EXHIBIT 99.1
FOR ADDITIONAL INFORMATION: | ||
Investor Relations Contact: | Media/Editorial Contact: | |
Applied Micro Circuits Corporation | The Ardell Group | |
Debra Hart | Angela Edgerton | |
Phone: (858) 535-4217 | Phone: (858) 792-2941 | |
E-Mail: dhart@amcc.com | E-Mail: angela@ardellgroup.com |
Thursday, April 24, 2003
Company Press Release
APPLIED MICRO CIRCUITS CORPORATION ANNOUNCES
FOURTH QUARTER FISCAL 2003 FINANCIAL RESULTS
SAN DIEGO—April 24, 2003—Applied Micro Circuits Corporation [NASDAQ: AMCC] today reported its financial results for the fourth quarter of fiscal 2003.
Net revenues for the fourth quarter of fiscal 2003 were $20.1 million, compared to $30.1 million for the fourth quarter of fiscal 2002 and $21.1 million for the third quarter of fiscal 2003.
The net loss for the fourth quarter of fiscal 2003 on a generally accepted accounting principles (GAAP) basis, was $229.1 million or $0.76 per share, compared with a net loss of $90.3 million or $0.30 per share for the fourth quarter of fiscal 2002, and a net loss of $39.1 million or $0.13 per share in the third quarter of fiscal 2003.The pro forma net loss for the fourth quarter of fiscal 2003 was $15.0 million or $0.05 per share, compared to the pro forma net loss of $17.5 million or $0.06 per share in the fourth quarter of fiscal 2002, and the pro forma net loss of $15.1 million or $0.05 per share in the third quarter of fiscal 2003.
Net revenues for the yearended March 31, 2003 were $101.6 million, down 34% from the $152.8 million reported for the year ended March 31, 2002.
The GAAP net loss for the yearended March 31, 2003 was $745.5 million or $2.47 per share, compared to the net loss of $3.6 billion or $12.08 per share for the year ended March 31, 2002.The pro forma net loss for the year ended March 31, 2003 was $56.6 million or $0.19 per share, compared with the pro forma net loss of $57.0 million or $0.19 per share for the year ended March 31, 2002.
–more–
In the fourth quarter of fiscal 2003, the Company performed the required annual impairment review of its goodwill. As a result, the Company recorded a non-cash goodwill impairment charge of $186.4 million. In addition, the Company recorded a $1.6 million charge for impairment of its strategic equity investments and a $1.8 million charge for restructuring costs associated with the recently announced organizational realignment and additional costs associated with the closure of the Company’s wafer fabrication facility which was announced in the first quarter of fiscal 2003.
The Company expects to record additional restructuring charges in the first quarter of fiscal 2004 of approximately $20 to $25 million for employee severance costs and the consolidation and disposal of certain facilities related to the realignment plan.
Commenting on the results, Dave Rickey, Chairman of the Board, President and Chief Executive Officer said, “Although our results for the fourth quarter are in line with our most recent forecast, they mark the end of what has been a very disappointing year for the Company and our industry. Given the prolonged downturn in our end markets and the uncertainty as to when these markets will recover, it became evident that more drastic cost reductions were required in order to return to profitability.” Rickey continued, “The realignment and workforce reduction announced earlier this month provide us with a cost structure that will enable the Company to return to profitability more quickly as well as the flexibility to pursue other markets more aggressively.”
AMCC reports its financial results in accordance with GAAP and additionally on a non-GAAP basis referred to as pro forma. These pro forma measures are not in accordance with, nor are they a substitute for, GAAP measures and may not be consistent with the presentation used by other companies. AMCC uses the pro forma financial measures to evaluate and manage the Company’s operations. AMCC is providing this information to investors to allow for the performance of additional financial analysis and because it is consistent with the financial models and estimates published by analysts who follow the Company.
