SUNNYVALE, Calif., Oct. 30, 2008 (GLOBE NEWSWIRE) -- 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: 719-325-4916 Conference ID: 4222506 Web Broadcast: http://investor.amcc.com/events.cfm Replay: 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,
ASSETS 2008 2008
--------- ---------
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
--------------------------- ------------------
Sep 30, Jun 30, Sep 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
--------------------------- ------------------
Sep 30, Jun 30, Sep 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
------------------------- ----------------
Sep 30, Jun 30, Sep 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
========= =========