PMC-Sierra, Inc., (Nasdaq:PMCS) or PMC, the semiconductor innovator
transforming storage, optical and mobile networks, today reported
results for the third quarter ended October 2, 2011.
Net revenues in the third quarter of 2011 were $173.3 million, a
sequential increase of 1% compared with $171.0 million in the second
quarter of 2011, and 7% higher than net revenues of $162.3 million in
the third quarter of 2010.
In the third quarter of 2011, the Company reported GAAP net
income of $47.3 million, or $0.20 per diluted share, compared with GAAP
net income in the second quarter of 2011 of $16.7 million, or $0.07 per
diluted share. Non-GAAP net income in the third quarter of 2011 was
$42.1 million, or $0.18 per diluted share, compared with non-GAAP net
income of $40.2 million, or $0.17 per diluted share, in the second
quarter of 2011.
"Our third quarter results were solid given the difficult economic
environment,” said Greg Lang, president and chief executive officer of
PMC. "While macro concerns impact our near-term outlook, PMC is
well-positioned to deliver the infrastructure required to support
explosive traffic growth on storage, mobile and optical networks.”
Net income on a non-GAAP basis in the third quarter of 2011 excludes the
following items: (i) $7.0 million stock-based compensation expense; (ii)
$0.6 million acquisition-related costs; (iii) $3.0 million asset
impairment; (iv) $11.0 million amortization of purchased intangible
assets; (v) $29.4 million gain on liability for contingent
consideration; (vi) $3.2 million foreign exchange gain on foreign tax
liabilities; (vii) $0.9 million of non-cash interest expense for the
accretion of the debt discount related to the senior convertible notes;
(viii) $0.4 million accretion of liability for contingent consideration;
and (ix) $4.6 million income tax related amounts.
For a full reconciliation of GAAP net income to non-GAAP net income,
please refer to the schedules included with 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.
In the third quarter of 2011, PMC announced:
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A new family of Tachyon® 6Gb/s SAS/SATA controller-based encryption
solutions for securing cloud storage. The SPCve controllers integrate
line-rate data encryption into the existing data flow, providing a
central, scalable and cost-effective means to secure and manage stored
data. PMC’s controller-based encryption architecture is agnostic to
drive type or vendor, allowing OEMs and cloud providers to mix and
match HDDs and SSDs, and to encrypt their deployed storage
infrastructure.
-
The Adaptec Series 6Q RAID controller with maxCache 2.0 SSD caching
designed to accelerate data center and cloud computing application
performance. PMC’s second-generation SSD caching solution, maxCache
2.0, adds support for write caching to expand the application
workloads that can benefit from this technology. The Series 6Q with
maxCache 2.0 improves quality of service, offers up to 13 times
improvement in I/O operations per second (IOPS) and a 13 times
reduction in application latency. PMC also released the Series 6T with
recessed top-mounted connectors that enable maximum installation
flexibility in dense form-factor servers.
Third Quarter 2011 Conference Call
Management will review the third quarter 2011 results and share its
outlook for the fourth quarter of 2011 during a conference call at 1:30
pm Pacific Time/4:30 pm Eastern Time on Thursday, October 27, 2011. The
conference call webcast will be accessible under the Financial Events
and Calendar section at http://investor.pmc-sierra.com.
To listen to the conference call live by telephone, dial 416-640-5926
approximately ten minutes before the start time. A telephone playback
will be available after the completion of the call and can be accessed
at 647-436-0148 using the access code 4676276. A replay of the webcast
will be available for five business days.
Safe Harbor Statement
This release contains forward-looking statements that involve risks and
uncertainties. The Company’s SEC filings describe the risks associated
with the Company’s business, including PMC’s limited revenue visibility
due to variable customer demands, market segment growth or decline,
orders with short delivery lead times, customer concentration, changes
in inventory, and other items such as foreign exchange rates and
volatility in global financial markets.
About PMC
PMC (Nasdaq:PMCS) is the semiconductor innovator transforming networks
that connect, move and store digital content. Building on a track record
of technology leadership, we are driving innovation across storage,
optical and mobile networks. Our highly integrated solutions increase
performance and enable next-generation services to accelerate the
network transformation. For more information, visit www.pmc-sierra.com.
© Copyright PMC-Sierra, Inc. 2011. All rights reserved. PMC, PMC-SIERRA,
"Enabling connectivity. Empowering people.” and Tachyon are registered
trademarks of PMC-Sierra, Inc. in the United States and other countries,
PMCS is a trademark of PMC-Sierra, Inc. Other product and company names
mentioned herein may be trademarks of their respective owners.
