Peregrine Semiconductor Announces Fourth Quarter and Full Year 2012 Financial Results

  Peregrine Semiconductor Announces Fourth Quarter and Full Year 2012
  Financial Results

Business Wire

SAN DIEGO -- February 6, 2013

Peregrine Semiconductor Corporation (Peregrine Semiconductor) (NASDAQ: PSMI),
a fabless provider of high-performance radio frequency integrated circuits
(RFICs), today announced its fourth quarter and 2012 fiscal year financial
results.

Fourth quarter 2012 revenue was $63.0 million, compared with $35.5 million for
the same period in 2011. Revenue for fiscal year 2012 was $203.9 million,
compared with $107.8 million for fiscal year 2011.

As reported under U.S. generally accepted accounting principles (GAAP), fourth
quarter 2012 net income was $5.6 million, compared with a GAAP net loss of
$2.7 million in the same period in 2011. Net income for fiscal year 2012 was
$7.3 million, compared with a GAAP net loss of $9.7 million for fiscal year
2011. Diluted net income per share for the fourth quarter of 2012 was $0.15
per share compared to a net loss per share of $0.99 for the same period in
2011. Diluted net income per share attributable to common stockholders* for
fiscal year 2012 was $0.15 per share compared to a net loss per share of $3.57
for fiscal year 2011.

Non-GAAP net income for the fourth quarter of 2012 was $6.9 million, or $0.19
per diluted share based on weighted average shares outstanding of 36.5
million. This compares with non-GAAP net loss of $1.8 million or $0.07 per
diluted share based on weighted average shares outstanding of 25.1 million for
the same period in 2011. Non-GAAP net income for the fiscal year 2012 was
$11.7 million, or $0.36 per diluted share** based on weighted average shares
outstanding of 32.2 million giving effect to the conversion of the preferred
stock at the beginning of the year. This compares with non-GAAP net loss of
$6.6 million or $0.26 per diluted share based on weighted average shares
outstanding of 25.1 million for fiscal year 2011.

Gross margin on a GAAP basis for the fourth quarter of 2012 was 43.3% of
revenue, compared to 30.1% of revenue for the same period in 2011. Gross
margin on a non-GAAP basis for the fourth quarter of 2012 was 43.6% of
revenue, compared to 30.4% of revenue for the same period in 2011. Gross
margin on a GAAP basis for fiscal year 2012 was 39.1% of revenue, compared to
34.2% of revenue for fiscal year 2011. Gross margin on a non-GAAP basis for
fiscal year 2012 was 39.4% of revenue, compared to 34.6% of revenue for fiscal
year 2011.

"Coming off a record fourth quarter that completed a successful fiscal 2012,
we continue to see our technology being widely acceptedin many of the world’s
most successful smartphones, and we are expanding well in our targetedgrowth
markets,” commented Jim Cable, Chief Executive Officer. “Presently we are
addressing short-term challenges related to the demand for certain OEM mobile
devices, but we remain confident that the continued adoptionof LTE
smartphones,our increasing tractionwith leading customers worldwide, and the
expansion of our non-handset business, will all contribute to Peregrine’s
continued long-term growth.”

“In 2013 we look forward to building upon our momentum and expanding on our
leadership position. We believe through continued focus on technology
leadership and operational excellence, we can deliver strong financial
performance and value to our shareholders. These objectives are achievable
with the dedication of our employees and the strong support and collaboration
of our customers and business partners worldwide," concluded Cable.

*Diluted net income (loss) per share attributable to common stockholders is
computed by dividing net income (loss) attributable to common stockholders,
calculated as net income (loss) less income allocable to preferred
stockholders for the period prior to their conversion upon our initial public
offering, by the weighted average number of common shares outstanding,
including unvested shares subject to repurchase, and potential dilutive
securities assuming the dilutive effect of outstanding stock options and
warrants using the treasury stock method.

**Non-GAAP diluted net income (loss) per share was computed to give effect to
the conversion of our preferred stock using the as-if converted method into
common shares as if the conversion had occurred as of the beginning of each
period presented.

Business Outlook

For the first quarter of 2013, the company expects revenue to be in the range
of $43 million to $46 million. First quarter GAAP gross margin is expected to
be in the range of 43.0% to 44.5%.

