NEWS:Applied Micro Circuits Corp. Reports Increased Revenues and Profits in Third Fiscal Quarter
SAN DIEGO--(BUSINESS WIRE)--Jan. 20, 1998--
Quarterly Revenues Up 36 Percent; Quarterly Earnings Up 111
Percent; Nine-Month Revenues Up 29 Percent; Nine-Month Earnings
Up 119 Percent; $51 Million IPO Completed
Applied Micro Circuits Corp. (AMCC) (Nasdaq:AMCC) Tuesday reported record revenues and increased net income for the third quarter of fiscal 1998, ended Dec. 31, 1997.
Net revenues in the third quarter of fiscal 1998 were $19.7 million, an increase of 36 percent over the $14.5 million reported in the third quarter of fiscal 1997. Net income for the third quarter of fiscal 1998 increased to $4 million, or 20 cents per share, compared with $1.9 million, or 10 cents per share, for the corresponding quarter of fiscal 1997.
These earnings-per-share numbers, which represent diluted earnings per share, reflect the weighted average increase in shares associated with the company's initial public offering, which was completed in the most-recent quarter.
Sequentially, net revenues for the third quarter of fiscal 1998 increased 8 percent over the $18.2 million reported in the second quarter of fiscal 1998. Net income for the third quarter was up 37 percent from the $2.9 million, or 15 cents per share, in the second quarter.
For the nine-month period ended Dec. 31, 1997, net revenues were $54.9 million, an increase of 29 percent over the $42.5 million reported for the corresponding period of the prior fiscal year. Net income for the first nine months of fiscal 1998 was $9.9 million, or 51 cents per share, compared with $4.5 million, or 24 cents per share, in the first nine months of the prior fiscal year.
Commenting on the results, Dave Rickey, president and chief executive officer of AMCC, said: ''The third quarter of fiscal 1998 was very successful. We continue to execute well on our strategy of delivering compelling products into the high-performance communications and the test-equipment markets.
''During the quarter we achieved solid bookings and revenue growth from these markets and produced increased profits from the revenue growth and effective cost management. We also completed a successful IPO, and will use some of the funds for additional manufacturing capacity.''
Third-Quarter Highlights
-- The company introduced the S3019, a highly integrated OC-12
transceiver for 622 Mbps applications.
-- AMCC's first OC-48 physical layer standard products were shipped to
beta sites.
-- The company continued to increase its fab capacity to meet projected
demand.
Initial Public Offering
During the quarter ended Dec. 31, 1997, AMCC completed a $51.1 million initial public offering. Of the gross proceeds, $28.3 million (before underwriting discounts, commissions and costs of the offering) went to the company, with the balance representing sales by stockholders.
The underwriting group was managed by BancAmerica Robertson Stephens, NationsBanc Montgomery Securities Inc. and Cowen & Co. AMCC's net proceeds from the offering are expected to be used to fund expanded manufacturing capacity and for working capital and other general corporate purposes.
AMCC's Market Opportunity
''With this successful IPO behind us,'' said Rickey, ''we are focused on the execution of our strategic vision to be the premier supplier of high-bandwidth silicon connectivity for the world's communications infrastructure.
''As the world's communications needs continue to grow, there is increasing demand for greater bandwidth. Our high-performance silicon solutions are being well received by leading communications OEMs.'' AMCC is focused on the fiber-optics-based, high-performance communications market that is being driven by increasing demand for greater bandwidth to accommodate growth in the Internet, the World Wide Web, and cellular and facsimile communications, as well as applications such as remote network access, video conferencing and higher-speed, data-intensive communication between local-area networks (LANs). The company's products serve these wide-area-network (WAN) and LAN applications.
For telecommunications markets, the company's products address the SONET/SDH- and ATM-transmission standards, and for data-communications markets, the company offers products that address the Gigabit Ethernet-, ATM- and Fibre Channel-transmission standards.
AMCC's Technology Strategy
The company uses its internal bipolar and BiCMOS manufacturing processes together with advanced CMOS processes from external foundries to provide cost-effective solutions to its customers.
