We use the non-GAAP financial measures that exclude these items to make strategic decisions, forecast future results and evaluate the Company's current operating performance. We believe that the presentation of non-GAAP financial measures that exclude these items is useful to investors because we do not consider these charges either part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that are used to evaluate the Company's operating performance.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Safe Harbor Statement
This press release contains forward-looking statements as defined under The Securities Litigation Reform Act of 1995. Forward-looking statements in this release include statements by our CEO concerning future business and revenue growth and margin improvement and the statements under the captions "Fiscal Q3 2015 Outlook", which regard the anticipated revenues, gross margin, operating expenses, other income, and effective tax rate in the third fiscal quarter of 2015. 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 28, 2014, the quarterly report on Form 10-Q for the quarter ended September 27, 2014, and in particular, the risk factors section contained in those reports.
Pericom Semiconductor Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
----------------------------- -------------------
December September December December December
27, 2014 27, 2014 28, 2013 27, 2014 28, 2013
--------- --------- --------- --------- ---------
Net revenues $ 33,255 $ 33,259 $ 32,040 $ 66,514 $ 64,648
Cost of revenues 18,427 19,179 19,820 37,606 39,620
--------- --------- --------- --------- ---------
Gross profit 14,828 14,080 12,220 28,908 25,028
Operating expenses:
Research and
development 4,390 4,588 5,274 8,978 10,319
Selling, general and
administrative 7,682 7,300 7,126 14,982 14,813
--------- --------- --------- --------- ---------
Total operating
expenses 12,072 11,888 12,400 23,960 25,132
--------- --------- --------- --------- ---------
Income (loss) from
operations 2,756 2,192 (180) 4,948 (104)
Interest and other
income, net 745 691 681 1,436 1,363
Foreign exchange gain 1,190 583 366 1,773 170
--------- --------- --------- --------- ---------
Income before income
taxes 4,691 3,466 867 8,157 1,429
Income tax expense
(benefit) 1,113 1,010 (331) 2,123 (100)
--------- --------- --------- --------- ---------
Net income from
consolidated companies 3,578 2,456 1,198 6,034 1,529
Equity in net income of
unconsolidated
affiliates 74 39 27 113 70
--------- --------- --------- --------- ---------
Net income $ 3,652 $ 2,495 $ 1,225 $ 6,147 $ 1,599
========= ========= ========= ========= =========
Basic income per share $ 0.17 $ 0.11 $ 0.05 $ 0.28 $ 0.07
========= ========= ========= ========= =========
Diluted income per share $ 0.16 $ 0.11 $ 0.05 $ 0.27 $ 0.07
========= ========= ========= ========= =========
Shares used in computing
basic income per share 22,110 21,936 22,800 22,023 22,797
========= ========= ========= ========= =========
Shares used in computing
diluted income per
share 22,624 22,262 23,019 22,443 22,985
========= ========= ========= ========= =========
Pericom Semiconductor Corporation
Supplemental Information
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
----------------------------- -------------------
December September December December December
27, 2014 27, 2014 28, 2013 27, 2014 28, 2013
--------- --------- --------- --------- ---------
Share-based compensation
Cost of revenues $ 56 $ 33 $ 50 $ 89 $ 86
Research and development 299 218 313 517 610
Selling, general and
administrative 595 458 388 1,053 784
--------- --------- --------- --------- ---------
Share-based
compensation expense $ 950 $ 709 $ 751 $ 1,659 $ 1,480
Amortization of intangible
assets
Cost of revenues $ 473 $ 478 $ 481 $ 951 $ 969
Research and development - - 17 - 67
Selling, general and
administrative 248 247 249 495 496
--------- --------- --------- --------- ---------
Amortization of
intangible assets $ 721 $ 725 $ 747 $ 1,446 $ 1,532
Pericom Semiconductor Corporation
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
------------------------------- --------------------
December September December December December
27, 2014 27, 2014 28, 2013 27, 2014 28, 2013
--------- --------- --------- --------- ---------
GAAP net income $ 3,652 $ 2,495 $ 1,225 $ 6,147 $ 1,599
Reconciling items:
Share-based
compensation
expense 950 709 751 1,659 1,480
Amortization of
intangible assets 721 725 747 1,446 1,532
Fair value
adjustment to
depreciation
expense on acquired
fixed assets 51 51 51 102 102
Restructuring charge - 112 95 112 95
Write-off of assets 109 - 210 109 210
Release of tax
reserves - - (741) - (741)
Tax on intercompany
transaction - - - - 15
Lease restructuring
and moving costs - - - - 522
Tax effect of
adjustments (461) (377) (452) (838) (995)
--------- --------- --------- --------- ---------
Total reconciling
items 1,370 1,220 661 2,590 2,220
--------- --------- --------- --------- ---------
Non-GAAP net income $ 5,022 $ 3,715 $ 1,886 $ 8,737 $ 3,819
========= ========= ========= ========= =========
Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
(unaudited)
Diluted net income per
share:
GAAP diluted income
per share $ 0.16 $ 0.11 $ 0.05 $ 0.27 $ 0.07
Adjustments:
Share-based
compensation
expense 0.04 0.03 0.03 0.07 0.06
Amortization of
intangible assets 0.03 0.03 0.03 0.06 0.06
Fair value
adjustment to
depreciation
expense on acquired
fixed assets - - - - -
Restructuring charge - 0.01 0.01 0.01 0.01
Write-off of assets 0.01 - 0.01 0.01 0.01
Release of tax
reserves - - (0.03) - (0.03)
Tax on intercompany
transaction - - - - -
Lease restructuring
and moving costs - - - - 0.02
Tax effect of
adjustments (0.02) (0.02) (0.02) (0.04) (0.04)
--------- --------- --------- --------- ---------
Total adjustments 0.06 0.05 0.03 0.11 0.09
--------- --------- --------- --------- ---------
Non-GAAP diluted
income per share $ 0.22 $ 0.16 $ 0.08 $ 0.38 $ 0.16
========= ========= ========= ========= =========
Shares used in diluted
net income per share
calculation:
GAAP 22,624 22,262 23,019 22,443 22,985
Exclude the
benefit of share-
based
compensation
expense (1) 412 413 426 412 408
--------- --------- --------- --------- ---------
Non-GAAP 23,036 22,675 23,445 22,855 23,393
========= ========= ========= ========= =========
(1) For purposes of calculating non-GAAP diluted net income per share, the
GAAP diluted weighted average shares outstanding is adjusted to
exclude the benefits of unamortized stock compensation costs that are
treated as proceeds assumed to be used to repurchase shares under the
GAAP treasury stock method.
