Pericom Semiconductor Reports Fiscal Q3 2009 Financial Results

San Jose, California, UNITED STATES

SAN JOSE, Calif., May 1, 2009 (GLOBE NEWSWIRE) -- Pericom Semiconductor Corporation (Nasdaq:PSEM), a worldwide supplier of high-speed integrated circuits and frequency control products, today announced results for its fiscal third quarter ended March 28, 2009.

Quarterly Summary

 * Net revenues declined 21% sequentially and 41% year-over-year to
   $24.4 million.
 * Gross profits decreased $2.1 million sequentially and $6.8 million
 * Gross margin of 35.5% improved 63 basis points on a sequential
   basis and decreased 205 basis points year-over-year.
 * Net income fell 85% sequentially and 94% year-over-year to $256,000.
 * Total shares repurchased during the period were 85,803 shares for

Net revenues for the third quarter were $24.4 million, down 21% from the $30.7 million reported in the second quarter, and down 41% from the $41.2 million reported in the comparable period last year. Gross margin was 35.5%, up from 34.9% last quarter, and down from 37.6% in the comparable period last year. Net revenues for the nine-month period ending March 28, 2009 were $99.0 million, down 18% from $120.4 million in the prior year comparable period. Gross margin in the nine-month period ending March 28, 2009 was 35.7%, down from 37.0% in the comparable period last year.

Operating expenses in the quarter were $9.4 million, down from $10.0 million in the previous quarter and down from $10.2 million in the comparable period last year. Operating expenses in the nine-month period ending March 28, 2009 were $30.6 million, up from $30.2 million in the comparable period last year. Share-based compensation expense in the quarter was $998,000, up from $904,000 in the previous quarter and up from $585,000 in the comparable period last year. Stock based compensation expense for the nine-month period ended March 28, 2009 was $2.7 million, up from $1.7 million in the comparable prior year period.

Net income in the quarter was $256,000, or $0.01 per diluted share, compared with net income of $1.7 million, or $0.07 per diluted share in the second quarter, and net income of $4.1 million, or $0.16 per diluted share in the same period a year ago. Net income in the nine-month period ending March 28, 2009 was $5.9 million, or $0.23 per diluted share, down from $12.4 million, or $0.47 per diluted share in the comparable prior year period.

"Our third quarter results reflect the difficult global economic environment in which we are currently operating," said Alex Hui, president and CEO of Pericom. "Over the past two quarters we have experienced a sharp decline in revenue, which was consistent with declining end-market demand and inventory reduction initiatives across the supply chain. As a result, we have taken steps to reduce our operating expenses to better match lower revenue expectations for our business.

"We believe the inventory reduction initiatives have been or will soon be completed. Our bookings began improving towards the end of the March quarter and resulted in our having an improved backlog as we entered the June quarter. We believe our revenues reached a low point in the March quarter, and we expect to see significantly improved revenues this quarter as demand levels more closely align with end user demand.

"Enabling serial connectivity in computer, communication and consumer applications remains our primary focus. We are encouraged by the increasing deployment of our serial protocol solution in our focus market segments, with PCI-e and e-SATA products accounting for 17% of total revenue in FYQ3. Despite the downturn, we continue to invest in innovation. We are developing connectivity and timing solutions for next generation serial protocols such as PCI-Express Gen3, DisplayPort 1.2 and USB 3.0. We believe our comprehensive serial connectivity and timing solutions position us well for long term growth."

New Products

In the March quarter, we continued to expand our serial connectivity solution with the introduction of 11 new products that work across the Signal Integrity, Timing and Connectivity product areas:

 * Expanding its solutions for high speed serial protocol signal
   integrity, Pericom introduced 2 new ReDriver(tm) products
   supporting the SATA (Serial ATA) protocol for storage media
   devices. The new products target next generation volume notebook
   and desktop applications, including advanced 6Gb/s SATA2
   applications. These products enable transfer of high speed serial
   signals across external cables to storage media, such as HDD.

