PMC-Sierra: Fiscal 4Q11 Financial Results

PMC-Sierra, Inc. reported results for the fourth quarter and full year ended December 31, 2011.

Net revenues in the fourth quarter of 2011 were $152.6 million, a sequential decrease of 12% compared to $173.3 million in the third quarter of 2011, and 4% lower than net revenues of $159.3 million in the fourth quarter of 2010.

GAAP net income in the fourth quarter of 2011 was $28.4 million, or $0.12 per diluted share, compared to GAAP net income in the third quarter of 2011 of $47.3 million, or $0.20 per diluted share. Non-GAAP net income in the fourth quarter of 2011 was $29.1 million, or $0.13 per diluted share, compared to non-GAAP net income of $42.1 million, or $0.18 per diluted share, in the third quarter of 2011.

Net income on a non-GAAP basis in 4Q11
excludes the following items:

• $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 net recovery of income taxes.

For the full year ended December 31, 2011, net revenues were $654.3 million compared to $635.1 million for the year ended December 26, 2010, an increase of 3% year over year. GAAP operating income in 2011 was $52.8 million compared to GAAP operating income of $108.6 million reported in the year ended December 26, 2010. Non-GAAP operating income in 2011 was $142.7 million compared to non-GAAP operating income of $173.7 million in the prior year. GAAP net income in 2011 was $84.7 million, or $0.36 per diluted share, compared to GAAP net income of $83.2 million, or $0.35 per diluted share, for the prior year. Non-GAAP net income in 2011 was $142.0 million or $0.60 per diluted share, compared to non-GAAP net income of $168.6 million or $0.72 per diluted share, in the year ended December 26, 2010.

"Our annual net revenues grew 3% in a roughly flat year for the semiconductor industry," said Greg Lang, president and chief executive officer of PMC. "While difficult conditions impact our near-term outlook, we see good signs of recovery in 2012, including a strong increase in bookings. PMC is well positioned to deliver the infrastructure required to support high traffic growth on storage, optical and mobile networks."

The company announced the following in 4Q11:

• PMC’s board of directors authorized another $40 million to repurchase the company’s shares for fiscal year 2012. In 2011, for the first time ever, the company authorized a share repurchase plan, repurchasing and retiring 6.1 million shares during the year for a total cost of $40 million, the full authorized amount.
• Delivering record-setting performance and scalability to enable a new generation of scalable tiered storage for corporate and cloud data centers, PMC announced the availability of 12Gb/s SAS protocol controllers, RoC controllers and expanders. PMC’s 12Gb/s SAS controllers provide well over two million I/Os per second, double the performance of competing 12Gb/s SAS controller solutions, to release the full potential of SSDs. With the addition of the industry’s highest port count expanders, PMC’s 12Gb/s solution provides 40 percent more ports and can support double the number of drives.
• Addressing carriers’ needs to drive mass deployment of OTN switching in their networks, PMC’s HyPHY OTN processors are the industry’s first to provide full architectural support of the Optical Internetworking Forum (OIF)’s new OTN-over-Packet-Fabric Protocol Implementation Agreement. The OIF initiative aims to help the industry develop an ecosystem for interoperable OTN switching at the silicon and optical equipment levels.
• Supporting interoperability and cost-effective network expansion for high-speed broadband service delivery, PMC’s GPON products are certified by the new Broadband Forum GPON ONU Certification Program.

To read the earnings call transcript