8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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 23, 2003

APPLIED MICRO CIRCUITS CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware (State or Other Jurisdiction of Incorporation) 000-23193 (Commission File Number) 94-2586591 (IRS Employer Identification No.)

6290 Sequence Drive

San Diego, California 92121

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (858) 450-9333

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits.

99.1 Press Release of Applied Micro Circuits Corporation issued on October 23, 2003.

Item 12. Results of Operations and Financial Condition

On October 23, 2003, Applied Micro Circuits Corporation (“AMCC”) issued a press release regarding its financial results for the quarter ended September 30, 2003. A copy of the press release is furnished as Exhibit 99.1 to this Current Report.

AMCC reports its financial results in accordance with GAAP and additionally on a non-GAAP basis referred to as pro forma. These pro forma measures are not in accordance with, nor are they a substitute for, GAAP measures and may not be consistent with the presentation used by other companies. AMCC uses the pro forma financial measures to evaluate and manage its operations. AMCC is providing this information to investors to allow for the performance of additional financial analysis and because it is consistent with the financial models and estimates published by analysts who follow AMCC.

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed with the Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	APPLIED MICRO CIRCUITS CORPORATION
Date: October 23, 2003	By:	/s/    Stephen M. Smith
		Stephen M. Smith Senior Vice President, Finance and Administration, and Chief Financial Officer

INDEX TO EXHIBITS

99.1 Press Release of Applied Micro Circuits Corporation issued on October 23, 2003.

EX-99.1

EXHIBIT 99.1

FOR ADDITIONAL INFORMATION:

Investor Relations Contact:	Media/Editorial Contact:
Applied Micro Circuits Corporation Debra Hart	The Ardell Group Angela Edgerton
Phone: (858) 535-4217	Phone: (858) 792-2941
E-Mail: dhart@amcc.com	E-Mail: angela@ardellgroup.com

Thursday, October 23, 2003

Company Press Release

APPLIED MICRO CIRCUITS CORPORATION ANNOUNCES

SECOND QUARTER FISCAL 2004 FINANCIAL RESULTS

SAN DIEGO—October 23, 2003—Applied Micro Circuits Corporation [NASDAQ: AMCC] today reported its financial results for the second quarter of fiscal 2004.

Net revenues for the second quarter of fiscal 2004 were $25.1 million, up 22% sequentially from the $20.5 million reported in the first quarter of fiscal 2004. Year over year, net revenues for the second quarter of fiscal 2004 were down 17% from the $30.2 million reported in the second quarter of fiscal 2003.

The net loss for the second quarter of fiscal 2004 on a generally accepted accounting principles (GAAP) basis was $22.9 million or $0.08 per share, compared with a net loss of $53.4 million or $0.18 per share for the first quarter of fiscal 2004 and a net loss of $72.4 million or $0.24 per share for the second quarter of fiscal 2003. The pro forma net loss for the second quarter of fiscal 2004 was reduced to $6.9 million or $0.02 per share, from the pro forma net loss of $9.0 million or $0.03 per share in the first quarter of fiscal 2004 and $11.8 million or $0.04 per share in the second quarter of fiscal 2003.

Net revenues for the six months ended September 30, 2003 were $45.6 million compared to $60.4 million reported for the six months ended September 30, 2002.

The GAAP net loss for the six months ended September 30, 2003 was $76.3 million or $0.25 per share, compared to the net loss of $477.3 million or $1.59 per share for the six months ended September 30, 2002. The pro forma net loss for the six months ended September 30, 2003 was

– more –

$15.9 million or $0.05 per share, compared with the pro forma net loss of $26.6 million or $0.09 per share for the six months ended September 30, 2002.

Commenting on the results, Dave Rickey, Chairman of the Board, President and Chief Executive Officer said, “I am encouraged by our financial results this quarter. I am also very excited about the acquisitions we have announced during the second quarter. The pending merger with JNI Corporation represents a tremendous opportunity to diversify our business into storage area networking. In addition, the acquisition of assets and licenses associated with IBM’s PowerPRS Switch Fabric product line complements and strengthens AMCC’s portfolio of switch fabric products with industry-leading technology, established customer relationships and near term revenue.”

