Pericom Semiconductor Reports Fiscal Third Quarter 2015 Financial Results

Non-GAAP Financial Information

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), this announcement of operating results contains non-GAAP financial measures that exclude the income statement effects of share-based compensation, amortization of intangible assets, fair value adjustments on acquired fixed assets, restructuring charges, lease restructuring and moving costs, asset write-offs, tax provision on intercompany transactions, the corresponding tax effects and the effects of excluding share-based compensation upon the number of diluted shares used in calculating non-GAAP earnings per share.

We have excluded share-based compensation expense in calculating these non-GAAP financial measures. These expenses are non-cash in nature and rely on valuations of the future market price of our common stock that is difficult to predict and is affected by market factors that are largely not within the control of management. We have excluded amortization of intangible assets, amortization of fair value adjustments on acquired fixed assets, restructuring charges, lease restructuring and moving costs, asset write-offs, tax provision on intercompany transactions and the corresponding tax effects because we do not consider them to be related to our core operating performance. We also use non-GAAP data in calculating certain metrics such as non-GAAP cost of goods sold in computing inventory days of supply.

We use the non-GAAP financial measures that exclude these items to make strategic decisions, forecast future results and evaluate the Company's current operating performance. We believe that the presentation of non-GAAP financial measures that exclude these items is useful to investors because we do not consider these charges either part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that are used to evaluate the Company's operating performance.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Safe Harbor Statement

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 by our CEO concerning future business and continued improvement in profitability and the statements under the captions "Fiscal Q4 2015 Outlook", which regard the anticipated revenues, gross margin, operating expenses, other income, and effective tax rate in the fourth fiscal quarter of 2015. 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 annual report on Form 10-K for the year ended June 28, 2014, the quarterly report on Form 10-Q for the quarter ended December 27, 2014, and in particular, the risk factors section contained in those reports.

                                                                            
                                                                            
                     Pericom Semiconductor Corporation                      
              Condensed Consolidated Statements of Operations               
                   (In thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                         Three Months Ended             Nine Months Ended   
                  ---------------------------------- -----------------------
                  March 28,  December 27, March 29,  December 27, March 29, 
                     2015        2014        2014        2014        2014   
                  ---------- ------------ ---------- ------------ ----------
                                                                            
Net revenues      $  31,757  $     33,255 $  30,681  $     98,271 $  95,329 
                                                                            
Cost of revenues     17,054        18,427    18,175        54,660    57,795 
                  ---------- ------------ ---------- ------------ ----------
                                                                                   
    Gross  profit              14,703                14,828        12,506                43,611        37,534  
                                                                                                                                                        
Operating                                                                                                                                      
  expenses:                                                                                                                                    
                                                                                                                                                        
    Research  and                                                                                                                            
      development                4,614                  4,390          4,694                13,592        15,013  
                                                                                                                                                        
    Selling,                                                                                                                                    
      general  and                                                                                                                            
      administrative          7,573                  7,682          7,407                22,555        22,220  
                                    ----------  ------------  ----------  ------------  ----------
                                                                                                                                                        
        Total                                                                                                                                      
          operating                                                                                                                            
          expenses                12,187                12,072        12,101                36,147        37,233  
                                    ----------  ------------  ----------  ------------  ----------
                                                                                                                                                        
Income  (loss)                                                                                                                              
  from  operations            2,516                  2,756              405                  7,464              301  
                                                                                                                                                        
Interest  and                                                                                                                                
  other  income,                                                                                                                            
  net                                    1,039                      745              696                  2,476          2,060  
                                                                                                                                                        
Foreign  exchange                                                                                                                        
  gain                                    (492)                1,190              106                  1,281              276  
                                    ----------  ------------  ----------  ------------  ----------
                                                                                                                                                        
Income  before                                                                                                                              
  income  taxes                  3,063                  4,691          1,207                11,221          2,637  
                                                                                                                                                        
Income  tax                                                                                                                                    
  expense                                                                                                                                        
  (benefit)                            635                  1,113            (421)                2,758            (521)
                                    ----------  ------------  ----------  ------------  ----------
                                                                                                                                                        
Net  income  from                                                                                                                          
  consolidated                                                                                                                              
  companies                        2,428                  3,578          1,628                  8,463          3,158  
                                                                                                                                                        
