Applied Micro Circuits Corporation (Nasdaq:AMCC) (“AppliedMicro”) today reported its financial results for the fiscal 2016 third quarter ended December 31, 2015.

Fiscal Q3 2016 Financial Information

  • Consolidated net revenue of $40.6 million, representing the fourth sequential quarter of revenue growth
  • GAAP net loss of $8.2 million or $0.10 per share
  • Non-GAAP net loss narrows to $2.1 million or $0.03 per share
  • Total cash, cash equivalents and short-term investments of approximately $76.4 million as of December 31, 2015

Commenting on AppliedMicro’s fiscal 2016 third quarter operations, Dr. Paramesh Gopi, President and Chief Executive Officer, said, “On top of the solid execution of our base connectivity business, and with overall financial results once again demonstrating continued and consistent improvement, we are seeing clear evidence of the ongoing traction of both our X-Gene® and HeliX® families of computing products, and our X-Weave® family of connectivity products.”

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 third quarter fiscal 2016 results and business and financial outlook today, January 28, 2016, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.

DIAL-IN:   (855) 777-0852
    (631) 485-4854
PASSCODE:   20258064
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 20258064. The replay will be available through February 4, 2016.

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  September 30, 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)
       
  December 31,   March 31,
    2015       2015  
  (unaudited)    
ASSETS      
Current assets:      
Cash, cash equivalents and short-term investments $   76,443     $   75,358  
Accounts receivable, net     12,452         12,407  
Inventories     19,692         23,514  
Other current assets     14,578         16,840  
Total current assets     123,165         128,119  
Property and equipment, net     13,348         16,749  
Goodwill     11,425         11,425  
Other assets     1,626         2,570  
Total assets $   149,564     $   158,863  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Accounts payable     12,876     $   13,896  
Other current liabilities     20,114         17,571  
Total current liabilities     32,990         31,467  
Non-current liabilities     781       4,291  
Stockholders' equity     115,793         123,105  
Total liabilities and stockholders' equity $   149,564     $   158,863  
       
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
                   
  Three Months Ended   Nine Months Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
    2015       2015       2014       2015       2014  
Net revenues $   40,623     $   39,743     $   36,747     $   118,179     $   127,964  
Cost of revenues     18,241         17,758         14,842         52,805         52,815  
Gross profit     22,382         21,985         21,905         65,374         75,149  
Operating expenses:                  
Research and development     22,377         22,411         24,721         66,405         82,636  
Selling, general and administrative     8,232         8,373         8,707         25,369         25,684  
Amortization of purchased intangible assets     -         -         -         -         105  
Restructuring     (29 )       15         221         82         1,322  
Total operating expenses     30,580         30,799         33,649         91,856         109,747  
Operating loss     (8,198 )       (8,814 )       (11,744 )       (26,482 )       (34,598 )
Interest and other income (expense), net     169         265         475         2,078         (1,322 )
Loss before income taxes     (8,029 )       (8,549 )       (11,269 )       (24,404 )       (35,920 )
Income tax provision (benefit)      170         (488 )       862         (740 )       993  
Net loss $   (8,199 )   $   (8,061 )   $   (12,131 )   $   (23,664 )   $   (36,913 )
                   
Basic and diluted net loss per share: $   (0.10 )   $   (0.10 )   $   (0.15 )   $   (0.29 )   $   (0.47 )
Shares used in calculating basic and diluted net loss per share     83,191         82,176         78,920         82,186         78,442  
                   
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
(in thousands, except per share data)
(unaudited)
                       
  Three Months Ended     Nine Months Ended
  December 31,   September 30,     December 31,     December 31,   December 31,
    2015       2015         2014         2015       2014  
                       
