FIRST QUARTER HIGHLIGHTS
- Revenues increased 1.6% sequentially and 2% year-over-year to $33.3 million
- Achieved 42.3% gross margin (44.2% non-GAAP) and year-over-year increase of 306 bps
- Net income was $0.11 per diluted share as compared with $0.02 in Q1 last year
- Non-GAAP net income was $0.16 per diluted share as compared with $0.08 in Q1 last year
Pericom Semiconductor Corporation (
Net revenues for the first quarter were $33.3 million, an increase of 1.6% from the $32.7 million reported in the fourth quarter of fiscal 2014, and up 2.0% from the $32.6 million reported in the comparable period last year. The revenue increase from the prior quarter reflects strength from primarily the embedded, PC/notebook and server end-market segments.
GAAP gross margin was 42.3% in the first quarter, an increase from 41.4% last quarter and from 39.3% for the comparable period last year.
GAAP net income for the first quarter was $2.5 million, or $0.11 per diluted share, compared with net income of $0.9 million, or $0.04 per diluted share in the fourth quarter, and net income of $0.4 million, or $0.02 per diluted share in the comparable period last year. The current quarter benefited from foreign exchange gains of approximately $0.6 million.
To facilitate the complete understanding of comparable financial performance between periods, Pericom also presents performance results net of certain non-cash and one-time items as non-GAAP measures.
On a non-GAAP basis, gross margin was 44.2% in the first quarter, an increase from 43.0% last quarter and 40.9% in the comparable period last year.
On a non-GAAP basis, net income for the first quarter was $3.7 million, or $0.16 per diluted share, compared with non-GAAP net income of $2.8 million or $0.12 per diluted share in the fourth quarter, and non-GAAP net income of $1.9 million, or $0.08 per diluted share in the comparable period last year.
"We are pleased to deliver strong sequential earnings growth driven by a combination of higher revenues, higher gross margins and lower operating expenses. Our gross margins continue to benefit from a more favorable product and market segment mix," said Alex Hui, President and CEO of Pericom. "A few years ago, we embarked on a strategy to transform our business by increasing sales from those market segments offering higher gross margins and growth potential. Achieving double digit operating margins this quarter is a validation of that strategy. We will continue to focus on growing our customer base in networking, cloud computing and embedded applications with our serial connectivity and timing solutions."
New Products
In the first quarter of fiscal 2015, Pericom introduced a total of 23 new products in our Signal Integrity, Connectivity, Switching and Timing product areas. All of these products are targeted to our focus market segments, and were sampled to key customers during the quarter.
For Signal Integrity, we introduced 4 new products, a new family of low voltage USB3 5Gb redrivers for mobile platforms, and a 12Gb SAS3 redriver for high performance enterprise storage platforms.
We introduced 7 new products across our Connectivity product families which included new additions to the 'Mezzo' family of medium size port/lane count PCIe GEN2 packet switches aimed at enterprise, cloud computing, and embedded applications, and a family of Microprocessor Supervisory IC's for consumer applications.
We introduced 4 new products across our Switching product families, which included PCIe GEN3 (8Gb), DDR4 memory, and power management switches, targeting server, storage, and mobile platform applications.
We expanded our Timing solutions for next generation enterprise and cloud computing platforms with 8 new products, including very low jitter, high performance clock generators and buffers, and real time clocks for mobile applications.
Share Repurchase Update
On April 26, 2012, the Board authorized a repurchase program for up to $25 million of shares of our common stock, and on April 24, 2014, the Board authorized an additional $20 million of share repurchases. Pursuant to these authorizations, the Company repurchased 250,547 shares in the three months ended September 27, 2014 for an aggregate cost of $2.3 million at an average per share purchase price of $9.19. The remaining balance of potential share repurchases under the authorization is approximately $24.3 million. Shares may be repurchased from time to time in the open market or through private transactions, at the discretion of Pericom management. As of October 24, 2014, Pericom had approximately 21.8 million shares of common stock outstanding.
Fiscal Q2 2015 Outlook
The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.
- Revenues are expected to be in the range of $32.6 million to $34.6 million.
- GAAP gross margins are expected to be between 41.0% and 43.0%, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately 1.5%, non-GAAP gross margins are expected to be in the 42.5% to 44.5% range.
- GAAP operating expenses are expected to be between $11.9 million and $12.3 million, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total approximately $1.0 million, non-GAAP operating expenses are expected to be in the range of $10.9 million to $11.3 million.
- Other income is expected to be between $0.8 million and $1.0 million on both a GAAP and non-GAAP basis.
- The effective tax rate is expected to be between 30-34% on a GAAP basis and 27-29% on a non-GAAP basis.
Conference Call
The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time on October 28, 2014. To listen to the call, dial (877) 377-7103 and provide the operator with conference ID 25292130. 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 also be available via a live webcast on the investor relations section of the website at http://www.pericom.com. Access the website 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 website for approximately 90 days.
About Pericom
Pericom Semiconductor Corporation (
Non-GAAP Financial Information
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), this announcement of operating results contains non-GAAP financial measures that exclude the income statement effects of share-based compensation, amortization of intangible assets, fair value adjustments on acquired fixed assets, restructuring charge, lease restructuring and moving costs, write-off of government subsidy, tax provision on intercompany transactions, the corresponding tax effects and the effects of excluding share-based compensation upon the number of diluted shares used in calculating non-GAAP earnings per share.
We have excluded share-based compensation expense in calculating these non-GAAP financial measures. These expenses are non-cash in nature and rely on valuations of the future market price of our common stock that is difficult to predict and is affected by market factors that are largely not within the control of management. We have excluded amortization of intangible assets, amortization of fair value adjustments on acquired fixed assets, restructuring charge, lease restructuring and moving costs, write-off of government subsidy, tax provision on intercompany transactions and the corresponding tax effects because we do not consider them to be related to our core operating performance. We also use non-GAAP data in calculating certain metrics such as non-GAAP cost of goods sold in computing inventory days of supply.
