Applied Micro Circuits (AMCC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

FOR ADDITIONAL INFORMATION:
Investor Relations Contact:	Media/Editorial Contact:
Applied Micro Circuits Corporation	The Bernard Group
Scott Dawson	Diane Bernard
Phone: (858) 535-4217	Phone: (512) 617-6319
E-Mail:sdawson@amcc.com	E-Mail: diane@bernardgroup.com

Thursday, May 1, 2008

Company Press Release

APPLIED MICRO CIRCUITS CORPORATION ANNOUNCES
FOURTH QUARTER FISCAL 2008 FINANCIAL RESULTS IN LINE WITH
REVENUE GUIDANCE

Selected Q4 Highlights

• Q4 net revenues of $71.5 million, up 8% sequentially

• Q4 GAAP net loss of $86.3 million or $(1.33) per share compared to a GAAP net loss of $4.3 million or $(0.06) per share in the third quarter. The Q4 GAAP net loss included an impairment charge for goodwill of $71.5 million.

• Q4 non-GAAP net income of $6.0 million or $0.09 per share compared to a non-GAAP net income of $3.9 million or $0.06 per share in the third quarter.

• Transport revenues were $27.8 million and grew 11% sequentially; Storage revenues were $13.0 million and declined 4% sequentially; Processor revenues were $30.7 million and grew 11% sequentially.

• AMCC’s PowerPC 405EX Embedded Processor Named Product of the Year by Electronic Products Magazine.

• The AMCC Storage family of 3ware RAID controllers was awarded the “”EE Times Ultimate Product of the Year” ACE Award. Additionally the AMCC 9690SA SAS controller was awarded the “PC Pro Recommended” award.

• Announced Pemaquid, a fully integrated 10G Framer/Mapper/PHY for transporting 10GbE or 10G FC over WDM and OTN networks. Pemaquid is ideal for Carrier Ethernet Switch/Router and optical systems.

SUNNYVALE, Calif., —May 1, 2008—Applied Micro Circuits Corporation [NASDAQ: AMCC] today reported its financial results for the fourth quarter of fiscal 2008.

Net revenues for the fourth quarter of fiscal 2008 were $71.5 million compared to $66.3 million reported in the third quarter of fiscal 2008, representing a sequential growth of 8% and a growth of 2% over the $70.2 million reported in the fourth quarter of fiscal 2007. Net revenues for the fiscal year ended March 31, 2008 were $246.1 million compared to $292.9 million for the prior fiscal year, representing a sequential decline of approximately 16%.

The net loss on a generally accepted accounting principles (GAAP) basis for the fourth quarter of fiscal 2008 was $86.3 million or $(1.33) per share, which includes the impact of a goodwill write-off of $71.5 million. The fourth quarter GAAP net loss compares with a net loss of $4.3 million or $(0.06) per share for the third quarter of fiscal 2008 and a net loss of $5.3 million or $(0.08) per share for the fourth quarter of fiscal 2007. The GAAP net loss was $115.1 million or $(1.70) per share for fiscal 2008 compared to $24.2 million or $(0.34) per share for fiscal 2007.

The non-GAAP net income for the fourth quarter of fiscal 2008 was $6.0 million or $0.09 per share, compared to the non-GAAP net income of $3.9 million or $0.06 per share in the third quarter of fiscal 2008. Non-GAAP net income for the fourth quarter of fiscal 2007 was $2.8 million or $0.04 per share. For fiscal 2008, the non-GAAP net loss was $0.4 million or $(0.01) per share compared to a non-GAAP net income of $30.3 million or $0.42 per share for fiscal 2007.

“I am pleased with our financial results for the March quarter. Our revenue growth was solid and in line with our expectations. Order patterns were strong and have continued into the June quarter. Inventory in the channel declined and our asset management continues to improve. Excluding the cash outflow for our stock buyback program, we were cash flow positive for the third straight quarter.” said Kambiz Hooshmand, president and chief executive officer.

Bob Gargus, chief financial officer commented, “We continued our focus on profitability, reducing our Op-Ex while improving our non-GAAP pretax profit margin from 6.1 percent of revenue last quarter to 8.7% of revenues this quarter. We accomplished this despite some unfavorable manufacturing variances that occurred during the quarter and are now behind us. Overall, we are definitely moving in the right direction.”

