UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported)
April
28, 2011
PMC-SIERRA,
INC.
(Exact
name of Registrant as specified in its charter)
|
Delaware |
0-19084 |
94-2925073 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS
Employer Identification |
1380 Bordeaux Drive
Sunnyvale, CA 94089
(Address
of Principal Executive Offices)(Zip Code)
(408)
239-8000
(Registrant’s
telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant under any
of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM 2.02. Results of Operations and Financial Condition
On April 28, 2011, PMC-Sierra, Inc. (“the Registrant”) issued a press release reporting the financial results for its fiscal first quarter ended March 27, 2011. The press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this Form 8-K and the Exhibit, attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
As a supplement to the Registrant's condensed consolidated financial statements presented on a generally accepted accounting principles (“GAAP”) basis, the Registrant provides additional non-GAAP measures for cost of revenues, gross profit, gross profit percentage, research and development expense, selling, general and administrative expense, amortization of purchased intangible assets, restructuring costs and other charges, other income (expense), provision for income taxes, operating expenses, operating income, operating margin percentage, net income (loss), and basic and diluted net income (loss) per share in its press release, along with reconciliations to each of the most comparable GAAP measures.
A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The Registrant believes that the additional non-GAAP measures are useful to investors for the performance of financial analysis. Management uses these measures internally to evaluate its in-period operating performance and the measures are used for planning and forecasting of the Registrant's future periods. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.
ITEM 9.01. Financial Statements and Exhibits
(d) Exhibits.
|
99.1 |
Press release dated April 28, 2011, reporting financial results of the Registrant for its fiscal first quarter ended March 27, 2011. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
PMC-SIERRA, INC. |
||||||
|
(Registrant) |
||||||
|
|
Date: |
April 28, 2011 |
By: |
/s/ Michael W. Zellner |
||
|
|
||||||
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|
Vice President |
|||||
|
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Chief Financial Officer and |
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Principal Accounting Officer |
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EXHIBIT INDEX
|
Exhibit |
Description |
| 99.1 |
Press release dated April 28, 2011, reporting financial results of the Registrant for its fiscal first quarter ended March 27, 2011. |
Exhibit 99.1
PMC-Sierra Reports First Quarter 2011 Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--April 28, 2011--PMC-Sierra, Inc. (Nasdaq:PMCS), the premier Internet infrastructure semiconductor solution provider, today reported results for the first quarter ended March 27, 2011.
Net revenues in the first quarter of 2011 were $157.4 million, a year-over-year increase of 3% compared with $152.8 million in the first quarter of 2010, and slightly lower than net revenues of $159.3 million in the fourth quarter of 2010.
In the first quarter of 2011, the Company reported a GAAP net loss of $7.7 million (GAAP net loss per share of $0.03) compared with GAAP net income in the first quarter of 2010 of $27.0 million (GAAP diluted net income per share of $0.12). Non-GAAP net income in the first quarter of 2011 was $30.6 million (non-GAAP diluted net income per share of $0.13) compared with non-GAAP net income of $43.5 million (non-GAAP diluted net income per share of $0.19) in the first quarter of 2010.
“We have been working diligently with our customers to reduce inventories and we currently anticipate a resumption of growth in the second quarter of 2011, led by our enterprise storage business,” said Greg Lang, president and chief executive officer of PMC-Sierra.
Net income on a non-GAAP basis in the first quarter of 2011 excludes the following items: (i) $6.3 million stock-based compensation expense; (ii) $10.4 million acquisition related costs; (iii) $3.4 million lease exit costs; (iv) $11.0 million amortization of purchased intangible assets; (v) $1.0 million foreign exchange loss on foreign tax liabilities; (vi) $0.9 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; (vii) $0.8 million of other items; and (viii) $4.5 million income tax provisions.
For a full reconciliation of GAAP net (loss) income to non-GAAP net income, please refer to the schedule included with this release. The Company believes the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses the non-GAAP measures internally to evaluate its in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company’s core operating results. In addition, the measures are used to plan for the Company’s future periods. However, non-GAAP measures are neither stated in accordance with, nor are they a substitute for, GAAP measures.
