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FORM 10−K
PMC SIERRA INC − PMCS
Filed: March 11, 2005 (period: December 26, 2004)
Annual report which provides a comprehensive overview of the company for the past year

Table of contents

  • Page 1
    FORM 10âˆ'K PMC SIERRA INC âˆ' PMCS Filed: March 11, 2005 (period: December 26, 2004) Annual report which provides a comprehensive overview of the company for the past year

  • Page 2
    ...and Financial Disclosure. ITEM 9A. Controls and Procedures. ITEM 9B. Other Information. PART III ITEM 10. Directors and Executive Officers of the Registrant. ITEM 11. Executive Compensation. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matt ITEM 13...

  • Page 3
    EXâˆ'32.2

  • Page 4
    ...by nonaffiliates of the Registrant, based upon the closing sale price of the Common Stock on June 25, 2004 as reported by the Nasdaq National Market, was approximately $1.6 billion. Shares of Common Stock held by each executive officer and director and by each person known to the Registrant who owns...

  • Page 5

  • Page 6
    ...âˆ'powered microprocessors for service provider, enterprise, storage, and wireless networking equipment. We have more than 230 different semiconductor devices that are sold to leading equipment manufacturers, who in turn supply their equipment principally to communications network service providers...

  • Page 7
    ..., third generation wireless services, and networkâˆ'attached storage are expected to drive additional traffic into the global network infrastructure. Commercial enterprises are also expanding their data networks to compete costâˆ'effectively in a world where more and more business operations require...

  • Page 8
    ... with multiple protocols. PRODUCTS PMCâˆ'Sierra designs, develops, markets and supports a broad range of highâˆ'performance integrated circuits that process analog and digital signals in a wide range of speeds and protocols that are used in the telecommunications and data networking industries. We...

  • Page 9
    ... into five areas of the worldwide network infrastructure, which we call the Metro, Access, Enterprise, Storage and Consumerâˆ'related markets. The following describes PMCâˆ'Sierra's view of these markets and some typical equipment that may include our chips and chipsets. Due to the complexity of the...

  • Page 10
    ... MIPSâˆ'powered microprocessors. • Storage: most companies connect to their data storage either directly or indirectly, the latter using networkâˆ'attached systems (NAS) or storage area networks (SAN). Our devices enable the interconnection of the servers, switches and storage devices that...

  • Page 11
    ... protocol telephony, analog telephone adapters, fibre channel switches, servers employing serial attached SCSI technology, and wireless base stations. 1. Strengthen our position in the service provider market and broaden our business in the enterprise and storage markets. We work closely with some...

  • Page 12
    ...to strengthen our relationships and business activity with our Asian customers. In 2004, 46% of our total revenues were received from the Asia Pacific region, including China and Japan. Based on PMC's revenues in 2004, some of our largest customers in Japan and Korea included Fujitsu, NEC, Ricoh and...

  • Page 13
    ... the use of Asian based contract manufacturers for the assembly of their products. Sales to Cisco Systems through distributors, contract manufacturers and direct sales represented more that 10% of our total revenues in 2004. MANUFACTURING PMCâˆ'Sierra is a fabless company, meaning that we do...

  • Page 14
    ... devices, commonly referred to as systemsâˆ'onâˆ'aâˆ'chip (SoCs), are targeted for use in enterprise, storage and service provider markets. Increasingly, our OEM customers that serve these end markets are demanding complete solutions with software support and complex feature sets. From time to time...

  • Page 15
    ... of products that meet our customers' future needs. At the end of fiscal 2004, we had design centers in the United States (California, Oregon, and Pennsylvania) and Canada (British Columbia, Saskatchewan, Manitoba, Ontario and Quebec). In 2003, we closed design centers in Maryland, Ireland and...

  • Page 16
    ... Semiconductors, LSI Logic Corporation, Marvell Technology Group, Mindspeed Technologies, Qlogic, Silicon Image, Transwitch and Vitesse Semiconductor. Many of these companies are well financed, have significant communications semiconductor technology assets and established sales channels, and...

  • Page 17
    ... square feet of office space in three separate buildings. These locations support a significant portion of our product development, manufacturing, marketing, sales and testing activities. We also operate six additional research & development centers: four in Canada and two in the US. We have twelve...

