PMC Sierra Inc. (NASDAQ:PMCS) filed Quarterly Report for the period ended 2009-06-28.
PMC-Sierra designs develops markets and supports high-performance semiconductor networking solutions. The company\'s products are used in the high speed transmission and networking systems which are being used to restructure the global telecommunications and data communications infrastructure. The company provides components for equipment based on Asynchronous Transfer Mode Synchronized Optical Network Synchronized Digital Hierarchy T1/E1/J1 and T3/E3/J2 access transmission High speed Data Link Control and Ethernet. PMC Sierra Inc. has a market cap of $1.96 billion; its shares were traded at around $8.79 with a P/E ratio of 28.4 and P/S ratio of 3.7.
Highlight of Business Operations:intangible assets acquired from the Storage Semiconductor Business and Passave in the second quarter of 2009 was $4.7 million and $5.1 million, respectively. Amortization from the Storage Semiconductor Business and Passave in the second quarter of 2008 was $4.7 million and $5.1 million, respectively.
We recorded a provision for income taxes of $3.4 million and a recovery of $120.4 million for the second quarter of 2009 and 2008, respectively. We had an increase in our provision for income taxes due to the product and income mix across our subsidiaries. The financial statements for the six months ended June 28, 2009 include the tax effects associated with the sale of certain assets between wholly-owned subsidiaries of the Company. GAAP requires the tax expense associated with gains on such inter-company transactions to be recognized over the estimated life of the related assets. Accordingly, the $23.7 million recorded as long-term prepaid expenses as at June 28, 2009 represents the remaining tax expense to be recognized over periods of up to six years, with corresponding amounts recorded as current and deferred income taxes payable and as liability for unrecognized tax benefits. The tax expense in the second quarter of 2009 resulting from these transactions was $1.1 million.
Our research and development, expenses decreased $2.3 million or 3% in the first six months of 2009 compared to the first six months of 2008. Payroll costs decreased by $4.6 million due to the headcount reduction. Total material costs, including outside consultant services, wafer and photomask costs increased by $2.3 million related to completing more tapeouts on smaller geometries in the first six months of 2009 than in the same period of 2008. These tapeouts on smaller geometries carry higher costs.
In the first and second quarters of 2006, we completed the acquisitions of the Storage Semiconductor Business from Avago, and of Passave, Inc., respectively. Amortization of intangible assets acquired from the Storage Semiconductor Business and Passave in the first six months of 2009 was $9.5 million and $10.2 million, respectively. Amortization from the Storage Semiconductor Business and Passave in the first six months of 2008 was $9.5 million and $10.2 million, respectively.
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