SUNNYVALE, Calif., Jan. 28, 2010 (GLOBE NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) today reported its financial results for the third quarter of fiscal 2010 ended December 31, 2009.
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Q3 2010 net revenues from continuing operations were $53.7 million up 9% sequentially and up 13% year over year.
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Q3 2010 GAAP net loss from continuing operations was $2.7 million or $(0.04) per share. Q3 2010 net loss from discontinued operations, net of taxes, was $0.9 million or $(0.01) per share.
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Q3 2010 non-GAAP net income (from continuing operations) was $2.6 million or $0.04 per share.
- Total cash, cash equivalents and short-term investments were approximately $202 million as of December 31, 2009.
Net revenues from continuing operations for the third quarter of fiscal 2010 were $53.7 million compared to $49.2 million in the second quarter of fiscal 2010, representing a sequential increase of 9% and an increase of 13% over the $47.7 million in net revenues reported in the third quarter of fiscal 2009. Revenues for the first nine months were $148.0 million compared to $173.2 million for the comparable period last year, a 15% decrease.
The net loss on a generally accepted accounting principles (GAAP) basis for the third quarter of fiscal 2010 was $3.6 million or $(0.05) per share. The third quarter GAAP net loss compares with a net loss of $6.7 million or $(0.10) per share for the second quarter of fiscal 2010 and a net loss of $274.5 million or $(4.20) per share for the third quarter of fiscal 2009. Year to date, GAAP net loss was $7.4 million or $(0.11) per share compared to $281.9 million or $(4.33) per share for the first nine months of fiscal 2009.
Non-GAAP income from continuing operations for the third quarter of fiscal 2010 was $2.6 million or $0.04 per share, compared to non-GAAP income from continuing operations of $1.3 million or $0.02 per share in the second quarter of fiscal 2010 and non-GAAP net income from continuing operations of $3.3 million or $0.05 per share for the third quarter of fiscal 2009. Year to date, non-GAAP net income from continuing operations was $4.8 million or $0.07 per share compared to $20.0 million or $0.31 per share for the first nine months of fiscal 2009.
“We executed as promised and are excited about the significant progress we are making to establish and improve our position as a leader in the markets that are key to our future strategy,” said Paramesh Gopi, president and chief executive officer.
Bob Gargus, chief financial officer, commented, “The fundamentals of the business remain strong and we achieved our top and bottom line goals while continuing to improve our asset management. We will continue to work on reducing our operating expenses but are particularly pleased by improving gross margins.”
AppliedMicro 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, other-than-temporary impairment on investments, impairment of strategic investment, non-cash tax adjustments and expenses related to stock option investigation and other litigation. 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.
AppliedMicro management will be holding a conference call today, January 28, 2010, 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 2010 and to provide guidance for the fourth quarter of fiscal 2010. You may access the conference call via any of the following:
Teleconference: 866-831-6234
Conference ID: 55816426
Web Broadcast: http://www.appliedmicro.com
Replay: 888-286-8010 (access code: 93541367, available through February 4, 2010)
