SUNNYVALE, Calif., Jan. 29, 2009 (GLOBE NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) today reported its financial results for the third quarter of fiscal 2009 ended December 31, 2008.
* Q3 net revenues were $57.6 million down 13% year over year. * Q3 GAAP net loss of $274.5 million or $(4.20) per share primarily due to a $264.1 million non-cash write-down of Goodwill and an other than temporary $10.1 million impairment of investments. * Q3 non-GAAP net income of $3.9 million or $0.06 per share. * Total cash was approximately $188 million. * AMCC further demonstrated its 10G OTN product leadership with the announcement that its Pemaquid S19258, a member of the Metro Ethernet (MEtrON) family of products, received the PRODUCT OF THE YEAR 2008 award from Electronic Products Magazine.
Net revenues for the third quarter of fiscal 2009 were $57.6 million compared to $76.9 million in the second quarter of fiscal 2009, representing a sequential decline of 25% and a decline of 13% over the $66.3 million reported in the third quarter of fiscal 2008. Revenues for the first nine months were $208.6 million compared to $174.6 million for the comparable period last year, a 19% increase.
The net loss on a generally accepted accounting principles (GAAP) basis for the third quarter of fiscal 2009 was $274.5 million or $(4.20) per share. The third quarter GAAP net loss compares with a net loss of $2.3 million or $(0.04) per share for the second quarter of fiscal 2009 and a net loss of $4.3 million or $(0.06) per share for the third quarter of fiscal 2008. Year to date, GAAP net loss was $281.9 million or $(4.33) per share compared to $28.8 million or $(0.42) per share for the first nine months of fiscal 2008. The large loss was due primarily to a $264.1 million write-down of goodwill and a $10.1 million impairment of cash investments.
The non-GAAP net income for the third quarter of fiscal 2009 was $3.9 million or $0.06 per share, compared to the non-GAAP net income of $10.3 million or $0.16 per share in the second quarter of fiscal 2009 and a net income of $3.9 million or $0.06 per share for the third quarter of fiscal 2008. Year to date, non-GAAP net income was $22.0 million or $0.34 per share compared to non-GAAP net loss of $6.4 million or $(0.09) per share for the first nine months of fiscal 2008.
"This was a difficult quarter across the board. General economic conditions continue to be unpredictable and order visibility remains very low. However, I am confident our solid product cycles and design win pipeline will enable us to emerge from this crisis in a stronger position," said Kambiz Hooshmand, president and chief executive officer.
Bob Gargus, chief financial officer commented, "This was a challenging quarter but we did an excellent job of controlling costs and managing our working capital. As the global economic crisis continues to evolve, we will continue to focus on prudent Op-Ex management while executing our long range plan."
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, gain on renegotiated tool agreement, other than temporary impairment on investments, realized gain on strategic equity investment, 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, January 29, 2009, 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 2009 and to provide guidance for the fourth quarter of fiscal 2009. You may access the conference call via any of the following:
Teleconference: 719-325-4831 Conference ID: 1494407 Web Broadcast: http://investor.amcc.com/events.cfm Replay: 719-457-0820 (available through February 6, 2009)
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. A leader in high speed signal processing, IP & Ethernet packet processing, storage controllers, and processors, AMCC's patented innovations provide high value solutions in Telecom, Enterprise and Consumer Applications.
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.
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
----------- -----------
December 31, March 31,
ASSETS 2008 2008
----------- -----------
Current assets:
Cash, cash equivalents and short-term
investments $ 187,885 $ 142,889
Accounts receivable, net 20,909 28,800
Inventories 38,769 37,966
Other current assets 9,330 11,340
-------- --------
Total current assets 256,893 220,995
Marketable securities -- 51,919
Property and equipment, net 27,644 25,995
Goodwill -- 264,130
Purchased intangibles 38,593 56,025
Other assets 25,003 13,783
-------- --------
Total assets $ 348,133 $ 632,847
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 17,969 $ 25,518
