EX-99.1 2 ps3362ex991.txt Exhibit 99.1 PERICOM SEMICONDUCTOR REPORTS FISCAL FOURTH QUARTER AND FULL YEAR RESULTS AND RESTATEMENT OF INTERIM FINANCIAL RESULTS FOR FISCAL 2005 SAN JOSE, Calif., Aug. 9 /PRNewswire-FirstCall/ -- Pericom Semiconductor Corporation (Nasdaq: PSEM) today announced results for its fiscal fourth quarter and full year ended June 30, 2005. Results for the fourth quarter are based upon 14 weeks versus a normal 13 week quarter, and the full fiscal year includes 53 weeks rather than the normal 52 weeks. Further, results include the acquired operations of SaRonix LLC since October 1, 2003. As announced on August 2, 2005, the Company is also issuing restated financial results for the first three quarters of fiscal 2005. The restatement is the result of certain new product research and development costs (initial wafer production costs) that were incorrectly capitalized into inventory. As a result of the restatement, engineering expenses increased in each quarter of fiscal 2005 from amounts previously reported and inventory and cost of sales decreased from amounts previously reported. Future gross margin will be benefited to the extent previously expensed new product costs are subsequently sold. Included with this release are comparisons of the previously reported results and the restated GAAP and pro forma results for each restated quarter. Net revenues for the fourth quarter were $21,121,000, up 8.7% from $19,433,000 in the preceding quarter and are up 5.5% from $20,029,000 in the comparable period last year. GAAP net income for the quarter was $1,173,000, or $0.04 per share (diluted), compared to a GAAP net income (restated) of $100,000, or $0.00 per share (diluted), in the preceding quarter and versus a GAAP net income of $663,000, or $0.02 per share (diluted), in the comparable period a year ago. Net revenues for the year ended June 30, 2005 were $79,557,000, up 19.8% from $66,417,000 a year ago. GAAP net income for the year ended June 30, 2005 was $927,000, or $0.03 per share (diluted), as compared with a GAAP net loss of $2,110,000, or ($0.08) per share, in the prior year comparable period. Our GAAP financial results include non-recurring charges or events which are explained in the reconciliation of pro forma and GAAP financial results that appears in the financial statements portion of this release. Pro forma results are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. Pericom management believes pro forma financial information is useful to investors because it illuminates underlying operational trends by excluding significant non-recurring or otherwise unusual transactions. Our criteria for determining pro forma results may differ from other companies' methods, and should not be regarded as a replacement for corresponding GAAP measures. Pro forma net income in the quarter ended June 30, 2005 was $1,173,000, or $0.04 per share (diluted), compared with pro forma net income (restated) of $134,000, or $0.00 per share (diluted), in the preceding quarter and pro forma net income of $348,000, or $0.01 per share (diluted), in the comparable period a year ago. Pro forma net income for the year ended June 30, 2005 was $1, 465,000, or $0.05 per share (diluted), as compared with a pro forma net loss of $923,000, or ($0.04) per share, for the prior fiscal year. Alex Hui, President and Chief Executive Officer of Pericom said, "In our fourth quarter, we delivered revenue and margins above the midpoint of our guidance. We are very pleased that we've now attained five consecutive quarters of pro forma profitability and increased our margins year over year by 440 basis points, or 350 basis points, excluding the effect of the restatement. Our integrated circuit (IC) focus products of Analog Switches, Clocks, and Connect (PCI Bridges/Switches and LVDS) rose to approximately 58% of IC revenue, evidence of the acceptance of our new product offerings and our penetration into new market segments. We will continue to execute the strategy that has brought us to this point: building upon the success of our focus IC products; offering increased Application Specific Interface Solutions to our customers served markets; and leveraging the synergies of our IC and frequency control product lines to drive continued improvement to operating results across the company." Mike Craighead, Chief Financial Officer of Pericom commented, "With respect to the restatements, our fourth quarter