AppliedMicro Overview
AppliedMicro is a global leader in energy conscious computing solutions for telco, enterprise, data center, consumer and SMB applications. With a 30-year heritage as an innovator in high-speed connectivity and high performance embedded processing, AMCC, now AppliedMicro, employs patented Power Architecture SoCs to provide energy efficient products that can deliver up to a 40 percent reduction in power consumption without sacrificing performance. AppliedMicro's corporate headquarters are located in Sunnyvale, California. Sales and engineering offices are located throughout the world. For further information regarding AppliedMicro, visit the company's Web site at www.globenewswire.com/newsroom/ctr%3Fd=181671%26amp;l=6%26amp;u=http%253A%252F%252Fwww.appliedmicro.com" target="_top" rel="nofollow">http://www.appliedmicro.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 the Company’s focus, product cycles, design-win pipeline and future revenues. 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, 2009, 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) | ||||
| ASSETS |
December 31, 2009 |
March 31, 2009 |
||
| Current assets: | ||||
| Cash, cash equivalents and short-term investments | $202,014 | $184,009 | ||
| Accounts receivable, net | 17,785 | 17,537 | ||
| Inventories | 17,167 | 26,598 | ||
| Other current assets | 9,948 | 8,871 | ||
| Assets of discontinued operations | -- | 8,558 | ||
| Total current assets | 246,914 | 245,573 | ||
| Property and equipment, net | 25,786 | 25,749 | ||
| Purchased intangibles, net | 20,479 | 32,965 | ||
| Other assets | 20,005 | 20,323 | ||
| Total assets | $313,184 | $324,610 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $18,344 | $16,715 | ||
| Other current liabilities | 15,220 | 23,925 | ||
| Total current liabilities | 33,564 | 40,640 | ||
| Stockholders' equity | 279,620 | 283,970 | ||
| Total liabilities and stockholders' equity | $313,184 | $324,610 | ||
| APPLIED MICRO CIRCUITS CORPORATION | |||||||
| GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (in thousands, except per share data) | |||||||
| (unaudited) | |||||||
| Three Months Ended | Nine Months Ended | ||||||
| December 31, 2009 | September 30, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||
| Net revenues | $53,704 | $49,232 | $47,726 | $147,988 | $173,215 | ||
| Cost of revenues | 24,173 | 23,796 | 22,226 | 70,144 | 79,228 | ||
| Gross profit | 29,531 | 25,436 | 25,500 | 77,844 | 93,987 | ||
| Operating expenses: | |||||||
| Research and development | 23,599 | 20,828 | 18,625 | 63,841 | 60,485 | ||
| Selling, general and administrative | 11,454 | 11,991 | 11,315 | 33,964 | 38,946 | ||
| Amortization of purchased intangibles | 1,005 | 1,005 | 1,005 | 3,015 | 3,015 | ||
| Goodwill impairment charges | -- | -- | 222,972 | -- | 222,972 | ||
| Restructuring charges (reversals), net | -- | (125) | 1,024 | (279) | 906 | ||
| Litigation settlement | -- | -- | -- | -- | 130 | ||
| Option investigation related expenses, net | -- | -- | (79) | -- | 84 | ||
| Total operating expenses | 36,058 | 33,699 | 254,862 | 100,541 | 326,538 | ||
| Operating loss | (6,527) | (8,263) | (229,362) | (22,697) | (232,551) | ||
| Interest and other (expense) income and other-than-temporary impairment, net | 1,619 | (3,425) | (7,397) | (217) | (9,274) | ||
|
Loss from continuing operations before income taxes |
(4,908) | (11,688) | (236,759) | (22,914) | (241,825) | ||
| Income tax benefit | (2,248) | (3,617) | (4,396) | (9,384) | (3,491) | ||
| Loss from continuing operations | (2,660) | (8,071) | (232,363) | (13,530) | (238,334) | ||