The pro forma results exclude the following items which are required by GAAP: the cumulative effect of accounting changes, goodwill and other purchased intangible asset impairment charges, restructuring costs, on-going amortization of purchased intangibles, stock compensation charges related to acquired companies, the special excess inventory charge in the first quarter of fiscal 2002, payroll tax effects of certain stock option exercises, net gains and losses related to strategic equity investments and real estate transactions, and income taxes are adjusted to an estimated pro forma effective tax rate. See the attached reconciliation of GAAP to pro forma net loss, which quantifies the amounts excluded from pro forma basis results.
For More Information
Management will be holding a conference call today, April 24, 2003, at 2:00 pm PDT to discuss additional details regarding the Company’s performance for the fourth quarter of fiscal 2003 and to provide guidance for the first quarter of fiscal 2004. You may access the conference call via one of the following:
Teleconference: | (719) 457-2601 | |
Conference ID: | 528194 | |
Web Broadcast: | http://www.amcc.com | |
Replay: | (719) 457-0820 (available for 7 days following the call) |
AMCC Overview
AMCC designs, develops, manufactures, and markets high-performance, high-bandwidth silicon solutions empowering intelligent wide area networks. AMCC utilizes a combination of digital, mixed- signal and high-frequency analog design expertise coupled with system-level knowledge and multiple silicon process technologies to offer integrated circuit products that enable the transport of voice and data over fiber optic networks. The Company’s system solution portfolio includes switch fabric, traffic management, network processor, framer/mapper, PHY and PMD devices that address the high-performance needs of the evolving intelligent optical network. AMCC’s corporate headquarters is located in San Diego, California. Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our Web site athttp://www.amcc.com or call our shareholder information line at (888) 982-AMCC (2622).
This news release contains forward-looking statements, including statements regarding the Company’s financial performance, that are subject to certain risks and uncertainties, including, but not limited to, customer demand for the Company’s products, concentration of revenues with major customers, 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, market acceptance of new products, manufacturing capacity and execution, the impact of the Company’s operating expense reduction program, 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, 2002, 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. The Company undertakes no duty to update this information.
-Financial Tables Follow-
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in thousands)
March 31, 2003 | March 31, 2002 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash, cash equivalents and short-term investments | $ | 1,036,140 | $ | 1,058,709 | ||
Accounts receivable, net |
| 5,634 |
| 14,191 | ||
Inventories |
| 7,178 |
| 16,608 | ||
Other current assets |
| 24,592 |
| 27,653 | ||
Total current assets |
| 1,073,544 |
| 1,117,161 | ||
Property and equipment, net |
| 62,035 |
| 106,412 | ||
Other assets |
| 759 |
| 487 | ||
Purchased intangibles |
| 88,219 |
| 590,610 | ||
Strategic equity investments |
| — |
| 14,523 | ||
Total assets | $ | 1,224,557 | $ | 1,829,193 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 12,689 | $ | 18,378 | ||
