PMC-Sierra Reports First Quarter 2011 Results

SUNNYVALE, Calif. — (BUSINESS WIRE) — April 28, 2011 — PMC-Sierra, Inc. (Nasdaq: PMCS), the premier Internet infrastructure semiconductor solution provider, today reported results for the first quarter ended March 27, 2011.

Net revenues in the first quarter of 2011 were $157.4 million, a year-over-year increase of 3% compared with $152.8 million in the first quarter of 2010, and slightly lower than net revenues of $159.3 million in the fourth quarter of 2010.

In the first quarter of 2011, the Company reported a GAAP net loss of $7.7 million (GAAP net loss per share of $0.03) compared with GAAP net income in the first quarter of 2010 of $27.0 million (GAAP diluted net income per share of $0.12). Non-GAAP net income in the first quarter of 2011 was $30.6 million (non-GAAP diluted net income per share of $0.13) compared with non-GAAP net income of $43.5 million (non-GAAP diluted net income per share of $0.19) in the first quarter of 2010.

“We have been working diligently with our customers to reduce inventories and we currently anticipate a resumption of growth in the second quarter of 2011, led by our enterprise storage business,” said Greg Lang, president and chief executive officer of PMC-Sierra.

Net income on a non-GAAP basis in the first quarter of 2011 excludes the following items: (i) $6.3 million stock-based compensation expense; (ii) $10.4 million acquisition related costs; (iii) $3.4 million lease exit costs; (iv) $11.0 million amortization of purchased intangible assets; (v) $1.0 million foreign exchange loss on foreign tax liabilities; (vi) $0.9 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; (vii) $0.8 million of other items; and (viii) $4.5 million income tax provisions.

For a full reconciliation of GAAP net (loss) 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.

In the first quarter of 2011:

  • In mobile backhaul, PMC-Sierra announced its Universal Front End 4 (UFE4) device that accelerates the transition of carrier networks to Ethernet-based backhaul. The UFE4, when combined with PMC-Sierra’s WinPath3 network processors, offers OEMs a highly integrated platform to deliver end-to-end solutions from cell-site backhaul through hub sites and aggregation equipment.
  • In the Fiber To The Home business, PMC-Sierra introduced the first symmetric and asymmetric 10G EPON OLT devices that incorporate industry-leading traffic management, packet processing, and on-chip redundancy for next generation ultra-broadband services.
  • PMC-Sierra also announced the industry's first EPON ONU devices with integrated Optical Analog Front End technology that significantly reduce the cost of ONU equipment and are optimized for the rapidly growing Fiber To The Home market segment.

First Quarter 2011 Conference Call

Management will review the first quarter 2011 results and share its outlook for the second quarter of 2011 during a conference call at 1:30 pm Pacific Time/4:30 pm Eastern Time on Thursday, April 28, 2011. The conference call webcast will be accessible under the Financial Events and Calendar section at To listen to the conference call live by telephone, dial 416-640-5925 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 3275058. A replay of the webcast will be available for five business days.

Second Quarter 2011 Conference Call

PMC-Sierra is planning on releasing its results for the second quarter of 2011 on July 21, 2011. A conference call will be held on the day of the release to review the quarter and provide an outlook for the third quarter of 2011.

Safe Harbor Statement

This release contains forward-looking statements that involve risks and uncertainties. The Company’s SEC filings describe 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, changes in inventory, and other items such as foreign exchange rates.

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 and Channel Storage, Wide Area Network Infrastructure, Fiber To The Home, and Laser Printer/Enterprise market segments. The Company is publicly traded on the NASDAQ Stock Market under the PMCS symbol. For more information, visit .

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