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PMC-Sierra, Inc.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(in thousands, except for per share amounts)
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(unaudited)
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Three Months Ended
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Nine Months Ended
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October 2,
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June 26,
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September 26,
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October 2,
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September 26,
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2011
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2011
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2010
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2011
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2010
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Net revenues
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$
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173,299
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$
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171,018
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$
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162,335
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$
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501,751
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$
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475,830
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Cost of revenues
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52,640
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52,663
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53,813
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164,464
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152,882
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Gross profit
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120,659
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118,355
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108,522
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337,287
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322,948
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Other costs and expenses:
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Research and development
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59,669
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56,421
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50,180
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170,589
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135,893
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Selling, general and administrative
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29,981
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29,366
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25,567
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91,556
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73,148
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Amortization of purchased intangible assets
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11,031
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11,031
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5,884
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33,083
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22,536
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Restructuring costs and other charges
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-
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-
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66
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-
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322
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Income from operations
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19,978
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21,537
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26,825
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42,059
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91,049
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Other income (expense):
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Gain on liability for contingent consideration
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29,376
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-
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-
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29,376
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-
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Gain (loss) on sale of investment securities
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222
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167
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220
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559
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(79
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Amortization of debt issue costs
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(50
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)
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(50
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)
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(50
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)
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(150
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)
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(150
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)
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Foreign exchange gain (loss)
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3,635
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(623
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(707
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1,538
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(1,622
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)
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Interest (expense) income, net
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(477
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)
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(571
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68
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(1,972
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(78
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Income before provision for income taxes
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52,684
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20,460
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26,356
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71,410
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89,120
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Provision for income taxes
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(5,428
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(3,725
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(11,201
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(15,076
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(16,872
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Net income
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$
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47,256
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$
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16,735
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$
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15,155
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$
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56,334
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$
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72,248
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Net income per common share - basic
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$
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0.20
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$
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0.07
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$
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0.07
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$
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0.24
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$
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0.31
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Net income per common share - diluted
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$
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0.20
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$
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0.07
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$
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0.06
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$
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0.24
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$
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0.31
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Shares used in per share calculation - basic
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232,590
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234,993
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231,966
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233,880
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230,922
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Shares used in per share calculation - diluted
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233,647
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237,506
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234,292
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236,236
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234,290
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As a supplement to the Company's condensed consolidated financial
statements presented in accordance with generally accepted
accounting principles ("GAAP"), the Company provides additional
non-GAAP measures for cost of revenues, gross profit, gross profit
percentage, research and development expense, selling, general and
administrative expense, amortization of purchased intangible
assets, restructuring costs and other charges, other income
(expense), provision for income taxes, operating expenses,
operating income, operating margin percentage, net income, and
basic and diluted net income per share.
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A non-GAAP financial measure is a numerical measure of a company's
performance, financial position, or cash flows that either
excludes or includes amounts that are not normally excluded or
included in the most directly comparable measure calculated and
presented in accordance with GAAP. The Company believes that the
additional non-GAAP measures are useful to investors for the
purpose of financial analysis. Management uses these measures
internally to evaluate the Company's 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 for
planning and forecasting of the Company's future
periods. However, non-GAAP measures are not in accordance with,
nor are they a substitute for, GAAP measures. Other companies may
use different non-GAAP measures and presentation of results.
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PMC-Sierra, Inc.
