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Applied Micro Circuits Corporation Reports Fourth Quarter Fiscal 2013 Financial Results



Applied Micro Circuits Corporation Reports Fourth Quarter Fiscal 2013
Financial Results

SUNNYVALE, Calif., April 25, 2013 (GLOBE NEWSWIRE) -- Applied Micro Circuits
Corporation (Nasdaq:AMCC) ("AppliedMicro" or the "Company") today reported its
financial results for the fourth quarter of fiscal 2013, ended March 31, 2013.

  * Q4 FY2013 net revenues were $56.3 million, up 9.0% sequentially and 15.5%
    year over year.
     
  * Q4 FY2013 non-GAAP EPS was $0.00 per diluted share on net income of $0.1
    million, compared to $(0.10) per share on a net loss of $6.9 million, for
    the third quarter of fiscal 2013. 
     
  * Q4 FY2013 GAAP net loss was $30.2 million or $(0.45) per share, compared
    to net loss of $71.6 million or $(1.08) per share for the third quarter of
    fiscal 2013. 
     
  * Total Cash, cash equivalents and short-term investments was approximately
    $85.5 million as of March 31, 2013, compared to $84.2 million as of
    December 31, 2012. 
     
  * On April 22, 2013, the Company completed the sale of the outstanding
    shares of TPack A/S and certain specified intellectual property (IP)
    assets owned by the Company related to TPack's business to Altera
    Corporation for a total purchase price of approximately $33.5 million,
    subject to adjustments. The Company retains a license to the TPack IP.
     
  * In April, the Company announced a strategic cooperation initiative with
    Altera Corporation to jointly develop and market optimized solutions for
    data center applications. 
  * The Company solidified its leadership in the cloud server market category
    by sampling its X-Gene™ Server on a Chip™ solution to customers and
    partners including HP, Dell, Red Hat and others. HP also announced that a
    Moonshot server featuring X-Gene is scheduled to be released in the second
    half of 2013.

Net revenues for the fourth quarter of fiscal 2013 were $56.3 million compared
to $51.7 million in the third quarter of fiscal 2013, representing a
sequential increase of 9.0% and an increase of 15.5% over the $48.8 million in
net revenues reported in the fourth quarter of fiscal 2012. Revenues for the
full fiscal year 2013 were $195.6 million compared to $230.9 million
for fiscal year 2012, representing a 15.3% decrease.

The net loss on a generally accepted accounting principles (GAAP) basis for
the fourth quarter of fiscal 2013 was $30.2 million or $(0.45) per share. The
fourth quarter GAAP net loss compares with a net loss of $71.6 million or
$(1.08) per share for the third quarter of fiscal 2013 and a net loss of $67.6
million or $(1.10) per share for the fourth quarter of fiscal 2012. For the
full fiscal year 2013, GAAP net loss was $146.8 million or $(2.25) per share
compared to a net loss of $82.7 million or $(1.33) per share for the full
fiscal year 2012.

Non-GAAP income for the fourth quarter of fiscal 2013 was $0.1 million or
$0.00 per diluted share, compared to non-GAAP loss of $6.9 million or $(0.10)
per share in the third quarter of fiscal 2013 and non-GAAP net loss of $6.2
million or $(0.10) per share for the fourth quarter of fiscal 2012. For the
full fiscal year 2013, non-GAAP net loss was $28.8 million or $(0.44) per
share compared to net loss of $5.6 million or $(0.09) per share for fiscal
year 2012.

"We fortified our financial position by achieving cash flow neutrality and
substantiated our market category leadership in the ARM cloud server space by
sampling X-Gene server platforms to our key customers," said Dr. Paramesh
Gopi, President and Chief Executive Officer.

Bob Gargus, Chief Financial Officer, commented, "We met our goal of delivering
non-GAAP break-even results. Development progress and initial customer
reaction are better than expected. This positions us well to take advantage of
the growth we anticipate in the future".