Other current liabilities |
| 38,415 |
| 37,281 | ||
Current portion of long-term debt & capital leases |
| 1,265 |
| 1,138 | ||
Total current liabilities |
| 52,369 |
| 56,797 | ||
Long-term debt & capital leases, less current portion |
| — |
| 1,145 | ||
Stockholders’ equity |
| 1,172,188 |
| 1,771,251 | ||
Total liabilities and stockholders’ equity | $ | 1,224,557 | $ | 1,829,193 | ||
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended | Year Ended | |||||||||||||||||||
Mar 31, 2003 | Dec 31, 2002 | Mar 31, 2002 | Mar 31, 2003 | Mar 31, 2002 | ||||||||||||||||
(unaudited) | ||||||||||||||||||||
Net revenues | $ | 20,103 |
| $ | 21,114 |
| $ | 30,112 |
| $ | 101,591 |
| $ | 152,840 |
| |||||
Cost of revenues |
| 13,431 |
|
| 14,327 |
|
| 34,511 |
|
| 61,900 |
|
| 150,924 |
| |||||
Gross profit (loss) |
| 6,672 |
|
| 6,787 |
|
| (4,399 | ) |
| 39,691 |
|
| 1,916 |
| |||||
Operating expenses: | ||||||||||||||||||||
Research and development |
| 30,940 |
|
| 32,040 |
|
| 37,528 |
|
| 131,918 |
|
| 154,625 |
| |||||
Selling, general and administrative |
| 13,806 |
|
| 14,467 |
|
| 17,586 |
|
| 59,588 |
|
| 75,656 |
| |||||
Stock-based compensation related to acquired companies: | ||||||||||||||||||||
Research and development |
| 8,274 |
|
| 10,467 |
|
| 16,651 |
|
| 70,831 |
|
| 71,757 |
| |||||
Selling, general and administrative |
| 3,490 |
|
| 4,286 |
|
| 14,833 |
|
| 58,510 |
|
| 66,425 |
| |||||
Amortization of goodwill and purchased intangibles |
| — |
|
| — |
|
| 23,337 |
|
| — |
|
| 239,563 |
| |||||
Impairment of goodwill and other intangible assets |
| 186,389 |
|
| — |
|
| — |
|
| 390,673 |
|
| 3,101,817 |
| |||||
Restructuring costs |
| 1,750 |
|
| — |
|
| 200 |
|
| 7,250 |
|
| 11,577 |
| |||||
Total operating expenses |
| 244,649 |
|
| 61,260 |
|
| 110,135 |
|
| 718,770 |
|
| 3,721,420 |
| |||||
Operating loss |
| (237,977 | ) |
| (54,473 | ) |
| (114,534 | ) |
| (679,079 | ) |
| (3,719,504 | ) | |||||
Interest and other income, net |
| 8,835 |
|
| 15,414 |
|
| 9,396 |
|
| 35,767 |
|
| 32,885 |
| |||||
Loss before income taxes |
| (229,142 | ) |
| (39,059 | ) |
| (105,138 | ) |
| (643,312 | ) |
| (3,686,619 | ) | |||||
Income tax benefit |
| — |
|
| — |
|
| (14,872 | ) |
| — |
|
| (80,929 | ) | |||||
Loss before cumulative effect of accounting change |
| (229,142 | ) |
| (39,059 | ) |
| (90,266 | ) |
| (643,312 | ) |
| (3,605,690 | ) | |||||
Cumulative effect of accounting change |
| — |
|
| — |
|
| — |
|
| 102,229 |
|
| — |
| |||||
Net loss | $ | (229,142 | ) | $ | (39,059 | ) | $ | (90,266 | ) | $ | (745,541 | ) | $ | (3,605,690 | ) | |||||
Basic and diluted loss per share: | ||||||||||||||||||||
Loss per share before cumulative effect of accounting change | $ | (0.76 | ) | $ | (0.13 | ) | $ | (0.30 | ) | $ | (2.14 | ) | $ | (12.08 | ) | |||||
Loss per share | $ | (0.76 | ) | $ | (0.13 | ) | $ | (0.30 | ) | $ | (2.47 | ) | $ | (12.08 | ) | |||||
Weighted average shares |
| 302,875 |
|
| 301,622 |
|
| 298,865 |
|
| 301,252 |
|
| 298,502 |
| |||||
APPLIED MICRO CIRCUITS CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended | Year Ended | |||||||||||||||||||
Mar 31, 2003 | Dec 31, 2002 | Mar 31, 2002 | Mar 31, 2003 | Mar 31, 2002 | ||||||||||||||||
Net revenues | $ | 20,103 |
| $ | 21,114 |
| $ | 30,112 |
| $ | 101,591 |
| $ | 152,840 |
| |||||
Cost of revenues |
| 11,579 |
|
| 12,355 |
|
| 14,738 |
|
| 53,077 |
|
| 67,831 |
| |||||
Gross profit |
| 8,524 |
|
| 8,759 |
|
| 15,374 |
|
| 48,514 |
|
| 85,009 |