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Adjustments to GAAP Cost of Revenues, Gross Profit, Gross Profit
Percentage, Research and Development Expense,
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Selling, General and Administrative Expense, Amortization of
Purchased Intangible Assets, Restructuring Costs and Other Charges,
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Other Income (Expense), Provision for Income Taxes, Operating
Expenses, Operating Income,
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Operating Margin Percentage, Net Income, and Basic and Diluted
Net Income Per Share
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(in thousands, except for per share amounts)
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(unaudited)
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Three Months Ended
|
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|
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Nine Months Ended
|
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|
|
|
|
|
October 2,
|
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|
|
June 26,
|
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|
|
September 26,
|
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|
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October 2,
|
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|
|
September 26,
|
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|
|
2011 (1)
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2011 (2)
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2010 (3)
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|
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2011 (4)
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|
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2010 (5)
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GAAP cost of revenues
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$
|
52,640
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$
|
52,663
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|
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$
|
53,813
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$
|
164,464
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|
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$
|
152,882
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|
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Stock-based compensation
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(220
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)
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|
|
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(260
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)
|
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|
|
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(162
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)
|
|
|
|
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(703
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)
|
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|
|
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(609
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)
|
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Acquisition related costs
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|
|
|
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(23
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)
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|
|
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(41
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)
|
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|
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(72
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)
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(9,128
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)
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|
|
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(145
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)
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Non-GAAP cost of revenues
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$
|
52,397
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|
|
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$
|
52,362
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|
|
|
$
|
53,579
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|
