-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q0WXDDDEo/ZqKvBh2fvvCcMfhI8AYWiIzwx4DT5msFDV4+Bqf5lqMyGzaSRF4ZoV VgFxr2tLjIKJQFHcXqmyRg== 0000898430-00-003851.txt : 20001219 0000898430-00-003851.hdr.sgml : 20001219 ACCESSION NUMBER: 0000898430-00-003851 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001025 ITEM INFORMATION: FILED AS OF DATE: 20001218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APPLIED MICRO CIRCUITS CORP CENTRAL INDEX KEY: 0000711065 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942586591 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-23193 FILM NUMBER: 791100 BUSINESS ADDRESS: STREET 1: 6290 SEQUENCE DR CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194509333 MAIL ADDRESS: STREET 1: 6290 SEQUENCE DRIVE CITY: SAN DIEGO STATE: CA ZIP: 92121 8-K/A 1 0001.txt AMENDED FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K/A AMENDMENT TO CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 25, 2000 APPLIED MICRO CIRCUITS CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 000-23193 94-2586591 (Commission File No.) (IRS Employer Identification No.) 6290 SEQUENCE DRIVE SAN DIEGO, CALIFORNIA 92122 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (858) 450-9333 ________________________________________ 1 Item 7. Financial Statements and Exhibits. (a) Financial statements of business acquired. The audited financial statements of MMC Networks, Inc. for the years ended December 31, 1997, 1998 and 1999, are incorporated herein by reference to AMCC's Registration Statement on Form S-4 (No. 333-45660) filed with the Securities and Exchange Commission on September 12, 2000. The interim financial statements of MMC Networks Inc. are attached hereto as Exhibit 99.1 and are also incorporated herein by reference. 2 (b) Pro forma financial information AMCC AND MMC NETWORKS UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS The following unaudited pro forma combined condensed financial information gives effect to the merger of AMCC and MMC Networks using the purchase method of accounting. Effective June 8, 2000, AMCC acquired YuniNetworks in a transaction accounted for as a purchase. Accordingly, the historical balance sheet of AMCC as of September 30, 2000 includes the accounts of YuniNetworks as of that date, but the historical income statements of AMCC for the year ended March 31, 2000 and the six months ended September 30, 2000 do not include the results of operations of YuniNetworks prior to June 8, 2000. The unaudited pro forma combined condensed balance sheet is based on the individual historical balance sheets of AMCC and MMC Networks and has been prepared to reflect the acquisition by AMCC of MMC Networks as if the acquisition had occurred as of September 30, 2000. The unaudited pro forma combined condensed statement of operations for the year ended March 31, 2000 is based on the individual historical statements of operations of AMCC, YuniNetworks and MMC Networks and combines the results of operations of AMCC for the year ended March 31, 2000 with the results of operations for YuniNetworks for the period from October 8, 1999 (inception) through March 31, 2000 and the results of operations for MMC Networks for the year ended December 31, 1999 as if the YuniNetworks acquisition had occurred as of October 8, 1999 (the date of inception) and the acquisition of MMC Networks had occurred as of April 1, 1999. The unaudited pro forma combined condensed statement of operations for the six months ended September 30, 2000 is based on the individual historical statements of operations of AMCC, YuniNetworks and MMC Networks and combines the results of operations for AMCC for the six months ended September 30, 2000 with the results of operations for YuniNetworks for the period from April 1, 2000 through June 8, 2000 (the acquisition date) and the results of operations for MMC Networks for the six months ended September 30, 2000, as if both acquisitions had occurred as of the beginning of the period. The fiscal year ends of AMCC and YuniNetworks are March 31, and MMC Networks is December 31. The results of operations of MMC Networks for the three months ended March 31, 2000 are not reflected in the above pro forma results of operations. Revenues of MMC Networks for the excluded period were $12.6 million with a net loss of $400,000. The pro forma combined condensed financial information is presented for illustrative purposes only and is not necessarily indicative of the financial position or operating results that would have been achieved if the acquisitions had been completed as of the beginning of the periods presented, nor