Pericom Semiconductor (PSEM) 8-K Fiscal Q4 and Annual 2009 Financial Results

Contact: Robert Strickland

Pericom Semiconductor

Tel: 408 435-0800

rstrickland@pericom.com

PERICOM SEMICONDUCTOR REPORTS

FISCAL Q4 AND ANNUAL 2009 FINANCIAL RESULTS

San Jose, Calif. – September 25, 2009 - Pericom Semiconductor Corporation (NASDAQ: PSEM), a worldwide supplier of high-speed integrated circuits and frequency control products, today announced results for its fiscal fourth quarter and full year ended June 27, 2009.

Quarterly Highlights

§   Net revenues grew 22% sequentially yet declined 31% year-over-year to $29.7 million

§   Net income increased 306% sequentially, and decreased 77% year-over-year to $1.0 million

Fiscal Year Highlights

§   Net revenues decreased 21% versus the prior year period

§   Net income decreased 64% versus the prior year period

§   Gross margins declined 318 basis points over the prior year period

§   Total share repurchase activity totaled 712,000 shares

Fourth Quarter Operating Results

Net revenues for the fourth quarter were $29.7 million, up 21.8% from the $24.4 million reported in the third quarter, and down 31.5% from the $43.4 million reported in the comparable period last year. Gross margin was 28.7%, down from 35.5% last quarter, and down from 36.0% in the comparable period last year, mainly due to lower manufacturing volumes and resulting increased overhead absorption, as well as pricing pressure. Operating expenses in the quarter were $9.5 million, up from $9.4 million in the previous quarter and down from $10.6 million in the comparable period last year. Stock-based compensation expense in the quarter was $888,000, down from $998,000 in the previous quarter and up from $615,000 in the comparable period last year. Net income in the quarter was $1.0 million, or $0.04 per diluted share, compared with net income of $256,000, or $0.01 per diluted share in the third quarter and net income of $4.6 million, or $0.17 per diluted share, in the same period a year ago.

NEWS RELEASE September 25, 2009

FY09 Operating Results

Net revenues for the fiscal year ending June 27, 2009 were $128.6 million, down 21.4% from $163.7 million in the prior year comparable period. Gross margin in the year ending June 27, 2009 was 33.5% as compared with 36.7% in the comparable period last year, reflecting pricing pressure in our markets and reduced capacity utilization in our operations. Operating expenses in the year ending June 27, 2009 were $40.1 million, down slightly from $40.8 million in the comparable period last year. Stock based compensation expense for the year ended June 27, 2009 was $3.6 million, up from $2.4 million in the comparable prior year period. Net income in the year ending June 27, 2009 was $6.1 million, or $0.24 per diluted share, down from $17.0 million, or $0.64 per diluted share in the comparable prior year period.

“Our fourth quarter confirmed the improved demand we anticipated at the start of the quarter, and this trend is being sustained into the first quarter of fiscal 2010,” said Alex Hui, president and CEO of Pericom. “Our bookings have continued to grow during the June quarter, and resulted in our having an improved backlog as we entered the September quarter. We believe our revenues are now better aligned with end user demand, which we believe will gradually strengthen in the coming months.

“In the fourth quarter we experienced a reduction in gross margins resulting from underabsorption of overhead in prior quarters as well as pricing pressure in competitive markets.  As a result, we have taken steps to improve gross margin through initiatives to reduce product cost as well as improve product mix.

“Enabling serial connectivity in computer, communication and consumer applications remains our primary focus. We are encouraged by the increasing deployment of our serial protocol solution in our focus market segments, with PCI-e and e-SATA products accounted for 18% of total revenue in FYQ4. Despite the downturn, we continue to invest in innovation. We are developing connectivity and timing solutions for next generation serial protocols such as PCI-Express Gen3, DisplayPort 1.2 and USB 3.0. We believe our comprehensive serial connectivity and timing solutions position us well for long term growth.”

Restated Financials

The Company is also issuing restated financial results for the first three quarters of fiscal 2009 to correct misstatements involving inventory reserves and inventory valuation, revenue, cost of goods sold and an other-than-temporary impairment of a securities investment. These adjustments reduced Q1 net income by $264K resulting in a restated Q1 net income of $3,661K or $0.14 per diluted share and reduced Q2 net income by $579K resulting in a restated Q2 net income of $1,130K or $0.04 per diluted share. The comparison of the restated first and second quarters with previously reported results are included in the financial tables section of this release.

