Applied Micro Circuits Corporation (ticker: AMCC, exchange: NASDAQ Global Market (.O))
News Release -
24-Apr-2003
Applied Micro Circuits Corporation Announces Fourth Quarter Fiscal 2003 Financial ResultsSAN DIEGO, Apr 24, 2003 /PRNewswire-FirstCall via COMTEX/ -- Applied Micro Circuits Corporation (Nasdaq: AMCC) today reported its financial
results for the fourth quarter of fiscal 2003.
Net revenues for the fourth quarter of fiscal 2003 were $20.1 million,
compared to $30.1 million for the fourth quarter of fiscal 2002 and
$21.1 million for the third quarter of fiscal 2003.
The net loss for the fourth quarter of fiscal 2003 on a generally accepted
accounting principles (GAAP) basis, was $229.1 million or $0.76 per share,
compared with a net loss of $90.3 million or $0.30 per share for the fourth
quarter of fiscal 2002, and a net loss of $39.1 million or $0.13 per share in
the third quarter of fiscal 2003. The pro forma net loss for the fourth
quarter of fiscal 2003 was $15.0 million or $0.05 per share, compared to the
pro forma net loss of $17.5 million or $0.06 per share in the fourth quarter
of fiscal 2002, and the pro forma net loss of $15.1 million or $0.05 per share
in the third quarter of fiscal 2003.
Net revenues for the year ended March 31, 2003 were $101.6 million, down
34% from the $152.8 million reported for the year ended March 31, 2002.
The GAAP net loss for the year ended March 31, 2003 was $745.5 million or
$2.47 per share, compared to the net loss of $3.6 billion or $12.08 per share
for the year ended March 31, 2002. The pro forma net loss for the year ended
March 31, 2003 was $56.6 million or $0.19 per share, compared with the pro
forma net loss of $57.0 million or $0.19 per share for the year ended
March 31, 2002.
In the fourth quarter of fiscal 2003, the Company performed the required
annual impairment review of its goodwill. As a result, the Company recorded a
non-cash goodwill impairment charge of $186.4 million. In addition, the
Company recorded a $1.6 million charge for impairment of its strategic equity
investments and a $1.8 million charge for restructuring costs associated with
the recently announced organizational realignment and additional costs
associated with the closure of the Company's wafer fabrication facility which
was announced in the first quarter of fiscal 2003.
The Company expects to record additional restructuring charges in the
first quarter of fiscal 2004 of approximately $20 to $25 million for employee
severance costs and the consolidation and disposal of certain facilities
related to the realignment plan.
Commenting on the results, Dave Rickey, Chairman of the Board, President
and Chief Executive Officer said, "Although our results for the fourth quarter
are in line with our most recent forecast, they mark the end of what has been
a very disappointing year for the Company and our industry. Given the
prolonged downturn in our end markets and the uncertainty as to when these
markets will recover, it became evident that more drastic cost reductions were
required in order to return to profitability." Rickey continued, "The
realignment and workforce reduction announced earlier this month provide us
with a cost structure that will enable the Company to return to profitability
more quickly as well as the flexibility to pursue other markets more
aggressively."
AMCC reports its financial results in accordance with GAAP and
additionally on a non-GAAP basis referred to as pro forma. These pro forma
measures are not in accordance with, nor are they a substitute for, GAAP
measures and may not be consistent with the presentation used by other
companies. AMCC uses the pro forma financial measures to evaluate and manage
the Company's operations. AMCC is providing this information to investors to
allow for the performance of additional financial analysis and because it is
consistent with the financial models and estimates published by analysts who
follow the Company.
The pro forma results exclude the following items which are required by
GAAP: the cumulative effect of accounting changes, goodwill and other
purchased intangible asset impairment charges, restructuring costs, on-going
amortization of purchased intangibles, stock compensation charges related to
acquired companies, the special excess inventory charge in the first quarter
of fiscal 2002, payroll tax effects of certain stock option exercises, net
gains and losses related to strategic equity investments and real estate
transactions, and income taxes are adjusted to an estimated pro forma
effective tax rate. See the attached reconciliation of GAAP to pro forma net
loss, which quantifies the amounts excluded from pro forma basis results.
For More Information
Management will be holding a conference call today, April 24, 2003, at
2:00 pm PDT to discuss additional details regarding the Company's performance
for the fourth quarter of fiscal 2003 and to provide guidance for the first
quarter of fiscal 2004. You may access the conference call via one of the
following:
Teleconference: (719) 457-2601
Conference ID: 528194
Web Broadcast: http://www.amcc.com
Replay: (719) 457-0820 (available for 7 days following the call)
AMCC Overview
AMCC designs, develops, manufactures, and markets high-performance,
high-bandwidth silicon solutions empowering intelligent wide area networks.
