EX-99.1 2 v072694_ex99.txt Pericom Semiconductor Reports Q3 2007 Financial Results SAN JOSE, Calif., April 26 /PRNewswire-FirstCall/ -- Pericom Semiconductor Corporation (Nasdaq: PSEM), a worldwide preferred supplier of PCI Express technology used for switching, timing, connecting and signal integrity, today announced results for its third quarter of fiscal 2007, ended March 31, 2007. Net revenues for the third quarter were $30.2 million, down $600,000 from the $30.8 million reported in the second quarter and up 8.4 percent from the $27.8 million reported in the comparable period last year. Gross margin was 33.9 percent, down from 34.6 percent last quarter, and 34.8 percent in the comparable period last year. Net revenues and gross margin in the third quarter were negatively affected by an inventory return reserve relating to a distributor that terminated during the quarter. The reserve reduced net revenues by $719,000 and gross margin by 1.2 percent. Net income in the quarter was a strong $2.6 million, or $0.10 per diluted share, compared with net income of $2.3 million, or $0.08 per diluted share in the second quarter and net income of $1.8 million, or $0.07 per diluted share, in the same period a year ago. Net income for the third quarter grew despite FAS 123(R) expenses of $443,000. Net income for the third quarter benefited by $1.0 million due to the sale of 50 percent of one of the company's investments in a privately-held semiconductor company. Net revenues for the nine-month period ending March 31, 2007 were $91.8 million, up 19.9 percent from the $76.6 million reported in the prior year comparable period. Net income for the nine-month period ending March 31, 2007 was $6.5 million, or $0.24 per diluted share, compared with net income of $3.9 million, or $0.14 per diluted share, in the same period a year ago. "We are very pleased to have reported another sequential increase in net profit this quarter," said Alex Hui, president and chief executive officer. "This is the highest net income we have seen in almost six years." "At the recent Intel Developer Forum, we introduced our GreenPacket(TM) family of PCI Express packet switches, which are designed for power, size and value-sensitive applications. We are already engaged with several high volume customers and expect to see adoption of this new family in the quarters to come," he said. Q3 NEW PRODUCTS With the release of three new Generation 2 phase jitter compliant HCSL differential clock buffers and a new clock synthesizer, Pericom further expanded its PCI-Express offerings in addressing the critical clock distribution needs of servers, high-end desktops and mobile platforms. The company began sampling new, low-power small PCI-Express packet switch family to top tier OEM customers. The GreenPacket(TM) switch product family is designed for power, size and value sensitive applications, such as volume motherboard/workstation, docking stations, networking control planes, video, graphics, embedded applications and mobile applications. Pericom also sampled two newly developed small form factor analog switch products. Target applications include cell phones, MP3/MP4 players and PDAs. Fiscal Q4 2007 OUTLOOK The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially. * The company continues to be in a high turns environment and therefore revenue visibility remains limited. Depending upon the strength of turns orders, revenues in the fourth fiscal quarter are expected to be in the range of $31.0 million to $32.0 million. * Gross margins are expected to be in the 35 to 36 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 $9.7 to $9.9 million. * Other income is expected to be approximately $1.2 million, consisting primarily of interest income. 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 (210) 234-0007. The passcode is Pericom. A taped replay of the conference call will be made available for one week. To listen to the replay, dial (210) 369-1863. 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/investor. 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 12 months. About Pericom Pericom Semiconductor Corporation (NASDAQ: PSEM) offers customers worldwide the industry's most complete silicon and quartz-based solutions for the Computing, Communications and Consumer market segments. Our broad portfolio of leading-edge analog, digital, and mixed-signal integrated circuits and SaRonix frequency control products are essential in the timing, transferring, routing, and translating of high-speed signals as required by today's ever-increasing speed and bandwidth demanding applications. Company headquarters are in San Jose, Calif., with design centers and sales offices located 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 2007 Outlook' and statements regarding the future adoption of our GreenPacket(TM) family of PCI Express packet switches. 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 July 1, 2006, our quarterly reports on Form 10-Q for the quarters ended September 30, 2006 and December 30, 2006 and, in particular, the risk factors sections of those filings. Pericom Semiconductor Corporation Consolidated Statements of Operations - GAAP (In thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended Mar 31 Dec 30, Apr 1 Mar 31 Apr 1 2007 2006 2006 2007 2006 Net revenues $30,182 $30,842 $27,847 $91,850 $76,590 Cost of revenues 19,960 20,176 18,157 60,530 49,605 Gross profit 10,222 10,666 9,690 31,320 26,985 Operating expenses: Research and development 4,048 4,040 4,170 12,030 12,040 Selling, general and administrative 5,342 4,919 4,394 16,056 13,569 Restructuring charge 0 0 0 0 55 Total 9,390 8,959 8,564 28,086 25,664 Income from operations 832 1,707 1,126 3,234 1,321 Interest and other income 2,496 1,151 888 4,927 2,698 Other than temporary decline in value of investment (5) 0 (31) (6) (64) Income before income taxes 3,323 2,858 1,983 8,155 3,955 Income tax expense 788 691 641 2,099 1,245 Minority interest in income (loss) in consolidated subsidiary (7) (21) 32 (37) 93 Equity in income (loss) of investees 86 110 464 476 1,072 Net income $2,614 $2,256 $1,838 $6,495 $3,875 Basic income per share $0.10 $0.09 $0.07 $0.25 $0.15 Diluted income per share $0.10 $0.08 $0.07 $0.24 $0.14 Shares used in computing basic income per share 26,109 26,113 26,207 26,118 26,271 Shares used in computing diluted income per share 26,702 26,783 26,984 26,725 27,033 Pericom Semiconductor Corporation Condensed Consolidated Balance Sheets (In thousands) As of As of Mar 31,2007 Jul 1, 2006 (unaudited) (1) Assets Current Assets: Cash & cash equivalents $8,544 $12,577 Restricted cash 302 950 Short-term investments 88,989 52,761 Accounts receivable 20,604 23,306 Inventories 14,047 16,742 Prepaid expenses and other current assets 700 508 Deferred income taxes 3,672 4,709 Total current assets 136,858 111,553 Property and equipment, net 23,294 24,376 Investment in unconsolidated affiliates 9,656 9,056 Deferred income taxes-non current 4,922 5,043 Long-term investment in marketable securities 31,788 56,297 Goodwill 1,348 1,348 Intangible assets 2,838 2,976 Other assets 2,077 3,037 Total assets $212,781 $213,686 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $11,571 $10,435 Accrued liabilities 7,094 7,243 Short-term and current portion of long-term debt 694 5,756 Total current liabilities 19,359 23,434 Long-term debt 1,323 3,482 Deferred tax liabilities 1,288 1,288 Other long-term liabilities 3 402 Minority interest in consolidated subsidiaries 1,006 969 Total liabilities 22,979 29,575 Shareholders' equity: Common stock and paid in capital 136,955 138,483 Retained earnings and other comprehensive loss 52,847 45,628 Total shareholders' equity 189,802 184,111 Total liabilities and shareholders' equity $212,781 $213,686 (1) The information in this column was derived from the Company's audited consolidated financial statements for the year ended July 1, 2006.