Other current liabilities 20,063 22,659
-------- --------
Total current liabilities 38,032 48,177
Deferred tax liability -- 3,958
Stockholders' equity 310,101 580,712
-------- --------
Total liabilities and stockholders' equity $ 348,133 $ 632,847
======== ========
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,
2008 2008 2007 2008 2007
------------------------------- --------------------
Net revenues $ 57,565 $ 76,931 $ 66,267 $ 208,556 $ 174,612
Cost of
revenues 27,763 35,981 33,311 99,594 90,137
--------- --------- --------- --------- ---------
Gross profit 29,802 40,950 32,956 108,962 84,475
Operating
expenses:
Research and
development 21,255 24,461 24,696 69,197 74,658
Selling,
general and
administrative 13,418 16,334 14,125 46,365 46,038
Amortization
of purchased
intangibles 1,320 1,320 1,320 3,960 4,001
Impairment of
goodwill 264,130 -- -- 264,130 --
Restructuring
charges, net 1,150 140 125 1,032 1,469
Litigation
settlement -- 130 -- 130 --
Option
investigation
related
expenses, net (79) (184) (792) 84 (291)
--------- --------- --------- --------- ---------
Total operating
expenses 301,194 42,201 39,474 384,898 125,875
--------- --------- --------- --------- ---------
Operating loss (271,392) (1,251) (6,518) (275,936) (41,400)
Interest and
other (expense)
income, net (7,397) (550) 2,148 (9,274) 12,130
--------- --------- --------- --------- ---------
Loss before
income taxes (278,789) (1,801) (4,370) (285,210) (29,270)
Income tax
expense
(benefit) (4,329) 512 (31) (3,263) (458)
--------- --------- --------- --------- ---------
Net loss $(274,460) $ (2,313) $ (4,339) $(281,947) $ (28,812)
========= ========= ========= ========= =========
Basic and
diluted loss
per share:
Loss per share $ (4.20)$ (0.04) $ (0.06) $ (4.33) $ (0.42)
========= ========= ========= ========= =========
Shares used in
calculating
basic and
diluted loss
per share 65,366 65,150 67,015 65,127 68,737
========= ========= ========= ========= =========
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,
2008 2008 2007 2008 2007
------------------------------- --------------------
GAAP net loss $(274,460) $ (2,313) $ (4,339) $(281,947) $ (28,812)
Adjustments:
Stock-based
compensation
charges 1,905 2,997 2,312 8,110 8,229
Amortization
of purchased
intangibles 5,628 5,903 5,903 17,432 17,858
Impairment of
goodwill 264,130 -- -- 264,130 --
Restructuring
charges 1,150 140 125 1,032 1,469
Other than
temporary
investment
impairment 10,104 3,444 846 16,941 846
Gain on
renegotiated
design tool
agreement -- -- -- -- (749)
Realized gain
on sale of
strategic
equity
investment -- -- -- -- (4,649)
Payroll taxes
on certain
stock option
exercises -- -- -- -- 3
Litigation
settlement -- 130 -- 130 --
Option
investigation
related
expenses, net (79) (184) (792) 84 (291)
Income tax
adjustments (4,450) 193 (152) (3,942) (261)
Total GAAP to
Non-GAAP --------- --------- --------- --------- ---------
adjustments 278,388 12,623 8,242 303,917 22,455
--------- --------- --------- --------- ---------
Non-GAAP net
income (loss) $ 3,928 $ 10,310 $ 3,903 $ 21,970 $ (6,357)
========= ========= ========= ========= =========
Diluted income
(loss) per
share $ 0.06 $ 0.16 $ 0.06 $ 0.34 $ (0.09)
========= ========= ========= ========= =========
Shares used in
calculating
diluted
income (loss)
per share 65,531 65,369 67,301 65,335 68,737
========= ========= ========= ========= =========
Income (loss)
per share:
GAAP (loss)
per share $ (4.20) $ (0.04) $ (0.06) $ (4.33) $ (0.42)
GAAP to
non-GAAP
adjustments 4.26 0.20 0.12 4.67 0.33
========= ========= ========= ========= =========
Non-GAAP income
(loss) per
share $ 0.06 $ 0.16 $ 0.06 $ 0.34 $ (0.09
========= ========= ========= ========= =========
Reconciliation
of shares used
in calculating the
non-GAAP income
per share:
Shares used in
calculating the
basic and
diluted
income
(loss) per
share 65,366 65,150 67,015 65,127 68,737
Adjustment for
dilutive
securities 165 219 286 208 --
--------- --------- --------- --------- ---------
Non-GAAP shares
used in the
EPS
calculation 65,531 65,369 67,301 65,335 68,737
========= ========= ========= ========= =========
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,
2008 2008 2007 2008 2007
------------------------------- --------------------
GROSS
PROFIT:
GAAP gross
profit $ 29,802 $ 40,950 $ 32,956 $ 108,962 $ 84,475
Amortization
of purchased
intangibles 4,308 4,583 4,583 13,472 13,857
Stock-based
compensation
expense 91 182 224 487 536
--------- --------- --------- --------- ---------
Non-GAAP gross
profit $ 34,201 $ 45,715 $ 37,763 $ 122,921 $ 98,868
========= ========= ========= ========= =========
