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| Applied Micro Circuits Corporation Announces First Quarter Fiscal 2009 Financial Results in Line With Revenue Guidance |
Selected Q1 Highlights * Q1 net revenues of $74.1 million, up 48% year over year and 4% sequentially. * Q1 GAAP net loss of $5.2 million or $(0.08) per share. * Q1 non-GAAP net income increased 29% sequentially to $7.7 million or $0.12 per share. * Total short and long term cash increased to approximately $200 million. * Signed major IP monetization contract for non-core patents valued at $33 million. * AMCC doubled the performance of its storage processors by introducing the 1.2GHz PowerPC 460SX. * AMCC announced the 1.4GHz PowerPC 460GTx for networking, wireless infrastructure, and general purpose control applications. * Announced next generation Ethernet WDM solutions with BTI Systems. SUNNYVALE, Calif., July 30, 2008 (PRIME NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) today reported its financial results for the first quarter of fiscal 2009. Net revenues for the first quarter of fiscal 2009 were $74.1 million compared to $71.5 million reported in the fourth quarter of fiscal 2008, representing a sequential growth of 4% and a growth of 48% over the $50.1 million reported in the first quarter of fiscal 2008. The net loss on a generally accepted accounting principles (GAAP) basis for the first quarter of fiscal 2009 was $5.2 million or $(0.08) per share. The first quarter GAAP net loss compares with a net loss of $86.3 million or $(1.33) per share for the fourth quarter of fiscal 2008 and a net loss of $16.4 million or $(0.23) per share for the first quarter of fiscal 2008. The non-GAAP net income for the first quarter of fiscal 2009 was $7.7 million or $0.12 per share, compared to the non-GAAP net income of $6.0 million or $0.09 per share in the fourth quarter of fiscal 2008. Non-GAAP net loss for the first quarter of fiscal 2008 was $7.3 million or $(0.10) per share. Non-GAAP net income as a percentage of revenue expanded from 8.4 percent in the fourth quarter to 10.4 percent in the first quarter. "I am pleased with our financial results for the June quarter. Our revenue growth was at the upper end of our guidance. We expect revenues to further expand in the September quarter. Our product cycles remain strong and are improving," said Kambiz Hooshmand, president and chief executive officer. Bob Gargus, chief financial officer commented, "We continued our focus on profitability, our non-GAAP gross margin improved to 58.1 percent of revenue from 55.5 percent of revenue last quarter while we maintained solid expense control. We were cash flow positive and our asset management -- particularly inventory, continues to improve. Overall a very solid quarter and we are definitely moving in the right direction." AMCC reports its financial results in accordance with GAAP and also provides additional financial data that have not been prepared in accordance with GAAP. The non-GAAP results and other financial measures reported by the Company exclude certain items that are required by GAAP, such as restructuring charges, amortization of purchased intangibles, stock-based compensation charges, impairment of goodwill, strategic investment written off, other than temporary impairment on investments, tax provision related to the creation of deferred tax liability relating to a prior asset purchase acquisition transaction, payroll tax on certain stock option exercises and expenses related to stock option investigation and other litigation. Expenses related to stock option investigation consist primarily of fees paid to professional service firms in connection with the Company's internal investigation of historical stock option grant practices and the resulting restatement of the Company's financial statements, the investigations by the Securities and Exchange Commission and the U.S. Attorney's office arising from the internal investigation and the defense of derivative lawsuits arising from the Company's internal investigation and other litigation relates to an accrual made for a potential litigation settlement. Income taxes are adjusted to an estimated non-GAAP effective tax rate. These non-GAAP measures are not a substitute for GAAP measures and may not be consistent with the presentation used by other companies. The Company uses the non-GAAP financial measures to evaluate and manage its operations. The Company is providing this information to allow investors to perform additional financial analysis and because it is consistent with the financial models and estimates published by analysts who follow the Company. The attached schedule reconciles non-GAAP results and other financial measures reported by the Company with the most directly comparable GAAP financial measures. For More Information AMCC management will be holding a conference call today, July 30, 2008, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss additional details regarding the Company's performance for the first quarter of fiscal 2009 and to provide guidance for the second quarter of fiscal 2009. You may access the conference call via any of the following: Teleconference: 719-325-4845 Conference ID: 9506474 Web Broadcast: http://investor.amcc.com/events.cfm Replay: 719-457-0820 (available through August 6, 2008) AMCC Overview AMCC is a global leader in network and embedded Power Architecture processing, optical transport and storage solutions. Our products enable the development of converged IP-based networks offering high-speed secure data, high-definition video and high-quality voice for carrier, metropolitan, access and enterprise applications. AMCC provides networking equipment vendors with industry-leading network and communications processing, Ethernet, SONET, OTN and switch fabric solutions. AMCC's 3ware SAS and SATA RAID product families deliver cost-effective, high-performance, high-capacity storage for enterprises and consumers worldwide for applications from the desktop to the data center. AMCC's corporate headquarters are located in Sunnyvale, California. Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our web site at http://www.amcc.com. AMCC and 3ware are registered trademarks of Applied Micro Circuits Corporation. The PowerPC name and logo are registered trademarks of IBM Corporation and used under license therefrom. All other trademarks are the property of their respective owners. This news release contains forward-looking statements that reflect the Company's current view with respect to future events and financial performance, including statements regarding backlog and future revenues, and profitability. These forward-looking statements are only predictions based on current information and expectations and are subject to certain risks and uncertainties, including, but not limited to, customer demand for the Company's products, the businesses of the Company's major customers, reductions, rescheduling or cancellation of orders by the Company's customers, successful and timely development of products, market acceptance of new products, and general economic conditions. More information about potential factors that could affect the Company's business and financial results is included in the "Risk Factors" set forth in the Company's Annual Report on Form 10-K for the year ended March 31, 2007, and the Company's other filings with the Securities and Exchange Commission. Actual results could differ materially, as a result of such factors, from those set forth in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the issuance of this press release.
