Selected Q4 Highlights * Q4 net revenues of $71.5 million, up 8% sequentially * Q4 GAAP net loss of $86.3 million or $(1.33) per share compared to a GAAP net loss of $4.3 million or $(0.06) per share in the third quarter. The Q4 GAAP net loss included an impairment charge for goodwill of $71.5 million * Q4 non-GAAP net income of $6.0 million or $0.09 per share compared to a non-GAAP net income of $3.9 million or $0.06 per share in the third quarter * Transport revenues were $27.8 million and grew 11% sequentially; Storage revenues were $13.0 million and declined 4% sequentially; Processor revenues were $30.7 million and grew 11% sequentially * AMCC's PowerPC 405EX Embedded Processor Named Product of the Year by Electronic Products Magazine * The AMCC Storage family of 3ware RAID controllers was awarded the "EE Times Ultimate Product of the Year" ACE Award. Additionally the AMCC 9690SA SAS controller was awarded the "PC Pro Recommended" award * Announced Pemaquid, a fully integrated 10G Framer/Mapper/PHY for transporting 10GbE or 10G FC over WDM and OTN networks. Pemaquid is ideal for Carrier Ethernet Switch/Router and optical systems
SUNNYVALE, Calif., May 1, 2008 (PRIME NEWSWIRE) -- Applied Micro Circuits Corporation (NASDAQ:AMCC) today reported its financial results for the fourth quarter of fiscal 2008.
Net revenues for the fourth quarter of fiscal 2008 were $71.5 million compared to $66.3 million reported in the third quarter of fiscal 2008, representing a sequential growth of 8% and a growth of 2% over the $70.2 million reported in the fourth quarter of fiscal 2007. Net revenues for the fiscal year ended March 31, 2008 were $246.1 million compared to $292.9 million for the prior fiscal year, representing a sequential decline of approximately 16%.
The net loss on a generally accepted accounting principles (GAAP) basis for the fourth quarter of fiscal 2008 was $86.3 million or $(1.33) per share, which includes the impact of a goodwill write-off of $71.5 million. The fourth quarter GAAP net loss compares with a net loss of $4.3 million or $(0.06) per share for the third quarter of fiscal 2008 and a net loss of $5.3 million or $(0.08) per share for the fourth quarter of fiscal 2007. The GAAP net loss was $115.1 million or $(1.70) per share for fiscal 2008 compared to $24.2 million or $(0.34) per share for fiscal 2007.
The non-GAAP net income for the fourth quarter of fiscal 2008 was $6.0 million or $0.09 per share, compared to the non-GAAP net income of $3.9 million or $0.06 per share in the third quarter of fiscal 2008. Non-GAAP net income for the fourth quarter of 2007 was $2.8 million or $0.04 per share. For fiscal 2008 the non-GAAP net loss was $0.4 million or $(0.01) per share compared to a non-GAAP net income of $30.3 million or $0.42 per share for fiscal 2007.
"I am pleased with our financial results for the March quarter. Our revenue growth was solid and in line with our expectations. Order patterns were strong and have continued into the June quarter. Inventory in the channel declined and our asset management continues to improve. Excluding the cash outflow for our stock buyback program, we were cash flow positive for the third straight quarter," said Kambiz Hooshmand, president and chief executive officer.
Bob Gargus, chief financial officer commented, "We continued our focus on profitability, reducing our Op-Ex while improving our non-GAAP pretax profit margin from 6.1 percent of revenue last quarter to 8.7% of revenues this quarter. We accomplished this despite some unfavorable manufacturing variances that occurred during the quarter and are now behind us. Overall, 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, acquired in-process research and development, goodwill impairment, stock-based compensation charges, gains on sale of strategic equity investment, strategic investment written off, 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.