Equity  in  net                                                                                                                              
  income  of                                                                                                                                    
  unconsolidated                                                                                                                          
  affiliates                            35                        74                13                      148                82  
                                    ----------  ------------  ----------  ------------  ----------
                                                                                                                                                        
Net  income                $      2,463    $            3,652  $      1,641    $            8,611  $      3,240  
                                    ==========  ============  ==========  ============  ==========
                                                                                                                                                        
Basic  income  per                                                                                                                        
  share                        $        0.11    $              0.17  $        0.07    $              0.39  $        0.14  
                                    ==========  ============  ==========  ============  ==========
                                                                                                                                                        
Diluted  income                                                                                                                            
  per  share                $        0.11    $              0.16  $        0.07    $              0.38  $        0.14  
                                    ==========  ============  ==========  ============  ==========
                                                                                                                                                        
Shares  used  in                                                                                                                            
  computing  basic                                                                                                                        
  income  per  share        22,436                22,110        22,659                22,161        22,751  
                                    ==========  ============  ==========  ============  ==========
                                                                                                                                                        
Shares  used  in                                                                                                                            
  computing                                                                                                                                    
  diluted  income                                                                                                                          
  per  share                      23,049                22,624        22,880                22,645        22,950  
                                    ==========  ============  ==========  ============  ==========
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                            Pericom  Semiconductor  Corporation                                          
                                                    Supplemental  Information                                                    
                                                              (In  thousands)                                                              
                                                                  (unaudited)                                                                
                                                                                                                                                        
                                                    Three  Months  Ended                        Nine  Months  Ended      
                                    ----------------------------------  -----------------------
                                      March  28,  December  27,    March  29,      March  28,      March  29,
                                          2015                2014                2014                2015                2014      
                                    ----------  ------------  ----------  ------------  ----------
                                                                                                                                                        
Share-based                                                                                                                                  
  compensation                                                                                                                              
    Cost  of                                                                                                                                      
      revenues              $              41  $                  56  $              40  $                130  $            126
    Research  and                                                                                                                            
      development                      365                    299                257                    882                867
    Selling,                                                                                                                                    
      general  and                                                                                                                            
      administrative                804                    595                420                1,857            1,204
                                    ----------  ------------  ----------  ------------  ----------
        Share-based                                                                                                                          
          compensation                                                                                                                      
          expense            $        1,210  $                950  $            717  $            2,869  $        2,197
                                    ==========  ============  ==========  ============  ==========
                                                                                                                                                        
Amortization  of                                                                                                                          
  intangible                                                                                                                                  
  assets                                                                                                                                          
    Cost  of                                                                                                                                      
      revenues              $            473  $                473  $            483  $            1,424  $        1,452
    Research  and                                                                                                                            
      development                          -                        -                    -                        -                  67
    Selling,                                                                                                                                    
      general  and                                                                                                                            
      administrative                244                    248                249                    739                745
                                    ----------  ------------  ----------  ------------  ----------
        Amortization                                                                                                                        
          of                                                                                                                                          
          intangible                                                                                                                          
          assets              $            717  $                721  $            732  $            2,163  $        2,264
                                    ==========  ============  ==========  ============  ==========
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                            Pericom  Semiconductor  Corporation                                          
                    Reconciliation  of  GAAP  Net  Income  to  Non-GAAP  Net  Income                    
                                                              (In  thousands)                                                              
                                                                  (unaudited)                                                                
                                                                                                                                                        