Pericom Semiconductor Corporation
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
------------------------------- --------------------
December September December December December
27, 2014 27, 2014 28, 2013 27, 2014 28, 2013
--------- --------- --------- --------- ---------
GAAP gross profit $ 14,828 $ 14,080 $ 12,220 $ 28,908 $ 25,028
- % of revenues 44.6% 42.3% 38.1% 43.5% 38.7%
Reconciling items:
Share-based
compensation 56 33 50 89 86
Amortization of
intangible assets 473 478 481 951 969
Fair value
adjustment to
depreciation
expense on
acquired fixed
assets 10 10 10 20 20
Restructuring
charge - 84 - 84 -
--------- --------- --------- --------- ---------
Total reconciling
items 539 605 541 1,144 1,075
--------- --------- --------- --------- ---------
Non-GAAP gross profit $ 15,367 $ 14,685 $ 12,761 $ 30,052 $ 26,103
========= ========= ========= ========= =========
- % of revenues 46.2% 44.2% 39.8% 45.2% 40.4%
Reconciliation of GAAP R&D Expenses to Non-GAAP R&D Expenses
(unaudited)
GAAP research and
development expenses $ 4,390 $ 4,588 $ 5,274 $ 8,978 $ 10,319
- % of revenues 13.2% 13.8% 16.5% 13.5% 16.0%
Reconciling items:
Share-based
compensation (299) (218) (313) (517) (610)
Amortization of
intangible assets - - (17) - (67)
Fair value
adjustment to
depreciation
expense on
acquired fixed
assets (10) (10) (10) (20) (20)
Restructuring
charge - (28) (78) (28) (78)
Write-off of assets - - (210) - (210)
--------- --------- --------- --------- ---------
Total reconciling
items (309) (256) (628) (565) (985)
--------- --------- --------- --------- ---------
Non-GAAP research and
development expenses $ 4,081 $ 4,332 $ 4,646 $ 8,413 $ 9,334
========= ========= ========= ========= =========
- % of revenues 12.3% 13.0% 14.5% 12.6% 14.4%
Reconciliation of GAAP SG&A Expenses to Non-GAAP SG&A Expenses
(unaudited)
GAAP selling, general
and administrative
expenses $ 7,682 $ 7,300 $ 7,126 $ 14,982 $ 14,813
- % of revenues 23.1% 21.9% 22.2% 22.5% 22.9%
Reconciling items:
Share-based
compensation (595) (458) (388) (1,053) (784)
Amortization of
intangible assets (248) (247) (249) (495) (496)
Fair value
adjustment to
depreciation
expense on
acquired fixed
assets (31) (31) (31) (62) (62)
Restructuring
charge - - (17) - (17)
Lease restructuring
and moving costs - - - - (522)
--------- --------- --------- --------- ---------
Total reconciling
items (874) (736) (685) (1,610) (1,881)
--------- --------- --------- --------- ---------
Non-GAAP selling,
general and
administrative
expenses $ 6,808 $ 6,564 $ 6,441 $ 13,372 $ 12,932
========= ========= ========= ========= =========
- % of revenues 20.5% 19.7% 20.1% 20.1% 20.0%
Pericom Semiconductor Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
As of As of
December 27, 2014 June 28, 2014
----------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 21,708 $ 33,020
Short-term investments 107,341 86,104
Accounts receivable - trade 25,015 24,036
Inventories 12,495 12,288
Prepaid expenses and other current
assets 4,979 5,336
Deferred income taxes 872 726
----------------- -----------------
Total current assets 172,410 161,510
Property, plant and equipment - net 56,769 58,537
Investments in unconsolidated affiliates 2,388 2,445
Deferred income taxes non-current 2,656 2,460
Intangible assets 5,490 7,009
Other assets 8,080 8,118
----------------- -----------------
Total assets $ 247,793 $ 240,079
================= =================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 9,319 $ 8,927
Accrued liabilities 10,855 9,934
----------------- -----------------
Total current liabilities 20,174 18,861
Industrial development subsidy 5,842 6,354
Deferred tax liabilities 5,737 5,460
Other long-term liabilities 1,958 1,912
----------------- -----------------
Total liabilities 33,711 32,587
Shareholders' equity:
Common stock and paid in capital 116,635 113,118
Retained earnings and other
comprehensive income 97,447 94,374
----------------- -----------------
Total shareholders' equity 214,082 207,492
----------------- -----------------
Total liabilities and shareholders'
equity $ 247,793 $ 240,079
================= =================