In the first quarter of 2011:
First Quarter 2011 Conference Call
Management will review the first quarter 2011 results and share its outlook for the second quarter of 2011 during a conference call at 1:30 pm Pacific Time/4:30 pm Eastern Time on Thursday, April 28, 2011. The conference call webcast will be accessible under the Financial Events and Calendar section at http://investor.pmc-sierra.com/. To listen to the conference call live by telephone, dial 416-640-5925 approximately ten minutes before the start time. A telephone playback will be available after the completion of the call and can be accessed at 647-436-0148 using the access code 3275058. A replay of the webcast will be available for five business days.
Second Quarter 2011 Conference Call
PMC-Sierra is planning on releasing its results for the second quarter of 2011 on July 21, 2011. A conference call will be held on the day of the release to review the quarter and provide an outlook for the third quarter of 2011.
Safe Harbor Statement
This release contains forward-looking statements that involve risks and uncertainties. The Company’s SEC filings describe the risks associated with the Company’s business, including PMC-Sierra’s limited revenue visibility due to variable customer demands, market segment growth or decline, orders with short delivery lead times, customer concentration, changes in inventory, and other items such as foreign exchange rates.
About PMC-Sierra
PMC-Sierra®, the premier Internet infrastructure semiconductor solution provider, offers its customers technical and sales support worldwide through a network of offices in North America, Europe, Israel and Asia. PMC-Sierra provides semiconductor solutions for Enterprise and Channel Storage, Wide Area Network Infrastructure, Fiber To The Home, and Laser Printer/Enterprise market segments. The Company is publicly traded on the NASDAQ Stock Market under the PMCS symbol. For more information, visit www.pmc-sierra.com.
© Copyright PMC-Sierra, Inc. 2011. All rights reserved. PMC and PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the United States and other countries. Other product and company names mentioned herein may be trademarks of their respective owners.
| PMC-Sierra, Inc. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except for per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| March 27, | December 26, | March 28, | ||||||||||||||
| 2011 | 2010 | 2010 | ||||||||||||||
| Net revenues | $ | 157,434 | $ | 159,252 | $ | 152,826 | ||||||||||
| Cost of revenues | 59,161 | 51,636 | 49,005 | |||||||||||||
| Gross profit | 98,273 | 107,616 | 103,821 | |||||||||||||
| Other costs and expenses: | ||||||||||||||||
| Research and development | 54,499 | 51,574 | 42,067 | |||||||||||||
| Selling, general and administrative | 32,209 | 30,969 | 22,385 | |||||||||||||
| Amortization of purchased intangible assets | 11,021 | 7,396 | 9,836 | |||||||||||||
| Restructuring costs and other charges | - | 81 | 256 | |||||||||||||
| Income from operations | 544 | 17,596 | 29,277 | |||||||||||||
| Other (expense) income: | ||||||||||||||||
| Gain on sale of investment securities | 170 | 281 | 130 | |||||||||||||
| Amortization of debt issue costs | (50 | ) | (50 | ) | (50 | ) | ||||||||||
| Foreign exchange loss | (1,474 | ) | (738 | ) | (989 | ) | ||||||||||
| Interest expense, net | (924 | ) | (1,170 | ) | (121 | ) | ||||||||||
| Recovery of impairment on investment securities | - | 3,776 | - | |||||||||||||
| Gain on investment in Wintegra, Inc. | - | 4,509 | - | |||||||||||||
| (Loss) income before provision for income taxes | (1,734 | ) | 24,204 | 28,247 | ||||||||||||
| Provision for income taxes | (5,923 | ) | (13,290 | ) | (1,260 | ) | ||||||||||
| Net (loss) income | $ | (7,657 | ) | $ | 10,914 | $ | 26,987 | |||||||||
