EX-99.1 2 f50330exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
FOR ADDITIONAL INFORMATION:
     
Investor Relations Contact:
  Media Contact:
 
    
Applied Micro Circuits Corporation
Bob Gargus
Phone: (408) 542-8752
E-Mail: bgargus@amcc.com
  Applied Micro Circuits Corporation
Gilles Garcia
Phone: (408) 542-8687
E-Mail: ggarcia@amcc.com
 
    
 
Thursday, October 30, 2008
Company Press Release
APPLIED MICRO CIRCUITS CORPORATION REPORTS
SECOND QUARTER FISCAL 2009 FINANCIAL RESULTS
Second Quarter Revenues Increased 32% Year-over-Year
SUNNYVALE, Calif., —October 30, 2008—Applied Micro Circuits Corporation [NASDAQ: AMCC] today reported its financial results for the second quarter of fiscal 2009 ending September 30th, 2008.
  •   Q2 net revenues of $76.9 million, up 32% year over year and 4% sequentially.
 
  •   Q2 GAAP net loss of $2.3 million or $(0.04) per share.
 
  •   Q2 non-GAAP net income of $10.3 million or $0.16 per share up 33% sequentially.
 
  •   Total short and long term cash was approximately $201 million.
 
  •   AMCC announced Pemaquid S19258 OTN 10Gbps framer/mapper shipping in production volume—fastest time to revenue product for the company and design wins in more than 20 major OEM platforms.
 
  •   AMCC’s SAS product, 9690SA-4I, was given the “Best in Storage” award by Network Products Guide.
 
  •   AMCC disclosed several customers using its 10Gbps PHY portfolio, like Netxen, MergeOptics, Mitel-Teleoptix, Civcom and technology partners like Avago Technologies and Gennum.
Net revenues for the second quarter of fiscal 2009 were $76.9 million compared to $74.1 million in the first quarter of fiscal 2009, representing a sequential growth of 4% and a growth of 32% over the $58.2 million reported in the second quarter of fiscal 2008. Revenues for the first six

 

 

months were $151.0 million compared to $108.3 million for the comparable period last year, a 39% increase.
The net loss on a generally accepted accounting principles (GAAP) basis for the second quarter of fiscal 2009 was $2.3 million or $(0.04) per share. The second quarter GAAP net loss compares with a net loss of $5.2 million or $(0.08) per share for the first quarter of fiscal 2009 and a net loss of $8.1 million or $(0.12) per share for the second quarter of fiscal 2008. Year to date, GAAP net loss was $7.5 million or $(0.12) per share compared to $24.5 million or $(0.35) per share for the first six months of fiscal year 2008.
The non-GAAP net income for the second quarter of fiscal 2009 was $10.3 million or $0.16 per share, compared to the non-GAAP net income of $7.7 million or $0.12 per share in the first quarter of fiscal 2009 and a net loss of $3.0 million or $(0.04) per share for the second quarter of fiscal 2008. Year to date, non-GAAP net income was $18.0 million or $0.28 per share compared to non-GAAP net loss of $10.3 million or $(0.15) per share for the first six months of fiscal 2008.
“I am pleased we were able to execute according to plan though macro economic conditions continued to worsen through the quarter. We expect a negative impact to our business for the next one to two quarters after which we remain optimistic given our strong product cycles and design win pipeline. In the interim, we continue to focus on implementing our growth strategies.” said Kambiz Hooshmand, president and chief executive officer.
Bob Gargus, chief financial officer commented, “This was a solid quarter financially. We were cash flow positive for the fourth straight quarter and our non-GAAP profitability improved as a percent of revenue for the fifth straight quarter. With non-GAAP operating income at 10% of revenue and EBITDA above 14% of revenue, we are clearly demonstrating our ability to leverage incremental revenue growth to the bottom line. We will continue to focus and execute on the financial fundamentals despite the challenging economic environment.”
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 and gain on renegotiated design tool agreement, 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.
AMCC management will be holding a conference call today, October 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 second quarter of fiscal 2009 and to provide guidance for the third quarter of fiscal 2009. You may access the conference call via any of the following:
     
