Vitesse Semiconductor (VTSS) 8-K Vitesse Reports Second Quarter Fiscal Year 2013 Results

Exhibit 99.1

FOR IMMEDIATE RELEASECompany Contact:Agency Contact:

Marty McDermutCathy Mattison

Vitesse SemiconductorLHA

+1.805.388.3700+1.415.433.3777

invest@vitesse.comVTSS@lhai.com

Vitesse Reports Second Quarter Fiscal Year 2013 Results

• New product revenue grew 44% sequentially, representing 29% of total revenue

• Net revenues totaled $24.8 million

• Operating expenses reduced to $17.3 million

• Design wins for 2013 up nearly 100% to date compared with the first half of 2012

CAMARILLO, Calif. ─ May 7, 2013 ─ Vitesse Semiconductor Corporation (NASDAQ: VTSS), a leading provider of advanced IC solutions for Carrier and Enterprise networks, reported its financial results for the second quarter fiscal year 2013, ended March 31, 2013.

“During the quarter, we continued to execute on our strategy to drive new product growth,” said Chris Gardner, CEO of Vitesse. “Sequentially, new product revenue increased over 44% and new product bookings were also up. Design wins for the first half of 2013 grew nearly 100% compared to the same period last year, and we are creating a record number of new opportunities. While net revenues were softer than anticipated due to timing of intellectual property revenue, operating expenses decreased as we continue to drive leverage into our financial model.”

“Our differentiating technologies are driving success, particularly in 4G base stations and backhaul, Ethernet Access Devices, and the cloud networking markets. Altogether, these trends put us on track to achieve our goal of doubling our new product revenue to $30.0 million in fiscal year 2013, and doubling it again in fiscal year 2014.”

Second Quarter Fiscal Year 2013 Financial Results Summary

• Total net revenues were $24.8 million, compared to $25.7 million in the first quarter of fiscal year 2013 and $29.7 million in the second quarter of fiscal year 2012.

◦ Product revenues were $24.7 million, compared to $23.9 million in the first quarter of fiscal year 2013 and $27.2 million in the second quarter of fiscal year 2012.

◦ The product lines contributed the following as a percentage of product revenue as compared to the first quarter of fiscal year 2013:

▪ Carrier networking products: 53.3% versus 58.5%

▪ Enterprise networking products: 44.0% versus 40.4%

◦ Intellectual property revenues totaled $64,000, compared to $1.8 million in the first quarter of fiscal year 2013 and $2.5 million in the second quarter of fiscal year 2012.

• Product margins were 54.0%, compared to 54.1% in the first quarter of fiscal year 2013 and 61.0% in the second quarter of fiscal year 2012.

• Operating expenses decreased to $17.3 million from $18.6 million in the first quarter of fiscal year 2013 and $18.0 million in the second quarter of fiscal year 2012.

• Operating loss was $3.9 million, compared to operating loss of $3.8 million in the first quarter of fiscal year 2013 and operating income of $1.1 million in the second quarter of fiscal year 2012.

• Non-GAAP operating loss was $2.8 million, compared to non-GAAP operating loss of $2.5 million in the first quarter of fiscal year 2013 and non-GAAP operating income of $2.3 million in the second quarter of fiscal year 2012.

• Net loss was $4.8 million, or $0.13 per basic and fully diluted share. This compares to net loss of $5.0 million, or $0.18 per basic and fully diluted share, in the first quarter of fiscal year 2013; and net loss of $6.2 million, which included $5.3 million loss on the embedded derivative, or $0.25 per basic and fully diluted share, in the second quarter of fiscal year 2012.

• Non-GAAP net loss was $3.8 million, or $0.10 per basic and fully diluted share, compared to non-GAAP net loss of $4.5 million, or $0.16 per basic and fully diluted share, for the first quarter of fiscal year 2013; and non-GAAP net income of $313,000, or $0.01 per basic share and breakeven per fully diluted share, in the second quarter of fiscal year 2012.

Balance Sheet Data at March 31, 2013 as Compared to September 30, 2012

• Cash balance increased to $36.9 million, compared to $23.9 million.

• Accounts receivable totaled $8.4 million, compared to $9.4 million.

• Inventory totaled $12.6 million, compared to $12.1 million.

• Working capital increased to $31.9 million, compared to $28.7 million.

Financial Outlook

For the third quarter of fiscal year 2013, ending June 30, 2013, Vitesse expects revenues to be in the range of $25.0 million to $27.5 million and product margins are expected to be between 51% and 53%. Operating expenses are expected to be between $18.5 million and $19.5 million.