| Net (loss) income per common share - basic | $ | (0.03 | ) | $ | 0.05 | $ | 0.12 | |||||||||
| Net (loss) income per common share - diluted | $ | (0.03 | ) | $ | 0.05 | $ | 0.12 | |||||||||
| Shares used in per share calculation - basic | 234,058 | 232,942 | 229,804 | |||||||||||||
| Shares used in per share calculation - diluted | 234,058 | 236,277 | 233,653 | |||||||||||||
|
As a supplement to the Company's condensed consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company provides additional non-GAAP measures for cost of revenues, gross profit, gross profit percentage, research and development expense, selling, general and administrative expense, amortization of purchased intangible assets, restructuring costs and other charges, other income (expense), provision for income taxes, operating expenses, operating income, operating margin percentage, net income (loss), and basic and diluted net income (loss) per share. |
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A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The Company believes that the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses these measures internally to evaluate the Company's in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company's core operating results. In addition, the measures are used for planning and forecasting of the Company's future periods. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results. |
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| PMC-Sierra, Inc. | |||||||||||||||
| Adjustments to GAAP Cost of Revenues, Gross Profit, Gross Profit Percentage, Research and Development Expense, | |||||||||||||||
| Selling, General and Administrative Expense, Amortization of Purchased Intangible Assets, Restructuring Costs and Other Charges, | |||||||||||||||
| Other Income (Expense), Provision for Income Taxes, Operating Expenses, Operating Income, | |||||||||||||||
| Operating Margin Percentage, Net Income (Loss), and Basic and Diluted Net Income (Loss) Per Share | |||||||||||||||
| (in thousands, except for per share amounts) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
|
March 27, |
December 26, | March 28, | |||||||||||||
|
2011(1) |
2010(2) |
2010(3) |
|||||||||||||
| GAAP cost of revenues | $ | 59,161 | $ | 51,636 | $ | 49,005 | |||||||||
| Stock-based compensation | (223 | ) | (218 | ) | (218 | ) | |||||||||
| Acquisition related costs | (9,064 | ) | (855 | ) | - | ||||||||||
| Non-GAAP cost of revenues | $ | 49,874 | $ | 50,563 | $ | 48,787 | |||||||||
| GAAP gross profit | $ | 98,273 | $ | 107,616 | $ | 103,821 | |||||||||
| Stock-based compensation | 223 | 218 | 218 | ||||||||||||
| Acquisition related costs | 9,064 | 855 | - | ||||||||||||
| Non-GAAP gross profit | $ | 107,560 | $ | 108,689 | $ | 104,039 | |||||||||
| Non-GAAP gross profit % | 68 | % | 68 | % | 68 | % | |||||||||
| GAAP research and development expense | $ | 54,499 | $ | 51,574 | $ | 42,067 | |||||||||
| Stock-based compensation | (2,697 | ) | (2,340 | ) | (2,164 | ) | |||||||||
| Acquisition related costs | (191 | ) | (2 | ) | - | ||||||||||
| Non-GAAP research and development expense | $ | 51,611 | $ | 49,232 | $ | 39,903 | |||||||||
| GAAP selling, general and administrative expense | $ | 32,209 | $ | 30,969 | $ | 22,385 | |||||||||
| Stock-based compensation | (3,395 | ) | (3,062 | ) | (2,969 | ) | |||||||||
| Acquisition related costs | (1,159 | ) | (4,696 | ) | - | ||||||||||
| Lease exit costs | (3,392 | ) | - | - | |||||||||||
| Non-GAAP selling, general and administrative expense | $ | 24,263 | $ | 23,211 | $ | 19,416 | |||||||||
| GAAP amortization of purchased intangible assets | $ | 11,021 | $ | 7,396 | $ | 9,836 | |||||||||
| Amortization of purchased intangible assets | (11,021 | ) | (7,396 | ) | (9,836 | ) | |||||||||
| Non-GAAP amortization of purchased intangible assets | $ | - | $ | - | $ | - | |||||||||
