PMC-Sierra Reports Third Quarter Record Revenues; Quarterly Revenues up 32% Sequentially Pro Forma Earnings Per Share of $0.31

Business Wire, Oct 12, 2000

Business Editors

CAMPBELL, Calif.--(BUSINESS WIRE)--Oct. 12, 2000

PMC-Sierra, Inc. (Nasdaq:PMCS) today reported net revenue of $198.1 million and pro forma net income of $ 0.31 per share (diluted) for the third quarter of fiscal 2000.

Third quarter revenues of $ 198.1 million increased 32% sequentially and 140% compared with the third quarter of 1999. Pro forma net income for the third quarter of 2000 was $ 56.0 million, triple the pro forma net income reported in the same period in 1999. Pro forma net income per share (diluted) was $ 0.31 in the third quarter of 2000 compared to $ 0.11 in the third quarter of 1999.

Net revenues for the first nine months of 2000 was $ 462.6 million, up 128% from the same period last year. Year-to-date pro forma net income per share (diluted) was $ 0.70 compared to $ 0.24 for the nine months ended Sept. 26, 1999.

Pro forma net income excludes the following items: acquisition expenses; in process research and development charges related to purchase acquisitions; goodwill and deferred stock compensation amortization; and gain on sale of investments net of the related tax provision. Year-to-date net income including the above items was $ 40.5 million or $ 0.23 per share (diluted) and the loss for the third quarter was $ 29.7 million or $ 0.18 per share.

"PMC-Sierra experienced significant growth in the third quarter despite a tight wafer supply situation. As the supply situation loosens we hope to help our customers reduce their mounting backlogs. The broadband bandwidth buildout is in full swing and should continue for several years as new technologies and web-centric applications come on-line," said Chairman, CEO and President Bob Bailey.

During the third quarter of 2000, PMC-Sierra completed the acquisitions of Malleable Technologies, Datum Telegraphic, and Quantum Effect Devices. The Malleable and Datum acquisitions were accounted for using the purchase method and the QED transaction was accounted for as a pooling of interests. QED's third quarter revenues increased 48% to $23.9 million compared to the second quarter as a result of the continued ramp up of their communication focused design wins.

"These companies will help provide complex architectural solutions for our customers," said Bailey. "Each acquisition complements our broadband communications expertise and expands PMC-Sierra's ability to address larger market segments in both digital signal processing, packet processing and optical networking."

PMC-Sierra is a leading provider of broadband semiconductor solutions for the global information infrastructure. PMC-Sierra is traded on the Nasdaq National Market under the symbol PMCS. The company is included in the NASDAQ-100 INDEX (NDX) which contains the largest non-financial companies on the Nasdaq Stock Market. The Nasdaq-100 Index is the benchmark for the Nasdaq-100 Index Tracking Stock (AMEX:QQQ).

Additional information on the Company can be found on-line at http://www.pmc-sierra.com. The Company's third quarter conference call will be webcast on Thursday Oct. 12 at 2:00pm Pacific Time and can be accessed via our company website (go to Investor News page on the PMC-Sierra website).