Teleconference:
Conference ID:
Web Broadcast:
Replay:
  719-325-4916
4222506
http://investor.amcc.com/events.cfm
719-457-0820 (available through November 6, 2008)
AMCC Overview
AMCC is a global leader in energy efficient sustainable solutions to Process, Transport, and Store information for the next generation of internet data center and carrier central office. AMCC is a leader in high speed signal processing, IP & Ethernet packet processing, and storage controllers and processors. AMCC’s patented innovations in high speed mixed signal, Forward Error Correction, RAID, and packet processing provide high value solutions.
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.
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, 2008, 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.
-Financial Tables Follow-

 

 

APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
                 
    September 30,     March 31,  
    2008     2008  
ASSETS
                
 
                
Current assets:
                
Cash, cash equivalents and short-term investments
   $ 195,648     $ 142,889  
Accounts receivable, net
     31,899       28,800  
Inventories
     34,481       37,966  
Other current assets
     9,400       11,340  
 
            
Total current assets
     271,428       220,995  
Marketable securities
     5,436       51,919  
Property and equipment, net
     27,456       25,995  
Goodwill
     264,130       264,130  
Purchased intangibles
     44,221       56,025  
Other assets
     14,673       13,783  
 
            
Total assets
   $ 627,344     $ 632,847  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 23,459     $ 25,518  
Other current liabilities
     22,526       22,659  
 
            
Total current liabilities
     45,985       48,177  
Deferred tax liability
     4,397       3,958  
Stockholders’ equity
     576,962       580,712  
 
            
Total liabilities and stockholders’ equity
   $ 627,344     $ 632,847  
 
            

 

 

APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
                                         
    Three Months Ended     Six Months Ended  
    September 30,     June 30,     September 30,     September 30,
    2008     2008     2007     2008     2007  
         
 
                                        
Net revenues
   $ 76,931     $ 74,060     $ 58,210     $ 150,991     $ 108,345  
Cost of revenues
     35,981       35,850       30,328       71,831       56,826  
 
                              
Gross profit
     40,950       38,210       27,882       79,160       51,519  
Operating expenses:
                                        
Research and development
     24,461       23,481       24,480       47,942       49,962  
Selling, general and administrative
     16,334       16,613       15,850       32,947       31,913  
Amortization of purchased intangibles
     1,320       1,320       1,336       2,640       2,681  
Restructuring charges
     140       (258 )     1,376       (118 )     1,344  
Litigation settlement
     130       —       —       130       —  
Option investigation related expenses, net
     (184 )     347       209       163       501  
 
                              
Total operating expenses
     42,201       41,503       43,251       83,704       86,401  
 
                              
Operating loss
     (1,251 )     (3,293 )     (15,369 )     (4,544 )     (34,882 )
Interest and other (expense) income, net
     (550 )     (1,327 )     6,906       (1,877 )     9,982  
 
                              
Loss before income taxes
     (1,801 )     (4,620 )     (8,463 )     (6,421 )     (24,900 )
Income tax expense (benefit)
     512       554       (410 )     1,066       (427 )
 
                              
Net loss
   $ (2,313 )   $ (5,174 )   $ (8,053 )   $ (7,487 )   $ (24,473 )
 
                              
 
                                        
Basic and diluted loss per share:
                                        
Loss per share
   $ (0.04 )   $ (0.08 )   $ (0.12 )   $ (0.12 )   $ (0.35 )
 
                              
Shares used in calculating basic and diluted loss per share
     65,150       64,864       68,783       65,007       69,599  
 
                              

 

 

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     Six Months Ended  
    September 30,     June 30,     September 30,     September 30,
    2008     2008     2007     2008     2007  
 
                                        
GAAP net loss
   $ (2,313 )   $ (5,174 )   $ (8,053 )   $ (7,487 )   $ (24,473 )
Adjustments:
                                        
