EX-99.1 2 exhibit991pressreleaseq215.htm EXHIBIT 99.1 Exhibit 99.1 Press Release Q2'15


Exhibit 99.1

Press Release

Applied Micro Circuits Corporation Reports Second Quarter Fiscal 2015 Financial Results

SUNNYVALE, Calif., October 28, 2014 (GLOBE NEWSWIRE) - Applied Micro Circuits Corporation (Nasdaq: AMCC) (“AppliedMicro”) today reported its financial results for the second quarter of fiscal 2015, ended September 30, 2014.

•
Consolidated net revenue of $40.9 million
•
GAAP net loss of $11.7 million or $0.15 per share
•
Non-GAAP net loss of $5.0 million or $0.06 per share

Commenting on AppliedMicro’s second quarter operations, Dr. Paramesh Gopi, President and Chief Executive Officer, said, “Following a very robust June quarter, our Connectivity business was impacted by weak service provider order patterns. We view this difficult environment as transitory.” Dr. Gopi continued, “We are very pleased with our ARM 64-bit processor success with strong sequential X-GeneTM revenue growth and our HeliXTM family product launch.”

AppliedMicro provides non-GAAP results as additional information relating to its financial condition and business trends. This information should be considered in conjunction with corresponding GAAP measures. A reconciliation between GAAP and non-GAAP financial results is provided in the financial tables section of this press release.

Conference Call and Webcast
Management will host a conference call and simultaneous webcast to discuss second quarter results and business and financial outlook today, October 28, 2014, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.
DAIL-IN:
(877) 415-3182
 
 
(857) 244-7325
 
 
 
 
PASSCODE:
76367505
 
 
 
 
WEBCAST:
Investor Relations section of the Company’s website at www.apm.com
 

A replay of the call will be available starting around 6:00 p.m. Pacific Time / 9:00 p.m. Eastern Time and can be accessed by dialing 888-286-8010 or 617-801-6888 and using the access code 15365763. The replay will be available through November 4, 2014.

About AppliedMicro
Applied Micro Circuits Corporation is a global leader in computing and connectivity solutions for next-generation cloud infrastructure and data centers. AppliedMicro delivers silicon solutions that dramatically lower total cost of ownership. Corporate headquarters are located in Sunnyvale, California. www.apm.com.

(C) Copyright 2014, Applied Micro Circuits Corporation. AppliedMicro, X-Gene, X-Weave, HeliX, Server on a Chip, Cloud Processor and Cloud Server are trademarks or registered trademarks of Applied Micro Circuits Corporation. All other product or service names are the property of their respective owners.

Forward-Looking Statements
This press release contains forward-looking statements that reflect the Company's current views and expectations with respect to future events and financial performance, including statements regarding the Company's strategic focus; product cycles; new product development, commercialization and customer acceptance; the development of the X-Gene™ ecosystem; the anticipated performance of the Company’s base business included the expected duration of weakness in service provider order patterns; and future revenues, expenses and liquidity. 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, successful and timely development of products, an evolving competitive landscape, rapid technological change, increased supplier lead times and other supply chain constraints, the businesses and budgeting decisions of the Company's major customers, reductions, rescheduling or cancellation of orders by the Company's customers, successful management of key service providers and recently acquired businesses, market acceptance of new products, legal and regulatory developments, and general economic conditions, and do not take into account any restructuring or related activities that the Company may undertake. 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, 2014, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, and its 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.

CONTACT:

Investor Relations Contact:
Traci Tsuchiguchi
Phone: (408) 542-8353
E-Mail: ttsuchiguchi@apm.com

Media Contact:
Mike Major
Phone: (408) 542-8831
E-mail: mmajor@apm.com








APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
 
 
June 30,
2014
 
March 31,
2014
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash, cash equivalents and short-term investments
 
$
89,518

 
$
106,583

Accounts receivable, net
 
17,881

 
25,178

Inventories
 
17,592

 
18,946

Other current assets
 
13,670

 
16,799

Total current assets
 
138,661

 
167,506

Property and equipment, net
 
20,783

 
20,746

Goodwill
 
11,425

 
11,425

Purchased intangibles, net
 
—

 
105

Other assets
 
4,278

 
7,754

Total assets
 
$
175,147

 
$
207,536

LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
11,576

 
$
26,194

Other current liabilities
 
23,237

 
28,961

Total current liabilities
 
34,813

 
55,155

Non-current liabilities:
 