are they necessarily indicative of the future financial position or operating results of AMCC. The pro forma combined condensed financial information does not give effect to any cost savings or restructuring and integration costs that may result from the integration of AMCC's, YuniNetworks' and MMC Networks' operations. The costs related to restructuring and integration have not yet been determined, and AMCC expects to charge these costs to operations during the quarter incurred. The unaudited pro forma combined condensed financial information should be read in conjunction with the audited and unaudited financial statements and accompanying notes of AMCC included in AMCC's Annual Report on Form 10-K for the year ended March 31, 2000 and AMCC's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000, the audited financial statements and accompanying notes of YuniNetworks included in the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on May 19, 2000, the audited financial statements and accompanying notes of MMC Networks included in MMC Networks' Annual Report on Form 10-K for the year ended December 31, 1999, and the unaudited financial statements and accompanying notes of MMC Networks included elsewhere in this report. 3 AMCC AND MMC NETWORKS UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET At September 30, 2000 (in thousands)
MMC Pro Forma Pro Forma AMCC Networks Adjustments Notes Combined ---------- -------- ----------- ------ ---------- ASSETS ------ Current assets: Cash and cash equivalents.......... $ 79,224 $ 43,151 $ -- $ 122,375 Short-term investments-- available-for-sale... 962,752 34,591 -- 997,343 Accounts receivable, net of allowance..... 49,032 12,707 -- 61,739 Inventories........... 11,153 7,704 -- 18,857 Deferred income taxes................ -- 2,947 -- 2,947 Other current assets.. 14,932 3,117 -- 18,049 ---------- -------- ---------- ---------- Total current assets............. 1,117,093 104,217 -- 1,221,310 Property and equipment, net.................... 52,815 12,380 -- 65,195 Intangible assets....... 218,962 -- 4,007,111 (A) 4,226,073 Other assets............ 3,552 1,363 -- 4,915 ---------- -------- ---------- ---------- Total assets........ $1,392,422 $117,960 $4,007,111 $5,517,493 ========== ======== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY -------------------- Current liabilities: Accounts payable...... $ 16,803 $ 8,940 $ 48,567 (B) $ 74,310 Accrued payroll and related expenses..... 8,108 4,749 -- 12,857 Other accrued liabilities.......... 18,348 4,262 -- 22,610 Deferred revenue...... 4,147 -- -- 4,147 Deferred tax liability............ 1,154 -- 129,920 (M) 131,074 Current portion of long-term debt....... 1,443 -- -- 1,443 Current portion of capital lease obligations.......... 677 -- -- 677 ---------- -------- ---------- ---------- Total current liabilities........ 50,680 17,951 178,487 247,118 Deferred income taxes, long-term.............. 11,232 -- -- 11,232 Long-term debt, less current portion........ 2,865 -- -- 2,865 Long-term capital lease obligations, less current portion........ 1,371 -- -- 1,371 Stockholders' equity: Preferred stock....... -- -- -- -- Common stock.......... 2,532 29 385 (C)(D) 2,946 Additional paid-in capital.............. 1,272,588 77,681 4,419,106 (C)(D) 5,769,375 Deferred compensation, net.................. (46,483) -- (391,821) (E) (438,304) Accumulated other comprehensive income (loss)............... 488 (67) 67 (C) 488 Retained earnings (deficit)............ 97,149 22,413 (199,113) (C)(F) (79,551) Notes receivable from stockholders......... -- (47) -- (47) ---------- -------- ---------- ---------- Total stockholders' equity............. 1,326,274 100,009 3,828,624 5,254,907 ---------- -------- ---------- ---------- Total liabilities and stockholders' equity............. $1,392,422 $117,960 $4,007,111 $5,517,493 ========== ======== ========== ==========
See accompanying notes to the unaudited pro forma combined condensed financial information. 4 AMCC AND MMC NETWORKS UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS Year Ended March 31, 2000 (in thousands, except per share data)