Stock-based compensation charges
     2,997       3,208       3,297       6,205       5,917  
Amortization of purchased intangibles
     5,903       5,901       5,919       11,804       11,955  
Restructuring charges
     140       (258 )     1,376       (118 )     1,344  
Other than temporary investment impairment
     3,444       3,393       —       6,837       —  
Realized gain on sale of strategic equity investment
     —       —       (4,649 )     —       (4,649 )
Gain on renegotiated design tool agreement
     —       —       (749 )     —       (749 )
Payroll taxes on certain stock option exercises
     —       —       1       —       3  
Litigation settlement
     130       —       —       130       —  
Option investigation related expenses, net
     (184 )     347       209       163       501  
Income tax adjustments
     193       315       (318 )     508       (109 )
 
                              
Total GAAP to Non-GAAP adjustments
     12,623       12,906       5,086       25,529       14,213  
 
                              
 
                                        
Non-GAAP net income (loss)
   $ 10,310     $ 7,732     $ (2,967 )   $ 18,042     $ (10,260 )
 
                              
 
                                        
Diluted income (loss) per share
   $ 0.16     $ 0.12     $ (0.04 )   $ 0.28     $ (0.15 )
 
                              
 
                                        
Shares used in calculating diluted income (loss) per share
     65,369       65,104       68,783       65,237       69,599  
 
                              
 
                                        
Income (loss) per share:
                                        
GAAP income (loss) per share
   $ (0.04 )   $ (0.08 )   $ (0.12 )   $ (0.12 )   $ (0.35 )
GAAP to non-GAAP adjustments
     0.20       0.20       0.08       0.40       0.20  
 
                              
Non-GAAP income (loss) per share
   $ 0.16     $ 0.12     $ (0.04 )   $ 0.28     $ (0.15 )
 
                              
 
                                        
Reconciliation of shares used in calculating the non-GAAP income per share:
                                        
Shares used in calculating the basic and diluted income(loss) per share
     65,150       64,864       68,783       65,007       69,599  
Adjustment for dilutive securities
     219       240       —       230       —  
 
                              
Non-GAAP shares used in the EPS calculation
     65,369       65,104       68,783       65,237       69,599  
 
                              

 

 

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     Six Months Ended  
    September 30,     June 30,     September 30,     September 30,
    2008     2008     2007     2008     2007  
GROSS PROFIT:
                                        
GAAP gross profit
   $ 40,950     $ 38,210     $ 27,882     $ 79,160     $ 51,519  
Amortization of purchased intangibles
     4,583       4,581       4,583       9,164       9,274  
Stock-based compensation expense
     182       214       240       396       312  
 
                              
Non-GAAP gross profit
   $ 45,715     $ 43,005     $ 32,705     $ 88,720     $ 61,105  
 
                              
 
                                        
OPERATING EXPENSES:
                                        
GAAP operating expenses
   $ 42,201     $ 41,503     $ 43,251     $ 83,704     $ 86,401  
Stock-based compensation expense
     (2,815 )     (2,994 )     (3,057 )     (5,809 )     (5,605 )
Amortization of purchased intangibles
     (1,320 )     (1,320 )     (1,336 )     (2,640 )     (2,681 )
Restructuring charges
     (140 )     258       (1,376 )     118       (1,344 )
Gain on renegotiated design tool agreement
     —       —       749       —       749  
Payroll taxes on certain stock option exercises
     —       —       (1 )     —       (3 )
Litigation settlement
     (130 )     —       —       (130 )     —  
Option investigation related expenses, net
     184       (347 )     (209 )     (163 )     (501 )
 
                              
Non-GAAP operating expenses
   $ 37,980     $ 37,100     $ 38,021     $ 75,080     $ 77,016  
 
                              
 
                                        
INTEREST AND OTHER INCOME, NET
                                        
GAAP interest and other (expense) income, net
   $ (550 )   $ (1,327 )   $ 6,906     $ (1,877 )   $ 9,982  
Realized gain on sale of strategic equity investments
     —       —       (4,649 )     —       (4,649 )
Other than temporary investment impairment
     3,444       3,393       —       6,837       —  
 