 
 
 
Veloce accrued liability
 
3,707

 
3,145

Stockholders' equity
 
136,627

 
149,236

Total liabilities and stockholders' equity
 
$
175,147

 
$
207,536









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,
2014
 
June 30,
2014
 
September 30,
2013
 
September 30,
2014
 
September 30,
2013
Net revenues
$
40,945

 
$
50,272

 
$
55,387

 
$
91,217

 
$
109,535

Cost of revenues
17,716

 
20,257

 
21,397

 
37,973

 
43,739

Gross profit
23,229

 
30,015

 
33,990

 
53,244

 
65,796

Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development
24,711

 
33,205

 
56,550

 
57,916

 
91,056

Selling, general and administrative
7,919

 
9,058

 
9,146

 
16,977

 
18,672

Amortization of purchased intangible assets
42

 
62

 
62

 
104

 
192

Restructuring
(110
)
 
1,211

 
999

 
1,101

 
1,092

Gain on sale of T-Pack
—

 
—

 
—

 
—

 
(19,699
)
Total operating expenses
32,562

 
43,536

 
66,757

 
76,098

 
91,313

Operating loss
(9,333
)
 
(13,521
)
 
(32,767
)
 
(22,854
)
 
(25,517
)
Interest and other (expense) income, net
(2,112
)
 
315

 
576

 
(1,797
)
 
4,371

Loss before income taxes
(11,445
)
 
(13,206
)
 
(32,191
)
 
(24,651
)
 
(21,146
)
Income tax expense (benefit)
272

 
(141
)
 
192

 
131

 
380

Net loss
$
(11,717
)
 
$
(13,065
)
 
$
(32,383
)
 
$
(24,782
)
 
(21,526
)
Basic and diluted net loss per share:
$
(0.15
)
 
$
(0.17
)
 
$
(0.45
)
 
$
(0.32
)
 
$
(0.30
)
Shares used in calculating basic and diluted net loss per share
78,487

 
77,916

 
72,610

 
78,202

 
70,985





APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET (LOSS) INCOME
(in thousands, except per share data)
(unaudited)
 
Three Months Ended
 
Six Months Ended
 
September 30,
2014
 
June 30,
2014
 
September 30,
2013
 
September 30,
2014
 
September 30,
2013
GAAP net loss
$
(11,717
)
 
$
(13,065
)
 
$
(32,383
)
 
$
(24,782
)
 
$
(21,526
)
Adjustments:
 
 
 
 
 
 
 
 
 
Stock-based compensation charges
4,230

 
5,216

 
3,834

 
9,446

 
7,548

Amortization of purchased intangible assets
42

 
62

 
62

 
104

 
358

Veloce acquisition consideration
—

 
7,140

 
30,484

 
7,140

 
39,739

Restructuring
(110
)
 
1,211

 
999

 
1,101

 
1,092

Impairment of a strategic investment
2,500

 
—

 
—

 
2,500

 
—

Gain on sale of TPack
—

 
—

 
—

 
—

 
(19,699
)
Reversals of impairment charges upon sales of marketable securities
(11
)
 
(18
)
 
(940
)
 
(29
)
 
(3,959
)
Income tax effect of non-GAAP adjustments
22

 
(391
)
 
(46
)
 
(369
)
 
(108
)
Total GAAP to Non-GAAP adjustments
6,673

 
13,220

 
34,393

 
19,893

 
24,971

Non-GAAP net (loss) income
$
(5,044
)
 
$
155

 
$
2,010

 
$
(4,889
)
 
$
3,445

Diluted non-GAAP (loss) income per share
$
(0.06
)
 
$
0.00

 
$
0.03

 
$
(0.06
)
 
$
0.05

Shares used in calculating diluted non-GAAP (loss) income per share
78,487

 
79,082

 
74,301

 
78,202

 
72,268

Net (loss) income per share:
 
 
 
 
 
 
 
 
 
GAAP loss per share
$
(0.15
)
 
$
(0.17
)
 
