Exhibit 99.1
PMC Reports Fourth Quarter and Full Year 2012 Results
PMC Investor Relations Website: http://investor.pmcs.com
Q4 and Full Year 2012 earnings announcement call live on Website at 1:30 p.m. PT
Conference call replay number 1 (888) 843-7419; passcode 34052547#
Replay available shortly after end of conference call through February 14, 2013
SUNNYVALE, Calif.--(BUSINESS WIRE)--January 31, 2013--PMC® (Nasdaq: PMCS), the semiconductor innovator transforming networks that connect, move and store big data, today reported results for the fourth quarter and full year ended December 29, 2012.
Net revenues in the fourth quarter of 2012 were $129.4 million, a sequential decrease of 2 percent compared to $131.7 million in the third quarter of 2012, and a decrease of 15 percent compared to $152.6 million in the fourth quarter of 2011.
GAAP net income in the fourth quarter of 2012 was $11.1 million, or $0.05 per diluted share, compared to GAAP net loss in the third quarter of 2012 was $274.4 million, or $1.31 per share. Third quarter of 2012 GAAP results included impairment write-downs of goodwill and intangible assets of $276.1 million. Non-GAAP net income in the fourth quarter of 2012 was $25.1 million, or $0.12 per diluted share, up 18 percent sequentially, compared to non-GAAP net income of $21.4 million, or $0.10 per diluted share, in the third quarter of 2012.
“We are pleased to report that our fourth quarter results were at the high end of our outlook, despite continued headwinds in the macro environment," said Greg Lang, PMC President and Chief Executive Officer.
Net income on a non-GAAP basis in the fourth quarter of 2012 excludes the following items: (i) $6.3 million stock-based compensation expense; (ii) $10.8 million amortization of purchased intangible assets; and (iii) $3.1 million of other adjustments including income tax related as described in the accompanying GAAP to non-GAAP reconciliation table.
For the full year ended December 29, 2012, net revenues were $531 million compared to $654.3 million for the year ended December 31, 2011, a decrease of 19 percent year over year. GAAP operating loss for the full year 2012 was $281.7 million compared to GAAP operating income of $52.8 million reported in the year ended December 31, 2011. GAAP operating loss for the full year 2012 included impairment write-downs of goodwill and intangible assets of $276.1 million. Non-GAAP operating income for the full year 2012 was $77.5 million compared to non-GAAP operating income of $142.7 million in the prior year. GAAP net loss for the full year 2012 was $333.1 million, or $1.54 per share, compared to GAAP net income of $84.7 million, or $0.36 per diluted share, for the prior year. Non-GAAP net income in the year ended December 29, 2012 was $81.8 million or $0.38 per diluted share, compared to non-GAAP net income of $142 million or $0.60 per diluted share, in the year ended December 31, 2011.
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 FULL YEAR 2012 HIGHLIGHTS
The Company announced the following in the fourth quarter and full year of 2012:
- Nov 19 - PMC Appoints Steve Geiser Vice President and Chief Financial Officer
- Sept 18 - PMC Delivers Industry’s First Tri-Speed Converged Carrier Ethernet/OTN Framer
- Sept 5 - Adaptec by PMC Transforms Data Center Storage Architectures with Industry’s Highest Port Count, PCIe Gen3 RAID Adapters
- Jun 25 - PMC Wins Huawei 2011 Technology Quality Award
- Jun 5 - PMC Introduces Industry’s Most Integrated, Lowest Power Radio Transceiver Chipset for Next-Generation Macro Base Stations
- Jun 5 - PMC Delivers Industry’s First End-to-End 12Gb/s Enterprise SAS Solution with SSD Controller
- May 24 - PMC Showcases the Industry’s First End-to-End Symmetric 10G EPON Demonstration at OptiNet China
- Mar 6 - Adaptec Doubles Server Storage Performance and Bandwidth in CeBIT Demo Featuring PCIe 3.0 on the Intel® Xeon® Processor E5-2600 Product Family and Seagate Pulsar® Solid State Drives
- Feb 29 - PMC Acquires the Server Storage 12Gb/s Expander Product Line from Maxim
Fourth Quarter and Full Year 2012 Conference Call
Management will review the fourth quarter and full year 2012 results and share its outlook for the first quarter of 2013 during a conference call at 1:30 pm Pacific Time/4:30 pm Eastern Time on January 31, 2013. 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 live by telephone, dial 1 (888) 771-4371 (US Toll Free) or 1 (847) 585-4405 (International) with passcode 34052547#, approximately ten minutes before the start time. A telephone playback will be available after the completion of the call and can be accessed at 1 (888) 843-7419 using the access code 34052547#. A replay of the webcast will be available for 10 business days.
