Applied Micro Circuits Corporation Reports Fourth Quarter & Full Year Fiscal 2016 Financial Results

Company Delivers Fifth Sequential Quarter of Revenue Growth and Improved Non-GAAP Earnings

Santa Clara, California, UNITED STATES


SANTA CLARA, Calif., April 28, 2016 (GLOBE NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) (“AppliedMicro”) today reported its financial results for the fiscal fourth quarter and full year ended March 31, 2016.

Q4 Fiscal 2016 Financial Information

  • Consolidated net revenue of $41.1 million, representing the fifth sequential quarter of revenue growth
  • GAAP net loss of $8.9 million or $0.11 per share
  • Non-GAAP net loss narrows to $1.4 million, or $0.02 per share

Full Year Fiscal 2016 Financial Information

  • Consolidated net revenue of $159.3 million
  • GAAP net loss of $32.6 million, or $0.39 per share
  • Non-GAAP net loss improves to $9.2 million, or $0.11 per share
  • Total cash, cash equivalents and short-term investments of approximately $83.8 million as of March 31, 2016

Commenting on Applied Micro’s fiscal 2016 fourth quarter and full year operations, Dr. Paramesh Gopi, President and Chief Executive Officer, said, “We are pleased to announce another strong quarter of solid financial results. Fourth quarter fiscal 2016 revenue of $41.1 million represents our fifth consecutive quarter of improving sales, and was driven by strength in our Connectivity business and driven by our ability to deliver 16nm PAM4 solutions to our customers. Overall, fiscal 2016 was a very important year for Applied Micro, highlighted by multiple Tier One X-Gene deployments, our launch of X-Gene 3, and our leadership in 100Gbps PAM4 for data center interconnectivity.” 

AppliedMicro provides non-GAAP results as additional information relating to its financial condition and business trends. This information should be considered in conjunction with corresponding GAAP measures. A reconciliation between GAAP and non-GAAP financial results is provided in the financial tables section of this press release. 

Conference Call and Webcast
Management will host a conference call and simultaneous webcast to discuss fourth quarter and full year fiscal 2016 results and business and financial outlook today, April 28, 2016, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.  

DIAL-IN:(855) 777-0852
PASSCODE:81179007
WEBCAST: Investor Relations section of the Company’s website at www.apm.com
  

A replay of the call will be available starting at 9:00 PM Eastern Time and can be accessed by dialing 855-859-2056 or 404-537-3406 and using the access code 81179007. The replay will be available for seven days.

About AppliedMicro
Applied Micro Circuits Corporation is a global leader in computing and connectivity solutions for next-generation cloud infrastructure and data centers. AppliedMicro delivers silicon solutions that dramatically lower total cost of ownership. Corporate headquarters are located in Santa Clara, California. www.apm.com.

(C) Copyright 2016, Applied Micro Circuits Corporation. AppliedMicro, X-Gene, X-Weave, HeliX, Server on a Chip, Cloud Processor and Cloud Server are trademarks or registered trademarks of Applied Micro Circuits Corporation. All other product or service names are the property of their respective owners.

Forward-Looking Statements
This press release contains forward-looking statements that reflect the Company's current views and expectations with respect to future events and financial performance, including statements regarding the Company's strategic focus; new product development, commercialization and customer acceptance; the development of the X-Gene and ARM ecosystems; the anticipated performance of the Company’s base business; and future revenues, expenses and liquidity. 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, successful and timely development of products, an evolving competitive landscape, rapid technological change, increased supplier lead times and other supply chain constraints, the businesses and budgeting decisions of the Company's major customers, which may cause delays, reductions, rescheduling or cancellation of customer orders, successful management and retention of key personnel and service providers, market acceptance of new products and technologies, legal and regulatory developments, and general economic conditions, and do not take into account any restructuring or related activities that the Company may undertake. 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 Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, and its 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)  
          
     March 31, March 31,  
      2016   2015   
     (unaudited)    
 ASSETS     
 Current assets:     
  Cash, cash equivalents and short-term investments$  83,845  $  75,358   
  Accounts receivable, net   9,265     12,407   
  Inventories   16,148     23,514   
  Other current assets   10,775     16,840   
   Total current assets   120,033     128,119   
 Property and equipment, net   13,293     16,749   
 Goodwill    11,425     11,425   
 Other assets   1,541     2,570   
   Total assets$  146,292  $  158,863   
          
 LIABILITIES AND STOCKHOLDERS' EQUITY     
 Current liabilities:     
  Accounts payable   8,599  $  13,896   
  Other current liabilities   20,862     17,571   
   Total current liabilities   29,461     31,467   
 Non-current liabilities   1,793   4,291   
 Stockholders' equity   115,038     123,105   
   Total liabilities and stockholders' equity$  146,292  $  158,863   
          

