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Press release from GlobeNewswire (a Nasdaq OMX company)

Applied Micro Circuits Corporation Reports Fourth Quarter Fiscal 2012 Financial Results

Thursday, April 26, 2012

Applied Micro Circuits Corporation Reports Fourth Quarter Fiscal 2012 Financial Results13:05 EDT Thursday, April 26, 2012SUNNYVALE, Calif., April 26, 2012 (GLOBE NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) ("AppliedMicro") today reported its financial results for the fourth quarter of fiscal 2012, ended March 31 2012. Q4 2012 net revenues were $48.8 million, down 13.5% sequentially and down 16.8% year over year. Q4 2012 GAAP net loss was $67.6 million or $1.10 per share compared to net loss of $7.1 million or $0.12 per share for the third quarter of fiscal 2012. Q4 2012 non-GAAP EPS was $(0.10) per share on net loss of $6.2 million, compared to $(0.02) per share on net loss of $1.1 million, for the third quarter of fiscal 2012. Total Cash and Short-term investments was approximately $113.8 million as of March 31, 2012 compared to $117.3 million at the end of December 2011. Following the end of the quarter, the Company announced a definitive amendment to spin-in Veloce Technologies, Inc. for an initial consideration of $60.4M, which was expensed in the quarter ended March 31, 2012, with additional earn-outs that could range from $0-$75M. The spin-in will enable securing the world class team and integrating the Veloce and APM teams in the ARM 64-bit development. During the quarter, the Company announced the release of several new products: The industry's first standard 100G per second transponder/muxponder for OTN and Datacenters; TPO134 an OTU2 Add-Drop multiplexer with 16 clients in one device and expands the ODU cross-connect capacity to 80Gps; TPO415/C415, the industry's first standard OTN multiplexer to enable 100Gps OTU4 linecards Net revenues for the fourth quarter of fiscal 2012 were $48.8 million compared to $56.3 million in the third quarter of fiscal 2012, representing a sequential decrease of 13.5% and a decrease of 16.8% over the $58.6 million in net revenues reported in the fourth quarter of fiscal 2011. Revenues for the full fiscal year of 2012 were $230.9 million compared to $247.7 million for the comparable period last year, a 7% decrease. The net loss on a generally accepted accounting principles (GAAP) basis for the fourth quarter of fiscal 2012 was $67.6 million or $1.10 per share. The fourth quarter GAAP net loss compares with a net loss of $7.1 million or $0.12 per share for the third quarter of fiscal 2012 and a net loss of $4.0 million or $0.06 per share for the fourth quarter of fiscal 2011. For the full fiscal year of 2012, GAAP net loss was $82.7 million or $1.33 per share compared to a net loss of $1.0 million or $0.02 per share for the full fiscal year 2011. Non-GAAP loss for the fourth quarter of fiscal 2012 was $6.2 million or $0.10 per share, compared to non-GAAP loss of $1.1 million or $0.02 per diluted share in the third quarter of fiscal 2012 and non-GAAP net income of $2.7 million or $0.04 per diluted share for the fourth quarter of fiscal 2011. For the full year, for fiscal 2012, non-GAAP net loss was $5.6 million or $0.09 per share compared to net income of $28.5 million or $0.42 per diluted share for fiscal 2011. "In early April, we announced the spin-in of Veloce, which is extremely significant to us in terms of integration of our processor teams and our ability to deliver our 64-bit ARM processor products and effectively execute our roadmap. Overall market softness impacted the base business during the quarter, but we are making sure we maintain focus on not only navigating the softness but on developing game changing products for the future," said Dr.Paramesh Gopi, President and Chief Executive Officer. Bob Gargus, Chief Financial Officer commented, "The market conditions continue to be challenging and we are very focused on managing our business effectively through the softness and as market conditions improve we remain poised to take advantage with our portfolio of market relevant products." 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 the Veloce acquisition consideration, restructuring charges (recoveries), amortization of purchased intangibles, stock-based compensation charges, impairment of strategic investment, realized gain on sale of strategic equity investment, other-than-temporary impairment on investments and non-cash tax adjustments. 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, April 26, 2012 at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss additional details regarding the Company's performance for the fourth quarter of fiscal 2012 and to provide guidance for the first quarter of fiscal 2013. You may access the conference call via any of the following: Teleconference: 866-203-3206 Conference ID: 82970062 Web Broadcast: http://www.apm.com Replay: 888-286-8010 (access code: 64022438, available through May 3, 2012)AppliedMicro Overview AppliedMicro is a global leader in energy conscious high performance computing and connectivity solutions for telco, enterprise, data center, consumer and SMB applications. 