PMC® (Nasdaq:PMCS), the semiconductor innovator transforming
networks that connect, move and store big data, today reported
results for the third quarter ended September 30, 2012.
Net revenues in the third quarter of 2012 were $131.7
million, a decrease of 4% compared to net revenues of $137.8
million in the second quarter of 2012 and a decrease of 24%
compared to $173.3 million in the third quarter of 2011.
GAAP net loss in the third quarter of 2012 was
$274.4 million, or a loss of $1.31 per share. Third quarter GAAP
results included impairment write-downs of goodwill and intangible
assets of $276.1 million related to the Passave and Wintegra
acquisitions, completed in 2006 and 2010, respectively. This
compares to a GAAP net income of $26.5 million, or $0.12 per
diluted share, including a $28.5 million benefit from the
recognition of certain U.S. tax credits, mainly arising from
foreign withholding taxes paid in the second quarter of 2012.
Non-GAAP net income in the third quarter of 2012 was
$21.4 million, or $0.10 per diluted share, compared to non-GAAP net
income of $21.3 million, or $0.09 per diluted share, in the second
quarter of 2012.
Non-GAAP net income in the third quarter of 2012 excludes
the following items: (i) $6.1 million in stock-based compensation
expense; (ii) $1.1 million in acquisition-related costs; (iii) $1.4
million in termination costs; (iv) $0.9 million in asset
impairments; (v) $1.8 million in lease exit costs; (vi) $11.6
million in amortization of purchased intangible assets; (vii) a
$2.1 million foreign exchange loss on foreign tax liabilities;
(viii) $1 million of non-cash interest expense for the accretion of
the debt discount related to the senior convertible notes; (ix) a
$6.3 million recovery of income taxes; and (x) a $276.1 million
impairment of goodwill and purchased intangible assets.
“Our third quarter results were in line with expectations
despite a tough macro environment,” said Greg Lang, president and
chief executive officer of PMC. “With business uncertainty weighing
on infrastructure purchases in every geography and market segment,
we remain focused on best-in-class product execution, design wins
and controlling operating expenses.”
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 these 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.
THIRD QUARTER AND RECENT HIGHLIGHTS
Highlights of events during the third quarter of 2012 and
recently include:
- On October 2, 2012, Goldman Sachs
completed the repurchase of PMC’s common stock under the
Accelerated Stock Buyback Agreement previously announced on May 2,
2012. Total shares repurchased under the Accelerated Stock Buyback
Agreement are 26.8 million. In addition, PMC repurchased an
additional 6.9 million shares under the Employee Equity Stock
Buyback Plan which was approved for $40 million. The total amount
of shares repurchased under both programs is approximately 33.7
million, representing approximately 14.5 percent of PMC’s total
shares outstanding as of May 2, 2012.
- PMC announced the redemption of the
Company’s 2.25% senior convertible notes. The redemption took place
on October 20, 2012, at one hundred per cent (100%) of the
outstanding principal amount of the notes plus accrued and unpaid
interest. On October 20, 2012, PMC redeemed the remaining
outstanding Senior Convertible Notes for approximately $51.8
million.
- As a leader in the innovation of
storage networks for next generation cloud, data center, and
broader market applications, Adaptec by PMC recently announced the
introduction of the Series 7 family of RAID adapters, representing
the industry’s first and highest port count PCIe Gen 3 6Gb/s
SAS/SATA RAID adapters. The Adaptec Series 7 family represents the
first RAID adapters to take full advantage of PCIe Gen3 bandwidth,
providing unmatched performance for a broad range of enterprise and
cloud computing applications. With 16 direct-connected solid state
drives (SSDs), Series 7 adapters can deliver up to 450,000
input/output operations per second (IOPS) on a 4K random read block
size, equivalent to nearly 10x the performance of
previous-generation RAID adapters.
