Published:
Applied Micro Circuits Corporation Announces Fourth Quarter Fiscal 2007 Financial Results
Selected Q4 Highlights
* Q4 net revenues of $70.2 million; fiscal 2007 net revenues of
$292.9 million
* Fiscal 2007 total revenues and Focus* revenues grew 11.8% and
22.5%, respectively
* Q4 GAAP net loss of $5.3 million or $(0.02) per share
* Q4 non-GAAP net income of $2.8 million or $0.01 per share
* Shipped the industry's first fully integrated dual port SFP+
transceiver
* Introduced a new suite of SONET/SDH/10GE PHY products
* Announced the availability of the powerful new 24-port RAID 6
controllers
* Shipped the two-millionth SATA RAID controller port
SUNNYVALE, Calif., May 1, 2007 (PRIME NEWSWIRE) -- Applied Micro Circuits Corporation today reported its financial results for the fourth quarter of fiscal 2007.
Net revenues for the fourth quarter of fiscal 2007 were $70.2 million compared to $76.6 million reported in the third quarter of fiscal 2007 and $67.0 million reported in the fourth quarter of fiscal 2006.
Net revenues for the year ended March 31, 2007 were $292.9 million compared to $261.8 million reported for the year ended March 31, 2006.
The net loss on a generally accepted accounting principles (GAAP) basis for the fourth quarter of fiscal 2007 was $5.3 million or $(0.02) per share. The fourth quarter GAAP net loss compares with a net loss of $4.2 million or $(0.01) per share for the third quarter of fiscal 2007 and a net loss of $138.3 million or $(0.47) per share for the fourth quarter of fiscal 2006. The GAAP net loss for the year ended March 31, 2007 was $24.2 million or $(0.09) per share, compared to the net loss of $148.4 million or $(0.49) per share for the year ended March 31, 2006.
The non-GAAP net income for the fourth quarter of fiscal 2007 was $2.8 million or $0.01 per share, compared to the non-GAAP net income of $9.0 million or $0.03 per share in the third quarter of fiscal 2007 and the non-GAAP net income of $6.0 million or $0.02 per share in the fourth quarter of fiscal 2006. The non-GAAP net income for the year ended March 31, 2007 was $30.3 million or $0.11 per share, compared with the non-GAAP net income of $17.9 million or $0.06 per share for the year ended March 31, 2006.
"Fourth quarter revenues were disappointing. This was largely due to a significant downturn in our distribution business primarily caused by a combination of inventory corrections and delays in production ramps from end customers. On a positive note, I am pleased that we were able to grow our fiscal 2007 revenues nearly 12% year over year and that within this, Focus* revenues grew 22.5%," said Kambiz Hooshmand, president and chief executive officer. "We also had a number of well-received product introductions in the fourth quarter that bode well for our future."
Bob Gargus, chief financial officer commented, "During fiscal 2007 we demonstrated the ability to manage our expenses, and to leverage our top line by putting a large percentage of every dollar of revenue growth to the bottom line. Despite our recent revenue decline, we remain optimistic that as the revenues expand we will once again show this leverage in our bottom line results. We did increase our non-GAAP net income by 70% in fiscal 2007 compared to fiscal 2006. Expanding profitability and generating growth remain our top two priorities in fiscal 2008."
AMCC reports its financial results in accordance 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 and impairments of purchased intangibles and goodwill, acquired in-process research and development charges, stock-based compensation charges, realized gains on strategic equity investments, payroll tax on certain stock option exercises and expenses related to stock option investigation. 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. 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, 2007, 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 2007 and to provide guidance for the first quarter of fiscal 2008. You may access the conference call via any of the following:
Teleconference: 913-981-5581
Conference ID: 7141735
Web Broadcast: http://investor.amcc.com/events.cfm
Replay: 719-457-0820
AMCC Overview
AMCC is a global leader in network and embedded PowerPC(r) 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 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.
* As we first noted in our January 2006 conference call, Non-focus revenues are derived from Non-focus products that we still support from a customer perspective, but for which we are no longer planning major enhancements. The Non-focus areas are: legacy switching products, ASICs, Fibre Channel HBAs, SAN IC's, Pointer Processors, and legacy framers. Focus revenues are all revenues not deemed to be Non-focus revenues.
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 product introductions, revenue expansion, and priorities for fiscal 2008. 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, 2006, 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.