May 7, 2013 Conference Call Information

A conference call is scheduled for today, May 7, 2013, at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to report financial results for the second quarter fiscal year 2013.

To listen to the conference call via telephone, dial 888.455.2263 (U.S. toll-free) or

719.457.2645 (International) and provide the passcode 9481541. Participants should dial in at least 10 minutes prior to the start of the call. To listen via the Internet, the webcast can be accessed through the investor section of the Vitesse corporate web site at www.vitesse.com.

The playback of the conference call will be available approximately two hours after the call concludes and will be accessible on the Vitesse corporate web site or by calling

877.870.5176 (U.S. toll-free) or 858.384.5517 (International) and entering the passcode 9481541. The audio replay will be available for seven days.

About Vitesse

Vitesse (NASDAQ: VTSS) designs a diverse portfolio of high-performance semiconductor solutions for Carrier and Enterprise networks worldwide. Vitesse products enable the fastest-growing network infrastructure markets including Mobile Access/IP Edge, Cloud Computing and SMB/SME Enterprise Networking. Visit www.vitesse.com or follow us on Twitter @VitesseSemi.

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Vitesse is a registered trademark of Vitesse Semiconductor Corporation in the United States and other jurisdictions. All other trademarks or registered trademarks mentioned herein are the property of their respective holders.

VTSS-F

Cautions Regarding Forward Looking Statements

All statements included or incorporated by reference in this release and the related conference call for analysts and investors, other than statements or characterizations of historical fact, are forward-looking statements that are based on our current expectations, estimates and projections about our business and industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” and similar terms, and variations or negatives of these words. Examples of forward-looking statements in this release include the Company's financial outlook for its third fiscal quarter of 2013, projected revenues from design wins and anticipated revenue growth. Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that could affect the Company's forward-looking statements include, among other things: identification of feasible new product initiatives, management of R&D efforts and the resulting successful development of new products and product platforms; acceptance by customers of the Company's products; reliance on key suppliers; rapid technological change in the industries in which the Company operates; and competitive factors, including pricing pressures and the introduction by others of new products with similar or better functionality than the Company's products. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Measures

A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. 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.

We provide non-GAAP measures of non-GAAP income (loss) from operations and non-GAAP net income (loss) as a supplement to financial results based on GAAP income (loss) from operations and GAAP net income (loss). The Company believes that the additional non-GAAP measures are useful to investors for the purpose of financial analysis. We believe the presentation of non-GAAP measures provides investors with additional insight into underlying operating results and prospects for the future by excluding gains, losses and other charges that are considered by management to be outside of the Company's core operating results. Management uses these measures internally to evaluate the Company's in-period operating performance before taking into account these non-operating gains, losses and charges. In addition, the measures are used for planning and forecasting of the Company's performance in future periods.

In deriving non-GAAP income (loss) from operations from GAAP income (loss) from operations, we exclude stock-based compensation charges, amortization of intangible assets, as well as restructuring and impairment charges. In deriving non-GAAP net income (loss) from GAAP net income (loss), we further exclude gain or loss on the embedded derivative and loss on extinguishment of debt. Stock-based compensation charges, amortization of intangible assets, gain or loss on the embedded derivative and loss on extinguishment of debt represent charges that recur in amounts unrelated to the Company's operations. Restructuring and impairment costs relate to strategic initiatives that result in short term increases in costs that end with the fulfillment of the initiative and cost reductions in future periods.

The non-GAAP financial measures we provide have certain limitations because they do not reflect all of the costs associated with the operation of our business as determined in accordance with GAAP. Non-GAAP income (loss) from operations and Non-GAAP net income (loss) are in addition to, and are not a substitute for or superior to, income (loss) from operations and net income (loss), which are prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. A detailed reconciliation of the non-GAAP measures to the most directly comparable GAAP measure is set forth below. Investors are encouraged to review these reconciliations to appropriately incorporate the non-GAAP measures and the limitations of these measures into their analyses. For complete information on stock-based compensation, amortization of intangible assets, restructuring and impairment charges, and the change in the fair value of our embedded derivatives, please see our Form 10-K for the year ended September 30, 2012.

