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Press release from GlobeNewswire (a Nasdaq OMX company)

Applied Micro Circuits Corporation Reports First Quarter Fiscal 2013 Financial Results

Wednesday, July 25, 2012

Applied Micro Circuits Corporation Reports First Quarter Fiscal 2013 Financial Results13:05 EDT Wednesday, July 25, 2012SUNNYVALE, Calif., July 25, 2012 (GLOBE NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) ("AppliedMicro") today reported its financial results for the first quarter of fiscal 2013, ended June 30, 2012. Q1 2013 net revenues were $41.3 million, down 15.3% sequentially and down 32.1% year over year.   Q1 2013 GAAP net loss was $23.4 million or $0.37 per share compared to net loss of $67.6 million or $1.10 per share for the fourth quarter of fiscal 2012.   Q1 2013 non-GAAP EPS was $(0.18) per share on net loss of $11.4 million, compared to $(0.10) per share on net loss of $6.2 million, for the fourth quarter of fiscal 2012.   Total Cash and Short-term investments was approximately $96.1 million as of June 30, 2012 compared to $113.8 million at the end of March 2012.   During the quarter, the Company announced the release of several new products; APM86491 Catalina System-on-a-Chip, a solution integrating high-performance network storage and 802.11ac WiFi wireless access into a single platform to provide the ultimate digital media experience for the connected home; APM8669x, Black Mamba, the highest performing member of our PacketPro2TM family of multi-core processors which offers the industry's premier virtualization and domain protection capabilities designed to keep systems operating continuously; In June 2012 we closed the previously announced acquisition of Veloce Technologies. Net revenues for the first quarter of fiscal 2013 were $41.3 million compared to $48.8 million in the fourth quarter of fiscal 2012, representing a sequential decrease of 15.3% and a decrease of 32.1% over the $60.8 million in net revenues reported in the first quarter of fiscal 2012. The net loss on a generally accepted accounting principles (GAAP) basis for the first quarter of fiscal 2013 was $23.4 million or $0.37 per share. The first quarter GAAP net loss compares with a net loss of $67.6 million or $1.10 per share for the fourth quarter of fiscal 2012 and a net loss of $6.9 million or $0.11 per share for the first quarter of fiscal 2012. Non-GAAP loss for the first quarter of fiscal 2013 was $11.4 million or $0.18 per share, compared to non-GAAP loss of $6.2 million or $0.10 per share in the fourth quarter of fiscal 2012 and non-GAAP net income of $0.6 million or $0.01 per diluted share for the first quarter of fiscal 2012. "We are making excellent progress in the development of our 64-bit ARM processor products. Although this quarter was a down quarter for us, we maintained focus and expect that our base business will improve going forward from this low point. We are encouraged by the continued design win traction that our products are attracting and believe that this bodes well for the future," said Dr.Paramesh Gopi, President and Chief Executive Officer. Bob Gargus, Chief Financial Officer, commented, "Although market conditions remain challenging we remain cautiously optimistic about the remainder of our fiscal year and are tracking to our plan at this time." 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, impairment of strategic investment, realized gain on sale of strategic equity investment, other-than-temporary impairment on investments, warrant expense, Veloce acquisition consideration, acquisition related (recoveries) charges, 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, July 25, 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 first quarter of fiscal 2013 and to provide guidance for the second quarter of fiscal 2013. You may access the conference call via any of the following: Teleconference: 800-573-4754 Conference ID: 39394636 Web Broadcast: http://www.apm.com Replay: 888-286-8010 (access code: 13718424, available through August 2, 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, 2012, 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)         June 30, March 31, ASSETS 2012 2012             Current assets:     Cash, cash equivalents and short-term investments  $ 96,138  $ 113,846 Accounts receivable, net  16,347  22,666 Inventories  22,594  23,244 Other current assets  23,035  31,105 Total current assets  158,114  190,861 Property and equipment, net  38,398  38,100 Goodwill  13,183  13,183 Purchased intangibles, net  15,305  16,634 Other assets  12,743  10,274 Total assets  $ 237,743  $ 269,052       LIABILITIES AND STOCKHOLDERS' EQUITY           Current liabilities:     Accounts payable  $ 13,739  $ 21,383 Other current liabilities  30,296  50,903 Total current liabilities  44,035  72,286 Non-current liability:     Veloce accrued liability  25,308  27,530 Stockholders' equity  168,400  169,236 Total liabilities and stockholders' equity  $ 237,743  $ 269,052    APPLIED MICRO CIRCUITS CORPORATIONGAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)                    Three Months Ended   June 30, March 31, June 30,   2012 2012 2011         Net revenues $ 41,294  $ 48,767 $ 60,844 Cost of revenues  18,355  20,974  26,331 Gross profit  22,939  27,793  34,513 Operating expenses:       Research and development  34,771  89,400  28,368 Selling, general and administrative  12,470  12,891  12,556 Amortization of purchased intangible assets  650  650  1,099 Restructuring charges, net  --   --   913 Total operating expenses  47,891  102,941  42,936 Operating loss  (24,952)  (75,148)  (8,423) Interest and other income (expense), net  1,762  7,897  1,356 Loss before income taxes  (23,190)  (67,251)  (7,067) Income tax expense (benefit)  200  331  (190) Net