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, Veloce acquisition
consideration, stock-based compensation charges, other-than-temporary
impairment on investments, impairment of notes receivable and other assets,
one-time acquisition related recoveries, sale of equipment and other assets,
warrant expense, payroll taxes on certain stock option exercises 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 25,
2013 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
2013 and to provide guidance for the first quarter of fiscal 2014. You may
access the conference call via any of the following:

  Teleconference: 800-884-5695
  Conference ID:  67598661
  Web Broadcast:  http://www.apm.com
  Replay:         888-286-8010 (access code: 65095963, available through May
                  9, 2013)

AppliedMicro Overview

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 Sunnyvale,
California. www.apm.com.

Applied Micro Circuits Corporation, AppliedMicro, the AppliedMicro logo,
X-Gene and Server on a Chip are trademarks or registered trademarks of Applied
Micro Circuits Corporation. All other product or service names are the
property of their respective owners.

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 chip performance of the 40nm
and 28nm ARM^® 64-Bit X Gene™ Server on a Chip™ products, the TAM for such
products, the estimated range and timing of payments for the Veloce
acquisition, product development cycles and schedules, design-win pipeline,
strategic focus 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, increased supplier lead times and other
supply chain constraints, 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 CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
                                                             
                                                  March 31, March 31,
ASSETS                                            2013      2012
                                                             
                                                             
Current assets:                                              
Cash, cash equivalents and short-term investments  $85,476   $113,846
Accounts receivable, net                           24,575    22,666
Inventories                                        12,900    23,244
Other current assets                               17,998    31,105
Total current assets                               140,949   190,861
Property and equipment, net                        34,391    38,100
Goodwill                                           13,183    13,183
Purchased intangibles, net                         11,991    16,634
Other assets                                       10,866    10,274
Total assets                                       $211,380  $269,052
                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                             
                                                             
Current liabilities:                                         
Accounts payable                                   $17,650   $21,383
Other current liabilities                          96,439    50,903
Total current liabilities                          114,089   72,286
Non-current liability:                                       
Other long-term liabilities                        28,429    27,530
Stockholders' equity                               68,862    169,236
Total liabilities and stockholders' equity         $211,380  $269,052

 
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   March 31,  March 31,   March 31,
                                  31,
                       2013       2012       2012       2013        2012
                                                                     
Net revenues            $56,326    $51,698    $48,767    $195,642    $230,887
Cost of revenues        21,174     22,958     20,974     83,048      98,804
Gross profit            35,152     28,740     27,793     112,594     132,083
Operating expenses:                                                  
Research and            48,196     82,711     89,400     200,061     175,656
development
Selling, general and    13,008     12,675     12,891     51,684      45,794
administrative
Amortization of
purchased intangible    337        338        650        1,926       3,202
assets
Restructuring charges,  217        6,218      --         6,435       875
net
Total operating         61,758     101,942    102,941    260,106     225,527
expenses
Operating loss          (26,606)   (73,202)   (75,148)   (147,512)   (93,444)
Interest and other
income (expense), net
and                     (4,654)    2,258      7,897      201         11,684
other-than-temporary
impairment
Loss before income      (31,260)   (70,944)   (67,251)   (147,311)   (81,760)
taxes
Income tax (benefit)    (1,012)    618        331        (554)       928
expense
Net loss                $(30,248)  $(71,562)  $(67,582)  $(146,757)  $(82,688)
                                                                     
Basic and diluted net                                                
loss per share:
Net loss per share     $(0.45)    $(1.08)    $(1.10)    $(2.25)     $(1.33)
Shares used in
calculating basic and   67,566     66,113     61,587     65,258      62,245
diluted net loss per
share

 
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-GAAP NET (LOSS) INCOME
(in thousands, except per share data)
(unaudited)
                                                                     
                       Three Months Ended                Year Ended
                       March 31,  December   March 31,  March 31,   March 31,
                                  31,
                       2013       2012       2012       2013        2012
                                                                     
