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 Debra Hart	The Ardell Group Angela Edgerton
Phone: (858) 535-4217	Phone: (858) 792-2941
E-Mail: dhart@amcc.com	E-Mail: angela@ardellgroup.com

Thursday, April 28, 2005

Company Press Release

APPLIED MICRO CIRCUITS CORPORATION ANNOUNCES

FOURTH QUARTER FISCAL 2005 FINANCIAL RESULTS

SAN DIEGO—April 28, 2005—Applied Micro Circuits Corporation [NASDAQ: AMCC] today reported its financial results for the fourth quarter of fiscal 2005.

Net revenues for the fourth quarter of fiscal 2005 were $64.2 million up 5% sequentially from the $61.1 million reported in the third quarter of fiscal 2005 and up 36% year over year from the $47.4 million reported in the fourth quarter of fiscal 2004.

The net loss on a GAAP basis for the fourth quarter of fiscal 2005 was $5.3 million or $(0.02) per share, compared with a net loss of $81.9 million or $(0.27) per share for the third quarter of fiscal 2005 and a net loss of $2.1 million or $(0.01) per share for the fourth quarter of fiscal 2004.

The pro forma net income for the fourth quarter of fiscal 2005 was $3.6 million or $0.01 per share, compared to the pro forma net loss of $4.1 million or $(0.01) per share in the third quarter of fiscal 2005 and the pro forma net income of $237,000 or $0.00 per share in the fourth quarter of fiscal 2004.

“We were pleased with our progress in the March quarter. Revenue increased sequentially and the company realized the benefits of our improved cost structure,” said Tom Tullie, AMCC’s Chief Operating Officer. “Fiscal 2005 was a strong year for AMCC, as we nearly doubled our revenue year over year and achieved proforma operating profitability a quarter ahead of plan.”

Net revenues for the year ended March 31, 2005 were $253.8 million compared to $131.2 million reported for the year ended March 31, 2004.

The net loss on a GAAP basis for the year ended March 31, 2005 was $127.4 million or $(0.41) per share, compared to the net loss of $104.9 million or $(0.34) per share for the year ended March 31, 2004. The pro forma net loss for the year ended March 31, 2005 was $2.5 million or $(0.01) per share, compared with the pro forma net loss of $22.8 million or $(0.07) per share for the year ended March 31, 2004.

“The diversity of our communications, storage and embedded products businesses help provide revenue stability, and the initiatives AMCC undertook to improve our operational performance are beginning to show results,” commented Kambiz Hooshmand, AMCC’s President and Chief Executive Officer. “We will continue our focus on delivering meaningful returns to our shareholders.”

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 they 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 certain items which are required by GAAP such as restructuring costs, amortization and impairments of purchased intangibles, excess inventory benefit, acquired in-process research and development charges, stock-based compensation charges related to acquired companies, gain on the sale of real estate, realized gains and losses on strategic equity investments, litigation settlement costs and payroll tax effects on certain stock option exercises. Income taxes are adjusted to an estimated pro forma effective tax rate. See the attached reconciliation of the GAAP net loss to the pro forma net income or loss, which quantifies the amounts excluded from pro forma basis results.

For More Information

AMCC management will be holding a conference call today, April 28, 2005, 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 2005 and to provide guidance for the first quarter of fiscal 2006. You may access the conference call via any of the following:

Teleconference:	913-981-4902
Conference ID:	4698566
Web Broadcast:	http://www.amcc.com
Replay:	719-457-0820
	(available for 7 days following the call)

AMCC Overview

AMCC provides the essential building blocks for the processing, moving and storing of information worldwide. The company blends systems and software expertise with high-performance, high-bandwidth silicon integration to deliver silicon, hardware and software solutions for global wide area networks (WAN), embedded applications such as PowerPC and programmable SOC architectures, storage area networks (SAN), and high-growth storage markets such as Serial ATA (SATA), and RAID. AMCC’s corporate headquarters are 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.

This news release contains forward-looking statements, including, but not limited to, statements regarding revenue stability, improvement in operational performance and shareholder return. 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, integration of acquired businesses, manufacturing capacity and execution, 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, 2004, 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.