  • Page 18
    ITEM 3. Legal Proceedings. We are currently not engaged in legal proceedings that require disclosure under this item. ITEM 4. Submission of Matters to a Vote of Security Holders. None. 14

  • Page 19
    ... for Registrant's Common Equity and Related Stockholder Matters. Stock Price Information. Our common stock trades on the Nasdaq National Market under the symbol PMCS. The following table sets forth, for the periods indicated, the high and low closing sale prices for our Common Stock as reported by...

  • Page 20
    ...elimination of a provision for employeeâˆ'related taxes, $1.8 million loss on extinguishment of debt, $9.2 million gain on sale of investments, $5.1 million recovery of prior year taxes, $9.4 million tax recovery based on agreements and assessments with Canada Revenue Agency and $1.5 million foreign...

  • Page 21
    ... year ended December 31, 2002 include a $4.0 million allowance for inventories in excess of twelveâˆ'month demand, recorded in cost of revenues, a $1.8 million writeâˆ'down for impairment of property and equipment, a $15.3 million charge for impairment of other investments recorded in gain (loss) on...

  • Page 22
    ...include costs of merger of $38.0 million and acquisition of in process research and development of $38.2 million related to the acquisitions of AANetcom, Inc., Extreme Packet Devices, Inc., Quantum Effect Devices, Inc. and SwitchOn Networks Inc. (7) Reflects two 2âˆ'forâˆ'1 stock splits, in the form...

  • Page 23
    ... for potential employeeâˆ'related taxes, $5.1 million recovery of prior year taxes, $9.4 million tax recovery based on agreements and assessments with Canada Revenue Agency, and $1.5 million foreign exchange loss on Canadian taxes. (2) Results include $1.2 million acquisition costs related to...

  • Page 24
    ... nonâˆ'networking revenues in the future. During the first half of 2004, we saw increased revenues from the markets for our telecommunication service provider products, particularly for Asymmetric Digital Subscriber Line, or ADSL, wireless, and wireline infrastructure applications in China and...

  • Page 25
    ...over the business conditions that had depressed demand for our communication products in 2002. We saw improved demand for our microprocessor products in enterpriseâˆ'related applications and products used in asynchronous digital subscriber line (ADSL) infrastructure applications. Our customers began...

  • Page 26
    ... gross profit in 2002. This increase in gross profit related primarily to higher sales volumes in 2003 compared to 2002. Also contributing to the ... 2 percentage points; and higher shipment volumes resulted in manufacturing costs being spread over a greater number of units, increasing gross margin by ...

  • Page 27
    ... as less software and related maintenance was required to support current development activity levels. Contributing to this reduction in tooling costs was the closure of our development sites in Ireland, India and Maryland as there were fewer licenses required to support the reduced R&D headcount...

  • Page 28
    ... to a reduction in facilitiesâˆ'related costs, resulting from our restructuring programs and ongoing cost control measures. Amortization of Deferred Stock Compensation We recorded a nonâˆ'cash charge of $0.7 million for amortization of deferred stock compensation in 2004 compared to $1.0 million in...

  • Page 29
    ... of 223 employees across all business functions, partial closures of design facilities in Kanata, Santa Clara, Montreal, Burnaby, and Maryland, the closure of product design facilities in San Diego and Denver and the curtailment of semiconductor design activity across the networking markets we...

  • Page 30
    ... expenses in the first quarter of 2003. The restructuring included the termination of 175 employees and the closure of design centers in Maryland, Ireland and India. To date, we have recorded a restructuring charge of $18.3 million in accordance with SFAS 146, "Accounting for Costs Associated...

  • Page 31
    ... our product development and sales activities on a smaller number of products and endâˆ'users....product development opportunities as the end markets we serve begin to recover. Acquisition costs In the third quarter of 2004, we purchased assets and intellectual property from a privatelyâˆ'held company...

  • Page 32
    ...decline in our average cash balances. Foreign exchange loss Foreign exchange loss increased to $1.3 million in 2004 compared to $1.0 million in 2003 and nil in 2002. We have a significant design presence outside the United States, especially in Canada. The majority of our operating expense exposures...

  • Page 33
    ...$19.9 million was received from the sale of our investments in three professionally managed venture funds and a private technology company. We recorded net gains of $9.2 million. In 2003, we sold our remaining investment in Sierra Wireless, Inc., a public company, resulting in a gain of $5.9 million...

  • Page 34
    ... in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts we report as assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities. Management bases its estimates on...