| GAAP restructuring costs and other charges | $ | - | $ | 81 | $ | 256 | |||||||||
| Restructuring costs and other charges | - | (81 | ) | (256 | ) | ||||||||||
| Non-GAAP restructuring costs and other charges | $ | - | $ | - | $ | - | |||||||||
| GAAP other (expense) income | $ | (2,278 | ) | $ | 6,608 | $ | (1,030 | ) | |||||||
| Foreign exchange loss on foreign tax liabilities | 953 | 510 | 962 | ||||||||||||
| Accretion of debt discount related to senior convertible notes | 853 | 837 | 788 | ||||||||||||
| Accretion of liability for contingent consideration | 476 | - | - | ||||||||||||
| Interest expense related to short-term loan | 258 | 1,149 | - | ||||||||||||
| Recovery of impairment on investment securities | - | (3,776 | ) | - | |||||||||||
| Gain on investment in Wintegra, Inc. | - | (4,509 | ) | - | |||||||||||
| Non-GAAP other income | $ | 262 | $ | 819 | $ | 720 | |||||||||
| GAAP provision for income taxes | $ | 5,923 | $ | 13,290 | $ | 1,260 | |||||||||
| (Provision for) recovery of income taxes | (4,541 | ) | (10,803 | ) | 693 | ||||||||||
| Non-GAAP provision for income taxes | $ | 1,382 | $ | 2,487 | $ | 1,953 | |||||||||
| Three Months Ended | |||||||||||||||
|
March 27, |
December 26, | March 28, | |||||||||||||
|
2011(1) |
2010(2) |
2010(3) |
|||||||||||||
| GAAP operating expenses | $ | 97,729 | $ | 90,020 | $ | 74,544 | |||||||||
| Stock-based compensation | (6,092 | ) | (5,402 | ) | (5,133 | ) | |||||||||
| Acquisition related costs | (1,350 | ) | (4,698 | ) | - | ||||||||||
| Lease exit costs | (3,392 | ) | - | - | |||||||||||
| Amortization of purchased intangible assets | (11,021 | ) | (7,396 | ) | (9,836 | ) | |||||||||
| Restructuring costs and other charges | - | (81 | ) | (256 | ) | ||||||||||
| Non-GAAP operating expenses | $ | 75,874 | $ | 72,443 | $ | 59,319 | |||||||||
| GAAP operating income | $ | 544 | $ | 17,596 | $ | 29,277 | |||||||||
| Stock-based compensation | 6,315 | 5,620 | 5,351 | ||||||||||||
| Acquisition related costs | 10,414 | 5,553 | - | ||||||||||||
| Lease exit costs | 3,392 | - | - | ||||||||||||
| Amortization of purchased intangible assets | 11,021 | 7,396 | 9,836 | ||||||||||||
| Restructuring costs and other charges | - | 81 | 256 | ||||||||||||
| Non-GAAP operating income | $ | 31,686 | $ | 36,246 | $ | 44,720 | |||||||||
| Non-GAAP operating margin % | 20 | % | 23 | % | 29 | % | |||||||||
| GAAP net (loss) income | $ | (7,657 | ) | $ | 10,914 | $ | 26,987 | ||||||||
| Stock-based compensation | 6,315 | 5,620 | 5,351 | ||||||||||||
| Acquisition related costs | 10,414 | 5,553 | - | ||||||||||||
| Lease exit costs | 3,392 | - | - | ||||||||||||
| Amortization of purchased intangible assets | 11,021 | 7,396 | 9,836 | ||||||||||||
| Restructuring costs and other charges | - | 81 | 256 | ||||||||||||
| Foreign exchange loss on foreign tax liabilities | 953 | 510 | 962 | ||||||||||||
| Accretion of debt discount related to senior convertible notes | 853 | 837 | 788 | ||||||||||||
| Accretion of liability for contingent consideration | 476 | - | - | ||||||||||||
| Interest expense related to short-term loan | 258 | 1,149 | - | ||||||||||||
| Recovery of impairment on investment securities | - | (3,776 | ) | - | |||||||||||
| Gain on investment in Wintegra, Inc. | - | (4,509 | ) | - | |||||||||||
| Provision for (recovery of) income taxes | 4,541 | 10,803 | (693 | ) | |||||||||||
| Non-GAAP net income | $ | 30,566 | $ | 34,578 | $ | 43,487 | |||||||||
| Non-GAAP net income per share - basic | $ | 0.13 | $ | 0.15 | $ | 0.19 | |||||||||
| Non-GAAP net income per share - diluted | $ | 0.13 | $ | 0.15 | $ | 0.19 | |||||||||
| Shares used to calculate non-GAAP net income per share - basic | 234,058 | 232,942 | 229,804 | ||||||||||||
| Shares used to calculate non-GAAP net income per share - diluted | 237,556 | 236,277 | 233,653 | ||||||||||||
|
