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PMC-Sierra Reports First Quarter 2001 Results
SANTA CLARA, Calif., Apr 19, 2001 (BUSINESS WIRE) -- PMC-Sierra, Inc. (Nasdaq: PMCS chart, msgs) today reported net revenues of $119.9 million and pro forma net income of $0.02 per share (diluted) for the first quarter of 2001.
Net revenues increased 5% compared to the first quarter of 2000 while declining 48% compared to the fourth quarter of 2000. Pro forma net income for the first quarter of 2001 was $4.4 million compared to pro forma net income of $27.2 million in the first quarter of 2000 and $62.5 million in the fourth quarter of 2000.
"During the first quarter of 2001, we announced 16 new products, including an OC-192 chip set solution, and we are continuing to build for the long term by achieving design wins at a brisk pace," said Bob Bailey, chairman, president and CEO of PMC-Sierra. "By executing a proactive internal restructuring process in the first quarter of this year, we have sharpened our product focus and operational efficiencies while lowering our cost structure going forward."
Pro forma net income for the first quarter of 2001 excludes amortization of goodwill, deferred stock compensation, gain on sale of investments (net of related tax provision), a $19.9 million restructuring charge, and a $2.1 million provision for inventory write-downs recorded in cost of revenues. The restructuring charge of $19.9 million is primarily related to employee severance and facility consolidation. Including the above items, the Company incurred a net loss in the first quarter of 2001 of $63.5 million or $0.38 per share (diluted) compared with net income of $17.5 million or $0.10 per share (diluted) in first quarter of 2000.
Strategic Alliance: In March, PMC-Sierra announced a technical and marketing alliance with Multilink Technology Corporation to develop complete 10 Gigabit-per-second reference platforms for optical networking. The two companies will combine Multilink's newly announced SiGe SERDES chip set and Forward Error Correction (FEC) devices with PMC-Sierra's 10 Gigabit-per-second framer technologies to facilitate the rapid design of innovative linecard solutions for the Metropolitan Area Network.
Product Announcements: PMC-Sierra has announced 16 new products in 2001 that address key segments of the broadband communications market.
-- CHESS-II(TM)(Channelizer Engine for SONET/SDH): the
CHESS-II(TM) chip set is targeted at the emerging Optical
Metropolitan Area Network and is an OC-192/STM-64 line rate
optical networking architecture that enables Internet Service
Providers and telecommunication carriers to deliver voice,
video and data services across a single optical transport
backbone. The chip set includes the SPECTRA(TM)-9953 (STS-1
channelized framer and pointer processor), TBS-9953 (groomer
and serializer), TSE-160 (160 Gbit/s STS-1 cross-connect) and
the CRSU-4x2488 (4xOC-48 clock and data recovery). The chip
set's unique architecture enables consolidation of traditional
SONET/SDH equipment, together with IP routers and multi
service switches, into a single shelf platform.
-- FREEDM(TM) packet processor family: two new members of the
Frame Engine and Datalink Manager (FREEDM(TM)) packet
processor family for packet-based line cards, namely the
FREEDM-336 and the FREEDM-84. The FREEDM-336 is the industry's
first packet processor to support up to 336 T1 lines and
achieve a sustained wire speed throughput for short IP
packets. The FREEDM-84 supports up to 84 T1 or 63 E1 links
over 1024 HDLC channels and is ideal for nxDS3 and nxOC-3 port
card designs. It can, for the first time, enable the routing
of up to an OC-48's worth of T1 and DS-3 traffic on a single
line card.
-- ClassiPI(TM) packet content classification processor: the
ClassiPI (Classification by Packet Inspection) is a new class
of packet processor for Gigabit Ethernet and OC-48
applications. It is designed to accelerate the deployment of
content aware Internet Protocol (IP) services such as
intrusion detection, load balancing and Quality of Service
(QoS) in the IP switches and routers.
