Pericom Semiconductor Reports Fiscal Q3 2008 Financial Results
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Pericom Semiconductor Reports Fiscal Q3 2008 Financial Results

Posts Year-Over-Year Revenue Growth of 36% And Net Income Growth of 58%

SAN JOSE, Calif., April 30 /PRNewswire-FirstCall/ -- Pericom Semiconductor Corporation (NASDAQ: PSEM), a worldwide supplier of high-speed integrated circuits and frequency control products, today announced results for its fiscal third quarter ended March 29, 2008.

    Quarterly Highlights

    -- Net revenues grew 1 percent sequentially and 36 percent year-over-year
       to $41.2 million
    -- Gross margin of 37.6 percent was up 70 basis points on a sequential
       basis and up 370 basis points year-over-year
    -- Net income declined 5.8 percent sequentially, but increased
       58.4 percent year-over-year to $4.1 million

Net revenues for the third quarter were $41.2 million, up 1.1 percent from the $40.7 million reported in the second quarter, and up 36.4 percent from the $30.2 million reported in the comparable period last year. Gross margin was 37.6 percent, up from 36.9 percent last quarter, and up from 33.9 percent in the comparable period last year. Net revenues for the nine-month period ending March 29, 2008 were $120.4 million, up 31.1 percent from the $91.9 million in the prior year comparable period. Gross margin in the nine-month period ending March 29, 2008 was 37.0 percent, up from the 34.1 percent in the comparable period last year.

Operating expenses in the quarter were $10.2 million, up slightly from $10.1 million in the previous quarter and up from $9.4 million in the comparable period last year. Operating expenses in the nine-month period ending March 29, 2008 were $30.2 million, up from $28.1 million in the comparable period last year. Stock-based compensation expense in the quarter was $585,000, down from $650,000 in the previous quarter and up from $443,000 in the comparable period last year. Stock based compensation expense for the nine-month period ended March 29, 2008 was $1.7 million, up from $1.5 million in the comparable prior year period.

Net income in the quarter was $4.1 million, or $0.16 per diluted share, compared with net income of $4.4 million, or $0.16 per diluted share in the second quarter and net income of $2.6 million, or $0.10 per diluted share, in the same period a year ago. Net income in the nine-month period ending March 29, 2008 was $12.4 million, or $0.47 per diluted share, up from $6.5 million, or $0.24 per diluted share in the comparable prior year period.

"Continued strength in high-growth end markets, especially in digital video and high-performance PCs and servers, allowed us to achieve strong financial results during the quarter," said Alex Hui, President and Chief Executive Officer. "Revenues from high-speed serial protocol solutions increased 80% sequentially and accounted for 9% of total revenue."

"While the broader consumer spending environment has become increasingly challenging, our design win pipeline is strong and we believe our products position us well to sustain revenue and earnings growth going forward. We believe that our end markets are in the early stages of high growth phases and accordingly, are less affected by consumer spending patterns," concluded Hui.

New Products

Expanding on our Digital Video solutions, Pericom launched two 'Industry First' products using both PCI Express(R) Gen2 and the new DisplayPort(TM) technologies. The two new switches allow next generation computing platforms using dual function (both PCIe Gen2 and DP) graphics ports to be switched between either of the high speed protocols, enabling PC manufacturers to build just one, rather than two, base motherboards.

Continuing our focus on Serial Signal Conditioning, Pericom launched three new HDMI signal conditioning products targeting consumer and computing platforms such as DTV and PC using HDMI signaling. This new ReDriver product family enables marginal HDMI/DVI designs to now pass compliance testing easily, thus speeding time to market and lowering overall design costs.

Further expanding our Timing portfolio, Pericom introduced a very low jitter (<0.2ps) clock oscillator/buffer, targeted to Gigabit Ethernet applications in communications and computing market segments. The new product provides exceptionally good performance in multi-port switches, where a very low clock jitter source is essential to good performance.

Share Repurchase Update

In April 2007, Pericom's board of directors authorized a share repurchase program to buy up to 2.0 million shares of its common stock. During the quarter, the Company spent approximately $14.9 million to repurchase approximately 1.09 million shares of Pericom common stock at an average price of $13.68. The company has purchased a total of approximately 1.86 million shares under this program at an average price of $12.49.

Fiscal Q4 Outlook

The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.

    -- Revenues in the fourth fiscal quarter are expected to be in the range
       of $42.0 million to $43.2 million.

    -- Gross margins are expected to be in the 36.8 to 37.8 percent range.
       Margins are influenced by the product mix of turns business and sales,
       if any, of previously reserved inventory.

    -- Operating expenses are expected to be in the range of $10.8 to
       $11.0 million, which include stock-based compensation expense of
       approximately $0.6 million.

    -- Other income is expected to be approximately $1.0 million, consisting
       primarily of interest income.

    -- The effective tax rate is expected to be approximately 33.5 percent.

Conference Call

The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time. To listen to the call, dial (877) 627-6580 and reference "Pericom".

A taped replay of the conference call will be made available for four business days. To listen to the replay, dial (888) 203-1112 and reference conference number 6574256. 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.

