PMC-Sierra: Fiscal 4Q14 Financial Results

PMC-Sierra, Inc. 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 1% from $135.5 million in the third quarter of 2014 and an increase of 7.9%, 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% 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 8% over the same quarter last year,” said Greg Lang, president and CEO. “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:

• $6.8 million stock-based compensation expense,
• $11 million amortization of purchased intangible assets;
• $2.7 million foreign exchange gain on foreign tax liabilities;
• $3.9 million provision for income tax matters; and
• $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% 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.

The company announced the following in 4FQ14 and FY14:

• On Dec. 3, PMC hosted a Flash Technology Forum in Beijing, where speakers from Sina, Inspur, China Telecom, Memblaze and discussed the 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, provider of flash storage solutions, is utilizing its Flashtec NVMe controllers in its next-generation 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 its storage solutions for external connectivity across its ThinkServer portfolio. The Lenovo 8885E by PMC card delivers 12Gb 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 shipped 16-port 12Gb SAS and 16-port 6Gb SATA I/O controller solutions. These 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 IO/s to support demanding cloud software applications.
• On Sept. 4, PMC executed an agreement with HP to license core HP Smart Array software, firmware and management technology. It 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 storage solution components across HP ProLiant Gen9 and beyond.
• On Aug. 26, PMC introduced the 12Gb SAS expander card to enable density-optimized servers, the fastest growing segment of the worldwide server market according to IDC. The Adaptec 12Gb 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 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 SSD, at more than 10 million IO/s, with sub-microsecond latency. Leveraging PCIe 3.0, the drives connect to the host to optimize CPU utilization and maximize overall system performance.
• On Mar. 10, PMC announced the 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.