• Applied Micro Circuits Corporation Reports Second Quarter Fiscal 2017 Financial Results

    Source: Nasdaq GlobeNewswire / 27 Oct 2016 16:17:35   Eastern Standard Time

    Company Delivers Seventh Sequential Quarter of Revenue Growth
    GAAP Loss Narrows to $0.05 per share; Non-GAAP Earnings Total $0.02 per share

    SANTA CLARA, Calif., , Oct. 27, 2016 (GLOBE NEWSWIRE) -- Applied Micro Circuits Corporation (Nasdaq:AMCC) (“AppliedMicro”) today reported financial results for its second quarter of fiscal 2017, ended September 30, 2016.

    Q2 Fiscal 2017 Financial Information

    • Consolidated net revenue of $41.8 million, represented the seventh sequential quarter of revenue growth
    • GAAP net loss narrowed significantly to $4.6 million or $0.05 per share, as compared with a GAAP net loss of $10.5 million or $0.12 per share in the previous quarter
    • Non-GAAP net income improved to $2.1 million, or $0.02 per share, as compared with non-GAAP net loss of $2.5 million, or $0.03 per share in the previous quarter

    Commenting on Applied Micro’s fiscal 2017 second quarter results, Dr. Paramesh Gopi, President and Chief Executive Officer, said, “In the second quarter of fiscal 2017 we achieved our seventh consecutive quarter of revenue growth. Our Connectivity business once again drove the improvement in top line results, and higher gross margins combined with greater operating efficiencies led to a return to profitability on a non-GAAP basis.” 

    "We continue to lead the optical market with our PAM4 single lambda 100/400G FinFET technology, which is now slated to become the industry standard for data center and enterprise connectivity. Additionally, we announced the deployment of our X-Gene products in industry-leading enterprise storage platforms, and successfully taped out X-Gene 3, our third generation server processor,” 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 Webcast
    Management will host a conference call and simultaneous webcast to discuss second quarter fiscal 2017 results and business and financial outlook today, October 27, 2016, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. 

    DIAL-IN:(855) 777-0852
    PASSCODE:83882028
    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 83882028. 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 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; 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 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) 
           
      September 30,
    2016
     March 31,
    2016
      
      (unaudited)    
    ASSETS      
    Current assets:      
    Cash, cash equivalents and short-term investments $81,728  $83,845   
    Accounts receivable, net  13,552   9,265   
    Inventories  13,181   16,148   
    Other current assets  9,929   10,775   
    Total current assets  118,390   120,033   
    Property and equipment, net  12,729   13,293   
    Goodwill  11,425   11,425   
    Other assets  1,201   1,541   
    Total assets $143,745  $146,292   
    LIABILITIES AND STOCKHOLDERS' EQUITY        
    Current liabilities:      
    Accounts payable $8,843  $8,599   
    Other current liabilities  20,877   20,862   
    Total current liabilities  29,720   29,461   
    Non-current liabilities  1,067   1,793   
    Total liabilities  30,787   31,254   
    Stockholders' equity  112,958   115,038   
    Total liabilities and stockholders' equity $143,745  $146,292   
           

     

    APPLIED MICRO CIRCUITS CORPORATION  
    GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
    (in thousands, except per share data)  
    (unaudited) 
           
     Three Months Ended Six Months Ended 
     September 30,
    2016
     June 30,
    2016
     September 30,
    2015
     September 30,
    2016
     September 30,
    2015
     
    Net revenues$41,779  $41,498  $39,743  $83,277  $77,556  
    Cost of revenues 14,119   16,029   17,758   30,148   34,564  
    Gross profit 27,660   25,469   21,985   53,129   42,992  
    Operating expenses:          
    Research and development 24,037   27,485   22,411   51,522   44,028  
    Selling, general and administrative 8,342   8,699   8,373   17,041   17,137  
    Restructuring -   -   15   -   111  
    Total operating expenses 32,379   36,184   30,799   68,563   61,276  
    Operating loss (4,719)  (10,715)  (8,814)  (15,434)  (18,284) 
    Interest and other income, net 257   247   265   504   1,909  
    Loss before income taxes (4,462)  (10,468)  (8,549)  (14,930)  (16,375) 
    Income tax provision (benefit) 178   71   (488)  249   (910) 
    Net loss$(4,640) $(10,539) $(8,061) $(15,179) $(15,465) 
    Basic and diluted net loss per share:$(0.05) $(0.12) $(0.10) $(0.18) $(0.19)  
    Shares used in calculating basic and diluted net loss per share 85,984   84,980   82,176   85,486   81,680  
               

     

    APPLIED MICRO CIRCUITS CORPORATION 
    RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS) 
    (in thousands, except per share data) 
    (unaudited) 
         
     Three Months Ended Six Months Ended 
     September 30,
    2016
     June 30,
    2016
     September 30,
    2015
     September 30,
    2016
     September 30,
    2015
     
    GAAP net loss$(4,640) $(10,539) $(8,061) $(15,179) $(15,465) 
    Adjustments:          
    Stock-based compensation expense and other 6,790   8,165   5,934   14,955   12,026  
    Restructuring -   -   15   -   111  
    Reversals of impairment charges upon sales of marketable securities -   -   (267)  -   (1,694) 
    Income tax effect on non-GAAP adjustments (22)  (129)  (25)  (151)  (647) 
    Total GAAP to Non-GAAP adjustments 6,768   8,036   5,657   14,804   9,796  
    Non-GAAP net income (loss)$2,128  $(2,503) $(2,404) $(375) $(5,669) 
    Diluted non-GAAP net income (loss) per share$0.02  $(0.03) $(0.03) $(0.01) $(0.07) 
    Shares used in calculating diluted non-GAAP net income (loss) per share (*) 87,014   84,980   82,176   85,486   81,680  
    Diluted net income (loss) per share:          
    GAAP diluted net loss per share$(0.05) $(0.12) $(0.10) $(0.18) $(0.19) 
    GAAP to non-GAAP adjustments 0.07   0.09   0.07   0.17   0.12  
    Non-GAAP diluted net income (loss) per share$0.02  $(0.03) $(0.03) $(0.01) $(0.07) 
               
    (*) For the three months ended September 30, 2016, non-GAAP adjustments convert GAAP net loss to non-GAAP net income; therefore, fully dilutive shares are used in the calculation of non-GAAP diluted net income per share. 
      