(1) $6.3 million stock-based compensation expense; $10.4 million acquisition related costs; $3.4 million lease exit costs; $11.0 million amortization of purchased intangible assets; $1.0 million foreign exchange loss on foreign tax liabilities; $0.9 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $0.5 million accretion of liability for contingent consideration; $0.3 million interest expense related to short-term loan; and $4.5 million income tax provision which includes $2.2 million sheltered by the benefit of stock option related loss carry-forwards recognized in equity, $3.6 million income tax provision relating to inter-company transactions, $1.9 million net tax recovery relating to foreign exchange translation of a foreign subsidiary, and $0.6 million arrears interest relating to unrecognized tax benefits. |
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(2) $5.6 million stock-based compensation expense; $5.6 million acquisition related costs; $7.4 million amortization of purchased intangible assets; $0.1 million restructuring costs; $0.5 million foreign exchange loss on foreign tax liabilities; $0.8 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $1.1 million interest expense related to short-term loan; $3.8 million recovery of impairment on investment securities; $4.5 million gain on investment in Wintegra, Inc., and $10.8 million income tax provision which includes $5.4 million sheltered by the benefit of stock option related loss carry-forwards recognized in equity, $2.9 million income tax provision for adjustments relating to prior periods, $1.9 million income tax provision relating to inter-company transactions, $1.6 million net tax recovery relating to foreign exchange translation of a foreign subsidiary, and $2.2 million arrears interest relating to unrecognized tax benefits. |
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(3) $5.4 million stock-based compensation expense; $9.8 million amortization of purchased intangible assets; $0.3 million restructuring costs; $1.0 million foreign exchange loss on foreign tax liabilities; $0.8 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and $0.7 million income tax recovery which includes $2.1 million net tax recovery relating to foreign exchange translation of a foreign subsidiary, $1.5 million tax provision relating to inter-company transactions, $0.5 million arrears interest relating to unrecognized tax benefits, $0.5 million deferred tax recovery related to non-deductible intangible asset amortization, and $0.1 million tax provision relating to prior periods. |
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| PMC-Sierra, Inc. | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (in thousands) | |||||||||||
| (unaudited) | |||||||||||
| March 27, | December 26, | ||||||||||
| 2011 | 2010 | ||||||||||
| ASSETS: | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 126,279 | $ | 293,355 | |||||||
| Short-term investments | 79,497 | 54,801 | |||||||||
| Accounts receivable, net | 80,085 | 69,263 | |||||||||
| Inventories, net | 37,472 | 51,133 | |||||||||
| Prepaid expenses and other current assets | 22,986 | 21,559 | |||||||||
| Income tax receivable | 4,329 | 4,554 | |||||||||
| Deferred tax assets | 17,451 | 12,162 | |||||||||
| Total current assets | 368,099 | 506,827 | |||||||||
| Investment securities | 207,951 | 235,369 | |||||||||
| Investments and other assets | 9,435 | 10,687 | |||||||||
| Prepaid expenses | 21,468 | 22,987 | |||||||||
| Property and equipment, net | 18,856 | 18,367 | |||||||||
| Goodwill | 520,899 | 523,712 | |||||||||
| Intangible assets, net | 191,528 | 202,265 | |||||||||
| Deferred tax assets | 1,263 | 1,187 | |||||||||
| Deposits for wafer fabrication capacity | 5,145 | 5,145 | |||||||||
| $ | 1,344,644 | $ | 1,526,546 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||||||
