AMCC Applied Micro Circuits Corp.

Applied Micro Circuits Corporation (Nasdaq:AMCC) (“AppliedMicro”) today reported its financial results for its first quarter of fiscal 2017, ended June 30, 2016.

Q1 Fiscal 2017 Financial Information

• Consolidated net revenue of $41.5 million, representing the sixth sequential quarter of revenue growth
• GAAP net loss of $10.5 million or $0.12 per share
• Non-GAAP net loss of $2.5 million, or $0.03 per share

Commenting on Applied Micro’s fiscal 2017 first quarter results, Dr. Paramesh Gopi, President and Chief Executive Officer, said, “We are beginning fiscal 2017 with our sixth consecutive quarter of revenue growth. Our Connectivity business drove the improvement in top line results and our on-going cost reduction efforts resulted in improved gross margins.” 

"We are pleased with the progress we've made in both our base Connectivity business as well as our Computing business.  Our PAM4 single lambda 100/400G FinFET technology continues to lead the market, while our X-Gene® product line gained meaningful traction and was deployed at top hyperscale data center customers.” concluded Dr. Gopi.

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 WebcastManagement will host a conference call and simultaneous webcast to discuss first quarter fiscal 2017 results and business and financial outlook today, July 27, 2016, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. 

DIAL-IN:		(855) 777-0852
PASSCODE:		46834760
WEBCAST:		Investor Relations section of the Company’s website at www.apm.com

A replay of the call will be available starting at 8:00 PM Eastern Time and can be accessed by dialing 855-859-2056 or 404-537-3406 and using the access code 46834760. The replay will be available for seven days.

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 Santa Clara, California. www.apm.com.

(C) Copyright 2016, 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 StatementsThis 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; new product development, commercialization and customer acceptance; the development of the X-Gene and ARM ecosystems; the anticipated performance of the Company’s base business; 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, which may cause delays, reductions, rescheduling or cancellation of customer orders, successful management and retention of key personnel and service providers, market acceptance of new products and technologies, 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, 2016, 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)
				June 30,				March 31,
					2016				2016
				(unaudited)
ASSETS
Current assets:
	Cash, cash equivalents and short-term investments			$	82,311			$	83,845
	Accounts receivable, net				9,163				9,265
	Inventories				12,604				16,148
	Other current assets				10,906				10,775
		Total current assets			114,984				120,033
Property and equipment, net					13,905				13,293
Goodwill					11,425				11,425
Other assets					1,323				1,541
		Total assets		$	141,637			$	146,292
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	6,184			$	8,599
	Other current liabilities				22,974				20,862
		Total current liabilities			29,158				29,461
Non-current liabilities					1,548				1,793
		Total liabilities			30,706				31,254
Stockholders' equity					110,931				115,038
		Total liabilities and stockholders' equity		$	141,637			$	146,292

 

APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
				Three Months Ended
				June 30,				March 31,				June 30,
					2016				2016				2015
Net revenues				$	41,498			$	41,108			$	37,813
Cost of revenues					16,029				16,934				16,806
Gross profit					25,469				24,174				21,007
Operating expenses:
	Research and development				27,485				25,113				21,617
	Selling, general and administrative				8,699				8,138				8,764
	Restructuring				-				(57	)			96
		Total operating expenses			36,184				33,194				30,477
Operating loss					(10,715	)			(9,020	)			(9,470	)
Interest and other income, net					247				229				1,644
Loss before income taxes					(10,468	)			(8,791	)			(7,826	)
Income tax provision (benefit)					71				116				(422	)
Net loss				$	(10,539	)		$	(8,907	)		$	(7,404	)
Basic and diluted net loss per share:				$	(0.12	)		$	(0.11	)		$	(0.09	)
Shares used in calculating basic and diluted net loss per share					84,980				84,127				81,179

 

APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
(in thousands, except per share data)
(unaudited)
				Three Months Ended
				June 30,				March 31,				June 30,
					2016				2016				2015
GAAP net loss				$	(10,539	)		$	(8,907	)		$	(7,404	)
Adjustments:
	Stock-based compensation expense				8,165				7,637				6,092
	Restructuring				-				(57	)			96
	Reversals of impairment charges upon sales of marketable securities				-				-				(1,427	)
	Income tax effect on non-GAAP adjustments				(129	)			(84	)			(622	)
	Total GAAP to non-GAAP adjustments				8,036				7,496				4,139
Non-GAAP net loss				$	(2,503	)		$	(1,411	)		$	(3,265	)
Diluted non-GAAP net loss per share				$	(0.03	)		$	(0.02	)		$	(0.04	)
Shares used in calculating diluted non-GAAP net loss per share					84,980				84,127				81,179
Diluted net loss per share:
	GAAP diluted net loss per share			$	(0.12	)		$	(0.11	)		$	(0.09	)
	GAAP to non-GAAP adjustments				0.09				0.09				0.05
	Non-GAAP diluted net loss per share			$	(0.03	)		$	(0.02	)		$	(0.04	)

