Form 8-K PMC SIERRA INC For: Jul 23

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)
July 23, 2015

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PMC-SIERRA, INC.
(Exact name of Registrant as specified in its charter)

1380 Bordeaux Drive
Sunnyvale, CA 94089
(Address of Principal Executive Offices) (Zip Code)

(408) 239-8000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.02.          Results of Operations and Financial Condition

On July 23, 2015, PMC-Sierra, Inc. (the “Company”) issued a press release reporting the financial results for its fiscal second quarter ended June 27, 2015.  The press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

As a supplement to the Company’s condensed consolidated financial statements presented on a generally accepted accounting principles (“GAAP”) basis, the Company provides additional non-GAAP measures for cost of revenues, gross profit, gross profit percentage, research and development expense, net, selling, general and administrative expense, amortization of purchased intangible assets, other income (expense), benefit from (provision for) income taxes, operating expenses, operating (loss) income, net (loss) income, and basic and diluted net (loss) income per share in its press release, along with reconciliations to each of the most comparable GAAP measures.

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 performance of financial analysis. Management uses these measures internally to evaluate its in-period operating performance and 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.

The information in Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

ITEM 2.05.          Costs Associated with Exit or Disposal Activities

On July 23, 2015, the Company announced its cost reduction plan to reduce spending across the organization.  This involves a reduction in force of approximately 200 employees worldwide and other reductions that are together expected to result in approximately $40 million per year in savings.  In connection with this plan, the Company expects to incur charges of approximately $15 million to $16 million, including approximately $13 million to $14 million in charges related to employee severance and related compensation benefits and approximately $2 million in charges related to site closures, asset impairments, and completion costs.  The Company expects approximately $14 million of these charges to be future cash expenditures.  The Company expects to realize the full savings from its spending reductions by end of fourth quarter 2015 and to complete activities under its cost reduction plan by end of fourth quarter 2016.

The cost estimates included above are preliminary and represent forward-looking statements based on our current expectations, estimates and projections about our business and industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change.  Forward-looking statements can often be identified by words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” “may,” “could,” “should,” “estimates,” “predicts,” “potential,” “continue,” “becoming,” “transitioning” and similar expressions, and variations or negatives of these words, and include the statement of our current expectations regarding our operating expense savings resulting from the restructuring activities described above. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Investors are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Current Report.   We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 9.01.          Financial Statements and Exhibits

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 99.1

PMC Reports Second Quarter 2015 Results

Q2 2015 earnings announcement call live on http://investor.pmcs.com at 1:30 p.m. PT

Conference call: 1 (888) 364-3108 or 1 (719) 325-2458 outside North America; passcode 8830911#

Replay available shortly after end of conference call through August 22, 2015

SUNNYVALE, Calif.--(BUSINESS WIRE)--July 23, 2015--PMC-Sierra, Inc. (PMC®) (Nasdaq: PMCS), the semiconductor and software solutions innovator transforming networks that connect, move and store big data, today reported results for the second quarter ended June 27, 2015.

Net revenues in the second quarter of 2015 totaled $124.8 million, a decrease of 1.6 percent, compared to $126.8 million in the second quarter of 2014, and a decrease of 6.2 percent from $133.1 million in the first quarter of 2015.

GAAP net loss in the second quarter of 2015 totaled $8.6 million or $0.04 per share, compared to GAAP net loss in the second quarter of 2014 of $3.5 million or $0.02 per share, and GAAP net income in the first quarter of 2015 of $4.7 million or $0.02 per diluted share.

Non-GAAP net income in the second quarter of 2015 totaled $18.0 million or $0.09 per diluted share, compared to non-GAAP net income in the second quarter of 2014 of $18.3 million or $0.09 per diluted share, and to non-GAAP net income in the first quarter of 2015 of $20.9 million or $0.10 per diluted share.