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’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 and volatility in global financial markets.
About PMC
PMC (Nasdaq:PMCS) is the semiconductor 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 Twitter, LinkedIn and RSS.
© Copyright PMC-Sierra, Inc. 2013. All rights reserved. PMC and PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the United States and other countries, and PMCS is a trademark of PMC-Sierra, Inc. Other product and company names mentioned herein may be trademarks of their respective owners. PMC is the corporate brand of PMC-Sierra.
| PMC-Sierra, Inc. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (in thousands, except for per share amounts) |
| (unaudited) |
| | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | | | | | | | | | |
| | December 29, | | September 30, | | December 31, | | December 29, | | December 31, |
| | | 2012 | | | | 2012 | | | | 2011 | | | | 2012 | | | | 2011 | |
| | | | | | | | | | |
| Net revenues | | $ | 129,418 | | | $ | 131,723 | | | $ | 152,553 | | | $ | 530,997 | | | $ | 654,304 | |
| Cost of revenues | | | 36,663 | | | | 38,990 | | | | 47,166 | | | | 157,918 | | | | 211,630 | |
| Gross profit | | | 92,755 | | | | 92,733 | | | | 105,387 | | | | 373,079 | | | | 442,674 | |
| | | | | | | | | | |
| Research and development | | | 49,553 | | | | 55,604 | | | | 56,517 | | | | 220,927 | | | | 227,106 | |
| Selling, general and administrative | | | 26,432 | | | | 27,786 | | | | 27,045 | | | | 112,479 | | | | 118,601 | |
| Amortization of purchased intangible assets | | | 10,784 | | | | 11,624 | | | | 11,099 | | | | 45,321 | | | | 44,182 | |
| Impairment of goodwill and purchased intangible assets | | | - | | | | 276,082 | | | | - | | | | 276,082 | | | | - | |
| Income (loss) from operations | | | 5,986 | | | | (278,363 | ) | | | 10,726 | | | | (281,730 | ) | | | 52,785 | |
| | | | | | | | | | |
| Other income (expense): | | | | | | | | | | |
| Revaluation of liability for contingent consideration | | | - | | | | - | | | | - | | | | - | | | | 29,376 | |
| Gain on investment securities and other | | | 777 | | | | 180 | | | | 286 | | | | 1,523 | | | | 845 | |
| Amortization of debt issue costs | | | (17 | ) | | | (50 | ) | | | (50 | ) | | | (167 | ) | | | (200 | ) |
| Foreign exchange gain (loss) | | | 439 | | | | (2,454 | ) | | | (1,194 | ) | | | (1,512 | ) | | | 344 | |
| Interest expense, net | | | (47 | ) | | | (797 | ) | | | (295 | ) | | | (1,586 | ) | | | (2,267 | ) |
| Income (loss) before recovery of (provision for) income taxes | | | 7,138 | | | | (281,484 | ) | | | 9,473 | | | | (283,472 | ) | | | 80,883 | |
| Recovery of (provision for) income taxes | | | 3,949 | | | | 7,098 | | | | 18,892 | | | | (49,618 | ) | | | 3,816 | |
| Net income (loss) | | $ | 11,087 | | | $ | (274,386 | ) | | $ | 28,365 | | | $ | (333,090 | ) | | $ | 84,699 | |
| | | | | | | | | | |
| Net income (loss) per common share - basic | | $ | 0.05 | | | $ | (1.31 | ) | | $ | 0.12 | | | $ | (1.54 | ) | | $ | 0.36 | |
| Net income (loss) per common share - diluted | | $ | 0.05 | | | $ | (1.31 | ) | | $ | 0.12 | | | $ | (1.54 | ) | | $ | 0.36 | |
| | | | | | | | | | |
| Shares used in per share calculation - basic | | | 202,400 | | | | 209,512 | | | | 231,199 | | | | 216,593 | | | | 233,210 | |
| Shares used in per share calculation - diluted | | | 202,900 | | | | 209,512 | | | | 232,028 | | | | 216,593 | | | | 235,184 | |
| | | | | | | | | | | | | | | | | | | | |