| |||||
Operating expenses: | ||||||||||||||||||||
Research and development |
| 30,940 |
|
| 32,040 |
|
| 37,498 |
|
| 131,914 |
|
| 154,548 |
| |||||
Selling, general and administrative |
| 13,806 |
|
| 14,467 |
|
| 17,487 |
|
| 59,588 |
|
| 75,352 |
| |||||
Total operating expenses |
| 44,746 |
|
| 46,507 |
|
| 54,985 |
|
| 191,502 |
|
| 229,900 |
| |||||
Operating loss |
| (36,222 | ) |
| (37,748 | ) |
| (39,611 | ) |
| (142,988 | ) |
| (144,891 | ) | |||||
Interest and other income, net |
| 10,435 |
|
| 11,751 |
|
| 9,396 |
|
| 45,354 |
|
| 46,660 |
| |||||
Loss before income taxes |
| (25,787 | ) |
| (25,997 | ) |
| (30,215 | ) |
| (97,634 | ) |
| (98,231 | ) | |||||
Income tax benefit |
| (10,831 | ) |
| (10,918 | ) |
| (12,690 | ) |
| (41,006 | ) |
| (41,257 | ) | |||||
Net loss | $ | (14,956 | ) | $ | (15,079 | ) | $ | (17,525 | ) | $ | (56,628 | ) | $ | (56,974 | ) | |||||
Diluted loss per share: | ||||||||||||||||||||
Loss per share | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.19 | ) | $ | (0.19 | ) | |||||
Weighted average shares |
| 302,875 |
|
| 301,622 |
|
| 298,865 |
|
| 301,252 |
|
| 298,502 |
| |||||
The above pro forma statements are based on the Company’s consolidated statements of operations for the periods presented. This pro forma information is not prepared in accordance with GAAP and may not be consistent with the presentation used by other companies. The pro forma operating results are used by the Company’s management to evaluate the operating performance of the Company and are also consistent with the financial models and estimates published by analysts who follow the Company.
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP TO PRO FORMA NET LOSS
(unaudited)
(in thousands)
Three Months Ended | Year Ended | |||||||||||||||||||
Mar 31, 2003 | Dec 31, 2002 | Mar 31, 2002 | Mar 31, 2003 | Mar 31, 2002 | ||||||||||||||||
GAAP net loss | $ | (229,142 | ) | $ | (39,059 | ) | $ | (90,266 | ) | $ | (745,541 | ) | $ | (3,605,690 | ) | |||||
Adjustments: | ||||||||||||||||||||
Stock-based compensation related to acquired companies |
| 12,044 |
|
| 15,153 |
|
| 36,673 |
|
| 131,877 |
|
| 147,051 |
| |||||
Amortization of goodwill and other intangibles |
| 1,572 |
|
| 1,572 |
|
| 37,921 |
|
| 6,287 |
|
| 297,902 |
| |||||
Impairments of goodwill and other intangibles |
| 186,389 |
|
| — |
|
| — |
|
| 390,673 |
|
| 3,101,817 |
| |||||
Cumulative effect of accounting change |
| — |
|
| — |
|
| — |
|
| 102,229 |
|
| — |
| |||||
Restructuring costs |
| 1,750 |
|
| — |
|
| 200 |
|
| 7,250 |
|
| 11,577 |
| |||||
Strategic investment gains (losses) |
| 1,600 |
|
| — |
|
| — |
|
| 13,250 |
|
| 13,775 |
| |||||
Real estate transaction gain |
| — |
|
| (3,663 | ) |
| — |
|
| (3,663 | ) |
| — |
| |||||
Special excess inventory charge |
| — |
|
| — |
|
| — |
|
| — |
|
| 15,859 |
| |||||
Payroll taxes on stock option exercises |
| — |
|
| — |
|
| 129 |
|
| 4 |
|
| 407 |
| |||||
Income tax adjustments |
| 10,831 |
|
| 10,918 |
|
| (2,182 | ) |
| 41,006 |
|
| (39,672 | ) | |||||
Total GAAP to pro forma adjustments |
| 214,186 |
|
| 23,980 |
|
| 72,741 |
|
| 688,913 |
|
| 3,548,716 |
| |||||
Pro forma net loss | $ | (14,956 | ) | $ | (15,079 | ) | $ | (17,525 | ) | $ | (56,628 | ) | $ | (56,974 | ) | |||||
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED PRO FORMA ADJUSTMENTS
(unaudited)
(in thousands)
The following schedule reconciles selected line items from the GAAP basis statements of operations to the pro forma statements of operations.
