Applied Micro Circuits Corp. Reports Fourth-Quarter Fiscal 1999 Financial Highlights.SAN DIEGO--(BUSINESS WIRE)--April 22, 1999--
Quarterly Fiscal
Year-over-Year Year
Revenues Up 32% Up 37%
Excluding $2.3 million of merger-
related costs:
Pretax Income Up 57% Up 90%
Net income Up 7% Up 28%
All amounts presented reflect the March 1999 acquisition of Cimaron
Communications Corp., which has been accounted for on the pooling of
interests method.
Applied Micro Circuits Corp. (AMCC AMCC Applied Micro Circuits Corporation AMCC Air Mobility Control Center AMCC Ashore Mobile Contingency Communications AMCC Advanced Materials Commercialization Center AMCC allied movement coordination center (US DoD) ) (Nasdaq:AMCC) Thursday Thursday: see week. reported its financial results for the fourth quarter and fiscal year ended March 31, 1999. Net revenues in the fourth quarter of fiscal 1999 were $28.7 million, an increase of 32 percent over the $21.7 million reported in the fourth quarter of fiscal 1998. Pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. for the fourth quarter of fiscal 1999 was $8.5 million (prior to merger-related costs of $2.3 million), an increase of 57 percent over the $5.4 million reported in the fourth quarter of fiscal 1998. Net income for the fourth quarter of fiscal 1999 was $5.6 million (excluding merger-related costs of $2.3 million), or $0.20 per share, diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. (excluding merger-related costs of $0.08 per share), compared with $5.3 million, or $0.23 per share, diluted, for the fourth quarter of fiscal 1998. In the fourth quarter of fiscal 1999, net income and earnings per share reflect an increase in AMCC's effective tax rate to approximately 34 percent (excluding the tax impact of merger-related costs) from fiscal 1998's rate of 3 percent. Additionally, earnings per share reflect the weighted average increase in shares associated with the company's public offerings in the second half of fiscal 1998 and AMCC's acquisition of Cimaron Communications Corp. in March 1999. Sequentially, net revenues for the fourth quarter of fiscal 1999 increased 7 percent over the $27.0 million of net revenues for the third quarter of fiscal 1999. Net income for the fourth quarter of fiscal 1999 (excluding merger-related costs of $2.3 million) was up 10 percent from $5.1 million, or $0.19 per share, in the third quarter of fiscal 1999. Prior quarter results have been restated to reflect the acquisition of Cimaron as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. transaction. For fiscal year 1999, which ended March 31, 1999, net revenues were $105.0 million, an increase of 37 percent over the $76.6 million reported for the prior fiscal year. Pretax income for fiscal year 1999 was $29.7 million (excluding merger-related costs of $2.3 million), an increase of 90 percent over the $15.6 million reported in the prior fiscal year. Net income for fiscal year 1999 was $19.4 million, or $0.71 per share (excluding merger-related costs of $2.3 million or $0.08 per share), compared with $15.2 million, or $0.75 per share, in the prior fiscal year. The effective tax rate was 37 percent in fiscal 1999 compared with 3 percent in fiscal 1998. Commenting on the results, Dave Rickey rick·ey n. pl. rick·eys A drink of soda water, lime or lemon juice, sugar, and usually gin. [Probably from the name Rickey.] Noun 1. , president and chief executive officer of AMCC, said: "The acquisition of Cimaron Communications Corp. last quarter was a significant achievement for AMCC. The leading-edge digital framer technologies from Cimaron combined with the introduction of our own Explorer chip adds higher-layer digital content to our overall product portfolio. "Our combined expertise in high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. CMOS (Complementary Metal Oxide Semiconductor) Pronounced "c-moss." The most widely used integrated circuit design. It is found in almost every electronic product from handheld devices to mainframes. mixed-signal design and digital systems provides a platform for optimum integration in the network. In addition, we introduced a number of innovative products during the fourth quarter, including the S3046, a SONET OC-48 transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. , and the S2066 and S2076, CMOS quad-channel transceivers for Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. and Fibre Channel networks, respectively. "These solutions continue to demonstrate our commitment to and success with delivering high-bandwidth, high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" silicon connectivity solutions that address the design requirements of our customers while meeting their cost and integration needs. We continue to build momentum in design wins for our communications products." Rickey continued: "We have also welcomed William E. Bendush to AMCC as our new CFO See Chief Financial Officer. , and Harvey Harvey, city (1990 pop. 29,771), Cook co., NE Ill., a suburb S of Chicago; inc. 1895. Its manufactures include steel castings, metal products, chemicals, machinery, and electronic equipment. Harvey has an oil research center. The city was founded by Turlington W. P. White as the newest member on our Board of Directors. Their proven abilities to scale an organization to meet the demands of high growth make them timely and valuable assets for the company." Fourth-Quarter Highlights