AMCC utilizes a combination of digital, mixed-signal and high-frequency analog
design expertise coupled with system-level knowledge and multiple silicon
process technologies to offer integrated circuit products that enable the
transport of voice and data over fiber optic networks. The Company's system
solution portfolio includes switch fabric, traffic management, network
processor, framer/mapper, PHY and PMD devices that address the
high-performance needs of the evolving intelligent optical network. AMCC's
corporate headquarters is located in San Diego, California. Sales and
engineering offices are located throughout the world. For further information
regarding AMCC, please visit our Web site at http://www.amcc.com or call our
shareholder information line at (888) 982-AMCC (2622).
This news release contains forward-looking statements, including
statements regarding the Company's financial performance, that are subject to
certain risks and uncertainties, including, but not limited to, customer
demand for the Company's products, concentration of revenues with major
customers, 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,
manufacturing capacity and execution, the impact of the Company's operating
expense reduction program, 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, 2002, 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. The Company undertakes no duty to update this
information.
APPLIED MICRO CIRCUITS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in thousands)
ASSETS March 31, March 31,
2003 2002
Current assets:
Cash, cash equivalents and short-term
investments $1,036,140 $1,058,709
Accounts receivable, net 5,634 14,191
Inventories 7,178 16,608
Other current assets 24,592 27,653
Total current assets 1,073,544 1,117,161
Property and equipment, net 62,035 106,412
Other assets 759 487
Purchased intangibles 88,219 590,610
Strategic equity investments -- 14,523
Total assets $1,224,557 $1,829,193
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $12,689 $18,378
Other current liabilities 38,415 37,281
Current portion of long-term debt & capital
leases 1,265 1,138
Total current liabilities 52,369 56,797
Long-term debt & capital leases, less
current portion -- 1,145
Stockholders' equity 1,172,188 1,771,251
Total liabilities and stockholders' equity $1,224,557 $1,829,193
APPLIED MICRO CIRCUITS CORPORATION
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Year Ended
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2003 2002 2002 2003 2002
(unaudited)
Net revenues $20,103 $21,114 $30,112 $101,591 $152,840
Cost of revenues 13,431 14,327 34,511 61,900 150,924
Gross profit
(loss) 6,672 6,787 (4,399) 39,691 1,916
Operating expenses:
Research and
development 30,940 32,040 37,528 131,918 154,625
Selling, general
and
administrative 13,806 14,467 17,586 59,588 75,656
Stock-based
compensation
related to
acquired
companies:
Research and
development 8,274 10,467 16,651 70,831 71,757
Selling, general
and
administrative 3,490 4,286 14,833 58,510 66,425
Amortization of
goodwill and
purchased
intangibles -- -- 23,337 -- 239,563
Impairment of
goodwill and
other
intangible
assets 186,389 -- -- 390,673 3,101,817
Restructuring
costs 1,750 -- 200 7,250 11,577
Total operating
expenses 244,649 61,260 110,135 718,770 3,721,420
Operating
loss (237,977) (54,473) (114,534) (679,079) (3,719,504)
Interest and
other income,
net 8,835 15,414 9,396 35,767 32,885
Loss before
income taxes (229,142) (39,059) (105,138) (643,312) (3,686,619)
Income tax
benefit -- -- (14,872) -- (80,929)
Loss before
cumulative
effect of
accounting
change (229,142) (39,059) (90,266) (643,312) (3,605,690)
Cumulative
effect of
accounting
change -- -- -- 102,229 --
Net loss $(229,142) $(39,059) $(90,266) $(745,541) $(3,605,690)
Basic and diluted
loss per share:
Loss per share
before
cumulative
effect of
accounting
change $(0.76) $(0.13) $(0.30) $(2.14) $(12.08)
Loss per share $(0.76) $(0.13) $(0.30) $(2.47) $(12.08)
Weighted
average
shares 302,875 301,622 298,865 301,252 298,502
APPLIED MICRO CIRCUITS CORPORATION
PRO FORMA 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,
2003 2002 2002 2003 2002
Net revenues $20,103 $21,114 $30,112 $101,591 $152,840
Cost of revenues 11,579 12,355 14,738 53,077 67,831
Gross profit 8,524 8,759 15,374 48,514 85,009
Operating expenses:
Research and
development 30,940 32,040 37,498 131,914 154,548
Selling, general
and
administrative 13,806 14,467 17,487 59,588 75,352
Total operating
expenses 44,746 46,507 54,985 191,502 229,900
Operating loss (36,222) (37,748) (39,611) (142,988) (144,891)
Interest and
other income,
net 10,435 11,751 9,396 45,354 46,660
Loss before
income taxes (25,787) (25,997) (30,215) (97,634) (98,231)
Income tax
benefit (10,831) (10,918) (12,690) (41,006) (41,257)
Net loss $(14,956) $(15,079) $(17,525) $(56,628) $(56,974)
Diluted loss
per share:
Loss per share $(0.05) $(0.05) $(0.06) $(0.19) $(0.19)
Weighted average
shares 302,875 301,622 298,865 301,252 298,502
The above pro forma statements are based on the Company's consolidated
statements of operations for the periods presented. This pro forma
information is not prepared in accordance with GAAP and may not be
consistent with the presentation used by other companies. The pro forma
operating results are used by the Company's management to evaluate the
operating performance of the Company and are also consistent with the
financial models and estimates published by analysts who follow the
Company.