- Building on its optical leadership, PMC
delivered the industry’s first tri-speed converged carrier
Ethernet/OTN framer. PMC's PM5442 META 120G enables OEMs to
substantially reduce total development costs by addressing
high-speed line-card needs with a single silicon platform. As
interconnect speeds increase, OTN is emerging as the de-facto
protocol enabling seamless and scalable convergence of IP
infrastructure and the optical transport domain. OTN provides the
operations, administration and maintenance (OAM) functionality
necessary for a DWDM transport infrastructure, and service
providers see value in extending the OTN OAM out to the router
interface. Additionally, OTN supports forward error correction
(FEC) for reach extension, significantly increasing the number of
links over which 100G can be deployed.
Third Quarter 2012 Conference Call
Management will review the third quarter 2012 results and share
its outlook for the fourth quarter of 2012 during a conference call
at 1:30 pm Pacific Time/4:30 pm Eastern Time on October 29, 2012.
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 live by telephone, dial 1 (888) 771-4371 (US
Toll Free) or 1 (847) 585-4405 (International) with passcode
33368644, approximately 10 minutes before the start time. A
telephone playback will be available after the completion of the
call and can be accessed at 1 (888) 843-7419 using the access code
33368644#. A replay of the webcast will be available for 10
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 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 Twitter,
LinkedIn and RSS.
© Copyright PMC-Sierra, Inc. 2012. All rights reserved. PMC and
PMC-SIERRA are registered trademarks of PMC-Sierra, Inc. in the
United States and other countries. PMCS and Adaptec by PMC are
trademarks of PMC-Sierra, Inc. Other product and company names
mentioned herein may be trademarks of their respective owners. PMC
is the corporate brand of PMC-Sierra, Inc.
PMC-Sierra, Inc. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except for per share amounts)
(unaudited)
Three Months Ended Nine
Months Ended September 30, July 1, October
2, September 30, October 2, 2012
2012 2011
2012 2011 Net
revenues $ 131,723 $ 137,762 $ 173,299 $ 401,579 $ 501,751 Cost of
revenues 38,990 41,253 52,640
121,255 164,464 Gross profit
92,733 96,509 120,659 280,324 337,287 Research and
development 55,604 56,699 59,669 171,374 170,589 Selling, general
and administrative 27,786 29,290 29,981 86,047 91,556 Amortization
of purchased intangible assets 11,624 11,626 11,031 34,537 33,083
Impairment of goodwill and purchased intangible assets
276,082 - -
276,082 - (Loss) income from operations
(278,363 ) (1,106 ) 19,978 (287,716 ) 42,059 Other (expense)
income: Gain on liability for contingent consideration - - 29,376 -
29,376 Gain on investment securities and other 180 527 222 746 559
Amortization of debt issue costs (50 ) (50 ) (50 ) (150 ) (150 )
Foreign exchange (loss) gain (2,454 ) 1,608 3,635 (1,951 ) 1,538
Interest expense, net (797 ) (563 ) (477 )
(1,539 ) (1,972 ) (Loss) income before recovery of
(provision for) income taxes (281,484 ) 416 52,684 (290,610 )
71,410 Recovery of (provision for) income taxes 7,098
26,064 (5,428 ) (53,567 )
(15,076 ) Net (loss) income $ (274,386 ) $ 26,480 $ 47,256
$ (344,177 ) $ 56,334 Net (loss) income per
common share - basic $ (1.31 ) $ 0.12 $ 0.20 $ (1.56 ) $ 0.24 Net
(loss) income per common share - diluted $ (1.31 ) $ 0.12 $ 0.20 $
(1.56 ) $ 0.24 Shares used in per share calculation - basic
209,512 222,316 232,590 221,323 233,880 Shares used in per share
calculation - diluted 209,512 224,560 233,647 221,323 236,236
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, impairment of goodwill and purchased
intangible assets, other income (expense), (provision for) recovery
of income taxes, operating expenses, operating income (loss),
operating margin percentage, net income (loss), and basic and
diluted net income (loss) per share.