-- Acquired Cimaron Communications, a leader in the design and
development of digital silicon solutions and ASIC cores for
high-speed SONET systems;
-- Introduced the S1203 Explorer IC, a SONET/SDH overhead processing
and termination device for OC-3, 12 and 48 applications, adding
higher-layer digital content to AMCC's product portfolio;
-- Introduced the S3046, a SONET OC-48 transceiver, that has been
successfully validated in Alcatel's 1603SMX system;
-- Announced compliance of S3041 transmitter and S3042 receiver
chipset with Hewlett-Packard Co.'s HFCT-5402D (a 2488 Mb/s
single-mode fiber transceiver for SONET OC-48/SDH STM-16 and ATM
applications), passing HP's bit error rate, jitter tolerance and
jitter generation tests;
-- Introduced the S2066 and S2076, quad-channel CMOS transceivers
for Gigabit Ethernet and Fibre Channel networks, respectively;
-- Expanded OC-48 DWDM and SONET/SDH portfolio with S3049 (laser
driver), S3053 (quad mux with fanout buffers) and S3054 (a dual
2 x 2 crosspoint switch); and
-- Introduced S3038, a first fully integrated SONET/SDH OC-12 quad
transceiver.
AMCC's Market Opportunity "We are executing on our vision to be the premier supplier of high-bandwidth silicon connectivity for the world's communications infrastructure," said Rickey. "We believe demand for our communications standard products continues to grow as the need for bandwidth expands, due to the increasing demand for Internet access See how to access the Internet. and high-bandwidth LAN/WAN LAN/WAN Local Area Network/Wide Area Network data and video transmission." AMCC is focused on the fiber optics-based, high-performance communications market that is being driven by increasing demand for greater bandwidth to accommodate growth in the Internet, the Internet, the, international computer network linking together thousands of individual networks at military and government agencies, educational institutions, nonprofit organizations, industrial and financial corporations of all sizes, and commercial enterprises World Wide Web, and cellular and facsimile communications, as well as applications such as remote network access, video conferencing See videoconferencing. (communications) video conferencing - A discussion between two or more groups of people who are in different places but can see and hear each other using electronic communications. and higher-speed, data-intensive communication between local area networks. The company's products serve these Wide Area Network (WAN) and Local Area Network (LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. ) applications. For telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. markets, the company's products address the SONET/SDH and ATM transmission standards, and for data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. markets, the company offers products that address the Gigabit Ethernet, ATM and Fibre Channel transmission standards. AMCC's Technology Strategy The company uses its internal bipolar (1) See bipolar transmission. (2) One of two major categories of transistor; the other is "field effect transistor" (FET). Although the first transistors and first silicon chips were bipolar, most chips today are field effect transistors wired as CMOS logic, which and BiCMOS manufacturing processes together with advanced CMOS processes from external foundries to provide cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. solutions to its customers. These multiple silicon process technologies, combined with the company's extensive analog, mixed-signal and digital design capabilities and its systems expertise, provide the core capabilities that the company believes give it a competitive edge in servicing the high-performance communications market. Results for the 30-Day Period Ended April 16, 1999 The following information is reported solely for purposes of complying with the Securities and Exchange Commission's Accounting Series Release No. 135. The following revenue and net income amounts include operations from parts of each of AMCC's two quarters ending March 31, 1999, and June 30, 1999, and should not be considered to be indicative of results expected for the quarter ending June 30, 1999, or the fiscal year ending March 31, 2000. The unaudited revenue, net income, basic earnings per share and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for AMCC for the 30-day period ended April 16, 1999, was $14.6 million, $4.4 million, $0.17, and $0.15, respectively. On March 17, 1999, AMCC acquired Cimaron Communications in a merger accounted for as a pooling of interests. AMCC issued approximately three million shares of its common stock in exchange for all outstanding shares of Cimaron's preferred and common stock, including shares issuable upon exercise of employee stock options and other rights. The revenue and net income amounts set forth above include 30 days of combined operations For the department of the British War Office during World War II, see . In the military, combined operations are operations conducted by forces of two or more allied nations acting together for the accomplishment of a single mission. See also