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, impairment of goodwill and 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, |
| Selling, General and Administrative Expense, Amortization of Purchased Intangible Assets, Impairment of goodwill and 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 |
| (in thousands, except for per share amounts) |
| (unaudited) |
| | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 29, | | September 30, | | December 31, | | December 29, | | December 31, |
| | | 2012 (1) | | | | 2012 (2) | | | | 2011 (3) | | | | 2012 (4) | | | | 2011 (5) | |
| | | | | | | | | | |
| GAAP cost of revenues | | $ | 36,663 | | | $ | 38,990 | | | $ | 47,166 | | | $ | 157,918 | | | $ | 211,630 | |
| Stock-based compensation | | | (218 | ) | | | (181 | ) | | | (242 | ) | | | (875 | ) | | | (945 | ) |
| Acquisition-related costs | | | - | | | | - | | | | - | | | | (37 | ) | | | (9,128 | ) |
| Asset impairment | | | 10 | | | | (108 | ) | | | - | | | | (98 | ) | | | - | |
| Termination costs | | | (92 | ) | | | - | | | | - | | | | (92 | ) | | | - | |
| Non-GAAP cost of revenues | | $ | 36,363 | | | $ | 38,701 | | | $ | 46,924 | | | $ | 156,816 | | | $ | 201,557 | |
| | | | | | | | | | |
| GAAP gross profit | | $ | 92,755 | | | $ | 92,733 | | | $ | 105,387 | | | $ | 373,079 | | | $ | 442,674 | |
| Stock-based compensation | | | 218 | | | | 181 | | | | 242 | | | | 875 | | | | 945 | |
| Acquisition-related costs | | | - | | | | - | | | | - | | | | 37 | | | | 9,128 | |
| Asset impairment | | | (10 | ) | | | 108 | | | | - | | | | 98 | | | | - | |
| Termination costs | | | 92 | | | | - | | | | - | | | | 92 | | | | - | |
| Non-GAAP gross profit | | $ | 93,055 | | | $ | 93,022 | | | $ | 105,629 | | | $ | 374,181 | | | $ | 452,747 | |
| | | | | | | | | | |
| Non-GAAP gross profit % | | | 72 | % | | | 71 | % | | | 69 | % | | | 70 | % | | | 69 | % |
| | | | | | | | | | |
| GAAP research and development expense | | $ | 49,553 | | | $ | 55,604 | | | $ | 56,517 | | | $ | 220,927 | | | $ | 227,106 | |
| Stock-based compensation | | | (2,909 | ) | | | (2,933 | ) | | | (2,983 | ) | | | (11,583 | ) | | | (11,648 | ) |
| Acquisition-related (costs) recoveries | | | (269 | ) | | | (751 | ) | | | 175 | | | | (2,162 | ) | | | (203 | ) |
| Termination costs | | | (347 | ) | | | (690 | ) | | | - | | | | (2,748 | ) | | | - | |
| Asset impairment | | | (533 | ) | | | (479 | ) | | | - | | | | (1,012 | ) | | | (3,029 | ) |
| Non-GAAP research and development expense | | $ | 45,495 | | | $ | 50,751 | | | $ | 53,709 | | | $ | 203,422 | | | $ | 212,226 | |
| | | | | | | | | | |
| GAAP selling, general and administrative expense | | $ | 26,432 | | | $ | 27,786 | | | $ | 27,045 | | | $ | 112,479 | | | $ | 118,601 | |
| Stock-based compensation | | | (3,210 | ) | | | (2,974 | ) | | | (3,500 | ) | | | (13,857 | ) | | | (14,462 | ) |
| Acquisition-related recoveries (costs) | | | 40 | | | | (335 | ) | | | (810 | ) | | | (1,591 | ) | | | (3,545 | ) |
| Termination costs | | | (219 | ) | | | (717 | ) | | | - | | | | (1,137 | ) | | | - | |
| Asset impairment | | | 39 | | | | (312 | ) | | | - | | | | (273 | ) | | | - | |
| Lease exit recoveries (costs) | | | 125 | | | | (1,755 | ) | | | 626 | | | | (2,384 | ) | | | (2,766 | ) |
| Non-GAAP selling, general and administrative expense | | $ | 23,207 | | | $ | 21,693 | | | $ | 23,361 | | | $ | 93,237 | | | $ | 97,828 | |
| | | | | | | | | | |
| GAAP amortization of purchased intangible assets | | $ | 10,784 | | | $ | 11,624 | | | $ | 11,099 | | | $ | 45,321 | | | $ | 44,182 | |
