AMCC Applied Micro Circuits Corp.

Applied Micro Circuits Corporation (Nasdaq:AMCC) (“AppliedMicro”) today reported its financial results for the fiscal fourth quarter and full year ended March 31, 2016.

Q4 Fiscal 2016 Financial Information

• Consolidated net revenue of $41.1 million, representing the fifth sequential quarter of revenue growth
• GAAP net loss of $8.9 million or $0.11 per share
• Non-GAAP net loss narrows to $1.4 million, or $0.02 per share

Full Year Fiscal 2016 Financial Information

• Consolidated net revenue of $159.3 million
• GAAP net loss of $32.6 million, or $0.39 per share
• Non-GAAP net loss improves to $9.2 million, or $0.11 per share
• Total cash, cash equivalents and short-term investments of approximately $83.8 million as of March 31, 2016

Commenting on Applied Micro’s fiscal 2016 fourth quarter and full year operations, Dr. Paramesh Gopi, President and Chief Executive Officer, said, “We are pleased to announce another strong quarter of solid financial results. Fourth quarter fiscal 2016 revenue of $41.1 million represents our fifth consecutive quarter of improving sales, and was driven by strength in our Connectivity business and driven by our ability to deliver 16nm PAM4 solutions to our customers. Overall, fiscal 2016 was a very important year for Applied Micro, highlighted by multiple Tier One X-Gene deployments, our launch of X-Gene 3, and our leadership in 100Gbps PAM4 for data center interconnectivity.” 

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 fourth quarter and full year fiscal 2016 results and business and financial outlook today, April 28, 2016, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.  

DIAL-IN:	(855) 777-0852
PASSCODE:	81179007
WEBCAST:	Investor Relations section of the Company’s website at www.apm.com

A replay of the call will be available starting at 9:00 PM Eastern Time and can be accessed by dialing 855-859-2056 or 404-537-3406 and using the access code 81179007. 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 Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, 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)
					March 31,				March 31,
						2016				2015
					(unaudited)
	ASSETS
	Current assets:
		Cash, cash equivalents and short-term investments			$	83,845			$	75,358
		Accounts receivable, net				9,265				12,407
		Inventories				16,148				23,514
		Other current assets				10,775				16,840
			Total current assets			120,033				128,119
	Property and equipment, net					13,293				16,749
	Goodwill					11,425				11,425
	Other assets					1,541				2,570
			Total assets		$	146,292			$	158,863
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Current liabilities:
		Accounts payable				8,599			$	13,896
		Other current liabilities				20,862				17,571
			Total current liabilities			29,461				31,467
	Non-current liabilities					1,793				4,291
	Stockholders' equity					115,038				123,105
			Total liabilities and stockholders' equity		$	146,292			$	158,863

 

	APPLIED MICRO CIRCUITS CORPORATION
	GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	(in thousands, except per share data)
	(unaudited)
					Three Months Ended													Year Ended
					March 31,				December 31,					March 31,				March 31,				March 31,
						2016				2015					2015				2016				2015
	Net revenues				$	41,108			$	40,623				$	37,048			$	159,287			$	165,011
	Cost of revenues					16,934				18,241					16,482				69,739				69,297
	Gross profit					24,174				22,382					20,566				89,548				95,714
	Operating expenses:
		Research and development				25,113				22,377					24,583				91,518				107,220
		Selling, general and administrative				8,138				8,232					7,959				33,507				33,643
		Amortization of purchased intangible assets				-				-					-				-				104
		Restructuring				(57	)			(29	)				4,098				25				5,421
			Total operating expenses			33,194				30,580					36,640				125,050				146,388
	Operating loss					(9,020	)			(8,198	)				(16,074	)			(35,502	)			(50,674	)
	Interest and other income (expense), net					229				169					1,029				2,307				(292	)
	Loss before income taxes					(8,791	)			(8,029	)				(15,045	)			(33,195	)			(50,966	)
	Income tax provision (benefit)					116				170					99				(624	)			1,092
	Net loss				$	(8,907	)		$	(8,199	)			$	(15,144	)		$	(32,571	)		$	(52,058	)
	Basic and diluted net loss per share:				$	(0.11	)		$	(0.10	)			$	(0.19	)		$	(0.39	)		$	(0.66	)
	Shares used in calculating basic and diluted net loss per share					84,127				83,191					80,667				82,668				78,814