-Financial Tables Follow-

APPLIED MICRO CIRCUITS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands)

	March 31, 2005		March 31, 2004
ASSETS
Current assets:
Cash, cash equivalents and short-term investments	$	423,392	$	861,041
Accounts receivable, net		28,601		23,284
Inventories		18,014		8,490
Other current assets		51,448		16,208
Total current assets		521,455		909,023
Property and equipment, net		44,461		37,271
Other assets		1,965		1,616
Purchased intangibles		538,118		240,193
Total assets	$	1,105,999	$	1,188,103
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	24,016	$	18,164
Other current liabilities		104,751		49,089
Current portion of long-term debt & capital leases		34		303
Total current liabilities		128,801		67,556
Stockholders’ equity		977,198		1,120,547
Total liabilities and stockholders’ equity	$	1,105,999	$	1,188,103

APPLIED MICRO CIRCUITS CORPORATION

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three months ended									Year ended
	Mar 31, 2005			Dec 31, 2004			Mar 31, 2004			Mar 31, 2005			Mar 31, 2004
Net revenues	$	64,204		$	61,081		$	47,354		$	253,756		$	131,177
Cost of revenues		30,073			30,159			20,862			123,253			57,601
Gross profit		34,131			30,922			26,492			130,503			73,576
Operating expenses:
Research and development		24,562			31,411			27,314			118,665			112,594
Selling, general and administrative		14,353			15,887			10,229			59,916			45,121
Stock-based compensation:
Research and development		708			752			598			3,407			15,444
Selling, general and administrative		763			876			369			5,164			5,195
Amortization of purchased intangibles		1,608			1,833			408			6,960			1,097
Impairment of purchased intangibles		—			27,330			—			27,330			—
Acquired in-process research and development		—			—			—			13,400			21,800
Restructuring charges (benefits)		1,233			8,079			(973	)		9,622			22,325
Litigation settlement, net		350			28,900			—			29,250			—
Total operating expenses		43,577			115,068			37,945			273,714			223,576
Operating loss		(9,446	)		(84,146	)		(11,453	)		(143,211	)		(150,000	)
Interest and other income, net		4,108			4,780			7,540			18,699			43,347
Loss before income taxes		(5,338	)		(79,366	)		(3,913	)		(124,512	)		(106,653	)
Income tax expense (benefit)		—			2,526			(1,776	)		2,861			(1,776	)
Net loss	$	(5,338	)	$	(81,892	)	$	(2,137	)	$	(127,373	)	$	(104,877	)
Basic and diluted loss per share:
Loss per share	$	(0.02	)	$	(0.27	)	$	(0.01	)	$	(0.41	)	$	(0.34	)
Shares used in calculating basic and diluted loss per share		308,448			307,729			310,083			309,456			306,476

APPLIED MICRO CIRCUITS CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three months ended								Year ended
	Mar 31, 2005		Dec 31, 2004			Mar 31, 2004			Mar 31, 2005			Mar 31, 2004
Net revenues	$	64,204	$	61,081		$	47,354		$	253,756		$	131,177
Cost of revenues		24,833		23,761			16,809			97,052			47,729
Gross profit		39,371		37,320			30,545			156,704			83,448
Operating expenses:
Research and development		24,555		31,411			27,286			118,658			112,547
Selling, general and administrative		14,350		15,887			10,204			59,911			45,014
Total operating expenses		38,905		47,298			37,490			178,569			157,561
Operating income (loss)		466		(9,978	)		(6,945	)		(21,865	)		(74,113	)
Interest and other income, net		4,108		4,780			7,354			18,699			34,748
Income (loss) before income taxes		4,574		(5,198	)		409			(3,166	)		(39,365	)
Income tax expense (benefit)		1,006		(1,144	)		172			(697	)		(16,531	)
Net income (loss)	$	3,568	$	(4,054	)	$	237		$	(2,469	)	$	(22,834	)
Diluted income (loss) per share:
Income (loss) per share	$	0.01	$	(0.01	)	$	0.00		$	(0.01	)	$	(0.07	)
Shares used in calculating diluted income (loss) per share		310,420		307,729			316,839			309,456			306,476

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 generally accepted accounting principles and may not be consistent with the presentation used by other companies. The proforma 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. See the schedule of pro forma adjustments for a reconciliation of the pro forma results to the GAAP basis results.

