Selected Q3 Highlights ---------------------- * Q3 net revenues of $66.3 million, up 14% sequentially * Q3 GAAP net loss of $4.3 million or $(0.06) per share compared to a GAAP net loss of $8.1 million or $(0.12) per share in the second quarter * Q3 non-GAAP net income of $3.1 million or $0.05 per share compared to a non-GAAP net loss of $3.0 million or $(0.04) per share in the second quarter * Transport revenues were $18.8 million and grew 34% sequentially; Storage revenues were $13.6 million and grew 11% sequentially; Processor revenues were $24.9 million and declined 8% sequentially * Implemented One-for-Four Reverse Stock Split * AMCC's PowerPC(r) 405EX Embedded Processor named 2007 Product of the Year by Electronic Products Magazine
SUNNYVALE, Calif., Jan. 23, 2008 (PRIME NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) today reported its financial results for the third quarter of fiscal 2008.
Net revenues for the third quarter of fiscal 2008 were $66.3 million compared to $58.2 million reported in the second quarter of fiscal 2008 and $76.6 million reported in the third quarter of fiscal 2007. Revenues for the first nine months were $174.6 million compared to $222.7 million for the comparable period last year.
The net loss on a generally accepted accounting principles ("GAAP") basis for the third quarter of fiscal 2008 was $4.3 million or $(0.06) per share. The third quarter GAAP net loss compares with a net loss of $8.1 million or $(0.12) per share for the second quarter of fiscal 2008 and a net loss of $4.2 million or $(0.06) per share for the third quarter of fiscal 2007. Year to date the GAAP net loss was $28.8 million or $(0.42) per share compared to $18.9 million or $(0.27) per share for the first nine months of fiscal 2007.
The non-GAAP net income for the third quarter of fiscal 2008 was $3.1 million or $0.05 per share, compared to the non-GAAP net loss of $3.0 million or $(0.04) per share in the second quarter of fiscal 2008 and the non-GAAP net income of $9.0 million or $0.13 per share in the third quarter of fiscal 2007. Year to date the non-GAAP net loss was $7.2 million or $(0.10) per share compared to a non-GAAP net income of $27.5 million or $0.38 per share for the first nine months of fiscal 2007.
"I am pleased with our financial results for the December quarter. We achieved revenue growth at the upper end of our guidance range and returned to non-GAAP profitability. Order patterns remained strong throughout the quarter and we entered the March quarter with our strongest backlog position in more than two years. Finally, all of us are proud that AMCC's PowerPC(r) 405EX Embedded Processor was named 2007 Product of the Year by Electronic Products Magazine," said Kambiz Hooshmand, president and chief executive officer.
Bob Gargus, chief financial officer commented, "During the quarter we continued to reduce operating expenses and did better than our goal. We implemented the planned one-for-four reverse stock split and we are looking forward to growth in revenues and further improvement in our non-GAAP profitability in the March quarter."
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, stock-based compensation charges, realized gains on sale of strategic equity investment and gain on renegotiated design tool agreement, payroll tax on certain stock option exercises and expenses related to stock option investigation, net. 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, net of insurance recoveries. 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 23, 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 third quarter of fiscal 2008 and to provide guidance for the fourth quarter of fiscal 2008. You may access the conference call via any of the following:
Teleconference: 913-312-1481 Conference ID: 7331488 Web Broadcast: http://investor.amcc.com/events.cfm Replay: 719-457-0820 (available through January 29, 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)
-------- --------
December 31, March 31,
2007 2007
ASSETS -------- --------
Current assets:
Cash, cash equivalents and short-term
investments $116,849 $284,470
Accounts receivable, net 31,745 32,558
Inventories 39,820 31,286
Other current assets 11,817 14,438
-------- --------
Total current assets 200,231 362,752
Marketable securities 69,453 --
Property and equipment, net 25,563 27,150
Goodwill 335,624 335,857
Purchased intangibles 61,929 79,787
Other assets 17,713 10,966
-------- --------
Total assets $710,513 $816,512