|
|
|
$
|
154,633
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|
|
|
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$
|
152,128
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|
|
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|
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GAAP gross profit
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|
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$
|
120,659
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|
|
|
|
$
|
118,355
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|
|
|
|
$
|
108,522
|
|
|
|
|
$
|
337,287
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|
|
|
|
$
|
322,948
|
|
|
Stock-based compensation
|
|
|
|
|
|
220
|
|
|
|
|
|
260
|
|
|
|
|
|
162
|
|
|
|
|
|
703
|
|
|
|
|
|
609
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|
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Acquisition related costs
|
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|
|
|
23
|
|
|
|
|
|
41
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|
|
|
|
|
72
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|
|
|
|
|
9,128
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|
|
|
|
|
145
|
|
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Non-GAAP gross profit
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|
|
|
|
$
|
120,902
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|
|
|
|
$
|
118,656
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|
|
|
|
$
|
108,756
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|
|
|
|
$
|
347,118
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|
|
|
|
$
|
323,702
|
|
|
|
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|
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|
|
|
|
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|
|
|
|
|
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|
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Non-GAAP gross profit %
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|
|
|
|
70
|
%
|
|
|
|
|
69
|
%
|
|
|
|
|
67
|
%
|
|
|
|
|
69
|
%
|
|
|
|
|
68
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expense
|
|
|
|
|
$
|
59,669
|
|
|
|
|
$
|
56,421
|
|
|
|
|
$
|
50,180
|
|
|
|
|
$
|
170,589
|
|
|
|
|
$
|
135,893
|
|
|
Stock-based compensation
|
|
|
|
|
|
(3,041
|
)
|
|
|
|
|
(2,927
|
)
|
|
|
|
|
(2,283
|
)
|
|
|
|
|
(8,665
|
)
|
|
|
|
|
(6,628
|
)
|
|
Acquisition related costs
|
|
|
|
|
|
(90
|
)
|
|
|
|
|
(97
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(378
|
)
|
|
|
|
|
-
|
|
|
Asset impairment
|
|
|
|
|
|
(3,029
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(4,882
|
)
|
|
|
|
|
(3,029
|
)
|
|
|
|
|
(4,882
|
)
|
|
Non-GAAP research and development expense
|
|
|
|
|
$
|
53,509
|
|
|
|
|
$
|
53,397
|
|
|
|
|
$
|
43,015
|
|
|
|
|
$
|
158,517
|
|
|
|
|
$
|
124,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling, general and administrative expense
|
|
|
|
|
$
|
29,981
|
|
|
|
|
$
|
29,366
|
|
|
|
|
$
|
25,567
|
|
|
|
|
$
|
91,556
|
|
|
|
|
$
|
73,148
|
|
|
Stock-based compensation
|
|
|
|
|
|
(3,708
|
)
|
|
|
|
|
(3,859
|
)
|
|
|
|
|
(2,856
|
)
|
|
|
|
|
(10,962
|
)
|
|
|
|
|
(9,078
|
)
|
|
Acquisition related costs
|
|
|
|
|
|
(525
|
)
|
|
|
|
|
(1,051
|
)
|
|
|
|
|
(773
|
)
|
|
|
|
|
(2,735
|
)
|
|
|
|
|
(2,226
|
)
|
|
Lease exit costs
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(3,392
|
)
|
|
|
|
|
-
|
|
|
Non-GAAP selling, general and administrative expense
|
|
|
|
|
$
|
25,748
|
|
|
|
|
$
|
24,456
|
|
|
|
|
$
|
21,938
|
|
|
|
|
$
|
74,467
|
|
|
|
|
$
|
61,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP amortization of purchased intangible assets
|
|
|
|
|
$
|
11,031
|
|
|
|
|
$
|
11,031
|
|
|
|
|
$
|
5,884
|
|
|
|
|
$
|
33,083
|
|
|
|
|
$
|
22,536
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
(11,031
|
)
|
|
|
|
|
(11,031
|
)
|
|
|
|
|
(5,884
|
)
|
|
|
|
|
(33,083
|
)
|
|
|
|
|
(22,536
|
)
|
|
Non-GAAP amortization of purchased intangible assets
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP restructuring costs and other charges
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
66
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
322
|
|
|
Restructuring costs and other charges
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(66
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(322
|
)
|
|
Non-GAAP restructuring costs and other charges