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.
PMC-Sierra, Inc. Adjustments to GAAP Cost of
Revenues, Gross Profit, Gross Profit Percentage, Research and
Development Expense, Selling, General and Administrative
Expense, Amortization of Purchased Intangible Assets, Impairment of
goodwill and purchased intangible assets,
Other Income (Expense), (Provision for)
Recovery of Income Taxes, Operating Expenses, Operating Income
(Loss),
Operating Margin Percentage, Net Income (Loss), and Basic and
Diluted Net Income (Loss) Per Share (in thousands, except for
per share amounts) (unaudited)
Three Months
Ended Nine Months Ended September 30, July
1, October 2, September 30, October 2,
2012 (1)
2012 (2)
2011 (3)
2012 (4)
2011 (5)
GAAP cost of revenues $ 38,990 $ 41,253 $ 52,640 $
121,255 $ 164,464 Stock-based compensation (181 ) (252 ) (220 )
(657 ) (703 ) Acquisition-related costs - (35 ) (23 ) (37 ) (9,128
) Asset impairment (108 ) - -
(108 ) -
Non-GAAP cost of revenues $
38,701 $ 40,966 $ 52,397 $ 120,453 $
154,633
GAAP gross profit $ 92,733 $ 96,509 $
120,659 $ 280,324 $ 337,287 Stock-based compensation 181 252 220
657 703 Acquisition-related costs - 35 23 37 9,128 Asset impairment
108 - - 108
-
Non-GAAP gross profit $ 93,022 $
96,796 $ 120,902 $ 281,126 $ 347,118
Non-GAAP gross profit % 71 % 70 % 70 % 70 % 69 %
GAAP research and development expense $ 55,604 $
56,699 $ 59,669 $ 171,374 $ 170,589 Stock-based compensation (2,933
) (2,900 ) (3,041 ) (8,674 ) (8,665 ) Acquisition-related costs
(751 ) (544 ) (90 ) (1,893 ) (378 ) Termination costs (690 ) (227 )
- (2,401 ) - Asset impairment (479 ) -
(3,029 ) (479 ) (3,029 )
Non-GAAP research and
development expense $ 50,751 $ 53,028 $ 53,509
$ 157,927 $ 158,517
GAAP selling,
general and administrative expense $ 27,786 $ 29,290 $ 29,981 $
86,047 $ 91,556 Stock-based compensation (2,974 ) (4,157 ) (3,708 )
(10,647 ) (10,962 ) Acquisition-related costs (335 ) (535 ) (525 )
(1,631 ) (2,735 ) Termination costs (717 ) (68 ) - (918 ) - Asset
impairment (312 ) - - (312 ) - Lease exit costs (1,755 )
(312 ) - (2,509 ) (3,392 )
Non-GAAP selling, general and administrative expense $
21,693 $ 24,218 $ 25,748 $ 70,030 $
74,467
GAAP amortization of purchased intangible
assets $ 11,624 $ 11,626 $ 11,031 $ 34,537 $ 33,083
Amortization of purchased intangible assets (11,624 )
(11,626 ) (11,031 ) (34,537 ) (33,083 )
Non-GAAP amortization of purchased intangible assets $ -
$ - $ - $ - $ -
GAAP
impairment of goodwill and purchased intangible assets $
276,082 $ - $ - $ 276,082 $ - Impairment of goodwill and purchased
intangible assets (276,082 ) - -
(276,082 ) -
Non-GAAP impairment of
goodwill and purchased intangible assets $ - $ -
$ - $ - $ -
GAAP other (expense)
income $ (3,121 ) $ 1,522 $ 32,706 $ (2,894 ) $ 29,351 Gain on
liability for contingent consideration - - (29,376 ) - (29,376 )
Foreign exchange loss (gain) on foreign tax liabilities 2,145
(1,084 ) (3,226 ) 2,403 (2,013 ) Accretion of debt discount related
to senior convertible notes 962 942 888 2,829 2,612 Accretion of
liability for contingent consideration - - 372 - 1,182 Interest
expense related to short-term loan - -
- - 258
Non-GAAP other
(expense) income $ (14 ) $ 1,380 $ 1,364 $ 2,338
$ 2,014
GAAP (recovery of) provision for
income taxes $ (7,098 ) $ (26,064 ) $ 5,428 $ 53,567 $ 15,076