For More Information
AMCC management will be holding a conference call today, May 1, 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 fourth quarter of fiscal 2008 and to provide guidance for the first quarter of fiscal 2009. You may access the conference call via any of the following:
Teleconference: 719-325-4870
Conference ID: 6524238
Web Broadcast: http://investor.amcc.com/events.cfm
Replay: 719-457-0820 (available through May 8, 2008)
AMCC Overview
AMCC is a global leader in network and embedded PowerPC(r) 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 is also the leading vendor of high-port count SATA RAID controllers enabling low-cost, high-performance, high-capacity storage. 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 is a registered trademark 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)
--------- ---------
March 31, March 31,
ASSETS 2008 2007
--------- ---------
Current assets:
Cash, cash equivalents and short-term
investments $ 142,889 $ 284,470
Accounts receivable, net 28,800 32,558
Inventories 37,966 31,286
Other current assets 11,340 14,438
--------- ---------
Total current assets 220,995 362,752
Marketable securities 51,919 --
Property and equipment, net 25,995 27,150
Goodwill 264,130 335,857
Purchased intangibles 56,026 79,787
Other assets 13,782 10,966
--------- ---------
Total assets $ 632,847 $ 816,512
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,518 $ 26,893
Other current liabilities 22,659 28,797
--------- ---------
Total current liabilities 48,177 55,690
Deferred tax liability 3,958 --
Stockholders' equity 580,712 760,822
--------- ---------
Total liabilities and stockholders' equity $ 632,847 $ 816,512
========= =========
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Fiscal Year Ended
------------------------------- --------------------
March 31, Dec. 31, March 31, March 31, March 31,
2008 2007 2007 2008 2007
------------------------------- --------------------
Net revenues $ 71,534 $ 66,267 $ 70,167 $ 246,146 $ 292,852
Cost of revenues 36,531 33,311 35,851 126,668 140,714
--------- --------- --------- --------- ---------
Gross profit 35,003 32,956 34,316 119,478 152,138
Operating
expenses:
Research and
development 22,892 24,696 24,176 97,550 96,418
Selling,
general and
administrative 15,869 14,125 18,008 61,907 67,971
Amortization of
purchased
intangibles 1,320 1,320 1,350 5,321 4,995
Acquired
in-process
research and
development -- -- -- -- 13,300
Impairment of
goodwill 71,494 -- -- 71,494 --
Restructuring
charges 1,516 125 (1,442) 2,985 1,291
Litigation
settlement 1,125 -- -- 1,125 --
Option
investigation
related
expenses, net 1,363 (792) 939 1,072 5,344
--------- --------- --------- --------- ---------
Total
operating
expenses 115,579 39,474 43,031 241,454 189,319
--------- --------- --------- --------- ---------
Operating loss (80,576) (6,518) (8,715) (121,976) (37,181)
Interest and
other income,
net (1,551) 2,148 3,460 10,579 13,375
--------- --------- --------- --------- ---------
Loss before
income taxes (82,127) (4,370) (5,255) (111,397) (23,806)
Income tax
expense
(benefit) 4,182 (31) 75 3,724 402
--------- --------- --------- --------- ---------
Net loss $ (86,309) $ (4,339) $ (5,330) $(115,121) $ (24,208)
========= ========= ========= ========= =========
Basic and
diluted loss
per share:
Loss per share $ (1.33) $ (0.06) $ (0.08) $ (1.70) $ (0.34)
========= ========= ========= ========= =========
Shares used in
calculating
basic
and diluted
loss per share 64,886 67,015 70,618 67,775 71,076
========= ========= ========= ========= =========
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 Fiscal Year Ended
------------------------------- --------------------
March 31, Dec. 31, March 31, March 31, March 31,
2008 2007 2007 2008 2007
------------------------------- --------------------
