[January 29, 2015] |
|
PMC Reports Fourth Quarter and Full Year 2014 Results
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 fourth quarter and full
year ended December 27, 2014.
Net revenues in the fourth quarter of 2014 totaled $136.9
million, an increase of one percent from $135.5 million in the third
quarter of 2014 and an increase of 7.9 percent, compared to $126.9
million in the fourth quarter of 2013. Storage product revenues in the
fourth quarter of 2014 totaled $98.4 million, an increase of 8.3 percent
from $90.9 million in the fourth quarter of 2013.
GAAP net income in the fourth quarter of 2014 totaled $2.3
million or $0.01 per diluted share, compared to a GAAP net income in the
third quarter of 2014 of $5.5 million or $0.03 per diluted share.
Non-GAAP net income in the fourth quarter of 2014 totaled $22.7
million or $0.11 per diluted share, compared to non-GAAP net income of
$22.5 million or $0.11 per diluted share in the third quarter of 2014.
"Due to strong Storage and record OTN revenues in the fourth quarter, we
grew revenue eight percent over the same quarter last year," said Greg
Lang, PMC president and chief executive officer. "And each of our four
major growth drivers started contributing revenue in 2014, positioning
PMC for continued growth in 2015."
Net income on a non-GAAP basis in the fourth quarter of 2014
excludes the following items: (i) $6.8 million stock-based compensation
expense, (ii) $11 million amortization of purchased intangible assets;
(iii) $2.7 million foreign exchange gain on foreign tax liabilities;
(iv) $3.9 million provision for income tax matters; and (v) $1.3 million
other adjustments as described in the accompanying GAAP to non-GAAP
reconciliation table.
For the full year ended December 27, 2014, net revenues were
$525.6 million, compared to $508.0 million for the year ended December
28, 2013, an increase of 3.5 percent year over year. GAAP operating
income for the full year 2014 was $11.1 million compared to GAAP
operating loss of $13.2 million reported in the year ended December 28,
2013. Non-GAAP operating income for the full year 2014 was $83.1 million
compared to non-GAAP operating income of $68.4 million the prior year.
GAAP net income for the full year 2014 was $0.1 million, or $0.00 per
diluted share, compared to GAAP net loss of $32.3 million, or $0.16 loss
per share the prior year. Non-GAAP net income in the year ended December
27, 2014, was $79.5 million or $0.40 per diluted share, compared to
non-GAAP net income of $68.3 million or $0.33 per diluted share in the
year ended December 28, 2013.
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.
FOURTH QUARTER AND 2014 HIGHLIGHTS
The Company announced the following in the fourth quarter and full year
2014:
-
On Dec. 3, PMC hosted a Flash Technology Forum in Beijing, where
speakers from Sina, Inspur, China Telecom, Memblaze and PMC discussed
the latest innovations and use cases for deploying flash to accelerate
storage in China's data centers.
-
On Dec. 1, PMC announced that Memblaze Technology Co. Ltd, a leading
provider of flash storage solutions, is utilizing PMC's Flashtec™ NVMe
controllers in its next-generation PCI Express® (PCIe®) flash
accelerators. The Flashtec-based Memblaze PBlaze4 products are
targeted at hyperscale and Open Compute Project deployments.
-
On Nov. 24, PMC announced that Lenovo selected PMC storage solutions
for external connectivity across its ThinkServer portfolio. The Lenovo
8885E by PMC card delivers the full throughput of 12Gb/s SAS and
6.6GB/s PCIe® to maximize the performance of ThinkServer scale-out
storage. The card is offered on Lenovo rack and tower servers.
-
On Sept. 17, PMC was first to ship 16-port 12Gb/s SAS and 16-port
6Gb/s SATA I/O controller solutions. PMC's data center I/O products
enable OEMs and ODMs to design cost-effective customized server
hardware for hyperscale deployments, such as Open Compute, Windows
Cloud Servers, OpenStack and Project Scorpio. The devices have the
industry's highest port density, lowest power and are capable of more
than 1,000,000 I/Os per second (IOPS) to support the most demanding
cloud software applications.
-
On Sept. 4, PMC announced that the Company executed an agreement with
HP to license core HP Smart Array software, firmware and management
technology. PMC will leverage this technology to provide more system
value to new and existing server storage and data center customers.
This transaction also positions PMC as the supplier of key storage
solution components across HP ProLiant Gen9 and beyond.
