Q2 2015 earnings announcement call live
on http://investor.pmcs.com at 1:30 p.m. PT
Conference call: 1 (888) 364-3108 or
1 (719) 325-2458 outside North America; passcode 8830911#
Replay available shortly after end of
conference call through August 22, 2015
PMC-Sierra, Inc. (PMC®) (Nasdaq: PMCS), the semiconductor and
software solutions innovator transforming networks that connect,
move and store big data, today reported results for the second
quarter ended June 27, 2015.
Net revenues in the second quarter of 2015 totaled $124.8
million, a decrease of 1.6 percent, compared to $126.8 million in
the second quarter of 2014, and a decrease of 6.2 percent from
$133.1 million in the first quarter of 2015.
GAAP net loss in the second quarter of 2015
totaled $8.6 million or $0.04 per share, compared to GAAP net loss
in the second quarter of 2014 of $3.5 million or $0.02 per share,
and GAAP net income in the first quarter of 2015 of $4.7 million or
$0.02 per diluted share.
Non-GAAP net income in the second quarter of 2015 totaled
$18.0 million or $0.09 per diluted share, compared to non-GAAP net
income in the second quarter of 2014 of $18.3 million or $0.09 per
diluted share, and to non-GAAP net income in the first quarter of
2015 of $20.9 million or $0.10 per diluted share.
The Company also today initiated steps to reduce spending across
the organization by approximately 14 percent. This reorganization
involves a reduction in force of approximately 200 employees
worldwide and other reductions that are together expected to result
in approximately $40 million per year in savings. The full savings
resulting from these workforce reductions will not be realized
until the fourth quarter of the current year, although some impact
from these measures will be noticeable in the Company’s third
quarter results.
“2015 has started weaker than expected in the carrier and
storage end markets,” said PMC President and Chief Executive
Officer, Greg Lang. “Given the tepid growth environment, we are
taking immediate action to reduce spending and accelerate our
return to target model profitability.”
For a full reconciliation of each non-GAAP item used herein to
the most directly comparable GAAP financial measure, 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.
SECOND QUARTER HIGHLIGHTS
The Company announced the following in the second quarter of
2015:
- On July 22, PMC announced it was named
a gold award winner in the ChannelPro-SMB 2015 Readers’ Choice
Awards for Best SATA/SAS RAID Controller. Readers of ChannelPro-SMB
cast their votes for the solution that best satisfies the unique
business requirements, work styles, and budgets of their small and
midsize business clients, and partner organizations.
- On July 15, PMC announced it won
the Fujitsu Network Communications 2015 Technology Award
for DIGI-120G. This prestigious award recognizes PMC as an
outstanding technology partner for delivering cutting-edge
technology and exceptional technical support that
enables Fujitsu to rapidly deliver competitive optical
transport solutions to market.
- On June 4, PMC hosted a Storage
Technology Summit at the China Cloud Computing Conference in
Beijing, China. PMC was joined by Baidu, Inspur, Memblaze, Sina and
Sugon to discuss the storage technologies and architectures that
are powering the China cloud.
- On May 22, Memblaze Technology Co.,
Ltd. launched its next-generation PBlaze4 PCIe Solid-State Drive
Series, which is based on PMC’s Flashtec™ NVMe Controllers.
Second Quarter 2015 Conference Call
Management will review second quarter 2015 results, share its
outlook for the third quarter of 2015 and discuss the spending
reductions described above during a conference call at 1:30 p.m.
Pacific Time/4:30 p.m. Eastern Time on July 23, 2015. The
conference call webcast will be accessible under the Financial News
and Events section at http://investor.pmcs.com. To listen to the
conference call by telephone, dial 1 (888) 364-3108 or 1 (719)
325-2458 outside North America with passcode 8830911# approximately
ten minutes before the start time. A telephone playback will be
available until August 22, 2015, and can be accessed at 1 (888)
203-1112 or 1 (719) 457-0820 outside North America using passcode
8830911#.
Safe Harbor Statement
This release contains forward-looking statements that involve
risks and uncertainties. The Company’s SEC filings, including the
Company’s most recent reports on Form 10-K and Form 10-Q, describe
the risks associated with the Company’s business, including PMC’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 tax rates, foreign exchange rates and volatility in global
financial markets.
About PMC
PMC (Nasdaq:PMCS) is the semiconductor and software solutions
innovator transforming networks that connect, move and store big
data. Building on a track record of technology leadership, the
Company is driving innovation across storage, optical and mobile
networks. PMC’s highly integrated solutions increase
performance and enable next-generation services to accelerate the
network transformation. For more information, visit www.pmcs.com.
Follow PMC on Facebook, Twitter, LinkedIn and RSS.
