Peregrine Semiconductor Announces Fourth Quarter and Full Year 2013 Financial Results

  Peregrine Semiconductor Announces Fourth Quarter and Full Year 2013
  Financial Results

  *Fourth quarter revenue of $43.3 million
  *Fiscal year 2013 revenue of $202.3 million
  *GAAP fourth quarter diluted net loss per share of $0.21
  *GAAP fiscal year 2013 diluted net loss per share of $0.13
  *Non-GAAP fourth quarter diluted net loss per share of $0.16
  *Non-GAAP fiscal year 2013 diluted income per share of $0.07

Business Wire

SAN DIEGO -- February 3, 2014

Peregrine Semiconductor Corporation (Peregrine Semiconductor) (NASDAQ: PSMI),
a fabless provider of high-performance radio frequency integrated circuits
(RFICs), today announced its fourth quarter and 2013 fiscal year financial
results.

Fourth quarter 2013 revenue was $43.3 million, compared with $63.0 million for
the same period in 2012. Revenue for fiscal year 2013 was $202.3 million,
compared with $203.9 million for fiscal year 2012.

As reported under U.S. generally accepted accounting principles (GAAP), fourth
quarter 2013 net loss was $6.8 million, compared with a GAAP net income of
$5.6 million in the same period in 2012. Net loss for fiscal 2013 was $4.1
million, compared with a GAAP net income of $7.3 million for fiscal 2012.
Diluted net loss per share was $0.21 for the fourth quarter of 2013 compared
to a net income per share of $0.15 for the same period in 2012. Diluted net
loss per share for fiscal year 2013 was $0.13 per share, compared net income
per share to $0.15 per share for fiscal 2012.

Non-GAAP net loss for the fourth quarter of 2013 was $5.1 million, or $0.16
per diluted share based on weighted average shares outstanding of 32.7
million. This compares with non-GAAP net income of $6.9 million or $0.19 per
diluted share based on weighted average shares outstanding of 36.5 million for
the same period in 2012. Non-GAAP net income for fiscal year 2013 was $2.6
million, or $0.07 per diluted share based on weighted average shares
outstanding of 35.7 million. This compares with non-GAAP net income of $11.7
million or $0.36 per diluted share based on weighted average shares
outstanding of 32.2 million for fiscal year 2012.

Gross margin on a GAAP basis for the fourth quarter of 2013 was 36.0% of
revenue, compared to 43.3% of revenue for the same period in 2012. Gross
margin on a non-GAAP basis for the fourth quarter of 2013 was 36.6% of
revenue, compared to 43.6% of revenue for the same period in 2012. Gross
margins in the fourth quarter were impacted by a higher than normal inventory
write-down of $3.1 million. Gross margin on a GAAP basis for fiscal year 2013
was 40.2% of revenue, compared to 39.1% of revenue for fiscal year 2012. Gross
margin on a non-GAAP basis for fiscal year 2013 was 40.7% of revenue, compared
to 39.4% of revenue for fiscal year 2012. Operating expenses increased to
$22.4 million for the fourth quarter 2013 as a result of higher than expected
legal expenses and restructuring charges by $1.4 million.

“We reported fourth quarter revenue in line with our prior guidance. For 2014,
we see a number of challenges facing the smartphone industry. However, we
believe our product development and our progress in developing an integrated
RF front-end positions us well for 2015 as the industry enters a strategic
transition,” commented Jim Cable, President and Chief Executive Officer.
“Today, I am pleased to announce our introduction of the Ultra CMOS Global 1,
the world’s first reconfigurable RF front-end system, featuring our
multi-mode, multi-band power amplifier and integrated suite of switches and
tuning elements. We are pleased to demonstrate that our power amplifier offers
raw performance comparable with GaAs, but with all the benefits of our
UltraCMOS SOI process.”

Business Outlook

For the first quarter of 2014, the company expects revenue to be in the range
of $33 million to $36 million. First quarter GAAP gross margin is expected to
be in the range of 36% to 38%.

Quarterly Conference Call Today

Jim Cable, President and Chief Executive Officer, and Jay Biskupski, Chief
Financial Officer, will host a fourth quarter and full year 2013 financial
results conference call today at 1:30 pm (Pacific) / 4:30 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
33642584. 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 December 28, 2013, 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 our Form 10-K for the year
ended December 29, 2012 and additional information that will be set forth in
our Form 10-K that will be filed for the year ended December 28, 2013, 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), founder of RF SOI (silicon on
insulator), is a leading fabless provider of highperformance, integrated RF
solutions. Since 1988 Peregrine and its founding team have been perfecting
UltraCMOS® technology - a patented, advanced form of SOI - to deliver the
performance edge needed to solve the RF market's biggest challenges, such as
linearity. With products that deliver best-in-class performance and monolithic
integration, Peregrine is the trusted choice for market leaders in automotive,
broadband, industrial, Internet of Things, military, mobile devices,
smartphones, space, test-and-measurement equipment and wireless
infrastructure. Peregrine holds more than 170 filed and pending patents and
has shipped over 2 billion UltraCMOS units. For more information, visit
http://www.psemi.com.