-
On Aug. 26, PMC introduced the industry's first 12Gb/s SAS expander
card to enable density-optimized servers, the fastest growing segment
of the worldwide server market according to IDC. The Adaptec® 12Gb/s
SAS expander card enables flexible, high-density server architectures
that can expand as data center storage needs grow. It provides 36
ports in a PCIe® low-profile form factor.
-
On Aug. 5, PMC established a new ultra-fast storage class memory tier
to accelerate critical applications in scale-out storage and all-flash
arrays. The PMC Flashtec™ NVRAM Drives combine the speed and endurance
of DRAM with the persistency of NAND flash to deliver ten times higher
performance than the fastest Solid State Drive (SSD), at more than 10
million IOPS, with sub-microsecond latency. Leveraging PCIe® 3.0, the
Flashtec NVRAM Drives connect directly to the host to optimize CPU
utilization and maximize overall system performance.
-
On Mar. 10, PMC announced the successful interoperability of its DIGI
120G OTN processor and Acacia's AC100 100G Coherent module, enabling
mass deployment of 100G OTN in metro networks, unlocking a 10-fold
increase in fiber capacity and eliminating the need for new fiber.
Demonstrating interoperability with Acacia's module was an important
step to show ecosystem readiness for the 100G transition.
Fourth Quarter and Full Year 2014 Conference Call
Management will review fourth quarter and full year 2014 results and
share its outlook for the first quarter of 2015 during a conference call
at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time on January 29, 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) 337-8169 or
1 (719) 325-2455 outside North America with passcode 2692388#
approximately ten minutes before the start time. A telephone playback
will be available until February 28, 2015, and can be accessed at 1
(888) 203-1112 or 1 (719) 457-0820 outside North America using passcode
2692388#.
PMC will be attending the Stifel, Nicolaus & Co.'s 2015 Technology,
Internet & Media Conference on February 9, 2015, at the Westin St.
Francis in San Francisco, as well as the Goldman Sachs Technology &
Internet Conference on February 10, at the Palace Hotel in San
Francisco. Steve Geiser, the Company's vice president and chief
financial officer, will be available both days for individual investor
meetings. He will also participate in fireside chats and Q&As during
both events, which will be webcast simultaneously at http://investor.pmcs.com.
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, PMC-SIERRA
and ADAPTEC 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.
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PMC-Sierra, Inc.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(in thousands, except for per share amounts)
|
(unaudited)
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|
|
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|
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|
|
|
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|
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Three Months Ended
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Twelve Months Ended
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December 27,
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September 27,
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December 28,
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December 27,
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December 28,
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2014
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2014
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2013
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2014
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2013
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Net revenues
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$
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136,851
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$
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135,462
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|
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$
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126,872
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|
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$
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525,603
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|
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$
|
508,028
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|
Cost of revenues
|
|
|
40,702
|
|
|
|
40,306
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|
|
|
37,349
|
|
|
|
|
|
155,396
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|
|
|
149,213
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|
Gross profit
|
|
|
96,149
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|
|
|
95,156
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89,523
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370,207
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358,815
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Gross profit %
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70
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%
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|
|
70
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%
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|
|
71
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%
|
|
|
|
|
70
|
%
|
|
|
71
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%
|
|
|
|
|
|
|
|
|
|
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|
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Research and development
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50,942
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48,441
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54,009
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|
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198,919
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211,047
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Selling, general and administrative
|
|
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29,411
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|
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29,265
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27,768
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|
|
|
|
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117,007
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|
|
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112,770
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Amortization of purchased intangible assets
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|
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10,994
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|
|
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9,948
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|
|
|
13,547
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|
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43,219
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|
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48,245
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Income (loss) from operations
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4,802
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7,502
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(5,801
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)
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11,062
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(13,247
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)
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Foreign exchange gain
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2,866
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899
|
|
|
|
2,363
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|
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|
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3,508
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4,043
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Amortization of debt issue costs
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(51
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)
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|
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(51
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)
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|
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(50
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)
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|
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(204
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)
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|
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(80
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)
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Amortization of discount on long-term obligation
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(350
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)
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|
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-
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-
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(350
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)
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|
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-
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Interest income, net
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|
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2
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|
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198
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83
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|
|
|
|
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323
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|
|
907
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Gain on investment securities and other investments
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68
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|
|
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12
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|
|
103
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|
|
|
|
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155
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|
|
1,879
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Income (loss) before provision for income taxes
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7,337
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8,560
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(3,302
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)
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14,494
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(6,498
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)
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Provision for income taxes
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(5,007
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)
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(3,087
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)
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(12,377
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)
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(14,412
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)
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(25,756
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)
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Net income (loss)
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$
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2,330
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$
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5,473
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$
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(15,679
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)
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|
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$
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82
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|
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$
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(32,254
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)
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Net income (loss) per common share - basic and diluted
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$
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0.01
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$
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0.03
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$
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(0.08
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)
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|
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$
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0.00
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|
|
$
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(0.16
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)
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|
|
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|
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Shares used in per share calculation - basic
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|
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198,625
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197,613
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201,615
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|
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196,885
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203,882
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Shares used in per share calculation - diluted
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201,935
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200,744
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201,615
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|
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|
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200,145
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203,882
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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, other income (expense),
(provision for) recovery of income taxes, operating expenses, operating
income (loss), operating margin percentage, net income (loss), and basic
and diluted net income (loss) per share.
