Exhibit 99.1
FOR ADDITIONAL INFORMATION: | ||
Investor Relations Contact: | Media/Editorial Contact: | |
Applied Micro Circuits Corporation | The Ardell Group | |
Scott Dawson | Angela Edgerton | |
Phone: (858) 535-4217 | Phone: (858) 792-2941 | |
E-Mail:sdawson@amcc.com | E-Mail: angela@ardellgroup.com | |
Wednesday, October 26, 2005
Company Press Release
APPLIED MICRO CIRCUITS CORPORATION ANNOUNCES
SECOND QUARTER FISCAL 2006 FINANCIAL RESULTS
Selected Q2 Highlights:
| • | Q2 Net Revenues of $64.9 million and Q2 GAAP Net Loss of $6.4 million or $(0.02) per share |
| • | Q2 Pro Forma Net Income improved to $4.0 million or $0.01 per share versus $3.1 million the prior quarter |
| • | Planned reductions in operating expenses achieved one quarter ahead of schedule |
| • | Announced and began shipping 9550SX SATA II RAID controller for high port market |
SAN DIEGO—October 26, 2005—Applied Micro Circuits Corporation [NASDAQ: AMCC] today reported its financial results for the second quarter of fiscal 2006.
Net revenues for the second quarter of fiscal 2006 were $64.9 million compared to the $64.7 million reported in the first quarter of fiscal 2006 and $61.1 million reported in the second quarter of fiscal 2005.
The net loss on a generally accepted accounting principles (GAAP) basis for the second quarter of fiscal 2006 was $6.4 million or $(0.02) per share, compared with a net loss of $4.2 million or $(0.01) per share for the first quarter of fiscal 2006 and a net loss of $18.3 million or $(0.06) per share for the second quarter of fiscal 2005.
The pro forma net income for the second quarter of fiscal 2006 was $4.0 million or $0.01 per share, compared to the pro forma net income of $3.1 million or $0.01 per share in the first quarter of fiscal 2006 and the pro forma net loss of $4.1 million or $(0.01) per share in the second quarter of fiscal 2005.
Net revenues for the six months ended September 30, 2005 were $129.6 million compared to $128.5 million reported for the six months ended September 30, 2004.
The GAAP net loss for the six months ended September 30, 2005 was $10.6 million or $(0.03) per share, compared to the net loss of $40.1 million or $(0.13) per share for the six months ended September 30, 2004. The pro forma net income for the six months ended September 30, 2005 was $7.0 million or $0.02 per share, compared with the pro forma net loss of $2.0 million or $(0.01) per share for the six months ended September 30, 2004.
“This was a solid quarter for AMCC. We continued to execute upon our strategy and manage expenses tightly,” said Kambiz Hooshmand, President and Chief Executive Officer. “We delivered our third consecutive quarter of pro forma operating profitability and we continue to expand our top and bottom line despite significant product line transitions. I am particularly pleased with our exciting new 9550SX SATA II RAID controller announcement. The 9550SX delivers the fastest SATA RAID performance available on the market today and we believe the 9550SX will accelerate adoption of SATA RAID products for the remainder of the year.”
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 of purchased intangibles, acquired in-process research and development charges, stock-based compensation charges related to acquired companies, and payroll tax 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 (loss), which quantifies the amounts excluded from pro forma results.