| Current liabilities: | |||||||||||
| Short-term loan | $ | - | $ | 180,991 | |||||||
| Accounts payable | 25,325 | 32,048 | |||||||||
| Accrued liabilities | 67,739 | 76,566 | |||||||||
| Liability for unrecognized tax benefit | 43,767 | 40,300 | |||||||||
| Income taxes payable | 1,095 | - | |||||||||
| Deferred income taxes | 2,905 | 2,823 | |||||||||
| Accrued restructuring costs | 1,119 | 1,604 | |||||||||
| Deferred income | 17,274 | 18,231 | |||||||||
| Liability for contingent consideration | 28,670 | - | |||||||||
| Total current liabilities | 187,894 | 352,563 | |||||||||
| 2.25% senior convertible notes due October 15, 2025, net | 62,458 | 61,605 | |||||||||
| Liability for contingent consideration | - | 28,194 | |||||||||
| Long-term obligations | 8,695 | 8,940 | |||||||||
| Deferred income taxes | 38,064 | 36,549 | |||||||||
| Liability for unrecognized tax benefit | 18,592 | 17,908 | |||||||||
|
PMC special shares convertible into 1,295 (2010 - 1,370) shares of common stock |
1,609 | 1,716 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock and additional paid in capital | 1,591,760 | 1,576,201 | |||||||||
| Accumulated other comprehensive income | 2,431 | 2,072 | |||||||||
| Accumulated deficit | (566,859 | ) | (559,202 | ) | |||||||
| Total stockholders' equity | 1,027,332 | 1,019,071 | |||||||||
| $ | 1,344,644 | $ | 1,526,546 | ||||||||
| PMC-Sierra, Inc. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (in thousands) | |||||||||||
| (unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 27, | March 28, | ||||||||||
| 2011 | 2010 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net (loss) income | $ | (7,657 | ) | $ | 26,987 | ||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 24,828 | 14,091 | |||||||||
| Stock-based compensation | 6,315 | 5,351 | |||||||||
| Unrealized foreign exchange loss, net | 1,360 | 838 | |||||||||
| Net amortization of premiums/discounts and accrued interest of investments | 1,159 | 1,364 | |||||||||
| Accrued interest on short-term loan | 589 | (413 | ) | ||||||||
| Gain on disposal of investment securities | (170 | ) | (130 | ) | |||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (10,822 | ) | (9,504 | ) | |||||||
| Inventories | 4,649 | (1,332 | ) | ||||||||
| Prepaid expenses and other current assets | (305 | ) | 3,064 | ||||||||
| Accounts payable and accrued liabilities | (13,435 | ) | (737 | ) | |||||||
| Deferred income taxes and income taxes payable | 4,326 | (12,744 | ) | ||||||||
| Accrued restructuring costs | (485 | ) | (395 | ) | |||||||
| Deferred income | (957 | ) | 2,313 | ||||||||
| Net cash provided by operating activities | 9,395 | 28,753 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | (2,937 | ) | (1,451 | ) | |||||||
| Purchases of intangible assets | (1,194 | ) | - | ||||||||
| Redemption of short-term investments | - | 4,314 | |||||||||
| Disposals of investment securities | 33,026 | 27,001 | |||||||||
| Purchases of investment securities | (31,779 | ) | (128,788 | ) | |||||||
| Net cash used in investing activities | (2,884 | ) | (98,924 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Repayment of short-term loan | (180,991 | ) | - | ||||||||
| Proceeds from issuance of common stock | 7,086 | 5,712 | |||||||||
| Net cash (used in) provided by financing activities | (173,905 | ) | 5,712 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | 318 | 158 | |||||||||
| Net decrease in cash and cash equivalents | (167,076 | ) | (64,301 | ) | |||||||
| Cash and cash equivalents, beginning of period | 293,355 | 192,841 | |||||||||
| Cash and cash equivalents, end of period | $ | 126,279 | $ | 128,540 | |||||||
CONTACT:
PMC-Sierra, Inc.
Mike Zellner, 1-408-988-1204
Vice
President & CFO
or
David Climie, 1-408-988-8276
VP
Marketing Communications
or
Susan Shaw, 1-408-988-8515
Sr
Manager, Communications