GAAP net loss $   (8,199 )   $   (8,061 )     $   (12,131 )     $   (23,664 )   $   (36,913 )
Adjustments:                      
Stock-based compensation expense     6,141         5,934           4,857           18,167         14,303  
Amortization of purchased intangible assets     -         -           -           -         105  
Veloce acquisition consideration     -         -           -            -         7,140  
Restructuring     (29 )       15           221           82         1,322  
Impairment of a strategic investment     -         -           -           -         2,500  
Reversals of impairment charges upon sales of marketable securities     -         (267 )         (129 )         (1,694 )       (158 )
Income tax effect on non-GAAP adjustments     (30 )       (25 )         62           (677 )       (307 )
Total GAAP to non-GAAP adjustments     6,082         5,657           5,011           15,878         24,905  
Non-GAAP net loss $   (2,117 )   $   (2,404 )     $   (7,120 )     $   (7,786 )   $   (12,008 )
                       
Diluted non-GAAP net loss per share $   (0.03 )   $   (0.03 )     $   (0.09 )     $   (0.09 )   $   (0.15 )
                       
Shares used in calculating diluted non-GAAP net loss per share      83,191         82,176           78,920           82,186         78,442  
                       
Diluted net loss per share:                      
GAAP diluted net loss per share $   (0.10 )   $   (0.10 )     $   (0.15 )     $   (0.29 )   $   (0.47 )
GAAP to non-GAAP adjustments   0.07       0.07         0.06         0.19       0.32  
Non-GAAP diluted net loss per share $   (0.03 )   $   (0.03 )     $   (0.09 )     $   (0.09 )   $   (0.15 )
                       
Reconciliation of shares used in calculating non-GAAP net loss per share:                      
Shares used in calculating the basic net loss per share     83,191         82,176           78,920           82,186         78,442  
Adjustment for dilutive securities     -         -           -           -         -  
Shares used in calculating diluted non-GAAP net loss per share     83,191         82,176           78,920           82,186         78,442  
                       
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS
(in thousands)
(unaudited)
                         
The following schedule reconciles selected line items on the condensed consolidated statements of operations from the GAAP basis to the non-GAAP basis:
                         
    Three Months Ended     Nine Months Ended
    December 31,   September 30,     December 31,     December 31,   December 31,
      2015       2015         2014         2015       2014  
GROSS PROFIT:                        
GAAP gross profit   $   22,382     $   21,985       $   21,905       $   65,374     $   75,149  
Stock-based compensation expense       140         116           72           349         221  
Non-GAAP gross profit   $   22,522     $   22,101       $   21,977       $   65,723     $   75,370  
                         
OPERATING EXPENSES:                        
GAAP operating expenses   $   30,580     $   30,799       $   33,649       $   91,856     $   109,747  
Stock-based compensation expense       (6,001 )       (5,818 )         (4,785 )         (17,818 )       (14,082 )
Amortization of purchased intangible assets       -         -           -           -         (105 )
Veloce acquisition consideration       -         -           -           -         (7,140 )
Restructuring       29         (15 )         (221 )         (82 )       (1,322 )
Non-GAAP operating expenses   $   24,608     $   24,966       $   28,643       $   73,956     $   87,098  
                         
INTEREST AND OTHER (EXPENSE) INCOME, NET                        
GAAP interest and other income (expense), net   $   169     $   265       $   475       $   2,078     $   (1,322 )
Impairment of a strategic investment       -         -           -           -         2,500  
Reversals of impairment charges upon sales of marketable securities       -         (267 )         (129 )         (1,694 )       (158 )
Non-GAAP interest and other income (expense), net   $   169     $   (2 )     $   346       $   384     $   1,020  
                         
INCOME TAX (BENEFIT) EXPENSE:                        
GAAP income tax expense (benefit)   $   170     $   (488 )     $   862       $   (740 )   $   993  
Income tax adjustment       30         25           (62 )         677         307  
Non-GAAP income tax expense (benefit)   $   200     $   (463 )     $   800       $   (63 )   $   1,300  
                         