 

APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
(in thousands)
(unaudited)
					Three Months Ended
					June 30,				March 31,				June 30,
						2016				2016				2015
GROSS PROFIT:
GAAP gross profit					$	25,469			$	24,174				21,007
Stock-based compensation expense						158				172				93
Non-GAAP gross profit					$	25,627			$	24,346			$	21,100
OPERATING EXPENSES:
GAAP operating expenses					$	36,184			$	33,194			$	30,477
Stock-based compensation expense						(8,007	)			(7,465	)			(5,999	)
Restructuring						-				57				(96	)
Non-GAAP operating expenses					$	28,177			$	25,786			$	24,382
INTEREST AND OTHER INCOME, NET
GAAP interest and other income, net					$	247			$	229			$	1,644
Reversals of impairment charges upon sales of marketable securities						-				-				(1,427	)
Non-GAAP interest and other income, net					$	247			$	229			$	217
INCOME TAX EXPENSE:
GAAP income tax expense					$	71			$	116			$	(422	)
Income tax adjustment						129				84				622
Non-GAAP income tax expense					$	200			$	200			$	200
RESEARCH AND DEVELOPMENT:
GAAP research and development					$	27,485			$	25,113			$	21,617
Stock-based compensation expense						(5,993	)			(5,503	)			(4,060	)
Non-GAAP research and development					$	21,492			$	19,610			$	17,557
SELLING, GENERAL AND ADMINISTRATIVE:
GAAP selling, general and administrative					$	8,699			$	8,138			$	8,764
Stock-based compensation expense						(2,014	)			(1,962	)			(1,939	)
Non-GAAP selling, general and administrative					$	6,685			$	6,176			$	6,825

 

APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
						Three Months Ended
						June 30,				March 31,				June 30,
							2016				2016				2015
Operating activities:
	Net loss					$	(10,539	)		$	(8,907	)		$	(7,404	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Depreciation					1,570				1,891				1,838
		Amortization of bond premium					226				258				-
		Stock-based compensation expense					8,165				7,637				6,092
		Tax effect on other comprehensive loss					(94	)			49				-
		Loss (gain) on short-term investments and other, net					(26	)			7				(1,455	)
	Changes in operating assets and liabilities:
		Accounts receivable					102				3,187				882
		Inventories					3,552				3,533				3,723
		Other assets					(70	)			3,891				2,464
		Accounts payable					(2,382	)			(4,248	)			(3,453	)
		Accrued payroll and other accrued liabilities					1,077				(1,018	)			220
		Veloce accrued liability					(8	)			(9	)			(65	)
		Deferred revenue					1				(7	)			7
			Net cash provided by operating activities				1,574				6,264				2,849
Investing activities:
	Proceeds from sales and maturities of short-term investments						18,461				5,487				7,444
	Purchases of short-term investments						(17,739	)			(6,443	)			(1,129	)
	Proceeds from sale of property and equipment						2				-				25
	Purchases of property and equipment						(2,547	)			(562	)			(315	)
			Net cash provided by (used for) investing activities				(1,823	)			(1,518	)			6,025
Financing activities:
	Proceeds from issuance of common stock						32				1,736				133
	Funding of restricted stock units withheld for taxes and other						(623	)			(187	)			(1,212	)
			Net cash provided by (used for) financing activities				(591	)			1,549				(1,079	)
Net increase (decrease) in cash and cash equivalents							(840	)			6,295				7,795
Cash and cash equivalents at beginning of the period							25,065				18,770				36,495
Cash and cash equivalents at end of the period						$	24,225			$	25,065			$	44,290

CONTACT: 
Investor Relations Contact:                     
Suzanne Schmidt                         
Phone: (415) 217-4962                   
E-Mail: suzanne@blueshirtgroup.com

Media Relations Contact:
Mike Major
Phone (408) 542-8831
E-mail: mmajor@apm.com