gross margin of 38.7% was 150 basis points higher than it would have been without the change in accounting process. This improvement in margin was offset by an increase in engineering expenses of $372,000 as a result of the accounting process change. Regarding the restatements, we would like to assure our customers, investors, suppliers and employees that we are making appropriate changes to accounting processes and internal controls to address this issue going forward." NEW PRODUCTS The Company launched 15 new Clock, Analog Switch and Interface products supporting Computing, Telecommunications, Networking, Mobile Terminals and Digital Video applications in the June quarter. -- PI6C4511, PI6C4512: 200MHz low jitter clock multipliers for consumer applications such as RFID reader and storage applications like RAID controller and network switching applications. -- PI74SSTUA32864: a DDR II 667MHz register for memory module applications in servers. -- PI6C48432: a Storage area network clock generator that combines 3 high frequency LVPECL clock outputs and 4 LVCMOS clock outputs. It provides cost effective, very low rms jitter clock source for critical storage area network applications. -- PI5A4213, PI5A4684, PIA4763, PIA4764, and PIA4765: Analog Switch products based on the Chip Scale Packages for mobile phone application. -- PI2EQX4401 and PI2EQX44022: 2 and 4-Differential Channels PCI- Express Re-drivers with 2.5 Gbps serial data rate for Notebooks, Servers, Test Equipment, Graphics, Networking and Telecom applications. -- PI2EQX4410: a 4-Differential Channel, 2.5 Gbps serial PCI-Express Re- Timer for Servers, Networking, Storage and Telecom system applications. -- PI4ULS3V16(M) and PI4ULSV08(M): 16-bit and 8-bit voltage translators for Mobile Terminals, Servers, Test Equipment, Data-com(Switches & Routers), and High-end telecom line cards applications. -- PI74LVC4245M: an 8-bit voltage translator introduced in a very small package suitable for mobile applications, SEPTEMBER 2005 QUARTER OUTLOOK The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially. -- We continue to be in a high turns environment and revenue visibility therefore remains limited. Depending upon the strength of turns orders, and normalizing the prior quarter to 13 weeks, we expect revenues to be in the range of down 1% to up 3% from the prior quarter. Gross margin is expected to be in the 37.5% range, plus or minus 100 basis points. Margins are influenced by the product mix of turns business and sales, if any, of previously written down inventory. -- Operating expenses are expected to decrease 2-3% from the prior quarter primarily as a result of the extra week in the prior quarter. -- Other income is expected to be approximately $0.9 million. -- We are now required to report separately our equity in the income or loss of unconsolidated subsidiaries. This was previously included with Other Income. This is currently estimated to be immaterial. -- The above guidance does not include the impact of FAS123(R), Share- Based Payment, which the Company is required to implement in the first quarter of fiscal 2006. Pericom will adhere to Regulation Fair Disclosure. The Company will provide its investors and analysts with guidance in the areas of total revenues, gross margin, operating expenses and other income each quarter in our earnings releases and in our conference calls. We will not provide further guidance or updates during the quarter unless we do so via a press release. NOTE: Our fourth quarter results telephone conference call will begin at 1:30 p.m. pacific time today. The conference call may be accessed by calling 800-949-8963 and referencing conference number 8485444. A replay of the fourth quarter results conference call will be available for 7 days commencing from 4:30 PM pacific time today. The replay telephone number is 800-642-1687 (domestic) or 706-645-9291 (international) and the access code is 8485444. Please note also that the conference call will be simultaneously Webcast live at: www.pericom.com/investors followed by on-demand Webcast beginning at 4:30 p.m. pacific time today through September 8, 2005 (Webcast requires Windows MediaPlayer). Pericom Semiconductor Corporation offers customers worldwide the industry's most complete silicon and quartz based solutions for the Computing, Communications, and Industrial 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, California, 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 'September 2005 Quarter Outlook' and statements regarding the Company's ongoing shift to higher margin focus products, our expansion of Application Specific Interface Solutions, our future improvements in operating results, the leveraging of the synergies of our IC and frequency control product lines, our future gross margin, and our changes to our accounting processes and internal controls. 