Net revenues increased 5% compared to the first quarter of 2000 while declining 48% compared to the fourth quarter of 2000. Pro forma net income for the first quarter of 2001 was $4.4 million compared to pro forma net income of $27.2 million in the first quarter of 2000 and $62.5 million in the fourth quarter of 2000.
During the first quarter of 2001, we announced 16 new products, including an OC-192 chip set solution, and we are continuing to build for the long term by achieving design wins at a brisk pace, said Bob Bailey, Chairman, President and CEO of PMC-Sierra. By executing a proactive internal restructuring process in the first quarter of this year, we have sharpened our product focus and operational efficiencies while lowering our cost structure going forward.
Pro forma net income for the first quarter of 2001 excludes amortization of goodwill, deferred stock compensation, gain on sale of investments (net of related tax provision), a $19.9 million restructuring charge, and a $2.1 million provision for inventory write-downs recorded in cost of revenues. The restructuring charge of $19.9 million is primarily related to employee severance and facility consolidation.
Including the above items, the Company incurred a net loss in the first quarter of 2001 of $63.5 million or $0.38 per share (diluted) compared with net income of $17.5 million or $0.10 per share (diluted) in first quarter of 2000.
Strategic Alliance: In March, PMC-Sierra announced a technical and marketing alliance with Multilink Technology Corporation to develop complete 10 Gigabit-per-second reference platforms for optical networking. The two companies will combine Multilink’s newly announced SiGe SERDES chip set and Forward Error Correction (FEC) devices with PMC-Sierra’s 10 Gigabit-per-second framer technologies to facilitate the rapid design of innovative linecard solutions for the Metropolitan Area Network.