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,
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Selling, General and Administrative Expense, Amortization of
Purchased Intangible Assets,
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Other Income, Provision for Income Taxes, Operating Expenses,
Operating Income (Loss),
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Net Income (Loss), and Basic and Diluted Net Income (Loss) Per
Share
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(in thousands, except for per share amounts)
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(unaudited)
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|
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|
|
|
|
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|
|
|
|
|
|
Three Months Ended
|
|
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Twelve Months Ended
|
|
|
December 27,
|
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September 27,
|
|
December 28,
|
December 27,
|
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December 28,
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|
|
|
2014 (1)
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|
|
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2014 (2)
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|
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2013 (3)
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|
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2014 (4)
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|
|
2013 (5)
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenues
|
|
$
|
40,702
|
|
|
$
|
40,306
|
|
|
$
|
37,349
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|
|
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$
|
155,396
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|
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$
|
149,213
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Stock-based compensation
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|
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(285
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)
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|
|
(226
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)
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|
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(256
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)
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|
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(966
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)
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|
|
(899
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)
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Acquisition-related costs
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-
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|
|
|
-
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|
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(5
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)
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|
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|
-
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|
|
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(800
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)
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Termination and separation (costs) recoveries
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|
|
-
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|
-
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|
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(171
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)
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|
|
9
|
|
|
|
(171
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)