For More Information
AMCC management will be holding a conference call today, October 26, 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 second quarter of fiscal 2006 and to provide guidance for the third quarter of fiscal 2006. You may access the conference call via any of the following:
Teleconference: | 913-981-4902 | |
Conference ID: | 6075994 | |
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) 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 product adoption and demand. 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, 2005, 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 reuse 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)
Sept 30, 2005 | March 31, 2005 | |||||
| (unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash, cash equivalents and short-term investments | $ | 369,507 | $ | 423,392 | ||
Accounts receivable, net | 26,365 | 28,601 | ||||
Inventories | 18,697 | 18,014 | ||||
Other current assets | 14,937 | 51,448 | ||||
Total current assets | 429,506 | 521,455 | ||||
Property and equipment, net | 41,076 | 44,461 | ||||
Other assets | 2,493 | 1,965 | ||||
Goodwill and purchased intangibles | 521,746 | 534,514 | ||||
Total assets | $ | 994,821 | $ | 1,102,395 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 25,984 | $ | 24,016 | ||
Other current liabilities | 32,132 | 101,147 | ||||
Current portion of long-term debt & capital leases | — | 34 | ||||
Total current liabilities | 58,116 | 125,197 | ||||
Stockholders’ equity | 936,705 | 977,198 | ||||
Total liabilities and stockholders’ equity | $ | 994,821 | $ | 1,102,395 | ||
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
| Three months ended | Six months ended | |||||||||||||||||||
| Sept 30, 2005 | June 30, 2005 | Sept 30, 2004 | Sept 30, 2005 | Sept 30, 2004 | ||||||||||||||||
Net revenues | $ | 64,935 | $ | 64,673 | $ | 61,069 | $ | 129,608 | $ | 128,471 | ||||||||||
Cost of revenues | 31,093 | 30,833 | 31,529 | 61,926 | 63,021 | |||||||||||||||
Gross profit | 33,842 | 33,840 | 29,540 | 67,682 | 65,450 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 23,161 | 22,974 | 31,702 | 46,135 | 62,692 | |||||||||||||||
Selling, general and administrative | 14,344 | 15,550 | 15,298 | 29,894 | 29,676 | |||||||||||||||
Stock-based compensation: | ||||||||||||||||||||
Research and development | 674 | 696 | 915 | 1,370 | 1,947 | |||||||||||||||
Selling, general and administrative | 783 | 785 | 2,202 | 1,568 | 3,525 | |||||||||||||||
Amortization of purchased intangibles | 1,107 | 1,267 | 1,962 | 2,374 | 3,519 | |||||||||||||||
Acquired in-process research and development | — | — | — | — | 13,400 | |||||||||||||||
Restructuring charges | 3,559 | — | 310 | 3,559 | 310 | |||||||||||||||
Total operating expenses | 43,628 | 41,272 | 52,389 | 84,900 | 115,069 | |||||||||||||||
Operating loss | (9,786 | ) | (7,432 | ) | (22,849 | ) | (17,218 | ) | (49,619 | ) | ||||||||||
Interest and other income, net | 3,537 | 3,404 | 4,530 | 6,941 | 9,811 | |||||||||||||||
Loss before income taxes | (6,249 | ) | (4,028 | ) | (18,319 | ) | (10,277 | ) | (39,808 | ) | ||||||||||
Income tax expense | 175 | 176 | — | 351 | 335 | |||||||||||||||
Net loss | $ | (6,424 | ) | $ | (4,204 | ) | $ | (18,319 | ) | $ | (10,628 | ) | $ | (40,143 | ) | |||||
Basic and diluted loss per share: | ||||||||||||||||||||
Loss per share | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.13 | ) | |||||
Shares used in calculating basic and diluted loss per share | 305,476 | 306,327 | 310,128 | 305,902 | 310,824 | |||||||||||||||
APPLIED MICRO CIRCUITS CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
| Three months ended | Six months ended | ||||||||||||||||
| Sept 30, 2005 | June 30, 2005 | Sept 30, 2004 | Sept 30, 2005 | Sept 30, 2004 | |||||||||||||
Net revenues | $ | 64,935 | $ | 64,673 | $ | 61,069 | $ | 129,608 | $ | 128,471 | |||||||
Cost of revenues | 25,874 | 25,611 | 23,823 | 51,485 | 48,458 | ||||||||||||