© Copyright PMC-Sierra, Inc. 2015. All rights reserved. PMC and
PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the
United States and other countries, PMCS and Flashtec are trademarks
of PMC-Sierra, Inc. PMC disclaims any ownership rights in other
product and company names mentioned herein. PMC is the corporate
brand of PMC-Sierra, Inc.
PMC-Sierra, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except for per share amounts) (unaudited)
Three Months Ended Six Months Ended June 27,
March 28, June 28, June 27, June 28,
2015 2015
2014 2015 2014
Net revenues $ 124,767 $ 133,071 $ 126,822 $ 257,838
$ 253,290 Cost of revenues 38,434 39,980
36,824 $ 78,414 74,388
Gross profit 86,333 93,091 89,998 179,424 178,902 Research
and development, net 55,833 48,866 49,388 104,699 99,536 Selling,
general and administrative 30,488 30,051 28,991 60,539 58,331
Amortization of purchased intangible assets 9,269
9,317 9,948 18,586
22,277 (Loss) income from operations (9,257 ) 4,857 1,671
(4,400 ) (1,242 ) Other income (expense): Gain on investment
securities and other investments 25 32 46 57 75 Amortization of
debt issuance costs (51 ) (51 ) (51 ) (102 ) (102 ) Accretion of
discount on short-term and long-term obligation (180 ) (210 ) -
(390 ) - Foreign exchange (loss) gain (948 ) 2,594 (789 ) 1,646
(257 ) Interest and other financial income, net 317
164 114 481 123
(Loss) income before recovery of (provision for) income
taxes (10,094 ) 7,386 991 (2,708 ) (1,403 ) Recovery of (provision
for) income taxes 1,515 (2,731 ) (4,471
) (1,216 ) (6,318 ) Net (loss) income $ (8,579 ) $
4,655 $ (3,480 ) $ (3,924 ) $ (7,721 ) Net (loss)
income per common share - basic and diluted $ (0.04 ) $ 0.02 $
(0.02 ) $ (0.02 ) $ (0.04 ) Shares used in per share
calculation - basic 195,732 200,249 196,114 197,991 195,651 Shares
used in per share calculation - diluted 195,732 205,688 196,114
197,991 195,651
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,
net, selling, general and administrative expense, amortization of
purchased intangible assets, other income (expense), benefit from
(provision for) income taxes, operating expenses, operating (loss)
income, operating margin, net (loss) income, and net income per
share - basic and diluted.
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.
PMC-Sierra,
Inc. Adjustments to GAAP Cost of Revenues, Gross Profit,
Gross Profit Percentage, Research and Development Expense, net,
Selling, General and Administrative Expense, Amortization of
Purchased Intangible Assets Other Income (Expense), Benefit
from (Provision for) Income Taxes, Operating Expenses, Operating
(Loss) Income, Net (Loss) Income, and Net (Loss) Income Per
Share - Basic and Diluted (in thousands, except for per share
amounts) (unaudited)
Three Months Ended Six Months
Ended June 27, March 28, June 28, June
27, June 28, 2015
2015 2014 2015
2014 GAAP cost of
revenues $ 38,434 $ 39,980 $ 36,824 $ 78,414 $ 74,388
Stock-based compensation (266 ) (271 ) $ (214 ) (537 ) (455 )
Termination (costs) recoveries (1,215 ) - $ -
(1,215 ) 9
Non-GAAP cost of
revenues $ 36,953 $ 39,709 $ 36,610 $
76,662 $ 73,942
GAAP gross profit $
86,333 $ 93,091 $ 89,998 $ 179,424 $ 178,902 Stock-based
compensation 266 271 214 537 455 Termination costs (recoveries)
1,215 - - 1,215
(9 )
Non-GAAP gross profit $ 87,814 $
93,362 $ 90,212 $ 181,176 $ 179,348
Non-GAAP gross profit % 70.4 % 70.2 % 71.1 % 70.3 %
70.8 %
GAAP research and development expense, net $
55,833 $ 48,866 $ 49,388 $ 104,699 $ 99,536 Stock-based
compensation (2,400 ) (2,844 ) (1,903 ) (5,244 ) (4,550 )
Acquisition-related costs (162 ) (106 ) (794 ) (268 ) (1,594 )
Termination (costs) recoveries (7,944 ) 38 (342 ) (7,906 ) (284 )
Asset impairments (252 ) - -
(252 ) -
Non-GAAP research and development
expense, net $ 45,075 $ 45,954 $ 46,349 $
91,029 $ 93,108