                                                      Three  Months  Ended                        Nine  Months  Ended    
                                      -----------------------------------  ---------------------
                                      March  28,    December  27,    March  29,    March  28,    March  29,  
                                            2015                2014                  2014              2015              2014      
                                      ----------  -------------  ----------  ----------  ----------
GAAP  net  income        $      2,463    $            3,652    $      1,641    $      8,611    $      3,240  
Reconciling  items:                                                                                                                    
    Share-based                                                                                                                              
      compensation                                                                                                                          
      expense                          1,210                      950                717            2,869            2,197  
    Amortization  of                                                                                                                      
      intangible                                                                                                                              
      assets                                717                      721                732            2,163            2,264  
    Fair  value                                                                                                                                
      adjustment  to                                                                                                                        
      depreciation                                                                                                                          
      expense  on                                                                                                                              
      acquired  fixed                                                                                                                      
      assets                                  50                        51                  51                152                153  
    Restructuring                                                                                                                          
      charge                                    -                          -                  95                112                190  
    Write-off  of                                                                                                                            
      assets                                    -                      109                    -                109                210  
    Release  of  tax                                                                                                                        
      reserves                                -                          -          (1,035)                  -          (1,776)
    Tax  on                                                                                                                                        
      intercompany                                                                                                                          
      transaction                          -                          -                    -                    -                  15  
    Lease                                                                                                                                          
      restructuring                                                                                                                        
      and  moving                                                                                                                              
      costs                                      -                          -                    -                    -                522  
    Tax  effect  of                                                                                                                          
      adjustments                    (521)                  (461)            (383)        (1,359)        (1,378)
                                      ----------  -------------  ----------  ----------  ----------
        Total                                                                                                                                      
          reconciling                                                                                                                        
          items                          1,456                  1,370                177            4,046            2,397  
                                      ----------  -------------  ----------  ----------  ----------
Non-GAAP  net                                                                                                                                
  income                        $      3,919    $            5,022    $      1,818    $    12,657    $      5,637  
                                      ==========  =============  ==========  ==========  ==========
                                                                                                                                                        
                                                                                                                                                        
                  Reconciliation  of  GAAP  Diluted  EPS  to  Non-GAAP  Diluted  EPS                  
                                                                  (unaudited)                                                                
                                                                                                                                                        
Diluted  net  income                                                                                                                    
  per  share:                                                                                                                                  
    GAAP  diluted                                                                                                                            
      income  per                                                                                                                              
      share                      $        0.11    $              0.16    $        0.07    $        0.38    $        0.14  
    Adjustments:                                                                                                                            
    Share-based                                                                                                                              
      compensation                                                                                                                          
      expense                            0.05                    0.04              0.03              0.12              0.09  
    Amortization  of                                                                                                                      
      intangible                                                                                                                              
      assets                              0.03                    0.03              0.03              0.09              0.10  
    Fair  value                                                                                                                                
      adjustment  to                                                                                                                        
      depreciation                                                                                                                          
      expense  on                                                                                                                              
      acquired  fixed                                                                                                                      
      assets                                    -                          -                    -                    -              0.01  
    Restructuring                                                                                                                          
      charge                                    -                    0.01              0.01              0.01              0.01  
    Write-off  of                                                                                                                            
      assets                                    -                          -                    -                    -              0.01  
    Release  of  tax                                                                                                                        
      reserves                                -                          -            (0.04)                  -            (0.08)
    Tax  on                                                                                                                                        
      intercompany                                                                                                                          
      transaction                          -                          -                    -                    -                    -  
    Lease                                                                                                                                          
      restructuring                                                                                                                        
      and  moving                                                                                                                              
      costs                                      -                          -                    -                    -              0.02  
    Tax  effect  of                                                                                                                          
      adjustments                  (0.02)                (0.02)          (0.02)          (0.06)          (0.06)
                                      ----------  -------------  ----------  ----------  ----------
        Total                                                                                                                                      
          adjustments                0.06                    0.06              0.01              0.16              0.10  
                                      ----------  -------------  ----------  ----------  ----------
Non-GAAP  diluted                                                                                                                        
  income  per  share    $        0.17    $              0.22    $        0.08    $        0.54    $        0.24  
                                      ==========  =============  ==========  ==========  ==========
                                                                                                                                                        
Shares  used  in                                                                                                                            
  diluted  net                                                                                                                                
  income  per  share                                                                                                                      
  calculation:                                                                                                                              
    GAAP                                23,049                22,624          22,880          22,645          22,950  
        Exclude  the                                                                                                                          
          benefit  of                                                                                                                          
          share-based                                                                                                                        
          compensation                                                                                                                      
          expense  (1)                  441                      412                526                446                447  
                                      ----------  -------------  ----------  ----------  ----------
    Non-GAAP                        23,490                23,036          23,406          23,091          23,397  
                                      ==========  =============  ==========  ==========  ==========
                                                                                                                                                        
