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7300000 12732000 11888000 76000 2192000 486000 1274000 562000 3466000 231000 1010000 331000 2456000 43000 39000 374000 2495000 0.02 0.11 0.02 0.11 22794000 21936000 22951000 22262000 307000 -174000 945000 -458000 -128000 115000 1124000 -517000 1498000 1978000 2695000 2260000 729000 709000 109000 293000 29000 -42000 -301000 44000 -6000 -103000 50000 2276000 1033000 -341000 -370000 212000 -1400000 -144000 -11000 -2227000 371000 501000 -41000 17000 47000 7124000 1243000 1136000 20624000 25719000 16538000 15292000 -5329000 -11563000 1498000 514000 514000 29000 765000 2302000 -765000 -775000 166000 -219000 -5881000 -5433000 <p style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin-top: 5.533px; margin-bottom: 5.533px;"><font size="2"><b>1. &#160;BASIS OF PRESENTATION</b></font></p> <p style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"><font size="2">The condensed consolidated financial statements have been prepared by Pericom Semiconductor Corporation (&#8220;Pericom&#8221; or the &#8220;Company&#8221;) pursuant to the rules and regulations of the Securities and Exchange Commission. &#160;In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments and accruals, necessary for a fair presentation of the Company&#8217;s financial position as of September 27, 2014, the results of operations for the three months ended September 27, 2014 and September 28, 2013 and cash flows for the three months ended September 27, 2014 and September 28, 2013. &#160;This unaudited quarterly information should be read in conjunction with the audited consolidated financial statements of Pericom and the notes thereto included in the Company&#8217;s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on August 29, 2014.</font></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"><font size="2">The preparation of the interim condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. &#160;Actual amounts could differ from these estimates. &#160;The results of operations for the three months ended September 27, 2014 are not necessarily indicative of the results to be expected for the entire year. &#160;The three month periods ended September 27, 2014 and September 28, 2013 each had 13 week periods.</font></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"><font size="2">The Company participates in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Company&#8217;s future financial position or results of operations: &#160;advances and trends in new technologies; competitive pressures in the form of new products or price reductions on current products; changes in the overall demand for products offered by the Company; changes in customer relationships; acquisitions and the subsequent integration of the acquired entity with the Company; litigation or claims against the Company based on intellectual property, patent, product, regulatory or other factors; risks associated with changes in domestic and international economic and/or political conditions or regulations and environmental laws; availability of necessary components; interruptions at wafer suppliers and subcontractors; fluctuations in currencies given the Company&#8217;s sales and operations being heavily weighted and paid in foreign currencies; and the Company&#8217;s ability to attract and retain employees necessary to support its growth. &#160;</font></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"><font size="2">These interim condensed consolidated financial statements include the accounts of Pericom Semiconductor Corporation and its wholly owned subsidiaries, Pericom Global Limited (&#8220;PGL&#8221;), PSE Technology Corporation (&#8220;PSE-TW&#8221;), and Pericom Asia Limited (&#8220;PAL&#8221;).&#160;<a name="ole_link1"></a><a name="ole_link2"></a>PGL has two wholly-owned subsidiaries, Pericom International Limited (&#8220;PIL&#8221;) and Pericom Semiconductor (HK) Limited (&#8220;P&#173;HK&#8221;). In addition, PAL has three subsidiaries, PSE Technology (Shandong) Corporation ("PSE-SD") and Pericom Technology Yangzhou Corporation (&#8220;PSC-YZ&#8221;) for the Jinan, China and Yangzhou, China operations, respectively, and Pericom Technology Inc. (&#8220;PTI&#8221;). The Company eliminates all intercompany balances and transactions in consolidation.</font></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"><font size="2"><b><i>FISCAL PERIOD</i></b>&#160;&#8211; For purposes of reporting the financial results, the Company&#8217;s fiscal years end on the Saturday closest to the end of June. The year ended June 28, 2014 is referred to as fiscal year 2014 or fiscal 2014, whereas the current fiscal year 2015 or fiscal 2015 will end on June 27, 2015. &#160;Both fiscal 2014 and fiscal 2015 contain 52 weeks or 364 days. Periodically, the Company adds a 53<sup>rd</sup>&#160;week to a year in order to end that year on the Saturday closest to the end of June.