-- Inverse Multiplexer for ATM: three new inverse multiplexer
products include the S/UNI-IMA-84 that supports an industry
leading 84 T1 or 63 E1 links in a single device. It is
optimized for T1/E1-over-fiber applications in Multiservice
ATM switches, Metro-Optical Access switches and 3G Wireless
Base Station Controllers. The S/UNI-IMA-32 supports up to 32
links and for lower link count applications the S/UNI-IMA-8
supports up to 8 links.
-- Multi-Port SERDES Devices: announced three highly integrated
Serializer/Deserializer (SERDES) devices including the
QuadPHY-II(TM), the OctalPHY(TM) and the QuadPHY(R) that
provide multi-port gigabit serial backplane interconnect for
switches/routers as well as Gigabit Ethernet, Fibre Channel,
and Infiniband serial interface standards for optical modules.
The QuadPHY-II, OctalPHY and QuadPHY devices dramatically
increase system design flexibility by allowing easy
interconnection of chip level and board level building blocks
used in Gigabit and Terabit Switches/Routers and Multi Service
Provisioning Platforms.
Conference Call: PMC-Sierra's management will provide guidance for the second quarter of 2001 during a conference call at 2:00 p.m. Pacific Time today. To listen to the call, investors can access the audio webcast by visiting www.StreetFusion.com and clicking on the PMC-Sierra conference call link. This audio webcast is also available on a replay basis. To listen to the call by phone, please dial 719/457-2653 approximately 10 minutes prior to the 2:00 p.m. Pacific Time start time. For a phone replay of the conference call, dial 719/457-0820 and key in the access code: 457482. This replay will run for five business days.
Corporate Website: Additional information on the Company can be found on line at pmc-sierra.com. PMC-Sierra is a leading provider of broadband semiconductor solutions for the global information infrastructure. PMC-Sierra is traded on the Nasdaq National Market under the symbol PMCS. The company is included in the NASDAQ-100 INDEX (NDX) which contains the largest non-financial companies on the Nasdaq Stock Market. The Nasdaq-100 Index is the benchmark for the Nasdaq-100 Index Tracking Stock (AMEX: QQQ chart, msgs).
PMC-Sierra, Inc.
PRO FORMA STATEMENTS OF OPERATIONS
(in thousands, except for per share amounts)
Three Months Ended (unaudited)
------------------------------
April 1, Dec. 31, March 26,
2001 (1) 2000 (2) 2000 (3)
Net revenues
Networking $ 116,146 $ 223,553 $ 109,312
Non-networking 3,749 8,099 5,054
--------- --------- ---------
Total 119,895 231,652 114,366
Gross profit $
Networking 82,417 170,427 85,946
Non-networking 1,631 3,507 2,248
--------- --------- ---------
Total 84,048 173,934 88,194
--------- --------- ---------
Gross profit %
Networking 71.0% 76.2% 78.6%
Non-networking 43.5% 43.3% 44.5%
Total 70.1% 75.1% 77.1%
Other costs and expenses:
Research and development 57,468 58,009 32,258
Marketing, general and administrative 25,093 30,085 18,125
--------- --------- ---------
Pro forma income from operations 1,487 85,840 37,811
Other income, net 4,867 5,998 3,915
--------- -------------------
Pro forma income before provision for
income taxes 6,354 91,838 41,726
Provision for income taxes 1,906 29,388 14,517
--------- --------- ---------
Pro forma net income $ 4,448 $ 62,450 $ 27,209
========= ========= =========
Pro forma diluted net income
per share $ 0.02 $ 0.34 $ 0.15
Shares used to calculate pro forma
diluted net income per share: 180,293 184,245 177,658
Pro forma adjustments
The above pro forma amounts have been adjusted to eliminate the following:
(1) $28.4 million amortization of deferred stock compensation, $17.8 million amortization of goodwill, a $19.9 million restructuring charge, a $2.1 million provision for inventory write-downs recorded in cost of revenues and $0.4 million gain on sale of investments net of the related tax provision of $0.2 million.