GAAP selling, general and
administrative expense $ 30,488 $ 30,051 $ 28,991 $ 60,539 $
58,331 Stock-based compensation (3,445 ) (3,578 ) (2,798 ) (7,023 )
(6,101 ) Acquisition-related costs (34 ) (171 ) (3 ) (205 ) (64 )
Lease exit recoveries (costs) 488 11 (4 ) 499 (146 ) Termination
costs (3,867 ) (507 ) (1,295 ) (4,374 ) (1,298 ) Asset impairments
- - - - (477 ) Other expenses - -
- - (58 )
Non-GAAP selling,
general and administrative expense $ 23,630 $ 25,806
$ 24,891 $ 49,436 $ 50,187
GAAP amortization of purchased intangible assets $ 9,269 $
9,317 $ 9,948 $ 18,586 $ 22,277 Amortization of purchased
intangible assets (9,269 ) (9,317 ) (9,948 )
(18,586 ) (22,277 )
Non-GAAP amortization of
purchased intangible assets $ - $ - $ - $
- $ -
GAAP other income $ (837 ) $
2,529 $ (680 ) $ 1,692 $ (161 ) Foreign exchange loss (gain) on
foreign tax liabilities 487 (2,179 ) 976 (1,692 ) 97 Accretion of
discount on short-term and long-term obligations 180
210 - 390 -
Non-GAAP other income (expense) $ (170 ) $ 560 $ 296
$ 390 $ (64 )
GAAP benefit from (provision
for) income taxes $ 1,515 $ (2,731 ) $ (4,471 ) $ (1,216 ) $
(6,318 ) Benefit from (provision for) income taxes (2,467 )
1,516 3,550 (951 ) 4,661
Non-GAAP provision for income taxes $ (952 ) $ (1,215
) $ (921 ) $ (2,167 ) $ (1,657 )
GAAP operating
expenses $ 95,590 $ 88,234 $ 88,327 $ 183,824 $ 180,144
Stock-based compensation (5,845 ) (6,422 ) (4,701 ) (12,267 )
(10,651 ) Acquisition-related costs (196 ) (277 ) (797 ) (473 )
(1,658 ) Asset impairments (252 ) - - (252 ) (477 ) Lease exit
recoveries (costs) 488 11 (4 ) 499 (146 ) Termination costs (11,811
) (469 ) (1,637 ) (12,280 ) (1,582 ) Amortization of purchased
intangible assets (9,269 ) (9,317 ) (9,948 ) (18,586 ) (22,277 )
Other expenses - - -
- (58 )
Non-GAAP operating expenses $
68,705 $ 71,760 $ 71,240 $ 140,465 $
143,295
June 27, March 28, June
28, June 27, June 28, 2015
2015 2014
2015 2014 GAAP
operating (loss) income $ (9,257 ) $ 4,857 $ 1,671 $ (4,400 ) $
(1,242 ) Stock-based compensation 6,111 6,693 4,915 12,804 11,106
Acquisition-related costs 196 277 797 473 1,658 Asset impairments
252 - - 252 477 Lease exit (recoveries) costs (488 ) (11 ) 4 (499 )
146 Termination costs 13,026 469 1,637 13,495 1,573 Amortization of
purchased intangible assets 9,269 9,317 9,948 18,586 22,277 Other
expenses - - - -
58
Non-GAAP operating income $ 19,109
$ 21,602 $ 18,972 $ 40,711 $ 36,053
Non-GAAP operating margin 15.3 % 16.2 % 15.0 %
15.8 % 14.2 %
GAAP net (loss) income $ (8,579 ) $
4,655 $ (3,480 ) $ (3,924 ) $ (7,721 ) Stock-based compensation
6,111 6,693 4,915 12,804 11,106 Acquisition-related costs 196 277
797 473 1,658 Termination costs 13,026 469 1,637 13,495 1,573 Asset
impairments 252 - - 252 477 Lease exit (recoveries) costs (488 )
(11 ) 4 (499 ) 146 Amortization of purchased intangible assets
9,269 9,317 9,948 18,586 22,277 Other expenses - - - - 58 Foreign
exchange loss (gain) on foreign tax liabilities 487 (2,179 ) 976
(1,692 ) 97 Accretion of discount on short-term and long-term
obligations 180 210 - 390 - (Provision for) benefit from income
taxes (2,467 ) 1,516 3,550
(951 ) 4,661
Non-GAAP net income $
17,987 $ 20,947 $ 18,347 $ 38,934 $
34,332
Non-GAAP net income per share - basic $
0.09 $ 0.10 $ 0.09 $ 0.20 $ 0.18
Non-GAAP net income per share -
diluted $ 0.09 $ 0.10 $ 0.09 $ 0.19 $ 0.17 Shares used
to calculate non-GAAP net income per share - basic 195,732 200,249
196,114 197,991 195,651 Shares used to calculate non-GAAP net
income per share - diluted 200,501 205,688 199,594 203,095 198,950
PMC-Sierra, Inc. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands) (unaudited)
June 27,
December 27, 2015 2014
ASSETS: Current assets: Cash and cash equivalents $ 64,864 $
112,570 Short-term investments 45,386 45,885
Cash, cash equivalents and short-term investments 110,250