 

	APPLIED MICRO CIRCUITS CORPORATION
	RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
	(in thousands, except per share data)
	(unaudited)
					Three Months Ended												Year Ended
					March 31,				December 31,				March 31,				March 31,				March 31,
						2016				2015				2015				2016				2015
	GAAP net loss				$	(8,907	)		$	(8,199	)		$	(15,144	)		$	(32,571	)		$	(52,058	)
	Adjustments:
		Stock-based compensation expense				7,637				6,141				4,002				25,804				18,305
		Amortization of purchased intangible assets				-				-				-				-				104
		Veloce acquisition consideration				-				-				2,090				-				9,230
		Restructuring				(57	)			(29	)			4,098				25				5,421
		Impairment of strategic investments				-				-				500				-				3,000
		Reversals of impairment charges upon sales of marketable securities				-				-				(1,176	)			(1,694	)			(1,334	)
		Income tax effect on non-GAAP adjustments				(84	)			(30	)			(151	)			(761	)			(458	)
		Total GAAP to non-GAAP adjustments				7,496				6,082				9,363				23,374				34,268
	Non-GAAP net loss				$	(1,411	)		$	(2,117	)		$	(5,781	)		$	(9,197	)		$	(17,790	)
	Diluted non-GAAP net loss per share				$	(0.02	)		$	(0.03	)		$	(0.07	)		$	(0.11	)		$	(0.23	)
	Shares used in calculating diluted non-GAAP net loss per share					84,127				83,191				80,667				82,668				78,814
	Diluted net loss per share:
		GAAP diluted net loss per share			$	(0.11	)		$	(0.10	)		$	(0.19	)		$	(0.39	)		$	(0.66	)
		GAAP to non-GAAP adjustments				0.09				0.07				0.12				0.28				0.43
		Non-GAAP diluted net loss per share			$	(0.02	)		$	(0.03	)		$	(0.07	)		$	(0.11	)		$	(0.23	)

 

	APPLIED MICRO CIRCUITS CORPORATION
	SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
	(in thousands)
	(unaudited)
						Three Months Ended													Year Ended
						March 31,				December 31,				March 31,					March 31,				March 31,
							2016				2015				2015					2016				2015
	GROSS PROFIT:
	GAAP gross profit					$	24,174			$	22,382			$	20,566				$	89,548			$	95,714
	Stock-based compensation expense						172				140				69					521				289
	Non-GAAP gross profit					$	24,346			$	22,522			$	20,635				$	90,069			$	96,003
	OPERATING EXPENSES:
	GAAP operating expenses					$	33,194			$	30,580			$	36,640				$	125,050			$	146,388
	Stock-based compensation expense						(7,465	)			(6,001	)			(3,933	)				(25,283	)			(18,016	)
	Amortization of purchased intangible assets						-				-				-					-				(104	)
	Veloce acquisition consideration						-				-				(2,090	)				-				(9,230	)
	Restructuring						57				29				(4,098	)				(25	)			(5,421	)
	Non-GAAP operating expenses					$	25,786			$	24,608			$	26,519				$	99,742			$	113,617
	INTEREST AND OTHER INCOME, NET
	GAAP interest and other income (expense), net					$	229			$	169			$	1,029				$	2,307			$	(292	)
	Impairment of strategic investments						-				-				500					-				3,000
	Reversals of impairment charges upon sales of marketable securities						-				-				(1,176	)				(1,694	)			(1,334	)
	Non-GAAP interest and other income, net					$	229			$	169			$	353				$	613			$	1,374
	INCOME TAX (BENEFIT) EXPENSE:
	GAAP income tax expense (benefit)					$	116			$	170			$	99				$	(624	)		$	1,092
	Income tax adjustment						84				30				151					761				458
	Non-GAAP income tax expense					$	200			$	200			$	250				$	137			$	1,550
	RESEARCH AND DEVELOPMENT:
	GAAP research and development					$	25,113			$	22,377			$	24,584				$	91,518			$	107,220
	Stock-based compensation expense						(5,503	)			(4,500	)			(2,619	)				(18,018	)			(11,658	)
	Veloce acquisition consideration						-				-				(2,090	)				-				(9,230	)
	Non-GAAP research and development					$	19,610			$	17,877			$	19,875				$	73,500			$	86,332
	SELLING, GENERAL AND ADMINISTRATIVE:
	GAAP selling, general and administrative					$	8,138			$	8,232			$	7,959				$	33,507			$	33,643
	Stock-based compensation expense						(1,962	)			(1,501	)			(1,314	)				(7,265	)			(6,358	)
	Non-GAAP selling, general and administrative					$	6,176			$	6,731			$	6,645				$	26,242			$	27,285