APPLIED MICRO CIRCUITS CORPORATION
RECONCILIATION OF GAAP TO PRO FORMA NET LOSS(unaudited)
(in thousands)
Three Months Ended Year Ended
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2003 2002 2002 2003 2002
GAAP net
loss $(229,142) $(39,059) $(90,266) $(745,541) $(3,605,690)
Adjustments:
Stock-based
compensation
related to
acquired
companies 12,044 15,153 36,673 131,877 147,051
Amortization of
goodwill and
other
intangibles 1,572 1,572 37,921 6,287 297,902
Impairments of
goodwill and
other
intangibles 186,389 -- -- 390,673 3,101,817
Cumulative
effect of
accounting
change -- -- -- 102,229 --
Restructuring
costs 1,750 -- 200 7,250 11,577
Strategic
investment
gains (losses) 1,600 -- -- 13,250 13,775
Real estate
transaction gain -- (3,663) -- (3,663) --
Special excess
inventory charge -- -- -- -- 15,859
Payroll taxes on
stock option
exercises -- -- 129 4 407
Income tax
adjustments 10,831 10,918 (2,182) 41,006 (39,672)
Total GAAP to pro
forma
adjustments 214,186 23,980 72,741 688,913 3,548,716
Pro forma net
loss $(14,956) $(15,079) $(17,525) $(56,628) $(56,974)
APPLIED MICRO CIRCUITS CORPORATION
SCHEDULE OF SELECTED PRO FORMA ADJUSTMENTS
(unaudited)
(in thousands)
The following schedule reconciles selected line items from the GAAP basis
statements of operations to the pro forma statements of operations.
Three Months Ended Year Ended
Mar 31, Dec 31, Mar 31, Mar 31, Mar 31,
2003 2002 2002 2003 2002
GROSS PROFIT
(LOSS):
GAAP gross profit
(loss) $6,672 $6,787 $(4,399) $39,691 $1,916
Amortization of
purchased
intangibles 1,572 1,572 14,584 6,287 58,339
Excess inventory
charge -- -- -- -- 15,859
Stock-based
compensation
related to
acquired
companies 280 400 5,189 2,536 8,869
Payroll taxes on
stock options -- -- -- -- 26
Pro forma gross
profit $8,524 $8,759 $15,374 $48,514 $85,009
OPERATING EXPENSES:
GAAP operating
expenses $244,649 $61,260 $110,135 $718,770 $3,721,420
Amortization of
goodwill and
purchased
intangibles -- -- 23,337 -- 239,563
Impairment of
goodwill and
other
intangible
assets 186,389 -- -- 390,673 3,101,817
Stock-based
compensation
related to
acquired
companies 11,764 14,753 31,484 129,341 138,182
Restructuring
costs 1,750 -- 200 7,250 11,577
Payroll taxes
on stock options -- -- 129 4 381
Pro forma
operating
expenses $44,746 $46,507 $54,985 $191,502 $229,900
Other income
(expense), net:
GAAP other income
(expense), net $8,835 $15,414 $9,396 $35,767 $32,885
Realized gains
on strategic
equity
investments -- -- -- -- (1,225)
Valuation
allowance for
strategic
equity
investments 1,600 -- -- 13,250 15,000
Real estate
transaction gain -- (3,663) -- (3,663) --
Pro forma other
income (expense),
net $10,435 $11,751 $9,396 $45,354 $46,660
SOURCE Applied Micro Circuits Corporation
Investor Relations, Debra Hart of Applied Micro Circuits
Corporation, +1-858-535-4217, dhart@amcc.com; or Media/Editorial, Angela
Edgerton of The Ardell Group, +1-858-792-2941, angela@ardellgroup.com, for
Applied Micro Circuits Corporation
http://www.amcc.com
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Applied Micro Circuits Corporation