VITESSE SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

	March 31, 2013			September 30, 2012
	(in thousands, except par value)
ASSETS
Current assets:
Cash	$	36,914		$	23,891
Accounts receivable, net	8,429			9,403
Inventory, net	12,566			12,060
Prepaid expenses and other current assets	2,964			2,125
Total current assets	60,873			47,479
Property, plant and equipment, net	3,126			3,832
Other intangible assets, net	1,087			1,175
Other assets	3,766			4,130
	$	68,852		$	56,616
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	6,540		$	5,726
Accrued expenses and other current liabilities	12,445			12,188
Current portion of debt, net	8,006			—
Deferred revenue	2,005			871
Total current liabilities	28,996			18,785
Other long-term liabilities	442			574
Long-term debt, net	8,083			15,852
Compound embedded derivative	—			2,899
Convertible subordinated debt, net	43,440			42,521
Total liabilities	80,961			80,631
Stockholders’ deficit:
Preferred stock, $0.01 par value: 10,000 shares authorized; Series B Non Cumulative, Convertible, 135 shares outstanding at March 31, 2013 and September 30, 2012, respectively	1			1
Common stock, $0.01 par value: 250,000 shares authorized; 37,455 and 25,812 shares outstanding at March 31, 2013 and September 30, 2012, respectively	375			258
Additional paid-in-capital	1,851,644			1,829,976
Accumulated deficit	(1,864,129		)	(1,854,250		)
Total stockholders’ deficit	(12,109		)	(24,015		)
	$	68,852		$	56,616

VITESSE SEMICONDUCTOR CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,						Six Months Ended March 31,
	2013			2012			2013			2012
	(in thousands, except per share data)
Net revenues:
Product revenues	$	24,689		$	27,195		$	48,594		$	56,137
Intellectual property revenues	64			2,542			1,886			3,591
Net revenues	$	24,753		$	29,737		$	50,480		$	59,728
Costs and expenses:
Cost of product revenues	11,369			10,595			22,344			22,758
Engineering, research and development	9,777			9,580			20,281			22,005
Selling, general and administrative	7,390			8,383			15,360			15,835
Restructuring and impairment	—			—			—			—
Amortization of intangible assets	89			79			186			146
Costs and expenses	28,625			28,637			58,171			60,744
(Loss) income from operations	(3,872		)	1,100			(7,691		)	(1,016		)
Other expense (income):
Interest expense, net	1,966			1,924			3,936			3,873
(Gain) loss on compound embedded derivative	—			5,280			(803		)	1,982
Other expense (income), net	5			29			(26		)	41
Other expense, net	1,971			7,233			3,107			5,896
Loss before income tax (benefit) expense	(5,843		)	(6,133		)	(10,798		)	(6,912		)
Income tax (benefit) expense	(996		)	63			(919		)	129
Net loss	$	(4,847	)	$	(6,196	)	$	(9,879	)	$	(7,041	)
Net loss per common share - basic and diluted	$	(0.13	)	$	(0.25	)	$	(0.30	)	$	(0.28	)
Weighted average common shares outstanding - basic and diluted	37,215			25,043			32,587			24,776

VITESSE SEMICONDUCTOR CORPORATION

UNAUDITED RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)

	Three Months Ended March 31,						Six Months Ended March 31,
	2013			2012			2013			2012
	(in thousands, except per share data)
GAAP net loss	$	(4,847	)	$	(6,196	)	$	(9,879	)	$	(7,041	)
Adjustments:
Stock-based compensation charges	1,006			1,146			2,149			2,209
Amortization of intangible assets	89			79			186			146
Restructuring and impairment charges	—			4			53			32
(Gain) loss on compound embedded derivative	—			5,280			(803		)	1,982
Total GAAP to non-GAAP adjustments	1,095			6,509			1,585			4,369
Non-GAAP net (loss) income	$	(3,752	)	$	313		$	(8,294	)	$	(2,672	)
Net (loss) income per common share
Basic:
GAAP net loss	(0.13		)	(0.25		)	(0.30		)	(0.28		)
Adjustments *	0.03			0.26			0.05			0.18
Non-GAAP net (loss) income	$	(0.10	)	$	0.01		$	(0.25	)	$	(0.10	)
Diluted:
GAAP net loss	$	(0.13	)	$	(0.25	)	$	(0.30	)	$	(0.28	)
Adjustments *	$	0.03		$	0.25		$	0.05		$	0.18
Non-GAAP net (loss) income	$	(0.10	)	$	—		$	(0.25	)	$	(0.10	)

UNAUDITED RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS

TO NON-GAAP INCOME FROM OPERATIONS

GAAP (loss) income from operations	$	(3,872	)	$	1,100	$	(7,691	)	$	(1,016	)
Adjustments:
Stock-based compensation charges	1,006			1,146		2,149			2,209
Amortization of intangible assets	89			79		186			146
Restructuring and impairment charges	—			4		53			32
Total GAAP to non-GAAP adjustments	1,095			1,229		2,388			2,387
Non-GAAP (loss) income from operations	$	(2,777	)	$	2,329	$	(5,303	)	$	1,371

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* Included in the adjustments are calculations required by the two class method relative to participation rights of our preferred shares.