|
Reversal of accruals
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|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
2,300
|
|
Non-GAAP cost of revenues
|
|
$
|
40,417
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|
|
$
|
40,080
|
|
|
$
|
36,917
|
|
|
|
$
|
154,439
|
|
|
$
|
149,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
96,149
|
|
|
$
|
95,156
|
|
|
$
|
89,523
|
|
|
|
$
|
370,207
|
|
|
$
|
358,815
|
|
Stock-based compensation
|
|
|
285
|
|
|
|
226
|
|
|
|
256
|
|
|
|
|
966
|
|
|
|
899
|
|
Acquisition-related costs
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
|
|
-
|
|
|
|
800
|
|
Termination and separation costs (recoveries)
|
|
|
-
|
|
|
|
-
|
|
|
|
171
|
|
|
|
|
(9
|
)
|
|
|
171
|
|
Reversal of accruals
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
(2,300
|
)
|
Non-GAAP gross profit
|
|
$
|
96,434
|
|
|
$
|
95,382
|
|
|
$
|
89,955
|
|
|
|
$
|
371,164
|
|
|
$
|
358,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit %
|
|
|
70
|
%
|
|
|
70
|
%
|
|
|
71
|
%
|
|
|
|
71
|
%
|
|
|
71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expense
|
|
$
|
50,942
|
|
|
$
|
48,441
|
|
|
$
|
54,009
|
|
|
|
$
|
198,919
|
|
|
$
|
211,047
|
|
Stock-based compensation
|
|
|
(2,880
|
)
|
|
|
(1,990
|
)
|
|
|
(2,854
|
)
|
|
|
|
(9,420
|
)
|
|
|
(11,095
|
)
|
Acquisition-related costs
|
|
|
(423
|
)
|
|
|
(356
|
)
|
|
|
(1,071
|
)
|
|
|
|
(2,373
|
)
|
|
|
(2,812
|
)
|
Termination and separation recoveries (costs)
|
|
|
8
|
|
|
|
28
|
|
|
|
(2,690
|
)
|
|
|
|
(248
|
)
|
|
|
(4,138
|
)
|
Reversal of accruals
|
|
|
342
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
342
|
|
|
|
2,890
|
|
Lease exit recoveries
|
|
|
29
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
29
|
|
|
|
-
|
|
Asset impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
(508
|
)
|
|
|
|
-
|
|
|
|
(508
|
)
|
Non-GAAP research and development expense
|
|
$
|
48,018
|
|
|
$
|
46,123
|
|
|
$
|
46,886
|
|
|
|
$
|
187,249
|
|
|
$
|
195,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling, general and administrative expense
|
|
$
|
29,411
|
|
|
$
|
29,265
|
|
|
$
|
27,768
|
|
|
|
$
|
117,007
|
|
|
$
|
112,770
|
|
Stock-based compensation
|
|
|
(3,682
|
)
|
|
|
(3,012
|
)
|
|
|
(3,694
|
)
|
|
|
|
(12,795
|
)
|
|
|
(14,271
|
)
|
Acquisition-related costs
|
|
|
(261
|
)
|
|
|
(669
|
)
|
|
|
(39
|
)
|
|
|
|
(994
|
)
|
|
|
(1,122
|
)
|
Lease exit costs
|
|
|
(5
|
)
|
|
|
(31
|
)
|
|
|
(48
|
)
|
|
|
|
(182
|
)
|
|
|
(48
|
)
|
Termination and separation (costs) recoveries
|
|
|
(645
|
)
|
|
|
254
|
|
|
|
(1,282
|
)
|
|
|
|
(1,689
|
)
|
|
|
(1,784
|
)
|
Reversal of accruals
|
|
|
-
|
|
|
|
-
|
|
|
|
1,300
|
|
|
|
|
-
|
|
|
|
1,300
|
|
Asset impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
(639
|
)
|
|
|
|
(477
|
)
|
|
|
(2,214
|
)
|
Other nonrecurring expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(58
|
)
|
|
|
-
|
|
Non-GAAP selling, general and administrative expense
|
$
|
24,818
|
|
|
$
|
25,807
|
|
|
$
|
23,366
|
|
|
|
$
|
100,812
|
|
|
$
|
94,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP amortization of purchased intangible assets
|
|
$
|
10,994
|
|
|
$
|
9,948
|
|
|
$
|
13,547
|
|
|
|
$
|
43,219
|
|
|
$
|
48,245
|
|
Amortization of purchased intangible assets
|
|
|
(10,994
|
)
|
|
|
(9,948
|
)
|
|
|
(13,547
|
)
|
|
|
|
(43,219
|
)
|
|
|
(48,245
|
)
|
Non-GAAP amortization of purchased intangible assets
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other income
|
|
$
|
2,535
|
|
|
$
|
1,058
|
|
|
$
|
2,499
|
|
|
|
$
|
3,432
|
|
|
$
|
6,749
|
|
Foreign exchange gain on foreign tax liabilities
|
|
|
(2,665
|
)
|
|
|
(1,081
|
)
|
|
|
(2,564
|
)
|
|
|
|
(3,649
|
)
|
|
|
(4,697
|
)
|
Gain on disposal of investments
|
|
|
(26
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(26
|
)
|
|
|
(1,762
|
)
|
Amortization of discount on long-term obligations