New Products

Pericom introduced 10 new products across the Signal Integrity, Switching, Timing and Connectivity product areas in this quarter.

Expanding its solutions for high-speed serial protocol signal integrity, Pericom introduced two new ReDriver products, the first supporting the 6 Gigabits/sec SATA (Serial ATA)/SAS (Serial Attached SCSI) storage media protocols, and the second supporting the DisplayPort video graphics protocol.  Both ReDrivers target next generation volume notebook and desktop applications for storage media attachment, and for advanced digital video and graphics. These products enable transfer of high-speed serial signals across external cables to end points such as HDD or monitor.

Pericom introduced seven new switching and connectivity products targeted across USB, DisplayPort, and PCI Express protocols. Target market segments include volume Consumer digital video, PC notebook, desktop, and graphics, and Ultra Mobility platforms such as cell phones and PDA.

3545 North First Street     San Jose, CA   95134     (408) 435-0800

NEWS RELEASE September 25, 2009

Finally, Pericom introduced an advanced PCIe Gen 2 (5Gb/s) ‘quad output’ clock generator featuring extremely low jitter, and targeting the Networking and PC Peripherals market segment, with applications such as wireless router and other networking applications, and multi-function printers.

Fiscal Q1 Outlook

The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.

·   Revenues in the first fiscal quarter are expected to be in the range of $31.5 million to $32.5 million.

·   Gross margins are expected to be in the 31% to 33% range. Margins are influenced by the product mix of turns business and sales, if any, of previously reserved inventory.

·   Operating expenses are expected to be in the range of $10.5 to $11.5 million, which include stock-based compensation expense of approximately $0.9 million, year-end/SOX audit fees $0.5M and the additional expenses related to accounting review $1.2M.

·   Other income is expected to be approximately $1.3 million, consisting primarily of interest income.

·   Net income from unconsolidated affiliates PTI and JCP of $0.4 - $0.5M.

·   The effective tax rate is expected to be approximately 32%.

Conference Call

The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time. To listen to the call, dial (877) 723-9521 and reference “Pericom”. A slide presentation will accompany the conference call.  To view the slides, please visit the investor relations section of www.pericom.com.

A taped replay of the conference call will be made available for five business days. To listen to the replay, dial (888) 203-1112 and reference conference number 6794266. The Pericom financial results conference call will be available via a live webcast on the investor relations section of the web site at http://www.pericom.com.  Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the web site for approximately 90 days.

About Pericom

Pericom Semiconductor Corporation (NASDAQ: PSEM) enables serial connectivity with the industry's most complete solutions for the computing, communications and consumer market segments. Pericom's analog, digital and mixed-signal integrated circuits, along with its SaRonix-eCERA frequency control products are essential in the timing, switching, bridging and conditioning of high-speed signals required by today's ever-increasing speed and bandwidth demanding applications. Company headquarters is in San Jose, California, with design centers and technical sales and support offices globally. http://www.pericom.com.

This press release contains forward-looking statements as defined under The Securities Litigation Reform Act of 1995. Forward-looking statements in this release include the statements under the caption ‘Fiscal Q1 Outlook’, which regard the anticipated revenues, gross margin, operating expenses, other income and tax rate in the first fiscal quarter, and statements regarding end user demand gradually strengthening, initiatives to reduce product cost and improve mix, and Pericom being well positioned. The Company’s actual results could differ materially from what is set forth in such forward-looking statements due to a variety of risk factors, including softness in demand for our products, price erosion for certain of our products, unexpected difficulties in developing new products, customer decisions to reduce inventory, economic or financial difficulties experienced by our customers, or technological and market changes. All forward-looking statements included in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and Pericom assumes no obligation to update any forward-looking statements. Parties receiving this release are encouraged to review our annual report on Form 10-K for the year ended June 28, 2008, and, in particular, the risk factors section contained therein.