GAAP net loss           $(30,248)  $(71,562)  $(67,582)  $(146,757)  $(82,688)
Adjustments:                                                         
Stock-based             2,691      6,222      6,639      24,236      18,374
compensation charges
Warrant expense         --         --         --         1,289       --
Amortization of         1,017      1,017      1,329      4,643       6,754
purchased intangibles
Veloce acquisition      22,250     51,930     60,400     78,830      60,400
consideration
Acquisition related     --         --         (265)      (133)       (2,532)
recoveries
Restructuring charges,  217        6,218      --         6,435       875
net
Impairment of           2,250      --         1,000      2,250       1,000
strategic investment
Impairment of notes
receivable and other    1,800      --         --         1,800       --
assets
Sale of equipment and   --         (1,299)    --         (1,299)     --
other assets
Other-than-temporary    1,121      (270)      (77)       (412)       (743)
investment impairment 
Realized gain on sale
of strategic equity     --         --         (8,147)    --          (8,147)
investment
Income tax adjustments  (1,015)    832        522        336         1,102
Total GAAP to Non-GAAP  30,331     64,650     61,401     117,975     77,083
adjustments
                                                                     
Non-GAAP net income     $83        $(6,912)   $(6,181)   $(28,782)   $(5,605)
(loss)
                                                                     
Diluted income (loss)  $0.00      $(0.10)    $(0.10)    $(0.44)     $(0.09)
per share
                                                                     
Shares used in
calculating diluted     68,522     66,113     61,587     65,258      62,245
income (loss) per
share 
                                                                     
Net income (loss) per                                                
share:
GAAP loss per share    $(0.45)    $(1.08)    $(1.10)    $(2.25)     $(1.33)
GAAP to non-GAAP       0.45       0.98       1.00       1.81        1.24
adjustments 
Non-GAAP net income    $0.00      $(0.10)    $(0.10)    $(0.44)     $(0.09)
(loss) per share
                                                                     
Reconciliation of
shares used in
calculating non-GAAP                                                 
income (loss) per
share:
Shares used in
calculating the basic   67,566     66,113     61,587     65,258      62,245
loss per share 
Adjustment for          956        --         --         --          --
dilutive securities 
Shares used in
calculating non-GAAP    68,522     66,113     61,587     65,258      62,245
diluted income (loss)
per share

 
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            Year Ended
                     March 31, December  March 31, March 31, March 31,
                               31,
                     2013      2012      2012      2013      2012
GROSS PROFIT:                                                 
GAAP gross profit     $35,152   $28,740   $27,793   $112,594  $132,083
Amortization of
purchased             680       679       679       2,717     3,552
intangibles
Stock-based           95        158       140       692       432
compensation expense
Non-GAAP gross        $35,927   $29,577   $28,612   $116,003  $136,067
profit
                                                              
OPERATING EXPENSES:                                           
GAAP operating        $61,758   $101,942  $102,941  $260,106  $225,527
expenses
Stock-based           (2,596)   (6,064)   (6,499)   (23,544)  (17,942)
compensation expense
Warrant expense       --        --        --        (1,289)   --
Amortization of
purchased             (337)     (338)     (650)     (1,926)   (3,202)
intangibles
Acquisition related   --        --        265       133       2,532
recoveries
Veloce acquisition    (22,250)  (51,930)  (60,400)  (78,830)  (60,400)
consideration
Restructuring         (217)     (6,218)   --        (6,435)   (875)
charges, net
Non-GAAP operating    $36,358   $37,392   $35,657   $148,215  $145,640
expenses
                                                              
INTEREST AND OTHER
INCOME, NET AND                                               
OTHER-THAN-TEMPORARY
IMPAIRMENT:
GAAP interest and     $(4,654)  $2,258    $7,897    $201      $11,684
other (loss) income
Realized gain on
sale of strategic     --        --        (8,147)   --        (8,147)
investment
Impairment of         2,250     --        1,000     2,250     1,000
strategic investment
Sale of equipment     --        (1,299)   --        (1,299)   --
and other assets
Impairment of notes
receivable and other  1,800     --        --        1,800     --
assets
Other-than-temporary
investment            1,121     (270)     (77)      (412)     (743)
impairment 
Non-GAAP interest
and other income,     $517      $689      $673      $2,540    $3,794
net
                                                              