  • Page 35
    ..., which resulted in the closing of an additional four product development sites: two in Ireland, one in India and our Maryland site and in 2003 we recorded total charges of $9.6 million when we abandoned usage of these sites. The amount unpaid at the end of 2004 of $3.9 million represents 55...

  • Page 36
    ... of a product tester. We did not identify any impairment to goodwill or purchased intangibles during our annual assessments in 2003. Business Outlook We expect our networking revenues for the first quarter of 2005 to increase approximately 5% to 8% from the fourth quarter of 2004 based on typical...

  • Page 37
    ... that impact our operating performance, such as service provider infrastructure spending, enterprise network capital ...timing of payments, a $1.3 million elimination of a provision for employeeâˆ'related taxes, and a $1.5 million reduction in our accrual for semiâˆ'annual interest on our convertible...

  • Page 38
    ... of cash was used to repurchase a portion of our convertible subordinated notes; and cash proceeds of $14.6 million from the issuance of common stock under our equityâˆ'based compensation plans. As of December 31, 2004 we have the following commitments: (in thousands) Contractual Obligations...

  • Page 39
    ... we call our "turns business." Our turns business varies widely quarter to quarter. Uncertainty in our customers' end markets and our customers' increased focus on cash management has caused our customers to delay product orders and reduce delivery leadâˆ'time expectations, which reduces our ability...

  • Page 40
    ...impact our revenues should they change their ordering pattern. We depend on a limited number of customers for a major portion of our revenues. Through direct, distributor and subcontractor purchases, Cisco Systems accounted for more than 10% of our revenues in 2004. We do not have longâˆ'term volume...

  • Page 41
    ... established sales channels, and are dependent on the market in which we participate for the bulk of their revenues. Other competitors include major domestic and international semiconductor companies, such as Agilent, Cypress Semiconductor, Intel, IBM, Infineon, Integrated Device Technology, Maxim...

  • Page 42
    ... impact on our profitability. China represents a significant portion of our net revenues (22% and 30% for each of the years ended December 31, 2004 and 2003, respectively, based on ship to location). Our financial condition and results of operations are becoming increasingly dependent on our sales...

  • Page 43
    ... than our networking equipment customers, who generally do not guarantee our credit receivables related to their contract manufacturers. In addition, a significant portion of our sales flow through our distribution channel which generally represent a higher credit risk. Should these companies enter...

  • Page 44
    ... the time of the acquisition. From time to time, we license, or acquire, technology from third parties to incorporate into our products. Incorporating technology into our products may be more costly, or result in additional management attention to achieve the desired functionality. Product sales mix...

  • Page 45
    ... and demand for their endâˆ'user networking equipment, our customers are focusing more on cash preservation and tighter inventory management, and because we supply a large number of products to a variety of customers and contract manufacturers who have many equipment programs for which they purchase...

  • Page 46
    ..., to satisfy our production requirements. Some companies that supply our customers are similarly dependent on a limited number of suppliers to produce their products. These other companies' products may be designed into the same networking equipment into which our products are designed. Our order...

  • Page 47
    ... reduce our net income. In December 2004, the Financial Accounting Standard Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") 123 (revised 2004), "Sharedâˆ'Based Payment" which will require us to measure the cost of employee services received in exchange for an award of...

  • Page 48
    ... customers. The majority of our customers are required to obtain licenses from and pay royalties to third parties for the sale of systems incorporating our semiconductor devices. Customers may also make claims against us with respect to infringement. Furthermore, we may initiate claims or litigation...

  • Page 49
    ... in control of us. In addition, our Board of Directors has the right to issue preferred stock without stockholder approval, which could be used to dilute the stock ownership of a potential hostile acquirer. Delaware law imposes some restrictions on mergers and other business combinations between...

  • Page 50
    ... income taxes in the ordinary course of business, and consequently in 2004 we incurred a $1.5 million foreign exchange loss relating to this item. Our profitability would be materially impacted by a shift in the foreign exchange rates between United States and Canadian currencies. For example, if 45

  • Page 51
    the value of the United States dollar decreased by 5% relative to the Canadian dollar, our profitability would decrease by $2.7 million. Debt At December 31, 2004, $68.1 million of our 3.75% convertible subordinated notes were outstanding. On January 18, 2005 we redeemed the remaining $68.1 million ...

  • Page 52
    ... Statements Reports on Internal Control Over Financial Reporting included in Item 9A: Management's Annual Report on Internal Control over Financial Reporting Report of Independent Registered Public Accountants Schedules for each of the three years in the period ended December 31, 2004 included...