| Amortization of purchased intangible assets | | | (10,784 | ) | | | (11,624 | ) | | | (11,099 | ) | | | (45,321 | ) | | | (44,182 | ) |
| Non-GAAP amortization of purchased intangible assets | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | |
| GAAP impairment of goodwill and purchased intangible assets | | $ | - | | | $ | 276,082 | | | $ | - | | | $ | 276,082 | | | $ | - | |
| Impairment of goodwill and purchased intangible assets | | | - | | | | (276,082 | ) | | | - | | | | (276,082 | ) | | | - | |
| Non-GAAP impairment of goodwill and purchased intangible assets | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | |
| GAAP other income (expense) | | $ | 1,152 | | | $ | (3,121 | ) | | $ | (1,253 | ) | | $ | (1,742 | ) | | $ | 28,098 | |
| Revaluation of liability for contingent consideration | | | - | | | | - | | | | - | | | | - | | | | (29,376 | ) |
| Foreign exchange (gain) loss on foreign tax liabilities | | | (872 | ) | | | 2,145 | | | | 1,430 | | | | 1,531 | | | | (583 | ) |
| Accretion of debt discount related to senior convertible notes | | | 389 | | | | 962 | | | | 906 | | | | 3,218 | | | | 3,518 | |
| Accretion of liability for contingent consideration | | | - | | | | - | | | | - | | | | - | | | | 1,182 | |
| Interest expense related to short-term loan | | | - | | | | - | | | | - | | | | - | | | | 258 | |
| Recovery of impairment on investment securities and other | | | - | | | | - | | | | (533 | ) | | | - | | | | (533 | ) |
| Non-GAAP other income (expense) | | $ | 669 | | | $ | (14 | ) | | $ | 550 | | | $ | 3,007 | | | $ | 2,564 | |
| | | | | | | | | | |
| GAAP (recovery of) provision for income taxes | | $ | (3,949 | ) | | $ | (7,098 | ) | | $ | (18,892 | ) | | $ | 49,618 | | | $ | (3,816 | ) |
| Recovery of (provision for) income taxes | | | 3,825 | | | | 6,305 | | | | 18,889 | | | | (50,915 | ) | | | 7,092 | |
| Non-GAAP (recovery of) provision for income taxes | | $ | (124 | ) | | $ | (793 | ) | | $ | (3 | ) | | $ | (1,297 | ) | | $ | 3,276 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 29, | | September 30, | | December 31, | | December 29, | | December 31, |
| | | 2012 (1) | | | | 2012 (2) | | | | 2011 (3) | | | | 2012 (4) | | | | 2011 (5) | |
| | | | | | | | | | |
| GAAP operating expenses | | $ | 86,769 | | | $ | 371,096 | | | $ | 94,661 | | | $ | 654,809 | | | $ | 389,889 | |
| Stock-based compensation | | | (6,119 | ) | | | (5,907 | ) | | | (6,483 | ) | | | (25,440 | ) | | | (26,110 | ) |
| Acquisition-related costs | | | (229 | ) | | | (1,086 | ) | | | (635 | ) | | | (3,753 | ) | | | (3,748 | ) |
| Termination costs | | | (566 | ) | | | (1,407 | ) | | | - | | | | (3,885 | ) | | | - | |
| Asset impairment | | | (494 | ) | | | (791 | ) | | | - | | | | (1,285 | ) | | | (3,029 | ) |
| Lease exit recoveries (costs) | | | 125 | | | | (1,755 | ) | | | 626 | | | | (2,384 | ) | | | (2,766 | ) |
| Amortization of purchased intangible assets | | | (10,784 | ) | | | (11,624 | ) | | | (11,099 | ) | | | (45,321 | ) | | | (44,182 | ) |
| Impairment of goodwill and purchased intangible assets | | | - | | | | (276,082 | ) | | | - | | | | (276,082 | ) | | | - | |
| Non-GAAP operating expenses | | $ | 68,702 | | | $ | 72,444 | | | $ | 77,070 | | | $ | 296,659 | | | $ | 310,054 | |
| | | | | | | | | | |
| GAAP operating income (loss) | | $ | 5,986 | | | $ | (278,363 | ) | | $ | 10,726 | | | $ | (281,730 | ) | | $ | 52,785 | |
| Stock-based compensation | | | 6,337 | | | | 6,088 | | | | 6,725 | | | | 26,315 | | | | 27,055 | |
| Acquisition-related costs | | | 229 | | | | 1,086 | | | | 635 | | | | 3,790 | | | | 12,876 | |