APPLIED MICRO CIRCUITS CORPORATION

RECONCILIATION OF GAAP TO PRO FORMA NET INCOME/LOSS

(in thousands)

	Three months ended									Year ended
	Mar 31, 2005			Dec 31, 2004			Mar 31, 2004			Mar 31, 2005			Mar 31, 2004
GAAP net loss	$	(5,338	)	$	(81,892	)	$	(2,137	)	$	(127,373	)	$	(104,877	)
Adjustments:
Stock-based compensation related to acquired companies		1,514			1,975			989			9,245			21,203
Amortization of purchased intangibles		6,805			7,884			4,439			32,487			11,447
Impairments of purchased intangibles		—			27,330			—			27,330			—
Restructuring costs(benefits)		1,233			8,079			(973	)		9,622			22,325
Litigation settlement, net		350			28,900			—			29,250			—
Gain on the sale of real estate		—			—			—			—			(7,551	)
Realized gains on strategic equity investments		—			—			(186	)		—			(1,048	)
Excess inventory benefit		—			—			—			—			(1,053	)
Acquired in-process research and development		—			—			—			13,400			21,800
Payroll taxes on certain stock option exercises		10			—			53			12			165
Income tax adjustments		(1,006	)		3,670			(1,948	)		3,558			14,755
Total GAAP to pro forma adjustments		8,906			77,838			2,374			124,904			82,043
Pro forma net income (loss)	$	3,568		$	(4,054	)	$	237		$	(2,469	)	$	(22,834	)

APPLIED MICRO CIRCUITS CORPORATION

SCHEDULE OF SELECTED PRO FORMA ADJUSTMENTS

(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, 2005		Dec 31, 2004			Mar 31, 2004			Mar 31, 2005			Mar 31, 2004
GROSS PROFIT:
GAAP gross profit	$	34,131	$	30,922		$	26,492		$	130,503		$	73,576
Amortization of purchased intangibles		5,197		6,051			4,031			25,527			10,350
Excess inventory benefit		—		—			—			—			(1,053	)
Stock-based compensation related to acquired companies		43		347			22			674			564
Payroll taxes on certain stock option exercises		—		—			—			—			11
Pro forma gross profit	$	39,371	$	37,320		$	30,545		$	156,704		$	83,448
OPERATING EXPENSES:
GAAP operating expenses	$	43,577	$	115,068		$	37,945		$	273,714		$	223,576
Amortization of purchased intangibles		1,608		1,833			408			6,960			1,097
Impairment of purchased intangibles		—		27,330			—			27,330			—
Acquired in-process research and development		—		—			—			13,400			21,800
Stock-based compensation related to acquired companies		1,471		1,628			967			8,571			20,639
Restructuring costs (benefits)		1,233		8,079			(973	)		9,622			22,325
Litigation settlement, net		350		28,900			—			29,250			—
Payroll taxes on certain stock option exercises		10		—			53			12			154
Pro forma operating expenses	$	38,905	$	47,298		$	37,490		$	178,569		$	157,561
INTEREST AND OTHER INCOME, NET
GAAP interest and other income, net	$	4,108	$	4,780		$	7,540		$	18,699		$	43,347
Gain on the sale of real estate		—		—			—			—			(7,551	)
Realized gains on strategic equity investments		—		—			(186	)		—			(1,048	)
Pro forma interest and other income, net	$	4,108	$	4,780		$	7,354		$	18,699		$	34,748
INCOME TAXES
GAAP income tax expense (benefit)	$	—	$	2,526		$	(1,776	)	$	2,861		$	(1,776	)
Income tax adjustments		1,006		(3,670	)		1,948			(3,558	)		(14,755	)
Pro forma income tax expense (benefit)	$	1,006	$	(1,144	)	$	172		$	(697	)	$	(16,531	)