loss  $ (23,390)  $ (67,582) $ (6,877)         Basic and diluted net loss per share:       Net loss per share $ (0.37) $ (1.10) $ (0.11) Shares used in calculating basic and diluted net loss per share  62,409  61,587  63,878    APPLIED MICRO CIRCUITS CORPORATIONRECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS)(in thousands, except per share data)(unaudited)           Three Months Ended   June 30, March 31, June 30,   2012 2012 2011         GAAP net loss  $ (23,390) $ (67,582) $ (6,877) Adjustments:       Stock-based compensation charges  7,689  6,639  4,178 Warrant expense  1,289  —   —  Amortization of purchased intangibles  1,329  1,329  2,614 Veloce acquisition consideration  2,325  60,400  —  Acquisition related recoveries  (133)  (265)  —  Restructuring charges, net  —   —   913 Impairment of strategic investment  —   1,000  —  Other-than-temporary investment impairment   (1,089)  (77)  (12) Realized gain on sale of strategic equity investment  —   (8,147)  —  Income tax adjustments  553  522  (209) Total GAAP to Non-GAAP adjustments  11,963  61,401  7,484 Non-GAAP net (loss) income  $ (11,427)  $ (6,181) $ 607         Diluted (loss) income per share $ (0.18) $ (0.10) $ 0.01         Shares used in calculating diluted (loss) income per share   62,409  61,587  65,003         Net (loss) income per share:       GAAP loss per share  $ (0.37) $ (1.10) $ (0.11) GAAP to non-GAAP adjustments  0.19 1.00 0.12 Non-GAAP net (loss) income per share $ (0.18) $ (0.10) $ 0.01         Reconciliation of shares used in calculating non-GAAP (loss) income per share:       Shares used in calculating the basic (loss) income per share   62,409  61,587  63,878 Adjustment for dilutive securities   —   —   1,125 Non-GAAP shares used in calculating diluted (loss) income per share  62,409  61,587  65,003    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   June 30, March 31, June 30,   2012 2012 2011GROSS PROFIT:       GAAP gross profit  $ 22,939  $ 27,793  $ 34,513 Amortization of purchased intangibles  679  679  1,515 Stock-based compensation expense  262  140  111 Non-GAAP gross profit  $ 23,880 $ 28,612  $ 36,139        OPERATING EXPENSES:       GAAP operating expenses  $ 47,891  $ 102,941  $ 42,936 Stock-based compensation expense  (7,427)  (6,499)  (4,067) Warrant expense  (1,289)  —   —  Amortization of purchased intangibles  (650)  (650)  (1,099) Acquisition related recoveries   133  265  —  Veloce acquisition consideration  (2,325)  (60,400)  —  Restructuring charges, net  —   —   (913) Non-GAAP operating expenses  $ 36,333  $ 35,657  $ 36,857        INTEREST AND OTHER INCOME (EXPENSE), NET:       GAAP interest and other income, net  $ 1,762  $ 7,897  $ 1,356 Realized gain on sale of strategic equity investments  —   (8,147)  —  Impairment of strategic investment  —   1,000  —  Other-than-temporary investment impairment   (1,089)  (77)  (12) Non-GAAP interest and other income, net $  673 $ 673  $ 1,344        INCOME TAX (BENEFIT) EXPENSE:       GAAP income tax expense (benefit)  $ 200 $ 331  $ (190) Income tax adjustments  (553)  (522)  209 Non-GAAP income tax (benefit) expense  $ (353)  $ (191)  $ 19        RESEARCH AND DEVELOPMENT :       GAAP research and development   $ 34,771  $ 89,400  $ 28,368 Stock-based compensation expense  (4,205)  (3,735)  (2,388) Warrant expense  (1,289)  —   —  Veloce acquisition consideration  (2,325)  (60,400)  —  Non-GAAP research and development   $ 26,952 $ 25,265  $ 25,980        SELLING, GENERAL AND ADMINISTRATIVE :       GAAP selling, general and administrative   $ 12,470  $ 12,891  $ 12,556 Stock-based compensation expense  (3,222)  (2,764)  (1,679) Acquisition related recoveries  133  265  —  Non-GAAP selling, general and administrative   $ 9,381  $ 10,392  $ 10,877    APPLIED MICRO CIRCUITS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)         Three Months Ended June 30,   2012 2011Operating activities:     Net loss  $ (23,390)  $ (6,877) Adjustments to reconcile net loss to net cash used for operating activities:     Depreciation   2,439  1,822 Amortization of purchased intangibles   1,329  2,614 Stock-based compensation expense:     Stock options   1,488  1,573 Restricted stock units   6,201  2,605 Warrants  1,289  —  Veloce accrued liability  2,325  —  Tax benefit from other comprehensive income  —   (367) Acquisition related adjustment  (133)  —  Net loss on disposals of property   —   10 Changes in operating assets and liabilities:     Accounts receivable   6,319  (4,160) Inventories   650  (185) Other assets   (1,045)  (3,230) Accounts payable   (4,751)  624 Accrued payroll and other accrued liabilities   (12,584)  1,825 Deferred revenue   (597)  (448) Net cash used for operating activities   (20,460)  (4,194)Investing activities:     Proceeds from sales and maturities of short-term investments  14,182  41,891 Purchases of short-term investments   (4,326)  (57,879) Purchase of property, equipment and other assets  (5,598)  (4,533) Proceeds from sale of equity investment  7,144  —  Purchase of strategic equity investment  (500)  (2,500) Funding of a note receivable  —   (1,000) Net cash provided by (used for) investing activities   10,902  (24,021)Financing activities:     Proceeds from issuances of common stock   3,330  587 Funding of restricted stock units withheld for taxes  (216)  (2,172) Repurchases of common stock  (654)  (3,097) Funding of structured stock repurchase agreements   —   (10,000) Other   (253)  (111) Net cash provided by (used for) financing activities   2,207  (14,793) Net decrease in cash and cash equivalents   (7,351)  (43,008) Cash and cash equivalents at the beginning of the period  28,065  84,402 Cash and cash equivalents at the end of the period  $ 20,714  $ 41,394CONTACT: 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