     The Peregrine Semiconductor name, logo, and UltraCMOS are registered
  trademarks of Peregrine Semiconductor Corporation in the U.S.A., and other
                                  countries.

Peregrine Semiconductor Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

                    Three Months Ended            Years Ended
                   December 28,     December 29,     December      December
                   2013            2012             28,          29,
                                                     2013          2012
Net revenue        $  43,324        $  62,999        $ 202,316     $ 203,908
Cost of net        27,717          35,717          120,920      124,135   
revenue
Gross profit       15,607           27,282           81,396        79,773
Operating
expense:
Research and       10,775           10,616           42,192        34,134
development
Selling,
general and        11,655         10,788          43,142       36,971    
administrative
Total operating    22,430          21,404          85,334       71,105    
expense
Income (loss)      (6,823     )     5,878            (3,938    )   8,668
from operations
Interest income    35               (107       )     (130      )   (1,354    )
(expense), net
Other income       34              2               84           (130      )
(expense), net
Income (loss)
before income      (6,754     )     5,773            (3,984    )   7,184
taxes
Provision
(benefit) for      74             146             67           (88       )
income taxes
Net income         (6,828     )     5,627            (4,051    )   7,272
(loss)
Net income
allocable to       —               —               —            (4,515    )
preferred
stockholders
Net income
(loss)
attributable to    $  (6,828  )     $  5,627        $ (4,051  )   $ 2,757   
common
stockholders
Net income
(loss) per
share
Basic              $  (0.21   )     $  0.18         $ (0.13   )   $ 0.19    
Diluted*           $  (0.21   )     $  0.15         $ (0.13   )   $ 0.15    
Shares used to
compute net
income (loss)
per share
Basic              32,687          31,837          32,294       14,291    
Diluted            32,687          36,548          32,294       18,651    
                                                                             
* Diluted net income per share attributable to common stockholders is computed
by dividing net income attributable to common stockholders, calculated as net
income 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.



Peregrine Semiconductor Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)
                                                               
                                                   December 28,   December 29,
                                                   2013           2012
Assets
Current assets:
Cash and cash equivalents                          $  16,249      $  44,106
Short-term marketable securities                   28,035         30,361
Accounts receivable, net                           16,905         13,353
Inventories                                        53,489         57,017
Prepaids and other current assets                  4,085         11,108     
Total current assets                               118,763        155,945
Property and equipment, net                        23,122         22,871
Long-term marketable securities                    18,888         18,892
Other assets                                       102           210        
Total assets                                       $  160,875    $  197,918 
                                                                  
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable                                   $  12,983      $  22,306
Accrued liabilities                                11,829         12,672
Accrued compensation                               4,542          5,726
Customer deposits                                  916            24,425
Deferred revenue                                   6,131          12,755
Current portion of obligations under capital       —             11         
leases
Total current liabilities                          36,401         77,895
Obligations under capital leases, less current     —              18
portion
Other long-term liabilities                        943            886
Stockholders’ equity:
Common stock                                       33             32
Additional paid-in capital                         348,684        340,221
Accumulated deficit                                (224,986   )   (220,935   )
Accumulated other comprehensive loss               (200       )   (199       )
Total stockholders’ equity                         123,531       119,119    
Total liabilities and stockholders’ equity         $  160,875    $  197,918 
                                                                             
                                                                             

Peregrine Semiconductor Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)
                                                 
                                                   Years Ended
                                                   December 28,  December 29,
                                                   2013           2012
Operating activities
Net income (loss)                                  $  (4,051  )   $  7,272
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization                      6,589          4,579
Loss on disposal of property and equipment         46             31
Stock-based compensation                           6,615          4,437
Revaluation of warrants to fair value              —              633
Imputed interest related to deposit                (313       )   420
arrangements, net
Amortization of premium and discount on            368            169
investments, net
Cash received for lease incentives                 135            115
Changes in operating assets and liabilities:
Accounts receivable                                (3,634     )   (255       )
Inventories                                        3,545          (27,188    )
Prepaids and other current and noncurrent assets   7,330          (7,751     )
Accounts payable and accrued liabilities           (12,585    )   16,098
Customer deposits                                  (11,425    )   11,425
Deferred revenue                                   (6,217     )   6,865      
Net cash provided by (used in) operating           (13,597    )   16,850
activities
Investing activities
Purchases of property and equipment                (5,884     )   (17,212    )
Proceeds from sale of equipment                    6              6
Purchase of marketable securities                  (39,097    )   (54,663    )
Sale of marketable securities                      41,027        5,100      
Net cash used in investing activities              (3,948     )   (66,769    )
Financing activities
Proceeds from customer deposit financing           —              13,000
arrangement
Payments on customer deposit financing             (12,084    )   —
arrangement
Proceeds from line of credit                       —              3,000
Payments on line of credit                         —              (10,749    )
Payments on obligations under capital leases       (37        )   (661       )
Payments on notes payable                          —              (1,618     )
Proceeds from exercise of stock options            1,845          445
Proceeds from exercise of warrants                 —              31
Proceeds from initial public offering, net of      —              80,278
offering cost
Costs paid in connection with initial public       —             (1,811     )
offering
Net cash provided by (used in) financing           (10,276    )   81,915
activities
Effect of exchange rate changes on cash and cash   (36        )   (9         )
equivalents
Net change in cash and cash equivalents            (27,857    )   31,987
Cash and cash equivalents at beginning of year     44,106        12,119     
Cash and cash equivalents at end of year           $  16,249     $  44,106  
                                                                             