For more information about AMCC, visit the company's Web site on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.amcc.com. For more information on Applied Micro Circuits via facsimile at no cost, call 800/PRO-INFO and dial client code AMCC. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Except for historical information contained herein, the matters set forth in this news release are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including, but not limited to, such factors as the rescheduling or cancellation of orders by customers; fluctuations in the timing and amount of customer requests for product shipments; fluctuations in manufacturing yields and inventory levels; changes in product mix; the company's ability to introduce new products and technologies on a timely basis; the introduction of products and technologies by the company's competitors; risks related to the Cimaron merger including the difficulty of assimilating as·sim·i·late v. as·sim·i·lat·ed, as·sim·i·lat·ing, as·sim·i·lates v.tr. 1. Physiology a. To consume and incorporate (nutrients) into the body after digestion. b. operations and personnel; the availability of external foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. capacity, purchased parts, and raw material; competitive pressures on selling prices; the timing of investments in research and development; market acceptance of the company's and its customers' products; the financial condition and performance of the company's customers; the timing of depreciation and other expenses to be incurred by the company in connection with the expansion of its existing manufacturing facility and in connection with its new proposed facility; the timing and amount of recruiting and relocating expenses, prototyping costs and promotional expenses Noun 1. promotional expense - the cost of promoting a product business expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade ; costs associated with future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , if any, including without limitation, litigation relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the use or ownership of intellectual property; costs associated with compliance with applicable environmental regulations; general semiconductor industry conditions, and general economic conditions, including, but not limited to, economic conditions in Asia and the risk factors that are detailed in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , for the year ended March 31, 1998, the company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended Dec. 31, 1998, and the other company's filings with the Securities and Exchange Commission. -0-
APPLIED MICRO CIRCUITS CORP.
CONSOLIDATED CONDENSED INCOME STATEMENTS
(Unaudited)
(in thousands, except per share data)
Three Months Year
Ended Ended
March 31, March 31,
1999 1998 1999 1998
Net revenues $ 28,742 $ 21,744 $105,000 $ 76,618
Cost of revenues 9,522 8,951 37,937 34,321
Gross profit 19,220 12,793 67,063 42,297
Operating expenses:
Research and development 6,278 3,929 22,472 13,268
Selling, general and
administrative 5,292 4,018 18,325 14,278
Merger related costs 2,350 -- 2,350 --
Total operating
expenses 13,920 7,947 43,147 27,546
Operating income 5,300 4,846 23,916 14,751
Interest income, net 837 577 3,450 871
Income before income
taxes 6,137 5,423 27,366 15,622
Provision for income
taxes 2,776 144 10,233 406
Net income $ 3,361 $ 5,279 $ 17,133 $ 15,216
Basic earnings per share:
Earnings per share $ 0.13 $ 0.26 $ 0.70 $ 1.44
Weighted average
shares 25,205 20,647 24,514 10,594
Diluted earnings per share:
Earnings per share $ 0.12 $ 0.23 $ 0.62 $ 0.75
Weighted average
shares 28,140 23,257 27,430 20,294
Pro forma results excluding merger-related costs of $2.3 million or
$0.08 per share incurred in the fourth quarter of fiscal 1999:
Operating income $ 7,650 $ 4,846 $ 26,266 $ 14,751
Income before income
taxes $ 8,487 $ 5,423 $ 29,716 $ 15,622
Net income $ 5,629 $ 5,279 $ 19,401 $ 15,216
Diluted earnings
per share $ 0.20 $ 0.23 $ 0.71 $ 0.75
-0-
APPLIED MICRO CIRCUITS CORP.
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in thousands)
March 31, March 31,
1999 1998
(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $ 86,540 $ 67,896
Accounts receivable, net 19,275 12,179
Inventories 9,813 8,185
Other current assets 9,392 6,266
Total current assets 125,020 94,526
Property and equipment, net 23,128 17,218
Other assets 2,507 1,090
Total assets $ 150,655 $ 112,834
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,131 $ 5,215
Other current liabilities 13,335 9,274
Current portion of long-term debt 1,862 567
Current portion of capital lease
obligations 1,075 2,053
Total current liabilities 21,403 17,109
Long-term debt, less current portion 4,995 2,736
Long-term capital lease obligations,
less current portion 2,563 1,355
Stockholders' equity 121,694 91,634
Total liabilities and
stockholders' equity $ 150,655 $ 112,834
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