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Applied Micro Circuits Corporation Reports Third Quarter Fiscal 2015 Financial Results

SUNNYVALE, Calif., Jan. 27, 2015 (GLOBE NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) ("AppliedMicro") today reported its financial results for the third quarter of fiscal 2015, ended December 31, 2014.

  • Consolidated net revenue of $36.7 million
  • GAAP net loss of $12.1 million or $0.15 per share
  • Non-GAAP net loss of $7.1 million or $0.09 per share

Commenting on AppliedMicro's third quarter operations, Dr. Paramesh Gopi, President and Chief Executive Officer, said, "We are pleased to report that our December quarter results were above the mid-point of our guidance range. Various indicators lead us to believe that our base business has stabilized." Dr. Gopi continued, "We are on track to meet our goal of shipping 10,000 X-GeneTM units by the end of our fiscal year as our end customer pipeline expands. Meanwhile, our HeliXTM family of embedded processors is expected to revitalize our base business."

AppliedMicro provides non-GAAP results as additional information relating to its financial condition and business trends. This information should be considered in conjunction with corresponding GAAP measures. A reconciliation between GAAP and non-GAAP financial results is provided in the financial tables section of this press release.

Conference Call and Webcast

Management will host a conference call and simultaneous webcast to discuss second quarter results and business and financial outlook today, January 27, 2015, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.

DIAL-IN: (866) 700-5192
(617) 213-8833
PASSCODE: 47379426
WEBCAST: Investor Relations section of the Company's website at www.apm.com

A replay of the call will be available starting around 6:00 p.m. Pacific Time / 9:00 p.m. Eastern Time and can be accessed by dialing 888-286-8010 or 617-801-6888 and using the access code 32069025. The replay will be available through February 3, 2015.

About AppliedMicro

Applied Micro Circuits Corporation is a global leader in computing and connectivity solutions for next-generation cloud infrastructure and data centers. AppliedMicro delivers silicon solutions that dramatically lower total cost of ownership. Corporate headquarters are located in Sunnyvale, California. www.apm.com.