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 http://www.apm.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, successful integration and management of recently acquired businesses, 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, 2011, 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.-Financial Tables Follow-APPLIED MICRO CIRCUITS CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited)       ASSETS March 31, 2012 March 31, 2011             Current assets:     Cash, cash equivalents and short-term investments  $ 113,846  $ 168,051 Accounts receivable, net  22,666  19,997 Inventories  23,244  26,561 Other current assets  31,105  16,784 Total current assets  190,861  231,393 Property and equipment, net  38,100  32,023 Goodwill  13,183  13,183 Purchased intangibles, net  16,634  23,388 Other assets  10,274  8,670 Total assets  $ 269,052  $ 308,657       LIABILITIES AND STOCKHOLDERS' EQUITY           Current liabilities:     Accounts payable  $ 21,383  $ 24,431 Other current liabilities  45,563  22,416 Total current liabilities  66,946  46,847 Other long term liabilities  32,870  -- Stockholders' equity  169,236  261,810 Total liabilities and stockholders' equity  $ 269,052  $ 308,657            APPLIED MICRO CIRCUITS CORPORATIONGAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)(unaudited)     Three Months Ended Year Ended   March 31, 2012 December 31, 2011 March 31, 2011 March 31, 2012 March 31, 2011             Net revenues  $ 48,767  $ 56,347  $ 58,583  $ 230,887  $ 247,710 Cost of revenues  20,974  23,795  25,476  98,804  95,282 Gross profit  27,793  32,552  33,107  132,083  152,428 Operating expenses:           Research and development  89,400  28,279  26,932  175,656  108,732 Selling, general and administrative  12,891  11,406  11,733  45,794  49,173 Amortization of purchased intangibles  650  650  1,713  3,202  5,285 Restructuring charges (recoveries), net  --  2  (34)  875  532 Total operating expenses  102,941  40,337  40,344  225,527  163,722 Operating loss  (75,148)  (7,785)  (7,237)  (93,444)  (11,294) Interest and other income (expense), net and other-than-temporary impairment  7,897  914  3,179  11,684  10,687 Loss from operations, before income taxes  (67,251)  (6,871)  (4,058)  (81,760)  (607) Income tax expense (benefit)  331  206  (47)  928  399 Net loss   $ (67,582)  $ (7,077)  $ (4,011)  $ (82,688)  $ (1,006)             Basic and diluted net loss per share:           Net loss per share  $ (1.10)  $ (0.12)  $ (0.06)  $ (1.33)  $ (0.02) Shares used in calculating basic and diluted net loss per share  61,587  60,990  64,236  62,245  65,160            APPLIED MICRO CIRCUITS CORPORATIONRECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)(in thousands, except per share data)(unaudited)     Three Months Ended Year Ended   March 31, 2012 December 31, 2011 March 31, 2011 March 31, 2012 March 31, 2011             GAAP net loss  $ (67,582)  $ (7,077)  $ (4,011)  $ (82,688)  $ (1,006) Adjustments:           Stock-based compensation charges  6,639  4,433  3,774  18,374  16,684 Amortization of purchased intangibles  1,329  1,329  4,978  6,754  17,167 Veloce acquisition consideration  60,400  --  --  60,400  -- Acquisition related (recoveries) charges  (265)  --  --  (2,532)  859 Restructuring charges (recoveries), net  --  2  (34)  875  532 Impairment of strategic investment  1,000  --  --  1,000  -- Other-than-temporary investment impairment   (77)  (61)  (1,914)  (743)  (5,284) Realized gain on sale of strategic equity investment  (8,147)  --  --  (8,147)  -- Payroll taxes on certain stock option exercises  --  --  --  --  4 Income tax adjustments  522  242  (129)  1,102  (481) Total GAAP to Non-GAAP adjustments  61,401  5,945  6,675  77,083  29,481             Non-GAAP net loss (income)  $ (6,181)  $ (1,132)  $ 2,664  $ (5,605)  $ 28,475             Diluted net (loss) income per share  $ (0.10)  $ (0.02)  $ 0.04  $ (0.09)  $ 0.42             Shares used in calculating diluted net loss (income) per share   61,587  60,990  65,741  62,245  67,097             Net (loss) income per share:           GAAP net loss per share   $ (1.10)  $ (0.12)  $ (0.06)  $ (1.33)  $ (0.02) GAAP to non-GAAP adjustments  1.00 0.10 0.10 1.24 0.44 Non-GAAP net (loss) income per share   $ (0.10)  $ (0.02)  $ 0.04  $ (0.09)  $ 0.42             Reconciliation of shares used in calculating non-GAAP net (loss) income per share:           Shares used in calculating basic net (loss) income per share   61,587  60,990  64,236  62,245  65,160 Adjustment for dilutive securities   --  --   1,505  --  1,937 Non-GAAP shares used in the EPS calculation   61,587  60,990  65,741  62,245  67,097            APPLIED MICRO CIRCUITS CORPORATIONSCHEDULE 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 Year Ended   March 31, 2012 December 31, 2011 March 31, 2011 March 31, 2012 March 31, 2011GROSS PROFIT:           GAAP gross