Recovery of (provision for) income taxes 6,305
25,673 (4,550 ) (54,740 ) (11,797 )
Non-GAAP (recovery of) provision for income taxes $ (793 ) $
(391 ) $ 878 $ (1,173 ) $ 3,279
Three Months Ended Nine Months Ended September
30, July 1, October 2, September 30,
October 2,
2012 (1)
2012 (2)
2011 (3)
2012 (4)
2011 (5)
GAAP operating expenses $ 371,096 $ 97,615 $ 100,681
$ 568,040 $ 295,228 Stock-based compensation (5,907 ) (7,057 )
(6,749 ) (19,321 ) (19,627 ) Acquisition-related costs (1,086 )
(1,079 ) (615 ) (3,524 ) (3,113 ) Termination costs (1,407 ) (295 )
- (3,319 ) - Asset impairment (791 ) - (3,029 ) (791 ) (3,029 )
Lease exit costs (1,755 ) (312 ) - (2,509 ) (3,392 ) Amortization
of purchased intangible assets (11,624 ) (11,626 ) (11,031 )
(34,537 ) (33,083 ) Impairment of goodwill and purchased intangible
assets (276,082 ) - -
(276,082 ) -
Non-GAAP operating expenses $
72,444 $ 77,246 $ 79,257 $ 227,957 $
232,984
GAAP operating (loss) income $
(278,363 ) $ (1,106 ) $ 19,978 $ (287,716 ) $ 42,059 Stock-based
compensation 6,088 7,309 6,969 19,978 20,330 Acquisition-related
costs 1,086 1,114 638 3,561 12,241 Termination costs 1,407 295 -
3,319 - Asset impairment 899 - 3,029 899 3,029 Lease exit costs
1,755 312 - 2,509 3,392 Amortization of purchased intangible assets
11,624 11,626 11,031 34,537 33,083 Impairment of goodwill and
purchased intangible assets 276,082 -
- 276,082 -
Non-GAAP
operating income $ 20,578 $ 19,550 $ 41,645
$ 53,169 $ 114,134
Non-GAAP
operating margin % 16 % 14 % 24 % 13 % 23 %
GAAP net
(loss) income $ (274,386 ) $ 26,480 $ 47,256 $ (344,177 ) $
56,334 Stock-based compensation 6,088 7,309 6,969 19,978 20,330
Acquisition-related costs 1,086 1,114 638 3,561 12,241 Termination
costs 1,407 295 - 3,319 - Asset impairment 899 - 3,029 899 3,029
Lease exit costs 1,755 312 - 2,509 3,392 Amortization of purchased
intangible assets 11,624 11,626 11,031 34,537 33,083 Impairment of
goodwill and purchased intangible assets 276,082 - - 276,082 - Gain
on liability for contingent consideration - - (29,376 ) - (29,376 )
Foreign exchange loss (gain) on foreign tax liabilities 2,145
(1,084 ) (3,226 ) 2,403 (2,013 ) Accretion of debt discount related
to senior convertible notes 962 942 888 2,829 2,612 Accretion of
liability for contingent consideration - - 372 - 1,182 Interest
expense related to short-term loan - - - - 258 (Recovery of)
provision for income taxes (6,305 ) (25,673 )
4,550 54,740 11,797
Non-GAAP
net income $ 21,357 $ 21,321 $ 42,131 $
56,680 $ 112,869
Non-GAAP net income per
share - basic $ 0.10 $ 0.10 $ 0.18 $ 0.26 $ 0.48
Non-GAAP
net income per share - diluted $ 0.10 $ 0.09 $ 0.18 $ 0.25 $
0.48 Shares used to calculate non-GAAP net income per share
- basic 209,512 222,316 232,590 221,323 233,880 Shares used to
calculate non-GAAP net income per share - diluted 210,525 224,560
233,647 223,094 236,236
(1) $6.1 million stock-based compensation
expense; $1.1 million acquisition-related costs; $1.4 million
termination costs; $0.9 million asset impairment; $1.8 million
lease exit costs; $11.6 million amortization of purchased
intangible assets; $276.1 million impairment of goodwill and
purchased intangible assets; $2.1 million foreign exchange loss on
foreign tax liabilities; $1 million non-cash interest expense for
the accretion of the debt discount related to the senior