Quarterly Conference Call Today

Jim Cable, President and Chief Executive Officer, and Jay Biskupski, Chief
Financial Officer, will host a fourth quarter 2012 financial results
conference call today at 2:00 pm (Pacific) / 5:00 pm (Eastern). Attendees are
asked to join the conference call at least ten minutes prior to the scheduled
conference call time. The call may be accessed by dialing 1-877-303-8027 (toll
free) or 1-760-536-5165 (international). The passcode is 91307644. A live and
archived webcast of the call will be available on Peregrine's website at
http://investors.psemi.com/ for one week following the live call.

Use of GAAP and Non-GAAP Financial Measures

Peregrine Semiconductor prepares its financial statements in accordance with
generally accepted accounting principles forthe United States(GAAP). The
non-GAAP financial measures such as gross margin, net income and loss per
share information for the year and three months ended December29, 2012, and
similar periods from the prior year included in this press release are
different from those otherwise presented under GAAP. The non-GAAP financial
measures exclude non-cash compensation expense for stock options. When
evaluating the performance of our business and developing short and long-term
plans, we do not consider share-based compensation charges. Although
share-based compensation is necessary to attract and retain quality employees,
our consideration of share-based compensation places its primary emphasis on
overall shareholder dilution rather than the accounting charges associated
with such grants. Because of the varying availability of valuation
methodologies and subjective assumptions, we believe that the exclusion of
share-based compensation allows for more accurate comparison of our financial
results to previous periods. In addition, we believe it useful to investors to
understand the specific impact of the application of the fair value method of
accounting for share-based compensation on our operating results. The
presentation of these financial measures is not intended to be considered in
isolation or as a substitute for, or superior to, financial information
prepared and presented in accordance with GAAP. We believe these non-GAAP
financial measures provide investors with useful supplemental information
about the financial performance of our business, enable comparison of
financial results between periods where certain items may vary independent of
business performance, and allow for greater transparency with respect to key
metrics used by management in operating our business. However, investors are
cautioned that there are material limitations associated with the use of
non-GAAP financial measures as an analytical tool. These measures may be
different from non-GAAP financial measures used by other companies, limiting
their usefulness for comparison purposes.

For more information on our non-GAAP financial measures and a reconciliation
of such measures to the nearest GAAP measure, please see the “Condensed
Consolidated Reconciliation of GAAP to Non-GAAP Results” table in this press
release.

Use of Forward Looking Statements

This press release contains forward looking statements regarding our
management's future expectations, beliefs, intentions, goals, strategies,
plans and prospects. Such statements constitute “forward-looking” statements
which are subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The achievement of the matters covered by such
forward-looking statements involves risks, uncertainties and assumptions. If
any of these risks or uncertainties materialize or if any of the assumptions
prove incorrect, our actual results, performance or achievements could be
materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such risks and
uncertainties include, but are not limited to, our dependence on a limited
number of customers for a substantial portion of our revenues; intellectual
property risks; intense competition in our industry; our ability to develop
and introduce new and enhanced products on a timely basis and achieve market
acceptance of those products; consumer acceptance of our customers’ products
that incorporate our solutions; our lack of long-term supply contracts and
dependence on limited sources of supply; and potential decreases in average
selling prices for our products.

For further information regarding risks and uncertainties associated with
Peregrine’s business, please refer to the filings that we make with the
Securities and Exchange Commission from time to time, including those set
forth in the section entitled “Risk Factors” in the company's Prospectus filed
on August 8, 2012 and additional information that will be set forth in our
Form 10-K that will be filed for the year ended December 29, 2012, which
should be read in conjunction with these financial results. These documents
are available on the SEC Filings section of the Investor Relations section of
our website at http://investors.psemi.com/. Please also note that
forward-looking statements represent our management's beliefs and assumptions
only as of the date of this press release. Except as required by law, we
assume no obligation to update these forward-looking statements publicly, or
to update the reasons actual results could differ materially from those
anticipated in the forward-looking statements, even if new information,
becomes available in the future.

About Peregrine Semiconductor

Peregrine Semiconductor (NASDAQ: PSMI) is a fabless provider of
high-performance radio frequency integrated circuits (RFICs). Our solutions
leverage our proprietary  UltraCMOS^®technology,an advanced RF
Silicon-On-Insulator process. Our products deliver what we believe is an
industry-leading combination of performance and monolithic integration, and
target a broad range of applications in the aerospace and defense, broadband,
industrial, mobile wireless device, test and measurement equipment, and
wireless infrastructure markets. Additional information is available on the
Company’s website athttp://www.psemi.com.

     The Peregrine Semiconductor name, logo and UltraCMOS are registered
   trademarks, and DuNE, and HaRP are trademarks of Peregrine Semiconductor
 Corporation in the U.S.A., and other countries. All other trademarks are the
                     property of their respective owners.