$
(0.45
)
 
$
(0.32
)
 
$
(0.30
)
GAAP to non-GAAP adjustments
0.09

 
0.17

 
0.48

 
0.26

 
0.35

Non-GAAP (loss) income per share
$
(0.06
)
 
$
0.00

 
$
0.03

 
$
(0.06
)
 
$
0.05

Reconciliation of shares used in calculating non-GAAP (loss) income per share:
 
 
 
 
 
 
 
 
 
Shares used in calculating the basic loss per share
78,487

 
77,916

 
72,610

 
78,202

 
70,985

Adjustment for dilutive securities
—

 
1,166

 
1,691

 
—

 
1,283

Shares used in calculating diluted non-GAAP (loss) income per share
78,487

 
79,082

 
74,301

 
78,202

 
72,268
















APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
(in thousands)
(unaudited)
The following schedule reconciles selected line items on the condensed consolidated statements of operations from the GAAP basis to the non-GAAP basis:
 
Three Months Ended
 
Six Months Ended
 
September 30,
2014
 
June 30,
2014
 
September 30,
2013
 
September 30,
2014
 
September 30,
2013
GROSS PROFIT:
 
 
 
 
 
 
 
 
 
GAAP gross profit
$
23,229

 
$
30,015

 
$
33,990

 
$
53,244

 
$
65,796

Amortization of purchased intangible assets
—

 
—

 
—

 
—

 
166

Stock-based compensation expense
102

 
47

 
125

 
149

 
223

Non-GAAP gross profit
$
23,331

 
$
30,062

 
$
34,115

 
$
53,393

 
$
66,185

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
GAAP operating expenses
$
32,562

 
$
43,536

 
$
66,757

 
$
76,098

 
$
91,313

Stock-based compensation expense
(4,128
)
 
(5,169
)
 
(3,709
)
 
(9,297
)
 
(7,325
)
Amortization of purchased intangible assets
(42
)
 
(62
)
 
(62
)
 
(104
)
 
(192
)
Veloce acquisition consideration
—

 
(7,140
)
 
(30,484
)
 
(7,140
)
 
(39,739
)
Gain on sale of building
—

 
—

 
—

 
—

 
19,699

Restructuring
110

 
(1,211
)
 
(999
)
 
(1,101
)
 
(1,092
)
Non-GAAP operating expenses
$
28,502

 
$
29,954

 
$
31,503

 
$
58,456

 
$
62,664

INTEREST AND OTHER (EXPENSE) INCOME, NET
 
 
 
 
 
 
 
 
 
GAAP interest and other (expense) income, net
$
(2,112
)
 
$
315

 
$
576

 
$
(1,797
)
 
$
4,371

Impairment of a strategic investment
2,500

 
—

 
—

 
2,500

 
—

Reversals of impairment charges upon sales of marketable securities
(11
)
 
(18
)
 
(940
)
 
(29
)
 
(3,959
)
Non-GAAP interest and other (expense) income, net
$
377

 
$
297

 
$
(364
)
 
$
674

 
$
412

INCOME TAX EXPENSE (BENEFIT):
 
 
 
 
 
 
 
 
 
GAAP income tax expense (benefit)
$
272

 
$
(141
)
 
$
192

 
$
131

 
$
380

Income tax adjustment
(22
)
 
391

 
46

 
369

 
108

Non-GAAP income tax expense
$
250

 
$
250

 
$
238

 
$
500

 
$
488

RESEARCH AND DEVELOPMENT :
 
 
 
 
 
 
 
 
 
GAAP research and development
$
24,711

 
$
33,205

 
$
56,550

 
$
57,916

 
$
91,056

Stock-based compensation expense
(2,776
)
 
(3,271
)
 
(1,524
)
 
(6,047
)
 
(3,341
)
Veloce acquisition consideration
—

 
(7,140
)
 
(30,484
)
 
(7,140
)
 
(39,739
)
Non-GAAP research and development
$
21,935

 
$
22,794

 
$
24,542

 
$
44,729

 
$
47,976

SELLING, GENERAL AND ADMINISTRATIVE :
 
 
 
 
 
 
 
 
 