The Company also today initiated steps to reduce spending across the organization by approximately 14 percent. This reorganization involves a reduction in force of approximately 200 employees worldwide and other reductions that are together expected to result in approximately $40 million per year in savings. The full savings resulting from these workforce reductions will not be realized until the fourth quarter of the current year, although some impact from these measures will be noticeable in the Company’s third quarter results.

“2015 has started weaker than expected in the carrier and storage end markets,” said PMC President and Chief Executive Officer, Greg Lang. “Given the tepid growth environment, we are taking immediate action to reduce spending and accelerate our return to target model profitability.”

For a full reconciliation of each non-GAAP item used herein to the most directly comparable GAAP financial measure, please refer to the schedule 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.

SECOND QUARTER HIGHLIGHTS

The Company announced the following in the second quarter of 2015:

• On July 22, PMC announced it was named a gold award winner in the ChannelPro-SMB 2015 Readers’ Choice Awards for Best SATA/SAS RAID Controller. Readers of ChannelPro-SMB cast their votes for the solution that best satisfies the unique business requirements, work styles, and budgets of their small and midsize business clients, and partner organizations.
• On July 15, PMC announced it won the Fujitsu Network Communications 2015 Technology Award for DIGI-120G. This prestigious award recognizes PMC as an outstanding technology partner for delivering cutting-edge technology and exceptional technical support that enables Fujitsu to rapidly deliver competitive optical transport solutions to market.
• On June 4, PMC hosted a Storage Technology Summit at the China Cloud Computing Conference in Beijing, China. PMC was joined by Baidu, Inspur, Memblaze, Sina and Sugon to discuss the storage technologies and architectures that are powering the China cloud.
• On May 22, Memblaze Technology Co., Ltd. launched its next-generation PBlaze4 PCIe Solid-State Drive Series, which is based on PMC’s Flashtec™ NVMe Controllers.

Second Quarter 2015 Conference Call

Management will review second quarter 2015 results, share its outlook for the third quarter of 2015 and discuss the spending reductions described above during a conference call at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time on July 23, 2015. The conference call webcast will be accessible under the Financial News and Events section at http://investor.pmcs.com. To listen to the conference call by telephone, dial 1 (888) 364-3108 or 1 (719) 325-2458 outside North America with passcode 8830911# approximately ten minutes before the start time. A telephone playback will be available until August 22, 2015, and can be accessed at 1 (888) 203-1112 or 1 (719) 457-0820 outside North America using passcode 8830911#.

Safe Harbor Statement

This release contains forward-looking statements that involve risks and uncertainties. The Company’s SEC filings, including the Company’s most recent reports on Form 10-K and Form 10-Q, 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 tax rates, foreign exchange rates and volatility in global financial markets.

About PMC

PMC (Nasdaq: PMCS) is the semiconductor and software solutions innovator transforming networks that connect, move and store big data. Building on a track record of technology leadership, the Company is driving innovation across storage, optical and mobile networks. PMC’s highly integrated solutions increase performance and enable next-generation services to accelerate the network transformation. For more information, visit www.pmcs.com. Follow PMC on Facebook, Twitter, LinkedIn and RSS.

© Copyright PMC-Sierra, Inc. 2015. All rights reserved. PMC and PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the United States and other countries, PMCS and Flashtec are trademarks of PMC-Sierra, Inc. PMC disclaims any ownership rights in other product and company names mentioned herein. PMC is the corporate brand of PMC-Sierra, Inc.

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, net, selling, general and administrative expense, amortization of purchased intangible assets, other income (expense), benefit from (provision for) income taxes, operating expenses, operating (loss) income, operating margin, net (loss) income, and net income per share - basic and diluted.

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.

CONTACT:
PMC-Sierra, Inc.
Joel Achramowicz, 1-408-239-8630
Director, Investor Relations
[email protected]
or
Sarah Kuchka, 1-604-415-6671
Senior Communications Specialist
[email protected]

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