Applied Micro Circuits Corporation Announces Fourth Quarter Fiscal 2006 Financial Results.Selected Q4 Highlights * Q4 net revenues of $67.0 million; fiscal 2006 net revenues of $261.8 million * Q4 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss of $138.3 million or $(0.47) per share, after recording a nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $131.2 million and a $7.7 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. * Q4 non-GAAP net income improved to $6.0 million or $0.02 per share; Q4 non-GAAP net operating margin Net operating margin The ratio of net operating income to net sales. measured as a percentage of revenue doubled to 5.6% from 2.8% in the prior quarter * Q4 quarterly revenues in the focus areas of Process, Transport and Store grew 6% sequentially; non-focus revenues declined 13% sequentially; overall revenues grew nearly 3% sequentially * Launched major initiative to develop a high performance processor core optimized for the needs of the converged network The integration of the telephone system with IP-based data networks. See softswitch. (networking) converged network - A single network that can carry voice, video and data. * Introduced two high-density high-den·si·ty adj. Having a high concentration: high-density urban areas. optical transceivers for the SONET/SDH (Synchronous Optical NETwork/Synchronous Digital Hierarchy) A common reference to SONET networks worldwide. See SONET. transport market * Completed the introduction of the 9550SX product line by shipping our first 16-port SATA (Serial ATA) A serial version of the ATA (IDE) interface, which has been the de facto standard hard disk interface for desktop PCs for more than two decades. The original Parallel ATA (PATA) interface was launched in 1986. RAID controller A disk controller card that supports one or more RAID configurations. Originally only for SCSI drives, RAID controllers have become very popular for PATA and SATA drives. See RAID. for the high performance storage market SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif., April 26 /PRNewswire-FirstCall/ -- Applied Micro Circuits Corporation Applied Micro Circuits Corporation (NASDAQ: AMCC) is a fabless semiconductor company designing network and embedded Power Architecture (including a Power Architecture license), optical transport and storage solutions. today reported its financial results for the fourth quarter of fiscal 2006. Net revenues for the fourth quarter of fiscal 2006 were $67.0 million compared to $65.2 million reported in the third quarter of fiscal 2006 and $64.2 million reported in the fourth quarter of fiscal 2005. Net revenues for the year ended March 31, 2006 were $261.8 million compared to $253.8 million reported for the year ended March 31, 2005. The net loss on a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP) basis for the fourth quarter of fiscal 2006 was $138.3 million or $(0.47) per share. This loss includes $131.2 million for the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of goodwill and a $7.7 million charge for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs associated with France and parts of our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. . The fourth quarter GAAP net loss compares with net income of $584,000 or $0.00 per share for the third quarter of fiscal 2006 and a net loss of $5.3 million or $(0.02) per share for the fourth quarter of fiscal 2005. The GAAP net loss for the year ended March 31, 2006 was $148.4 million or $(0.49) per share, compared to the net loss of $127.4 million or $(0.41) per share for the year ended March 31, 2005. The non-GAAP net income for the fourth quarter of fiscal 2006 was $6.0 million or $0.02 per share, compared to the non-GAAP net income of $4.8 million or $0.02 per share in the third quarter of fiscal 2006 and the non-GAAP net income of $3.6 million or $0.01 per share in the fourth quarter of fiscal 2005. The non-GAAP net income for the year ended March 31, 2006 was $17.9 million or $0.06 per share, compared with the non-GAAP net loss of $2.5 million or $(0.01) per share for the year ended March 31, 2005. "During the quarter we grew our focus revenues by 6% sequentially while putting in place strategic initiatives for long-term growth," said Kambiz KAMBIZ can refer to 1.Name of an Iranian HAKHAMANESHI king, also KAMBOUJIEH. 2.Persian men's given name. This page or section lists people with the given name Kambiz. Hooshmand, president and chief executive officer. "This is our fifth consecutive quarter of non-GAAP profitability and our first full fiscal year of non-GAAP profitability since 2001." Bob Gargus, chief financial officer commented, "On a non-GAAP basis in the fourth quarter we grew gross margins while continuing to drive down operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . We are working through our revenue transitions while managing multiple initiatives to improve both growth and profitability for the company. We're making good progress and a clear indication is the continued improvement in our non-GAAP net operating margin which doubled as a percent of revenue over the prior quarter." 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) reports its financial results in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP and additionally provides supplemental financial data on a non-GAAP basis. These non-GAAP 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's management believes this non-GAAP financial data is useful and facilitates evaluating the ongoing performance of AMCC operations on a comparable basis. AMCC uses non-GAAP financial data to internally evaluate and manage our operating performance and in formulating our budget for future periods. AMCC is providing this information to investors and analysts, who may wish to use some or all of this information to analyze our current performance and because it is consistent with the financial models and estimates published by analysts who follow the Company. The non-GAAP results and financial measures exclude certain items which 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, 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. settlement costs, and payroll tax Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. on certain stock option exercises. Income taxes are adjusted to an estimated non-GAAP effective tax rate. See the attached reconciliation of the GAAP net income (loss) to the non-GAAP net income (loss), which quantifies the amounts excluded from non-GAAP results. For More Information AMCC management will be holding a conference call today, April 26, 2006, 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 2006 and to provide guidance for the first quarter of fiscal 2007. You may access the conference call via any of the following:
