SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
AMENDMENT TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 25, 2000
APPLIED MICRO CIRCUITS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
000-23193 94-2586591
(Commission File No.) (IRS Employer Identification No.)
6290 SEQUENCE DRIVE
SAN DIEGO, CALIFORNIA 92122
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (858) 450-9333
________________________________________
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
The audited financial statements of MMC Networks, Inc. for the
years ended December 31, 1997, 1998 and 1999, are incorporated
herein by reference to AMCC's Registration Statement on Form S-4
(No. 333-45660) filed with the Securities and Exchange Commission
on September 12, 2000. The interim financial statements of MMC
Networks Inc. are attached hereto as Exhibit 99.1 and are also
incorporated herein by reference.
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(b) Pro forma financial information
AMCC AND MMC NETWORKS
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial information
gives effect to the merger of AMCC and MMC Networks using the purchase method
of accounting. Effective June 8, 2000, AMCC acquired YuniNetworks in a
transaction accounted for as a purchase. Accordingly, the historical balance
sheet of AMCC as of September 30, 2000 includes the accounts of YuniNetworks as
of that date, but the historical income statements of AMCC for the year ended
March 31, 2000 and the six months ended September 30, 2000 do not include the
results of operations of YuniNetworks prior to June 8, 2000.
The unaudited pro forma combined condensed balance sheet is based on the
individual historical balance sheets of AMCC and MMC Networks and has been
prepared to reflect the acquisition by AMCC of MMC Networks as if the
acquisition had occurred as of September 30, 2000.
The unaudited pro forma combined condensed statement of operations for the
year ended March 31, 2000 is based on the individual historical statements of
operations of AMCC, YuniNetworks and MMC Networks and combines the results of
operations of AMCC for the year ended March 31, 2000 with the results of
operations for YuniNetworks for the period from October 8, 1999 (inception)
through March 31, 2000 and the results of operations for MMC Networks for the
year ended December 31, 1999 as if the YuniNetworks acquisition had occurred as
of October 8, 1999 (the date of inception) and the acquisition of MMC Networks
had occurred as of April 1, 1999. The unaudited pro forma combined condensed
statement of operations for the six months ended September 30, 2000 is based on
the individual historical statements of operations of AMCC, YuniNetworks and
MMC Networks and combines the results of operations for AMCC for the six
months ended September 30, 2000 with the results of operations for YuniNetworks
for the period from April 1, 2000 through June 8, 2000 (the acquisition date)
and the results of operations for MMC Networks for the six months ended
September 30, 2000, as if both acquisitions had occurred as of the beginning of
the period. The fiscal year ends of AMCC and YuniNetworks are March 31, and MMC
Networks is December 31. The results of operations of MMC Networks for the three
months ended March 31, 2000 are not reflected in the above pro forma results of
operations. Revenues of MMC Networks for the excluded period were $12.6
million with a net loss of $400,000.
The pro forma combined condensed financial information is presented for
illustrative purposes only and is not necessarily indicative of the financial
position or operating results that would have been achieved if the acquisitions
had been completed as of the beginning of the periods presented, nor are they
necessarily indicative of the future financial position or operating results of
AMCC. The pro forma combined condensed financial information does not give
effect to any cost savings or restructuring and integration costs that may
result from the integration of AMCC's, YuniNetworks' and MMC Networks'
operations. The costs related to restructuring and integration have not yet
been determined, and AMCC expects to charge these costs to operations during
the quarter incurred.
The unaudited pro forma combined condensed financial information should be
read in conjunction with the audited and unaudited financial statements and
accompanying notes of AMCC included in AMCC's Annual Report on Form 10-K for
the year ended March 31, 2000 and AMCC's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2000, the audited financial statements
and accompanying notes of YuniNetworks included in the Registration Statement on
Form S-4 filed with the Securities and Exchange Commission on May 19, 2000, the
audited financial statements and accompanying notes of MMC Networks included in
MMC Networks' Annual Report on Form 10-K for the year ended December 31, 1999,
and the unaudited financial statements and accompanying notes of MMC Networks
included elsewhere in this report.