     

    APPLIED MICRO CIRCUITS CORPORATION  
    SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS 
    (in thousands) 
    (unaudited) 
      
     Three Months Ended Six Months Ended  
     September 30,
    2016
     June 30,
    2016
     September 30,
    2015
     September 30,
    2016
     September 30,
    2015
     
    GROSS PROFIT:          
    GAAP gross profit$27,660  $25,469  $21,985  $53,129  $42,992   
    Stock-based compensation expense and other 172   158   116   330   209   
    Non-GAAP gross profit$27,832  $25,627  $22,101  $53,459  $43,201   
    OPERATING EXPENSES:          
    GAAP operating expenses$32,379  $36,184  $30,799  $68,563  $61,276   
    Stock-based compensation expense and other (6,618)  (8,007)  (5,818)  (14,625)  (11,817)  
    Restructuring -   -   (15)  -   (111)  
    Non-GAAP operating expenses$25,761  $28,177  $24,966  $53,938  $49,348   
    INTEREST AND OTHER INCOME, NET          
    GAAP interest and other income, net$257  $247  $265  $504  $1,909   
    Reversals of impairment charges upon sales of marketable securities -   -   (267)  -   (1,694)  
    Non-GAAP interest and other income, net$257  $247  $(2) $504  $215   
    INCOME TAX EXPENSE (BENEFIT):          
    GAAP income tax expense (benefit)$178  $71  $(488) $249  $(910)  
    Income tax adjustment 22   129   25   151   647   
    Non-GAAP income tax expense$200  $200  $(463) $400  $(263)  
    RESEARCH AND DEVELOPMENT :          
    GAAP research and development$24,037  $27,485  $22,411  $51,522  $44,028   
    Stock-based compensation expense and other (4,624)  (5,993)  (3,955)  (10,617)  (8,015)  
    Non-GAAP research and development$19,413  $21,492  $18,456  $40,905  $36,013   
    SELLING, GENERAL AND ADMINISTRATIVE :          
    GAAP selling, general and administrative$8,342  $8,699  $8,373  $17,041  $17,137   
    Stock-based compensation expense and other (1,994)  (2,014)  (1,863)  (4,008)  (3,802)  
    Non-GAAP selling, general and administrative$6,348  $6,685  $6,510  $13,033  $13,335   
               

     

    APPLIED MICRO CIRCUITS CORPORATION  
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
    (in thousands) 
    (unaudited) 
         
     Three Months Ended Six Months Ended  
     September 30,
    2016
     June 30,
    2016
     September 30,
    2015
     September 30,
    2016
     September 30,
    2015
      
    Operating activities:           
    Net loss$(4,640) $(10,539) $(8,061) $(15,179) $(15,465)  
    Adjustments to reconcile net loss to net cash  provided by operating activities:           
    Depreciation 1,570   1,570   1,833   3,140   3,671   
    Amortization of bond premium 174   226   -   400   -   
    Stock-based compensation expense 6,696   8,165   5,934   14,861   12,026   
    Tax effect on other comprehensive loss 19   (94)  -   (75)  -   
    Loss (gain) on short-term investments and other, net 137   (26)  (132)  111   (1,587)  
    Changes in operating assets and liabilities:           
    Accounts receivable (4,389)  102   (1,099)  (4,287)  (217)  
    Inventories (584)  3,552   (574)  2,968   3,149   
    Other assets 1,113   (70)  (355)  1,042   2,109   
    Accounts payable 2,767   (2,382)  1,095   384   (2,358)  
    Accrued payroll and other accrued liabilities (101)  1,077   (50)  977   170   
    Veloce accrued liability (3,660)  (8)  (25)  (3,668)  (90)  
    Deferred revenue (12)  1   (30)  (10)  (23)  
    Net cash provided by (used for) operating activities (910)  1,574   (1,464)  664   1,385   
    Investing activities:           
    Proceeds from sales and maturities of short-term investments 9,684   18,461   40,403   28,145   47,847   
    Purchases of short-term investments (11,062)  (17,739)  (62,573)  (28,801)  (63,702)  
    Proceeds from sale of property and equipment -   2   6   2   31   
    Purchases of property and equipment (761)  (2,547)  (492)  (3,308)  (807)  
    Net cash used for investing activities (2,139)  (1,823)  (22,656)  (3,962)  (16,631)  
    Financing activities:           
    Proceeds from issuances of common stock 1,744   32   1,112   1,776   1,245   
    Funding of restricted stock units withheld for taxes and other (431)  (623)  (207)  (1,054)  (1,419)  
    Net cash provided by (used for) financing activities 1,313   (591)  905   722   (174)  
    Net decrease in cash and cash equivalents (1,736)  (840)  (23,215)  (2,576)  (15,420)  
    Cash and cash equivalents at beginning of the period 24,225   25,065   44,290   25,065   36,495  
    Cash and cash equivalents at end of the period$22,489  $24,225  $21,075  $22,489  $21,075  
               


    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 

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