|
|
|
350
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
350
|
|
|
|
-
|
|
Non-GAAP other income (expense)
|
|
$
|
194
|
|
|
$
|
(23
|
)
|
|
$
|
(65
|
)
|
|
|
$
|
107
|
|
|
$
|
290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for income taxes
|
|
$
|
5,007
|
|
|
$
|
3,087
|
|
|
$
|
12,377
|
|
|
|
$
|
14,412
|
|
|
$
|
25,756
|
|
Provision for income tax matters
|
|
|
(3,900
|
)
|
|
|
(2,178
|
)
|
|
|
(11,760
|
)
|
|
|
|
(10,739
|
)
|
|
|
(25,396
|
)
|
Non-GAAP provision for income taxes
|
|
$
|
1,107
|
|
|
$
|
909
|
|
|
$
|
617
|
|
|
|
$
|
3,673
|
|
|
$
|
360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
$
|
91,347
|
|
|
$
|
87,654
|
|
|
$
|
95,324
|
|
|
|
$
|
359,145
|
|
|
$
|
372,062
|
|
Stock-based compensation
|
|
|
(6,562
|
)
|
|
|
(5,002
|
)
|
|
|
(6,548
|
)
|
|
|
|
(22,215
|
)
|
|
|
(25,366
|
)
|
Acquisition-related costs
|
|
|
(684
|
)
|
|
|
(1,025
|
)
|
|
|
(1,110
|
)
|
|
|
|
(3,367
|
)
|
|
|
(3,934
|
)
|
Asset impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,147
|
)
|
|
|
|
(477
|
)
|
|
|
(2,722
|
)
|
Lease exit recoveries (costs)
|
|
|
24
|
|
|
|
(31
|
)
|
|
|
(48
|
)
|
|
|
|
(153
|
)
|
|
|
(48
|
)
|
Termination and separation (costs) recoveries
|
|
|
(637
|
)
|
|
|
282
|
|
|
|
(3,972
|
)
|
|
|
|
(1,937
|
)
|
|
|
(5,922
|
)
|
Reversal of accruals
|
|
|
342
|
|
|
|
-
|
|
|
|
1,300
|
|
|
|
|
342
|
|
|
|
4,190
|
|
Amortization of purchased intangible assets
|
|
|
(10,994
|
)
|
|
|
(9,948
|
)
|
|
|
(13,547
|
)
|
|
|
|
(43,219
|
)
|
|
|
(48,245
|
)
|
Other nonrecurring expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(58
|
)
|
|
|
-
|
|
Non-GAAP operating expenses
|
|
$
|
72,836
|
|
|
$
|
71,930
|
|
|
$
|
70,252
|
|
|
|
$
|
288,061
|
|
|
$
|
290,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
$
|
4,802
|
|
|
$
|
7,502
|
|
|
$
|
(5,801
|
)
|
|
|
$
|
11,062
|
|
|
$
|
(13,247
|
)
|
Stock-based compensation
|
|
|
6,847
|
|
|
|
5,228
|
|
|
|
6,804
|
|
|
|
|
23,181
|
|
|
|
26,265
|
|
Acquisition-related costs
|
|
|
684
|
|
|
|
1,025
|
|
|
|
1,115
|
|
|
|
|
3,367
|
|
|
|
4,734
|
|
Asset impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
1,147
|
|
|
|
|
477
|
|
|
|
2,722
|
|
Reversal of accruals
|
|
|
(342
|
)
|
|
|
-
|
|
|
|
(1,300
|
)
|
|
|
|
(342
|
)
|
|
|
(6,490
|
)
|
Lease exit (recoveries) costs
|
|
|
(24
|
)
|
|
|
31
|
|
|
|
48
|
|
|
|
|
153
|
|
|
|
48
|
|
Termination and separation costs (recoveries)
|
|
|
637
|
|
|
|
(282
|
)
|
|
|
4,143
|
|
|
|
|
1,928
|
|
|
|
6,093
|
|
Amortization of purchased intangible assets
|
|
|
10,994
|
|
|
|
9,948
|
|
|
|
13,547
|
|
|
|
|
43,219
|
|
|
|
48,245
|
|
Other nonrecurring expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
58
|
|
|
|
-
|
|
Non-GAAP operating income
|
|
$
|
23,598
|
|
|
$
|
23,452
|
|
|
$
|
19,703
|
|
|
|
$
|
83,103
|
|
|
$
|
68,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
17
|
%
|
|
|
17
|
%
|
|
|
16
|
%
|
|
|
|
16
|
%
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
December 27,
|
|
September 27,
|
|
December 28,
|
December 27,
|
|
December 28,
|
|
|
|
2014 (1)
|
|
|
|
2014 (2)
|
|
|
|
2013 (3)
|
|
|
|
|
2014 (4)
|
|
|
|
2013 (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
2,330
|
|
|
$
|
5,473
|
|
|
$
|
(15,679
|
)
|
|
|
$
|
82
|
|
|
$
|
(32,254
|
)
|
Stock-based compensation
|
|
|
6,847
|
|
|
|
5,228
|
|
|
|
6,804
|
|
|
|
|
23,181
|
|
|
|
26,265
|
|
Acquisition-related costs
|
|
|
684
|
|
|
|
1,025
|
|
|
|
1,115
|
|
|
|
|
3,367
|
|
|
|
4,734
|
|
Termination and separation costs (recoveries)
|
|
|
637
|
|
|
|
(282
|
)
|
|
|
4,143
|
|
|
|
|
1,928
|
|
|
|
6,093
|
|
Asset impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
1,147
|
|
|
|
|
477
|
|
|
|
2,722
|
|
Reversal of accruals
|
|
|
(342
|
)
|
|
|
-
|
|
|
|
(1,300
|
)
|
|
|
|
(342
|
)
|
|
|
(6,490
|
)
|
Lease exit (recoveries) costs
|
|
|
(24
|
)
|
|
|
31
|
|
|
|
48
|
|
|
|
|
153
|
|
|
|
48
|
|
