- Q4 revenues increased 10% sequentially and 4% year-over-year, and annual revenues increased 13% from FY10.
- Q4 GAAP gross margin increased by 374 bps sequentially and decreased 175 bps year-over-year, while annual gross margin decreased 108 bps from FY10.
- Q4 GAAP net income increased 203% sequentially and decreased 59% year-over-year, and annual net income increased 25% from FY10.
Pericom Semiconductor Corporation (
Net revenues for the fourth quarter were $43.3 million, an increase of 10% from the $39.6 million reported in the third quarter of fiscal 2011, and up 4% from the $41.5 million reported in the comparable period last year. Net revenues for fiscal year 2011 were $166.3 million, an increase of 13% from the $146.9 million reported for fiscal year 2010. When normalizing for the additional, fourteenth week, during the fourth quarter of fiscal 2010, the fourth quarter net revenues increased by 12% year-over-year and increased by 16% for the full fiscal year. The sequential quarter revenue increase primarily resulted from networking and enterprise computing end-market strength. The fiscal year 2011 results included Pericom Technology, Inc. ("PTI") operations, which was acquired on August 31, 2010. The first quarter included only one month of PTI results due to the timing of the acquisition.
GAAP gross margin was 35.0% in the fourth quarter, up from 31.3% last quarter and down from 36.7% in the comparable period last year. On a non-GAAP basis, gross margin was 36.2% in the fourth 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 32.6% last quarter and 37.0% in the comparable period last year. The improvement in sequential gross margin primarily reflects favorable product mix from higher networking and lower consumer end-market shipments, as well as lower absorption charges from increased volume. For the full fiscal year 2011, GAAP gross margin was 33.5% compared with 34.6% for fiscal year 2010. On a non-GAAP basis, gross margin was 35.1% for fiscal year 2011 compared with 34.8% for fiscal year 2010.
GAAP net income attributable to Pericom shareholders for the fourth quarter was $1.6 million, or $0.06 per diluted share, compared with net income of $0.5 million, or $0.02 per diluted share in the third quarter, and net income of $3.9 million, or $0.15 per diluted share in the comparable period last year. GAAP net income attributable to Pericom shareholders for the fiscal year 2011 was $13.5 million, or $0.53 per diluted share, compared with net income of $10.8 million, or $0.42 per diluted share in fiscal year 2010. GAAP net income for all periods of fiscal 2011 included share-based compensation, amortization of intangible assets, amortization of fair value adjustments, and other PTI acquisition related expenses, and for fiscal year 2010, GAAP net income included share-based compensation and amortization of intangible assets. Excluding these items, non-GAAP net income for the fourth quarter was $3.6 million or $0.14 per diluted share, compared with $2.5 million or $0.10 per diluted share in the third quarter, and non-GAAP net income of $4.8 million, or $0.19 per diluted share in the comparable period last year. For the fiscal year 2011, non-GAAP net income was $14.4 million, or $0.56 per diluted share compared with $14.3 million, or $0.55 per diluted share for fiscal year 2010.
The balance sheet remained very strong with cash and investments in marketable securities of $128 million at the end of the fourth quarter, and cash and investments per basic share was $5.12 for the fourth quarter. Our cash position improved by $7 million during the quarter, net of $3 million of share repurchases. Working capital was $129 million and the current ratio was 4.2 to 1.
"For the fourth quarter, we were pleased to see nice sequential revenue growth and improvement in gross margin," said Alex Hui, President and CEO of Pericom. "We were also pleased by the 14% reduction of in-house inventory while channel inventory remained flat in the 7 week range at the end of the fourth quarter. This is important as the overall industry slows down a bit due to the macro-economic conditions."
In the June quarter, Pericom introduced a total of 17 new products across the Signal Integrity, Timing, and Connectivity product areas.
- Signal Integrity: We expanded our solutions for high-speed serial protocol signal integrity by introducing 5 new ReDriver products for SATA3, SAS2, and the new USB3 (SuperSpeed) protocols. These products address volume notebook, server, storage, and embedded market segments, with all five redrivers offering low power consumption from a competitive standpoint. The new USB3 products are specifically designed to meet the latest industry compliance testing requirements for next generation platforms with integrated USB3 controllers.
- Connectivity: Adding to our high-speed connectivity solutions, we introduced 3 products for the new Thunderbolt, Display Port and USB protocols. These products are specifically aimed at next generation notebook, tablet, and embedded market segments.
- Timing: Expanding our timing solutions for next generation platforms, we introduced 9 new products in the HiFlex crystal oscillator (XO) and clock generator product families. These product families offer attractively low jitter and package footprints and target server, storage, networking and embedded market segments.
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 334,452 shares in the three months ended July 2, 2011 for an aggregate cost of $2,966,297 and an average per share purchase price of $8.87. The remaining balance of potential share repurchases under the 2008 authority is approximately $12.3 million.
Fiscal Q1 2012 Outlook
The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.
The overall macro environment has been weak the past few months and we have seen a slowdown in demand. Q4's book-to-bill ratio was slightly less than 1:1, which resulted in lower backlog entering fiscal Q1 2012 than the prior sequential quarter. Below are the estimates for fiscal Q1 2012.
- Revenues in the first fiscal quarter are expected to be in the range of $38.0 million to $41.5 million.
- GAAP gross margins are expected to be between 33.5% and 35.5%, and adjusting for share-based compensation, amortization of intangibles, fair value adjustments, and compensation accruals that are expected to total approximately 1.0%, non-GAAP gross margins are expected to be in the 34.5% to 36.5% range.
- GAAP operating expenses are expected to be between $12.2 and $12.8 million, and adjusting for share-based compensation, amortization of intangibles, fair value adjustments, and compensation accruals that are expected to total approximately $1.4 million, non-GAAP operating expenses are expected to be in the range of $10.8 to $11.4 million.
- Other income is expected to be between $0.6 and $0.7 million on a GAAP basis and on a non-GAAP basis.
- The effective tax rate is expected to be approximately 34-36% 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 August 9, 2011. 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, August 16th. To listen to the replay, dial toll-free (855) 859-2056 and reference conference ID 87723981.
Pericom Semiconductor Corporation (