Rickey continued, “We continue to expect to achieve synergies from the JNI Corporation and IBM PowerPRS acquisitions. As a result of anticipated savings and reasonable revenue growth assumptions, I expect to finish the March quarter at a run rate that will allow us to be profitable going forward, on a pro forma basis.”

AMCC reports its financial results in accordance with GAAP and additionally on a non-GAAP basis referred to as pro forma. These pro forma measures are not in accordance with, nor are they a substitute for, GAAP measures and may not be consistent with the presentation used by other companies. AMCC uses the pro forma financial measures to evaluate and manage the Company’s operations. AMCC is providing this information to investors to allow for the performance of additional financial analysis and because it is consistent with the financial models and estimates published by analysts who follow the Company.

The pro forma results exclude the following items which are required by GAAP: cumulative effect of accounting changes, goodwill and other purchased intangible asset impairment charges, restructuring costs, on-going amortization of purchased intangibles, acquired in-process research and development charges, stock-based compensation charges related to acquired companies, certain excess inventory charges and benefits, payroll tax effects of certain stock option exercises, and net gains and losses related to strategic equity investments. Income taxes are adjusted to an estimated pro forma effective tax rate. See the attached reconciliation of GAAP to pro forma net loss, which quantifies the amounts excluded from pro forma basis results.

Fiscal 2004 Second Quarter Highlights

• Signed a definitive agreement to acquire JNI Corporation marking AMCC’s entry into the storage area networking (SAN) market. JNI provides Fibre Channel hardware and software products that form critical elements of SANs.

• Completed the purchase of assets and license of property associated with IBM’s PowerPRS Switch Fabric product line on September 30, 2003. Currently in its fifth generation of products, IBM’s PowerPRS product line is designed into numerous leading OEM platforms that are now in production and ramping to volume.

• Introduced the S19235 and S19237 transceivers featuring electronic compensation built upon AMCC’s proven 10 Gbps and CMOS expertise. These devices enable OEMs to deliver more integrated capabilities for line card and XFP module applications, while simultaneously driving down overall system power, cost and size.

• Teamed with IBM, Infineon Technologies, Texas Instruments and Xilinx to announce the creation and promotion of the Unified 10 Gbps Physical-Layer Initiative (UXPi), a program of the IEEE-ISTO. The goal of UXPi is to advocate a common 10 Gbps physical-layer standard across multiple markets, to simplify and accelerate the implementation of next generation 10 Gbps systems.

For More Information

AMCC management will be holding a conference call today, October 23, 2003, at 2:00 pm PDT to discuss additional details regarding the Company’s performance for the second quarter of fiscal 2004 and to provide guidance for the third quarter of fiscal 2004. You may access the conference call via any of the following:

Teleconference:	(719) 457-2658
Conference ID:	779222
Web Broadcast:	http://www.amcc.com
Replay:	(719) 457-0820 (available for 7 days following the call)

AMCC Overview

AMCC designs, develops, manufactures, and markets high-performance, high-bandwidth silicon integrated circuits empowering wide area networks. AMCC utilizes a combination of digital, mixed-signal and high-frequency analog design expertise coupled with system-level knowledge and multiple silicon process technologies to offer integrated circuit products that enable the transport of voice and data over fiber optic networks. The Company’s system solution portfolio includes switch fabric, traffic management, network processor, framer/mapper, PHY and PMD devices that address the high-performance needs of the evolving intelligent optical network. AMCC’s corporate headquarters is located in San Diego, 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 or call our shareholder information line at (888) 982-AMCC (2622).

This news release contains forward-looking statements, including statements regarding acquisitions and expected synergies therefrom, revenue growth and the Company’s anticipated financial performance, that are subject to certain risks and uncertainties, including, but not limited to, the Company’s ability to realize expected synergies associated with the pending merger with JNI Corporation and the acquisition of the PRS product line assets, 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, manufacturing capacity and execution, 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, 2003, 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.