AMCC YuniNetworks, MMC Networks 12 months Inc. 12 months ended Inception to ended March 31, March 31, December 31, Pro Forma Pro Forma 2000 2000 1999 Adjustments Notes Combined --------- ------------- ------------ ----------- ------ --------- Net revenues............ $172,352 $ -- $70,149 $ -- $ 242,501 Cost of revenues........ 50,218 -- 21,524 71,401 (I)(L) 143,143 -------- ------- ------- --------- --------- Gross profit............ 122,134 -- 48,625 (71,401) 99,358 Operating expenses: Research and development.......... 32,815 758 22,645 58,773 (L) 114,991 Selling, general and administrative....... 28,199 252 11,182 58,773 (L) 98,406 Amortization of intangible assets.... -- -- -- 637,829 (G)(H) 637,829 -------- ------- ------- --------- --------- Total operating expenses........... 61,014 1,010 33,827 755,375 851,226 -------- ------- ------- --------- --------- Operating income (loss)................. 61,120 (1,010) 14,798 (826,776) (751,868) Interest income, net.... 12,872 71 3,138 (3,181) (J) 12,900 -------- ------- ------- --------- --------- Income (loss) before income taxes........... 73,992 (939) 17,936 (829,957) (738,968) Provision for income taxes.................. 25,367 -- 6,099 (27,399) (K) 4,067 -------- ------- ------- --------- --------- Net income (loss)....... $ 48,625 $ (939) $11,837 $(802,558) $(743,035) ======== ======= ======= ========= ========= Basic earnings (loss) per share: Earnings (loss) per share................ $ 0.23 $ (0.10) $ 0.38 $ (2.88) ======== ======= ======= ========= Shares used in calculating basic earnings (loss) per share................ 215,640 9,526 31,065 (N) 258,146 ======== ======= ======= ========= Diluted earnings (loss) per share: Earnings (loss) per share................ $ 0.20 $ (0.10) $ 0.35 $ (2.88) ======== ======= ======= ========= Shares used in calculating diluted earnings (loss) per share................ 238,304 9,526 33,791 (N) 258,146 ======== ======= ======= =========
The above pro forma combined condensed statement of operations does not include an estimated $176.7 million in-process research and development charge to be recorded by AMCC in conjunction with the acquisition of MMC Networks for the estimated fair value of the in-process research and development of MMC Networks or $21.8 million of acquired in-process research and development which was recorded by AMCC at the closing of the YuniNetworks acquisition. See accompanying notes to the unaudited pro forma combined condensed financial information. 5 AMCC AND MMC NETWORKS UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS Six Months Ended September 30, 2000 (in thousands, except per share data)
AMCC MMC Networks 6 months ended YuniNetworks 6 months ended September 30, April 1, 2000- September 30, Pro Forma Pro Forma 2000 June 8, 2000 2000 Adjustments Notes Combined -------------- -------------- -------------- ----------- ------ --------- Net revenues...................... $171,195 $ -- $39,507 $ -- $ 210,702 Cost of revenues.................. 43,846 -- 11,007 35,700 (I)(L) 90,553 -------- ------- ------- --------- --------- Gross profit...................... 127,349 -- 28,500 (35,700) 120,149 Operating expenses: Research and development........ 34,643 1,880 17,397 29,387 (L) 83,307 Selling, general and administrative................. 25,391 627 8,189 29,387 (L) 63,594 Amortization of intangible assets......................... 10,847 -- -- 316,943 (G)(H) 327,790 Acquired in-process research and development.................... 25,400 -- -- -- 25,400 -------- ------- ------- --------- --------- Total operating expenses...... 96,281 2,507 25,586 375,717 500,091 -------- ------- ------- --------- --------- Operating income (loss)........... 31,068 (2,507) 2,914 (411,417) (379,942) Interest income, net.............. 25,742 35 2,187 (1,558) (J) 26,406 -------- ------- ------- --------- --------- Income (loss) before income taxes. 56,810 (2,472) 5,101 (412,975) (353,536) Provision for income taxes........ 29,800 -- 1,631 (14,419) (K) 17,012 -------- ------- ------- --------- --------- Net income (loss)................. $ 27,010 $(2,472) $ 3,470 $(398,556) $(370,548) ======== ======= ======= ========= ========= Basic earnings (loss) per share: Earnings (loss) per share....... $ 0.11 $ * $ 0.10 $ (1.28) ======== ======= ======= ========= Shares used in calculating basic earnings (loss) per share...... 245,376 * 33,119 (N) 289,401 ======== ======= ======= ========= Diluted earnings (loss) per share: Earnings (loss) per share....... $ 0.10 $ * $ 0.09 $ (1.28) ======== ======= ======= ========= Shares used in calculating diluted earnings (loss) per share...................... 268,480 * 36,988 (N) 289,401 ======== ======= ======= =========