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other income (expense)
|
|
|
|
|
$
|
32,706
|
|
|
|
|
$
|
(1,077
|
)
|
|
|
|
$
|
(469
|
)
|
|
|
|
$
|
29,351
|
|
|
|
|
$
|
(1,929
|
)
|
|
Gain on liability for contingent consideration
|
|
|
|
|
|
(29,376
|
)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(29,376
|
)
|
|
|
|
|
-
|
|
|
Foreign exchange (gain) loss on foreign tax liabilities
|
|
|
|
|
|
(3,226
|
)
|
|
|
|
|
260
|
|
|
|
|
|
281
|
|
|
|
|
|
(2,013
|
)
|
|
|
|
|
1,259
|
|
|
Accretion of debt discount related to senior convertible notes
|
|
|
|
|
|
888
|
|
|
|
|
|
871
|
|
|
|
|
|
820
|
|
|
|
|
|
2,612
|
|
|
|
|
|
2,412
|
|
|
Accretion of liability for contingent consideration
|
|
|
|
|
|
372
|
|
|
|
|
|
334
|
|
|
|
|
|
-
|
|
|
|
|
|
1,182
|
|
|
|
|
|
-
|
|
|
Interest expense related to short-term loan
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
258
|
|
|
|
|
|
-
|
|
|
Non-GAAP other income
|
|
|
|
|
$
|
1,364
|
|
|
|
|
$
|
388
|
|
|
|
|
$
|
632
|
|
|
|
|
$
|
2,014
|
|
|
|
|
$
|
1,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for income taxes
|
|
|
|
|
$
|
5,428
|
|
|
|
|
$
|
3,725
|
|
|
|
|
$
|
11,201
|
|
|
|
|
$
|
15,076
|
|
|
|
|
$
|
16,872
|
|
|
Provision for income taxes
|
|
|
|
|
|
(4,550
|
)
|
|
|
|
|
(2,706
|
)
|
|
|
|
|
(9,636
|
)
|
|
|
|
|
(11,797
|
)
|
|
|
|
|
(11,645
|
)
|
|
Non-GAAP provision for income taxes
|
|
|
|
|
$
|
878
|
|
|
|
|
$
|
1,019
|
|
|
|
|
$
|
1,565
|
|
|
|
|
$
|
3,279
|
|
|
|
|
$
|
5,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
October 2,
|
|
|
|
June 26,
|
|
|
|
September 26,
|
|
|
|
October 2,
|
|
|
|
September 26,
|
|
|
|
|
|
|
|
2011 (1)
|
|
|
|
|
|
2011 (2)
|
|
|
|
|
|
2010 (3)
|
|
|
|
|
|
2011 (4)
|
|
|
|
|
|
2010 (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
|
|
|
$
|
100,681
|
|
|
|
|
$
|
96,818
|
|
|
|
|
$
|
81,697
|
|
|
|
|
$
|
295,228
|
|
|
|
|
$
|
231,899
|
|
|
Stock-based compensation
|
|
|
|
|
|
(6,749
|
)
|
|
|
|
|
(6,786
|
)
|
|
|
|
|
(5,139
|
)
|
|
|
|
|
(19,627
|
)
|
|
|
|
|
(15,706
|
)
|
|
Acquisition related costs
|
|
|
|
|
|
(615
|
)
|
|
|
|
|
(1,148
|
)
|
|
|
|
|
(773
|
)
|
|
|
|
|
(3,113
|
)
|
|
|
|
|
(2,226
|
)
|
|
Asset impairment
|
|
|
|
|
|
(3,029
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(4,882
|
)
|
|
|
|
|
(3,029
|
)
|
|
|
|
|
(4,882
|
)
|
|
Lease exit costs
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(3,392
|
)
|
|
|
|
|
-
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
(11,031
|
)
|
|
|
|
|
(11,031
|
)
|
|
|
|
|
(5,884
|
)
|
|
|
|
|
(33,083
|
)
|
|
|
|
|
(22,536
|
)
|
|
Restructuring costs and other charges
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(66
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(322
|
)
|
|
Non-GAAP operating expenses
|
|
|
|
|
$
|
79,257
|
|
|
|
|
$
|
77,853
|
|
|
|
|
$
|
64,953
|
|
|
|
|
$
|
232,984
|
|
|
|
|
$
|
186,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
|
|
|
|
|
$
|
19,978
|
|
|
|
|
$
|
21,537
|
|
|
|
|
$
|
26,825
|
|
|
|
|
$
|
42,059
|
|
|
|
|
$
|
91,049
|
|
|
Stock-based compensation
|
|
|
|
|
|
6,969
|
|
|
|
|
|
7,046
|
|
|
|
|
|
5,301
|
|
|
|
|
|
20,330
|
|
|
|
|
|
16,315
|
|
|
Acquisition related costs
|
|
|
|
|
|
638
|
|
|
|
|
|
1,189
|
|
|
|
|
|
845
|
|
|
|
|
|
12,241
|
|
|
|
|
|
2,371
|
|
|
Asset impairment
|
|
|
|
|
|
3,029
|
|
|
|
|
|
-
|
|
|
|
|
|
4,882
|
|
|
|
|
|
3,029
|
|
|
|
|
|
4,882
|
|
|
Lease exit costs
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
3,392
|
|
|
|
|
|
-
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
11,031
|
|
|
|
|
|
11,031
|
|
|
|
|
|
5,884
|
|
|
|
|
|
33,083
|
|
|
|
|
|
22,536
|
|
|
Restructuring costs and other charges
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
66
|
|
|
|
|
|
-
|
|
|
|
|
|
322
|
|
|
Non-GAAP operating income
|
|
|
|
|
$
|
41,645
|
|
|
|
|
$
|
40,803
|
|
|
|
|
$
|
43,803
|
|
|
|
|
$
|
114,134
|
|
|
|
|
$
|
137,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin %
|
|
|
|
|
|
24
|
%
|
|
|
|
|
24
|
%
|
|
|
|
|
27
|
%
|
|
|
|
|
23
|
%
|
|
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
|
|
$
|
47,256
|
|
|
|
|
$
|
16,735
|
|
|
|
|
$
|
15,155
|
|
|
|
|
$
|
56,334
|
|
|
|
|
$
|
72,248
|
|
|
Stock-based compensation
|
|
|
|
|
|
6,969
|
|
|
|
|
|
7,046
|
|
|
|
|
|
5,301
|
|
|
|
|
|
20,330
|
|
|
|
|
|
16,315
|
|
|
Acquisition related costs
|
|
|
|
|
|
638
|
|
|
|
|
|
1,189
|
|
|
|
|
|
845
|
|
|
|
|
|
12,241
|
|
|
|
|
|
2,371
|
|
|
Asset impairment
|
|
|
|
|
|
3,029
|
|
|
|
|
|
-
|
|
|
|
|
|
4,882
|
|
|
|
|
|
3,029
|
|
|
|
|
|
4,882