 * Adding to high speed Connectivity and Switching solutions, Pericom
   introduced 5 new switch and interface products targeted across USB,
   HDMI video, and Ethernet serial protocols. Market segments include
   volume consumer GPS, PC graphics, Consumer digital video,
   notebook/docking, and ultra mobility platforms such as cell phones
   and PDA.

 * Expanding its timing solutions for next generation platforms,
   Pericom introduced 4 new products and families in the past quarter.
   Advanced clock buffers and generators address PC and peripherals,
   storage, telecom, and GPS market segments, while the new XP crystal
   oscillator (XO) family is aimed at Ethernet, Storage, and GPON
   market segments and applications.

Share Repurchase Update

On April 26, 2007, the Company's Board of Directors authorized the repurchase of 2.0 million shares, and on April 29, 2008, our Board of Directors authorized the repurchase of an additional $30 million of our common stock. The Company has completed the repurchase of 2,000,000 shares under the 2007 authority at a total cost of approximately $25.2 million. Pursuant to the 2008 authority, the Company repurchased 85,803 shares in the three months ended March 28, 2009 for an aggregate cost of $471,815 and an average per share purchase price of $5.50. For the nine months ended March 28, 2009 the Company repurchased 712,297 shares for $5,450,964, with an average of $7.65 per share. The remaining balance of potential share repurchases under the 2008 authority is approximately $26.5 million.

Fiscal Q4 Outlook

The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.

 * Revenues in the fourth fiscal quarter are expected to be in the
   range of $27.0 million to $30.0 million.

 * Gross margins are expected to be in the 32.0% to 34.0% range.

 * Operating expenses are expected to be in the range of $9.0 to $9.5
   million, which include stock-based compensation expense of
   approximately $1.0 million.

 * Other income is expected to be approximately $1.0 million,
   consisting primarily of interest income.

 * The effective tax rate is expected to be approximately 31 percent.

Conference Call

The press release will be followed by a conference call beginning at 1:30 p.m. Pacific time. To listen to the call, dial (877) 879-6207 (domestic) or (719) 325-4759 (international) and reference "Pericom."

A taped replay of the conference call will be made available for five business days. To listen to the replay, dial (888) 203-1112 and reference Passcode 7884625.

The Pericom financial results conference call will be available via a live webcast on the investor relations section of the web site at Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the web site for approximately 90 days.

About Pericom

Pericom Semiconductor Corporation (Nasdaq:PSEM) enables serial connectivity with the industry's most complete solutions for the computing, communications and consumer market segments. Pericom's analog, digital and mixed-signal integrated circuits, along with its SaRonix-eCERA frequency control products, are essential in the timing, switching, bridging and conditioning of high-speed signals required by today's ever-increasing speed and bandwidth demanding applications. Company headquarters is in San Jose, California, with design centers and technical sales and support offices globally.

This press release contains forward-looking statements as defined under The Securities Litigation Reform Act of 1995. Forward-looking statements in this release include statements regarding the completion of inventory reduction initiatives, our revenues reaching a low point in the March quarter, expectations as to improved revenues in the fiscal fourth quarter, Pericom being well positioned and the statements under the caption "Fiscal Q4 Outlook," which regard the anticipated revenues, gross margins, operating expenses, other income and the effective tax rate. The Company's actual results could differ materially from what is set forth in such forward-looking statements due to a variety of risk factors, including a prolonged continuation of the current economic downturn, softness in demand for our products, price erosion for certain of our products, unexpected difficulties in developing new products, customer decisions to reduce inventory, economic or financial difficulties experienced by our customers, or technological and market changes. All forward-looking statements included in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and Pericom assumes no obligation to update any forward-looking statements. Parties receiving this release are encouraged to review our quarterly report on Form 10-Q for the quarter ended December 27, 2008 and in particular the risk factors sections of that filing.