About Pericom

Pericom Semiconductor Corporation (NASDAQ: PSEM) enables serial connectivity with the industry's most complete solutions for the computing, communications and consumer market segments. Pericom's analog, digital and mixed-signal integrated circuits, along with its SaRonix-eCERA frequency control products are essential in the timing, switching, bridging and conditioning of high-speed signals required by today's ever-increasing speed and bandwidth demanding applications. Company headquarters is in San Jose, Calif., with design centers and technical sales and support offices globally. http://www.pericom.com.

This press release contains forward-looking statements as defined under The Securities Litigation Reform Act of 1995. Forward-looking statements in this release include the statements under the captions 'Fiscal Q4 Outlook', which regard the anticipated revenues, gross margin, operating expenses, other income and tax rate in the fourth fiscal quarter, and statements regarding Pericom being positioned well to revenue and earnings growth going forward, that Pericom's end markets are in the early stages of high growth phases and that Pericom will be less affected by consumer spending patterns. The Company's actual results could differ materially from what is set forth in such forward-looking statements due to a variety of risk factors, including softness in demand for our products, price erosion for certain of our products, unexpected difficulties in developing new products, customer decisions to reduce inventory, economic or financial difficulties experienced by our customers, or technological and market changes. All forward-looking statements included in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and Pericom assumes no obligation to update any forward-looking statements. Parties receiving this release are encouraged to review our annual report on Form 10-K for the year ended June 30, 2007, and our quarterly report on Form 10-Q for the quarter ended December 29, 2007, and, in particular, the risk factors sections of those filings.

    DisplayPort is a trademark of VESA (http://www.vesa.org)
    PCI Express is a registered trademark of PCI SIG (http://www.pcisig.org)



                      Pericom Semiconductor Corporation
                    Consolidated  Statements of Operations
                    (In thousands, except per share data)
                                 (unaudited)

                                    Three Months Ended       Nine Months Ended
                                 Mar 29   Dec 29   Mar 31    Mar 29     Mar 31
                                  2008     2007     2007      2008       2007

    Net revenues                 $41,177  $40,726  $30,182  $120,371  $91,850

    Cost of revenues              25,709   25,694   19,960    75,870   60,530

      Gross profit                15,468   15,032   10,222    44,501   31,320

    Operating expenses:

      Research and development     4,503    4,278    4,048    12,863   12,030

      Selling, general and
       administrative              5,705    5,786    5,342    17,330   16,056

           Total                  10,208   10,064    9,390    30,193   28,086

    Income from operations         5,260    4,968      832    14,308    3,234

    Interest and other income        903    1,622    2,496     3,895    4,927

    Other than temporary decline
     in value of investment          (52)       0       (5)      (52)      (6)

    Income before income taxes     6,111    6,590    3,323    18,151    8,155

    Income tax expense             2,054    2,344      788     6,089    2,099

    Minority interest in
     (income) loss in
     consolidated subsidiary         (47)     (19)      (7)      (63)     (37)

    Equity in income (loss) of
     investees                       131      169       86       421      476

    Net income                    $4,141   $4,396   $2,614   $12,420   $6,495

    Basic income per share         $0.16    $0.17    $0.10     $0.48    $0.25

    Diluted income per share       $0.16    $0.16    $0.10     $0.47    $0.24

    Shares used in computing
     basic income
     per share                    25,835   25,888   26,109    25,823   26,118

    Shares used in computing
     diluted income
     per share                    26,633   26,959   26,702    26,657   26,725



                      Pericom Semiconductor Corporation
                    Condensed Consolidated Balance Sheets
                                (In thousands)

                                                   As of              As of
                                                Mar 29,2008       Jun 30, 2007
                                                (unaudited)
                      Assets

    Current Assets:

          Cash & cash equivalents                  $17,334            $29,173
          Short-term investments                    92,741             42,268
          Accounts receivable                       28,533             19,621
          Inventories                               18,988             14,787
          Prepaid expenses and other
           current assets                              967                669
          Deferred income taxes                      3,967              4,280
                Total current assets               162,530            110,798

    Property and equipment, net                     28,941             23,940
    Investments in unconsolidated affiliates        10,192              9,619
    Deferred income taxes-non current                5,434              5,572
    Long-term investment in marketable
     securities                                      8,020             59,574
    Goodwill                                         1,325              1,348
    Intangible assets                                1,186              1,311
    Other assets                                     2,820              2,073
                Total assets                      $220,448           $214,235


                Liabilities and Shareholders' Equity

    Current liabilities:

          Accounts payable                         $12,160            $12,553
          Accrued liabilities                        9,789              8,718
          Current portion of long-term debt              0                392
                Total current liabilities           21,949             21,663

    Long-term debt                                       0                388
    Deferred tax liabilities                           797                797
    Other long-term liabilities                          0                  3
    Minority interest in consolidated
     subsidiaries                                    1,064                906
                Total liabilities                   23,810             23,757

    Shareholders' equity:
          Common stock                             125,238            135,887
          Retained earnings and other               71,400             54,591
                Total shareholders' equity         196,638            190,478

                Total liabilities and
                 shareholders' equity             $220,448           $214,235

Web site: http://www.pericom.com/
http://www.vesa.org/
http://www.pcisig.org/