GAAP selling, general and administrative
$
7,919

 
$
9,058

 
$
9,146

 
$
16,977

 
$
18,672

Stock-based compensation expense
(1,352
)
 
(1,898
)
 
(2,185
)
 
(3,250
)
 
(3,984
)
Non-GAAP selling, general and administrative
$
6,567

 
$
7,160

 
$
6,961

 
$
13,727

 
$
14,688







APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Three Months Ended
 
Six Months Ended
 
September 30,
2014
 
June 30,
2014
 
September 30,
2013
 
September 30,
2014
 
September 30,
2013
Operating activities:
 
 
 
 
 
 
 
 
 
Net loss
$
(11,717
)
 
$
(13,065
)
 
$
(32,384
)
 
$
(24,782
)
 
$
(21,526
)
Adjustments to reconcile net loss to net cash used for operating activities:
 
 
 
 
 
 
 
 
 
Depreciation
2,227

 
2,174

 
2,659

 
4,401

 
5,283

Amortization of purchased intangibles
42

 
62

 
62

 
104

 
358

Stock-based compensation expense
4,230

 
5,216

 
3,834

 
9,446

 
7,548

Veloce acquisition consideration
—

 
7,140

 
30,484

 
7,140

 
39,739

Tax effect on other comprehensive loss
110

 
(194
)
 
—

 
(84
)
 
—

Non-cash restructuring charges
—

 
—

 
272

 
—

 
298

Gain on sale of TPack
—

 
—

 
—

 
—

 
(19,699
)
Loss on disposals of property and equipment
6

 
16

 
30

 
22

 
27

Impairment of a strategic investment
2,500

 
—

 
—

 
2,500

 
—

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
Accounts receivable
5,051

 
2,246

 
2,108

 
7,297

 
(2,366
)
Inventories
3,079

 
(1,745
)
 
(80
)
 
1,334

 
105

Other assets
(1,241
)
 
1,994

 
(1,757
)
 
753

 
(159
)
Accounts payable
(5,741
)
 
(6,163
)
 
(1,257
)
 
(11,904
)
 
(1,943
)
Accrued payroll and other accrued liabilities
(4,252
)
 
1,663

 
(2,339
)
 
(2,589
)
 
1,810

Veloce accrued liability
(1,116
)
 
(6,383
)
 
(19,258
)
 
(7,499
)
 
(44,240
)
Deferred revenue
(668
)
 
502

 
79

 
(166
)
 
(594
)
Net cash used for operating activities
(7,490
)
 
(6,537
)
 
(17,547
)
 
(14,027
)
 
(35,359
)
Investing activities:
 
 
 
 
 
 
 
 
 
Proceeds from sales and maturities of short-term investments
1,238

 
682

 
7,118

 
1,920

 
21,303

Purchases of short-term investments
(749
)
 
(1,320
)
 
(5,816
)
 
(2,069
)
 
(8,177
)
Proceeds from sale of TPack, net
—

 
3,353

 
—

 
3,353

 
29,498

Proceeds from sale of property and equipment
1

 
—

 
20

 
1

 
20

Purchase of property and equipment
(2,756
)
 
(4,544
)
 
(1,744
)
 
(7,300
)
 
(2,023
)
Proceeds from sale of strategic equity investment
—

 
—

 
1,286

 
—

 
1,286

Net cash (used for) provided by investing activities
(2,266
)
 
(1,829
)
 
864

 
(4,095
)
 
41,907

Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from issuances of common stock
1,757

 
106

 
6,765

 
1,863

 
6,936

Funding of restricted stock units withheld for taxes
(322
)
 
(924
)
 
(1,697
)
 
(1,246
)
 
(4,079
)
Other
—

 
(88
)
 
(150
)
 
(88
)
 
(562
)
Net cash provided by (used for) financing activities
1,435

 
(906
)
 
4,918

 
529

 
2,295

Net (decrease) increase in cash and cash equivalents
(8,321
)
 
(9,272
)
 
(11,765
)
 
(17,593
)
 
8,843

Cash and cash equivalents at the beginning of the period
62,267

 
71,539

 
39,673

 
71,539

 
19,065

Cash and cash equivalents at the end of the period
$
53,946

 
$
62,267

 
$
27,908

 
$
53,946

 
$
27,908