PMC-Sierra Reports Q1

SANTA CLARA, Calif. -- PMC-Sierra, Inc. (Nasdaq:PMCS), a leading provider of high-speed broadband communications and storage semiconductors, today reported results for the first quarter ending March 30, 2008.

Net revenues in the first quarter of 2008 were $125.0 million, which is 21% higher than the first quarter of 2007 and a slight increase compared with $123.6 million in the fourth quarter of 2007.

Net loss in the first quarter of 2008 on a GAAP basis was $22.7 million (GAAP basic and diluted loss per share of $0.10) compared with a GAAP net loss in the fourth quarter of 2007 of $5.1 million (GAAP basic and diluted loss per share of $0.02). Non-GAAP net income in the first quarter of 2008 was $23.5 million (non-GAAP diluted earnings per share of $0.11) compared with non-GAAP net income of $20.1 million (non-GAAP diluted earnings per share of $0.09) in the fourth quarter of 2007.

Non-GAAP net income in the first quarter of 2008 excludes the following items: (i) $7 million in stock-based compensation expense; (ii) $9.8 million amortization of purchased intangible assets; (iii) $0.9 million in restructuring costs; (iv) $3.6 million foreign exchange gain relating to an income tax liability in a foreign jurisdiction; (v) $1.4 million gain on repurchase of senior convertible notes, net; and (vi) $30.3 million relating to FIN48 items arising in prior years and related interest, $2.3 million tax impact related to repatriation of earnings from a foreign jurisdiction, and $0.8 million income tax provision related to the non-GAAP adjustments above.

For a full reconciliation of GAAP net income to non-GAAP net income, please refer to the schedule on page 6 of this release. The Company believes the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses the non-GAAP measures internally to evaluate its in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Companys 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 first quarter, we experienced strong demand for our fiber to the home, enterprise storage, and laser printer products,” said Bob Bailey, chairman and chief executive officer of PMC-Sierra. “We believe that the overall business environment has improved in Asia, and PMC-Sierra is gaining market share in a number of key target markets.”

PMC-Sierra Inc.