Exhibit 99.1
Applied Micro Circuits Corporation
Unaudited Pro Forma Condensed Consolidated Financial Statements
These unaudited pro forma condensed consolidated financial statements of the Company have been prepared to reflect the April 21, 2009 sale of the Company’s Storage Business to LSI as described in Item 2.01 of this Current Report.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended December 31, 2008 and fiscal years ended March 31, 2008, 2007 and 2006 are based on the Company’s historical condensed consolidated statements of operations, and give effect to the disposition transaction as if it had occurred on the first day of each period presented. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2008 is based on the Company’s historical balance sheet as of that date, and gives effect to the disposition transaction as if it had occurred on December 31, 2008. The Unaudited Pro Forma Condensed Consolidated Statements of Operations are based on the assumptions and adjustments described in the accompanying notes and do not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the disposition. These unaudited pro forma condensed consolidated financial statements include no assumptions regarding the use of proceeds from the sale of the Storage Business, which are presented as additional cash on the Unaudited Pro Forma Condensed Consolidated Balance Sheet. Accordingly, the actual effect of the sale, due to this and other factors, could differ from the pro forma adjustments presented herein. However, management believes that the assumptions used and the adjustments made are reasonable under the circumstances and given the information available.
These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the sale been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the fiscal year ended March 31, 2008, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008, as well as in conjunction with the Company’s unaudited condensed consolidated financial statements and accompanying notes as of and for the period ended December 31, 2008, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Quarterly Report on Form 10-Q for the nine months ended December 31, 2008.
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
| December 31, 2008 | ||||||||||||
| As Reported | Adjustments | Pro Forma | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 92,667 | $ | 18,750 | (a) | $ | 111,417 | |||||
| Short-term investments-available-for-sale | 95,218 | — | 95,218 | |||||||||
| Accounts receivable, net | 20,909 | — | 20,909 | |||||||||
| Inventories | 38,769 | (7,799 | )(b) | 30,970 | ||||||||
| Other current assets | 9,330 | (133 | )(c) | 9,197 | ||||||||
| Total current assets | 256,893 | 10,818 | 267,711 | |||||||||
| Marketable securities | — | — | — | |||||||||
| Property and equipment, net | 27,644 | (626 | )(b) | 27,018 | ||||||||
| Goodwill | — | — | — | |||||||||
| Purchased intangibles, net | 38,593 | (1,040 | )(c) | 37,553 | ||||||||
| Other assets | 25,003 | — | 25,003 | |||||||||
| Total assets | $ | 348,133 | $ | 9,152 | $ | 357,285 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 17,969 | $ | — | $ | 17,969 | ||||||
| Accrued payroll and related expenses | 6,385 | — | 6,385 | |||||||||
| Other accrued liabilities | 11,652 | — | 11,652 | |||||||||
| Deferred revenue | 2,026 | — | 2,026 | |||||||||
| Total current liabilities | 38,032 | — | 38,032 | |||||||||
| Deferred tax liability | — | — | — | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders’ equity: | ||||||||||||
| Preferred stock, $0.01 par value: | ||||||||||||
| Authorized shares — 2,000, none issued and outstanding | — | — | — | |||||||||
| Common stock, $0.01 par value: | ||||||||||||
| Authorized shares — 375,000 at December 31, 2008 | ||||||||||||
| Issued and outstanding shares — 65,459 at December 31, 2008 | 655 | — | 655 | |||||||||
| Additional paid-in capital | 5,906,228 | — | 5,906,228 | |||||||||
| Accumulated other comprehensive income (loss) | (3,259 | ) | — | (3,259 | ) | |||||||
