Revenues of $76.6 million, up 17.5% from the third quarter last year Q3 GAAP net loss of $4.2 million and $(0.01) per share Q3 non-GAAP net income of $9.0 million and $0.03 per share Revenues from storage products grew 12% sequentially
SUNNYVALE, Calif., Jan. 30, 2007 (PRIME NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) today reported its financial results for the three and nine months ended December 31, 2006.
Net revenues for the third quarter of fiscal 2007 were $76.6 million compared to the $76.4 million reported in the second quarter of fiscal 2007 and $65.2 million reported in the third quarter of fiscal 2006.
The net loss on a generally accepted accounting principles (GAAP) basis for the third quarter of fiscal 2007 was $4.2 million or $(0.01) per share, compared with a net loss of $13.9 million or $(0.05) per share for the second quarter of fiscal 2007 and net income of $584,000 or $0.00 per share for the third quarter of fiscal 2006.
The non-GAAP net income for the third quarter of fiscal 2007 was $9.0 million or $0.03 per diluted share, compared to the non-GAAP net income of $10.4 million or $0.04 per diluted share in the second quarter of fiscal 2007 and the non-GAAP net income of $4.8 million or $0.02 per diluted share in the third quarter of fiscal 2006.
Net revenue for the nine months ended December 31, 2006 was $222.7 million and increased 14.3% from the $194.9 million reported for the nine months ended December 31, 2005.
The GAAP net loss for the nine months ended December 31, 2006 was $18.9 million or $(0.07) per share, compared to the GAAP net loss of $10.0 million or $(0.03) per share for the nine months ended December 31, 2005. The non-GAAP net income for the nine months ended December 31, 2006 was $27.5 million or $0.10 per share, a 133% increase compared with the non-GAAP net income of $11.8 million or $0.04 per share for the nine months ended December 31, 2005.
"The communications market weakened throughout this quarter due to inventory corrections and industry consolidations. Revenues were disappointing but we managed on-going expenses well. Storage revenues showed strong sequential growth since we executed our initiatives to enhance our product portfolio and channel partners," said Kambiz Hoosmand, president and chief executive officer.
AMCC reports its financial results in accordance 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 and impairments of purchased intangibles and goodwill, acquired in-process research and development charges, stock-based compensation charges, litigation settlement costs, realized gains on strategic equity investments, payroll tax on certain stock option exercises and expenses related to stock option investigation. Expenses related to the 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. 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, January 30, 2007, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss the Company's financial results for the third quarter of fiscal 2007 and to provide guidance for the fourth quarter of fiscal 2007. You may access the conference call via any of the following:
Teleconference: 913-981-5584 Conference ID: 9540488 Web Broadcast: http://www.amcc.com Replay: 719-457-0820 (Available for 7 days following the call)
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 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 there from. All other trademarks are the property of their respective owners.