AMCC 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, acquired in-process research and development, goodwill impairment, stock-based compensation charges, gains on sale of strategic equity investment, strategic investment written off, gain on renegotiated design tool agreement, other than temporary impairment on investments, tax provision related to the creation of deferred tax liability relating to a prior asset purchase acquisition transaction, payroll tax on certain stock

option exercises and expenses related to stock option investigation and other litigation. Expenses related to stock option investigation consist primarily of fees paid to professional service firms in connection with the Company’s internal investigation of historical stock option grant practices and the resulting restatement of the Company’s financial statements, the investigations by the Securities and Exchange Commission and the U.S. Attorney’s office arising from the internal investigation and the defense of derivative lawsuits arising from the Company’s internal investigation and other litigation relates to an accrual made for a potential litigation settlement. 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.

For More Information

AMCC management will be holding a conference call today, May 1, 2008, 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 2008 and to provide guidance for the first quarter of fiscal 2009. You may access the conference call via any of the following:

Teleconference:	719-325-4870
Conference ID:	6524238
Web Broadcast:	http://investor.amcc.com/events.cfm
Replay:	719-457-0820 (available through May 8, 2008)

AMCC Overview

AMCC is a global leader in network and embedded PowerPC^® processing, optical transport and storage solutions. Our products enable the development of converged IP-based networks offering high-speed secure data, high-definition video and high-quality voice for carrier, metropolitan, access and enterprise applications. AMCC provides networking equipment vendors with industry-leading network and communications processing, Ethernet, SONET, OTN and switch fabric solutions. AMCC is also the leading vendor of high-port count SATA RAID controllers enabling low-cost, high-performance, high-capacity storage. AMCC’s corporate headquarters are located in Sunnyvale, California. Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our web site at http://www.amcc.com.

AMCC is a registered trademark of Applied Micro Circuits Corporation. The PowerPC name and logo are registered trademarks of IBM Corporation and used under license therefrom. All other trademarks 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 backlog and future revenues, and profitability. 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, 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, 2007, 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,
	2008		2007
ASSETS
Current assets:
Cash, cash equivalents and short-term investments	$	142,889	$	284,470
Accounts receivable, net		28,800		32,558
Inventories		37,966		31,286
Other current assets		11,340		14,438
Total current assets		220,995		362,752
Marketable securities		51,919		—
Property and equipment, net		25,995		27,150
Goodwill		264,130		335,857
Purchased intangibles		56,026		79,787
Other assets		13,782		10,966
Total assets	$	632,847	$	816,512
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	25,518	$	26,893
Other current liabilities		22,659		28,797
Total current liabilities		48,177		55,690
Deferred tax liability		3,958		—
Stockholders’ equity		580,712		760,822
Total liabilities and stockholders’ equity	$	632,847	$	816,512

APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

	Three Months Ended									Fiscal Year Ended
	March 31,			December 31,			March 31,			March 31,			March 31,
	2008			2007			2007			2008			2007
Net revenues	$	71,534		$	66,267		$	70,167		$	246,146		$	292,852
Cost of revenues		36,531			33,311			35,851			126,668			140,714
Gross profit		35,003			32,956			34,316			119,478			152,138
Operating expenses:
Research and development		22,892			24,696			24,176			97,550			96,418
Selling, general and administrative		15,869			14,125			18,008			61,907			67,971
Amortization of purchased intangibles		1,320			1,320			1,350			5,321			4,995
Acquired in-process research and development		—			—			—			—			13,300
Impairment of goodwill		71,494			—			—			71,494			—
Restructuring charges		1,516			125			(1,442	)		2,985			1,291
Litigation settlement		1,125			—			—			1,125			—
Option investigation related expenses, net		1,363			(792	)		939			1,072			5,344
Total operating expenses		115,579			39,474			43,031			241,454			189,319
Operating loss		(80,576	)		(6,518	)		(8,715	)		(121,976	)		(37,181	)
Interest and other income, net		(1,551	)		2,148			3,460			10,579			13,375
Loss before income taxes		(82,127	)		(4,370	)		(5,255	)		(111,397	)		(23,806	)
Income tax expense (benefit)		4,182			(31	)		75			3,724			402
Net loss	$	(86,309	)	$	(4,339	)	$	(5,330	)	$	(115,121	)	$	(24,208	)
Basic and diluted loss per share:
Loss per share	$	(1.33	)	$	(0.06	)	$	(0.08	)	$	(1.70	)	$	(0.34	)
Shares used in calculating basic and diluted loss per share		64,886			67,015			70,618			67,775			71,076

APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS)
(in thousands, except per share data)
(unaudited)

	Three Months Ended									Fiscal Year Ended
	March 31,			December 31,			March 31,			March 31,			March 31,
	2008			2007			2007			2008			2007
GAAP net loss	$	(86,309	)	$	(4,339	)	$	(5,330	)	$	(115,121	)	$	(24,208	)
Adjustments:
Stock-based compensation charges		3,078			2,312			2,440			11,307			10,351
Amortization of purchased intangibles		5,903			5,903			6,200			23,761			24,751
Impairment of goodwill		71,494			—			—			71,494			—
Restructuring charges		1,516			125			(1,442	)		2,985			1,291
Other than temporary investment impairment		836			846			—			1,682			—
Impairment of strategic investment		3,000			—			—			3,000			—
Realized gain on sale of strategic equity investment		—			—			—			(4,649	)		—
Gain on renegotiated design tool agreement		—			—			—			(749	)		—
Acquired in-process research and development		—			—			—			—			13,300
Payroll taxes on certain stock option exercises		—			—			6			3			7
Litigation settlement		1,125			—			—			1,125			—
Option investigation related expenses, net		1,363			(792	)		939			1,072			5,344
Income tax adjustments		3,996			(152	)		(12	)		3,735			(535	)
Total GAAP to Non-GAAP adjustments		92,311			8,242			8,131			114,766			54,509
Non-GAAP net income (loss)	$	6,002		$	3,903		$	2,801		$	(355	)	$	30,301
Diluted income (loss) per share	$	0.09		$	0.06		$	0.04		$	(0.01	)	$	0.42
Shares used in calculating diluted income (loss) per share		65,039			67,301			70,968			67,775			71,353
Income (loss) per share:
GAAP income (loss) per share	$	(1.33	)	$	(0.06	)	$	(0.08	)	$	(1.70	)	$	(0.34	)
GAAP to non-GAAP adjustments		1.42			0.12			0.12			1.69			0.76
Non-GAAP income (loss) per share	$	0.09		$	0.06		$	0.04		$	(0.01	)	$	0.42
Reconciliation of shares used in calculating the non-GAAP income per share:
Shares used in calculating the basic and diluted income(loss) per share		64,886			67,015			70,618			67,775			71,076
Adjustment for dilutive securities		153			286			350			—			277
Non-GAAP shares used in the EPS calculation		65,039			67,301			70,968			67,775			71,353