| Accumulated deficit | (5,593,523 | ) | (9,152 | )(d) | (5,584,371 | ) | ||||||
| Total stockholders’ equity | 310,101 | (9,152 | ) | 319,253 | ||||||||
| Total liabilities and stockholders’ equity | $ | 348,133 | $ | (9,152 | ) | $ | 357,285 | |||||
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Nine Months Ended December 31, 2008 | ||||||||||||
| As Reported | Adjustments(e) | Pro Forma | ||||||||||
| Net revenues | $ | 208,556 | $ | 35,341 | $ | 173,215 | ||||||
| Cost of revenues | 99,594 | 20,366 | 79,228 | |||||||||
| Gross profit | 108,962 | 14,975 | 93,987 | |||||||||
| Operating expenses: | ||||||||||||
| Research and development | 69,197 | 8,713 | 60,484 | |||||||||
| Selling, general and administrative | 46,365 | 7,419 | 38,946 | |||||||||
| Acquired in-process research and development | — | — | — | |||||||||
| Amortization of purchased intangible assets | 3,960 | 945 | 3,015 | |||||||||
| Restructuring charges, net | 1,032 | 126 | 906 | |||||||||
| Option investigation, net | 84 | — | 84 | |||||||||
| Goodwill impairment charges | 264,130 | 41,158 | 222,972 | |||||||||
| Litigation settlement, net | 130 | — | 130 | |||||||||
| Total operating expenses | 384,898 | 58,361 | 326,537 | |||||||||
| Operating loss | (275,936 | ) | (43,386 | ) | (232,550 | ) | ||||||
| Interest income (expense), net | (9,713 | ) | — | (9,713 | ) | |||||||
| Other income, net | 439 | — | 439 | |||||||||
| Loss from continuing operations before income taxes | (285,210 | ) | (43,386 | ) | (241,824 | ) | ||||||
| Income tax expense (benefit) | (3,263 | ) | (170 | ) | (3,093 | ) | ||||||
| Net loss from continuing operations | $ | (281,947 | ) | $ | (43,216 | ) | $ | (238,731 | ) | |||
| Basic and diluted net loss per share: | ||||||||||||
| Net loss from continuing operations per share | $ | (4.33 | ) | $ | (0.66 | ) | $ | (3.67 | ) | |||
| Shares used in calculating basic and diluted net loss from continuing operations per share | 65,127 | 65,127 | 65,127 | |||||||||
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Fiscal Year Ended March 31, 2008 | ||||||||||||
| As Reported | Adjustments(e) | Pro Forma | ||||||||||
| Net revenues | $ | 246,146 | $ | 52,031 | $ | 194,115 | ||||||
| Cost of revenues | 126,668 | 27,913 | 98,755 | |||||||||
| Gross profit | 119,478 | 24,118 | 95,360 | |||||||||
| Operating expenses: | ||||||||||||
| Research and development | 97,550 | 11,434 | 86,116 | |||||||||
| Selling, general and administrative | 61,907 | 9,870 | 52,037 | |||||||||
| Acquired in-process research and development | — | — | — | |||||||||
| Amortization of purchased intangible assets | 5,321 | 1,260 | 4,061 | |||||||||
| Restructuring charges, net | 2,985 | 27 | 2,958 | |||||||||
| Option investigation, net | 1,072 | — | 1,072 | |||||||||
| Goodwill impairment charges | 71,494 | 71,494 | — | |||||||||
| Litigation settlement, net | 1,125 | — | 1,125 | |||||||||
| Total operating expenses | 241,454 | 94,085 | 147,369 | |||||||||
| Operating loss | (121,976 | ) | (69,967 | ) | (52,009 | ) | ||||||
| Interest income (expense), net | 8,635 | — | 8,635 | |||||||||
| Other income, net | 1,944 | — | 1,944 | |||||||||
| Loss from continuing operations before income taxes | (111,397 | ) | (69,967 | ) | (41,430 | ) | ||||||
| Income tax expense (benefit) | 3,724 | (178 | ) | 3,902 | ||||||||
| Net loss from continuing operations | $ | (115,121 | ) | $ | (69,789 | ) | $ | (45,332 | ) | |||
| Basic and diluted net loss from continuing operations per share: | ||||||||||||
| Net loss per share | $ | (1.70 | ) | $ | (1.03 | ) | $ | (0.67 | ) | |||
| Shares used in calculating basic and diluted net loss from continuing operations per share | 67,775 | 67,775 | 67,775 | |||||||||
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Fiscal Year Ended March 31, 2007 | ||||||||||||
| As Reported | Adjustments(e) | Pro Forma | ||||||||||
| Net revenues | $ | 292,852 | $ | 50,374 | $ | 242,478 | ||||||
| Cost of revenues | 140,714 | 24,920 | 115,794 | |||||||||