OPERATING
EXPENSES:
GAAP operating
expenses $ 301,194 $ 42,201 $ 39,474 $ 384,898 $ 125,875
Stock-based
compensation
expense (1,814) (2,815) (2,088) (7,623) (7,693)
Amortization
of
purchased
intangibles (1,320) (1,320) (1,320) (3,960) (4,001)
Impairment of
goodwill (264,130) -- -- (264,130) --
Restructuring
charges (1,150) (140) (125) (1,032) (1,469)
Gain on
renegotiated
design tool
agreement -- -- -- -- 749
Payroll taxes
on certain
stock option
exercises -- -- -- -- (3)
Litigation
settlement -- (130) -- (130) --
Option
investigation
related
expenses, net 79 184 792 (84) 291
--------- --------- --------- --------- ---------
Non-GAAP
operating
expenses $ 32,859 $ 37,980 $ 36,733 $ 107,939 $ 113,749
========= ========= ========= ========= =========
INTEREST AND
OTHER
INCOME, NET
GAAP interest
and other
(expense)
income, net $ (7,397) $ (550) $ 2,148 $ (9,274) $ 12,130
Realized
gain on
sale of
strategic
equity
investments -- -- -- -- (4,649)
Other than
temporary
investment
impairment 10,104 3,444 846 16,941 846
--------- --------- --------- --------- ---------
Non-GAAP
interest
and other
income, net $ 2,707 $ 2,894 $ 2,994 $ 7,667 $ 8,327
========= ========= ========= ========= =========
INCOME TAX
EXPENSE
(BENEFIT):
GAAP income
tax
expense
(benefit) $ (4,329) $ 512 $ (31) $ (3,263) $ (458)
Income tax
adjustments 4,450 (193) 152 3,942 261
--------- --------- --------- --------- ---------
Non-GAAP
income tax
expense
(benefit) $ 121 $ 319 $ 121 $ 679 $ (197)
========= ========= ========= ========= =========
RESEARCH AND
DEVELOPMENT
GAAP research
and
development $ 21,255 $ 24,461 $ 24,696 $ 69,197 $ 74,658
Stock-based
compensation
expense (1,244) (1,098) (1,177) (3,679) (3,448)
Gain on
renegotiated
design tool
agreement -- -- -- -- 749
Payroll taxes
on certain
stock
option
exercises -- -- -- -- (2)
--------- --------- --------- --------- ---------
Non-GAAP
research
and
development $ 20,011 $ 23,363 $ 23,519 $ 65,518 $ 71,957
========= ========= ========= ========= =========
SELLING,
GENERAL AND
ADMINISTRATIVE
GAAP selling,
general and
adminis-
trative $ 13,418 $ 16,334 $ 14,125 $ 46,365 $ 46,038
Stock-based
compensation
expense (570) (1,717) (911) (3,944) (4,245)
Payroll taxes
on certain
stock option
exercises -- -- -- -- (1)
--------- --------- --------- --------- ---------
Non-GAAP
selling,
general and
adminis-
trative $ 12,848 $ 14,617 $ 13,214 $ 42,421 $ 41,792
========= ========= ========= ========= =========
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
December 31,
-----------------------
2008 2007
--------- ---------
Operating activities:
Net loss $(281,947) $ (28,812)
Adjustments to reconcile net loss to net
cash provided by (used for) operating
activities
Depreciation 5,148 4,891
Amortization of purchased intangibles 17,432 17,858
Impairment of goodwill 264,130 --
Stock-based compensation expense:
Stock options 4,135 7,029
Restricted stock units 3,975 1,199
Impairment of short-term investments and
marketable securities 16,941 846
Net gain on sale of strategic equity
investment -- (4,649)
Non-cash restructuring charges 57 --
Net gain (loss) on disposal of property 15 (8)
Changes in operating assets and liabilities:
Accounts receivable 7,891 813
Inventories (803) (8,534)
Other assets (9,210) 1,106
Accounts payable (7,549) (1,019)
Accrued payroll and other accrued
liabilities (2,705) (5,660)
Deferred taxes (3,958) --
Deferred revenue 109 429
--------- ---------
Net cash provided by (used for) operating
activities 13,661 (14,511)
Investing activities:
Proceeds from sales and maturities
investments 897,153 490,932
Purchases of investments (855,263) (416,517)
Purchase of strategic investments -- (5,000)
Net proceeds from the sale of strategic
equity investment -- 5,249
Purchase of property, equipment and other
assets (6,812) (4,943)
Proceeds from sale of property, equipment
and other assets -- 1,646
--------- ---------
Net cash provided by (used for)
investing activities 35,078 71,367
Financing activities:
Proceeds from issuance of common stock 1,570 3,785
Repurchase of Company stock -- (56,950)
Funding of structured stock repurchase
agreements -- (41,830)
Funds received from structured stock
repurchase agreements including gains -- 21,112
Other (331) (77)
--------- ---------
Net cash provided by (used for)
financing activities 1,239 (73,960)
--------- ---------
Net decrease in cash and cash
equivalents 49,978 (17,104)
Cash and cash equivalents at beginning of the
period 42,689 51,595
--------- ---------
Cash and cash equivalents at end of the
period $ 92,667 $ 34,491
========= =========