Teleconference: 913-981-4902
Conference ID: 4600587
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, transporting 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 Inserted into. See embedded system. applications such as PowerPC and programmable SOC (System On a Chip) The electronics for a complete, working product contained on a single chip. While a microcontroller includes all the hardware components required to process instructions, an SoC includes the computer and all required ancillary electronics. architectures, storage area networks (SAN), and high-growth storage markets such as Serial ATA (SATA) RAID. AMCC's corporate headquarters are located in Sunnyvale, California Sunnyvale ([sʌniveil]) is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley. As of the 2000 census, the city population was 131,760. . Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our web site at http://www.amcc.com/. This news release contains forward-looking statements that reflect the Company's current view with respect to future events and financial performance. 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, 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 reuse - Using code developed for one application program in another application. Traditionally achieved using program libraries. Object-oriented programming offers reusability of code via its techniques of inheritance and genericity. or update any forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the issuance of this press release.
APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
March 31, March 31,
ASSETS 2006 2005
Current assets:
Cash, cash equivalents and short-term
investments $335,665 $423,392
Accounts receivable, net 26,324 28,601
Inventories 24,941 18,014
Other current assets 12,618 51,448
Total current assets 399,548 521,455
Property and equipment, net 36,127 44,461
Other assets 8,685 1,965
Goodwill and purchased intangibles 381,066 534,514
Total assets $825,426 $1,102,395
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $24,656 $24,016
Other current liabilities 37,962 101,147
Current portion of long-term debt & capital
leases -- 34
Total current liabilities 62,618 125,197
Stockholders' equity 762,808 977,198
Total liabilities and stockholders' equity $825,426 $1,102,395
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three months ended Year ended
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2006 2005 2005 2006 2005
Net revenues $66,993 $65,243 $64,204 $261,844 $253,756
Cost of revenues 30,449 30,017 30,073 122,392 123,253
Gross profit 36,544 35,226 34,131 139,452 130,503
Operating expenses:
Research and
development 22,170 22,775 24,562 91,080 118,665
Selling, general
and administrative 14,263 14,239 14,258 58,396 59,821
Stock-based
compensation:
Research and
development 666 654 708 2,690 3,407
Selling,
general and
administrative 1,410 783 858 3,761 5,259
Amortization of
purchased
intangibles 1,107 1,107 1,608 4,588 6,960
Impairment of
purchased
intangibles -- -- -- -- 27,330
Impairment
of goodwill 131,216 -- -- 131,216 --
Acquired
in-process
research and
development -- -- -- -- 13,400
Restructuring
charges 7,704 1,339 1,233 12,602 9,622
Litigation
settlement, net -- -- 350 -- 29,250
Total
operating
expenses 178,536 40,897 43,577 304,333 273,714
Operating loss (141,992) (5,671) (9,446) (164,881) (143,211)
Interest and other
income, net 3,992 4,940 4,108 15,873 18,699
Loss before income
taxes (138,000) (731) (5,338) (149,008) (124,512)
Income tax expense
(benefit) 328 (1,315) -- (636) 2,861
Net income (loss) $(138,328) $584 $(5,338) $(148,372) $(127,373)
Income (loss) per
share:
Basic income
(loss) per share $(0.47) $0.00 $(0.02) $(0.49) $(0.41)
Diluted income
(loss) per share $(0.47) $0.00 $(0.02) $(0.49) $(0.41)
Shares used in
calculating basic
and diluted income
(loss) per share:
Basic 294,442 297,119 308,448 300,841 309,456
Diluted 294,442 299,049 308,448 300,841 309,456
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(unaudited)
(in thousands, except per share data)
Three months ended Year ended
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2006 2005 2005 2006 2005
GAAP net income
(loss) $(138,328) $584 $(5,338) $(148,372) $(127,373)
Adjustments:
Stock-based
compensation (1) 2,097 1,458 1,514 6,540 9,245
Amortization of
purchased
intangibles (2) 4,732 4,732 6,805 22,232 32,487
Impairment of
purchased
intangibles (3) -- -- -- -- 27,330
Impairment of
goodwill(4) 131,216 -- -- 131,216 --
Restructuring
charges (5) 7,704 1,339 1,233 12,602 9,622
Litigation
settlement,
net (6) -- -- 350 -- 29,250
Realized gain on
sale of strategic
equity investment (7) -- (672) -- (672) --
Acquired in-process
research and
development (8) -- -- -- -- 13,400
Payroll taxes on
certain stock
option exercises (9) 2 1 10 3 12
Income tax
adjustments (10) (1,377) (2,663) (1,006) (5,676) 3,558
Total GAAP to
non-GAAP
adjustments 144,374 4,195 8,906 166,245 124,904
Non-GAAP net income
(loss) $6,046 $4,779 $3,568 $17,873 $(2,469)
Non-GAAP income
(loss) per share:
Diluted income
(loss) per share $0.02 $0.02 $0.01 $0.06 $(0.01)
Reconciliation of
shares used in
calculating the
non-GAAP income
(loss) per share:
GAAP diluted shares
used 294,442 299,049 308,448 300,841 309,456
Adjustment for
dilutive
securities (11) 2,119 -- 1,972 1,690 --
Non-GAAP shares
used in the
EPS calculation 296,561 299,049 310,420 302,531 309,456
Non-GAAP adjustments include:
(1) The exclusion of stock based compensation. This amount is included in
cost of goods sold, research and development, and selling, general
and administrative.