(C) Copyright 2015, Applied Micro Circuits Corporation. AppliedMicro, X-Gene, X-Weave, HeliX, Server on a Chip, Cloud Processor and Cloud Server are trademarks or registered trademarks of Applied Micro Circuits Corporation. All other product or service names are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements that reflect the Company's current views and expectations with respect to future events and financial performance, including statements regarding the Company's strategic focus; product cycles; new product development, commercialization and customer acceptance; the development of the X-Gene™ ecosystem; the anticipated performance of the Company's base business included the expected duration of weakness in service provider order patterns; and future revenues, expenses and liquidity. 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, successful and timely development of products, an evolving competitive landscape, rapid technological change, increased supplier lead times and other supply chain constraints, the businesses and budgeting decisions of the Company's major customers, reductions, rescheduling or cancellation of orders by the Company's customers, successful management of key service providers and recently acquired businesses, market acceptance of new products, legal and regulatory developments, and general economic conditions, and do not take into account any restructuring or related activities that the Company may undertake. 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, 2014, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, and its 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)
(unaudited)
December 31, March 31,
ASSETS 2014 2014
Current assets:
Cash, cash equivalents and short-term investments $ 83,023 $ 106,583
Accounts receivable, net 19,247 25,178
Inventories 24,222 18,946
Other current assets 15,203 16,799
Total current assets 141,695 167,506
Property and equipment, net 20,946 20,746
Goodwill 11,425 11,425
Purchased intangibles, net -- 105
Other assets 3,976 7,754
Total assets $ 178,042 $ 207,536
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 22,155 $ 26,194
Other current liabilities 22,706 28,961
Total current liabilities 44,861 55,155
Non-current liabilities:
Non-current liabilities 4,134 3,145
Stockholders' equity 129,047 149,236
Total liabilities and stockholders' equity $ 178,042 $ 207,536
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
December 31, September 30, December 31, December 31, December 31,
2014 2014 2013 2014 2013
Net revenues $ 36,747 $ 40,945 $ 54,844 $ 127,964 $ 164,379
Cost of revenues 14,842 17,716 21,644 52,815 65,383
Gross profit 21,905 23,229 33,200 75,149 98,996
Operating expenses:
Research and development 24,721 24,711 29,870 82,636 120,926
Selling, general and administrative 8,707 7,919 10,930 25,684 29,602
Amortization of purchased intangible assets -- 42 62 105 254
Restructuring 221 (110) 38 1,322 1,130
Gain on sale of TPack -- -- -- -- (19,699)
Total operating expenses 33,649 32,562 40,900 109,747 132,213
Operating loss (11,744) (9,333) (7,700) (34,598) (33,217)
Interest and other (expense) income, net 475 (2,112) 617 (1,322) 4,988
Loss before income taxes (11,269) (11,445) (7,083) (35,920) (28,229)
Income tax expense 862 272 201 993 581
Net loss $ (12,131) $ (11,717) $ (7,284) $ (36,913) $ (28,810)
Basic and diluted net loss per share: $ (0.15) $ (0.15) $ (0.10) $ (0.47) $ (0.40)
Shares used in calculating basic and diluted net loss per share 78,920 78,487 73,989 78,442 71,986
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-GAAP NET (LOSS) INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
December 31, September 30, December 31, December 31, December 31,
2014 2014 2013 2014 2013
GAAP net loss $ (12,131) $ (11,717) $ (7,284) $ (36,913) $ (28,810)
Adjustments:
Stock-based compensation charges 4,857 4,230 5,882 14,303 13,430
Amortization of purchased intangible assets -- 42 62 105 420
Veloce acquisition consideration -- -- 2,945 7,140 42,684
Restructuring 221 (110) 38 1,322 1,130
Impairment of a strategic investment -- 2,500 -- 2,500 --
Gain on sale of TPack -- -- -- -- (19,699)
Reversals of impairment charges upon sales of marketable securities (129) (11) (17) (158) (3,976)
Income tax 62 22 (48) (307) (156)
Total GAAP to non-GAAP adjustments 5,011 6,673 8,862 24,905 33,833
Non-GAAP net (loss) income $ (7,120) $ (5,044) $ 1,578 $ (12,008) $ 5,023
Diluted non-GAAP (loss) income per share $ (0.09) $ (0.06) $ 0.02 $ (0.15) $ 0.07
Shares used in calculating diluted non-GAAP (loss) income per share 78,920 78,487 75,754 78,442 73,430
Net (loss) income per share:
GAAP loss per share $ (0.15) $ (0.15) $ (0.10) $ (0.47) $ (0.40)
GAAP to non-GAAP adjustments 0.06 0.09 0.12 0.32 0.47
Non-GAAP net (loss) income per share $ (0.09) $ (0.06) $ 0.02 $ (0.15) $ 0.07
Reconciliation of shares used in calculating non-GAAP (loss) income per share:
Shares used in calculating the basic loss per share 78,920 78,487 73,989 78,442 71,986
