PMC-Sierra Reports Results for the Second Quarter Ended June 29, 2008

PMC-Sierra, a leading provider of high-speed broadband communications and storage semiconductors, has reported results for the second quarter ended June 29, 2008.

Net revenues in the second quarter of 2008 were $139.8 million, an increase of 33.6% compared with the second quarter of 2007 and 11.8% higher than the $125.0 million in the first quarter of 2008.


Net income in the second quarter of 2008 on a GAAP basis was $137.2 million (GAAP diluted earnings per share of $0.61) compared with a GAAP net loss in the first quarter of 2008 of $22.7 million (GAAP basic and diluted loss per share of $0.10). Non-GAAP net income in the second quarter of 2008 was $29.7 million (non-GAAP diluted earnings per share of $0.13) compared with non-GAAP net income of $23.5 million (non-GAAP diluted earnings per share of $0.11) in the first quarter of 2008.

Non-GAAP net income in the second quarter of 2008 excludes $124.3 million related to an adjustment to the accrual for unrecognized tax benefits. During the second quarter, the Company reached a settlement on several ongoing foreign tax matters related to prior years for amounts less than had been accrued as unrecognized tax benefits. As part of the settlement, the Company agreed to a cash payment of $18.0 million and utilized $38.1 million in investment tax credits. The non-GAAP net income for the second quarter of 2008 also excludes the following items: (i) $7.4 million in stock-based compensation expense; (ii) $9.8 million amortization of purchased intangible assets; (iii) $0.1 million in restructuring related to severance; (iv) $0.8 million foreign exchange loss on the Company’s liability for unrecognized tax benefits; and (v) $1.3 million income tax effect of these non-GAAP adjustments.

For a full reconciliation of GAAP net income to non-GAAP net income, please refer to the schedule on page 6 of this release. The Company believes the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses the non-GAAP measures internally to evaluate its in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company’s core operating results. In addition, the measures are used to plan for the Company’s future periods. However, non-GAAP measures are neither stated in accordance with, nor are they a substitute for, GAAP measures.

PMC-Sierra