Selected Q1 Highlights * Q1 net revenues of $50.1 million * Q1 GAAP net loss of $16.4 million or $(0.06) per share * Q1 non-GAAP net loss of $7.3 million or $(0.03) per share * Storage revenues grew 5.0% sequentially * Announced Titan, the Company's next generation dual-core processor for embedded applications * Introduced new members of the Rubicon family: 10G ENET/OTN/SONET/SDH Mapper and FEC devices * Announced that Donald Colvin, CFO of ON Semiconductor, was elected to the board of directors
SUNNYVALE, Calif., July 25, 2007 (PRIME NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) today reported its financial results for the first quarter of fiscal 2008.
Net revenues for the first quarter of fiscal 2008 were $50.1 million compared to $70.2 million reported in the fourth quarter of fiscal 2007 and $69.7 million reported in the first quarter of fiscal 2007.
The net loss on a generally accepted accounting principles (GAAP) basis for the first quarter of fiscal 2008 was $16.4 million or $(0.06) per share. The first quarter GAAP net loss compares with a net loss of $5.3 million or $(0.02) per share for the fourth quarter of fiscal 2007 and a net loss of $0.8 million or $(0.00) per share for the first quarter of fiscal 2007.
The non-GAAP net loss for the first quarter of fiscal 2008 was $7.3 million or $(0.03) per share, compared to the non-GAAP net income of $2.8 million or $0.01 per share in the fourth quarter of fiscal 2007 and the non-GAAP net income of $8.1 million or $0.03 per share in the first quarter of fiscal 2007.
"The first quarter revenues represent what we believe is the bottom of this correction cycle. With a book-to-bill ratio of 1.15x and firm order patterns continuing into the current quarter, I am confident that we will return to solid revenue growth for the September quarter and optimistic that this will continue for the remainder of this fiscal year," said Kambiz Hooshmand, president and chief executive officer.
Bob Gargus, chief financial officer commented, "We have already taken the first steps in our initiative to reduce operating expenses. I expect that reductions implemented earlier this month will yield a little less than half the needed reductions and represents a good first step. I anticipate that revenue growth in the second half combined with planned expense reductions will return us to profitability later in the year."
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, payroll tax on certain stock option exercises and expenses related to stock option investigation. 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. 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, July 25, 2007, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss additional details regarding the Company's performance for the first quarter of fiscal 2008 and to provide guidance for the second quarter of fiscal 2008. You may access the conference call via any of the following:
Teleconference: 913-312-1302 Conference ID: 3482534 Web Broadcast: http://investor.amcc.com/events.cfm Replay: 719-457-0820 (available through August 1, 2007)
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 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 future revenues, orders, operating expenses 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)
----------- -----------
June 30, March 31,
ASSETS 2007 2007
----------- -----------
Current assets:
Cash, cash equivalents and short-term
investments $ 255,873 $ 284,470
Accounts receivable, net 21,710 32,558
Inventories 34,834 31,286
Other current assets 12,950 14,438
----------- -----------
Total current assets 325,367 362,752
Property and equipment, net 26,613 27,150
Goodwill and purchased intangibles 409,376 415,644
Other assets 12,113 10,966
----------- -----------
Total assets 773,469 $ 816,512
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,110 $ 26,893
Other current liabilities 27,048 28,797
----------- -----------
Total current liabilities 45,158 55,690
Stockholders' equity 728,311 760,822
----------- -----------
Total liabilities and stockholders'
equity $ 773,469 $ 816,512
=========== ===========
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended
-----------------------------------
June 30, March 31, June 30,
2007 2007 2006
---------- ---------- ----------
Net revenues $ 50,135 $ 70,167 $ 69,679
Cost of revenues 26,498 35,851 31,528
---------- ---------- ----------
Gross profit 23,637 34,316 38,151
Operating expenses:
Research and development 25,482 24,176 22,839
Selling, general and
administrative 16,063 18,008 16,450
Amortization of purchased
intangibles 1,345 1,350 1,107
Restructuring charges (32) (1,442) 1,247
Option investigation 292 939 550
---------- ---------- ----------
Total operating expenses 43,150 43,031 42,193
---------- ---------- ----------
Operating loss (19,513) (8,715) (4,042)
Interest and other income, net 3,076 3,460 3,365
--------- ---------- ----------
Loss before income taxes (16,437) (5,255) (677)
Income tax expense (benefit) (17) 75 140
--------- ---------- ----------
Net loss $ (16,420) $ (5,330) $ (817)
========== ========== ==========
Basic and diluted loss per share:
Loss per share $ (0.06) $ (0.02) $ (0.00)
========== ========== ==========
Shares used in calculating basic
and diluted loss per share 281,656 282,472 291,178
========== ========== ==========
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS)
(unaudited)
(in thousands)
Three months ended
----------------------------------
June 30, March 31, June 30,
2007 2007 2006
----------------------------------