- -------- * Not meaningful The above pro forma combined condensed statement of operations does not include an estimated $176.7 million in-process research and development charge to be recorded by AMCC in conjunction with the acquisition of MMC Networks for the estimated fair value of the in-process research and development of MMC Networks. See accompanying notes to the unaudited pro forma combined condensed financial information. 6 AMCC AND MMC NETWORKS NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS 1. Pro Forma Basis of Presentation and Adjustments The unaudited pro forma combined condensed financial information assumes the acquisition by AMCC of MMC Networks in a transaction accounted for as a purchase. The unaudited pro forma combined condensed balance sheet is based on the individual balance sheets of AMCC and MMC Networks and has been prepared to reflect the acquisition by AMCC of MMC Networks as if the acquisition had occurred as of September 30, 2000. Effective June 8, 2000, AMCC acquired YuniNetworks in a transaction accounted for as a purchase. Accordingly, the historical balance sheet of AMCC as of September 30, 2000 includes the accounts of YuniNetworks as of that date, but the historical income statements of AMCC for the year ended March 31, 2000 and the six months ended September 30, 2000 do not include the results of operations for YuniNetworks for the period prior to June 8, 2000. The unaudited pro forma combined condensed statement of operations for the year ended March 31, 2000 is based on the individual historical statements of operations of AMCC, YuniNetworks and MMC Networks and combines the results of operations of AMCC for the year ended March 31, 2000 with the results of operations for YuniNetworks for the period from October 8, 1999 (inception) through March 31, 2000 and the results of operations for MMC Networks for the year ended December 31, 1999 as if the YuniNetworks acquisition had occurred as of October 8, 1999 (the date of inception) and the acquisition of MMC Networks had occurred as of April 1, 1999. The unaudited pro forma combined condensed statements of operations for the six months ended September 30, 2000 is based on the individual historical statements of operations of AMCC, YuniNetworks and MMC Networks and combines the results of operations for AMCC for the six months ended September 30, 2000 with the results of operations for YuniNetworks for the period from April 1, 2000 through June 8, 2000 (the acquisition date) and the results of operations for MMC Networks for the six months ended September 30, 2000, as if both acquisitions had occurred as of April 1, 2000. Under the terms of the merger agreement, AMCC issued 1.238 shares of AMCC common stock for each outstanding common share of MMC Networks common stock. Based on the number of shares of MMC Networks common stock and options to purchase shares of MMC Networks common stock outstanding, AMCC issued 41,392,404 shares of AMCC common stock and assumed options to purchase 7,981,595 shares of AMCC common stock. 7 AMCC AND MMC NETWORKS NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS--(Cont.) Based on the consideration issued in the transaction the total purchase price is approximately $4.5 billion. AMCC is in the process of conducting an independent valuation of the tangible assets to be acquired in order to allocate the purchase price in accordance with Accounting Principle Bulletin Opinion No. 16. Subject to adjustments when the evaluation is updated, the purchase price was allocated as follows based upon management's best estimate of the tangible and intangible assets, including acquired technology and in-process research and development (in thousands): Current assets acquired.......................................... $ 104,217 Property and equipment........................................... 12,380 Other assets..................................................... 1,363 Notes receivable from stockholders............................... 47 In-process research and development.............................. 176,700 Developed core technology........................................ 291,700 Assembled workforce.............................................. 10,200 Trademarks/trade name............................................ 22,900 Goodwill......................................................... 3,682,311 Liabilities assumed.............................................. (17,951) Deferred tax liability........................................... (129,920) Liabilities for merger-related costs............................. (48,567) Deferred compensation............................................ 391,821 ---------- $4,497,201 ==========