RESEARCH AND DEVELOPMENT:                        
GAAP research and development    $   22,377     $   22,411       $   24,721       $   66,405     $   82,636  
Stock-based compensation expense       (4,500 )       (3,955 )         (2,992 )         (12,515 )       (9,039 )
Veloce acquisition consideration       -         -           -           -         (7,140 )
Non-GAAP research and development    $   17,877     $   18,456       $   21,729       $   53,890     $   66,457  
                         
SELLING, GENERAL AND ADMINISTRATIVE:                        
GAAP selling, general and administrative    $   8,232     $   8,373       $   8,707       $   25,369     $   25,684  
Stock-based compensation expense       (1,501 )       (1,863 )         (1,793 )     $   (5,303 )       (5,043 )
Non-GAAP selling, general and administrative    $   6,731     $   6,510       $   6,914       $   20,066     $   20,641  
                         
APPLIED MICRO CIRCUITS CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(in thousands)  
(unaudited)  
                       
    Three Months Ended   Nine Months Ended  
    December 31,   September 30,   December 31,   December 31,   December 31,  
      2015       2015       2014       2015       2014    
Operating activities:                      
Net loss   $   (8,199 )   $   (8,061 )   $   (12,131 )   $   (23,664 )   $   (36,913 )  
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:                    
Depreciation       2,028         1,833         2,223         5,699         6,598    
Amortization of purchased intangible assets       -         -         -         -         105    
Amortization of bond premium       429         -         -         429         -    
Stock-based compensation expense       6,141         5,934         4,857         18,167         14,303    
Veloce acquisition consideration       -         -         -          -         7,140    
Tax effect on other comprehensive loss       -         -         50         -         (34 )  
Non-cash restructuring charges       -         -         14         -         14    
Impairment of a strategic investment       -         -         -         -         2,500    
Gain on short-term investments and other, net        (1 )       (132 )       (123 )       (1,588 )       (101 )  
Changes in operating assets and liabilities:                   -        
Accounts receivable       172         (1,099 )       (1,366 )       (45 )       5,931    
Inventories       700         (574 )       (6,605 )       3,849         (5,271 )  
Other assets        754         (355 )       (1,336 )       2,863         (736 )  
Accounts payable        992         1,095         8,375         (1,366 )       (3,719 )  
Accrued payroll and other accrued liabilities        168         (50 )       1,662         338         (927 )  
Veloce accrued liability       (9 )       (25 )       (1,482 )       (99 )       (8,981 )  
Deferred revenue        (39 )       (30 )       (22 )       (62 )       (188 )  
Net cash provided by (used for) operating activities       3,136         (1,464 )       (5,884 )       4,521         (20,279 )  
Investing activities:                      
Proceeds from sales and maturities of short-term investments        10,380         40,403         3,278         58,227         5,198    
Purchases of short-term investments        (14,319 )       (62,573 )       (653 )       (78,021 )       (2,722 )  
Proceeds from sale of property and equipment       -         6         -         31         1    
Purchases of property and equipment and other assets       (1,232 )       (492 )       (271 )       (2,039 )       (7,291 )  
Proceeds from sale of TPack       -          -         -         -          3,353    
Net cash provided by (used for) investing activities       (5,171 )       (22,656 )       2,354         (21,802 )       (1,461 )  
Financing activities:                      
Proceeds from issuances of common stock       (2 )       1,112         27         1,243         1,890    
Funding of restricted stock units withheld for taxes       (268 )       (207 )       (363 )       (1,687 )       (1,609 )  
Net cash provided by (used for) financing activities       (270 )       905         (336 )       (444 )       281    
Net decrease in cash and cash equivalents       (2,305 )       (23,215 )       (3,866 )       (17,725 )       (21,459 )  
Cash and cash equivalents at the beginning of the period       21,075         44,290         53,946         36,495         71,539    
Cash and cash equivalents at the end of the period   $   18,770     $   21,075     $   50,080     $   18,770     $   50,080    
                       
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
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