(1)  For  purposes  of  calculating  non-GAAP  diluted  net  income  per  share,  the    
  GAAP  diluted  weighted  average  shares  outstanding  is  adjusted  to  exclude  the
  benefits  of  unamortized  stock  compensation  costs  that  are  treated  as              
  proceeds  assumed  to  be  used  to  repurchase  shares  under  the  GAAP  treasury      
  stock  method.                                                                                                                            
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                            Pericom  Semiconductor  Corporation                                          
                Reconciliation  of  GAAP  Gross  Profit  to  Non-GAAP  Gross  Profit                
                                                              (In  thousands)                                                              
                                                                  (unaudited)                                                                
                                                                                                                                                        
                                                      Three  Months  Ended                        Nine  Months  Ended    
                                      -----------------------------------  ---------------------
                                      March  28,    December  27,    March  29,    March  28,    March  29,  
                                            2015                2014                  2014              2015              2014      
                                      ----------  -------------  ----------  ----------  ----------
GAAP  gross  profit    $    14,703    $          14,828    $    12,506    $    43,611    $    37,534  
    -  %  of  revenues              46.3%                  44.6%            40.8%            44.4%            39.4%
Reconciling  items:                                                                                                                    
    Share-based                                                                                                                              
      compensation                      41                        56                  40                130                126  
    Amortization  of                                                                                                                      
      intangible                                                                                                                              
      assets                                473                      473                483            1,424            1,452  
    Fair  value                                                                                                                                
      adjustment  to                                                                                                                        
      depreciation                                                                                                                          
      expense  on                                                                                                                              
      acquired  fixed                                                                                                                      
      assets                                  10                        10                  10                  30                  30  
    Restructuring                                                                                                                          
      charge                                    -                          -                    -                  84                    -  
                                      ----------  -------------  ----------  ----------  ----------
        Total                                                                                                                                      
          reconciling                                                                                                                        
          items                              524                      539                533            1,668            1,608  
                                      ----------  -------------  ----------  ----------  ----------
Non-GAAP  gross                                                                                                                            
  profit                        $    15,227    $          15,367    $    13,039    $    45,279    $    39,142  
                                      ==========  =============  ==========  ==========  ==========
    -  %  of  revenues              47.9%                  46.2%            42.5%            46.1%            41.1%
                                                                                                                                                        
                                                                                                                                                        
                Reconciliation  of  GAAP  R&D  Expenses  to  Non-GAAP  R&D  Expenses                
                                                                  (unaudited)                                                                
                                                                                                                                                        
GAAP  research  and                                                                                                                      
  development                                                                                                                                
  expenses                    $      4,614    $            4,390    $      4,694    $    13,592    $    15,013  
    -  %  of  revenues              14.5%                  13.2%            15.3%            13.8%            15.7%
Reconciling  items:                                                                                                                    
    Share-based                                                                                                                              
      compensation                  (365)                  (299)            (257)            (882)            (867)
    Amortization  of                                                                                                                      
      intangible                                                                                                                              
      assets                                    -                          -                    -                    -                (67)
    Fair  value                                                                                                                                
      adjustment  to                                                                                                                        
      depreciation                                                                                                                          
      expense  on                                                                                                                              
      acquired  fixed                                                                                                                      
      assets                                (10)                    (10)              (10)              (30)              (30)
    Restructuring                                                                                                                          
      charge                                    -                          -                (59)              (28)            (137)
    Write-off  of                                                                                                                            
      assets                                    -                          -                    -                    -              (210)
                                      ----------  -------------  ----------  ----------  ----------
        Total                                                                                                                                      
          reconciling                                                                                                                        
          items                            (375)                  (309)            (326)            (940)        (1,311)
                                      ----------  -------------  ----------  ----------  ----------
Non-GAAP  research                                                                                                                      
  and  development                                                                                                                        
  expenses                    $      4,239    $            4,081    $      4,368    $    12,652    $    13,702  
                                      ==========  =============  ==========  ==========  ==========
    -  %  of  revenues              13.3%                  12.3%            14.2%            12.9%            14.4%
                                                                                                                                                        
                                                                                                                                                        
              Reconciliation  of  GAAP  SG&A  Expenses  to  Non-GAAP  SG&A  Expenses              
                                                                  (unaudited)                                                                
                                                                                                                                                        
