Applied Micro Circuits Corporation Reports Fourth Quarter Fiscal 2013 Financial Results

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| Source: Applied Micro Circuits Corporation

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 31, March 31, March 31, March 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 development  48,196  82,711  89,400  200,061  175,656
Selling, general and administrative  13,008  12,675  12,891  51,684  45,794
Amortization of purchased intangible assets  337  338  650  1,926  3,202
Restructuring charges, net  217  6,218  --  6,435  875
Total operating expenses  61,758  101,942  102,941  260,106  225,527
Operating loss  (26,606)  (73,202)  (75,148)  (147,512)  (93,444)
Interest and other income (expense), net and other-than-temporary impairment  (4,654)  2,258  7,897  201  11,684
Loss before income taxes  (31,260)  (70,944)  (67,251)  (147,311)  (81,760)
Income tax (benefit) expense  (1,012)  618  331  (554)  928
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 diluted net loss per share  67,566  66,113  61,587  65,258  62,245
 
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 31, March 31, March 31, March 31,
  2013 2012 2012 2013 2012
           
GAAP net loss  $(30,248)  $(71,562)  $(67,582)  $(146,757)  $(82,688)
Adjustments:          
Stock-based compensation charges  2,691  6,222  6,639  24,236  18,374
Warrant expense  --  --  --  1,289  --
Amortization of purchased intangibles  1,017  1,017  1,329  4,643  6,754
Veloce acquisition consideration  22,250  51,930  60,400  78,830  60,400
Acquisition related recoveries  --  --  (265)  (133)  (2,532)
Restructuring charges, net  217  6,218  --  6,435  875
Impairment of strategic investment  2,250  --  1,000  2,250  1,000
Impairment of notes receivable and other assets  1,800  --  --  1,800  --
Sale of equipment and other assets  --  (1,299)  --  (1,299)  --
Other-than-temporary investment impairment   1,121  (270)  (77)  (412)  (743)
Realized gain on sale of strategic equity investment  --  --  (8,147)  --  (8,147)
Income tax adjustments  (1,015)  832  522  336  1,102
Total GAAP to Non-GAAP adjustments  30,331  64,650  61,401  117,975  77,083
           
Non-GAAP net income (loss)  $83  $(6,912)  $(6,181)  $(28,782)  $(5,605)
           
Diluted income (loss) per share $0.00 $(0.10) $(0.10) $(0.44) $(0.09)
           
Shares used in calculating diluted income (loss) per share   68,522  66,113  61,587  65,258  62,245
           
Net income (loss) per share:          
GAAP loss per share  $(0.45) $(1.08) $(1.10) $(2.25) $(1.33)
GAAP to non-GAAP adjustments  0.45 0.98 1.00 1.81 1.24
Non-GAAP net income (loss) per share $0.00 $(0.10) $(0.10) $(0.44) $(0.09)
           
Reconciliation of shares used in calculating non-GAAP income (loss) per share:          
Shares used in calculating the basic loss per share   67,566  66,113  61,587  65,258  62,245
Adjustment for dilutive securities   956  --   --  --  --
Shares used in calculating non-GAAP diluted income (loss) per share  68,522  66,113  61,587  65,258  62,245
 
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 31, March 31, March 31, March 31,
  2013 2012 2012 2013 2012
GROSS PROFIT:          
GAAP gross profit  $35,152  $28,740  $27,793  $112,594  $132,083
Amortization of purchased intangibles  680  679  679  2,717  3,552
Stock-based compensation expense  95  158  140  692  432
Non-GAAP gross profit  $35,927  $29,577  $28,612  $116,003  $136,067
           
OPERATING EXPENSES:          
GAAP operating expenses  $61,758  $101,942  $102,941  $260,106  $225,527
Stock-based compensation expense  (2,596)  (6,064)  (6,499)  (23,544)  (17,942)
Warrant expense  --  --  --  (1,289)  --
Amortization of purchased intangibles  (337)  (338)  (650)  (1,926)  (3,202)
Acquisition related recoveries  --  --  265  133  2,532
Veloce acquisition consideration  (22,250)  (51,930)  (60,400)  (78,830)  (60,400)
Restructuring charges, net  (217)  (6,218)  --  (6,435)  (875)
Non-GAAP operating expenses  $36,358  $37,392  $35,657  $148,215  $145,640
           
INTEREST AND OTHER INCOME, NET AND OTHER-THAN-TEMPORARY IMPAIRMENT:          
GAAP interest and other (loss) income  $(4,654)  $2,258  $7,897  $201  $11,684
Realized gain on sale of strategic investment  --  --  (8,147)  --  (8,147)
Impairment of strategic investment  2,250  --  1,000  2,250  1,000
Sale of equipment and other assets  --  (1,299)  --  (1,299)  --
Impairment of notes receivable and other assets  1,800  --  --  1,800  --
Other-than-temporary investment impairment   1,121  (270)  (77)  (412)  (743)
Non-GAAP interest and other income, net  $517  $689  $673  $2,540  $3,794
           
INCOME TAX EXPENSE (BENEFIT):          
GAAP income tax expense  $(1,012)  $618  $331  $(554)  $928
Income tax adjustments  1,015  (832)  (522)  (336)  (1,102)
Non-GAAP income tax expense (benefit)  $3  $(214)  $(191)  $(890)  $(174)
           
RESEARCH AND DEVELOPMENT :          
GAAP research and development   $48,196  $82,711  $89,400  $200,061  $175,656
Stock-based compensation expense  (1,026)  (2,814)  (3,735)  (11,760)  (10,496)
Warrant expense  --  --  --  (1,289)  --
Veloce acquisition consideration  (22,250)  (51,930)  (60,400)  (78,830)  (60,400)
Non-GAAP research and development   $24,920  $27,967  $25,265  $108,182  $104,760
           
SELLING, GENERAL AND ADMINISTRATIVE :          
GAAP selling, general and administrative   $13,008  $12,675  $12,891  $51,684  $45,794
Stock-based compensation expense  (1,570)  (3,250)  (2,764)  (11,784)  (7,446)
Acquisition related recoveries  --  --  265  133  2,532
Non-GAAP selling, general and administrative   $11,438  $9,425  $10,392  $40,033  $40,880
 
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 and other assets  (1,293)  10
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 securities  1,143  -- 
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 investments  42,164  101,222
Purchases of short-term investments   (21,633)  (103,046)
Proceeds from sale of property, equipment and other assets  1,800  -- 
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
Investor Relations Contact:

Applied Micro Circuits Corporation
Bob Gargus
Phone: (408) 542-8752
E-Mail: 

Media Contact:

Applied Micro Circuits Corporation
Diane Orr
Phone: (408) 358-1617
E-mail: