PMCS PR and CC notes
SANTA CLARA, Calif., Apr 18, 2002 (BUSINESS WIRE) -- PMC-Sierra, Inc. (Nasdaq:PMCS) today reported net revenues of $51.4 million and a pro forma net loss per share of $0.09 for the first quarter of 2002.
Networking revenue increased 10.6% to $46.9 million and non-networking revenue decreased 4.2% to $4.6 million compared to the fourth quarter of 2001. Pro forma net loss in the first quarter of 2002 was $15.1 million ($0.09 per share) compared to a pro forma net loss of $25.8 million ($0.15 per share) in the fourth quarter of 2001.
"PMC-Sierra's revenue growth in the March quarter resulted from the ramping of new products and further engagements with our top-tier customers," said Bob Bailey, chairman and chief executive officer of PMC-Sierra. "Our management team remains focused on breaking even and returning to solid profitability."
Under generally accepted accounting principles (GAAP), the loss in the first quarter of 2002 was $13.7 million or $0.08 per share. The GAAP loss for this period includes a gain on investments of $2.4 million and the amortization of deferred stock compensation of $1.0 million. For a full reconciliation of adjustments between the pro forma and GAAP financial statements, see the schedule incorporated into this press release.
PMC-Sierra introduced the following new products in the first quarter of 2002:
-- S/UNI-12xJET - this device is the industry's only single-chip solution for terminating packet/cell traffic for a single OC-12 down to the DS3/E3 level. The S/UNI-12xJET is a physical layer solution for the aggregation, transport and termination of up to 12-channels of DS3/E3 and J2 protocols. It replaces up to four discrete devices, enabling cost-effective DS3 services to be deployed in both new and existing Add/Drop Multiplexers, Multi Service Provisioning Platforms, and edge aggregation routers and switches.
-- 7000C and 7065C - these 64-bit MIPS-based processors continue the company's legacy of pin and software compatible solutions. These 600 MHz processors use a 0.13 micron copper-interconnect technology process that allows power consumption to be lowered to 2.5 watts. PMC-Sierra's 64-bit MIPS-based processors span a broad range of communications applications including network router control planes, enterprise switches and networked printers.
PMC-Sierra Management Announcement
John Sullivan, VP finance and chief financial officer, has announced he will be retiring from the company later in the year. To allow for the orderly transition of this position, the company will be engaging an executive search firm. Mr. Sullivan started with PMC-Sierra in 1997 and has been instrumental in helping the company become a leading broadband semiconductor company.
First Quarter 2002 Conference Call
Management will review the first quarter 2002 results and provide guidance for the second quarter of 2002 during a conference call at 2:00 pm Pacific Time today. To listen to the call, investors can access an audio webcast of the conference from the Investor Relations page of PMC-Sierra's corporate website (www.pmc-sierra.com). A replay of this webcast will be posted and available two hours after the conference call has been completed. To listen to the conference call live by telephone, please dial 913/981-5509 approximately ten minutes prior to the 2:00 pm start time. A phone replay will be available 15 minutes after the completion of the call and can be accessed by dialing 719/457-0820 (enter access code: 584456).
CC Notes:
John Sullivan.
- networking chips revs 46M up 11%
- CSCO and HWP were 10% customers
- 60.1% GM up due
- 36.2% down 12%
- SGA 17.1 down 7%
- tax rate goal is 28%
- excluded 2 items - noncash com of 1M and 2.4M gains on investments
- cash/inv 568M or 14M less
- inv turns 2.6,
- 36M inv and inv down 8%
- no undisclosed borrowing of debt
- very low goodwill on
- we only contribute cash to ees 401K
- book to bill over 1, network chip most of that
- except netweork pro to 105
- non network rev will cont to decline as product
- 50M in shippable backlog
- expect GM to improve as move to network chips away from legacy chips
Bob Bailey
- grew rev 9% q2q, first increase after 4 qs
- first b2b over in 5 q
- customer burned through invs
- rev attributed to new products
- 12 months ago top 6 was 57%, to 46% y23y nbut now 56% as network chip improving
- promising ATM product ILEC using it
- MIPS product in laser printers prod
- OC48 in metro transport up
- seeing firming in enterprise with 33% of rev, no exposure in optoicla and log haul area
- Asia is up
- will increase in china
- more silicon outsourced to PMCS than ever before last few quarter
- will grow despite soft carrier market
- design win 530 vs 517 last q
- was drop on pending new design wins
- Wins at NT CSCO Futijitsu
- Optical network at 259 win
- Only 10 gigabit ethernet with customer assistance
- MIPS RM9000 will be out at end of
- network business up 10-20% as legacy fades
- Expect breakeven at end of this year.