Amortization of purchased intangible assets
|
|
|
10,994
|
|
|
|
9,948
|
|
|
|
13,547
|
|
|
|
|
43,219
|
|
|
|
48,245
|
|
Foreign exchange gain on foreign tax liabilities
|
|
|
(2,665
|
)
|
|
|
(1,081
|
)
|
|
|
(2,564
|
)
|
|
|
|
(3,649
|
)
|
|
|
(4,697
|
)
|
Gain on disposal of investments
|
|
|
(26
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(26
|
)
|
|
|
(1,762
|
)
|
Amortization of discount on long-term obligation
|
|
|
350
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
350
|
|
|
|
-
|
|
Other nonrecurring expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
58
|
|
|
|
-
|
|
Provision for income tax matters
|
|
|
3,900
|
|
|
|
2,178
|
|
|
|
11,760
|
|
|
|
|
10,739
|
|
|
|
25,396
|
|
Non-GAAP net income
|
|
$
|
22,685
|
|
|
$
|
22,520
|
|
|
$
|
19,021
|
|
|
|
$
|
79,537
|
|
|
$
|
68,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - basic
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
|
$
|
0.40
|
|
|
$
|
0.33
|
|
Non-GAAP net income per share - diluted
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
|
$
|
0.40
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to calculate non-GAAP net income per share - basic
|
|
198,625
|
|
|
|
197,613
|
|
|
|
201,615
|
|
|
|
|
196,885
|
|
|
|
203,882
|
|
Shares used to calculate non-GAAP net income per share - diluted
|
|
201,935
|
|
|
|
200,744
|
|
|
|
203,047
|
|
|
|
|
200,145
|
|
|
|
205,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) $6.8 million stock-based compensation expense; $0.7 million
acquisition-related costs; $0.6 million termination and separation
costs; $0.3 million reversal of accrual; $0.1 million lease exit
recoveries; $11 million amortization of purchased intangible assets;
$2.7 million foreign exchange gain on foreign tax liabilities; $0.1
million gain on disposal of investment; $0.3 million amortization of
discount on long-term obligations; and $3.9 million provision for income
taxes which includes $4 million arrears interest relating to
unrecognized tax benefits, $2.7 million income tax provision related to
prepaid tax amortization, and $5.2 million income tax provision related
to tax deductible goodwill, and $8 million income tax recovery related
to change in valuation allowance and other deductible items above.
(2) $5.2 million stock-based compensation expense; $1 million
acquisition-related costs; $0.3 million recovery of termination and
separation costs; $9.9 million amortization of purchased intangible
assets; $1.1 million foreign exchange gain on foreign tax liabilities;
$0.1 million lease exit costs; and $2.2 million provision for income
taxes which includes $0.9 million income tax provision related to
unrecognized tax benefits, $1.1 million income tax provision related to
prepaid tax amortization, and $0.2 million income tax provision from
adjustments related to prior periods.
(3) $6.8 million stock-based compensation expense; $1.1 million
acquisition-related costs; $4.1 million termination and separation
costs; $1.2 million asset impairment; $1.3 million reversal of accrual;
$0.1 million lease exit costs; $13.5 million amortization of purchased
intangible assets; $2.6 million foreign exchange gain on foreign tax
liabilities; and $11.8 million provision for income taxes which includes
$1.9 million income tax recovery relating to intercompany transactions,
$2.5 million income tax recovery for adjustments relating to prior
periods and changes in estimates, $0.9 million arrears interest relating
to unrecognized tax benefits, $3.3 million provision related to
non-deductible intangible asset amortization, $0.7 million income tax
provision relating to foreign exchange translation of a foreign
subsidiary, $10.4 million deferred tax effect related to changes in
assessments for certain income tax credits, and $0.9 million income tax
provision related to tax deductible goodwill and other items above.