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
-------- --------
March 31, March 31,
2007 2006
-------- --------
ASSETS (audited)
Current assets:
Cash, cash equivalents and short-term
investments $284,470 $335,665
Accounts receivable, net 32,558 26,324
Inventories 31,286 24,941
Other current assets 14,438 12,618
-------- --------
Total current assets 362,752 399,548
Property and equipment, net 27,150 36,127
Goodwill and purchased intangibles 415,644 381,066
Other assets 10,966 8,685
-------- --------
Total assets $816,512 $825,426
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 26,893 $ 24,656
Other current liabilities 28,797 37,962
-------- --------
Total current liabilities 55,690 62,618
Stockholders' equity 760,822 762,808
-------- --------
Total liabilities and stockholders' equity $816,512 $825,426
======== ========
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended Fiscal years ended
----------------------------- --------------------
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2007 2006 2006 2007 2006
------- ------- --------- -------- ---------
(audited)
Net revenues $70,167 $76,642 $ 66,993 $292,852 $ 261,844
Cost of revenues 35,851 37,799 30,449 140,714 122,392
------- ------- --------- -------- ---------
Gross profit 34,316 38,843 36,544 152,138 139,452
Operating expenses:
Research and
development 24,176 24,550 22,836 96,418 93,770
Selling, general
and adminis-
trative 18,008 17,351 15,673 67,971 62,157
Amortization of
purchased
intangibles 1,350 1,350 1,107 4,995 4,588
Acquired in-
process re-
search and
development -- -- -- 13,300 --
Impairment of
goodwill -- -- 131,216 -- 131,216
Restructuring
charges (1,442) 67 7,704 1,291 12,602
Option
investigation 939 2,705 -- 5,344 --
------- ------- --------- -------- ---------
Total operating
expenses 43,031 46,023 178,536 189,319 304,333
------- ------- --------- -------- ---------
Operating loss (8,715) (7,180) (141,992) (37,181) (164,881)
Interest and other
income, net 3,460 3,121 3,992 13,375 15,873
------- ------- --------- -------- ---------
Loss before
income taxes (5,255) (4,059) (138,000) (23,806) (149,008)
Income tax expense
(benefit) 75 113 328 402 (636)
------- ------- --------- -------- ---------
Net loss $(5,330) $(4,172) $(138,328) $(24,208) $(148,372)
======= ======= ========= ======== =========
Basic and diluted
loss per share:
Loss per share $ (0.02) $ (0.01) $ (0.47) $ (0.09) $ (0.49)
======= ======= ========= ======== =========
Shares used in
calculating
basic and
diluted loss
per share 282,472 281,799 294,442 284,303 300,841
======= ======= ========= ======== =========
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS)
(unaudited)
(in thousands)
Three months ended Fiscal years ended
------------------------------- --------------------
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2007 2006 2006 2007 2006
-------- -------- --------- -------- ---------
GAAP net loss $ (5,330) $ (4,172) $(138,328) $(24,208) $(148,372)
Adjustments:
Stock-based
compensation
charges 2,440 2,723 2,097 10,351 6,540
Amortization
of purchased
intangibles 6,200 7,877 4,732 24,751 22,232
Impairment of
goodwill -- -- 131,216 -- 131,216
Restructuring
charges (1,442) 67 7,704 1,291 12,602
Realized gain
on sale of
strategic
equity
investment -- -- -- -- (672)
Acquired in-
process re-
search and
development -- -- -- 13,300 --
Payroll taxes
on certain
stock option
exercises 6 -- 2 7 3
Expenses
related to
stock option
investigation 939 2,705 -- 5,344 --
Income tax
adjustments (12) (217) (1,377) (535) (5,676)
Total GAAP to
Non-GAAP
adjustments 8,131 13,155 144,374 54,509 166,245
-------- -------- --------- -------- ---------
Non-GAAP net
income $ 2,801 $ 8,983 $ 6,046 $ 30,301 $ 17,873
======== ======== ========= ======== =========
Diluted income
per share $ 0.01 $ 0.03 $ 0.02 $ 0.11 $ 0.06
======== ======== ========= ======== =========
Shares used in
calculating
diluted income
per share 283,871 283,060 296,561 285,411 302,531
======== ======== ========= ======== =========
Income (loss)
per share:
GAAP income
(loss) per
share $ (0.02) $ (0.01) $ (0.47) $ (0.09) $ (0.49)
GAAP to
non-GAAP
adjustments 0.03 0.04 0.49 0.20 0.55
-------- -------- --------- -------- ---------
Non-GAAP
income (loss)
per share $ 0.01 $ 0.03 $ 0.02 $ 0.11 $ 0.06
======== ======== ========= ======== =========
Reconciliation
of shares used
in calculating
the non-GAAP
income per
share:
Shares used in
calculating
the basic and
diluted income
(loss) per
share 282,472 281,799 294,442 284,303 300,841
Adjustment for
dilutive
securities 1,399 1,261 2,119 1,108 1,690
-------- -------- --------- -------- ---------
Non-GAAP
shares used
in the EPS
calculation 283,871 283,060 296,561 285,411 302,531
======== ======== ========= ======== =========
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
(unaudited)
(in thousands)
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
---------------------------- -------------------
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2007 2006 2006 2007 2006
------- ------- -------- -------- --------
GROSS PROFIT:
GAAP gross profit $34,316 $38,843 $ 36,544 $152,138 $139,452
Amortization of
purchased
intangibles 4,850 6,527 3,625 19,756 17,644
Stock-based
compensation
expense 153 148 21 592 89
------- ------- -------- -------- --------
Non-GAAP gross
profit $39,319 $45,518 $ 40,190 $172,486 $157,185
======= ======= ======== ======== ========
OPERATING EXPENSES:
GAAP operating
expenses $43,031 $46,023 $178,536 $189,319 $304,333
Amortization of
purchased
intangibles 1,350 1,350 1,107 4,995 4,588
Impairment of
goodwill -- -- 131,216 -- 131,216
Acquired in-
process research
and development -- -- -- 13,300 --
Stock-based
compensation
expense 2,287 2,575 2,076 9,759 6,451
Restructuring
charges (1,442) 67 7,704 1,291 12,602
Payroll taxes on
certain stock
option exercises 6 -- 2 7 3
Expenses related
to stock option
investigation 939 2,705 -- 5,344 --
------- ------- -------- -------- --------
Non-GAAP operating
expenses $39,891 $39,326 $ 36,431 $154,623 $149,473
======= ======= ======== ======== ========
INTEREST AND OTHER
INCOME, NET
GAAP interest and
other income,
net $ 3,460 $ 3,121 $ 3,992 $ 13,375 $ 15,873
Realized gain
on sale of
strategic
equity
investments -- -- -- -- (672)
------- ------- -------- -------- --------
Non-GAAP interest
and other income,
net $ 3,460 $ 3,121 $ 3,992 $ 13,375 $ 15,201
======= ======= ======== ======== ========
INCOME TAX EXPENSE
(BENEFIT):
GAAP income tax
expense (benefit) $ 75 $ 113 $ 328 $ 402 $ (636)
Income tax
adjustments 12 217 1,377 535 5,676
------- ------- -------- -------- --------
Non-GAAP income tax
expense (benefit) $ 87 $ 330 $ 1,705 $ 937 $ 5,040
======= ======= ======== ======== ========
RESEARCH AND
DEVELOPMENT
GAAP research and
development $24,176 $24,550 $ 22,836 $ 96,418 $ 93,770
Stock-based
compensation
expense 786 882 666 3,765 2,690
Payroll taxes on
certain stock
option exercises 3 -- 1 3 2
------- ------- -------- -------- --------
Non-GAAP research
and development $23,387 $23,668 $ 22,169 $ 92,650 $ 91,078
======= ======= ======== ======== ========
SELLING, GENERAL
AND ADMINISTRATIVE
GAAP selling,
general and
administrative $18,008 $17,351 $ 15,673 $ 67,971 $ 62,157
Stock-based
compensation
expense 1,501 1,693 1,410 5,994 3,761
Payroll taxes on
certain stock
option exercises 3 -- 1 4 1
------- ------- -------- -------- --------
Non-GAAP selling,
general and
administrative $16,504 $15,658 $ 14,262 $ 61,973 $ 58,395
======= ======= ======== ======== ========
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
($ in thousands)
Fiscal years ended
March 31,
------------------------
2007 2006
--------- -----------
(audited)
Operating activities:
Net loss $ (24,208) $ (148,372)
Adjustments to reconcile net loss to net
cash used for operating activities
Depreciation and amortization 8,410 12,902
Amortization of purchased intangibles 24,751 22,232
Acquired in-process research and
development 13,300 --
Goodwill and purchased intangible asset
impairment charges -- 131,216
Stock-based compensation expense:
Stock options 10,211 6,540
Restricted stock units 142 --
Non-cash restructuring charges 2,798 4,395
Net gain on strategic equity investments -- (672)
Net gain on disposals of property 120 (4)
Changes in operating assets and liabilities:
Accounts receivables (4,790) 2,277
Inventories (5,307) (6,927)
Other assets (1,336) 34,388
Accounts payable 1,214 640
Accrued payroll and other accrued
liabilities (11,566) (62,782)
Deferred revenue (1,230) (403)
--------- -----------
Net cash provided by (used for)
operating activities 12,509 (4,570)
Investing activities:
Proceeds from sales and maturities of
short-term investments 468,570 1,082,451
Purchases of short-term investments (403,080) (1,025,274)
Purchase of property, equipment and
other assets (6,732) (7,933)
Proceeds from the sale of strategic equity
investments -- 672
Purchase of strategic investment (1,500) (3,500)
Proceeds from sale of real estate 4,788 --
Proceeds from sale of property, equipment
and other assets -- 101
Net cash paid for acquisitions (71,971) --
--------- -----------
Net cash provided by (used for)
investing activities (9,925) 46,517
Financing activities:
Proceeds from issuance of common stock 2,850 6,745
Repurchase of Company stock (20,137) (9,947)
Funding of structured stock repurchase
agreements (9,398) (105,000)
Funds received from structured stock
repurchase agreements including gains 26,973 40,144
Payments on long-term debt (289) (34)
Other (113) (126)
--------- -----------
Net cash used for financing activities (114) (68,218)
--------- -----------
Net increase (decrease) in cash and
cash equivalents 2,470 (26,271)
Cash and cash equivalents at beginning
of year 49,125 75,396
--------- -----------
Cash and cash equivalents at end of year $ 51,595 $ 49,125
========= ===========
Supplementary cash flow disclosure:
Cash paid for:
Interest $ 4 $ 86
Income taxes $ 369 $ 884
CONTACT: Applied Micro Circuits Corporation
Investor Relations:
Scott Dawson
(858) 535-4217
sdawson@amcc.com
Media/Editorial:
The Bernard Group
Diane Bernard
(512) 617-6319
diane@bernardgroup.com
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