(2) $11.5 million amortization of deferred stock compensation, $17.7 million amortization of goodwill, $1.1 million costs of merger related to the acquisition of SwitchOn and $17.2 million gain on sale of investments net of the related tax provision of $5.5 million.
(3) $4.1 million amortization of deferred stock compensation, $0.5 million amortization of goodwill, $7.9 million costs of merger related to the Toucan and AANetcom acquisitions and $4.1 million gain on sale of investments net of the related tax provision of $1.4 million.
PMC-Sierra, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share amounts)
Three Months Ended (unaudited)
-----------------------------------
April 1, Dec. 31, March 26,
2001 2000 2000
Net revenues
Networking $ 116,146 $ 223,553 $ 109,312
Non-networking 3,749 8,099 5,054
----------- ----------- -----------
Total 119,895 231,652 114,366
Cost of revenues 37,927 57,718 26,172
----------- ----------- -----------
Gross profit 81,968 173,934 88,194
Other costs and expenses:
Research and development 57,468 58,009 32,258
Marketing, general and
administrative 25,093 30,085 18,125
Amortization of deferred stock
compensation:
Research and development 27,900 10,082 3,679
Marketing, general and
administrative 519 1,419 371
Amortization of goodwill 17,811 17,680 459
Costs of merger - 1,116 7,902
Restructuring costs 19,900 - -
----------- ----------- -----------
Income (loss) from operations (66,723) 55,543 25,400
Other income, net 4,867 5,998 3,915
Gain on sale of investments 401 17,208 4,117
----------- ----------- -----------
Income (loss) before provision
for income taxes (61,455) 78,749 33,432
Provision for income taxes 2,071 34,895 15,917
----------- ----------- -----------
Net income (loss) $ (63,526) $ 43,854 $ 17,515
=========== =========== ===========
Net income (loss) per common
share - basic $ (0.38) $ 0.26 $ 0.11
Net income (loss) per common
share - diluted $ (0.38) $ 0.24 $ 0.10
Shares used in per share
calculation - basic 166,786 165,609 157,798
Shares used in per share
calculation - diluted 166,786 184,245 177,658
PMC-Sierra, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
April 1, Dec. 31,
2001 2000
(unaudited)
ASSETS:
Current assets:
Cash and short term investments $ 343,605 $ 375,116
Accounts receivable, net 40,807 93,852
Inventories, net 63,727 54,913
Deferred income taxes 13,947 13,947
Prepaid expenses and other current assets 19,894 26,910
Short-term deposits for wafer
fabrication capacity 4,266 6,265
----------- -------------
Total current assets 486,246 571,003
Property and equipment, net 126,745 127,534
Goodwill and other intangible assets, net 307,780 326,150
Investments and other assets 49,936 84,667
Deposits for wafer fabrication capacity 21,991 16,736
----------- -------------
$ 992,698 $ 1,126,090
=========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 22,035 $ 60,978
Accrued liabilities 35,062 39,724
Accrued restructuring costs 15,553 -
Deferred income 56,289 64,055
Income taxes payable 26,017 63,491
Current portion of obligations under
capital leases and long-term debt 1,491 1,769
----------- ------------
Total current liabilities 156,447 230,017
Deferred income taxes 23,027 37,824
Non-current obligations under capital
leases and long-term debt 313 564
PMC special shares convertible into 3,687
(2000 - 3,746) shares of common stock 6,284 6,367
Stockholders' equity 806,627 851,318
----------- -------------
$ 992,698 $ 1,126,090
=========== =============
Contact:
PMC-Sierra
John W. Sullivan, 408/988-7785
john_sullivan@pmc-sierra.com
or
David Climie, 408/988-8276
david_climie@pmc-sierra.com
or
Susan Shaw, 408/988-8515
susan_shaw@pmc-sierra.com |