 

                 
 APPLIED MICRO CIRCUITS CORPORATION  
 GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
 (in thousands, except per share data)  
 (unaudited)  
                 
     Three Months Ended Year Ended  
     March 31, December 31,  March 31, March 31, March 31,  
      2016   2015    2015   2016   2015   
 Net revenues$  41,108  $  40,623   $  37,048  $  159,287  $  165,011   
 Cost of revenues   16,934     18,241      16,482     69,739     69,297   
 Gross profit   24,174     22,382      20,566     89,548     95,714   
 Operating expenses:            
  Research and development   25,113     22,377      24,583     91,518     107,220   
  Selling, general and administrative   8,138     8,232      7,959     33,507     33,643   
  Amortization of purchased intangible assets   -     -      -     -     104   
  Restructuring   (57)    (29)     4,098     25     5,421   
   Total operating expenses   33,194     30,580      36,640     125,050     146,388   
 Operating loss   (9,020)    (8,198)     (16,074)    (35,502)    (50,674)  
 Interest and other income (expense), net   229     169      1,029     2,307     (292)  
 Loss before income taxes   (8,791)    (8,029)     (15,045)    (33,195)    (50,966)  
 Income tax provision (benefit)    116     170      99     (624)    1,092   
 Net loss $  (8,907) $  (8,199)  $  (15,144) $  (32,571) $  (52,058)  
                 
 Basic and diluted net loss per share:$  (0.11) $  (0.10)  $  (0.19) $  (0.39) $  (0.66)  
 Shares used in calculating basic and diluted net loss per share   84,127     83,191      80,667     82,668     78,814   
                 

 

                
 APPLIED MICRO CIRCUITS CORPORATION  
 RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS  
 (in thousands, except per share data)  
 (unaudited)  
                
     Three Months Ended Year Ended  
     March 31, December 31, March 31, March 31, March 31,  
      2016   2015   2015   2016   2015   
                
 GAAP net loss$  (8,907) $  (8,199) $  (15,144) $  (32,571) $  (52,058)  
 Adjustments:           
  Stock-based compensation expense   7,637     6,141     4,002     25,804     18,305   
  Amortization of purchased intangible assets   -     -     -     -     104   
  Veloce acquisition consideration   -     -     2,090     -     9,230   
  Restructuring   (57)    (29)    4,098     25     5,421   
  Impairment of strategic investments   -     -     500     -     3,000   
  Reversals of impairment charges upon sales of marketable securities   -     -     (1,176)    (1,694)    (1,334)  
  Income tax effect on non-GAAP adjustments   (84)    (30)    (151)    (761)    (458)  
  Total GAAP to non-GAAP adjustments   7,496     6,082     9,363     23,374     34,268   
 Non-GAAP net loss$  (1,411) $  (2,117) $  (5,781) $  (9,197) $  (17,790)  
                
 Diluted non-GAAP net loss per share$  (0.02) $  (0.03) $  (0.07) $  (0.11) $  (0.23)  
                
 Shares used in calculating diluted non-GAAP net loss per share    84,127     83,191     80,667     82,668     78,814   
                
 Diluted net loss per share:           
  GAAP diluted net loss per share $  (0.11) $  (0.10) $  (0.19) $  (0.39) $  (0.66)  
  GAAP to non-GAAP adjustments  0.09   0.07   0.12   0.28   0.43   
  Non-GAAP diluted net loss per share$  (0.02) $  (0.03) $  (0.07) $  (0.11) $  (0.23)  
                

 

                   
 APPLIED MICRO CIRCUITS CORPORATION   
 SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS   
 (in thousands)   
 (unaudited)   
                   
                   
      Three Months Ended  Year Ended   
      March 31, December 31, March 31,  March 31, March 31,   
       2016   2015   2015    2016   2015    
 GROSS PROFIT:              
 GAAP gross profit $  24,174  $  22,382  $  20,566   $  89,548  $  95,714    
 Stock-based compensation expense    172     140     69      521     289    
 Non-GAAP gross profit $  24,346  $  22,522  $  20,635   $  90,069  $  96,003    
                   
 OPERATING EXPENSES:              
 GAAP operating expenses $  33,194  $  30,580  $  36,640   $  125,050  $  146,388    
 Stock-based compensation expense    (7,465)    (6,001)    (3,933)     (25,283)    (18,016)   
 Amortization of purchased intangible assets    -     -     -      -     (104)   
 Veloce acquisition consideration    -     -     (2,090)     -     (9,230)   
 Restructuring    57     29     (4,098)     (25)    (5,421)   
 Non-GAAP operating expenses $  25,786  $  24,608  $  26,519   $  99,742  $  113,617    
                   