2. Pro Forma Adjustments to Pro Forma Combined Condensed Financial Information (A) The residual amount of the purchase price over the net book value of the assets and liabilities assumed and in-process research and development charges have been allocated to intangible assets. The intangible assets consist of developed core technology, intellectual property, assembled workforce, trademarks and goodwill. (B) To increase the accrued expenses by $48.6 million for acquisition-related expenses such as investment banking, legal, accounting, registration and miscellaneous fees. (C) To eliminate the MMC Networks equity accounts. (D) To reflect the value of the shares of AMCC common stock and vested options issued in connection with the merger. (E) To record deferred compensation related to the unvested stock options of MMC Networks employees that will be assumed by AMCC in accordance with recently issued FASB Interpretation No. 44 ("FIN No. 44") of APB Opinion No. 25. Prior to the issuance of FIN No. 44 this would have been accounted for as additional purchase price and amortized over the life of the goodwill. (F) To reflect the charge for the MMC Networks in-process research and development of approximately $176.7 million. (G) To record amortization expense of the acquired intangibles related to the purchase of YuniNetworks based on a useful life of six years. (H) To record amortization expense of the acquired intangibles related to the purchase of MMC Networks based on useful lives of three to six years. 8 AMCC AND MMC NETWORKS NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS--(Cont.) (I) To record amortization expense of developed core technology acquired in the purchase of MMC Networks based on a useful life of five years. (J) To eliminate interest income which would not have been earned on the cash expended for the transactions. (K) To record tax benefits for the YuniNetworks' net loss which would have been absorbed by AMCC's taxable income, the reduction of interest income related to the cash paid in the transaction and to amortize a portion of the deferred tax liability set up in connection with the non-goodwill intangibles. (L) To record the amortization of deferred compensation for the unvested MMC employee stock options assumed by AMCC. (M) To record the estimated deferred tax liability on the non-goodwill intangible assets. (N) Reflects the shares of AMCC common stock used in computing earnings per share plus the shares of common stock issued in connection with the acquisitions of YuniNetworks and MMC Networks based on the conversion rates in the merger agreements, adjusted for the 100% stock dividend paid on October 30, 2000. 9 (c) Exhibits. 2.1 Agreement and Plan of Merger and Reorganization, dated as of August 28, 2000, by and among Applied Micro Circuits Corporation, Mercury Acquisition Corp. and MMC Networks, Inc. (1) 2.2 Form of Voting Agreement between Applied Micro Circuits Corporation and certain stockholders of MMC Networks, Inc. (2) *2.3 Press Release dated October 25, 2000 23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants. 99.1 The unaudited interim financial statements of MMC Networks for the three and nine months ended September 30, 2000. _________________________________________ * Previously filed as an exhibit to the Form 8-K filed on November 9, 2000. (1) Incorporated by reference to Exhibit 99.1 filed with the Company's Current report on Form 8-K dated August 28, 2000. (2) Incorporated by reference to Exhibit 99.2 filed with the Company's Current report on Form 8-K dated August 28, 2000. 10 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Applied Micro Circuits Corporation Dated: December 15, 2000 By: /s/ William E. Bendush ------------------------------------------ William E. Bendush Vice President, Finance and Administration and Chief Financial Officer (Principal Accounting Officer and Officer duly authorized to sign off this report on behalf of the registrant) 11 EX-23.1 2 0002.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-48914); Form S-8 (No. 333-48912); Form S-3 (No. 333-35404); Form S-3/A (No. 333-46586); Form S-8 (No. 333-35408); Form S-8 (No. 333-40905); Form S-8 (No. 333-41572); Form S-8 (No. 333-46584); Form S-8 (No. 333-47185); Form S-8 (No. 333-74787); Form S-8 (No. 333-76185); Form S-8 (No. 333-76767); and Form S-8 (No. 333-92507) of Applied Micro Circuits Corporation of our report dated January 19, 2000, relating to the financial statements of MMC Networks which appears in the Applied Micro Circuits Corporation Registration Statement on Form S-4 (No 333-45660) which is incorporated by reference in this current report on Form 8-K/A of Applied Micro Circuits Corporation. PricewaterhouseCoopers LLP San Jose, California December 15, 2000 EX-99.1 3 0003.txt MMC, INC. FINANCIAL STATEMENTS EXHIBIT 99.1 INDEX TO FINANCIAL STATEMENTS Page ---- MMC Networks, Inc. Interim Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets at September 30, 2000 (unaudited) and December 31, 1999.................................... F-2 Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2000 and 1999.............. F-3 Condensed Consolidated Statements of Cash Flow (unaudited) for the nine months ended September 30, 2000 and 1999........................ F-4 Notes to the Condensed Consolidated Financial Statements (unaudited)... F-5 F-1 MMC NETWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)