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AMCC AND MMC NETWORKS
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
At September 30, 2000
(in thousands)
MMC Pro Forma Pro Forma
AMCC Networks Adjustments Notes Combined
---------- -------- ----------- ------ ----------
ASSETS
------
Current assets:
Cash and cash
equivalents.......... $ 79,224 $ 43,151 $ -- $ 122,375
Short-term
investments--
available-for-sale... 962,752 34,591 -- 997,343
Accounts receivable,
net of allowance..... 49,032 12,707 -- 61,739
Inventories........... 11,153 7,704 -- 18,857
Deferred income
taxes................ -- 2,947 -- 2,947
Other current assets.. 14,932 3,117 -- 18,049
---------- -------- ---------- ----------
Total current
assets............. 1,117,093 104,217 -- 1,221,310
Property and equipment,
net.................... 52,815 12,380 -- 65,195
Intangible assets....... 218,962 -- 4,007,111 (A) 4,226,073
Other assets............ 3,552 1,363 -- 4,915
---------- -------- ---------- ----------
Total assets........ $1,392,422 $117,960 $4,007,111 $5,517,493
========== ======== ========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------
Current liabilities:
Accounts payable...... $ 16,803 $ 8,940 $ 48,567 (B) $ 74,310
Accrued payroll and
related expenses..... 8,108 4,749 -- 12,857
Other accrued
liabilities.......... 18,348 4,262 -- 22,610
Deferred revenue...... 4,147 -- -- 4,147
Deferred tax
liability............ 1,154 -- 129,920 (M) 131,074
Current portion of
long-term debt....... 1,443 -- -- 1,443
Current portion of
capital lease
obligations.......... 677 -- -- 677
---------- -------- ---------- ----------
Total current
liabilities........ 50,680 17,951 178,487 247,118
Deferred income taxes,
long-term.............. 11,232 -- -- 11,232
Long-term debt, less
current portion........ 2,865 -- -- 2,865
Long-term capital lease
obligations, less
current portion........ 1,371 -- -- 1,371
Stockholders' equity:
Preferred stock....... -- -- -- --
Common stock.......... 2,532 29 385 (C)(D) 2,946
Additional paid-in
capital.............. 1,272,588 77,681 4,419,106 (C)(D) 5,769,375
Deferred compensation,
net.................. (46,483) -- (391,821) (E) (438,304)
Accumulated other
comprehensive income
(loss)............... 488 (67) 67 (C) 488
Retained earnings
(deficit)............ 97,149 22,413 (199,113) (C)(F) (79,551)
Notes receivable from
stockholders......... -- (47) -- (47)
---------- -------- ---------- ----------
Total stockholders'
equity............. 1,326,274 100,009 3,828,624 5,254,907
---------- -------- ---------- ----------
Total liabilities
and stockholders'
equity............. $1,392,422 $117,960 $4,007,111 $5,517,493
========== ======== ========== ==========
See accompanying notes to the unaudited pro forma combined condensed financial
information.
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AMCC AND MMC NETWORKS
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
Year Ended March 31, 2000
(in thousands, except per share data)
AMCC YuniNetworks, MMC Networks
12 months Inc. 12 months
ended Inception to ended
March 31, March 31, December 31, Pro Forma Pro Forma
2000 2000 1999 Adjustments Notes Combined
--------- ------------- ------------ ----------- ------ ---------
Net revenues............ $172,352 $ -- $70,149 $ -- $ 242,501
Cost of revenues........ 50,218 -- 21,524 71,401 (I)(L) 143,143
-------- ------- ------- --------- ---------
Gross profit............ 122,134 -- 48,625 (71,401) 99,358
Operating expenses:
Research and
development.......... 32,815 758 22,645 58,773 (L) 114,991
Selling, general and
administrative....... 28,199 252 11,182 58,773 (L) 98,406
Amortization of
intangible assets.... -- -- -- 637,829 (G)(H) 637,829
-------- ------- ------- --------- ---------
Total operating
expenses........... 61,014 1,010 33,827 755,375 851,226
-------- ------- ------- --------- ---------
Operating income
(loss)................. 61,120 (1,010) 14,798 (826,776) (751,868)
Interest income, net.... 12,872 71 3,138 (3,181) (J) 12,900
-------- ------- ------- --------- ---------
Income (loss) before
income taxes........... 73,992 (939) 17,936 (829,957) (738,968)
Provision for income
taxes.................. 25,367 -- 6,099 (27,399) (K) 4,067
-------- ------- ------- --------- ---------
Net income (loss)....... $ 48,625 $ (939) $11,837 $(802,558) $(743,035)
======== ======= ======= ========= =========
Basic earnings (loss)
per share:
Earnings (loss) per
share................ $ 0.23 $ (0.10) $ 0.38 $ (2.88)
======== ======= ======= =========
Shares used in
calculating basic
earnings (loss) per
share................ 215,640 9,526 31,065 (N) 258,146
======== ======= ======= =========
Diluted earnings (loss)
per share:
Earnings (loss) per
share................ $ 0.20 $ (0.10) $ 0.35 $ (2.88)
======== ======= ======= =========
Shares used in
calculating diluted
earnings (loss) per
share................ 238,304 9,526 33,791 (N) 258,146
======== ======= ======= =========
The above pro forma combined condensed statement of operations does not
include an estimated $176.7 million in-process research and development charge
to be recorded by AMCC in conjunction with the acquisition of MMC Networks for
the estimated fair value of the in-process research and development of MMC
Networks or $21.8 million of acquired in-process research and development which
was recorded by AMCC at the closing of the YuniNetworks acquisition.