                              
Non-GAAP interest and other income, net
   $ 2,894     $ 2,066     $ 2,257     $ 4,960     $ 5,333  
 
                              
 
                                        
INCOME TAX EXPENSE (BENEFIT):
                                        
GAAP income tax expense (benefit)
   $ 512     $ 554     $ (410 )   $ 1,066     $ (427 )
Income tax adjustments
     (193 )     (315 )     318       (508 )     109  
 
                              
Non-GAAP income tax expense (benefit)
   $ 319     $ 239     $ (92 )   $ 558     $ (318 )
 
                              
 
                                        
RESEARCH AND DEVELOPMENT
    
GAAP research and development
   $ 24,461     $ 23,481     $ 24,480     $ 47,942     $ 49,962  
Stock-based compensation expense
     (1,098 )     (1,337 )     (1,216 )     (2,435 )     (2,271 )
Gain on renegotiated design tool agreement
     —       —       749       —       749  
Payroll taxes on certain stock option exercises
     —       —       —       —       (2 )
 
                              
Non-GAAP research and development
   $ 23,363     $ 22,144     $ 24,013     $ 45,507     $ 48,438  
 
                              
 
                                        
SELLING, GENERAL AND ADMINISTRATIVE
    
GAAP selling, general and administrative
   $ 16,334     $ 16,613     $ 15,850     $ 32,947     $ 31,913  
Stock-based compensation expense
     (1,717 )     (1,657 )     (1,841 )     (3,374 )     (3,334 )
Payroll taxes on certain stock option exercises
     —       —       (1 )     —       (1 )
 
                              
Non-GAAP selling, general and administrative
   $ 14,617     $ 14,956     $ 14,008     $ 29,573     $ 28,578  
 
                              

 

 

APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
(in thousands)
(unaudited)
                 
    Six Months Ended September 30,  
    2008     2007  
 
            
Operating activities:
                
Net loss
   $ (7,487 )   $ (24,473 )
Adjustments to reconcile net loss to net cash provided by (used for) operating activities
               
Depreciation
     3,449       3,227  
Amortization of purchased intangibles
     11,804       11,956  
Stock-based compensation expense :
                
Stock options
     3,703       5,268  
Restricted stock units
     2,502       649  
Investment impairment charge
     6,837       —  
Net gain on sale of strategic equity investment
     —       (4,649 )
Net loss (gain) on disposal of property
     29       (64 )
Changes in operating assets and liabilities:
                
Accounts receivable
     (3,099 )     9,340  
Inventories
     3,485       (9,195 )
Other assets
     1,050       1,653  
Accounts payable
     (2,059 )     (12,582 )
Accrued payroll and other accrued liabilities
     (244 )     (4,506 )
Deferred taxes
     439       —  
Deferred revenue
     111       6  
 
            
Net cash provided by (used for) operating activities
     20,520       (23,370 )
 
            
 
            
Investing activities:
                
Proceeds from sales and maturities of short-term investments and marketable securities
     339,602       345,009  
Purchases of short-term investments and marketable securities
     (335,619 )     (286,191 )
Purchase of strategic investments
     —       (5,000 )
Net proceeds from the sale of strategic equity investments
     —       5,249  
Purchase of property, equipment and other assets
     (4,935 )     (3,314 )
Proceeds from sale of property and equipment
     —       1,646  
 
            
Net cash provided by (used for) investing activities
     (952 )     57,399  
 
            
Financing activities:
                
Proceeds from issuance of common stock
     1,615       3,286  
Open market repurchases of Company stock
     —       (29,268 )
Funding of structured stock repurchase agreements
     —       (23,830 )
Funds received from structured stock repurchase agreements including gains
     —       13,237  
Other
     (63 )     (231 )
 
            
Net cash used for financing activities
     1,552       (36,806 )
 
            
Net decrease in cash and cash equivalents
     21,120       (2,777 )
Cash and cash equivalents at beginning of the period
     42,689       51,595  
 
            
Cash and cash equivalents at end of the period
   $ 63,809     $ 48,818