Sept. 30, Dec. 31, 2000 1999 (unaudited) --------- ---------- ASSETS ------ Current assets: Cash and cash equivalents............................. $ 43,151 $13,484 Short-term investments................................ 34,591 58,511 Accounts receivable, net of allowances of $420 and $422 ............................................... 12,707 6,358 Inventories........................................... 7,704 3,216 Prepaid expenses and other current assets............. 6,064 6,374 -------- ------- Total current assets................................ 104,217 87,943 Property and equipment, net............................. 12,380 8,222 Other assets............................................ 1,363 230 -------- ------- $117,960 $96,395 ======== ======= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable...................................... $ 8,940 $ 4,725 Accrued expenses...................................... 9,011 3,710 -------- ------- Total current liabilities........................... 17,951 8,435 -------- ------- Stockholders' equity: Preferred Stock: $0.001 par value; 10,000 shares authorized; no shares issued or outstanding.......... -- -- Common Stock: $0.001 par value; 100,000 shares authorized; 33,267 and 31,871 shares issued and outstanding.......................................... 29 28 Additional paid-in capital............................ 77,681 68,771 Notes receivable from stockholders.................... (47) (47) Retained earnings..................................... 22,413 19,343 Accumulated other comprehensive loss.................. (67) (135) -------- ------- Total stockholders' equity.......................... 100,009 87,960 -------- ------- $117,960 $96,395 ======== =======
The accompanying notes are an integral part of these condensed consolidated financial statements. F-2 MMC NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands) (unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2000 1999 2000 1999 ------- ------- ------- -------- Revenues..................................... $22,477 $23,149 $52,146 $58,582 Cost of revenues............................. 5,994 6,868 14,854 17,336 ------- ------- ------- ------- Gross profit............................. 16,483 16,281 37,292 41,246 ------- ------- ------- ------- Gross profit as a percent of revenue......... 73.3% 70.3% 71.5% 70.4% Operating expenses: Research and development................... 9,484 6,360 24,566 16,070 Selling, general and administrative........ 4,452 3,136 11,401 8,211 ------- ------- ------- ------- Total operating expenses................. 13,936 9,496 35,967 24,281 Operating income............................. 2,547 6,785 1,325 16,965 Interest income, net....................... 1,137 844 3,187 2,189 ------- ------- ------- ------- Income before income taxes................... 3,684 7,629 4,512 19,154 Provision for income taxes................... 1,178 2,745 1,442 6,890 ------- ------- ------- ------- Net income................................... $ 2,506 $ 4,884 $ 3,070 $12,264 ======= ======= ======= ======= Basic income per share....................... $ 0.08 $ 0.16 $ 0.09 $ 0.40 ======= ======= ======= ======= Shares used to compute basic income per share....................................... 33,119 31,417 32,694 30,821 ======= ======= ======= ======= Diluted income per share..................... $ 0.07 $ 0.14 $ 0.08 $ 0.36 ======= ======= ======= ======= Shares used to compute diluted income per share....................................... 36,988 35,283 36,136 34,456 ======= ======= ======= =======
The accompanying notes are an integral part of these condensed consolidated financial statements. F-3 MMC NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (in thousands) (unaudited)