|
|
|
Lease exit costs
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
3,392
|
|
|
|
|
|
-
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
11,031
|
|
|
|
|
|
11,031
|
|
|
|
|
|
5,884
|
|
|
|
|
|
33,083
|
|
|
|
|
|
22,536
|
|
|
Restructuring costs and other charges
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
66
|
|
|
|
|
|
-
|
|
|
|
|
|
322
|
|
|
Gain on liability for contingent consideration
|
|
|
|
|
|
(29,376
|
)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(29,376
|
)
|
|
|
|
|
-
|
|
|
Foreign exchange (gain) loss on foreign tax liabilities
|
|
|
|
|
|
(3,226
|
)
|
|
|
|
|
260
|
|
|
|
|
|
281
|
|
|
|
|
|
(2,013
|
)
|
|
|
|
|
1,259
|
|
|
Accretion of debt discount related to senior convertible notes
|
|
|
|
|
|
888
|
|
|
|
|
|
871
|
|
|
|
|
|
820
|
|
|
|
|
|
2,612
|
|
|
|
|
|
2,412
|
|
|
Accretion of liability for contingent consideration
|
|
|
|
|
|
372
|
|
|
|
|
|
334
|
|
|
|
|
|
-
|
|
|
|
|
|
1,182
|
|
|
|
|
|
-
|
|
|
Interest expense related to short-term loan
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
258
|
|
|
|
|
|
-
|
|
|
Provision for income taxes
|
|
|
|
|
|
4,550
|
|
|
|
|
|
2,706
|
|
|
|
|
|
9,636
|
|
|
|
|
|
11,797
|
|
|
|
|
|
11,645
|
|
|
Non-GAAP net income
|
|
|
|
|
$
|
42,131
|
|
|
|
|
$
|
40,172
|
|
|
|
|
$
|
42,870
|
|
|
|
|
$
|
112,869
|
|
|
|
|
$
|
133,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - basic
|
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
0.17
|
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
0.48
|
|
|
|
|
$
|
0.58
|
|
|
Non-GAAP net income per share - diluted
|
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
0.17
|
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
0.48
|
|
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to calculate non-GAAP net income per share - basic
|
|
|
|
|
|
232,590
|
|
|
|
|
|
234,993
|
|
|
|
|
|
231,966
|
|
|
|
|
|
233,880
|
|
|
|
|
|
230,922
|
|
|
Shares used to calculate non-GAAP net income per share - diluted
|
|
|
|
|
|
233,647
|
|
|
|
|
|
237,506
|
|
|
|
|
|
234,292
|
|
|
|
|
|
236,236
|
|
|
|
|
|
234,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) $7.0 million stock-based compensation expense; $0.6 million
acquisition related costs; $3.0 million asset impairment; $11.0
million amortization of purchased intangible assets; $29.4
million gain on liability for contingent consideration; $3.2
million foreign exchange gain on foreign tax liabilities; $0.9
million of non-cash interest expense for the accretion of the debt
discount related to the senior convertible notes; $0.4 million
accretion of liability for contingent consideration; and $4.6
million provision for income taxes which includes $1.6 million
income tax provision relating to inter-company transactions, $0.8
million net tax expense relating to foreign exchange translation
of a foreign subsidiary, $1.9 million sheltered by the benefit of
stock option related loss carry-forwards recognized in equity,
$0.4 million arrears interest relating to unrecognized tax
benefits, $0.2 million income tax recovery for adjustments
relating to prior periods, and $0.1 million income tax provision
related to stock-based compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) $7.0 million stock-based compensation expense; $1.2 million
acquisition related costs; $11.0 million amortization of purchased
intangible assets; $0.3 million foreign exchange loss on foreign
tax liabilities; $0.9 million of non-cash interest expense for the
accretion of the debt discount related to the senior convertible
notes; $0.3 million accretion of liability for contingent
consideration; and $2.7 million provision for income taxes which
includes $1.6 million income tax provision relating to
inter-company transactions, $1.2 million net tax expense relating
to foreign exchange translation of a foreign subsidiary, $0.9
million reduction of stock option related loss carry-forward
benefit recognized in equity, $0.6 million arrears interest
relating to unrecognized tax benefits, $0.5 million income tax
provision for adjustments relating to prior periods, and $0.3
million income tax recovery related to stock-based compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) $5.3 million stock-based compensation expense; $0.8 million
acquisition related costs; $4.9 million asset impairment; $5.9
million amortization of purchased intangible assets; $0.1 million
restructuring costs; $0.3 million foreign exchange loss on foreign