| Termination costs | | | 658 | | | | 1,407 | | | | - | | | | 3,977 | | | | - | |
| Asset impairment | | | 484 | | | | 899 | | | | - | | | | 1,383 | | | | 3,029 | |
| Lease exit (recoveries) costs | | | (125 | ) | | | 1,755 | | | | (626 | ) | | | 2,384 | | | | 2,766 | |
| Amortization of purchased intangible assets | | | 10,784 | | | | 11,624 | | | | 11,099 | | | | 45,321 | | | | 44,182 | |
| Impairment of goodwill and purchased intangible assets | | | - | | | | 276,082 | | | | - | | | | 276,082 | | | | - | |
| Non-GAAP operating income | | $ | 24,353 | | | $ | 20,578 | | | $ | 28,559 | | | $ | 77,522 | | | $ | 142,693 | |
| | | | | | | | | | |
| Non-GAAP operating margin % | | | 19 | % | | | 16 | % | | | 19 | % | | | 15 | % | | | 22 | % |
| | | | | | | | | | |
| GAAP net income (loss) | | $ | 11,087 | | | $ | (274,386 | ) | | $ | 28,365 | | | $ | (333,090 | ) | | $ | 84,699 | |
| Stock-based compensation | | | 6,337 | | | | 6,088 | | | | 6,725 | | | | 26,315 | | | | 27,055 | |
| Acquisition-related costs | | | 229 | | | | 1,086 | | | | 635 | | | | 3,790 | | | | 12,876 | |
| Termination costs | | | 658 | | | | 1,407 | | | | - | | | | 3,977 | | | | - | |
| Asset impairment | | | 484 | | | | 899 | | | | - | | | | 1,383 | | | | 3,029 | |
| Lease exit (recoveries) costs | | | (125 | ) | | | 1,755 | | | | (626 | ) | | | 2,384 | | | | 2,766 | |
| Amortization of purchased intangible assets | | | 10,784 | | | | 11,624 | | | | 11,099 | | | | 45,321 | | | | 44,182 | |
| Impairment of goodwill and purchased intangible assets | | | - | | | | 276,082 | | | | - | | | | 276,082 | | | | - | |
| Revaluation of liability for contingent consideration | | | - | | | | - | | | | - | | | | - | | | | (29,376 | ) |
| Foreign exchange (gain) loss on foreign tax liabilities | | | (872 | ) | | | 2,145 | | | | 1,430 | | | | 1,531 | | | | (583 | ) |
| Accretion of debt discount related to senior convertible notes | | | 389 | | | | 962 | | | | 906 | | | | 3,218 | | | | 3,518 | |
| Accretion of liability for contingent consideration | | | - | | | | - | | | | - | | | | - | | | | 1,182 | |
| Interest expense related to short-term loan | | | - | | | | - | | | | - | | | | - | | | | 258 | |
| Recovery of impairment on investment securities and other | | | - | | | | - | | | | (533 | ) | | | - | | | | (533 | ) |
| (Recovery of) provision for income taxes | | | (3,825 | ) | | | (6,305 | ) | | | (18,889 | ) | | | 50,915 | | | | (7,092 | ) |
| Non-GAAP net income | | $ | 25,146 | | | $ | 21,357 | | | $ | 29,112 | | | $ | 81,826 | | | $ | 141,981 | |
| | | | | | | | | | |
| Non-GAAP net income per share - basic | | $ | 0.12 | | | $ | 0.10 | | | $ | 0.13 | | | $ | 0.38 | | | $ | 0.61 | |
| Non-GAAP net income per share - diluted | | $ | 0.12 | | | $ | 0.10 | | | $ | 0.13 | | | $ | 0.38 | | | $ | 0.60 | |
| | | | | | | | | | |
| Shares used to calculate non-GAAP net income per share - basic | | | 202,400 | | | | 209,512 | | | | 231,199 | | | | 216,593 | | | | 233,210 | |
| Shares used to calculate non-GAAP net income per share - diluted | | | 202,900 | | | | 210,525 | | | | 232,028 | | | | 218,046 | | | | 235,184 | |
| | | | | | | | | | | | | | | | | | | | |