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									Fiscal Year Ended
	March 31,			December 31,			March 31,			March 31,			March 31,
	2008			2007			2007			2008			2007
GROSS PROFIT:
GAAP gross profit	$	35,003		$	32,956		$	34,316		$	119,478		$	152,138
Amortization of purchased intangibles		4,583			4,583			4,850			18,440			19,756
Stock-based compensation expense		135			224			153			671			592
Non-GAAP gross profit	$	39,721		$	37,763		$	39,319		$	138,589		$	172,486
OPERATING EXPENSES:
GAAP operating expenses	$	115,579		$	39,474		$	43,031		$	241,454		$	189,319
Amortization of purchased intangibles		(1,320	)		(1,320	)		(1,350	)		(5,321	)		(4,995	)
Impairment of goodwill		(71,494	)		—			—			(71,494	)		—
Acquired in-process research and development		—			—			—			—			(13,300	)
Stock-based compensation expense		(2,943	)		(2,088	)		(2,287	)		(10,636	)		(9,759	)
Restructuring charges		(1,516	)		(125	)		1,442			(2,985	)		(1,291	)
Gain on renegotiated design tool agreement		—			—			—			749			—
Payroll taxes on certain stock option exercises		—			—			(6	)		(3	)		(7	)
Litigation settlement		(1,125	)		—			—			(1,125	)		—
Option investigation related expenses, net		(1,363	)		792			(939	)		(1,072	)		(5,344	)
Non-GAAP operating expenses	$	35,818		$	36,733		$	39,891		$	149,567		$	154,623
INTEREST AND OTHER INCOME, NET
GAAP interest and other income, net	$	(1,551	)	$	2,148		$	3,460		$	10,579		$	13,375
Other than temporary investment impairment		836			846			—			1,682			—
Impairment of strategic investment		3,000			—			—			3,000			—
Realized gain on sale of strategic equity investments		—			—			—			(4,649	)		—
Non-GAAP interest and other income, net	$	2,285		$	2,994		$	3,460		$	10,612		$	13,375
INCOME TAX EXPENSE (BENEFIT):
GAAP income tax expense (benefit)	$	4,182		$	(31	)	$	75		$	3,724		$	402
Income tax adjustments		(3,996	)		152			12			(3,735	)		535
Non-GAAP income tax expense (benefit)	$	186		$	121		$	87		$	(11	)	$	937
RESEARCH AND DEVELOPMENT
GAAP research and development	$	22,892		$	24,696		$	24,176		$	97,550		$	96,418
Stock-based compensation expense		(1,349	)		(1,177	)		(786	)		(4,797	)		(3,765	)
Gain on renegotiated design tool agreement		—			—			—			749			—
Payroll taxes on certain stock option exercises		—			—			(3	)		(2	)		(3	)
Non-GAAP research and development	$	21,543		$	23,519		$	23,387		$	93,500		$	92,650
SELLING, GENERAL AND ADMINISTRATIVE
GAAP selling, general and administrative	$	15,869		$	14,125		$	18,008		$	61,907		$	67,971
Stock-based compensation expense		(1,594	)		(911	)		(1,501	)		(5,839	)		(5,994	)
Payroll taxes on certain stock option exercises		—			—			(3	)		(1	)		(4	)
Non-GAAP selling, general and administrative	$	14,275		$	13,214		$	16,504		$	56,067		$	61,973

APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
($ in thousands)
(unaudited)

	Fiscal Year Ended March 31,
	2008			2007
Operating activities:
Net loss	$	(115,121	)	$	(24,208	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities
Depreciation and amortization		6,542			8,410
Amortization of purchased intangibles		23,762			24,751
Acquired in-process research and development		—			13,300
Impairment of goodwill		71,494			—
Stock-based compensation expense :
Stock options		9,349			10,211
Restricted stock units		1,957			142
Non-cash restructuring charges (benefit)		316			2,798
Litigation settlement		1,125			—
Net gain on strategic equity investments		(4,649	)		—
Impairment of strategic investment		3,000			—
Impairment of marketable securities		1,682			—
Net gain on disposal of property		23			120
Changes in operating assets and liabilities:
Accounts receivable		3,758			(4,790	)
Inventories		(6,680	)		(5,307	)
Other assets		2,282			(1,336	)
Accounts payable		(1,375	)		1,214
Accrued payroll and other accrued liabilities		(7,103	)		(11,566	)
Deferred tax liability		3,958			—
Deferred revenue		(476	)		(1,230	)
Net cash provided by (used for) operating activities		(6,156	)		12,509
Investing activities:
Proceeds from sales and maturities of investments		623,619			468,570
Purchases of investments		(550,137	)		(403,080	)
Purchase of strategic investments		(5,000	)		(1,500	)
Net proceeds from the sale of strategic equity investments		5,249			—
Purchase of property, equipment and other assets		(7,021	)		(6,732	)
Proceeds from sale of property, equipment and other assets		1,646			4,788
Net cash paid for acquisitions		232			(71,971	)
Net cash provided by (used for) investing activities		68,588			(9,925	)
Financing activities:
Proceeds from issuance of common stock		6,431			2,850
Open market repurchases of Company stock		(56,950	)		(20,137	)
Funding of structured stock repurchase agreements		(41,830	)		(9,398	)
Funds received from structured stock repurchase agreements including gains		21,112			26,963
Payments on long-term debt		—			(289	)
Other		(101	)		(103	)
Net cash used for financing activities		(71,338	)		(114	)
Net decrease in cash and cash equivalents		(8,906	)		2,470
Cash and cash equivalents at beginning of the period		51,595			49,125
Cash and cash equivalents at end of the period	$	42,689		$	51,595