Gross profit | 39,061 | 39,062 | 37,246 | 78,123 | 80,013 | ||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 23,161 | 22,974 | 31,702 | 46,135 | 62,692 | ||||||||||||
Selling, general and administrative | 14,344 | 15,550 | 15,298 | 29,894 | 29,674 | ||||||||||||
Total operating expenses | 37,505 | 38,524 | 47,000 | 76,029 | 92,366 | ||||||||||||
Operating income (loss) | 1,556 | 538 | (9,754 | ) | 2,094 | (12,353 | ) | ||||||||||
Interest and other income, net | 3,537 | 3,404 | 4,530 | 6,941 | 9,811 | ||||||||||||
Income (loss) before income taxes | 5,093 | 3,942 | (5,224 | ) | 9,035 | (2,542 | ) | ||||||||||
Income tax expense (benefit) | 1,120 | 867 | (1,149 | ) | 1,987 | (559 | ) | ||||||||||
Net income (loss) | $ | 3,973 | $ | 3,075 | $ | (4,075 | ) | $ | 7,048 | $ | (1,983 | ) | |||||
Diluted income (loss) per share: | |||||||||||||||||
Income (loss) per share | $ | 0.01 | $ | 0.01 | $ | (0.01 | ) | $ | 0.02 | $ | (0.01 | ) | |||||
Shares used in calculating diluted income (loss) per share | 307,156 | 307,357 | 310,128 | 307,257 | 310,824 | ||||||||||||
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 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. 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 NET LOSS TO PRO FORMA NET INCOME (LOSS)
(unaudited)
(in thousands)
| Three months ended | Six months ended | |||||||||||||||||||
| Sept 30, 2005 | June 30, 2005 | Sept 30, 2004 | Sept 30, 2005 | Sept 30, 2004 | ||||||||||||||||
GAAP net loss | $ | (6,424 | ) | $ | (4,204 | ) | $ | (18,319 | ) | $ | (10,628 | ) | $ | (40,143 | ) | |||||
Adjustments: | ||||||||||||||||||||
Stock-based compensation related to acquired companies | 1,478 | 1,507 | 3,246 | 2,985 | 5,756 | |||||||||||||||
Amortization of purchased intangibles | 6,305 | 6,463 | 9,539 | 12,768 | 17,798 | |||||||||||||||
Restructuring costs | 3,559 | — | 310 | 3,559 | 310 | |||||||||||||||
Acquired in-process research and development | — | — | — | — | 13,400 | |||||||||||||||
Payroll taxes on certain stock option exercises | — | — | — | — | 2 | |||||||||||||||
Income tax adjustments | (945 | ) | (691 | ) | 1,149 | (1,636 | ) | 894 | ||||||||||||
Total GAAP to pro forma adjustments | 10,397 | 7,279 | 14,244 | 17,676 | 38,160 | |||||||||||||||
Pro forma net income (loss) | $ | 3,973 | $ | 3,075 | $ | (4,075 | ) | $ | 7,048 | $ | (1,983 | ) | ||||||||
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 | Six months ended | ||||||||||||||||
| Sept 30, 2005 | June 30, 2005 | Sept 30, 2004 | Sept 30, 2005 | Sept 30, 2004 | |||||||||||||
GROSS PROFIT: | |||||||||||||||||
GAAP gross profit | $ | 33,842 | $ | 33,840 | $ | 29,540 | $ | 67,682 | $ | 65,450 | |||||||
Amortization of purchased intangibles | 5,198 | 5,196 | 7,577 | 10,394 | 14,279 | ||||||||||||
Stock-based compensation related to acquired companies | 21 | 26 | 129 | 47 | 284 | ||||||||||||
Pro forma gross profit | $ | 39,061 | $ | 39,062 | $ | 37,246 | $ | 78,123 | $ | 80,013 | |||||||
OPERATING EXPENSES: | |||||||||||||||||
GAAP operating expenses | $ | 43,628 | $ | 41,272 | $ | 52,389 | $ | 84,900 | $ | 115,069 | |||||||
Amortization of purchased intangibles | 1,107 | 1,267 | 1,962 | 2,374 | 3,519 | ||||||||||||
Acquired in-process research and development | — | — | — | — | 13,400 | ||||||||||||
Stock-based compensation related to acquired companies | 1,457 | 1,481 | 3,117 | 2,938 | 5,472 | ||||||||||||
Restructuring costs | 3,559 | — | 310 | 3,559 | 310 | ||||||||||||
Payroll taxes on certain stock option exercises | — | — | — | — | 2 | ||||||||||||
Pro forma operating expenses | $ | 37,505 | $ | 38,524 | $ | 47,000 | $ | 76,029 | $ | 92,366 | |||||||
INCOME TAX EXPENSE (BENEFIT): | |||||||||||||||||
GAAP income tax expense | $ | 175 | $ | 176 | $ | — | $ | 351 | $ | 335 | |||||||
Income tax adjustments | 945 | 691 | (1,149 | ) | 1,636 | (894 | ) | ||||||||||
Pro forma income tax expense (benefit) | $ | 1,120 | $ | 867 | $ | (1,149 | ) | $ | 1,987 | $ | (559 | ) | |||||