See accompanying notes to the unaudited pro forma combined condensed financial
information.
5
AMCC AND MMC NETWORKS
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
Six Months Ended September 30, 2000
(in thousands, except per share data)
AMCC MMC Networks
6 months ended YuniNetworks 6 months ended
September 30, April 1, 2000- September 30, Pro Forma Pro Forma
2000 June 8, 2000 2000 Adjustments Notes Combined
-------------- -------------- -------------- ----------- ------ ---------
Net revenues...................... $171,195 $ -- $39,507 $ -- $ 210,702
Cost of revenues.................. 43,846 -- 11,007 35,700 (I)(L) 90,553
-------- ------- ------- --------- ---------
Gross profit...................... 127,349 -- 28,500 (35,700) 120,149
Operating expenses:
Research and development........ 34,643 1,880 17,397 29,387 (L) 83,307
Selling, general and
administrative................. 25,391 627 8,189 29,387 (L) 63,594
Amortization of intangible
assets......................... 10,847 -- -- 316,943 (G)(H) 327,790
Acquired in-process research and
development.................... 25,400 -- -- -- 25,400
-------- ------- ------- --------- ---------
Total operating expenses...... 96,281 2,507 25,586 375,717 500,091
-------- ------- ------- --------- ---------
Operating income (loss)........... 31,068 (2,507) 2,914 (411,417) (379,942)
Interest income, net.............. 25,742 35 2,187 (1,558) (J) 26,406
-------- ------- ------- --------- ---------
Income (loss) before income taxes. 56,810 (2,472) 5,101 (412,975) (353,536)
Provision for income taxes........ 29,800 -- 1,631 (14,419) (K) 17,012
-------- ------- ------- --------- ---------
Net income (loss)................. $ 27,010 $(2,472) $ 3,470 $(398,556) $(370,548)
======== ======= ======= ========= =========
Basic earnings (loss) per share:
Earnings (loss) per share....... $ 0.11 $ * $ 0.10 $ (1.28)
======== ======= ======= =========
Shares used in calculating basic
earnings (loss) per share...... 245,376 * 33,119 (N) 289,401
======== ======= ======= =========
Diluted earnings (loss) per share:
Earnings (loss) per share....... $ 0.10 $ * $ 0.09 $ (1.28)
======== ======= ======= =========
Shares used in calculating
diluted earnings (loss)
per share...................... 268,480 * 36,988 (N) 289,401
======== ======= ======= =========
- --------
* Not meaningful
The above pro forma combined condensed statement of operations does not
include an estimated $176.7 million in-process research and development charge
to be recorded by AMCC in conjunction with the acquisition of MMC Networks for
the estimated fair value of the in-process research and development of MMC
Networks.
See accompanying notes to the unaudited pro forma combined condensed financial
information.
6
AMCC AND MMC NETWORKS
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
1. Pro Forma Basis of Presentation and Adjustments
The unaudited pro forma combined condensed financial information assumes the
acquisition by AMCC of MMC Networks in a transaction accounted for as a
purchase. The unaudited pro forma combined condensed balance sheet is based on
the individual balance sheets of AMCC and MMC Networks and has been prepared to
reflect the acquisition by AMCC of MMC Networks as if the acquisition had
occurred as of September 30, 2000. Effective June 8, 2000, AMCC acquired
YuniNetworks in a transaction accounted for as a purchase. Accordingly, the
historical balance sheet of AMCC as of September 30, 2000 includes the accounts
of YuniNetworks as of that date, but the historical income statements of AMCC
for the year ended March 31, 2000 and the six months ended September 30, 2000 do
not include the results of operations for YuniNetworks for the period prior to
June 8, 2000.
The unaudited pro forma combined condensed statement of operations for the
year ended March 31, 2000 is based on the individual historical statements of
operations of AMCC, YuniNetworks and MMC Networks and combines the results of
operations of AMCC for the year ended March 31, 2000 with the results of
operations for YuniNetworks for the period from October 8, 1999 (inception)
through March 31, 2000 and the results of operations for MMC Networks for the
year ended December 31, 1999 as if the YuniNetworks acquisition had occurred as
of October 8, 1999 (the date of inception) and the acquisition of MMC Networks
had occurred as of April 1, 1999. The unaudited pro forma combined condensed
statements of operations for the six months ended September 30, 2000 is based on
the individual historical statements of operations of AMCC, YuniNetworks and MMC
Networks and combines the results of operations for AMCC for the six months
ended September 30, 2000 with the results of operations for YuniNetworks for the
period from April 1, 2000 through June 8, 2000 (the acquisition date) and the
results of operations for MMC Networks for the six months ended September 30,
2000, as if both acquisitions had occurred as of April 1, 2000.
Under the terms of the merger agreement, AMCC issued 1.238 shares of AMCC
common stock for each outstanding common share of MMC Networks common stock.