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,874 $ 26,893
Other current liabilities 23,567 28,797
-------- --------
Total current liabilities 49,441 55,690
Stockholders' equity 661,072 760,822
-------- --------
Total liabilities and stockholders' equity $710,513 $816,512
======== ========
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
---------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
---------------------------- ------------------
Net revenues $ 66,267 $ 58,210 $ 76,642 $174,612 $222,685
Cost of revenues 33,311 30,328 37,799 90,137 104,863
-------- -------- -------- -------- --------
Gross profit 32,956 27,882 38,843 84,475 117,822
Operating expenses:
Research and
development 24,696 24,480 24,550 74,658 72,242
Selling, general
and administrative 14,125 15,850 17,351 46,038 49,963
Amortization of
purchased
intangibles 1,320 1,336 1,350 4,001 3,645
Acquired in-process
research and
development -- -- -- -- 13,300
Restructuring
charges 125 1,376 67 1,469 2,733
Option
investigation, net (792) 209 2,705 (291) 4,405
-------- -------- -------- -------- --------
Total operating
expenses 39,474 43,251 46,023 125,875 146,288
-------- -------- -------- -------- --------
Operating loss (6,518) (15,369) (7,180) (41,400) (28,466)
Interest and other
income, net 2,148 6,906 3,121 12,130 9,915
-------- -------- -------- -------- --------
Loss before income
taxes (4,370) (8,463) (4,059) (29,270) (18,551)
Income tax expense
(benefit) (31) (410) 113 (458) 327
-------- -------- -------- -------- --------
Net loss $ (4,339) $ (8,053) $ (4,172) $(28,812) $(18,878)
======== ======== ======== ======== ========
Basic and diluted
loss per share:
Loss per share $ (0.06) $ (0.12) $ (0.06) $ (0.42) $ (0.27)
======== ======== ======== ======== ========
Shares used in
calculating basic
and diluted loss
per share 67,015 68,783 70,450 68,737 71,228
======== ======== ======== ======== ========
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 Nine months ended
---------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
---------------------------- ------------------
GAAP net loss $ (4,339) $ (8,053) $ (4,172) $(28,812) $(18,878)
Adjustments:
Stock-based
compensation
charges 2,312 3,297 2,723 8,229 7,911
Amortization of
purchased
intangibles 5,903 5,919 7,877 17,858 18,551
Restructuring
charges 125 1,376 67 1,469 2,733
Realized gain on
sale of strategic
equity investment -- (4,649) -- (4,649) --
Gain on
renegotiated
design tool
agreement -- (749) -- (749) --
Acquired in-process
research and
development -- -- -- -- 13,300
Payroll taxes on
certain stock
option exercises -- 1 -- 3 1
Expenses related to
stock option
investigation, net (792) 209 2,705 (291) 4,405
Income tax
adjustments (126) (318) (217) (236) (523)
-------- -------- -------- -------- --------
Total GAAP to
Non-GAAP adjustments 7,422 5,086 13,155 21,634 46,378
-------- -------- -------- -------- --------
Non-GAAP net income
(loss) $ 3,083 $ (2,967) $ 8,983 $ (7,178) $ 27,500
======== ======== ======== ======== ========
Diluted income (loss)
per share $ 0.05 $ (0.04) $ 0.13 $ (0.10) $ 0.38
======== ======== ======== ======== ========
Shares used in
calculating diluted
income (loss) per
share 67,207 68,783 70,765 68,737 71,481
======== ======== ======== ======== ========
Income (loss) per
share:
GAAP income (loss)
per share $ (0.06) $ (0.12) $ (0.06) $ (0.42) $ (0.27)
GAAP to non-GAAP
adjustments 0.11 0.08 0.19 0.32 0.65
-------- -------- -------- -------- --------
Non-GAAP income
(loss) per share $ 0.05 $ (0.04) $ 0.13 $ (0.10) $ 0.38
======== ======== ======== ======== ========
Reconciliation of
shares used in
calculating the
non-GAAP income per
share:
Shares used in
calculating the
basic and diluted
income(loss) per
share 67,015 68,783 70,450 68,737 71,228
Adjustment for
dilutive
securities 192 -- 315 -- 253
-------- -------- -------- -------- --------
Non-GAAP shares
used in the EPS
calculation 67,207 68,783 70,765 68,737 71,481
======== ======== ======== ======== ========
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 Nine months ended
---------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
---------------------------- ------------------
GROSS PROFIT:
GAAP gross profit $ 32,956 $ 27,882 $ 38,843 $ 84,475 $117,822
Amortization of
purchased
intangibles 4,583 4,583 6,527 13,857 14,906
Stock-based
compensation
expense 224 240 148 536 439
-------- -------- -------- -------- --------
Non-GAAP gross
profit $ 37,763 $ 32,705 $ 45,518 $ 98,868 $133,167
======== ======== ======== ======== ========