                   
                                                                
Peregrine Semiconductor Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
                                                              
                     Three Months Ended            Years Ended
                     December 29,   December 31,   December 29,   December 31,
                     2012           2011           2012           2011
                                                                  
Net revenue          $  62,999      $  35,547      $  203,908     $  107,771
Cost of net            35,717       24,865       124,135      70,955  
revenue
                                                                  
Gross profit            27,282         10,682         79,773         36,816
Operating expense:
Research and            10,616         6,438          34,134         22,730
development
Selling, general       10,788       6,707        36,971       23,252  
and administrative
                                                                  
Total operating        21,404       13,145       71,105       45,982  
expense
                                                                  
Income (loss) from      5,878          (2,463  )      8,668          (9,166  )
operations
Interest expense,       (107    )      (204    )      (1,354  )      (311    )
net
Other income           2            (43     )     (130    )     (9      )
(expense), net
                                                                  
Income (loss)
before income           5,773          (2,710  )      7,184          (9,486  )
taxes
Provision
(benefit) for          146          2            (88     )     196     
income taxes
                                                                  
Net income (loss)       5,627          (2,712  )      7,272          (9,682  )
Net income
allocable to           -            -            (4,515  )     -       
preferred
stockholders
                                                                  
Net income (loss)
attributable to      $  5,627      $  (2,712  )   $  2,757      $  (9,682  )
common
stockholders
                                                                  
Net income (loss)
per share:
Basic                $  0.18       $  (0.99   )   $  0.19       $  (3.57   )
Diluted              $  0.15       $  (0.99   )   $  0.15       $  (3.57   )
                                                                  
Shares used to
compute net income
(loss) per share:
Basic                  31,837       2,745        14,291       2,715   
Diluted                36,548       2,745        18,651       2,715   
                                                                             
                                                                             

Peregrine Semiconductor Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
                                                               
                                                   December 29,   December 31,
                                                    2012         2011     
Assets
Current assets:
Cash and cash equivalents                          $ 44,106       $ 12,119
Short-term marketable securities                     30,361         -
Accounts receivable, net                             13,353         13,082
Inventories                                          57,017         29,822
Prepaids and other current assets                   11,108       2,644    
                                                                  
Total current assets                                 155,945        57,667
Property and equipment, net                          22,871         10,272
Long-term marketable securities                      18,892         -
Other assets                                         210            2,919
                                                                 
Total assets                                       $ 197,918     $ 70,858   
                                                                  
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable                                   $ 22,306       $ 9,390
Accrued liabilities                                  12,672         11,477
Accrued compensation                                 5,726          3,458
Customer deposits                                    24,425         -
Deferred net revenue                                 12,755         5,298
Line of credit                                       -              7,749
Current portion of notes payable                     -              861
Current portion of obligations under capital        11           520      
leases
                                                                             
Total current liabilities                            77,895         38,753
                                                                  
Obligations under capital leases, less current       18             189
portion
Notes payable, less current portion                  -              757
Other long-term liabilities                          886            1,329
                                                                  
Convertible preferred stock                          -              172,430
Stockholders’ equity (deficit):
Preferred stock                                      -              -
Common stock                                         32             3
Additional paid-in capital                           340,221        85,828
Accumulated deficit                                  (220,935 )     (228,207 )
Accumulated other comprehensive loss                 (199     )     (224     )
                                                                 
Total stockholders’ equity (deficit)                119,119      (142,600 )
Total liabilities and stockholders’ equity         $ 197,918     $ 70,858   
(deficit)
                                                                             
                                                                             

Peregrine Semiconductor Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                                                               
                                                   Years Ended
                                                   December 29,   December 31,
                                                     2012         2011    
Operating activities
Net income (loss)                                  $  7,272       $  (9,682  )
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization                         4,579          3,980
Loss on disposal of property and equipment            31             8
Stock-based compensation                              4,437          3,084
Revaluation of warrants to fair value                 633            (36     )
Imputed interest related to customer deposit          420            -
financing arrangements
Amortization of premium and discount on               169            -
investments, net
Cash received for lease incentive                     115            348
Changes in operating assets and liabilities:
Accounts receivable                                   (255    )      (1,303  )
Inventories                                           (27,188 )      (7,522  )
Prepaids and other current and noncurrent assets      (7,751  )      (2,271  )
Accounts payable and accrued liabilities              16,098         13,032
Customer deposits                                     11,425         -
Deferred revenue                                     6,865        265     
                                                                  