Based on the number of shares of MMC Networks common stock and options to
purchase shares of MMC Networks common stock outstanding, AMCC issued 41,392,404
shares of AMCC common stock and assumed options to purchase 7,981,595 shares of
AMCC common stock.
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AMCC AND MMC NETWORKS
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS--(Cont.)
Based on the consideration issued in the transaction the total purchase price
is approximately $4.5 billion. AMCC is in the process of conducting an
independent valuation of the tangible assets to be acquired in order to allocate
the purchase price in accordance with Accounting Principle Bulletin Opinion No.
16. Subject to adjustments when the evaluation is updated, the purchase price
was allocated as follows based upon management's best estimate of the tangible
and intangible assets, including acquired technology and in-process research and
development (in thousands):
Current assets acquired.......................................... $ 104,217
Property and equipment........................................... 12,380
Other assets..................................................... 1,363
Notes receivable from stockholders............................... 47
In-process research and development.............................. 176,700
Developed core technology........................................ 291,700
Assembled workforce.............................................. 10,200
Trademarks/trade name............................................ 22,900
Goodwill......................................................... 3,682,311
Liabilities assumed.............................................. (17,951)
Deferred tax liability........................................... (129,920)
Liabilities for merger-related costs............................. (48,567)
Deferred compensation............................................ 391,821
----------
$4,497,201
==========
2. Pro Forma Adjustments to Pro Forma Combined Condensed Financial Information
(A) The residual amount of the purchase price over the net book value of the
assets and liabilities assumed and in-process research and development
charges have been allocated to intangible assets. The intangible assets
consist of developed core technology, intellectual property, assembled
workforce, trademarks and goodwill.
(B) To increase the accrued expenses by $48.6 million for acquisition-related
expenses such as investment banking, legal, accounting, registration and
miscellaneous fees.
(C) To eliminate the MMC Networks equity accounts.
(D) To reflect the value of the shares of AMCC common stock and vested options
issued in connection with the merger.
(E) To record deferred compensation related to the unvested stock options of
MMC Networks employees that will be assumed by AMCC in accordance with
recently issued FASB Interpretation No. 44 ("FIN No. 44") of APB Opinion No.
25. Prior to the issuance of FIN No. 44 this would have been accounted for
as additional purchase price and amortized over the life of the goodwill.
(F) To reflect the charge for the MMC Networks in-process research and
development of approximately $176.7 million.
(G) To record amortization expense of the acquired intangibles related to the
purchase of YuniNetworks based on a useful life of six years.
(H) To record amortization expense of the acquired intangibles related to the
purchase of MMC Networks based on useful lives of three to six years.
8
AMCC AND MMC NETWORKS
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS--(Cont.)
(I) To record amortization expense of developed core technology acquired in the
purchase of MMC Networks based on a useful life of five years.
(J) To eliminate interest income which would not have been earned on the cash
expended for the transactions.
(K) To record tax benefits for the YuniNetworks' net loss which would have been
absorbed by AMCC's taxable income, the reduction of interest income related
to the cash paid in the transaction and to amortize a portion of the
deferred tax liability set up in connection with the non-goodwill
intangibles.
(L) To record the amortization of deferred compensation for the unvested MMC
employee stock options assumed by AMCC.
(M) To record the estimated deferred tax liability on the non-goodwill
intangible assets.
(N) Reflects the shares of AMCC common stock used in computing earnings per
share plus the shares of common stock issued in connection with the
acquisitions of YuniNetworks and MMC Networks based on the conversion rates
in the merger agreements, adjusted for the 100% stock dividend paid on
October 30, 2000.
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(c) Exhibits.
2.1 Agreement and Plan of Merger and Reorganization, dated as of August
28, 2000, by and among Applied Micro Circuits Corporation, Mercury
Acquisition Corp. and MMC Networks, Inc. (1)
2.2 Form of Voting Agreement between Applied Micro Circuits Corporation
and certain stockholders of MMC Networks, Inc. (2)
*2.3 Press Release dated October 25, 2000
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
99.1 The unaudited interim financial statements of MMC Networks for the
three and nine months ended September 30, 2000.
_________________________________________
* Previously filed as an exhibit to the Form 8-K filed on November 9,
2000.
(1) Incorporated by reference to Exhibit 99.1 filed with the Company's
Current report on Form 8-K dated August 28, 2000.
(2) Incorporated by reference to Exhibit 99.2 filed with the Company's
Current report on Form 8-K dated August 28, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Applied Micro Circuits Corporation
Dated: December 15, 2000 By: /s/ William E. Bendush
------------------------------------------
William E. Bendush
Vice President, Finance and Administration
and Chief Financial Officer
(Principal Accounting Officer and Officer
duly authorized to sign off this report on
behalf of the registrant)
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