convertible notes; and $6.3 million recovery of income taxes which
includes $4.3 million income tax recovery related to an
intercompany dividend, $2.8 million income tax recovery for
adjustments relating to prior periods, $1.7 million income tax
provision relating to intercompany transactions, $1.2 million
deferred tax recovery related to non-deductible intangible asset
amortization and impairment, $0.8 million arrears interest relating
to unrecognized tax benefits, and $0.5 million income tax recovery
relating to foreign exchange translation of a foreign
subsidiary.
(2) $7.3 million stock-based compensation
expense; $1.1 million acquisition-related costs; $0.3 million
termination costs; $0.3 million lease exit costs; $11.6 million
amortization of purchased intangible assets; $1.1 million foreign
exchange gain on foreign tax liabilities; $0.9 million non-cash
interest expense for the accretion of the debt discount related to
the senior convertible notes; and $25.7 million recovery of income
taxes which includes $28.5 million benefit of certain U.S. Federal
and State tax credits required to be recognized in advance of their
utilization, $2.6 million arrears interest relating to unrecognized
tax benefits, $1.7 million income tax provision relating to
intercompany transactions, $0.9 million income tax recovery for
adjustments relating to prior periods, $0.5 million deferred tax
recovery related to non-deductible intangible asset amortization,
$0.4 million reduction of stock option related loss carry-forwards
recognized in equity, and $0.3 million income tax provision
relating to foreign exchange translation of a foreign
subsidiary.
(3) $7 million stock-based compensation
expense; $0.6 million acquisition-related costs; $3 million asset
impairment; $11 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.
(4) $20 million stock-based compensation
expense; $3.6 million acquisition-related costs; $3.3 million
termination costs; $0.9 million asset impairment; $2.5 million
lease exit costs; $34.5 million amortization of purchased
intangible assets; $276.1 million impairment of goodwill and
purchased intangible assets; $2.4 million foreign exchange loss on
foreign tax liabilities; $2.8 million non-cash interest expense for
the accretion of the debt discount related to the senior
convertible notes; and $54.7 million provision for income taxes
which includes $56.2 million income tax provision related to an
intercompany dividend net of $25.7 million related to the U.S.
Federal and State tax credits required to be recognized in advance
of their utilization, $5 million income tax provision relating to
intercompany transactions, $4.1 million arrears interest relating
to unrecognized tax benefits, $3.9 million benefit of certain U.S.
Federal and State tax credits required to recognized in advance of
their utilization, $3.8 million income tax recovery for adjustments
relating to prior periods, $2.3 million deferred tax recovery
related to non-deductible intangible asset amortization and
impairment, and $0.6 million net tax recovery relating to foreign
exchange translation of a foreign subsidiary.
(5) $20.3 million stock-based compensation
expense; $12.2 million acquisition-related costs; $3 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 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.