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
-----------------------
Dec 31, March 31,
2006 2006
-----------------------
ASSETS (unaudited)
Current assets:
Cash, cash equivalents and
short-term investments $261,040 $335,665
Accounts receivable, net 35,741 26,324
Inventories 37,273 24,941
Other current assets 16,351 12,618
-------- --------
Total current assets 350,405 399,548
Property and equipment, net 32,010 36,127
Goodwill and purchased intangibles 422,009 381,066
Other assets 12,099 8,685
-------- --------
Total assets $816,523 $825,426
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 24,960 $ 24,656
Other current liabilities 35,070 37,962
-------- --------
Total current liabilities 60,030 62,618
Stockholders' equity 756,493 762,808
-------- --------
Total liabilities and stockholders' equity $816,523 $825,426
======== ========
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three months ended Nine months ended
---------------------------- ------------------
Dec 31, Sept 30, Dec 31, Dec 31, Dec 31,
2006 2006 2005 2006 2005
---------------------------- ------------------
Net revenues $ 76,642 $ 76,364 $ 65,243 $222,685 $194,851
Cost of revenues 37,799 35,536 30,017 104,863 91,943
-------- -------- -------- -------- --------
Gross profit 38,843 40,828 35,226 117,822 102,908
Operating expenses:
Research and
development 24,550 24,853 23,429 72,242 70,934
Selling, general
and
administrative 20,056 17,312 15,022 54,368 46,484
Amortization of
purchased
intangibles 1,350 1,188 1,107 3,645 3,481
Acquired in-process
research and
development -- 13,300 -- 13,300 --
Restructuring
charges 67 1,419 1,339 2,733 4,898
Litigation
settlement, net -- -- -- -- --
-------- -------- -------- -------- --------
Total operating
expenses 46,023 58,072 40,897 146,288 125,797
-------- -------- -------- -------- --------
Operating loss (7,180) (17,244) (5,671) (28,466) (22,889)
Interest and other
income, net 3,121 3,429 4,940 9,915 11,881
-------- -------- -------- -------- --------
Loss before income
taxes (4,059) (13,815) (731) (18,551) (11,008)
Income tax expense
(benefit) 113 74 (1,315) 327 (964)
-------- -------- -------- -------- --------
Net income (loss) $ (4,172) $(13,889) $ 584 $(18,878) $(10,044)
======== ======== ======== ======== ========
Basic and diluted
income (loss) per
share:
Income (loss) per
share $ (0.01) $ (0.05) $ 0.00 $ (0.07) $ (0.03)
======== ======== ======== ======== ========
Shares used in
calculating
basic and
diluted income
(loss) per share 281,799 281,762 299,049* 284,913 302,974
======== ======== ======== ======== ========
* Represents diluted shares. Basic shares used for calculating net
income per share were 297,119.
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME
(unaudited)
(in thousands)
Three months ended Nine months ended
---------------------------- ------------------
Dec 31, Sept 30, Dec 31, Dec 31, Dec 31,
2006 2006 2005 2006 2005
---------------------------- ------------------
GAAP net income
(loss) $ (4,172) $(13,889) $ 584 $(18,878) $(10,044)
Adjustments:
Stock-based
compensation
charges 2,723 2,677 1,458 7,911 4,443
Amortization of
purchased
intangibles 7,877 5,941 4,732 18,551 17,500
Restructuring
charges 67 1,419 1,339 2,733 4,898
Realized gain
on sale of
strategic
equity
investment -- -- (672) -- (672)
Acquired
in-process
research and
development -- 13,300 -- 13,300 --
Payroll taxes
on certain
stock option
exercises -- -- 1 1 1
Expenses
related to
stock option
investigation 2,705 1,150 -- 4,405 --
Income tax
adjustments (217) (212) (2,663) (523) (4,299)
-------- -------- -------- -------- --------
Total GAAP to
Non-GAAP
adjustments 13,155 24,275 4,195 46,378 21,871
-------- -------- -------- -------- --------
Non-GAAP net
income $ 8,983 $ 10,386 $ 4,779 $ 27,500 $ 11,827
======== ======== ======== ======== ========
Diluted income
per share $ 0.03 $ 0.04 $ 0.02 $ 0.10 $ 0.04
======== ======== ======== ======== ========
Shares used in
calculating
diluted
income per
share 283,060 282,586 299,049 285,924 304,521
======== ======== ======== ======== ========
Income (loss)
per share:
GAAP income (loss)
per share $ (0.01) $ (0.05) $ 0.00 $ (0.07) $ (0.03)
GAAP to non-GAAP
adjustments 0.04 0.09 0.02 0.17 0.07
-------- -------- -------- -------- --------
Non-GAAP income
per share $ 0.03 $ 0.04 $ 0.02 $ 0.10 $ 0.04
======== ======== ======== ======== ========
Reconciliation of
shares used in
calculating the
non-GAAP income per
share:
Shares used in
calculating
the basic
and diluted
income(loss)
per share 281,799 281,762 299,049* 284,913 302,974
Adjustment for
dilutive
securities 1,261 824 -- 1,011 1,547
-------- -------- -------- -------- --------
Non-GAAP shares
used in the
EPS
calculation 283,060 282,586 299,049 285,924 304,521
======== ======== ======== ======== ========
* Represents diluted shares. Basic shares used for calculating net
income per share were 297,119.