GAAP net loss $ (86,309) $ (4,339) $ (5,330) $(115,121) $ (24,208)
Adjustments:
Stock-based
compensation
charges 3,078 2,312 2,440 11,307 10,351
Amortization of
purchased
intangibles 5,903 5,903 6,200 23,761 24,751
Impairment of
goodwill 71,494 -- -- 71,494 --
Restructuring
charges 1,516 125 (1,442) 2,985 1,291
Other than
temporary
investment
impairment 836 846 -- 1,682 --
Impairment of
strategic
investment 3,000 -- -- 3,000 --
Realized gain
on sale of
strategic
equity
investment -- -- -- (4,649) --
Gain on
renegotiated
design tool
agreement -- -- -- (749) --
Acquired
in-process
research and
development -- -- -- -- 13,300
Payroll taxes
on certain
stock option
exercises -- -- 6 3 7
Litigation
settlement 1,125 -- -- 1,125 --
Option
investigation
related
expenses, net 1,363 (792) 939 1,072 5,344
Income tax
adjustments 3,996 (152) (12) 3,735 (535)
Total GAAP to
Non-GAAP --------- --------- --------- --------- ---------
adjustments 92,311 8,242 8,131 114,766 54,509
--------- --------- --------- --------- ---------
Non-GAAP net
income (loss) $ 6,002 $ 3,903 $ 2,801 $ (355) $ 30,301
========= ========= ========= ========= =========
Diluted income
(loss) per
share $ 0.09 $ 0.06 $ 0.04 $ (0.01) $ 0.42
========= ========= ========= ========= =========
Shares used in
calculating
diluted income
(loss) per
share 65,039 67,301 70,968 67,775 71,353
========= ========= ========= ========= =========
Income (loss)
per share:
GAAP income
(loss) per
share $ (1.33) $ (0.06) $ (0.08) $ (1.70) $ (0.34)
GAAP to
non-GAAP
adjustments 1.42 0.12 0.12 1.69 0.76
--------- --------- --------- --------- ---------
Non-GAAP
income (loss)
per share $ 0.09 $ 0.06 $ 0.04 $ (0.01) $ 0.42
========= ========= ========= ========= =========
Reconciliation
of shares used
in calculating
the non-GAAP
income per
share:
Shares used in
calculating
the basic and
diluted
income(loss)
per share 64,886 67,015 70,618 67,775 71,076
Adjustment for
dilutive
securities 153 286 350 -- 277
--------- --------- --------- --------- ---------
Non-GAAP shares
used in the
EPS
calculation 65,039 67,301 70,968 67,775 71,353
========= ========= ========= ========= =========
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 Fiscal Year Ended
---------------------------- ------------------
March 31, Dec. 31, March 31, March 31, March 31,
2008 2007 2007 2008 2007
---------------------------- ------------------
GROSS PROFIT:
GAAP gross profit $ 35,003 $ 32,956 $ 34,316 $119,478 $152,138
Amortization of
purchased
intangibles 4,583 4,583 4,850 18,440 19,756
Stock-based
compensation
expense 135 224 153 671 592
-------- -------- -------- -------- --------
Non-GAAP gross
profit $ 39,721 $ 37,763 $ 39,319 $138,589 $172,486
======== ======== ======== ======== ========
OPERATING EXPENSES:
GAAP operating
expenses $115,579 $ 39,474 $ 43,031 $241,454 $189,319
Amortization of
purchased
intangibles (1,320) (1,320) (1,350) (5,321) (4,995)
Impairment of
goodwill (71,494) -- -- (71,494) --
Acquired in-process
research and
development -- -- -- -- (13,300)
Stock-based
compensation
expense (2,943) (2,088) (2,287) (10,636) (9,759)
Restructuring
charges (1,516) (125) 1,442 (2,985) (1,291)
Gain on renegotiated
design tool
agreement -- -- -- 749 --
Payroll taxes on
certain stock
option exercises -- -- (6) (3) (7)
Litigation
settlement (1,125) -- -- (1,125) --
Option investigation
related expenses,
net (1,363) 792 (939) (1,072) (5,344)
-------- -------- -------- -------- --------
Non-GAAP operating
expenses $ 35,818 $ 36,733 $ 39,891 $149,567 $154,623
======== ======== ======== ======== ========
INTEREST AND OTHER
INCOME, NET
GAAP interest and
other income, net $ (1,551) $ 2,148 $ 3,460 $ 10,579 $ 13,375
Other than
temporary
investment
impairment 836 846 -- 1,682 --
Impairment of
strategic
investment 3,000 -- -- 3,000 --
Realized gain on
sale of strategic