| (1) $6.3 million stock-based compensation expense; $0.2 million acquisition-related costs; $0.7 million termination costs; $0.5 million asset impairment; $0.1 million recovery of lease exit costs; $10.8 million amortization of purchased intangible assets; $0.9 million foreign exchange gain on foreign tax liabilities; $0.4 million non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and $3.8 million recovery of income taxes which includes $5.1 million income tax recovery related to an intercompany dividend, $1.7 million income tax provision relating to intercompany transactions, $1.3 million income tax provision for adjustments relating to prior periods, $0.6 million recovery of arrears interest relating to unrecognized tax benefits, $0.5 million deferred tax recovery related to non-deductible intangible asset amortization and impairment, $0.4 million income tax recovery relating to foreign exchange translation of a foreign subsidiary, and $0.2 million income tax recovery related to tax deductible items above. |
|
| (2) $6.1 million stock-based compensation expense; $1.1 million acquisition-related costs; $1.4 million termination costs; $0.9 million asset impairment; $1.8 million lease exit costs; $11.6 million amortization of purchased intangible assets; $276.1 million impairment of goodwill and purchased intangible assets; $2.1 million foreign exchange loss on foreign tax liabilities; $1 million non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and $6.3 million recovery of income taxes which includes $4.3 million income tax recovery related to an intercompany dividend, $2.8 million income tax recovery for adjustments relating to prior periods, $1.7 million income tax provision relating to intercompany transactions, $1.2 million deferred tax recovery related to non-deductible intangible asset amortization and impairment, $0.8 million arrears interest relating to unrecognized tax benefits, and $0.5 million income tax recovery relating to foreign exchange translation of a foreign subsidiary. |
| |
| (3) $6.7 million stock-based compensation expense; $0.6 million acquisition-related costs; $0.6 million recovery of lease exit costs; $11.1 million amortization of purchased intangible assets; $1.4 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 recovery of impairment on investment securities and other; and $18.9 million recovery of income taxes which includes $10.2 million income tax recovery for adjustments relating to prior periods, $2.5 million reduction of stock option related loss carry-forwards recognized in equity, $1.8 million recovery of arrears interest relating to unrecognized tax benefits, $1 million income tax recovery related to foreign tax credits, $0.6 million net tax recovery relating to foreign exchange translation of a foreign subsidiary, $0.4 million income tax recovery relating to intercompany transactions, and $2.4 million deferred tax recovery related to non-deductible intangible asset amortization. |
| |
| (4) $26.3 million stock-based compensation expense; $3.8 million acquisition-related costs; $4 million termination costs; $1.4 million asset impairment; $2.4 million lease exit costs; $45.3 million amortization of purchased intangible assets; $276.1 million impairment of goodwill and purchased intangible assets; $1.5 million foreign exchange loss on foreign tax liabilities; $3.2 million non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; and $50.9 million provision for income taxes which includes $47.2 million income tax provision related to an intercompany dividend net of $11.1 million related to the U.S. Federal and State tax credits required to be recognized in advance of their utilization, $6.7 million income tax provision relating to intercompany transactions, $3.4 million arrears interest relating to unrecognized tax benefits, $2.8 million deferred tax recovery related to non-deductible intangible asset amortization and impairment, $2.2 million income tax recovery for adjustments relating to prior periods, $0.9 million net tax recovery relating to foreign exchange translation of a foreign subsidiary, and $0.5 million income tax recovery related to tax deductible items above. |