</font></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"><font size="2"><b><i>WARRANTY</i></b>&#160;&#8211; The Company offers a standard one-year product replacement warranty. &#160;In the past, the Company has not had to accrue for a general warranty reserve, but assesses the level and materiality of return material authorizations (&#8220;RMA&#8221;s) and determines whether it is appropriate to accrue for estimated returns of defective products at the time revenue is recognized. &#160;On occasion, management may determine to accept product returns beyond the standard one-year warranty period. &#160;In those instances, the Company accrues for the estimated cost at the time management decides to accept the return. &#160;Because of the Company&#8217;s standardized manufacturing processes and product testing procedures, returns of defective product are infrequent and the quantities have not been significant. &#160;Accordingly, historical warranty costs have not been material.</font></p> <p align="justify" style="margin: 0px;"></p> <p align="justify" style="margin: 0px;"><font size="2"><b><i>RECENTLY ISSUED ACCOUNTING STANDARDS</i></b></font></p> <p style="margin: 0px;"></p> <p align="justify" style="margin-top: 0px; margin-bottom: 0px;"><font size="2">In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update (&#8220;ASU&#8221;) No. 2013-11,&#160;<i>Income Taxes (Topic 740)-Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists</i>. ASU 2013-11 provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax loss, or tax credit carryforward exists. This new standard requires the netting of unrecognized tax benefits (&#8220;UTBs&#8221;) against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. The Company adopted the provisions of ASU 2013-11 this quarter. Since ASU 2013-11 only impacts financial statement disclosure requirements for unrecognized tax benefits, its adoption has had no impact on the Company&#8217;s financial position or results of operations.</font></p> <p style="margin: 0px;"></p> <p align="justify" style="margin-top: 0px; margin-bottom: 0px;"><font size="2">In May 2014, the FASB issued ASU 2014-09,&#160;<i>Revenue from Contracts with Customers</i>. ASU 2014-09 outlines a single comprehensive model for accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for annual and interim reporting periods beginning after December 15, 2016. 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(&#8220;JCP&#8221;), an FCP manufacturing company located in Science Park of Jiyuan City, Henan Province, China. JCP is a key manufacturing partner of&#160;<font>PSE-TW and supplies PSE-TW with blanks for its surface mount device (&#8220;SMD&#8221;) production lines.&#160;</font>For the first three months of fiscal 2015 and 2014, the Company&#8217;s allocated portion of JCP&#8217;s results was income of $39,000 and $43,000, respectively.</p> <p style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin-top: 0px; margin-bottom: 0px;"><b>12. 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As of September 28, 2013, accumulated other comprehensive income of $11.3 million was made up of $11.6 million of accumulated currency translation gains partially offset by $318,000 of net unrealized losses on available-for-sale investments, which was recorded net of a $73,000 tax benefit.</p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"><b>13. &#160;SHORT-TERM DEBT</b></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;">As of September 27, 2014 and June 28, 2014, the Company has no outstanding debt. However, the Company&#8217;s subsidiary PSE-TW has two loan and credit facilities in place for equipment purchases or inventory financing via short term loans, letters of credit, and trade financing. The first is an unsecured facility for $100 million New Taiwan Dollars (&#8220;NTD&#8221;), approximately U.S. $3.3 million. Loans under this facility are limited to $70 million NTD (U.S. $2.3 million), are for up to 180 days, and are based on the Taiwan Interbank Offered Rate (&#8220;TAIBOR&#8221;) plus 1.25% and may be in NTD, USD, Japanese yen (&#8220;JPY&#8221;) or other currencies. The second is an unsecured facility for $80 million NTD (U.S. $2.6 million). 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The subsidies may be used for the acquisition of assets or to cover business expenses. When a subsidy is used to acquire assets, the subsidy will be amortized over the useful life of the asset. When a subsidy is used for expenses incurred, the subsidy is regarded as earned upon the incurrence of the expenditure. 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-webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;">The Company had no transfers into or out of Level 2 during the three months ended September 27, 2014.</p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;"></p> <p align="justify" style="color: #000000; font-family: 'times new roman'; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 16px; orphans: auto; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0px;">When assessing marketable securities for other-than-temporary declines in value, a number of factors are considered. 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