-Financial Tables Follow-

APPLIED MICRO CIRCUITS CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

($ in thousands)

	September 30, 2003		March 31, 2003
	(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term investments	$	955,889	$	1,036,140
Accounts receivable, net		11,286		5,634
Inventories		5,475		7,178
Other current assets		15,442		23,623
Total current assets		988,092		1,072,575
Property and equipment, net		52,927		62,035
Other assets		1,153		759
Purchased intangibles		126,731		88,219
Total assets	$	1,168,903	$	1,223,588
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,007	$	12,689
Other current liabilities		44,599		37,446
Current portion of long-term debt & capital leases		159		1,265
Total current liabilities		56,765		51,400
Stockholders’ equity		1,112,138		1,172,188
Total liabilities and stockholders’ equity	$	1,168,903	$	1,223,588

Certain year-end amounts have been reclassified to conform with the current period presentation.

APPLIED MICRO CIRCUITS CORPORATION

GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

	Three Months Ended									Six months Ended
	Sept 30, 2003			June 30, 2003			Sept 30, 2002			Sept 30, 2003			Sept 30, 2002
Net revenues	$	25,119		$	20,515		$	30,219		$	45,634		$	60,374
Cost of revenues		9,485			9,783			16,503			19,268			34,142
Gross profit		15,634			10,732			13,716			26,366			26,232
Operating expenses:
Research and development		26,102			29,126			33,441			55,228			68,938
Selling, general and administrative		11,037			10,362			14,989			21,399			31,315
Stock-based compensation:
Research and development		3,579			9,125			11,413			12,704			52,090
Selling, general and administrative		1,043			3,408			24,104			4,451			50,734
Acquired in-process research and development		5,700			—			—			5,700			—
Impairment of goodwill and other intangible assets		—			—			—			—			204,284
Restructuring costs		—			23,498			3,000			23,498			5,500
Total operating expenses		47,461			75,519			86,947			122,980			412,861
Operating loss		(31,827	)		(64,787	)		(73,231	)		(96,614	)		(386,629	)
Interest and other income, net		8,919			11,395			795			20,314			11,518
Loss before income taxes		(22,908	)		(53,392	)		(72,436	)		(76,300	)		(375,111	)
Income tax benefit		—			—			—			—			—
Loss before cumulative effect of accounting change		(22,908	)		(53,392	)		(72,436	)		(76,300	)		(375,111	)
Cumulative effect of accounting change		—			—			—			—			(102,229	)
Net loss	$	(22,908	)	$	(53,392	)	$	(72,436	)	$	(76,300	)	$	(477,340	)
Basic and diluted loss per share:
Loss per share before cumulative effect of accounting change	$	(0.08	)	$	(0.18	)	$	(0.24	)	$	(0.25	)	$	(1.25	)
Loss per share	$	(0.08	)	$	(0.18	)	$	(0.24	)	$	(0.25	)	$	(1.59	)
Weighted average shares		305,195			303,801			300,701			304,498			300,256

APPLIED MICRO CIRCUITS CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

	Three Months Ended									Six Months Ended
	Sept 30, 2003			June 30, 2003			Sept 30, 2002			Sept 30, 2003			Sept 30, 2002
Net revenues	$	25,119		$	20,515		$	30,219		$	45,634		$	60,374
Cost of revenues		8,795			7,993			14,513			16,788			29,143
Gross profit		16,324			12,522			15,706			28,846			31,231
Operating expenses:
Research and development		26,099			29,124			33,441			55,223			68,934
Selling, general and administrative		11,036			10,360			14,989			21,396			31,315
Total operating expenses		37,135			39,484			48,430			76,619			100,249
Operating loss		(20,811	)		(26,962	)		(32,724	)		(47,773	)		(69,018	)
Interest and other income, net		8,919			11,395			12,445			20,314			23,168
Loss before income taxes		(11,892	)		(15,567	)		(20,279	)		(27,459	)		(45,850	)
Income tax benefit		(4,994	)		(6,538	)		(8,517	)		(11,532	)		(19,257	)
Net loss	$	(6,898	)	$	(9,029	)	$	(11,762	)	$	(15,927	)	$	(26,593	)
Diluted loss per share:
Loss per share	$	(0.02	)	$	(0.03	)	$	(0.04	)	$	(0.05	)	$	(0.09	)
Weighted average shares		305,195			303,801			300,701			304,498			300,256