These multiple silicon-process technologies, combined with the company's extensive mixed-signal design capability and its systems expertise, provide the core capabilities that the company believes give it a competitive edge in servicing the high-performance- communications market. -0-
Forward-Looking Statements
Except for historical information contained herein, the matters set forth in this news release are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward- looking statements, including such factors as the rescheduling or cancellation of orders by customers; fluctuations in the timing and amount of customer requests for product shipments; fluctuations in manufacturing yields and inventory levels; changes in product mix; the company's ability to introduce new products and technologies on a timely basis; the introduction of products and technologies by the company's competitors; the availability of external foundry capacity, purchased parts and raw materials; competitive pressures on selling prices, the timing of investments in research and development; market acceptance of the company's and its customers' products; the timing of depreciation and other expenses to be incurred by the company in connection with the expansion of its existing manufacturing facility and in connection with its new proposed facility; the timing and amount of recruiting and relocating expenses, prototyping costs and promotional expenses; costs associated with future litigation, if any, including without limitation, litigation relating to the use or ownership of intellectual property; costs associated with compliance with applicable environmental regulations; general semiconductor- industry conditions; and general economic conditions, and the risk factors that are detailed in the Final Prospectus dated Nov. 25, 1997, relating to the recent initial public offering of the company's common stock and the company's other filings with the Securities and Exchange Commission.
*T
Applied Micro Circuits Corp.
Consolidated Condensed Statements of Operations
(Unaudited) (In thousands, except per-share data)
Three months Nine months
Ended Dec. 31, Ended Dec. 31, 1997 1996 1997 1996
Net revenue $ 19,666 $ 14,509 $ 54,874 $ 42,464 Cost of revenues 8,836 7,046 25,370 22,800 Gross profit 10,830 7,463 29,504 19,664 Operating expenses: Research and development 3,337 2,256 9,339 5,668 Selling, general and
administrative 3,530 3,092 10,260 8,986
Total operating expenses 6,867 5,348 19,599 14,654 Operating income 3,963 2,115 9,905 5,010 Interest income (expense), net 143 (19) 294 5 Income before income taxes 4,106 2,096 10,199 5,015 Provision for income taxes 103 198 262 474 Net income $ 4,003 $ 1,898 $ 9,937 $ 4,541
Basic earnings per share: Earnings per share 33 cents 31 cents $ 1.20 74 cents Weighted average shares 12,042 6,168 8,253 6,145 Diluted earnings per share: Earnings per share 20 cents 10 cents 51 cents 24 cents Weighted average shares 20,364 19,072 19,652 19,047
NOTE: It is now a requirement to report two separate earnings-per- share numbers, basic EPS and diluted EPS. The basic EPS prior to the IPO did not include the preferred stock on an as-converted basis. Diluted EPS is similar in concept to primary EPS, which is the concept employed in AMCC's prospectus dated Nov. 25, 1997. Both the diluted and primary methods include the dilutive impact of employee options.
Applied Micro Circuits Corp.
Consolidated Condensed Balance-Sheet Items
($ in thousands)
Dec. 31, 1997 March 31, 1997
(Unaudited)
Assets Current assets: Cash, cash equivalents and
short-term investments $ 36,230 $ 13,597 Accounts receivable, net 10,529 8,418 Inventories 8,002 7,530 Other current assets 2,761 698
Total current assets 57,522 30,243 Property and equipment, net 15,427 10,768 Other assets 908 803 Total assets $ 73,857 $ 41,814
Liabilities and stockholders' equity Current liabilities: Accounts payable $ 5,010 $ 2,428 Other current liabilities 5,602 5,789 Current portion of long-term debt
and capital leases 2,215 2,662
Total current liabilities 12,827 10,879 Long-term capital lease obligations, less current portion 1,675 3,192 Stockholders' equity 9,355 27,743 Total liabilities and stockholders' equity $ 73,857 $ 41,814 *T
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CONTACT:
Applied Micro Circuits Corp.
Joel O. Holliday, 619/450-9333
or
Financial Relations Board, 310/442-0599
Fiona Ross/George Christy (general information)
James Hoyne (investor/analyst contact)
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