| |
| (5) $27.1 million stock-based compensation expense; $12.9 million acquisition-related costs; $3 million asset impairment; $2.8 million lease exit costs; $44.2 million amortization of purchased intangible assets; $29.4 million revaluation of liability for contingent consideration; $0.6 million foreign exchange gain on foreign tax liabilities; $3.5 million of non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $1.2 million accretion of liability for contingent consideration; $0.3 million interest related to short-term loan; $0.5 million recovery of impairment on investment securities and other; and $7.1 million recovery of income taxes which includes $9.9 million income tax recovery for adjustments relating to prior periods, $6.5 million income tax provision relating to inter-company transactions, $1 million income tax recovery related to foreign tax credits, $0.6 million of stock option related loss carry-forwards recognized in equity, $0.5 million net tax recovery related to foreign exchange translation of a foreign subsidiary, $0.2 million recovery of arrears interest relating to unrecognized tax benefits, $0.2 million income tax recovery related to stock-based compensation, and $2.4 million deferred tax recovery related to non-deductible intangible asset amortization. |
| |
| PMC-Sierra, Inc. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (in thousands) |
| (unaudited) |
| | | | |
| | December 29, | | December 31, |
| | | 2012 | | | | 2011 | |
| ASSETS: | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 169,970 | | | $ | 182,571 | |
| Short-term investments | | | 11,431 | | | | 104,391 | |
| Accounts receivable, net | | | 62,143 | | | | 59,213 | |
| Inventories, net | | | 23,548 | | | | 39,911 | |
| Prepaid expenses and other current assets | | | 22,125 | | | | 23,411 | |
| Income tax receivable | | | 5,824 | | | | 8,027 | |
| Deferred tax assets | | | 45,063 | | | | 30,725 | |
| Total current assets | | | 340,104 | | | | 448,249 | |
| | | | |
| Investment securities | | | 91,778 | | | | 226,619 | |
| Investments and other assets | | | 20,133 | | | | 2,431 | |
| Prepaid expenses | | | 10,920 | | | | 16,901 | |
| Property and equipment, net | | | 43,146 | | | | 25,364 | |
| Goodwill | | | 252,419 | | | | 520,899 | |
| Intangible assets, net | | | 128,668 | | | | 158,482 | |
| Deferred tax assets | | | 484 | | | | 494 | |
| | $ | 887,652 | | | $ | 1,399,439 | |
| | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | | | | |
| Current liabilities: | | | | |
| 2.25% senior convertible notes due October 15, 2025, net | | $ | - | | | $ | 65,122 | |
| Accounts payable | | | 27,410 | | | | 38,340 | |
| Accrued liabilities | | | 72,282 | | | | 66,139 | |
| Liability for unrecognized tax benefit | | | 52,948 | | | | 46,394 | |
| Income taxes payable | | | 644 | | | | - | |
| Deferred income taxes | | | 2,466 | | | | 2,450 | |
| Deferred income | | | 8,113 | | | | 16,024 | |
| Total current liabilities | | | 163,863 | | | | 234,469 | |
| | | | |
| Long-term obligations | | | 17,233 | | | | 1,284 | |
| Deferred income taxes | | | 43,888 | | | | 40,663 | |
| Liability for unrecognized tax benefit | | | 19,257 | | | | 17,323 | |
| | | | |
| PMC special shares convertible into 1,019 (2011 - 1,029) | | | | |
| shares of common stock | | | 1,188 | | | | 1,228 | |
