Pericom Semiconductor Reports Fiscal Fourth Quarter 2010 Financial Results


SAN JOSE, CA--(Marketwire - August 9, 2010) - Pericom Semiconductor Corporation (NASDAQ: PSEM)

-- Net revenues increased 13% sequentially, and 40% year-over-year.

-- Gross margin increased 146 basis points sequentially.

-- GAAP net income attributable to Pericom shareholders increased 28%
   sequentially and 277% year-over-year.

Pericom Semiconductor Corporation (NASDAQ: PSEM), a worldwide supplier of high-speed integrated circuits and frequency control products, today announced results for its fiscal fourth quarter ended July 3, 2010.

Net revenues for the fourth quarter were $41.5 million, an increase of 13% from the $36.7 million reported in the third quarter, and up 40% from the $29.7 million reported in the comparable period last year. When normalizing for the additional fourteenth week during the fourth quarter, net revenues increased by 5% sequentially, and 30% year-over-year.

Gross margin was 36.7%, up from 35.3% last quarter, and from 28.7% in the comparable period last year.

GAAP net income attributable to Pericom shareholders for the fourth quarter was $3.9 million, or $0.15 per diluted share, compared with net income of $3.1 million, or $0.12 per diluted share in the third quarter, and net income of $1.0 million, or $0.04 per diluted share in the comparable period last year.

The balance sheet remained very strong with cash and investments in marketable securities of $119 million at the end of the fourth quarter and cash and investments per basic share was $4.72 for the fourth quarter. Working capital was $138 million and the current ratio was 6.25 to 1.00.

"We are pleased to report a sequential revenue increase, driven by increased demand from enterprise computing, networking and embedded applications," said Alex Hui, President and CEO of Pericom. "We continued to expand gross margin and control operating expenses, which led to a 31% improvement in operating results compared with last quarter."

"The book to bill ratio was significantly higher than one for the quarter just concluded which gives us a higher backlog entering Q1 fiscal 2011. We continue to uncover new opportunities to deploy our first and second generation high-speed serial connectivity solutions and we have begun to work with key customers on initial deployment of our third generation solutions. We believe Pericom is well positioned to continue delivering both revenue growth and better operating results as we realize the opportunities in the end market segments that we serve with our expanding solutions and design win activities."

New Products

In the June quarter, we continued to expand our serial connectivity solution with the introduction of 9 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™ products addressing SATA2 and USB3
   protocols.  These products are intended for volume computing and
   embedded applications.

-- Adding to high speed connectivity solutions, Pericom introduced 3 new
   switching and connectivity products across PCIe, USB, VGA, and Display
   Port protocols. The PCIe to USB2.0+PCIe product is the first to combine
   bridging and switching of multiple high-speed serial protocols. These
   products target the computing, server, networking, and embedded market
   segments.

-- Expanding its timing solutions for next generation platforms, Pericom
   introduced 4 new products -- 2 advanced clock generators aimed at access
   router networking platforms, 1 advanced crystal oscillator (XO)
   targeting 10Gb Ethernet, and a new family of very small footprint
   crystals aimed at volume ultra-mobility products such as cell phones,
   PDA, and smart card applications.

Share Repurchase Update

On April 29, 2008, our Board of Directors authorized the repurchase of $30 million of our common stock. Pursuant to the 2008 authority, the Company repurchased 467,408 shares in the three months ended July 3, 2010 for an aggregate cost of $4,429,066 and an average per share purchase price of $9.48. The remaining balance of potential share repurchases under the 2008 authority is approximately $17.8 million.

PTI Acquisition

Pericom announced today that it has entered into a definitive agreement to acquire all remaining outstanding shares of Pericom Technology, Inc. ("PTI") for up to approximately $35 million in cash. Pericom previously held a 40.6% ownership in PTI on a fully diluted basis and accounted for its investment in PTI using the equity method due to Pericom's significant influence over its operations. PTI is a fabless IC provider of timing, power management, and analog switch products that are sold primarily to Asian telecom, consumer, and ultra-mobility market segments. The company was incorporated in the British Virgin Islands in 1994, and is headquartered in Hong Kong, with significant operations in Shanghai and Shenzhen, People's Republic of China. For additional information about the PTI acquisition, please refer to the Pericom press release library at http://www.pericom.com/press/211/ and click on the link for the press release dated August 9, 2010 describing Pericom's acquisition of PTI.