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, difficulties in integrating SaRonix with our business, 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/A for the year ended June 30, 2004 and, in particular, the risk factors sections of that filing. Pericom Semiconductor Corporation Consolidated Statements of Operations - GAAP (In thousands, except per share data) (unaudited)
Three Months Ended Twelve Months Ended ------------------------------------ ----------------------- Jun 30, Mar 31 Jun 30 Jun 30 Jun 30 2005 2005 2004 2005 2004 ---------- ---------- ---------- ---------- ---------- (Restated) Net revenues $ 21,121 $ 19,433 $ 20,029 $ 79,557 $ 66,417 Cost of revenues 12,940 11,982 12,789 50,764 45,182 Gross profit 8,181 7,451 7,240 28,793 21,235 Operating expenses: Research and development 3,992 4,022 3,513 15,767 14,161 Selling, general and administrative 4,150 3,849 3,896 15,538 14,979 Restructuring Charge 51 243 0 294 784 Total 8,193 8,114 7,409 31,599 29,924 Income (loss) from operations (12) (663) (169) (2,806) (8,689) Other income, net 1,042 913 697 3,761 3,700 Recovery (write down) of nonmarketable investment (5) (4) (15) (105) (14) Income (loss) before income taxes 1,025 246 513 850 (5,003) Income tax (benefit) 120 95 78 27 (2,380) Minority income in consolidated subsidiary 26 22 0 58 0 Equity of income (loss) in unconsolidated subsidiary 242 (73) 228 46 513 Net income (loss) $ 1,173 $ 100 $ 663 $ 927 $ (2,110) Basic earnings (loss) per share $ 0.04 $ 0.00 $ 0.03 $ 0.04 $ (0.08) Diluted earnings (loss) per share $ 0.04 $ 0.00 $ 0.02 $ 0.03 $ (0.08) Shares used in computing basic earnings (loss) per share 26,371 26,531 26,388 26,476 26,075 Shares used in computing diluted earnings (loss) per share 27,076 27,112 27,289 27,187 26,075
Note: The restatement is the result of certain new product research and development costs (initial wafer production costs) that were incorrectly capitalized into inventory. As a result of the restatement, engineering expenses increased in each quarter of fiscal 2005. Pericom Semiconductor Corporation Consolidated Statements of Operations - Pro Forma (In thousands, except per share data) (unaudited)
Three Months Ended Twelve Months Ended -------------------------------------- ------------------------ Jun 30, Mar 31 Jun 30 Jun 30 Jun 30 2005 2005 2004 2005 2004 ---------- ---------- ---------- ---------- ---------- (Restated) Net revenues $ 21,121 $ 19,433 $ 20,029 $ 79,557 $ 66,417 Cost of revenues 12,940 11,982 12,789 49,720 44,487 Gross profit 8,181 7,451 7,240 29,837 21,930 Operating expenses: Research and development 3,992 4,022 3,513 15,767 13,753 Selling, general and administrative 4,210 3,849 3,896 16,011 14,339 Total 8,202 7,871 7,409 31,778 28,092 Income (loss) from operations (21) (420) (169) (1,941) (6,162) Other income, net 1,042 913 697 3,761 3,700 Recovery (write down) of nonmarketable investment (5) (4) (15) (105) (14) Income (loss) before income taxes 1,016 489 513 1,715 (2,476) Income tax (benefit) 111 304 393 354 (1,040) Minority income in consolidated subsidiary 26 22 0 58 0 Equity of income (loss) in unconsolidated subsidiary 242 (73) 228 46 513 Net income (loss) $ 1,173 $ 134 $ 348 $ 1,465 $ (923) Basic earnings (loss) per share $ 0.04 $ 0.01 $ 0.01 $ 0.06 $ (0.04) Diluted earnings (loss) per share $ 0.04 $ 0.00 $ 0.01 $ 0.05 $ (0.04) Shares used in computing basic earnings (loss) per share 26,371 26,531 26,388 26,476 26,075 Shares used in computing diluted earnings (loss) per share 27,076 27,112 27,289 27,187 26,075
Note: The restatement is the result of certain new product research and development costs (initial wafer production costs) that were incorrectly capitalized into inventory. As a result of the restatement, engineering expenses increased in each quarter of fiscal 2005 from amounts previously reported and inventory and cost of sales decreased from amounts previously reported. Pericom Semiconductor Corporation Reconciliation of Net Income (Loss) In Accordance With GAAP to Pro Forma Net Income (Loss) (In thousands) (unaudited)