GAAP net loss $ (16,420) $ (5,330) $ (817)
Adjustments:
Stock-based compensation charges 2,620 2,440 2,511
Amortization of purchased
intangibles 6,036 6,200 4,733
Restructuring charges (32) (1,442) 1,247
Payroll taxes on certain
stock option exercises 2 6 1
Expenses related to stock option
investigation 292 939 550
Income tax adjustments 209 (12) (94)
--------- ---------- ---------
Total GAAP to Non-GAAP adjustments 9,127 8,131 8,948
--------- ---------- ---------
Non-GAAP net income (loss) $ (7,293) $ 2,801 $ 8,131
========= ========== ==========
Diluted income (loss) per share $ (0.03) $ 0.01 $ 0.03
========= ========== ==========
Shares used in calculating diluted
income (loss) per share 281,656 283,871 292,126
========= ========== ==========
Income (loss) per share:
GAAP income (loss) per share $ (0.06) $ (0.02) $ (0.00)
GAAP to non-GAAP adjustments 0.03 0.03 0.03
--------- ---------- ---------
Non-GAAP income (loss) per share $ (0.03) $ 0.01 $ 0.03
========= ========== ==========
Reconciliation of shares used in
calculating the non-GAAP income
per share:
Shares used in calculating the
basic and diluted income (loss)
per share 281,656 282,472 291,178
Adjustment for dilutive
securities -- 1,399 948
--------- ---------- ---------
Non-GAAP shares used in the EPS
calculation 281,656 283,871 292,126
========= ========== ==========
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
----------------------------------
June 30, March 31, June 30,
2007 2007 2006
----------------------------------
GROSS PROFIT:
GAAP gross profit $ 23,637 $ 34,316 $ 38,151
Amortization of purchased
intangibles 4,691 4,850 3,626
Stock-based compensation
expense 72 153 134
---------- ---------- ----------
Non-GAAP gross profit $ 28,400 $ 39,319 $ 41,911
========== ========== ==========
OPERATING EXPENSES:
GAAP operating expenses $ 43,150 $ 43,031 $ 42,193
Amortization of purchased
intangibles (1,345) (1,350) (1,107)
Stock-based compensation
expense (2,548) (2,287) (2,377)
Restructuring charges 32 1,442 (1,247)
Payroll taxes on certain stock
option exercises (2) (6) (1)
Expenses related to stock option
investigation (292) (939) (550)
---------- ---------- ----------
Non-GAAP operating expenses $ 38,995 $ 39,891 $ 36,911
========== ========== ==========
INTEREST AND OTHER INCOME, NET
GAAP interest and other income,
net $ 3,076 $ 3,460 $ 3,365
Realized gain on sale of
strategic equity investments -- -- --
---------- ---------- ----------
Non-GAAP interest and other
income, net $ 3,076 $ 3,460 $ 3,365
========== ========== ==========
INCOME TAX EXPENSE (BENEFIT):
GAAP income tax expense (benefit) $ (17) $ 75 $ 140
Income tax adjustments (209) 12 94
---------- ---------- ----------
Non-GAAP income tax expense
(benefit) $ (226) $ 87 $ 234
========== ========== ==========
RESEARCH AND DEVELOPMENT
GAAP research and development $ 25,482 $ 24,176 $ 22,839
Stock-based compensation expense (1,055) (786) (1,069)
Payroll taxes on certain stock
option exercises (2) (3) --
---------- ---------- ----------
Non-GAAP research and development $ 24,425 $ 23,387 $ 21,770
========== ========== ==========
SELLING, GENERAL AND ADMINISTRATIVE
GAAP selling, general and
administrative $ 16,063 $ 18,008 $ 16,450
Stock-based compensation expense (1,493) (1,501) (1,308)
Payroll taxes on certain stock
option exercises -- (3) (1)
---------- ---------- ----------
Non-GAAP selling, general and
administrative $ 14,570 $ 16,504 $ 15,141
========== ========== ==========
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
($ in thousands)
(unaudited)
Three Months ended June 30,
---------------------------
2007 2006
----------- -----------
Operating activities:
Net loss $ (16,420) $ (817)
Adjustments to reconcile net loss to net
cash provided by (used for) operating
activities
Depreciation and amortization 1,633 2,473
Amortization of purchased intangibles 6,036 4,733
Stock-based compensation expense:
Stock options 2,339 2,499
Restricted stock units 281 12
Non-cash restructuring charges (benefit) (32) 558
Net gain on disposal of property (6) --
Changes in operating assets and
liabilities:
Accounts receivable 10,848 (4,779)
Inventories (3,548) (1,392)
Other assets 341 (1,379)
Accounts payable (8,783) 4,073
Accrued payroll and other accrued
liabilities (1,770) 276
Deferred revenue 53 63
----------- -----------
Net cash provided by (used for)
operating activities (9,028) 6,320
Investing activities:
Proceeds from sales and maturities of
short-term investments 118,105 137,354
Purchases of short-term investments (112,237) (99,747)
Purchase of property, equipment and other
assets (1,097) (1,736)
Proceeds from sale of property, equipment
and other assets 7 --
Reduction of purchase price from prior
acquisition 232 --
----------- -----------
Net cash provided by investing
activities 5,010 35,871
Financing activities:
Proceeds from issuance of common stock 599 239
Open market repurchases of Company stock (9,138) (20,137)
Funding of structured stock repurchase
agreements (10,000) --
Funds received from structured stock
repurchase agreements including gains -- 17,379
Other (172) (89)
----------- -----------
Net cash used for financing activities (18,711) (2,608)
----------- -----------
Net increase (decrease) in cash and
cash equivalents (22,729) 39,583
Cash and cash equivalents at beginning of
year 51,595 49,125
----------- -----------
Cash and cash equivalents at end of year $ 28,866 $ 88,708
=========== ===========
Supplementary cash flow disclosure:
Cash paid for:
Interest $ 3 $ --
Income taxes $ 171 $ 210