Adjustment for dilutive securities -- -- 1,765 -- 1,444
Shares used in calculating diluted non-GAAP (loss) income per share 78,920 78,487 75,754 78,442 73,430
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
(in thousands)
(unaudited)
The following schedule reconciles selected line items on the condensed consolidated statements of operations from the GAAP basis to the non-GAAP basis:
Three Months Ended Nine Months Ended
December 31, September 30, December 31, December 31, December 31,
2014 2014 2013 2014 2013
GROSS PROFIT:
GAAP gross profit $ 21,905 $ 23,229 $ 33,200 $ 75,149 $ 98,996
Amortization of purchased intangible assets -- -- -- -- 166
Stock-based compensation expense 71 102 120 220 343
Non-GAAP gross profit $ 21,976 $ 23,331 $ 33,320 $ 75,369 $ 99,505
OPERATING EXPENSES:
GAAP operating expenses $ 33,649 $ 32,562 $ 40,900 $ 109,747 $ 132,213
Stock-based compensation expense (4,786) (4,128) (5,762) (14,083) (13,087)
Amortization of purchased intangible assets -- (42) (62) (105) (254)
Veloce acquisition consideration -- -- (2,945) (7,140) (42,684)
Gain on sale of TPack -- -- -- -- 19,699
Restructuring (221) 110 (38) (1,322) (1,130)
Non-GAAP operating expenses $ 28,642 $ 28,502 $ 32,093 $ 87,097 $ 94,757
INTEREST AND OTHER (EXPENSE) INCOME, NET
GAAP interest and other (expense) income, net $ 475 $ (2,112) $ 617 $ (1,322) $ 4,988
Impairment of a strategic investment -- 2,500 -- 2,500 --
Reversals of impairment charges upon sales of marketable securities (129) (11) (17) (158) (3,976)
Non-GAAP interest and other (expense) income, net $ 346 $ 377 $ 600 $ 1,020 $ 1,012
INCOME TAX EXPENSE (BENEFIT):
GAAP income tax expense $ 862 $ 272 $ 201 $ 993 $ 581
Income tax adjustment (62) (22) 48 307 156
Non-GAAP income tax expense $ 800 $ 250 $ 249 $ 1,300 $ 737
RESEARCH AND DEVELOPMENT:
GAAP research and development $ 24,721 $ 24,711 $ 29,870 $ 82,636 $ 120,926
Stock-based compensation expense (2,992) (2,776) (1,546) (9,039) (4,887)
Veloce acquisition consideration -- -- (2,945) (7,140) (42,684)
Non-GAAP research and development $ 21,729 $ 21,935 $ 25,379 $ 66,457 $ 73,355
SELLING, GENERAL AND ADMINISTRATIVE:
GAAP selling, general and administrative $ 8,707 $ 7,919 $ 10,930 $ 25,684 $ 29,602
Stock-based compensation expense (1,794) (1,352) (4,216) (5,044) (8,200)
Non-GAAP selling, general and administrative $ 6,913 $ 6,567 $ 6,714 $ 20,640 $ 21,402
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
December 31, September 30, December 31, December 31, December 31,
2014 2014 2013 2014 2013
Operating activities:
Net loss $ (12,131) $ (11,717) $ (7,284) $ (36,913) $ (28,810)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities:
Depreciation 2,223 2,227 2,445 6,624 7,728
Amortization of purchased intangible assets -- 42 62 105 420
Stock-based compensation expense 4,857 4,230 5,882 14,303 13,430
Veloce acquisition consideration -- -- 2,945 7,140 42,684
Tax effect on other comprehensive loss 50 110 -- (34) --
Noncash restructuring charges 14 -- -- 14 298
Gain on sale of TPack -- -- -- -- (19,699)
Loss on disposals of property and equipment -- 6 -- 22 27
Impairment of a strategic investment -- 2,500 -- 2,500 --
Changes in operating assets and liabilities:
Accounts receivable, net (1,366) 5,051 (2,093) 5,931 (4,459)
Inventories (6,605) 3,079 2,309 (5,271) 2,415
Assets held for sale -- -- (14,260) -- (14,260)
Other assets (1,236) (1,241) 16,634 (484) 16,475
Accounts payable 8,275 (5,741) (2,479) (3,629) (4,423)
Accrued payroll and other accrued liabilities 1,662 (4,252) (1,200) (927) 610
Veloce accrued liability (1,482) (1,116) (1,192) (8,981) (45,432)
Deferred revenue (22) (668) 145 (188) (449)
Net cash (used for) provided by operating activities (5,761) (7,490) 1,914 (19,788) (33,445)
Investing activities:
Proceeds from sales and maturities of short-term investments 3,155 1,238 5,291 5,075 26,594
Purchases of short-term investments (653) (749) (8,064) (2,722) (16,241)
Proceeds from sale of TPack, net -- -- -- 3,353 29,498
Proceeds from sale of property and equipment -- 1 -- 1 20
Purchase of property and equipment (271) (2,756) (3,593) (7,571) (5,616)
Proceeds from sale of strategic equity investment -- -- -- -- 1,286
Net cash provided by (used for) investing activities 2,231 (2,266) (6,366) (1,864) 35,541
Financing activities:
Proceeds from issuances of common stock 27 1,757 1,646 1,890 8,582
Funding of restricted stock units withheld for taxes (363) (322) (1,439) (1,609) (5,518)
Other -- -- (33) (88) (595)
Net cash (used for) provided by financing activities (336) 1,435 174 193 2,469
Net (decrease) increase in cash and cash equivalents (3,866) (8,321) (4,278) (21,459) 4,565
Cash and cash equivalents at the beginning of the period 53,946 62,267 27,908 71,539 19,065
Cash and cash equivalents at the end of the period $ 50,080 $ 53,946 $ 23,630 $ 50,080 $ 23,630

CONTACT: Investor Relations Contact: Traci Tsuchiguchi Phone: (408) 542-8353 E-Mail: ttsuchiguchi@apm.com Media Contact: Mike Major Phone: (408) 542-8831 E-mail: mmajor@apm.com

Source:Applied Micro Circuits Corporation