  • Page 53
    ... material respects, the information set forth therein. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, based on the criteria...

  • Page 54
    ... tax liabilities Commitments and contingencies (Note 9) PMC special shares convertible into 2,897 (2003 âˆ' 2,921) shares of common stock Stockholders' equity Common stock and additional paid in capital, par value $.001: 900,000 shares authorized; 178,510 shares issued and outstanding (2003 âˆ' 174...

  • Page 55
    PMCâˆ'Sierra, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share amounts) Year Ended December 31, 2003 2004 2002 Net revenues Cost of revenues Gross profit Other costs and expenses: Research and development Marketing, general and administrative Amortization of deferred...

  • Page 56
    PMCâˆ'Sierra, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2003 2004 2002 Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income (loss... of convertible subordinated notes Proceeds from issuance of common stock Net cash...

  • Page 57
    Cash refund of income taxes Cash paid for income taxes Supplemental disclosures of nonâˆ'cash investing and financing activities: Conversion of PMCâˆ'Sierra special shares into common stock See notes to the consolidated financial statements. 51 22,316 163 85 23,943 295 533 29,357 411 265

  • Page 58
    ...Other comprehensive gain (loss): Change in net unrealized gains on investments Change in fair value of derivatives Comprehensive income Conversion of special shares into common stock Issuance of common stock under stock benefit plans Deferred stock compensation Balances at December 31, 2004 165,702...

  • Page 59
    ... and MIPSâˆ'based microprocessors for service provider, enterprise, storage, and wireless networking equipment. The Company offers worldwide technical and sales support through a network of offices in North America, Europe and Asia. Basis of presentation. The Company's fiscal year ends on the...

  • Page 60
    ... the Company's volume requirements change in relation to sales of its products. In each year, the Company is entitled to receive a refund of a portion of the deposits based on the annual purchases from these suppliers compared to the target levels in the wafer supply agreements. In 2004, PMC renewed...

  • Page 61
    ... Leasehold improvements Furniture and fixtures Total $ $ 181,565 11,070 13,352 205,987 $ $ (165,375) (8,373) (11,489) (185,237) $ $ 16,190 2,697 1,863 20,750 In 2003, the Company sold a property it held in Burnaby, Canada for proceeds of $15.3 million. The Company recorded a nominal gain...

  • Page 62
    ...of Operations. Derivatives and Hedging Activities. PMC's net income (loss) and cash flows may be impacted by fluctuating foreign exchange rates. The Company periodically hedges foreign currency forecasted transactions related to certain operating expenses. All derivatives are recorded in the balance...

  • Page 63
    ... the sales from this distributor to end customers and the Company may utilize inventory at the major distributor to satisfy product demand by other customers. PMC recognizes revenues from minor distributors at the time of shipment. These distributors are also given business terms to return a portion...

  • Page 64
    ...that are applied to direct sales. PMC product sales are subject to a oneâˆ'year warranty against regular mechanical or electrical failure. PMC maintains accruals for potential returns based on its historical experience. Research and development expenses. The Company expenses research and development...

  • Page 65
    ... value of the Company's stockâˆ'based awards to employees was estimated using the multiple option approach, recognizing forfeitures as they occur, assuming no expected dividends and using the following weighted average assumptions: Options 2003 ESPP 2003 2004 2002 2004 2002 Expected life (years...

  • Page 66
    ... per share amounts) 2004 Year Ended December 31 2003 2002 Net Income (loss), as reported Adjustments: Additional stockâˆ'based employee compensation expense under fair value based method for all awards, net of related tax effects Net loss, adjusted Basic net income (loss) per share, as reported...

  • Page 67
    .... In December 2004, the Financial Accounting Standard Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") 123 (revised 2004), "Sharedâˆ'Based Payment". Revised SFAS 123 addresses the requirements of an entity to measure the cost of employee services received in exchange...

  • Page 68
    ... to the decline in demand for our networking products and consequently recorded a restructuring charge of $19.9 million. The restructuring plan included the involuntary termination of 223 employees across all business functions, the consolidation of a number of facilities and the curtailment of...

  • Page 69
    ... industry, the Company implemented another corporate restructuring aimed at further reducing operating expenses in the first quarter of 2003. The restructuring included the termination of 175 employees and the closure of design centers in Maryland, Ireland and India. To date, PMC has recorded a 63

  • Page 70
    ... for the Company's products prompted the Company to assess its current inventory levels compared to sales forecasts for the next twelve months. The excess inventory charge, which was included in cost of revenues, was calculated in accordance with the Company's policy, which is based on inventory...