OPERATING EXPENSES:
GAAP operating
expenses $ 39,474 $ 43,251 $ 46,023 $125,875 $146,288
Amortization of
purchased
intangibles (1,320) (1,336) (1,350) (4,001) (3,645)
Acquired in-process
research and
development -- -- -- -- (13,300)
Stock-based
compensation
expense (2,088) (3,057) (2,575) (7,693) (7,472)
Restructuring
charges (125) (1,376) (67) (1,469) (2,733)
Gain on
renegotiated
design tool
agreement -- 749 -- 749 --
Payroll taxes on
certain stock
option exercises -- (1) -- (3) (1)
Expenses related to
stock option
investigation, net 792 (209) (2,705) 291 (4,405)
-------- -------- -------- -------- --------
Non-GAAP operating
expenses $ 36,733 $ 38,021 $ 39,326 $113,749 $114,732
======== ======== ======== ======== ========
INTEREST AND OTHER
INCOME, NET
GAAP interest and
other income, net $ 2,148 $ 6,906 $ 3,121 $ 12,130 $ 9,915
Realized gain on
sale of
strategic equity
investments -- (4,649) -- (4,649) --
-------- -------- -------- -------- --------
Non-GAAP interest
and other income,
net $ 2,148 $ 2,257 $ 3,121 $ 7,481 $ 9,915
======== ======== ======== ======== ========
INCOME TAX EXPENSE
(BENEFIT):
GAAP income tax
expense (benefit) $ (31) $ (410) $ 113 $ (458) $ 327
Income tax
adjustments 126 318 217 236 523
-------- -------- -------- -------- --------
Non-GAAP income tax
expense (benefit) $ 95 $ (92) $ 330 $ (222) $ 850
======== ======== ======== ======== ========
RESEARCH AND
DEVELOPMENT
GAAP research and
development $ 24,696 $ 24,480 $ 24,550 $ 74,658 $ 72,242
Stock-based
compensation
expense (1,177) (1,216) (882) (3,448) (2,979)
Gain on
renegotiated
design tool
agreement -- 749 -- 749 --
Payroll taxes on
certain stock
option exercises -- -- -- (2) --
-------- -------- -------- -------- --------
Non-GAAP research and
development $ 23,519 $ 24,013 $ 23,668 $ 71,957 $ 69,263
======== ======== ======== ======== ========
SELLING, GENERAL AND
ADMINISTRATIVE
GAAP selling, general
and administrative $ 14,125 $ 15,850 $ 17,351 $ 46,038 $ 49,963
Stock-based
compensation
expense (911) (1,841) (1,693) (4,245) (4,493)
Payroll taxes on
certain stock
option exercises -- (1) -- (1) (1)
-------- -------- -------- -------- --------
Non-GAAP selling,
general and
administrative $ 13,214 $ 14,008 $ 15,658 $ 41,792 $ 45,469
======== ======== ======== ======== ========
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
(in thousands)
(unaudited)
Nine months ended
December 31,
---------------------
2007 2006
-------- --------
Operating activities:
Net loss $(28,812) $(18,878)
Adjustments to reconcile net loss to net
cash provided by (used for) operating
activities
Depreciation and amortization 4,891 6,518
Amortization of purchased intangibles 17,859 18,551
Acquired in-process research and
development -- 13,300
Stock-based compensation expense:
Stock options 7,029 7,854
Restricted stock units 1,199 59
Non-cash restructuring charges (benefit) (32) 2,521
Realized gain on strategic equity
investment (4,649) --
Impairment of marketable securities 846 --
Net gain on disposal of property 68 34
Changes in operating assets and
liabilities:
Accounts receivable 813 (7,973)
Inventories (8,589) (11,294)
Other assets 1,106 (3,148)
Accounts payable (1,019) (719)
Accrued payroll and other accrued
liabilities (5,628) (6,315)
Deferred revenue 429 (372)
-------- --------
Net cash provided by (used for)
operating activities (14,489) 138
Investing activities:
Proceeds from sales and maturities of
investments 490,932 379,413
Purchases of investments (416,517) (306,744)
Purchase of strategic investments (5,000) (1,500)
Net proceeds from the sale of strategic
investments 5,249 --
Purchase of property, equipment (5,013) (5,783)
Proceeds from sale of property, equipment 1,646 --
Net cash paid for acquisitions -- (71,971)
-------- --------
Net cash provided by (used for)
investing activities 71,297 (6,585)
Financing activities:
Proceeds from issuance of common stock 3,785 248
Open market repurchases of Company stock (56,961) (20,137)
Funding of structured stock repurchase
agreements (41,819) --
Funds received from structured stock
repurchase agreements including gains 21,112 17,379
Payments on long-term debt -- (289)
Other (29) 166
-------- --------
Net cash used for financing activities (73,912) (2,633)
-------- --------
Net decrease in cash and cash
equivalents (17,104) (9,080)
Cash and cash equivalents at beginning of the
period 51,595 49,125
-------- --------
Cash and cash equivalents at end of the period $ 34,491 $ 40,045
======== ========