(2) The exclusion of amortization of purchased intangible assets
associated with purchase acquisitions.
(3) The exclusion of impairment charges related to purchased intangible
assets recorded in accordance with FASB 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets."
(4) The exclusion of a goodwill impairment charge recorded in accordance
with FASB 142, "Goodwill and Other Intangible Assets."
(5) The exclusion of restructuring charges for non-cash and cash items.
Non-cash items includes fixed asset impairments and prepaid asset
write-offs. Cash items include severance and excess facilities
charges.
(6) The exclusion of litigation costs associated with the settlement of
shareholder lawsuit.
(7) The exclusion of realized gains on the sale of strategic equity
investments.
(8) The exclusion of acquired in-process research and development costs
associated with purchase acquisitions.
(9) The exclusion of payroll taxes associated with certain stock option
exercises.
(10) The income taxes are adjusted to reflect a long-term tax rate.
(11) The shares adjustment for dilutive securities includes stock awards
outstanding calculated under the treasury stock method that are not
included in the GAAP diluted calculation as their effect would be
anti-dilutive.
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED NON-GAAP ADJUSTMENTS
(unaudited)
(in thousands)
The following schedule reconciles selected line items from the GAAP basis statements of operations to the most directly comparable non-GAAP measure.
Three months ended Year ended
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2006 2005 2005 2006 2005
GROSS PROFIT:
GAAP gross profit $36,544 $35,226 $34,131 $139,452 $130,503
Amortization of
purchased
intangibles 3,625 3,625 5,197 17,644 25,527
Stock-based
compensation 21 21 43 89 674
Non-GAAP gross profit $40,190 $38,872 $39,371 $157,185 $156,704
OPERATING EXPENSES:
GAAP operating
expenses $178,536 $40,897 $43,577 $304,333 $273,714
Amortization of
purchased
intangibles 1,107 1,107 1,608 4,588 6,960
Impairment of
purchased
intangibles -- -- -- -- 27,330
Impairment of
goodwill 131,216 -- -- 131,216 --
Acquired in-process
research and
development -- -- -- -- 13,400
Stock-based
compensation 2,076 1,437 1,471 6,451 8,571
Restructuring charges 7,704 1,339 1,233 12,602 9,622
Litigation
settlement, net -- -- 350 -- 29,250
Payroll taxes on
certain stock
option exercises 2 1 10 3 12
Non-GAAP operating
expenses $36,431 $37,013 $38,905 $149,473 $178,569
INTEREST AND OTHER
INCOME, NET
GAAP interest and
other income, net $3,992 $4,940 $4,108 $15,873 $18,699
Realized gain
on sale of
strategic equity
investments -- (672) -- (672) --
Non-GAAP interest
and other income,
net $3,992 $4,268 $4,108 $15,201 $18,699
INCOME TAX EXPENSE
(BENEFIT):
GAAP income tax
expense (benefit) $328 $(1,315) $-- $(636) $2,861
Income tax
adjustments 1,377 2,663 1,006 5,676 (3,558)
Non-GAAP income tax
expense (benefit) $1,705 $1,348 $1,006 $5,040 $(697)
CONTACT: Investor Relations Investor relations The process by which the corporation communicates with its investors. , Scott Dawson of Applied Micro Circuits Corporation, +1-858-535-4217, sdawson@amcc.com; or Media/Editorial, Angela Edgerton of The Ardell Group, +1-858-792-2941, angela@ardellgroup.com, for Applied Micro Circuits Corporation Web site: http://www.amcc.com/ |
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