  • Page 71
    ... in the third quarter to partially fund the repurchase of $100 million face value of convertible subordinated notes. As a result of this sale, all debt investments were reclassified as availableâˆ'forâˆ'sale. The realized gain or loss on these sales was immaterial. The Company has classified its $74...

  • Page 72
    ... for one year. The Company recorded a gain of $8.6 million, excluding the escrowed portion of the proceeds. During 2004 we invested approximately $3.9 million in four professionally managed venture funds. During the third quarter of 2004, the Company sold three of these funds for net proceeds of...

  • Page 73
    ... 3.75% payable semiâˆ'annually and were convertible into an aggregate of approximately 6.5 million shares of PMC's common stock at any time prior to maturity at a conversion price of approximately $42.43 per share. The Company was permitted to redeem the notes at any time after August 19, 2004. NOTE...

  • Page 74
    .... During the year ended December 31, 2004 the Company sold its investments in professionally managed venture funds. As of December 31, 2003 the Company had committed to invest an additional $19.2 million (2002 âˆ' $38.1 million) in these funds. NOTE 10. Special Shares At December 31, 2004 and 2003...

  • Page 75
    ... rights for $0.001 per right. NOTE 12. Employee Benefit Plans Employee Stock Purchase Plan. In 1991, the Company adopted an Employee Stock Purchase Plan ("PMC ESPP") under Section 423 of the Internal Revenue Code. Under the PMC ESPP, the number of shares authorized to be available for issuance under...

  • Page 76
    ...2004: Options Outstanding Weighted Average Remaining Options Contractual Outstanding Life (years) Options Exercisable Weighted Average Exercise Price per Share Weighted Average Exercise Price per Share...Voluntary stock option exchange offer. On September 26, 2002, the Company completed an ...

  • Page 77
    ...the closing price of the Company's stock on the grant date. Employee Retirement Savings Plans. The Company sponsors a 401(k) retirement plan for its employees in the United States and similar plans for its employees in Canada and other countries. Employees can contribute a percentage of their annual...

  • Page 78
    ... to ownership change limitations provided by the Internal Revenue Code of 1986. The Company also has approximately $192.9 million of state tax loss carryforwards, which expire through 2024. The utilization of a portion of these state losses is also subject to ownership change limitations provided...

  • Page 79
    ... semiconductor devices and related technical service and support to equipment manufacturers for use in their communications and networking equipment. The nonâˆ'networking segment consisted of a single medical device. The Company is supporting this nonâˆ'networking product for existing customers, but...

  • Page 80
    ...âˆ'term assets. Geographic information about longâˆ'lived assets is based on the physical location of the assets. Year Ended December 31, 2003 (in thousands) 2004 2002 Net revenues United States Asia âˆ' excluding China Canada China Europe and Middle East Other foreign Total Longâˆ'lived assets...

  • Page 81
    (1) PMCâˆ'Sierra, Ltd. Special Shares are included in the calculation of basic weighted average common shares outstanding. NOTE 16. Comprehensive Income The components of comprehensive income, net of tax, are as follows: Year Ended December 31, 2003 (in thousands) 2004 2002 Net income (loss) ...

  • Page 82
    ... under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. Management's Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining...

  • Page 83
    ... To the Board of Directors of PMCâˆ'Sierra, Inc. We have audited management's assessment, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting, that PMCâˆ'Sierra, Inc. and subsidiaries (the Company) maintained effective internal control over financial...

  • Page 84
    ..., in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2004 of the Company and our report dated March 10, 2005 expressed an unqualified...

  • Page 85
    ...Item is incorporated by reference from the information set forth in the sections entitled "Election of Directors", "Code of Business Conduct and Ethics", "Executive Officers", and "Section 16(a) Beneficial Ownership Reporting Compliance" in our Proxy Statement for the 2005 Annual Stockholder Meeting...

  • Page 86
    ... connection with mergers and acquisitions we completed prior to 2001. The number of options that may be granted under the 2001 Plan equals (i) the number of shares reserved under the assumed stock option plans that were not subject to outstanding or exercised options plus (ii) the number of options...