PMC-Sierra, Inc. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands) (unaudited)
September
30, December 31, 2012
2011 ASSETS: Current assets: Cash and cash
equivalents $ 181,230 $ 182,571 Short-term investments 34,370
104,391 Accounts receivable, net 62,568 59,213 Inventories, net
27,405 39,911 Prepaid expenses and other current assets 13,588
23,411 Income tax receivable 5,806 8,027 Deferred tax assets
42,151 30,725 Total current assets 367,118
448,249 Investment securities 116,336 226,619 Investments
and other assets 4,570 2,431 Prepaid expenses 12,517 16,901
Property and equipment, net 40,408 25,364 Goodwill 252,419 520,899
Intangible assets, net 137,679 158,482 Deferred tax assets
58 494 $ 931,105 $ 1,399,439
LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities:
2.25% senior convertible notes due October 15, 2025, net $ 67,951 $
65,122 Accounts payable 29,093 38,340 Accrued liabilities 62,242
66,139 Liability for unrecognized tax benefit 52,304 46,394
Deferred income taxes 2,494 2,450 Deferred income 12,720
16,024 Total current liabilities 226,804
234,469 Long-term obligations 2,025 1,284 Deferred income
taxes 42,894 40,663 Liability for unrecognized tax benefit 20,403
17,323 PMC special shares convertible into 1,019 (2011 -
1,029) shares of common stock 1,188 1,228 Stockholders'
equity: Common stock and additional paid in capital 1,536,470
1,594,667 Accumulated other comprehensive income (loss) 767 (1,146
) Accumulated deficit (899,446 ) (489,049 ) Total
stockholders' equity 637,791 1,104,472
$ 931,105 $ 1,399,439
PMC-Sierra, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands) (unaudited)
Nine Months Ended
September 30, October 2, 2012
2011 Cash flows from operating
activities: Net (loss) income $ (344,177 ) $ 56,334 Adjustments
to reconcile net (loss) income to net cash provided by operating
activities: Depreciation and amortization 48,724 56,795 Stock-based
compensation 19,978 20,330 Unrealized foreign exchange loss (gain),
net 2,299 (1,650 ) Net amortization of premiums/discounts and
accrued interest of investments 3,844 3,361 Accrued interest on
short-term loan - 589 Gain on investment securities and other (731
) (558 ) Impairment of goodwill and purchased intangible assets
277,240 3,029 Gain on liability for contingent consideration -
(29,376 ) Taxes related to intercompany dividend 60,940 -
Changes in operating assets and liabilities: Accounts receivable
(3,352 ) 4,749 Inventories 12,506 1,361 Prepaid expenses and other
current assets 4,108 1,989 Accounts payable and accrued liabilities
(27,643 ) (10,285 ) Deferred income taxes and income taxes payable
(5,747 ) 11,020 Accrued restructuring costs - (1,418 ) Deferred
income (3,304 ) (2,690 ) Net cash provided by
operating activities 44,685 113,580
Cash flows from investing activities: Business
acquisition (15,900 ) - Purchases of property and equipment (25,558
) (8,142 ) Purchases of intangible assets (4,602 ) (5,620 )
Redemption of short-term investments 11,415 - Disposals of
investment securities 107,636 116,813 Purchases of investment
securities and other investments (87,267 ) (160,169 )
Reclassification of short-term investments and long-term investment
securities 142,863 - Net cash provided
by (used in) investing activities 128,587
(57,118 )
Cash flows from financing activities:
Repurchases of common stock (180,807 ) (39,999 ) Equity forward
contract related to accelerated share repurchase program (9,827 ) -
Repayment of short-term loan - (180,991 ) Proceeds from issuance of
common stock 15,869 16,462 Net cash
used in financing activities (174,765 ) (204,528 )
Effect of exchange rate changes on cash and cash equivalents
152 (270 ) Net decrease in cash and cash equivalents (1,341 )
(148,336 ) Cash and cash equivalents, beginning of period
182,571 293,355 Cash and cash equivalents, end
of period $ 181,230 $ 145,019
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