GAAP  selling,                                                                                                                              
  general  and                                                                                                                                
  administrative                                                                                                                          
  expenses                    $      7,573    $            7,682    $      7,407    $    22,555    $    22,220  
    -  %  of  revenues              23.8%                  23.1%            24.1%            23.0%            23.3%
Reconciling  items:                                                                                                                    
    Share-based                                                                                                                              
      compensation                  (804)                  (595)            (420)        (1,857)        (1,204)
    Amortization  of                                                                                                                      
      intangible                                                                                                                              
      assets                              (244)                  (248)            (249)            (739)            (745)
    Fair  value                                                                                                                                
      adjustment  to                                                                                                                        
      depreciation                                                                                                                          
      expense  on                                                                                                                              
      acquired  fixed                                                                                                                      
      assets                                (30)                    (31)              (31)              (92)              (93)
    Restructuring                                                                                                                          
      charge                                    -                          -                (36)                  -                (53)
    Lease                                                                                                                                          
      restructuring                                                                                                                        
      and  moving                                                                                                                              
      costs                                      -                          -                    -                    -              (522)
                                      ----------  -------------  ----------  ----------  ----------
        Total                                                                                                                                      
          reconciling                                                                                                                        
          items                        (1,078)                  (874)            (736)        (2,688)        (2,617)
                                      ----------  -------------  ----------  ----------  ----------
Non-GAAP  selling,                                                                                                                      
  general  and                                                                                                                                
  administrative                                                                                                                          
  expenses                    $      6,495    $            6,808    $      6,671    $    19,867    $    19,603  
                                      ==========  =============  ==========  ==========  ==========
    -  %  of  revenues              20.5%                  20.5%            21.7%            20.2%            20.6%
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                            Pericom  Semiconductor  Corporation                                          
                                        Condensed  Consolidated  Balance  Sheets                                      
                                                              (In  thousands)                                                              
                                                                  (unaudited)                                                                
                                                                                                                                                        
                                                                                                    As  of                      As  of          
                                                                                            March  28,  2015    June  28,  2014  
                                                                                          ---------------  ---------------
                                      Assets                                                                                                      
                                                                                                                                                        
Current  assets:                                                                                                                          
                                                                                                                                                        
    Cash  and  cash  equivalents                                    $                39,208  $                33,020
    Short-term  investments                                                            99,824                    86,104
    Accounts  receivable  -  trade                                                  22,918                    24,036
    Inventories                                                                                  14,078                    12,288
    Prepaid  expenses  and  other  current  assets                        4,719                      5,336
    Deferred  income  taxes                                                                    764                          726
                                                                                          ---------------  ---------------
        Total  current  assets                                                          181,511                  161,510
                                                                                                                                                        
Property,  plant  and  equipment  -  net                                      56,865                    58,537
Investments  in  unconsolidated  affiliates                              2,413                      2,445
Deferred  income  taxes  non-current                                            2,518                      2,460
Intangible  assets                                                                            4,772                      7,009
Other  assets                                                                                      7,964                      8,118
                                                                                          ---------------  ---------------
        Total  assets                                                          $              256,043  $              240,079
                                                                                          ===============  ===============
                                                                                                                                                        
                                                                                                                                                        
        Liabilities  and  Shareholders'  Equity                                                                        
                                                                                                                                                        
Current  liabilities:                                                                                                                
                                                                                                                                                        
    Accounts  payable                                                      $                13,752  $                  8,927
    Accrued  liabilities                                                                  11,896                      9,934
                                                                                          ---------------  ---------------
        Total  current  liabilities                                                  25,648                    18,861
                                                                                                                                                        
Industrial  development  subsidy                                                  5,606                      6,354
Deferred  tax  liabilities                                                              4,820                      5,460
Other  long-term  liabilities                                                        1,961                      1,912
                                                                                          ---------------  ---------------
        Total  liabilities                                                                  38,035                    32,587
                                                                                                                                                        
Shareholders'  equity:                                                                                                              
    Common  stock  and  paid  in  capital                                      118,618                  113,118
    Retained  earnings  and  other  comprehensive                                                                  
      income                                                                                          99,390                    94,374
                                                                                          ---------------  ---------------
    Total  shareholders'  equity                                                  218,008                  207,492
                                                                                          ---------------  ---------------
                                                                                                                                                        
    Total  liabilities  and  shareholders'  equity  $              256,043  $              240,079
                                                                                          ===============  ===============
                                                                                                                                                        
 




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