| Income (loss) from discontinued operations net of income taxes (1) | (934) | 1,347 | (42,097) | 6,110 | (43,613) | ||
| Net loss | $(3,594) | $(6,724) | $(274,460) | $(7,420) | $(281,947) | ||
| Basic income (loss) per share: | |||||||
| Loss per share from continuing operations | $(0.04) | $(0.12) | $(3.55) | $(0.20) | $(3.66) | ||
| Income (loss) per share from discontinued operations | (0.01) | 0.02 | (0.65) | 0.09 | (0.67) | ||
| Net loss per share | $(0.05) | $(0.10) | $(4.20) | $(0.11) | $(4.33) | ||
| Shares used in calculating basic income (loss) per share | 66,139 | 66,469 | 65,366 | 66,226 | 65,127 | ||
| Diluted income (loss) per share: | |||||||
| Loss per share from continuing operations | $(0.04) | $(0.12) | $(3.55) | $(0.20) | $(3.66) | ||
| Income (loss) per share from discontinued operations | (0.01) | 0.02 | (0.65) | 0.09 | (0.67) | ||
| Net loss per share | $(0.05) | $(0.10) | $(4.20) | $(0.11) | $(4.33) | ||
| Shares used in calculating diluted income (loss) per share | 66,139 | 66,469 | 65,366 | 66,226 | 65,127 | ||
| (1) The following table provides information on the components of the loss from discontinued operations for the periods presented: | |||||||
| Components of discontinued operations | |||||||
| Three Months Ended | Nine Months Ended | ||||||
| December 31, 2009 | September 30, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||
| Net revenues | $1,009 | $703 | $9,839 | $2,228 | $35,341 | ||
| Cost of revenues | 1,003 | 51 | 5,537 | 1,787 | 20,366 | ||
| Gross profit | 6 | 652 | 4,302 | 441 | 14,975 | ||
| Operating expenses: | |||||||
| Research and development | 10 | 83 | 2,630 | 687 | 8,712 | ||
| Selling, general and administrative | 24 | 238 | 2,103 | 807 | 7,419 | ||
| Amortization of purchased intangibles | -- | -- | 315 | -- | 945 | ||
| Goodwill impairment charges | -- | -- | 41,158 | -- | 41,158 | ||
| Restructuring charges, net | -- | -- | 126 | -- | 126 | ||
| Total operating expenses | 34 | 321 | 46,332 | 1,494 | 58,360 | ||
| Operating income (loss) | (28) | 331 | (42,030) | (1,053) | (43,385) | ||
| Gain on sale of Storage Business | -- | 712 | -- | 11,366 | -- | ||
| Income (loss) from discontinued operations before income taxes | (28) | 1,043 | (42,030) | 10,313 | (43,385) | ||
| Income tax expense (benefit) | 906 | (304) | 67 | 4,203 | 228 | ||
| Net income (loss) from discontinued operations, net of income taxes | $(934) | $1,347 | $(42,097) | $6,110 | $(43,613) | ||
| 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 | |||||
| December 31, 2009 | September 30, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | ||
| GAAP net loss from continuing operations | $(2,660) | $(8,071) | $(232,363) | $(13,530) | $(238,334) | |
| Adjustments: | ||||||
| Stock-based compensation charges | 3,737 | 3,767 | 1,547 | 10,119 | 7,109 | |
| Amortization of purchased intangibles | 3,630 | 4,269 | 4,588 | 12,487 | 14,312 | |
| Goodwill impairment charges | -- | -- | 222,972 | -- | 222,972 | |
| Restructuring charges (reversals), net | -- | (125) | 1,024 | (279) | 906 | |
| Impairment of strategic investment | -- | 2,000 | -- | 2,000 | -- | |
| Other-than-temporary investment impairment | 261 | 3,133 | 10,104 | 3,569 | 16,941 | |
| Litigation settlement | -- | -- | -- | -- | 130 | |
| Option investigation related expenses, net | -- | -- | (79) | -- | 84 | |
| Income tax adjustments | (2,330) | (3,658) | (4,498) | (9,534) | (4,110) | |
| Total GAAP to Non-GAAP adjustments | 5,298 | 9,386 | 235,658 | 18,362 | 258,344 | |
| Non-GAAP income from continuing operations | $2,638 | $1,315 | $3,295 | $4,832 | $20,010 | |
| Diluted income per share from continuing operations | $0.04 | $0.02 | $0.05 | $0.07 | $0.31 | |