| Gross profit | 152,138 | 25,454 | 126,684 | |||||||||
| Operating expenses: | ||||||||||||
| Research and development | 96,418 | 15,152 | 81,266 | |||||||||
| Selling, general and administrative | 67,971 | 9,553 | 58,418 | |||||||||
| Acquired in-process research and development | 13,300 | — | 13,300 | |||||||||
| Amortization of purchased intangible assets | 4,995 | 1,260 | 3,735 | |||||||||
| Restructuring charges, net | 1,291 | — | 1,291 | |||||||||
| Option investigation, net | 5,344 | — | 5,344 | |||||||||
| Goodwill impairment charges | — | — | — | |||||||||
| Litigation settlement, net | — | — | — | |||||||||
| Total operating expenses | 189,319 | 25,965 | 163,354 | |||||||||
| Operating loss | (37,181 | ) | (511 | ) | (36,670 | ) | ||||||
| Interest income (expense), net | 13,125 | — | 13,125 | |||||||||
| Other income, net | 250 | — | 250 | |||||||||
| Loss from continuing operations before income taxes | (23,806 | ) | (511 | ) | (23,295 | ) | ||||||
| Income tax expense (benefit) | 402 | 9 | 393 | |||||||||
| Net loss from continuing operations | $ | (24,208 | ) | $ | (520 | ) | $ | (23,688 | ) | |||
| Basic and diluted net loss per share: | ||||||||||||
| Net loss from continuing operations per share | $ | (0.34 | ) | $ | (0.01 | ) | $ | (0.33 | ) | |||
| Shares used in calculating basic and diluted net loss from continuing operations per share | 71,076 | 71,076 | 71,076 | |||||||||
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Fiscal Year Ended March 31, 2006 | ||||||||||||
| As Reported | Adjustments(e) | Pro Forma | ||||||||||
| Net revenues | $ | 261,844 | $ | 47,223 | $ | 214,621 | ||||||
| Cost of revenues | 122,392 | 27,672 | 94,720 | |||||||||
| Gross profit | 139,452 | 19,551 | 119,901 | |||||||||
| Operating expenses: | ||||||||||||
| Research and development | 93,770 | 15,328 | 78,442 | |||||||||
| Selling, general and administrative | 62,157 | 8,654 | 53,503 | |||||||||
| Acquired in-process research and development | — | — | — | |||||||||
| Amortization of purchased intangible assets | 4,588 | 1,260 | 3,328 | |||||||||
| Restructuring charges, net | 12,602 | — | 12,602 | |||||||||
| Option investigation, net | — | — | — | |||||||||
| Goodwill impairment charges | 131,216 | 81,493 | 49,723 | |||||||||
| Litigation settlement, net | — | — | — | |||||||||
| Total operating expenses | 304,333 | 106,735 | 197,598 | |||||||||
| Operating loss | (164,881 | ) | (87,184 | ) | (77,697 | ) | ||||||
| Interest income (expense), net | 15,617 | — | 15,617 | |||||||||
| Other income, net | 256 | — | 256 | |||||||||
| Loss from continuing operations before income taxes | (149,008 | ) | (87,184 | ) | (61,824 | ) | ||||||
| Income tax expense (benefit) | (636 | ) | (372 | ) | (264 | ) | ||||||
| Net loss from continuing operations | $ | (148,372 | ) | $ | (86,812 | ) | $ | (61,560 | ) | |||
| Basic and diluted net loss per share: | ||||||||||||
| Net loss from continuing operations per share | $ | (1.97 | ) | $ | (1.15 | ) | $ | (0.82 | ) | |||
| Shares used in calculating basic and diluted net loss from continuing operations per share | 75,210 | 75,210 | 75,210 | |||||||||
| (a) | Estimated sales proceeds of $20 million less estimated direct transactional costs of $1 million in investment banker fees and $250,000 in attorney’s fees. | |
| (b) | Assets to be transferred to LSI under the asset purchase agreement. | |
| (c) | Assets to be reclassified to discontinued operations as of December 31, 2008 as the assets were used by the Company in the Storage Business, but were not sold to LSI under the asset purchase agreement. | |
| (d) | Gain which would have been realized upon disposition of the Storage Business had the transaction closed on December 31, 2008. | |
| (e) | Reflects the elimination of the results of operations of the discontinued operations of the Company’s Storage Business. These eliminations represent transactions directly attributable to the Storage Business and do not include any corporate allocations of indirect costs. |