(4) $23.2 million stock-based compensation expense; $3.4 million
acquisition-related costs; $1.9 million termination and separation
costs; $0.5 million asset impairment; $0.3 million reversal of accruals;
$0.2 million lease exit costs; $43.2 million amortization of purchased
intangible assets; $3.6 million foreign exchange gain on foreign tax
liabilities; $0.1 million gain on disposal of investment; $0.3 million
amortization of discount on long-term obligations; $0.1 million other
nonrecurring expenses; and $10.7 million provision for income taxes
which includes $6.5 million arrears interest relating to unrecognized
tax benefits, $5.7 million income tax provision related to prepaid tax
amortization, $6.5 million income tax provision related to tax
deductible goodwill, and $8 million income tax recovery related to
change in valuation allowance and other deductible items above.
(5) $26.3 million stock-based compensation expense; $4.8 million
acquisition-related costs and deferred tax effects; $6.1 million
termination and separation costs; $2.8 million asset impairment; $6.5
million reversal of accruals; $0.1 million lease exit costs; $48.2
million amortization of purchased intangible assets; $4.7 million
foreign exchange gain on foreign tax liabilities; $1.8 million gain on
disposal of investment and $25.4 million provision for income taxes
which includes $0.2 million income tax provision relating to
intercompany transactions, $2.6 million arrears interest relating to
unrecognized tax benefits, $11.7 million provision related to
non-deductible intangible asset amortization and impairment, $2 million
income tax recovery for adjustments relating to prior periods and
changes in estimates, $1.2 million income tax provision relating to
foreign exchange translation of a foreign subsidiary, $10.4 million
deferred tax effect related to change in assessment for certain income
tax credit, and $1.3 million income tax provision related to tax
deductible goodwill and other items above.
PMC-Sierra, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
December 27,
|
|
December 28,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
112,570
|
|
|
$
|
100,038
|
|
Short-term investments
|
|
45,885
|
|
|
|
10,894
|
|
Cash, cash equivalents and short-term investments
|
|
158,455
|
|
|
|
110,932
|
|
Accounts receivable, net
|
|
55,414
|
|
|
|
56,112
|
|
Inventories, net
|
|
37,949
|
|
|
|
31,074
|
|
Prepaid expenses and other current assets
|
|
16,473
|
|
|
|
19,855
|
|
Income tax receivable
|
|
1,968
|
|
|
|
2,640
|
|
Prepaid tax expense
|
|
51
|
|
|
|
5,695
|
|
Deferred tax assets(1)
|
|
4,079
|
|
|
|
43,131
|
|
Total current assets
|
|
274,389
|
|
|
|
269,439
|
|
|
|
|
|
|
Investment securities
|
|
107,509
|
|
|
|
103,391
|
|
Investments and other assets
|
|
7,683
|
|
|
|
10,750
|
|
Prepaid tax expense
|
|
42
|
|
|
|
93
|
|
Property and equipment, net
|
|
37,311
|
|
|
|
39,149
|
|
Goodwill and other intangible assets, net
|
|
426,919
|
|
|
|
425,823
|
|
Deferred tax assets (1)
|
|
13,412
|
|
|
|
1,306
|
|
Long-term income tax receivable
|
|
457
|
|
|
|
-
|
|
|
|
$
|
867,722
|
|
|
$
|
849,951
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
Current liabilities:
|
|
|
|
Accounts payable
|
$
|
23,360
|
|
|
$
|
23,173
|
|
Accrued liabilities
|
|
74,135
|
|
|
|
64,257
|
|
Credit facility
|
|
-
|
|
|
|
30,000
|
|
Income taxes payable
|
|
1,062
|
|
|
|
632
|
|
Liability for unrecognized tax benefit (1)
|
|
16,076
|
|
|
|
54,127
|
|
Current deferred income taxes
|
|
7,644
|
|
|
|
71
|
|
Deferred income
|
|
4,530
|
|
|
|
7,481
|
|
Total current liabilities
|
|
126,807
|
|
|
|
179,741
|
|
|
|
|
|
|
Long-term obligations
|
|
36,305
|
|
|
|
11,108
|
|
Deferred income taxes
|
|
52,130
|
|
|
|
43,143
|
|
Liability for unrecognized tax benefit (1)
|
|
25,244
|
|
|
|
27,947
|
|
|
|
|
|
|
PMC special shares convertible into 278 (2013 - 1,019)
|
|
745
|
|
|
|
1,188
|
|
shares of common stock
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
Common stock and additional paid in capital
|
|
1,595,809
|
|
|
|
1,550,385
|
|
Accumulated other comprehensive loss
|
|
(2,355
|
)
|
|
|
(526
|
)
|
Accumulated deficit
|
|
(966,963
|
)
|
|
|
(963,035
|
)
|
Total stockholders' equity
|
|
626,491
|
|
|
|
586,824
|
|
|
|
$
|
867,722
|
|
|
$
|
849,951
|
|
|
|
|
|
|
|
|
|
|
|
(1) Effective from the beginning of the first quarter of 2014, the
Company adopted Financial Accounting Standards Board's Accounting
Standards Update ("ASU") No. 2013-11, "Presentation of an
Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a
Similar Tax Loss, or Tax Credit Carryforward Exists." Approximately
$44 million of deferred tax assets of a foreign subsidiary were
derecognized along with the related liability for unrecognized tax
benefits as a result of this presentation adoption, with no impact
to the Condensed Consolidated Statements of Operations.
