PMC: Fiscal 1Q12 Financial Results

                            
PMC-Sierra, Inc. reported results for the first quarter ended April 1, 2012.

Net revenues in the first quarter of 2012 were $132.1 million, a decrease of 13% compared to $152.6 million in the fourth quarter of 2011, and 16% lower than net revenues of $157.4 million in the first quarter of 2011.

GAAP net loss in the first quarter of 2012 was $96.3 million, or $0.41 per share, including $85.4 million income tax provision related to an intercompany dividend made in preparation for funding our share repurchase program, of which $65.4 million had a corresponding offset recognized in equity from the utilization of stock-option-related loss carry-forwards. This compares to GAAP net income in the fourth quarter of 2011 of $28.4 million, or $0.12 per diluted share. Non-GAAP net income in the first quarter of 2012 was $14.0 million, or $0.06 per diluted share, compared to non-GAAP net income of $30.6 million, or $0.13 per diluted share, in the first quarter of 2011.

Non-GAAP net income in the first quarter of 2012
excludes the following items:

• $6.6 million stock-based compensation expense;
• $1.4 million acquisition-related costs;
• $1.6 million termination costs;
• $0.4 million lease exit costs;
• $11.3 million amortization of purchased intangible assets;
• $1.3 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; and
• $86.7 million provision for income taxes.

"Despite a challenging first quarter, we continued to execute well, making key product announcements and winning designs in all of our business segments,"said Greg Lang, president and CEO of PMC. "We expect sequential improvement in our business in Q2 and a stronger second half of 2012.”

The company announced
in the first quarter of 2012:

• PMC’s board of directors authorized a new share repurchase program for up to $275 million of its common stock, reflecting the company’s strong balance sheet and free-cash-flow generation, and emphasizing the board’s commitment to enhancing shareholder value. Added to the $40 million share repurchase program that the board authorized in the fourth quarter of 2011, the total authorization is $315 million. PMC expects to fund the repurchases through the use of available cash resources.
• Strengthening its relationships with server OEMs, PMC acquired Maxim Integrated Products, Inc.’s 12Gb/s SAS expander technology. Combined with PMC’s 12Gb/s SAS RAID-on-Chip (RoC) products, Maxim’s expander technology enables PMC to offer end-to-end 12Gb/s SAS solutions tailored for server platforms. Continued support for Maxim’s server expander firmware will preserve OEM investment during the transition from 6Gb/s SAS to 12Gb/s SAS.
• Adaptec by PMC demonstrated a server configuration at CeBIT that doubles storage performance and bandwidth featuring a RAID controller card prototype based on the industry’s only PCIe 3.0 capable 24-port RoC from PMC, installed in a system based on the new Intel Xeon processor E5-2600 product family, and 22 Seagate Pulsar enterprise solid state drives.
• PMC announced that its 6Gb/s SAS RoC controllers are shipping on new HP ProLiant Generation 8 (Gen8) servers. PMC’s SRCv RoCs are the first production released PCIe 3.0 capable storage controllers for the volume server market. The PCIe technology and 24 ports of 6Gb/s SAS connectivity enable HP Gen8 Servers to deliver seven times faster solid state storage performance and support twice the number of drives per RAID.
• Building on its FTTH, PMC announced availability of the first end-to-end symmetric 10G-EPON fiber access SoC solution with performance and feature integration that enables carriers to connect up to 10 times more subscribers per Optical Distribution Network and lower power consumption by more than 50 percent.
• PMC marked another major fiber access milestone, with more than 20 million ONU SoCs deployed in EPON, GPON and 10G-EPON Optical Network Units worldwide.