Three Months Ended Twelve Months Ended -------------------------------------------- ---------------------------- Jun 30, Mar 31, Jun 30, Jun 30, Jun 30, 2005 2005 2004 2005 2004 ------------ ------------ ------------ ------------ ------------ Net income (loss) in accordance with GAAP $ 1,173 $ 100 $ 663 927 $ (2,110) Workforce reduction (Note 1) 51 243 294 231 Restructuring charge (Note 2) 784 End of life program one time inventory reserve change (note 3) 1,044 SaRonix inventory fair value adjustment (Note 4) 573 Write off furniture & fixtures (Note 5) 45 Moving cost (Note 6) 214 Write off of in-process R&D (Note 7) 360 Amortization of customer backlog (Note 8) 320 Gain on sale of Ireland building (Note 9) (60) (473) Income tax (benefit) (Note 10) 9 (209) (315) (327) (1,340) Net income (loss) on a Pro Forma basis $ 1,173 $ 134 $ 348 $ 1,465 $ (923)
Notes to pro forma adjustments: Note 1: In February & June 2005 & November 2003, we reduced our total workforce by approximately 10% and 12% respectively. Note 2: In December 2003, we recorded a non-recurring charge related to an unused leased facility resulting from our move to a new corporate headquarters. Note 3: In December 2004, we recorded a non-recurring charge to inventory reserve related to a product end of life program. Note 4: In the three months ended December 2003, we sold inventory acquired from SaRonix that was written up to fair value in connection with the acquisition. Note 5: In February 2004 we wrote off the net book value of the furniture and fixtures no longer in use due to the move. (refer to note 6). Note 6: In the three months ended March 2004, we recorded a non-recurring moving charge related to our move to a new corporate headquarters. Note 7: In the three months ended December 2003, we wrote off the cost of acquired in-process R&D from the Saronix acquisition. Note 8: In the three months ended December 2003, we completely amortized the cost of acquired customer backlog from the Saronix acquisition for which we did not incur related selling expense. Note 9: In November 2004, we sold a building in Ireland that resulted in a gain with final settlement in June 2005. Note 10: The tax (benefit) relating to the pro forma adjustments above. Pericom Semiconductor Corporation Consolidated Statements of Operations - GAAP (In thousands, except per share data) (unaudited)
Three Months Ended Three Months Ended Three Months Ended ---------------------------- ---------------------------- ---------------------------- Mar 31, Mar 31, Dec 31, Dec 31, Sep 30, Sep 30, 2005 2005 2004 2004 2004 2004 As As As Previously As Previously As Previously As Reported Restated Reported Restated Reported Restated ------------ ------------ ------------ ------------ ------------ ------------ Net revenues $ 19,433 $ 19,433 $ 19,217 $ 19,217 $ 19,786 $ 19,786 Cost of revenues 12,262 11,982 13,219 13,071 12,806 12,771 Gross profit 7,171 7,451 5,998 6,146 6,980 7,015 Operating expenses: Research and development 3,678 4,022 3,485 3,806 3,716 3,947 Selling, general and administrative 3,849 3,849 3,707 3,707 3,832 3,832 Restructuring charge 243 243 0 0 0 0 Total 7,770 8,114 7,192 7,513 7,548 7,779 Income (loss) from operations (599) (663) (1,194) (1,367) (568) (764) Other income, net 913 913 875 875 931 931 Recovery (write down) of nonmarketable investment (4) (4) (96) (96) 0 0 Income (loss) before income taxes 310 246 (415) (588) 363 167 Income tax (benefit) 125 95 (102) (203) 89 15 Minority income in consolidated subsidiary 22 22 10 10 0 0 Equity of income (loss) in unconsolidated subsidiary (73) (73) 0 0 (123) (123) Net income (loss) $ 134 $ 100 $ (303) $ (375) $ 151 $ 29 Basic earnings (loss) per share $ 0.01 $ 0.00 $ (0.01) $ (0.01) $ 0.01 $ 0.00 Diluted earnings (loss) per share $ 0.00 $ 0.00 $ (0.01) $ (0.01) $ 0.01 $ 0.00 Shares used in computing basic earnings (loss) per share 26,531 26,531 26,554 26,554 26,515 26,515 Shares used in computing diluted earnings (loss) per share 27,112 27,112 26,554 26,554 27,268 27,268 Note: The restatement is the result of certain new product research and development costs (initial wafer production costs) that were incorrectly capitalized into inventory. As a result of the restatement, engineering expenses increased in each quarter of fiscal 2005 from amounts previously reported and inventory and cost of sales decreased from amounts previously reported.