Three Months Ended | Year Ended | ||||||||||||||||||
Mar 31, 2003 | Dec 31, 2002 | Mar 31, 2002 | Mar 31, 2003 | Mar 31, 2002 | |||||||||||||||
GROSS PROFIT (LOSS): | |||||||||||||||||||
GAAP gross profit (loss) | $ | 6,672 | $ | 6,787 |
| $ | (4,399 | ) | $ | 39,691 |
| $ | 1,916 |
| |||||
Amortization of purchased intangibles |
| 1,572 |
| 1,572 |
|
| 14,584 |
|
| 6,287 |
|
| 58,339 |
| |||||
Excess inventory charge |
| — |
| — |
|
| — |
|
| — |
|
| 15,859 |
| |||||
Stock-based compensation related to acquired companies |
| 280 |
| 400 |
|
| 5,189 |
|
| 2,536 |
|
| 8,869 |
| |||||
Payroll taxes on stock options |
| — |
| — |
|
| — |
|
| — |
|
| 26 |
| |||||
Pro forma gross profit | $ | 8,524 | $ | 8,759 |
| $ | 15,374 |
| $ | 48,514 |
| $ | 85,009 |
| |||||
OPERATING EXPENSES: | |||||||||||||||||||
GAAP operating expenses | $ | 244,649 | $ | 61,260 |
| $ | 110,135 |
| $ | 718,770 |
| $ | 3,721,420 |
| |||||
Amortization of goodwill and purchased intangibles |
| — |
| — |
|
| 23,337 |
|
| — |
|
| 239,563 |
| |||||
Impairment of goodwill and other intangible assets |
| 186,389 |
| — |
|
| — |
|
| 390,673 |
|
| 3,101,817 |
| |||||
Stock-based compensation related to acquired companies |
| 11,764 |
| 14,753 |
|
| 31,484 |
|
| 129,341 |
|
| 138,182 |
| |||||
Restructuring costs |
| 1,750 |
| — |
|
| 200 |
|
| 7,250 |
|
| 11,577 |
| |||||
Payroll taxes on stock options |
| — |
| — |
|
| 129 |
|
| 4 |
|
| 381 |
| |||||
Pro forma operating expenses | $ | 44,746 | $ | 46,507 |
| $ | 54,985 |
| $ | 191,502 |
| $ | 229,900 |
| |||||
OTHER INCOME (EXPENSE), NET: | |||||||||||||||||||
GAAP other income (expense), net | $ | 8,835 | $ | 15,414 |
| $ | 9,396 |
| $ | 35,767 |
| $ | 32,885 |
| |||||
Realized gains on strategic equity investments |
| — |
| — |
|
| — |
|
| — |
|
| (1,225 | ) | |||||
Valuation allowance for strategic equity investments |
| 1,600 |
| — |
|
| — |
|
| 13,250 |
|
| 15,000 |
| |||||
Real estate transaction gain |
| — |
| (3,663 | ) |
| — |
|
| (3,663 | ) |
| — |
| |||||
Pro forma other income (expense), net | $ | 10,435 | $ | 11,751 |
| $ | 9,396 |
| $ | 45,354 |
| $ | 46,660 |
| |||||
