP net income for the full year 2014 was $0.1 million, or $0.00 per diluted share, compared to GAAP net loss of $32.3 million, or $0.16 loss per share the prior year. Non-GAAP net income in the year ended December 27, 2014, was $79.5 million or $0.40 per diluted share, compared to non-GAAP net income of $68.3 million or $0.33 per diluted share in the year ended December 28, 2013.
For a full reconciliation of each non-GAAP item used herein to the most directly comparable GAAP financial measure, 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.
FOURTH QUARTER AND 2014 HIGHLIGHTS
The Company announced the following in the fourth quarter and full year 2014:
- On Dec. 3, PMC hosted a Flash Technology Forum in Beijing, where speakers from Sina, Inspur, China Telecom, Memblaze and PMC discussed the latest innovations and use cases for deploying flash to accelerate storage in China’s data centers.
- On Dec. 1, PMC announced that Memblaze Technology Co. Ltd, a leading provider of flash storage solutions, is utilizing PMC’s Flashtec™ NVMe controllers in its next-generation PCI Express® (PCIe®) flash accelerators. The Flashtec-based Memblaze PBlaze4 products are targeted at hyperscale and Open Compute Project deployments.
- On Nov. 24, PMC announced that Lenovo selected PMC storage solutions for external connectivity across its ThinkServer portfolio. The Lenovo 8885E by PMC card delivers the full throughput of 12Gb/s SAS and 6.6GB/s PCIe® to maximize the performance of ThinkServer scale-out storage. The card is offered on Lenovo rack and tower servers.
- On Sept. 17, PMC was first to ship 16-port 12Gb/s SAS and 16-port 6Gb/s SATA I/O controller solutions. PMC’s data center I/O products enable OEMs and ODMs to design cost-effective customized server hardware for hyperscale deployments, such as Open Compute, Windows Cloud Servers, OpenStack and Project Scorpio. The devices have the industry’s highest port density, lowest power and are capable of more than 1,000,000 I/Os per second (IOPS) to support the most demanding cloud software applications.
- On Sept. 4, PMC announced that the Company executed an agreement with HP to license core HP Smart Array software, firmware and management technology. PMC will leverage this technology to provide more system value to new and existing server storage and data center customers. This transaction also positions PMC as the supplier of key storage solution components across HP ProLiant Gen9 and beyond.
- On Aug. 26, PMC introduced the industry’s first 12Gb/s SAS expander card to enable density-optimized servers, the fastest growing segment of the worldwide server market according to IDC. The Adaptec® 12Gb/s SAS expander card enables flexible, high-density server architectures that can expand as data center storage needs grow. It provides 36 ports in a PCIe® low-profile form factor.
- On Aug. 5, PMC established a new ultra-fast storage class memory tier to accelerate critical applications in scale-out storage and all-flash arrays. The PMC Flashtec™ NVRAM Drives combine the speed and endurance of DRAM with the persistency of NAND flash to deliver ten times higher performance than the fastest Solid State Drive (SSD), at more than 10 million IOPS, with sub-microsecond latency. Leveraging PCIe® 3.0, the Flashtec NVRAM Drives connect directly to the host to optimize CPU utilization and maximize overall system performance.
- On Mar. 10, PMC announced the successful interoperability of its DIGI 120G OTN processor and Acacia’s AC100 100G Coherent module, enabling mass deployment of 100G OTN in metro networks, unlocking a 10-fold increase in fiber capacity and eliminating the need for new fiber. Demonstrating interoperability with Acacia’s module was an important step to show ecosystem readiness for the 100G transition.