profit  $ 27,793  $ 32,552  $ 33,107  $ 132,083  $ 152,428 Amortization of purchased intangibles  679  679  3,265  3,552  11,882 Stock-based compensation expense  140  83  154  432  651 Non-GAAP gross profit  $ 28,612  $ 33,314  $ 36,526  $ 136,067  $ 164,961            OPERATING EXPENSES:           GAAP operating expenses  $ 102,941  $ 40,337  $ 40,344  $ 225,527  $ 163,722 Stock-based compensation expense  (6,499)  (4,350)  (3,620)  (17,942)  (16,033) Amortization of purchased intangibles  (650)  (650)  (1,713)  (3,202)  (5,285) Aquisition related recoveries (charges)  265  --  --  2,532  (859) Veloce acquisition consideration  (60,400)  --  --  (60,400)  -- Restructuring (charges) recoveries, net  --  (2)  34  (875)  (532) Payroll taxes on certain stock option exercises  --  --  --  --  (4) Non-GAAP operating expenses  $ 35,657  $ 35,335  $ 35,045  $ 145,640  $ 141,009            INTEREST AND OTHER INCOME (EXPENSE), NET AND OTHER-THAN-TEMPORARY IMPAIRMENT:           GAAP interest and other income and other-than-temporary impairment, net  $ 7,897  $ 914  $ 3,179  $ 11,684  $ 10,687 Realized gain on sale of strategic equity investments  (8,147)  --  --  (8,147)  -- Impairment of strategic investment  1,000  --  --  1,000  -- Other-than-temporary investment impairment   (77)  (61)  (1,914)  (743)  (5,284) Non-GAAP interest and other income, net  $ 673  $ 853  $ 1,265  $ 3,794  $ 5,403            INCOME TAX EXPENSE (BENEFIT):           GAAP income tax expense (benefit)  $ 331  $ 206  $ (47)  $ 928  $ 399 Income tax adjustments  (522)  (242)  129  (1,102)  482 Non-GAAP income tax expense (benefit)  $ (191)  $ (36)  $ 82  $ (174)  $ 881            RESEARCH AND DEVELOPMENT:           GAAP research and development   $ 89,400  $ 28,279  $ 26,932  $ 175,656  $ 108,732 Stock-based compensation expense  (3,735)  (2,647)  (2,288)  (10,496)  (8,999) Veloce acquisition consideration  (60,400)  --  --  (60,400)  -- Payroll taxes on certain stock option exercises   --  --  --  --  (2) Non-GAAP research and development   $ 25,265  $ 25,632  $ 24,644  $ 104,760  $ 99,731            SELLING, GENERAL AND ADMINISTRATIVE :           GAAP selling, general and administrative   $ 12,891  $ 11,406  $ 11,733  $ 45,794  $ 49,173 Stock-based compensation expense  (2,764)  (1,703)  (1,332)  (7,446)  (7,034) Aquisition related recoveries (charges)  265  --  --  2,532  (859) Payroll taxes on certain stock option exercises   --  --  --  --  (2) Non-GAAP selling, general and administrative   $ 10,392  $ 9,703  $ 10,401  $ 40,880  $ 41,278      APPLIED MICRO CIRCUITS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)     Year Ended March 31,   2012 2011Operating activities:     Net loss  $ (82,688)  $ (1,006) Adjustments to reconcile net loss to net cash (used in) provided by operating activities:     Depreciation   8,436  7,243 Amortization of purchased intangibles   6,754  17,167 Stock-based compensation expense:     Stock options   5,298  5,592 Restricted stock units   13,076  11,092 Veloce acquisition consideration  60,400  -- Aquisition related recoveries  (2,532)  -- Capitalization of prior year's mask set costs  --  (1,177) Realized gain on strategic investment, net  (7,147)  -- Tax benefit from other comprehensive income  (123)  -- Net loss (gain) on disposals of property   10  (322) Changes in operating assets and liabilities, net of amounts acquired:     Accounts receivable   (2,669)  3,465 Inventories   3,317  (11,174) Other assets   (3,903)  (1,561) Accounts payable   (4,451)  1,842 Accrued payroll and other accrued liabilities   (2,860)  (1,162) Deferred revenue  (270)  956 Net cash (used in) provided by operating activities   (9,352)  30,955Investing activities:     Proceeds from sales and maturities of short-term investments  101,222  121,876 Purchases of short-term investments   (103,046)  (124,950) Proceeds from sale of property and equipment  --  365 Purchase of property, equipment and other assets  (13,264)  (9,740) Proceeds from sale of strategic investment  --  4,991 Purchase of strategic investment  (4,750)  (330) Purchase of a business, net of cash acquired  --  (31,484) Net cash used for investing activities   (19,838)  (39,272)Financing activities:     Proceeds from issuances of common stock   6,736  8,045 Funding of restricted stock units withheld for taxes  (2,864)  (2,746) Repurchases of common stock  (20,852)  (40,063) Funding of structured stock repurchase agreements   (10,000)  (10,000) Funds received from structured stock repurchase agreements  --  15,512 Other   (167)  (555) Net cash used for financing activities   (27,147)  (29,807) Net decrease in cash and cash equivalents   (56,337)  (38,124) Cash and cash equivalents at the beginning of the period  84,402  122,526 Cash and cash equivalents at the end of the period  28,065  84,402CONTACT: Investor Relations Contact: Applied Micro Circuits Corporation Bob Gargus Phone: (408) 542-8752 E-Mail: rgargus@apm.com Media Contact: Applied Micro Circuits Corporation Tally Kaplan-Porat Phone: (408) 702-3139 E-Mail: tkaplan@apm.com