Fiscal Q1 2011 Outlook

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

-- Revenues in the first fiscal quarter are expected to be in the range
   of $40.5 million to $42.5 million.

-- Gross margins are expected to be in the 36% to 38% range.

-- Operating expenses are expected to be in the range of $11.0 to $11.5
   million, which include stock-based compensation expense of
   approximately $1.2 million.

-- Other income is expected to be approximately $0.9 million.

-- Net income from unconsolidated affiliates PTI and JCP is expected to be
   approximately $0.6 million.

-- The effective tax rate is expected to be approximately 32%.

Fiscal Q1 2011 Outlook -- with the acquisition of PTI

We expect to complete the acquisition of PTI late in the first quarter. Below is our guidance with the inclusion of PTI as if the acquisition is completed at the start of September. These statements are forward-looking, and actual results may differ materially.

-- Revenues in the first fiscal quarter are expected to be in the range
   of $42.0 million to $45.0 million.

-- Gross margins are expected to be in the 37% to 38% range.

-- Operating expenses are expected to be in the range of $11.9 to $12.5
   million, which include stock-based compensation expense of approximately
   $1.2 million, and also $0.5 million of one-time acquisition related
   expense.

-- Other income is expected to be approximately $0.9 million.

-- Net income from unconsolidated affiliates PTI (before acquisition) and
   JCP is expected to be approximately $0.4 million.

-- The effective tax rate is expected to be approximately 31%.

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) 377-7103 and reference "Pericom." A slide presentation will accompany the conference call. To view the slides, please visit the investor relations section of www.pericom.com.

The Pericom financial results conference call will be available via a live webcast on the investor relations section of the web site at http://www.pericom.com. 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.

A taped replay of the conference call will be made available for the period from this evening through midnight on Monday, August 16th. To listen to the replay, dial (800) 642-1687 and reference conference ID 92282911.

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. http://www.pericom.com.

This press release contains forward-looking statements as defined under The Securities Litigation Reform Act of 1995. Forward-looking statements in this release include the statements under the captions "Fiscal Q1 2011 Outlook" and "Fiscal Q1 2011 Outlook - With the Acquisition of PTI," which regard the anticipated revenues, gross margin, operating expenses, other income and tax rate in the first fiscal quarter of 2011, and statements regarding continuing to drive improvements in gross margin and operating overhead, an increasing need for our products, Pericom being well positioned for the next phase of growth, and continuing revenue growth and delivering improved operating results. 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 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 March 27, 2010, our annual report on Form 10-K for the year ended June 27, 2009, and, in particular, the risk factors sections contained in those reports.

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

                           Three Months Ended         Twelve Months Ended
                     -------------------------------- --------------------
                       July 3     Mar 27     Jun 27     July 3     Jun 27
                       2010       2010       2009       2010       2009
                     ---------- ---------- ---------  ---------  ---------

Net revenues         $   41,495 $   36,661 $  29,721  $ 146,913  $ 128,645

Cost of revenues         26,246     23,723    21,193     96,146     85,514
                     ---------- ---------- ---------  ---------  ---------

   Gross profit          15,249     12,938     8,528     50,767     43,131

Operating expenses:

   Research and
    development           4,575      4,251     4,117     17,208     16,697

   Selling, general
    and
    administrative        7,413      6,201     5,343     26,478     22,833

   Restructuring
    charge                    -          -        74          -        584
                     ---------- ---------- ---------  ---------  ---------

      Total operating
       expenses          11,988     10,452     9,534     43,686     40,114
                     ---------- ---------- ---------  ---------  ---------

Income (loss) from
 operations               3,261      2,486    (1,006)     7,081      3,017

Interest and other
 income                   1,072      1,219     1,677      5,222      5,548

Other than temporary
 decline in value of
 investment                   -          -         -          -       (506)
                     ---------- ---------- ---------  ---------  ---------

Income before income
 taxes                    4,333      3,705       671     12,303      8,059

Income tax expense
 (benefit)                1,174      1,260      (135)     3,911      2,209
                     ---------- ---------- ---------  ---------  ---------