  • Page 87
    ... Agreement effective August 9, 1995 Terms of PMCâˆ'Sierra, Ltd. Special Shares Preferred Stock Rights Agreement, as amended and restated as of July 27, 2001, by and between the Registrant and American Stock Transfer and Trust Company 1991 Employee Stock Purchase Plan, as amended 1994 Incentive...

  • Page 88
    ... by and between Chartered Semiconductor Manufacturing Ltd. and the Registrant. 10âˆ'Q 05/10/2000 Technology License Agreement, by and between Weitek Corporation and MIPS Computer Systems, Inc. Assignment Agreement, by and between Weitek Corporation and PMCâˆ'Sierra US, Inc. (formerly Quantum Effect...

  • Page 89
    ... Circle Partners II, L.L.C. and PMCâˆ'Sierra, Inc. Amendment for Purchase and Sale of Real Property between PMCâˆ'Sierra, Inc. and WB Mission Towers, L.L.C. Calculation of earnings per share (1) Statement of Computation of Ratio of Earnings to Fixed Charges Subsidiaries of the Registrant Consent...

  • Page 90
    (c) Financial Statement Schedules required by this item are listed on page 47 of this Annual Report on Form 10k. 84

  • Page 91
    ... the undersigned, thereunto duly authorized. PMCâˆ'SIERRA, INC. (Registrant) Date: March 10, 2005 /s/ Alan F. Krock Alan F. Krock Vice President, Finance (duly authorized officer) Chief Financial Officer and Principal Accounting Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each...

  • Page 92
    /s/ William Kurtz William Kurtz /s/ Frank Marshall Frank Marshall /s/ Jonathan Judge Jonathan Judge /s/ Lewis O. Wilks Lewis O. Wilks Director Director Director Director March 10, 2005 March 10, 2005 March 10, 2005 March 10, 2005 86

  • Page 93
    SCHEDULE II âˆ' Valuation and Qualifying Accounts Years ended December 31, 2004, 2003, and 2002 (in thousands) Charged to expenses or other accounts Balance at beginning of year Writeâˆ'offs Balance at end of year Allowance for doubtful accounts: 2004 2003 2002 Allowance for obsolete inventory ...

  • Page 94
    INDEX TO EXHIBITS Exhibit Number Description 12.1 21.1 23.1 31.1 31.2 32.1 32.2 Statement of Computation of Ratio of Earnings to Fixed Charges Subsidiaries of the Registrant Consent of Deloitte & Touche LLP Certification of Chief Executive Officer pursuant to Section 302 (a) of the Sarbanesâˆ'...

  • Page 95
    Exhibit 12.1 PMCâˆ'SIERRA, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) Year Ended December 31 (2) 2002 2004 2003 2001 2000 Earnings: Income (loss) before income taxes and before income from equity investees Fixed charges: Interest expense and amortization of debt issuance...

  • Page 96
    ...the laws of the United Kingdom, doing business only under its official name or under PMCâˆ'Sierra, Inc. 4. PMCâˆ'Sierra Ireland Limited, organized under the laws of the Ireland, doing business only under its official name or under PMCâˆ'Sierra, Inc. 5. PMCâˆ'Sierra US, Inc., organized under the laws...

  • Page 97
    ...âˆ'Sierra, Inc. and management's report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10âˆ'K of PMCâˆ'Sierra, Inc. for the year ended December 26, 2004. /s/ DELOITTE & TOUCHE LLP Independent Registered Public Accountants Vancouver, Canada...

  • Page 98
    Exhibit 31.1 CERTIFICATION I, Robert L. Bailey, certify that: 1. I have reviewed this annual report on Form 10âˆ'K of PMCâˆ'Sierra, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements ...

  • Page 99
    ... adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 10...

  • Page 100
    ....2 CERTIFICATION I, Alan F. Krock, certify that: 1. 2. I have reviewed this annual report on Form 10âˆ'K of PMCâˆ'Sierra, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light...

  • Page 101
    affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 10, 2005 /s/...

  • Page 102
    Exhibit 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS...in my capacity as an officer of PMCâˆ'Sierra, Inc. ("PMC"), that, to my knowledge, the Annual Report of PMC on Form 10âˆ'K for the annual period ended December 26, 2004, fully complies with the requirements of...

  • Page 103
    Exhibit 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS...in my capacity as an officer of PMCâˆ'Sierra, Inc. ("PMC"), that, to my knowledge, the Annual Report of PMC on Form 10âˆ'K for the annual period ended December 26, 2004, fully complies with the requirements of...