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
-------- --------
June 30, March 31,
ASSETS 2008 2008
-------- --------
Current assets:
Cash, cash equivalents and short-term
investments $194,408 $142,889
Accounts receivable, net 29,433 28,800
Inventories 33,928 37,966
Other current assets 10,646 11,340
-------- --------
Total current assets 268,415 220,995
Marketable securities 5,186 51,919
Property and equipment, net 27,726 25,995
Goodwill 264,130 264,130
Purchased intangibles 50,124 56,025
Other assets 13,843 13,783
-------- --------
Total assets $629,424 $632,847
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 24,366 $ 25,518
Other current liabilities 21,533 22,659
-------- --------
Total current liabilities 45,899 48,177
Deferred tax liability 4,178 3,958
Stockholders' equity 579,347 580,712
-------- --------
Total liabilities and stockholders' equity $629,424 $632,847
======== ========
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
------------------------------
June 30, March 31, June 30,
2008 2008 2007
------------------------------
Net revenues $ 74,060 $ 71,534 $ 50,135
Cost of revenues 35,850 36,531 26,498
-------- -------- --------
Gross profit 38,210 35,003 23,637
Operating expenses:
Research and development 23,481 22,892 25,482
Selling, general and administrative 16,613 15,869 16,063
Amortization of purchased intangibles 1,320 1,320 1,345
Impairment of goodwill -- 71,494 --
Restructuring charges (258) 1,516 (32)
Litigation settlement -- 1,125 --
Option investigation related
expenses, net 347 1,363 292
-------- -------- --------
Total operating expenses 41,503 115,579 43,150
-------- -------- --------
Operating loss (3,293) (80,576) (19,513)
Interest and other (expense)
income, net (1,327) (1,551) 3,076
-------- -------- --------
Loss before income taxes (4,620) (82,127) (16,437)
Income tax expense (benefit) 554 4,182 (17)
-------- -------- --------
Net loss $ (5,174) $(86,309) $(16,420)
======== ======== ========
Basic and diluted loss per share:
Loss per share $ (0.08) $ (1.33) $ (0.23)
======== ======== ========
Shares used in calculating basic
and diluted loss per share 64,864 64,886 70,414
======== ======== ========
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS)
(in thousands, except per share data)
(unaudited)
Three Months Ended
------------------------------
June 30, March 31, June 30,
2008 2008 2007
------------------------------
GAAP net loss $ (5,174) $(86,309) $(16,420)
Adjustments:
Stock-based compensation charges 3,208 3,078 2,620
Amortization of purchased intangibles 5,901 5,903 6,036
Impairment of goodwill -- 71,494 --
Restructuring charges (258) 1,516 (32)
Other than temporary
investment impairment 3,393 836 --
Impairment of strategic investment -- 3,000 --
Payroll taxes on certain stock
option exercises -- -- 2
Litigation settlement -- 1,125 --
Option investigation related
expenses, net 347 1,363 292
Income tax adjustments 315 3,996 209
-------- -------- --------
Total GAAP to Non-GAAP adjustments 12,906 92,311 9,127
-------- -------- --------
Non-GAAP net income (loss) $ 7,732 $ 6,002 $ (7,293)
======== ======== ========
Diluted income (loss) per share $ 0.12 $ 0.09 $ (0.10)
======== ======== ========
Shares used in calculating diluted
income (loss) per share 65,104 65,039 70,414
======== ======== ========
Income (loss) per share:
GAAP income (loss) per share $ (0.08) $ (1.33) $ (0.23)
GAAP to non-GAAP adjustments 0.20 1.42 0.13
-------- -------- --------
Non-GAAP income (loss) per share $ 0.12 $ 0.09 $ (0.10)
======== ======== ========
Reconciliation of shares used in
calculating the non-GAAP income per
share:
Shares used in calculating the
basic and diluted income(loss) per
share 64,864 64,886 70,414
Adjustment for dilutive securities 240 153 --
-------- -------- --------
Non-GAAP shares used in the
EPS calculation 65,104 65,039 70,414
======== ======== ========
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
(in thousands)
(unaudited)
The following schedule reconciles selected line items from the
GAAP basis statements of operations to the non-GAAP statements