                   Pericom Semiconductor Corporation
            Condensed Consolidated Statements of Operations
                 (In thousands, except per share data)

                           Three Months Ended        Nine Months Ended
                           ------------------        -----------------
                       Mar 28,   Dec 27,   Mar 29,   Mar 28,   Mar 29,
                        2009      2008      2008      2009      2008
                      --------  --------  --------  --------  --------

 Net revenues         $ 24,394  $ 30,732  $ 41,177  $ 99,022  $120,371

 Cost of revenues       15,731    20,013    25,709    63,657    75,870
                      --------  --------  --------  --------  --------

   Gross profit          8,663    10,719    15,468    35,365    44,501

 Operating expenses:

   Research and
    development          3,996     4,363     4,503    12,580    12,863

   Selling, general
    and administrative   5,136     5,453     5,705    17,491    17,330

    charge                 293       217        --       510        --
                      --------  --------  --------  --------  --------

     Total               9,425    10,033    10,208    30,581    30,193

 Income (loss) from
  operations              (762)      686     5,260     4,784    14,308

 Interest and other
  income                 1,501     1,264       903     3,871     3,895

 Other than temporary
  decline in value of
  investment               (48)       --       (52)      (92)      (52)
                      --------  --------  --------  --------  --------

 Income before income
  tax expense              691     1,950     6,111     8,563    18,151

 Income tax expense        460       147     2,054     2,676     6,089

 Minority interest in
  income of
  subsidiaries             (24)      (23)      (47)      (92)      (63)

 Equity in net income
  (loss) of
  affiliates                49       (71)      131        95       421
                      --------  --------  --------  --------  --------

 Net income           $    256  $  1,709  $  4,141  $  5,890  $ 12,420
                      ========  ========  ========  ========  ========

 Basic income per
  share               $   0.01  $   0.07  $   0.16  $   0.23  $   0.48
                      ========  ========  ========  ========  ========

 Diluted income per
  share               $   0.01  $   0.07  $   0.16  $   0.23  $   0.47
                      ========  ========  ========  ========  ========

 Shares used in
  computing basic
  income per share      25,218    25,418    25,835    25,438    25,823
                      ========  ========  ========  ========  ========

 Shares used in
  computing diluted
  income per share      25,282    25,496    26,633    25,673    26,657
                      ========  ========  ========  ========  ========

                   Pericom Semiconductor Corporation
                 Condensed Consolidated Balance Sheets
                             (In thousands)

                                           As of             As of
                                       March 28, 2009    June 28, 2008
                                       --------------    -------------

 Current Assets:

   Cash and cash equivalents                 $ 29,617         $ 41,646
   Short-term investments                      69,261           72,108
   Accounts receivable
     Trade                                     22,158           29,002
     Other receivables                          1,602            1,684
   Inventories                                 17,268           17,921
   Prepaid expenses and other current
    assets                                      1,395            5,943
   Deferred income taxes                        3,888            3,344
                                       --------------    -------------
     Total current assets                     145,189          171,648

 Property, plant and equipment - net           34,103           29,173
 Investments in unconsolidated
  affiliates                                   10,512           10,392
 Deferred income taxes - non current            4,652            4,543
 Long-term investments in marketable
  securities                                   24,023           10,171
 Goodwill                                       1,665            1,325
 Intangible assets                              1,823            1,140
 Other assets                                   3,150            3,191
                                       --------------    -------------
       Total assets                          $225,117         $231,583
                                       ==============    =============

   Liabilities and Shareholders' Equity

 Current liabilities:

   Accounts payable                          $  6,843         $ 13,431
   Accrued liabilities                          6,130            8,779
                                       --------------    -------------
     Total current liabilities                 12,973           22,210

 Long-term debt                                 1,628               --
 Deferred tax liabilities                         800              800
 Other long term liabilities                    1,018               --
 Minority interest in consolidated
  subsidiaries                                  1,211            1,118
                                       --------------    -------------
     Total liabilities                         17,630           24,128

 Shareholders' equity:
   Common stock and paid in capital           130,819          132,028
   Retained earnings and other
    comprehensive income                       76,668           75,427
                                       --------------    -------------
     Total shareholders' equity               207,487          207,455
                                       --------------    -------------

     Total liabilities and
      shareholders' equity                   $225,117         $231,583
                                       ==============    =============


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