tax liabilities; $0.8 million of non-cash interest expense for the
accretion of the debt discount related to the senior convertible
notes; and $9.6 million provision for income taxes which includes
$8.0 million sheltered by the benefit of stock option related loss
carry-forwards recognized in equity, $2.6 million income tax
provision for adjustments relating to prior periods, $0.7 million
income tax recovery relating to inter-company transactions, $0.6
million net tax recovery relating to foreign exchange translation
of a foreign subsidiary, $0.5 million arrears interest relating to
unrecognized tax benefits, and $0.2 million income tax recovery
related to stock-based compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) $20.3 million stock-based compensation expense; $12.2 million
acquisition related costs; $3.0 million asset impairment; $3.4
million lease exit costs; $33.1 million amortization of purchased
intangible assets; $29.4 million gain on liability for contingent
consideration; $2.0 million foreign exchange gain on foreign tax
liabilities; $2.6 million of non-cash interest expense for the
accretion of the debt discount related to the senior convertible
notes; $1.2 million accretion of liability for contingent
consideration; $0.3 million interest related to short-term loan;
and $11.8 million provision for income taxes which includes $3.1
million sheltered by the benefit of stock option related loss
carry-forwards recognized in equity, $6.9 million income tax
provision relating to inter-company transactions, $0.1 million net
tax expense relating to foreign exchange translation of a foreign
subsidiary, $1.6 million arrears interest relating to unrecognized
tax benefits, $0.4 million income tax provision for adjustments
relating to prior periods, and $0.3 million income tax recovery
related to stock-based compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) $16.3 million stock-based compensation expense; $2.4 million
acquisition related costs; $4.9 million asset impairment; $22.5
million amortization of purchased intangible assets; $0.3 million
restructuring costs; $1.3 million foreign exchange loss on foreign
tax liabilities; $2.4 million of non-cash interest expense for the
accretion of the debt discount related to the senior convertible
notes; and $11.6 million provision for income taxes which includes
$8.0 million income tax provision relating to the benefit of stock
option related loss carry-forwards recognized in equity, $2.9
million income tax provision relating to inter-company
transactions, $2.6 million income tax provision for adjustments
relating to prior periods, $2.5 million net tax recovery relating
to foreign exchange translation of a foreign subsidiary, $1.5
million arrears interest relating to unrecognized tax benefits,
$0.6 million deferred tax recovery related to non-deductible
intangible asset amortization, and $0.3 million income tax
recovery related to stock-based compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PMC-Sierra, Inc.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 2,
|
|
|
|
December 26,
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
2010
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
145,019
|
|
|
|
|
$
|
293,355
|
|
|
Short-term investments
|
|
|
|
|
|
98,850
|
|
|
|
|
|
54,801
|
|
|
Accounts receivable, net
|
|
|
|
|
|
64,514
|
|
|
|
|
|
69,263
|
|
|
Inventories, net
|
|
|
|
|
|
40,760
|
|
|
|
|
|
51,133
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
21,114
|
|
|
|
|
|
21,559
|
|
|
Income tax receivable
|
|
|
|
|
|
4,471
|
|
|
|
|
|
4,554
|
|
|
Deferred tax assets
|
|
|
|
|
|
19,451
|
|
|
|
|
|
12,162
|
|
|
Total current assets
|
|
|
|
|
|
394,179
|
|
|
|
|
|
506,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
|
|
|
|
|
230,459
|
|
|
|
|
|
235,369
|
|
|
Investments and other assets
|
|
|
|
|
|
4,252
|
|
|
|
|
|
10,687
|
|
|
Prepaid expenses
|
|
|
|
|
|
18,423
|
|
|
|
|
|
22,987
|
|
|
Property and equipment, net
|
|
|
|
|
|
19,062
|
|
|
|
|
|
18,367
|
|
|
Goodwill
|
|
|
|
|
|
520,899
|
|
|
|
|
|
523,712
|
|
|
Intangible assets, net
|
|
|
|
|
|
168,325
|
|
|
|
|
|
202,265
|
|
|
Deferred tax assets
|
|
|
|
|
|
2,392
|
|
|
|
|
|
1,187
|
|
|
Deposits for wafer fabrication capacity
|
|
|
|
|
|
-
|
|
|
|
|
|
5,145
|
|
|
|
|
|
|
|
$
|
1,357,991
|
|
|
|
|
$
|
1,526,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Short-term loan
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