INCOME TAX EXPENSE                                            
(BENEFIT):
GAAP income tax       $(1,012)  $618      $331      $(554)    $928
expense
Income tax            1,015     (832)     (522)     (336)     (1,102)
adjustments
Non-GAAP income tax   $3        $(214)    $(191)    $(890)    $(174)
expense (benefit)
                                                              
RESEARCH AND                                                  
DEVELOPMENT :
GAAP research and     $48,196   $82,711   $89,400   $200,061  $175,656
development 
Stock-based           (1,026)   (2,814)   (3,735)   (11,760)  (10,496)
compensation expense
Warrant expense       --        --        --        (1,289)   --
Veloce acquisition    (22,250)  (51,930)  (60,400)  (78,830)  (60,400)
consideration
Non-GAAP research     $24,920   $27,967   $25,265   $108,182  $104,760
and development 
                                                              
SELLING, GENERAL AND                                          
ADMINISTRATIVE :
GAAP selling,
general and           $13,008   $12,675   $12,891   $51,684   $45,794
administrative 
Stock-based           (1,570)   (3,250)   (2,764)   (11,784)  (7,446)
compensation expense
Acquisition related   --        --        265       133       2,532
recoveries
Non-GAAP selling,
general and           $11,438   $9,425    $10,392   $40,033   $40,880
administrative 

 
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                                                                    
                                                      Year Ended March 31,
                                                      2013         2012
Operating activities:                                               
Net loss                                               $ (146,757)  $ (82,688)
Adjustments to reconcile net loss to net cash used in               
operating activities:
Depreciation                                           9,542        8,436
Amortization of purchased intangibles                  4,643        6,754
Stock-based compensation expense:                                   
Stock options                                          3,469        5,298
Restricted stock units                                 20,767       13,076
Warrants                                               1,289        -- 
Veloce accrued liability                               78,830       60,400
Acquisition related adjustment                         (133)        (2,532)
Net (gain) loss on disposals of property, equipment    (1,293)      10
and other assets
Impairment (gain) on strategic investments, net        2,250        (7,147)
Tax effect on other comprehensive income               (989)        (123)
Restructuring charges-asset impairment                 4,719        -- 
Impairment of short term investments and marketable    1,143        -- 
securities
Impairment of notes receivable and other assets        1,800        -- 
Changes in operating assets and liabilities:                        
Accounts receivable                                    (1,909)      (2,669)
Inventories                                            10,344       3,317
Other assets                                           (2,871)      (3,903)
Accounts payable                                       (622)        (4,451)
Accrued payroll and other liabilities                  (82)         (2,860)
Veloce accrued liability                               (16,537)     -- 
Deferred revenue                                       (668)        (270)
Net cash used in operating activities                  (33,065)     (9,352)
Investing activities:                                               
Proceeds from sales and maturities of short-term       42,164       101,222
investments
Purchases of short-term investments                    (21,633)     (103,046)
Proceeds from sale of property, equipment and other    1,800        -- 
assets
Purchase of property, equipment and other assets       (9,045)      (13,264)
Proceeds from sale of strategic investment             7,146        -- 
Purchase of strategic investment                       (500)        (4,750)
Net cash provided by (used in) investing activities    19,932       (19,838)
Financing activities:                                               
Proceeds from issuances of common stock                8,873        6,736
Funding of restricted stock units withheld for taxes   (3,121)      (2,864)
Repurchases of common stock                            (653)        (20,852)
Funding of structured stock repurchase agreements      --           (10,000)
Payment of contingent consideration                    (485)        -- 
Other                                                  (481)        (167)
Net cash provided by (used in) financing activities    4,133        (27,147)
Net decrease in cash and cash equivalents              (9,000)      (56,337)
Cash and cash equivalents at the beginning of year     28,065       84,402
Cash and cash equivalents at the end of year           $ 19,065     $ 28,065

CONTACT: Investor Relations Contact:
        
         Applied Micro Circuits Corporation
         Bob Gargus
         Phone: (408) 542-8752
         E-Mail: rgargus@apm.com
        
         Media Contact:
        
         Applied Micro Circuits Corporation
         Diane Orr
         Phone: (408) 358-1617
         E-mail: dianer@orr-co.com

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