 

	APPLIED MICRO CIRCUITS CORPORATION
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	(in thousands)
	(unaudited)
								Three Months Ended												Year Ended
								March 31,				December 31,				March 31,				March 31,				March 31,
									2016				2015				2015				2016				2015
	Operating activities:
		Net loss						$	(8,907	)		$	(8,199	)		$	(15,144	)		$	(32,571	)		$	(52,058	)
		Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
			Depreciation						1,891				2,028				1,957				7,590				8,555
			Amortization of purchased intangible assets						-				-				-				-				104
			Amortization of bond premium						258				429				-				687				-
			Stock-based compensation expense						7,637				6,141				4,002				25,804				18,305
			Veloce acquisition consideration						-				-				2,090				-				9,230
			Tax effect on other comprehensive loss						49				-				160				49				126
			Non-cash restructuring charges						-				-				2,601				-				2,615
			Impairment of strategic investments						-				-				500				-				3,000
			Loss (gain) on short-term investments and other, net						7				(1	)			(1,216	)			(1,581	)			(1,317	)
		Changes in operating assets and liabilities:
			Accounts receivable						3,187				172				6,840				3,142				12,771
			Inventories						3,533				700				698				7,382				(4,573	)
			Other assets						3,891				754				(705	)			6,754				(1,440	)
			Accounts payable						(4,248	)			992				(6,193	)			(5,614	)			(9,911	)
			Accrued payroll and other accrued liabilities						(1,018	)			168				(2,200	)			(680	)			(3,127	)
			Veloce accrued liability						(9	)			(9	)			(169	)			(108	)			(9,150	)
			Deferred revenue						(7	)			(39	)			36				(69	)			(152	)
			Net cash provided by (used for) operating activities						6,264				3,136				(6,743	)			10,785				(27,022	)
	Investing activities:
		Proceeds from sales and maturities of short-term investments							5,487				10,380				11,142				63,714				16,340
		Purchases of short-term investments							(6,443	)			(14,319	)			(17,165	)			(84,464	)			(19,887	)
		Proceeds from sale of property and equipment							-				-				-				31				1
		Purchases of property and equipment and other assets							(562	)			(1,232	)			(2,481	)			(2,601	)			(9,772	)
		Proceeds from sale of TPack							-				-				-				-				3,353
			Net cash used for investing activities						(1,518	)			(5,171	)			(8,504	)			(23,320	)			(9,965	)
	Financing activities:
		Proceeds from issuances of common stock							1,736				(2	)			1,964				2,979				3,854
		Funding of restricted stock units withheld for taxes							(187	)			(268	)			(302	)			(1,874	)			(1,911	)
			Net cash provided by (used for) financing activities						1,549				(270	)			1,662				1,105				1,943
	Net increase (decrease) in cash and cash equivalents								6,295				(2,305	)			(13,585	)			(11,430	)			(35,044	)
	Cash and cash equivalents at the beginning of the period								18,770				21,075				50,080				36,495				71,539
	Cash and cash equivalents at the end of the period							$	25,065			$	18,770			$	36,495			$	25,065			$	36,495

CONTACT:

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


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