180,991
|
|
|
Accounts payable
|
|
|
|
|
|
28,439
|
|
|
|
|
|
32,048
|
|
|
Accrued liabilities
|
|
|
|
|
|
67,484
|
|
|
|
|
|
76,566
|
|
|
Liability for unrecognized tax benefit
|
|
|
|
|
|
44,036
|
|
|
|
|
|
40,300
|
|
|
Income taxes payable
|
|
|
|
|
|
499
|
|
|
|
|
|
-
|
|
|
Deferred income taxes
|
|
|
|
|
|
2,450
|
|
|
|
|
|
2,823
|
|
|
Accrued restructuring costs
|
|
|
|
|
|
191
|
|
|
|
|
|
1,604
|
|
|
Deferred income
|
|
|
|
|
|
15,536
|
|
|
|
|
|
18,231
|
|
|
Total current liabilities
|
|
|
|
|
|
158,635
|
|
|
|
|
|
352,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.25% senior convertible notes due October 15, 2025, net
|
|
|
|
|
|
64,216
|
|
|
|
|
|
61,605
|
|
|
Liability for contingent consideration
|
|
|
|
|
|
-
|
|
|
|
|
|
28,194
|
|
|
Long-term obligations
|
|
|
|
|
|
4,370
|
|
|
|
|
|
8,940
|
|
|
Deferred income taxes
|
|
|
|
|
|
41,095
|
|
|
|
|
|
36,549
|
|
|
Liability for unrecognized tax benefit
|
|
|
|
|
|
17,978
|
|
|
|
|
|
17,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PMC special shares convertible into 1,029 (2010 - 1,370) shares of
common stock
|
|
|
|
|
|
1,228
|
|
|
|
|
|
1,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Common stock and additional paid in capital
|
|
|
|
|
|
1,590,191
|
|
|
|
|
|
1,576,201
|
|
|
Accumulated other comprehensive (loss) income
|
|
|
|
|
|
(2,308
|
)
|
|
|
|
|
2,072
|
|
|
Accumulated deficit
|
|
|
|
|
|
(517,414
|
)
|
|
|
|
|
(559,202
|
)
|
|
Total stockholders' equity
|
|
|
|
|
|
1,070,469
|
|
|
|
|
|
1,019,071
|
|
|
|
|
|
|
|
$
|
1,357,991
|
|
|
|
|
$
|
1,526,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PMC-Sierra, Inc.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
October 2,
|
|
|
|
September 26,
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
2010
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
56,334
|
|
|
|
|
$
|
72,248
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
56,795
|
|
|
|
|
|
35,645
|
|
|
Stock-based compensation
|
|
|
|
|
|
20,330
|
|
|
|
|
|
16,315
|
|
|
Unrealized foreign exchange (gain) loss, net
|
|
|
|
|
|
(1,650
|
)
|
|
|
|
|
1,436
|
|
|
Net amortization of premiums/discounts and accrued interest of
investments
|
|
|
|
|
|
3,361
|
|
|
|
|
|
3,810
|
|
|
Accrued interest on short-term loan
|
|
|
|
|
|
589
|
|
|
|
|
|
-
|
|
|
(Gain) loss on disposal of investment securities
|
|
|
|
|
|
(558
|
)
|
|
|
|
|
78
|
|
|
Asset impairment
|
|
|
|
|
|
3,029
|
|
|
|
|
|
4,882
|
|
|
Gain on liability for contingent consideration
|
|
|
|
|
|
(29,376
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
|
4,749
|
|
|
|
|
|
(17,739
|
)
|
|
Inventories
|
|
|
|
|
|
1,361
|
|
|
|
|
|
912
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
1,989
|
|
|
|
|
|
2,896
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
(10,285
|
)
|
|
|
|
|
5,648
|
|
|
Deferred income taxes and income taxes payable
|
|
|
|
|
|
11,020
|
|
|
|
|
|
(68
|
)
|
|
Accrued restructuring costs
|
|
|
|
|
|
(1,418
|
)
|
|
|
|
|
(1,739
|
)
|
|
Deferred income
|
|
|
|
|
|
(2,690
|
)
|
|
|
|
|
9,720
|
|
|
Net cash provided by operating activities
|
|
|
|
|
|
113,580
|
|
|
|
|
|
134,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Acquisition of Channel Storage business from Adaptec, Inc.
|
|
|
|
|
|
-
|
|
|
|
|
|
(34,250
|
)
|
|
Purchases of property and equipment
|
|
|
|
|
|
(8,142
|
)
|
|
|
|
|
(6,847
|
)
|
|
Purchases of intangible assets
|
|
|
|
|
|
(5,620
|
)
|
|
|
|
|
(4,287
|
)
|
|
Redemption of short-term investments
|
|
|
|
|
|
-
|
|
|
|
|
|
4,574
|
|
|
Disposals of investment securities
|
|
|
|
|
|
116,813
|
|
|
|
|
|
133,000
|
|
|
Purchases of investment securities
|
|
|
|
|
|
(160,169
|
)
|
|
|
|
|
(303,192
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
|
(57,118
|
)
|
|
|
|
|
(211,002
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Repayment of short-term loan
|
|
|
|
|
|
(180,991
|
)
|
|
|
|
|
-
|
|
|
Proceeds from issuance of common stock
|
|
|
|
|
|
16,462
|
|
|
|
|
|
15,133
|
|
|
Repurchases of common stock
|
|
|
|
|
|
(39,999
|
)
|
|
|
|
|
-
|
|
|
Net cash (used in) provided by financing activities
|
|
|
|
|
|
(204,528
|
)
|
|
|
|
|
15,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
|
(270
|
)
|
|
|
|
|
59
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(148,336
|
)
|
|
|
|
|
(61,766
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
|
293,355
|
|
|
|
|
|
192,841
|
|
|
Cash and cash equivalents, end of period
|
|
|
|
|
$
|
145,019
|
|
|
|
|
$
|
131,075
|
|