158,455 Accounts receivable, net 58,141 55,414 Inventories, net
36,165 37,949 Prepaid expenses and other current assets 14,097
16,473 Income taxes receivable 1,554 1,968 Prepaid tax expense - 51
Deferred tax assets 5,008 5,442 Total
current assets 225,215 275,752 Investment securities 131,508
107,509 Investments and other assets 7,629 7,683 Prepaid tax
expense 93 42 Property and equipment, net 37,413 37,311 Goodwill
283,239 283,239 Intangible assets, net 125,808 143,680 Deferred tax
assets 13,186 13,412 Long-term income tax receivable 459
457 $ 824,550 $ 869,085
LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts
payable $ 18,848 $ 23,360 Accrued liabilities 71,108 74,135 Credit
facility 37,000 - Income taxes payable 44 1,062 Liability for
unrecognized tax benefit 15,153 16,076 Deferred tax liabilities
7,646 7,644 Deferred income 4,371 4,530
Total current liabilities 154,170 126,807 Long-term
obligations 24,718 36,305 Deferred tax liabilities 53,028 53,493
Liability for unrecognized tax benefit 26,036 25,244 PMC special
shares convertible into 205 (2014 - 278) shares of common stock 480
745 Stockholders\' equity: Common stock and additional paid in
capital 1,590,565 1,595,809 Accumulated other comprehensive loss
(93 ) (2,355 ) Accumulated deficit (1,024,354 )
(966,963 ) Total stockholders' equity 566,118
626,491 $ 824,550 $ 869,085
PMC-Sierra, Inc. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in thousands) (unaudited)
Six Months Ended June 27, June 28,
2015 2014 Cash flows
from operating activities: Net loss $ (3,924 ) $ (7,721 )
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization 30,058 33,278 Stock-based
compensation 12,804 11,106 Unrealized foreign exchange gain, net
(4,328 ) (1,264 ) Net amortization of premiums and accrued interest
of investments 390 # 390 Asset impairments 252 770 Gain on
investment securities and other investments (57 ) (74 ) Accretion
of discount on short-term and long-term obligations 390 -
Amortization of debt issuance costs 102 102 Gain on lease exit, net
(696 ) - Changes in operating assets and liabilities:
Accounts receivable, net (2,727 ) (2,249 ) Inventories, net 1,784
(311 ) Prepaid expenses and other current assets 1,055 3,068
Accounts payable and accrued liabilities 5,190 (2,234 ) Deferred
taxes and income taxes payable 1,285 6,447 Deferred income
(159 ) (2,292 ) Net cash provided by operating activities
41,419 39,016
Cash flows from
investing activities: Purchases of property and equipment
(8,850 ) (8,054 ) Purchase of intangible assets (3,845 ) (733 )
Redemption of short-term investments 13,466 3,535 Disposals of
investment securities and other investments 29,973 25,538 Purchases
of investment securities and other investments (67,515 )
(41,966 ) Net cash used in investing activities
(36,771 ) (21,680 )
Cash flows from financing
activities: Installment payment in connection with previous
business acquisition (18,000 ) - Proceeds from credit facility
102,000 30,000 Repayment of credit facility (65,000 ) (60,000 )
Proceeds from issuance of common stock 31,342 10,615 Repurchases of
common stock (102,108 ) (11,496 )
Net cash used in financing activities
(51,766 ) (30,881 ) Effect of exchange rate
changes on cash and cash equivalents (588 ) 95
Net decrease in cash and cash equivalents (47,706 ) (13,450 ) Cash
and cash equivalents, beginning of the period 112,570
100,038 Cash and cash equivalents, end of the period
$ 64,864 $ 86,588
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150723006476/en/
PMC-Sierra, Inc.Joel Achramowicz, 1-408-239-8630Director,
Investor RelationsJoel.Achramowicz@pmcs.comorSarah Kuchka,
1-604-415-6671Senior Communications
Specialistsarah.kuchka@pmcs.com
PMC Sierra (NASDAQ:PMCS)
Historical Stock Chart
From Aug 2024 to Sep 2024
PMC Sierra (NASDAQ:PMCS)
Historical Stock Chart
From Sep 2023 to Sep 2024