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
(unaudited)
(in thousands)
The following schedule reconciles selected line items from the
GAAP basis statements of operations to the non-GAAP statements of
operations:
Three months ended Nine months ended
---------------------------- ------------------
Dec 31, Sept 30, Dec 31, Dec 31, Dec 31,
2006 2006 2005 2006 2005
---------------------------- ------------------
GROSS PROFIT:
GAAP gross profit $ 38,843 $ 40,828 $ 35,226 $117,822 $102,908
Amortization of
purchased
intangibles 6,527 4,753 3,625 14,906 14,019
Stock-based
compensation
expense 148 157 21 439 68
-------- -------- -------- -------- --------
Non-GAAP gross
profit $ 45,518 $ 45,738 $ 38,872 $133,167 $116,995
======== ======== ======== ======== ========
OPERATING
EXPENSES:
GAAP operating
expenses $ 46,023 $ 58,072 $ 40,897 $146,288 $125,797
Amortization of
purchased
intangibles 1,350 1,188 1,107 3,645 3,481
Impairment of
purchased
intangibles -- -- -- -- --
Acquired
in-process
research
and development -- 13,300 -- 13,300 --
Stock-based
compensation
expense 2,575 2,520 1,437 7,472 4,375
Restructuring
charges 67 1,419 1,339 2,733 4,898
Payroll taxes on
certain stock
option exercises -- -- 1 1 1
Expenses related
to stock option
investigation 2,705 1,150 -- 4,405 --
-------- -------- -------- -------- --------
Non-GAAP operating
expenses $ 39,326 $ 38,495 $ 37,013 $114,732 $113,042
======== ======== ======== ======== ========
INTEREST AND OTHER
INCOME, NET
GAAP interest and
other income,
net $ 3,121 $ 3,429 $ 4,940 $ 9,915 $ 11,881
Realized gain on
sale of
strategic
equity
investments -- -- (672) -- (672)
-------- -------- -------- -------- --------
Non-GAAP interest
and other
income, net $ 3,121 $ 3,429 $ 4,268 $ 9,915 $ 11,209
======== ======== ======== ======== ========
INCOME TAX EXPENSE
(BENEFIT):
GAAP income tax
expense (benefit) $ 113 $ 74 $ (1,315) $ 327 $ (964)
Income tax
adjustments 217 212 2,663 523 4,299
-------- -------- -------- -------- --------
Non-GAAP income
tax expense
(benefit) $ 330 $ 286 $ 1,348 $ 850 $ 3,335
======== ======== ======== ======== ========
RESEARCH AND
DEVELOPMENT
GAAP research and
development $ 24,550 $ 24,853 $ 23,429 $ 72,242 $ 70,934
Stock-based
compensation
expense 882 1,028 654 2,979 2,024
Payroll taxes on
certain stock
option exercises -- -- 1 -- 1
-------- -------- -------- -------- --------
Non-GAAP research
and development $ 23,668 $ 23,825 $ 22,774 $ 69,263 $ 68,909
======== ======== ======== ======== ========
SELLING, GENERAL
AND
ADMINISTRATIVE
GAAP selling,
general and
administrative $ 20,056 $ 17,312 $ 15,022 $ 54,368 $ 46,484
Stock-based
compensation
expense 1,693 1,492 783 4,493 2,351
Payroll taxes on
certain stock
option
exercises -- -- -- 1 --
Expenses related
to stock option
investigation 2,705 1,150 -- 4,405 --
-------- -------- -------- -------- --------
Non-GAAP selling,
general and
administrative $ 15,658 $ 14,670 $ 14,239 $ 45,469 $ 44,133
======== ======== ======== ======== ========