|
|
PMC-Sierra, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
December 27,
|
|
December 28,
|
|
|
|
2014
|
|
|
|
2013
|
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
|
$
|
82
|
|
|
$
|
(32,254
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
65,477
|
|
|
|
71,432
|
|
Stock-based compensation
|
|
|
23,181
|
|
|
|
26,264
|
|
Unrealized foreign exchange gain, net
|
|
|
(5,846
|
)
|
|
|
(2,251
|
)
|
Net amortization of premiums and accrued interest of investments
|
|
|
718
|
|
|
|
1,580
|
|
Asset impairments
|
|
|
770
|
|
|
|
2,966
|
|
Gain on investment securities and other investments
|
|
|
(131
|
)
|
|
|
(1,796
|
)
|
Loss on disposal of property and equipment
|
|
|
4
|
|
|
|
6
|
|
Amortization of discount on long-term obligations
|
|
|
350
|
|
|
|
-
|
|
Excess tax benefits from stock option transactions
|
|
|
-
|
|
|
|
(842
|
)
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable, net
|
|
|
598
|
|
|
|
6,330
|
|
Inventories, net
|
|
|
(6,875
|
)
|
|
|
(3,625
|
)
|
Prepaid expenses and other current assets
|
|
|
1,349
|
|
|
|
1,315
|
|
Accounts payable and accrued liabilities
|
|
|
878
|
|
|
|
(5,551
|
)
|
Deferred income taxes and income taxes receivables/payables
|
|
|
12,970
|
|
|
|
15,900
|
|
Deferred income
|
|
|
(2,951
|
)
|
|
|
(632
|
)
|
Net cash provided by operating activities
|
|
|
90,574
|
|
|
|
78,842
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Business acquisition
|
|
|
(10,000
|
)
|
|
|
(96,098
|
)
|
Investment in long term deposits
|
|
|
-
|
|
|
|
(1,127
|
)
|
Purchases of property and equipment
|
|
|
(13,945
|
)
|
|
|
(16,851
|
)
|
Purchases of intangible assets
|
|
|
(1,437
|
)
|
|
|
(3,979
|
)
|
Redemption of short-term investments
|
|
|
5,670
|
|
|
|
8,466
|
|
Disposals of investment securities and other investments
|
|
|
61,695
|
|
|
|
162,773
|
|
Purchases of investment securities and other investments
|
|
|
(106,076
|
)
|
|
|
(179,837
|
)
|
Net cash used in investing activities
|
|
|
(64,093
|
)
|
|
|
(126,653
|
)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Payment of debt issuance costs
|
|
|
-
|
|
|
|
(928
|
)
|
Proceeds from credit facility
|
|
|
30,000
|
|
|
|
30,000
|
|
Repayment of credit facility
|
|
|
(60,000
|
)
|
|
|
-
|
|
Proceeds from issuance of common stock
|
|
|
29,175
|
|
|
|
25,247
|
|
Repurchases of common stock
|
|
|
(11,496
|
)
|
|
|
(76,335
|
)
|
Excess tax benefits from stock option transactions
|
|
|
-
|
|
|
|
842
|
|
Net cash used in financing activities
|
|
|
(12,321
|
)
|
|
|
(21,174
|
)
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(1,628
|
)
|
|
|
(947
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
12,532
|
|
|
|
(69,932
|
)
|
Cash and cash equivalents, beginning of the period
|
|
|
100,038
|
|
|
|
169,970
|
|
Cash and cash equivalents, end of the period
|
|
$
|
112,570
|
|
|
$
|
100,038
|
|
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|