equity investments -- -- -- (4,649) --
-------- -------- -------- -------- --------
Non-GAAP interest
and other income,
net $ 2,285 $ 2,994 $ 3,460 $ 10,612 $ 13,375
======== ======== ======== ======== ========
INCOME TAX EXPENSE
(BENEFIT):
GAAP income tax
expense (benefit) $ 4,182 $ (31) $ 75 $ 3,724 $ 402
Income tax
adjustments (3,996) 152 12 (3,735) 535
-------- -------- -------- -------- --------
Non-GAAP income tax
expense (benefit) $ 186 $ 121 $ 87 $ (11) $ 937
======== ======== ======== ======== ========
RESEARCH AND
DEVELOPMENT
GAAP research and
development $ 22,892 $ 24,696 $ 24,176 $ 97,550 $ 96,418
Stock-based
compensation
expense (1,349) (1,177) (786) (4,797) (3,765)
Gain on renegotiated
design tool
agreement -- -- -- 749 --
Payroll taxes on
certain stock
option exercises -- -- (3) (2) (3)
-------- -------- -------- -------- --------
Non-GAAP research
and development $ 21,543 $ 23,519 $ 23,387 $ 93,500 $ 92,650
======== ======== ======== ======== ========
SELLING, GENERAL AND
ADMINISTRATIVE
GAAP selling, general
and administrative $ 15,869 $ 14,125 $ 18,008 $ 61,907 $ 67,971
Stock-based
compensation
expense (1,594) (911) (1,501) (5,839) (5,994)
Payroll taxes on
certain stock
option exercises -- -- (3) (1) (4)
-------- -------- -------- -------- --------
Non-GAAP selling,
general and
administrative $ 14,275 $ 13,214 $ 16,504 $ 56,067 $ 61,973
======== ======== ======== ======== ========
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
($ in thousands)
(unaudited)
Fiscal Year Ended
March 31,
---------------------
2008 2007
--------- ---------
Operating activities:
Net loss $(115,121) $ (24,208)
Adjustments to reconcile net loss to net
cash provided by (used for) operating
activities
Depreciation and amortization 6,542 8,410
Amortization of purchased intangibles 23,762 24,751
Acquired in-process research and development -- 13,300
Impairment of goodwill 71,494 --
Stock-based compensation expense :
Stock options 9,349 10,211
Restricted stock units 1,957 142
Non-cash restructuring charges (benefit) 316 2,798
Litigation settlement 1,125 --
Net gain on strategic equity investments (4,649) --
Impairment of strategic investment 3,000 --
Impairment of marketable securities 1,682 --
Net gain on disposal of property 23 120
Changes in operating assets and liabilities:
Accounts receivable 3,758 (4,790)
Inventories (6,680) (5,307)
Other assets 2,282 (1,336)
Accounts payable (1,375) 1,214
Accrued payroll and other accrued
liabilities (7,103) (11,566)
Deferred tax liability 3,958 --
Deferred revenue (476) (1,230)
--------- ---------
Net cash provided by (used for)
operating activities (6,156) 12,509
Investing activities:
Proceeds from sales and maturities of
investments 623,619 468,570
Purchases of investments (550,137) (403,080)
Purchase of strategic investments (5,000) (1,500)
Net proceeds from the sale of strategic
equity investments 5,249 --
Purchase of property, equipment and other
assets (7,021) (6,732)
Proceeds from sale of property, equipment and
other assets 1,646 4,788
Net cash paid for acquisitions 232 (71,971)
--------- ---------
Net cash provided by (used for)
investing activities 68,588 (9,925)
Financing activities:
Proceeds from issuance of common stock 6,431 2,850
Open market repurchases of Company stock (56,950) (20,137)
Funding of structured stock repurchase
agreements (41,830) (9,398)
Funds received from structured stock
repurchase agreements including gains 21,112 26,963
Payments on long-term debt -- (289)
Other (101) (103)
--------- ---------
Net cash used for financing activities (71,338) (114)
--------- ---------
Net decrease in cash and cash
equivalents (8,906) 2,470
Cash and cash equivalents at beginning of the
period 51,595 49,125
--------- ---------
Cash and cash equivalents at end of the period $ 42,689 $ 51,595
========= =========