| | | | |
| Stockholders' equity: | | | | |
| Common stock and additional paid in capital | | | 1,537,930 | | | | 1,594,667 | |
| Accumulated other comprehensive income (loss) | | | 616 | | | | (1,146 | ) |
| Accumulated deficit | | | (896,323 | ) | | | (489,049 | ) |
| Total stockholders' equity | | | 642,223 | | | | 1,104,472 | |
| | $ | 887,652 | | | $ | 1,399,439 | |
| | | | | | | | |
| PMC-Sierra, Inc. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (in thousands) |
| (unaudited) |
| | | |
| Twelve Months Ended |
| December 29, | | December 31, |
| | 2012 | | | | 2011 | |
| Cash flows from operating activities: | | | |
| Net (loss) income | $ | (333,090 | ) | | $ | 84,699 | |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | | | |
| Depreciation and amortization | | 64,535 | | | | 72,544 | |
| Stock-based compensation | | 26,315 | | | | 27,055 | |
| Unrealized foreign exchange loss (gain), net | | 1,747 | | | | (43 | ) |
| Net amortization of premiums/discounts and accrued interest of investments | | 5,101 | | | | 4,520 | |
| Asset impairment | | 1,759 | | | | 3,589 | |
| Accrued interest on short-term loan | | - | | | | 589 | |
| Gain on investment securities and other | | (1,508 | ) | | | (671 | ) |
| Impairment of goodwill and purchased intangible assets | | 276,082 | | | | - | |
| Revaluation of liability for contingent consideration | | - | | | | (29,376 | ) |
| Taxes related to intercompany dividend | | 60,940 | | | | - | |
| | | |
| Changes in operating assets and liabilities: | | | |
| Accounts receivable | | (2,929 | ) | | | 10,177 | |
| Inventories | | 16,363 | | | | 2,210 | |
| Prepaid expenses and other current assets | | 2,635 | | | | 2,824 | |
| Accounts payable and accrued liabilities | | (28,267 | ) | | | (9,447 | ) |
| Deferred income taxes and income taxes payable | | (8,768 | ) | | | (4,044 | ) |
| Accrued restructuring costs | | - | | | | (1,609 | ) |
| Deferred income | | (7,911 | ) | | | (2,202 | ) |
| Net cash provided by operating activities | | 73,004 | | | | 160,815 | |
| | | |
| Cash flows from investing activities: | | | |
| Business acquisition | | (15,900 | ) | | | (1,669 | ) |
| Purchases of property and equipment | | (31,229 | ) | | | (12,702 | ) |
| Purchases of intangible assets | | (7,438 | ) | | | (6,116 | ) |
| Redemption of short-term investments | | 26,473 | | | | - | |
| Disposals of investment securities | | 315,310 | | | | 159,523 | |
| Purchases of investment securities and other investments | | (120,917 | ) | | | (205,903 | ) |
| Net cash provided by (used in) investing activities | | 166,299 | | | | (66,867 | ) |
| | | |
| Cash flows from financing activities: | | | |
| Repurchase of senior convertible notes | | (68,340 | ) | | | - | |
| Repurchases of common stock | | (199,999 | ) | | | (39,999 | ) |
| Repayment of short-term loan | | - | | | | (180,991 | ) |
| Proceeds from issuance of common stock | | 16,000 | | | | 16,764 | |
| Net cash used in financing activities | | (252,339 | ) | | | (204,226 | ) |
| | | |
| Effect of exchange rate changes on cash and cash equivalents | | 435 | | | | (506 | ) |
| Net decrease in cash and cash equivalents | | (12,601 | ) | | | (110,784 | ) |
| Cash and cash equivalents, beginning of year | | 182,571 | | | | 293,355 | |
| Cash and cash equivalents, end of year | $ | 169,970 | | | $ | 182,571 | |
CONTACT:
PMC-Sierra, Inc.
Director, Investor Relations
Jennifer Gianola, 1-408-239-8630
jennifer.gianola@pmcs.com
or
Communications Specialist
Hillary Choularton, 1-604-415-6671
hillary.choularton@pmcs.com