| Shares used in calculating diluted income per share | 68,095 | 68,409 | 65,531 | 67,746 | 65,335 | |
| Income (loss) per share from continuing operations: | ||||||
| GAAP loss per share | $(0.04) | $(0.12) | $(3.55) | $(0.20) | $(3.66) | |
| GAAP to non-GAAP adjustments | 0.08 | 0.14 | 3.60 | 0.27 | 3.97 | |
| Non-GAAP income per share from continuing operations | $0.04 | $0.02 | $0.05 | $0.07 | $0.31 | |
| Reconciliation of shares used in calculating non-GAAP income per share: | ||||||
| Shares used in calculating the basic loss per share | 66,139 | 66,469 | 65,366 | 66,226 | 65,127 | |
| Adjustment for dilutive securities | 1,956 | 1,940 | 165 | 1,520 | 208 | |
| Non-GAAP shares used in the EPS calculation | 68,095 | 68,409 | 65,531 | 67,746 | 65,335 | |
| Discontinued operations | |||||||
| Three Months Ended | Nine Months Ended | ||||||
| December 31, 2009 | September 30, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||
| GAAP income (loss) from discontinued operations | $(934) | $1,347 | $(42,097) | $6,110 | $(43,613) | ||
| Adjustments: | |||||||
| Stock-based compensation charges | -- | -- | 358 | -- | 1,001 | ||
| Amortization of purchased intangibles | -- | -- | 1,040 | -- | 3,120 | ||
| Goodwill impairment charges | -- | -- | 41,158 | -- | 41,158 | ||
| Restructuring charges, net | -- | -- | 126 | -- | 126 | ||
| Gain on sale of Storage Business | -- | (712) | -- | (11,366) | -- | ||
| Income tax adjustments | 907 | (314) | 48 | 4,235 | 168 | ||
| Total GAAP to non-GAAP adjustments | 907 | (1,026) | 42,730 | (7,131) | 45,573 | ||
| Non-GAAP income (loss) from discontinued operations | $(27) | $321 | $633 | $(1,021) | $1,960 | ||
| Income (loss) per share from discontinued operations: | |||||||
| GAAP income (loss) per share | $(0.01) | $0.02 | $(0.65) | $0.09 | $(0.67) | ||
| GAAP to non-GAAP adjustments | 0.01 | (0.02) | 0.66 | (0.11) | 0.70 | ||
| Non-GAAP income (loss) per share from discontinued operations | $-- | $-- | $0.01 | $(0.02) | $0.03 | ||
| 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 | ||||||
| December 31, 2009 | September 30, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||
| GROSS PROFIT: | |||||||
| GAAP gross profit | $29,531 | $25,436 | $25,500 | $77,844 | $93,987 | ||
| Gross profit from discontinued operations | 6 | 652 | 4,302 | 441 | 14,975 | ||
| Amortization of purchased intangibles | 2,625 | 3,264 | 4,308 | 9,472 | 13,472 | ||
| Stock-based compensation expense | 164 | 143 | 91 | 418 | 487 | ||
| Non-GAAP gross profit | $32,326 | $29,495 | $34,201 | $88,175 | $122,921 | ||
| OPERATING EXPENSES: | |||||||
| GAAP operating expenses | $36,058 | $33,699 | $254,862 | $100,541 | $326,538 | ||
| Operating expenses from discontinued operations | 34 | 321 | 46,332 | 1,494 | 58,360 | ||
| Stock-based compensation expense | (3,573) | (3,624) | (1,814) | (9,701) | (7,623) | ||
| Amortization of purchased intangibles | (1,005) | (1,005) | (1,320) | (3,015) | (3,960) | ||
| Goodwill impairment charges | -- | -- | (264,130) | -- | (264,130) | ||
| Restructuring charges (reversals), net | -- | 125 | (1,150) | 279 | (1,032) | ||
| Litigation settlement | -- | -- | -- | -- | (130) | ||
| Option investigation related expenses, net | -- | -- | 79 | -- | (84) | ||
| Non-GAAP operating expenses | $31,514 | $29,516 | $32,859 | $89,598 | $107,939 | ||
| INTEREST AND OTHER INCOME, NET | |||||||
|
GAAP interest and other (expense) income, net |
$1,619 | $(3,425) | $(7,397) | $(217) | $(9,274) | ||
| Impairment of strategic investment | -- | 2,000 | -- | 2,000 | -- | ||
| Other-than-temporary investment impairment | 261 | 3,133 | 10,104 | 3,569 | 16,941 | ||
| Non-GAAP interest and other income, net | $1,880 | $1,708 | $2,707 | $5,352 | $7,667 | ||