- See Attached Tables -

3545 North First Street     San Jose, CA   95134     (408) 435-0800

NEWS RELEASE September 25, 2009

Pericom Semiconductor Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(unaudited)

	Three Months Ended									Twelve Months Ended
	Jun 27			Mar 28			Jun 28			Jun 27			Jun 28
	2009			2009			2008			2009			2008
Net revenues	$	29,721		$	24,394		$	43,373		$	128,645		$	163,744
Cost of revenues		21,193			15,731			27,768			85,514			103,638
Gross profit		8,528			8,663			15,605			43,131			60,106
Operating expenses:
Research and development		4,117			3,996			4,296			16,697			17,159
Selling, general and administrative		5,343			5,136			6,294			22,833			23,624
Restructuring charge		74			293			-			584			-
Total		9,534			9,425			10,590			40,114			40,783
Income from operations		(1,006	)		(762	)		5,015			3,017			19,323
Interest and other income, net		1,677			1,501			1,606			5,548			5,501
Other than temporary decline in value of investment		-			(48	)		(24	)		(506	)		(76	)
Income before income taxes		671			691			6,597			8,059			24,748
Income tax expense		(135	)		460			2,132			2,209			8,221
Minority interest in (income) loss in consolidated subsidiary		(22	)		(24	)		(53	)		(114	)		(116	)
Equity in income (loss) of investees		256			49			181			351			602
Net income	$	1,040		$	256		$	4,593		$	6,087		$	17,013
Basic income per share	$	0.04		$	0.01		$	0.18		$	0.24		$	0.66
Diluted income per share	$	0.04		$	0.01		$	0.17		$	0.24		$	0.64
Shares used in computing basic income		25,354			25,218			25,480			25,417			25,737
per share
Shares used in computing diluted income
per share		25,485			25,282			26,472			25,626			26,611

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NEWS RELEASE September 25, 2009

Pericom Semiconductor Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(unaudited)

	Restatements
	Three Months Ended						Three Months Ended
	Sep 27			Sep 27			Dec 27			Dec 27
	2008			2008			2008			2008
	As						As
	Previously			As			Previously			As
	Reported			Restated			Reported			Restated
Net revenues	$	43,896		$	43,798		$	30,732		$	30,732
Cost of revenues		27,914			27,805			20,013			20,785
Gross profit		15,982			15,993			10,719			9,947
Operating expenses:
Research and development		4,221			4,221			4,363			4,363
Selling, general and administrative		6,901			6,901			5,453			5,453
Restructuring charge		-			-			217			217
Total		11,122			11,122			10,033			10,033
Income from operations		4,860			4,871			686			(86	)
Interest and other income, net		1,106			1,106			1,264			1,264
Other than temporary decline in value of investment		(44	)		(458	)		-			-
Income before income taxes		5,922			5,519			1,950			1,178
Income tax expense		2,069			1,930			147			(46	)
Minority interest in (income) loss in consolidated subsidiary		(45	)		(45	)		(23	)		(23	)
Equity in income (loss) of investees		117			117			(71	)		(71	)
Net income	$	3,925		$	3,661		$	1,709		$	1,130
Basic income per share	$	0.15		$	0.14		$	0.07		$	0.04
Diluted income per share	$	0.15		$	0.14		$	0.07		$	0.04
Shares used in computing basic income		25,679			25,679			25,418			25,418
per share
Shares used in computing diluted income
per share		26,239			26,239			25,495			25,495

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NEWS RELEASE September 25, 2009

Pericom Semiconductor Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(unaudited)

	As of		As of
	Jun 27,2009		Jun 28,2008
Assets
Current Assets:
Cash & cash equivalents	$	37,321	$	41,646
Restricted cash		3,200		-
Short-term investments		75,471		72,108
Accounts receivable - trade		22,875		29,002
Inventories		16,340		17,921
Prepaid expenses and other current assets		3,738		7,627
Deferred income taxes		2,433		3,344
Total current assets		161,378		171,648
Property and equipment, net		47,238		29,173
Investments in unconsolidated affiliates		10,826		10,392
Deferred income taxes-non current		4,657		4,543
Long-term investments in marketable securities		11,780		10,171
Goodwill		1,673		1,325
Intangible assets		1,764		1,140
Other assets		6,742		3,191
Total assets	$	246,058	$	231,583
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	10,824	$	13,431
Accrued liabilities		15,118		8,779
Current portion of long-term debt		60		-
Total current liabilities		26,002		22,210
Long-term debt		1,610		-
Industrial development subsidy		3,718		-
Deferred tax liabilities		-		800
Other long term liabilities		1,287		-
Minority interest in consolidated subsidiaries		1,233		1,118
Total liabilities		33,850		24,128
Shareholders' equity:
Common stock		133,162		132,028
Retained earnings and other		79,046		75,427
Total shareholders' equity		212,208		207,455
Total liabilities and shareholders' equity	$	246,058	$	231,583

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