The above pro forma statements are based on the Company’s consolidated statements of operations for the periods presented. This pro forma information is not prepared in accordance with GAAP and may not be consistent with the presentation used by other companies. The pro forma operating results are used by the Company’s management to evaluate the operating performance of the Company and are also consistent with the financial models and estimates published by analysts who follow the Company.

APPLIED MICRO CIRCUITS CORPORATION

RECONCILIATION OF GAAP TO PRO FORMA NET LOSS

(unaudited)

(in thousands)

	Three Months Ended									Six Months Ended
	Sept 30, 2003			June 30, 2003			Sept 30, 2002			Sept 30, 2003			Sept 30, 2002
GAAP net loss	$	(22,908	)	$	(53,392	)	$	(72,436	)	$	(76,300	)	$	(477,340	)
Adjustments:
Stock-based compensation related to acquired companies		4,793			12,751			35,936			17,544			104,680
Amortization of purchased intangibles		1,572			1,571			1,571			3,143			3,143
Impairments of goodwill and other intangibles		—			—			—			—			204,284
Cumulative effect of accounting change		—			—			—			—			102,229
Restructuring costs		—			23,498			3,000			23,498			5,500
Valuation allowance for strategic equity investments		—			—			11,650			—			11,650
Excess inventory benefit		(1,053	)		—			—			(1,053	)		—
Acquired in-process research and development		5,700			—			—			5,700			—
Payroll taxes on certain stock option exercises		4			5			—			9			4
Income tax adjustments		4,994			6,538			8,517			11,532			19,257
Total GAAP to pro forma adjustments		16,010			44,363			60,674			60,373			450,747
Pro forma net loss	$	(6,898	)	$	(9,029	)	$	(11,762	)	$	(15,927	)	$	(26,593	)

APPLIED MICRO CIRCUITS CORPORATION

SCHEDULE OF SELECTED PRO FORMA ADJUSTMENTS

(unaudited)

(in thousands)

The following schedule reconciles selected line items from the GAAP basis statements of operations to the pro forma statements of operations.

	Three Months Ended							Six Months Ended
	Sept 30, 2003			June 30, 2003		Sept 30, 2002		Sept 30, 2003			Sept 30, 2002
GROSS PROFIT:
GAAP gross profit	$	15,634		$	10,732	$	13,716	$	26,366		$	26,232
Amortization of purchased intangibles		1,572			1,571		1,571		3,143			3,143
Excess inventory charge(benefit)		(1,053	)		—		—		(1,053	)		—
Stock-based compensation related to acquired companies		171			218		419		389			1,856
Payroll taxes on certain stock option exercises		—			1		—		1			—
Pro forma gross profit	$	16,324		$	12,522	$	15,706	$	28,846		$	31,231
OPERATING EXPENSES:
GAAP operating expenses	$	47,461		$	75,519	$	86,947	$	122,980		$	412,861
Acquired in-process research and development		5,700			—		—		5,700			—
Impairment of goodwill and other intangible assets		—			—		—		—			204,284
Stock-based compensation related to acquired companies		4,622			12,533		35,517		17,155			102,824
Restructuring costs		—			23,498		3,000		23,498			5,500
Payroll taxes on certain stock option exercises		4			4		—		8			4
Pro forma operating expenses	$	37,135		$	39,484	$	48,430	$	76,619		$	100,249
OTHER INCOME (EXPENSE), NET:
GAAP other income (expense), net	$	8,919		$	11,395	$	795	$	20,314		$	11,518
Valuation allowance for strategic equity investments		—			—		11,650		—			11,650
Pro forma other income (expense), net	$	8,919		$	11,395	$	12,445	$	20,314		$	23,168