Net income from
 consolidated
 companies                3,159      2,445       806      8,392      5,850

Equity in net income
 of unconsolidated
 affiliates                 759        608       256      2,430        351
                     ---------- ---------- ---------  ---------  ---------

Net income                3,918      3,053     1,062     10,822      6,201

Net income
 attributable to
 noncontrolling
 interests                    -          -       (22)       (28)      (114)
                     ---------- ---------- ---------  ---------  ---------

Net income
 attributable to
 Pericom
 shareholders        $    3,918 $    3,053 $   1,040  $  10,794  $   6,087
                     ========== ========== =========  =========  =========

Basic income per
 share to Pericom
 shareholders        $     0.16 $     0.12 $    0.04  $    0.42  $    0.24
                     ========== ========== =========  =========  =========

Diluted income per
 share to Pericom
 shareholders        $     0.15 $     0.12 $    0.04  $    0.42  $    0.24
                     ========== ========== =========  =========  =========

Shares used in
 computing basic
 income per share        25,210     25,386    25,354     25,412     25,417
                     ========== ========== =========  =========  =========

Shares used in
 computing diluted
 income per share        25,582     25,697    25,485     25,717     25,626
                     ========== ========== =========  =========  =========




                   Pericom Semiconductor Corporation
                  Condensed Consolidated Balance Sheets
                              (In thousands)
                                (unaudited)

                                                     As of        As of
                                                  July 3, 2010 Jun 27, 2009
                                                  ------------ ------------
          Assets

Current assets:

    Cash & cash equivalents                       $     29,495 $     37,321
    Restricted cash                                          -        3,200
    Short-term investments                              76,454       75,471
    Accounts receivable - trade                         25,365       22,875
    Inventories                                         23,431       16,340
    Prepaid expenses and other current assets            6,825        3,738
    Deferred income taxes                                3,119        2,433
                                                  ------------ ------------
          Total current assets                         164,689      161,378

Property, plant and equipment - net                     50,760       47,238
Investments in unconsolidated affiliates                13,183       10,826
Deferred income taxes non current                        3,868        4,913
Long-term investments in marketable securities          12,977       11,780
Goodwill                                                 1,681        1,673
Intangible assets                                        1,452        1,764
Other assets                                             7,438        6,742
                                                  ------------ ------------
          Total assets                            $    256,048 $    246,314
                                                  ============ ============


          Liabilities and Shareholders' Equity

Current liabilities:

    Accounts payable                              $     15,585 $     10,824
    Accrued liabilities and other                       10,781       15,118
    Current portion of long-term debt                        -           60
                                                  ------------ ------------
          Total current liabilities                     26,366       26,002

Long-term debt                                               -        1,610
Industrial development subsidy                           6,577        3,718
Other long-term liabilities                              1,199        1,287
                                                  ------------ ------------
          Total liabilities                             34,142       32,617

Shareholders' equity:
    Common stock and paid in capital                   130,536      133,162
    Retained earnings and other comprehensive
     income                                             91,370       79,302
                                                  ------------ ------------
          Total Pericom shareholders' equity           221,906      212,464
    Noncontrolling interests in consolidated
     subsidiaries                                            -        1,233
                                                  ------------ ------------
          Total shareholders' equity                   221,906      213,697
                                                  ------------ ------------

          Total liabilities and shareholders'
           equity                                 $    256,048 $    246,314
                                                  ============ ============





                    Pericom Semiconductor Corporation
                         Share-Based Compensation
                              (In thousands)
                                (unaudited)

                                          Three Months      Twelve Months
                                             Ended              Ended
                                    ----------------------- ---------------
                                    July 3  Mar 27  Jun 27  July 3  Jun 27
                                     2010    2010    2009    2010    2009
                                    ------- ------- ------- ------- -------

Cost of revenues                    $    88 $    70 $    52 $   286 $   244

Research and development                441     371     359   1,506   1,407

Selling, general and administrative     659     557     477   2,257   1,935
                                    ------- ------- ------- ------- -------

                                    $ 1,188 $   998 $   888 $ 4,049 $ 3,586
                                    ======= ======= ======= ======= =======

Contact Information: Contact: Aaron Tachibana Pericom Semiconductor Tel: 408 435-0800