Net cash provided by (used in) operating              16,850         (97     )
activities
                                                                  
Investing activities
Purchase of property and equipment                    (17,212 )      (4,354  )
Proceeds from sale of equipment                       6              24
Purchase of marketable securities                     (54,663 )      -
Sale of marketable securities                        5,100        -       
                                                                  
Net cash used in investing activities                 (66,769 )      (4,330  )
                                                                  
Financing activities
Payments on obligations under capital leases          (661    )      (681    )
Payments on notes payable                             (1,618  )      (820    )
Proceeds from line of credit                          3,000          4,500
Payments on line of credit                            (10,749 )      -
Proceeds from exercise of stock options               445            148
Proceeds from exercise of warrants                    31             -
Proceeds from customer deposit financing              13,000         -
arrangement
Proceeds from initial public offering                 80,278         -
Costs paid in connection with initial public         (1,811  )     (1,845  )
offering
                                                                  
Net cash provided by financing activities             81,915         1,302
                                                                  
Effect of exchange rate changes on cash and cash     (9      )     18      
equivalents
                                                                  
Net change in cash and cash equivalents               31,987         (3,107  )
Cash and cash equivalents at beginning of year       12,119      15,226  
                                                                  
Cash and cash equivalents at end of year           $  44,106     $  12,119  
                                                                             
                                                                             

Peregrine Semiconductor Corporation
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(in thousands, except per share data)
(unaudited)
                                                                            
               Three Months Ended                     Years Ended
               December 29,      December 31,         December 29,      December 31,
               2012              2011                 2012              2011
                                                                                     
Gross profit   $ 27,282   43 %   $ 10,682     30 %    $ 79,773   39 %   $ 36,816     34 %
- GAAP
Non-cash
compensation    184      1      129       0       588      0      431       1  
expense
                                                                                     
Gross profit   $ 27,466   44 %   $ 10,811    30 %    $ 80,361   39 %   $ 37,247    35 %
- Non-GAAP
                                                                                     
Income
(loss) from    $ 5,878    9  %   $ (2,463 )   (7 %)   $ 8,668    4  %   $ (9,166 )   (9 %)
operations -
GAAP
Non-cash
compensation    1,321    2      925       3       4,437    2      3,084     3  
expense
                                                                                     
Income
(loss) from    $ 7,199    11 %   $ (1,538 )   (4 %)   $ 13,105   6  %   $ (6,082 )   (6 %)
operations -
Non-GAAP
                                                                                     
Net income
(loss) -       $ 5,627    9  %   $ (2,712 )   (8 %)   $ 7,272    4  %   $ (9,682 )   (9 %)
GAAP
Non-cash
compensation    1,321    2      925       3       4,437    2      3,084     3  
expense
                                                                                     
Net income
(loss) -       $ 6,948    11 %   $ (1,787 )   (5 %)   $ 11,709   6  %   $ (6,598 )   (6 %)
Non-GAAP
                                                                                     
Diluted net
income
(loss) per
share          $ 0.15            $ (0.99  )           $ 0.15            $ (3.57  )
attributable
to common
stockholders
- GAAP
Adjustment
to reflect
conversion
of preferred     -                 0.88                 0.07              3.19
stock at the
beginning of
period
Non-cash
compensation    0.04             0.04               0.14             0.12   
expense
                                                                                     
Diluted net
income
(loss) per     $ 0.19            $ (0.07  )           $ 0.36            $ (0.26  )
share -
Non-GAAP
                                                                                     
Net income
(loss)
attributable   $ 5,627           $ (2,712 )           $ 2,757           $ (9,682 )
to common
stockholders
- GAAP
Net income
(loss) -       $ 6,948           $ (1,787 )           $ 11,709          $ (6,598 )
Non-GAAP
                                                                                     
Shares used
to compute
diluted net
income
(loss) per       36,548            2,745                18,651            2,715
share
attributable
to common
stockholders
- GAAP
Adjustment
to reflect
conversion
of preferred    -                22,365             13,529           22,365 
stock at the
beginning of
period
                                                                                     
Shares used
to compute
diluted net
income          36,548           25,110             32,180           25,080 
(loss) per
share -
Non-GAAP

Contact:

Peregrine Semiconductor Corporation
Jay Biskupski, Chief Financial Officer
858-731-9400
ir@psemi.com
or
Investor Relations:
The Blueshirt Group
Suzanne Craig or Melanie Friedman
415-217-4962; 415-217-4964
Suzanne@blueshirtgroup.com
Melanie@blueshirtgroup.com