| INCOME TAX EXPENSE (BENEFIT): | |||||||
| GAAP income tax benefit | $(2,248) | (3,617) | $(4,396) | $(9,384) | $(3,491) | ||
| Income tax expense (benefit) from discontinued operations | 906 | (304) | 67 | 4,203 | 228 | ||
| Income tax adjustments | 1,423 | 3,972 | 4,450 | 5,299 | 3,942 | ||
| Non-GAAP income tax expense | $81 | 51 | 121 | $118 | $679 | ||
| RESEARCH AND DEVELOPMENT | |||||||
| GAAP research and development | $23,599 | 20,828 | 18,625 | $63,841 | $60,485 | ||
| Research and development from discontinued operations | 10 | 83 | 2,630 | 687 | 8,712 | ||
| Stock-based compensation expense | (1,692) | (1,594) | (1,244) | (4,558) | (3,679) | ||
| Non-GAAP research and development | $21,917 | 19,317 | 20,011 | $59,970 | $65,518 | ||
| SELLING, GENERAL AND ADMINISTRATIVE | |||||||
| GAAP selling, general and administrative | $11,454 | 11,991 | 11,315 | $33,964 | $38,946 | ||
| Selling, general and administrative from discontinued operations | 24 | 238 | 2,103 | 807 | 7,419 | ||
| Stock-based compensation expense | (1,881) | (2,030) | (570) | (5,143) | (3,944) | ||
| Non-GAAP selling, general and administrative | $9,597 | 10,199 | 12,848 | $29,628 | $42,421 | ||
| APPLIED MICRO CIRCUITS CORPORATION | |||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
| (in thousands) | |||
| (unaudited) | |||
|
Nine Months Ended December 31, |
|||
| 2009 | 2008 | ||
| Operating activities: | |||
| Net loss | $(7,420) | $(281,947) | |
| Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | |||
| Depreciation | 4,881 | 5,148 | |
| Amortization of purchased intangibles | 12,486 | 17,432 | |
| Stock-based compensation expense: | |||
| Stock options | 3,224 | 4,135 | |
| Restricted stock units | 6,895 | 3,975 | |
| Other-than-temporary impairment of marketable securities | 4,047 | 16,941 | |
| Impairment of strategic investment | 2,000 | — | |
| Goodwill impairment charges | — | 264,130 | |
| Non-cash restructuring charges | — | 57 | |
| Tax benefit from other comprehensive income | (5,077) | ||
| Net loss on disposals of property | 66 | 15 | |
| Net gain on sale of storage business unit | (11,366) | — | |
| Changes in operating assets and liabilities: | |||
| Accounts receivable | (248) | 7,891 | |
| Inventories | 8,974 | (803) | |
| Other assets | (1,797) | (9,210) | |
| Accounts payable | 515 | (7,549) | |
| Accrued payroll and other accrued liabilities | (7,513) | (2,705) | |
| Deferred tax liability | — | (3,958) | |
| Deferred revenue | (1,216) | 109 | |
| Net cash provided by (used for) operating activities | 8,451 | 13,661 | |
| Investing activities: | |||
| Proceeds from sales and maturities of short-term investments | 176,182 | 897,153 | |
| Purchases of short-term investments | (159,357) | (855,263) | |
| Purchase of property, equipment and other assets | (4,976) | (6,812) | |
| Purchases of strategic investment | (1,000) | — | |
| Proceeds from sale of storage business unit | 21,527 | — | |
| Net cash provided by (used for) investing activities | 32,376 | 35,078 | |
| Financing activities: | |||
| Proceeds from issuance of common stock | 1,972 | 1,570 | |
| Repurchase on Company stock | (8,076) | — | |
| Funding of structured stock repurchase agreements | (31,797) | — | |
| Funds received from structured stock repurchase agreements | 22,484 | — | |
| Other | (776) | (331) | |
| Net cash provided by (used for) financing activities | (16,193) | 1,239 | |
| Net increase in cash and cash equivalents | 24,634 | 49,978 | |
| Cash and cash equivalents at the beginning of the period | 99,337 | 42,689 | |
| Cash and cash equivalents at the end of the period | 123,971 | 92,667 | |