Nine Months Ended September 30, ---------------------- 2000 1999 ---------- ---------- Cash flows from operating activities: Net income...................................................... $ 3,070 $ 12,264 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization................................. 3,783 2,300 Tax benefit from the exercise of stock options................ -- 4,798 Changes in assets and liabilities: Accounts receivable......................................... (6,350) (1,602) Inventories................................................. (4,488) (1,658) Prepaid expenses and other current assets................... 310 (630) Accounts payable............................................ 4,215 1,832 Accrued expenses............................................ 5,301 (1,471) ---------- ---------- Net cash provided by operating activities................. 5,841 15,833 ---------- ---------- Cash flows from investing activities: Sale (purchase) of short-term investments....................... 23,988 (21,439) Acquisition of property and equipment........................... (7,940) (3,780) Investment in convertible debenture............................. (1,000) -- Other assets.................................................... (133) -- ---------- ---------- Net cash provided by (used for) investing activities...... 14,915 (25,219) ---------- ---------- Cash flows from financing activities: Proceeds from issuance of Common Stock, net..................... 8,911 4,931 Principal payments on capital lease obligations................. -- (234) ---------- ---------- Net cash provided by financing activities................. 8,911 4,697 ---------- ---------- Net increase (decrease) in cash and cash equivalents.............. 29,667 (4,689) Cash and cash equivalents at beginning of period.................. 13,484 31,452 ---------- ---------- Cash and cash equivalents at end of period........................ $ 43,151 $ 26,763 ========== ========== Supplemental disclosure: Cash paid for interest.......................................... $ -- $ 29 Cash paid for income taxes...................................... $ 64 $ 3,377
The accompanying notes are an integral part of these condensed consolidated financial statements. F-4 MMC NETWORKS, INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1--BASIS OF PRESENTATION The accompanying interim condensed consolidated financial statements and notes to the interim condensed consolidated financial statements of MMC Networks, Inc. ("MMC") are unaudited. In the opinion of management, these statements and notes have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial position, results of operations and cash flows for MMC for the periods presented. Results for the interim periods presented are not necessarily indicative of results for the entire year. The accompanying interim condensed consolidated financial statements and notes do not include certain information and footnote disclosures normally required under generally accepted accounting principles. Therefore, these condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in MMC Networks' Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1999. NOTE 2--EARNINGS PER SHARE The computations of basic and diluted earnings per share for the periods presented are as follows:
Three Nine Months Ended Months Ended --------------------------- --------------------------- September 30, September 30, September 30, September 30, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- (in thousands, except per share data) Net income available to common stockholders.......................... $2,506 $4,884 $3,070 $12,264 ====== ====== ====== ======= Shares used to compute basic income per share................................. 33,119 31,417 32,694 30,821 Effect of dilutive securities: Stock options........................ 3,869 3,866 3,442 3,635 ------ ------ ------ ------ Shares used to compute diluted income per share............................. 36,988 35,283 36,136 34,456 ====== ====== ====== ====== Basic income per share................. $ 0.08 $ 0.16 $ 0.09 $ 0.40 ====== ====== ====== ====== Diluted income per share............... $ 0.07 $ 0.14 $ 0.08 $ 0.36 ====== ====== ====== ======
NOTE 3--COMPOSITION OF INVENTORIES
September 30, December 31, 2000 1999 ------------- ------------ (in thousands) Inventories: Work in process...................................... $4,243 $1,541 Finished goods....................................... 3,461 1,675 ------ ------ $7,704 $3,216 ====== ======
F-5 MMC NETWORKS, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (4) Subsequent Events On October 25, 2000, the Company completed the merger with Applied Micro Circuits Corporation ("AMCC"). Under the terms of the merger agreement, AMCC issued 1.238 shares of AMCC common stock for each outstanding share of the Company stock. Based on the number of shares of Company common stock and options to purchase shares of Company common stock outstanding, AMCC issued 41,392,404 shares of AMCC stock and options to purchase 7,981,595 shares of AMCC's stock. F-6 -----END PRIVACY-ENHANCED MESSAGE-----