Pericom Semiconductor Corporation Consolidated Statements of Operations - Pro Forma (In thousands, except per share data) (unaudited)
Three Months Ended Three Months Ended Three Months Ended ---------------------------- ---------------------------- ---------------------------- Mar 31, Mar 31, Dec 31, Dec 31, Sep 30, Sep 30, 2005 2005 2004 2004 2004 2004 As As As Previously As Previously As Previously As Reported Restated Reported Restated Reported Restated ------------ ------------ ------------ ------------ ------------ ------------ Net revenues $ 19,433 $ 19,433 $ 19,217 $ 19,217 $ 19,786 $ 19,786 Cost of revenues 12,262 11,982 12,175 12,027 12,806 12,771 Gross profit 7,171 7,451 7,042 7,190 6,980 7,015 Operating expenses: Research and development 3,678 4,022 3,485 3,806 3,716 3,947 Selling, general and administrative 3,849 3,849 4,120 4,120 3,832 3,832 Total 7,527 7,871 7,605 7,926 7,548 7,779 Income (loss) from operations (356) (420) (563) (736) (568) (764) Other income, net 913 913 875 875 931 931 Recovery (write down) of nonmarketable investment (4) (4) (96) (96) 0 0 Income (loss) before income taxes 553 489 216 43 363 167 Income tax (benefit) 335 304 25 (76) 89 15 Minority income in consolidated subsidiary 22 22 10 10 0 0 Equity of income (loss) in unconsolidated subsidiary (73) (73) 0 0 (123) (123) Net income (loss) $ 167 $ 134 $ 201 $ 129 $ 151 $ 29 Basic earnings (loss) per share $ 0.01 $ 0.01 $ 0.01 $ 0.00 $ 0.01 $ 0.00 Diluted earnings (loss) per share $ 0.01 $ 0.00 $ 0.01 $ 0.00 $ 0.01 $ 0.00 Shares used in computing basic earnings (loss) per share 26,531 26,531 26,554 26,554 26,515 26,515 Shares used in computing diluted earnings (loss) per share 27,112 27,112 27,342 27,342 27,268 27,268
Note: The restatement is the result of certain new product research and development costs (initial wafer production costs) that were incorrectly capitalized into inventory. As a result of the restatement, engineering expenses increased in each quarter of fiscal 2005 from amounts previously reported and inventory and cost of sales decreased from amounts previously reported. Pericom Semiconductor Corporation Condensed Consolidated Balance Sheets (In thousands) As of As of Jun 30, 2005 Jun 30, 2004 ------------- ------------- (unaudited) Assets Current Assets: Cash & cash equivalents $ 20,902 $ 13,965 Short-term investments $ 122,385 $ 130,412 Accounts receivable 9,442 7,549 Inventories 13,428 15,980 Prepaid expenses and other current assets 409 664 Deferred income taxes 5,291 5,564 Total current assets 171,857 174,134 Property and equipment, net 5,927 6,442 Investment in and advances to Pericom Technology, Inc. 7,257 7,019 Deferred income taxes-non current 2,205 1,419 Other assets 6,749 8,438 Total assets $ 193,995 $ 197,452 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 6,899 $ 8,153 Accrued liabilities 5,470 5,972 Current portion of long-term debt 0 1,291 Total current liabilities 12,369 15,416 Other long term liabilities 207 139 Total liabilities 12,576 15,555 Minority interest in consolidated subsidiary 257 0 Total minority Interest 257 0 Shareholders' equity: Common stock 141,233 142,607 Retained earnings and other 39,929 39,290 Total shareholders' equity 181,162 181,897 Total liabilities and shareholders' equity $ 193,995 $ 197,452 SOURCE Pericom Semiconductor Corporation -0- 08/09/2005 /CONTACT: Mike Craighead, VP/Chief Financial Officer of Pericom Semiconductor Corporation, +1-408-435-0800, or +1-408-435-1100/ /Web site: http://www.pericom.com / (PSEM)