                                                                             

Peregrine Semiconductor Corporation

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(in thousands, except per share data)

(unaudited)
                                                            
                 Three Months Ended                           Years Ended
                 December 28,           December 29,          December 28,          December 29,
                 2013                    2012                  2013                   2012
Gross profit -   $ 15,607    36.0  %    $ 27,282   43.3 %   $ 81,396    40.2 %    $ 79,773   39.1 %
GAAP
Non-cash
compensation     231         0.6       184         0.3     883         0.5      588         0.3  
expense (1)
                                                                                                   
Gross profit -   $ 15,838    36.6  %    $ 27,466    43.6 %   $ 82,279    40.7 %    $ 80,361    39.4 %
Non-GAAP
                                                               ;
Income (loss)
from             $ (6,823 )   (15.7 )%   $ 5,878      9.3  %   $ (3,938 )   (2.0 )%   $ 8,668      4.3  %
operations -
GAAP
Non-cash
compensation     1,761       4.0       1,321       2.1     6,615      3.3      4,437      2.1  
expense (1)
                                                                                                   
Income (loss)
from             $ (5,062 )   (11.7 )%   $ 7,199     11.4 %   $ 2,677     1.3  %    $ 13,105    6.4  %
operations -
Non-GAAP
                                                                                                   
Net income       $ (6,828 )   (15.7 )%   $ 5,627      8.9  %   $ (4,051 )   (2.0 )%   $ 7,272      3.6  %
(loss) - GAAP
Non-cash
compensation     1,761       4.0       1,321       2.1     6,615       3.3      4,437       2.1  
expense (1)
                                                                                                   
Net income
(loss) -         $ (5,067 )   (11.7 )%   $ 6,948     11.0 %   $ 2,564     1.3  %    $ 11,709    5.7  %
Non-GAAP
                                                                                                   
Diluted net
income (loss)
per share
attributable     $ (0.21  )              $ 0.15                $ (0.13  )             $ 0.15
to common
stockholders -
GAAP
Adjustment to
reflect
conversion of
preferred        —                       —                     —                      0.07
stock at the
beginning of
period
Non-cash
compensation     0.05                   0.04                 0.20                  0.14     
expense
                                                                                                   
Diluted net
income (loss)    $ (0.16  )              $ 0.19               $ 0.07                $ 0.36   
per share -
Non-GAAP
                                                                                                   
Net income
(loss)
attributable     $ (6,828 )              $ 5,627              $ (4,051 )             $ 2,757  
to common
stockholders -
GAAP
Net income
(loss) -         $ (5,067 )              $ 6,948              $ 2,564               $ 11,709 
Non-GAAP
                                                                                                   
Shares used to
compute
diluted net
income (loss)
per share        32,687                  36,548                32,294                 18,651
attributable
to common
stockholders -
GAAP
Adjustment to
reflect
conversion of
preferred        —                       —                     —                      13,529
stock at the
beginning of
period
Dilutive
effect of        —                      —                    3,401                 —        
stock options
and warrants
                                                                                                   
Shares used to
compute
diluted net      32,687                 36,548               35,695                32,180   
income (loss)
per share -
Non-GAAP
                                                                                                   
(1) Includes
stock-based
compensation
as follows:
                 Three Months Ended                           Years Ended
                 December 28,            December 29,          December 28,           December 29,
                 2013                    2012                  2013                   2012
Cost of net      $ 231                   $ 184                 $ 883                  $ 588
revenue
Research and     563                     484                   2,097                  1,419
development
Selling,
general and      967                    653                  3,635                 2,430             
administrative
Total            $ 1,761                $ 1,321              $ 6,615               $ 4,437           

Contact:

Peregrine Semiconductor Corporation
Jonathan Goldberg, Senior Director of Corporate Development
858-795-0161
ir@psemi.com
or
Investor Relations Contact:
The Blueshirt Group
Suzanne Schmidt or Melanie Solomon
415-217-4962; 415-217-4964
Suzanne@blueshirtgroup.com
Melanie@blueshirtgroup.com
 
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