 INTEREST AND OTHER INCOME, NET              
 GAAP interest and other income (expense), net $  229  $  169  $  1,029   $  2,307  $  (292)   
 Impairment of strategic investments    -     -     500      -     3,000    
 Reversals of impairment charges upon sales of marketable securities    -     -     (1,176)     (1,694)    (1,334)   
 Non-GAAP interest and other income, net $  229  $  169  $  353   $  613  $  1,374    
                   
 INCOME TAX (BENEFIT) EXPENSE:              
 GAAP income tax expense (benefit) $  116  $  170  $  99   $  (624) $  1,092    
 Income tax adjustment    84     30     151      761     458    
 Non-GAAP income tax expense  $  200  $  200  $  250   $  137  $  1,550    
                   
 RESEARCH AND DEVELOPMENT:              
 GAAP research and development  $  25,113  $  22,377  $  24,584   $  91,518  $  107,220    
 Stock-based compensation expense    (5,503)    (4,500)    (2,619)     (18,018)    (11,658)   
 Veloce acquisition consideration    -     -     (2,090)     -     (9,230)   
 Non-GAAP research and development  $  19,610  $  17,877  $  19,875   $  73,500  $  86,332    
                   
 SELLING, GENERAL AND ADMINISTRATIVE:              
 GAAP selling, general and administrative  $  8,138  $  8,232  $  7,959   $  33,507  $  33,643    
 Stock-based compensation expense    (1,962)    (1,501)    (1,314)     (7,265)    (6,358)   
 Non-GAAP selling, general and administrative  $  6,176  $  6,731  $  6,645   $  26,242  $  27,285    
                   

 

                   
 APPLIED MICRO CIRCUITS CORPORATION  
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
 (in thousands)  
 (unaudited)  
                   
        Three Months Ended Year Ended  
        March 31, December 31, March 31, March 31, March 31,  
         2016   2015   2015   2016   2015   
 Operating activities:              
  Net loss    $  (8,907) $  (8,199) $  (15,144) $  (32,571) $  (52,058)  
  Adjustments to reconcile net loss to net cash provided by (used for) operating activities:           
   Depreciation       1,891     2,028     1,957     7,590     8,555   
   Amortization of purchased intangible assets    -     -     -     -     104   
   Amortization of bond premium     258     429     -     687     -   
   Stock-based compensation expense     7,637     6,141     4,002     25,804     18,305   
   Veloce acquisition consideration     -     -     2,090     -     9,230   
   Tax effect on other comprehensive loss     49     -     160     49     126   
   Non-cash restructuring charges     -     -     2,601     -     2,615   
   Impairment of strategic investments     -     -     500     -     3,000   
   Loss (gain) on short-term investments and other, net     7     (1)    (1,216)    (1,581)    (1,317)  
  Changes in operating assets and liabilities:             
   Accounts receivable      3,187     172     6,840     3,142     12,771   
   Inventories      3,533     700     698     7,382     (4,573)  
   Other assets       3,891     754     (705)    6,754     (1,440)  
   Accounts payable       (4,248)    992     (6,193)    (5,614)    (9,911)  
   Accrued payroll and other accrued liabilities     (1,018)    168     (2,200)    (680)    (3,127)  
   Veloce accrued liability      (9)    (9)    (169)    (108)    (9,150)  
   Deferred revenue       (7)    (39)    36     (69)    (152)  
    Net cash provided by (used for) operating activities     6,264     3,136     (6,743)    10,785     (27,022)  
 Investing activities:              
  Proceeds from sales and maturities of short-term investments     5,487     10,380     11,142     63,714     16,340   
  Purchases of short-term investments      (6,443)    (14,319)    (17,165)    (84,464)    (19,887)  
  Proceeds from sale of property and equipment     -     -      -     31     1   
  Purchases of property and equipment and other assets    (562)    (1,232)    (2,481)    (2,601)    (9,772)  
  Proceeds from sale of TPack      -     -     -     -     3,353   
    Net cash used for investing activities     (1,518)    (5,171)    (8,504)    (23,320)    (9,965)  
 Financing activities:              
  Proceeds from issuances of common stock      1,736     (2)    1,964     2,979     3,854   
  Funding of restricted stock units withheld for taxes    (187)    (268)    (302)    (1,874)    (1,911)  
    Net cash provided by (used for) financing activities     1,549     (270)    1,662     1,105     1,943   
 Net increase (decrease) in cash and cash equivalents     6,295     (2,305)    (13,585)    (11,430)    (35,044)  
 Cash and cash equivalents at the beginning of the period    18,770     21,075     50,080     36,495     71,539   
 Cash and cash equivalents at the end of the period  $  25,065  $  18,770  $  36,495  $  25,065  $  36,495   
                   



        

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