- Still have limited visible into second half.
- Bottle necks in metro will need to be resolved as data is increase in use
- expect bottom out in carrier capex this year
- Will grow faster than the more do to more outside, 1-10 gigabit ethernet, 3G
Q&A
- Cody Any replenishment of inventory
- 46M in shippable last q, ended up doing 51M this q
10 GigaE - capex
- there is a lot in develop in the design win, data services and enterprise boxes. Will ramp sometimes next year.
Q - lead times?
- Lead times are driven on what we have inventory on and what we don’t. 4-6 weeks. There are short shortage for some areas here and there particularly devices. Very limited though. We expect we will be in expedite mode next two quarter.
Q - Backlog % was network.
- 90% was network backlog
Q - MIPS trend
- We have laser printer, network, and set top boxes. We are seeing activity in all three of these area particularly the Far East on in the laser printers.
Q - time to market with design wins
- If whole new switch or case, enormous software development must be worked through. 2-3 years if new. Companies are upgrading their line cards with more capability.
Q - Enterprise?
- MIPS processor is strong though not majority, 10Gig are being designed into FDRY box, and other 10 giga solutions
Q - Mips 7000 shipping?
- the B is past our internal qualification and ready for production and will be software compatible with previous generations.
Q - tax rate
- Had a conservative tax rate because of all the restructuring. Normal was 28-30% range.
Q - Booking trends
- Certainly fair to say March was better than January. First quarter with a solid book to bill. Newer products were 50% were shipped.
Q - Platforms IMA product?
- Inverse multiplexing adds bandwidth granularity. We add T1 incrementally via an ATM switch. IMA chip is only one that does it as a single chip solution in line cards. Seeing it deployed as next gen wireless. Not a stopgap solution. It will be a long time before large amount of companies get T3. ERICY has used it to backhaul their base stations.
Q - OEM outsources
- Half of our rev were 1999-2001 introduced products. Big transport companies. Big 4 never used to never outsource any silicon now seeming like outsource everything. We don’t know where a chip is being used in the end.
Q - B2B industry channels?
- no specific breakdown, Europe a little weaker, Asia was much stronger.
Q - Revs going to tick up?
- Mid 50% for operating expense. Paladin product is revolutionary product. We have 13 out of 15 wireless product have committed to it or analyzing. I guess we will get 10 of the top 15 as customers. Opens us to more sales in other product. We have to be patient as 3G bumps along. Not much in rev this year. 2003 will be prototypes. Some sig revs in 2004 from it.
Q - breakeven point.
- Printers are lower margin than other chips. Breakeven is 80M?
Q - ATM ramping up?
- Enterprise and storage division are seeing ramps upward. Processors doing better than most areas since less inventory was stacked up. OC 48 and OC 192 are ramping up now also.
Q - OC 48 shipping?
- It is shipping in some boxes now. OC-192 will be shipping. OC48 is the highly channelized stuff and router centric product. Some metro transports, multi service switches, DWDM, line cards etc.
Q - Enterprise group?
- We will break even next year on this group. Several design wins. Propriety customers.
Q - Cash balance.
- Went down 14M in q1. Deprication was 11M, capex was 500K-600K. 170 shares outstanding.
Q - 50M shippable
- 46M last quarter. 41M was network then.
I like the backlog and bought in on weakness today.
Jack |
