In accordance with regulations of Fair Disclosure, Pericom will continue to only provide guidance via its earnings release and its conference calls. The company will not provide further guidance or updates during the quarter, unless it does so via a press release.
Please note that we are reporting non-GAAP financial measures for net income, gross profit and operating expenses in addition to our GAAP financial results. Due to the PTI acquisition, we have a significant amount of non-cash and non-operating expense items included in the income statement, which are not reflective of the performance for our normal business operations. Aaron will discuss the financial performance for the quarter, and Alex will give his comments on the industry and on Pericom’s business. Then, Aaron will provide guidance for the third quarter of fiscal 2012. Aaron?
Thank you, Bob, and good afternoon, everyone. Our consolidated net revenues for the second quarter were $30.5 million, and decreased by 14% from the $35.3 million reported last quarter and decreased by 25% from the $40.7 million for the same period last year. Most of the sequential decline in revenue was due to PC, notebooks, and consumer end-market demand and also lower storage volume due to the Thailand flood which had a negative 3% impact on revenues.On a positive note, our networking and telecom revenue increased by 3% over last quarter. Sales by channel were, international distribution 63%, contract manufacturers 24%, OEMs 10%, and U.S. distribution 3%. Consolidated non-GAAP gross profit was $11.4 million for Q2, compared with $13.1 million last quarter and $14.8 million last year. Non-GAAP gross margin for the second quarter was 37.3%, and was up 40 basis points from last quarter’s 36.9% and 100 basis points higher than last year’s 36.3%. The sequential quarter gross margin improvement was a result of favorable product mix from less PC, storage and consumer shipments that have a lower gross margin percentage than our consolidated average. We remain on track to achieve our target gross margin range of 38% to 40% four to five quarters out although there could be some fluctuation along the way due to product, or end-market mix.