of operations:
Three Months Ended
------------------------------
June 30, March 31, June 30,
2008 2008 2007
------------------------------
GROSS PROFIT:
GAAP gross profit $ 38,210 $ 35,003 $ 23,637
Amortization of purchased intangibles 4,581 4,583 4,691
Stock-based compensation expense 214 135 72
-------- -------- --------
Non-GAAP gross profit $ 43,005 $ 39,721 $ 28,400
======== ======== ========
OPERATING EXPENSES:
GAAP operating expenses $ 41,503 $115,579 $ 43,150
Amortization of purchased intangibles (1,320) (1,320) (1,345)
Impairment of goodwill -- (71,494) --
Stock-based compensation expense (2,994) (2,943) (2,548)
Restructuring charges 258 (1,516) 32
Payroll taxes on certain stock
option exercises -- -- (2)
Litigation settlement -- (1,125) --
Option investigation related
expenses, net (347) (1,363) (292)
-------- -------- --------
Non-GAAP operating expenses $ 37,100 $ 35,818 $ 38,995
======== ======== ========
INTEREST AND OTHER INCOME, NET
GAAP interest and other (expense)
income, net $ (1,327) $ (1,551) $ 3,076
Other than temporary investment
impairment 3,393 836 --
Impairment of strategic investment -- 3,000 --
-------- -------- --------
Non-GAAP interest and other
income, net $ 2,066 $ 2,285 $ 3,076
======== ======== ========
INCOME TAX EXPENSE (BENEFIT):
GAAP income tax expense (benefit) $ 554 $ 4,182 $ (17)
Income tax adjustments (315) (3,996) (209)
-------- -------- --------
Non-GAAP income tax expense (benefit) $ 239 $ 186 $ (226)
======== ======== ========
RESEARCH AND DEVELOPMENT
GAAP research and development $ 23,481 $ 22,892 $ 25,482
Stock-based compensation expense (1,337) (1,349) (1,055)
Payroll taxes on certain stock
option exercises -- -- (2)
-------- -------- --------
Non-GAAP research and development $ 22,144 $ 21,543 $ 24,425
======== ======== ========
SELLING, GENERAL AND ADMINISTRATIVE
GAAP selling, general and
administrative $ 16,613 $ 15,869 $ 16,063
Stock-based compensation expense (1,657) (1,594) (1,493)
-------- -------- --------
Non-GAAP selling, general
and administrative $ 14,956 $ 14,275 $ 14,570
======== ======== ========
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
($ in thousands)
(unaudited)
Three Months Ended
June 30,
-------------------
2008 2007
-------- --------
Operating activities:
Net loss $ (5,174) $(16,420)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities
Depreciation and amortization 1,742 1,633
Amortization of purchased intangibles 5,901 6,036
Stock-based compensation expense :
Stock options 2,110 2,339
Restricted stock units 1,098 281
Impairment of marketable securities 3,393 --
Net gain on disposal of property 29 (6)
Changes in operating assets and liabilities:
Accounts receivable (633) 10,848
Inventories 4,038 (3,548)
Other assets 634 573
Accounts payable (1,152) (8,783)
Accrued payroll and other accrued liabilities (1,475) (1,802)
Deferred tax liability 220 --
Deferred revenue 349 53
-------- --------
Net cash provided by (used for)
operating activities 11,080 (8,796)
Investing activities:
Proceeds from sales and maturities
of investments 138,248 118,105
Purchases of investments (135,162) (112,237)
Purchase of property, equipment
and other assets (3,502) (1,097)
Proceeds from sale of property, equipment
and other assets -- 7
-------- --------
Net cash provided by (used for)
investing activities (416) 4,778
Financing activities:
Proceeds from issuance of common stock 78 599
Open market repurchases of Company stock -- (9,138)
Funding of structured stock
repurchase agreements -- (10,000)
Other (109) (172)
-------- --------
Net cash used for financing activities (31) (18,711)
-------- --------
Net decrease in cash and cash equivalents 10,633 (22,729)
Cash and cash equivalents at
beginning of the period 42,689 51,595
-------- --------
Cash and cash equivalents at
end of the period $ 53,322 $ 28,866
======== ========
CONTACT: Applied Micro Circuits Corporation
Investor Relations:
Bob Gargus
(408) 542-8752
bgargus@amcc.com
Media:
Gilles Garcia
(408) 542-8687
ggarcia@amcc.com
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