Applied Micro Circuits Corporation Reports Second Quarter Fiscal 2012 Financial Results

SUNNYVALE, Calif., Nov. 1, 2011 (GLOBE NEWSWIRE) -- Applied Micro Circuits
Corporation (Nasdaq:AMCC) ("AppliedMicro") today reported its financial results
for the second quarter of fiscal 2012, ended September 30, 2011.

-- Q2 2012 net revenues were $64.9 million, up approximately 7%
sequentially and down approximately 2% year over year.

-- Q2 2012 GAAP net loss was $1.2 million or $0.02 per share compared to
net loss of $6.9 million or $0.11 per share for the first quarter of
fiscal 2012.

-- Q2 2012 non-GAAP EPS was $0.02 per share on net income of $1.1 million,
compared to $0.01 per share on net income of $0.6 million, from
continuing operations, for the first quarter of fiscal 2012.

-- Total cash, cash equivalents and short-term investments was
approximately $114 million as of September 30, 2011 compared to $142
million as of June 30, 2011. The decrease in cash is mainly due to stock
buybacks and investment in working capital.

-- During the quarter, the Company announced its progress on its
revolutionary ARM 64-bit processor core.

Net revenues for the second quarter of fiscal 2012 were $64.9 million compared
to $60.8 million in the first quarter of fiscal 2012, representing a sequential
increase of 6.7% and a decrease of 1.6% over the $66.0 million in net revenues
reported in the second quarter of fiscal 2011. Net revenues for the first six
months of fiscal 2012 were $125.8 million, compared to $126.8 million for the
same period last year, representing a decrease of 0.8%.

The net loss on a generally accepted accounting principles (GAAP) basis for the
second quarter and for the first six months of fiscal 2012 were $1.2 million and
$8.0 million or $0.02 and $0.13 per share, respectively. This compares with a
net loss of $6.9 million or $0.11 per share for the first quarter of fiscal 2012
and net income of $3.6 million or $0.05 per diluted share and net income of $5.0
million or $0.07 per diluted share for the second quarter and first six months
of fiscal 2011, respectively.

Non-GAAP income from continuing operations for the second quarter and the first
six months of fiscal 2012 was $1.1 million or $0.02 per diluted share and $1.7
million or $0.03 per diluted share, respectively, compared to non-GAAP income
from continuing operations of $0.6 million or $0.01 per diluted share in the
first quarter of fiscal 2012 and non-GAAP net income from continuing operations
of $10.7 million or $0.16 per diluted share and $19.0 million or $0.28 per
diluted share for the second quarter and first six months of fiscal 2011,
respectively.

"We executed quite well considering the overall softness in the markets we
serve. We are very excited to share the progress on our development of an ARM
64-bit core. We fully believe that this will dramatically change the scale of
our product offerings and the markets that are now available to us and is a
giant step forward towards sustainable long term growth for the Company." said
Dr. Paramesh Gopi, President and Chief Executive Officer.

Bob Gargus, Chief Financial Officer commented, "In spite of overall market
conditions being soft, we delivered to expectations. We also made good progress
on rebalancing operating expenses for our core business and we can now explain
to investors the size of the investment we have been making in the ARM project
and its related multi-billion dollar market expansion that it brings to
AppliedMicro."

AppliedMicro reports its financial results in accordance with GAAP and also
provides additional financial data that have not been prepared in accordance
with GAAP. The non-GAAP results and other financial measures reported by the
Company exclude certain items that are required by GAAP, such as restructuring
charges, amortization of purchased intangibles, stock-based compensation
charges, other-than-temporary impairment on investments, acquisition related
(recoveries) expenses, payroll taxes on certain stock option exercises and
non-cash tax adjustments. Income taxes are adjusted to an estimated non-GAAP
effective tax rate. These non-GAAP measures are not a substitute for GAAP
measures and may not be consistent with the presentation used by other
companies. The Company uses the non-GAAP financial measures to evaluate and
manage its operations. The Company is providing this information to allow
investors to perform additional financial analysis and because it is consistent
with the financial models and estimates published by analysts who follow the
Company. The attached schedule reconciles non-GAAP results and other financial
measures reported by the Company with the most directly comparable GAAP
financial measures.

AppliedMicro management will be holding a conference call today, November 1,
2011 at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss additional
details regarding the Company's performance for the second quarter of fiscal
2012 and to provide guidance for the third quarter of fiscal 2012. You may
access the conference call via any of the following:

Teleconference: 866-788-0543
Conference ID: 12034083
Web Broadcast: http://www.apm.com
888-286-8010 (access
code: 43368762,
available through
Replay: November 3, 2011)

AppliedMicro Overview

AppliedMicro is a global leader in energy conscious high performance computing
and connectivity solutions for telco, enterprise, data center, consumer and SMB
applications. AppliedMicro's corporate headquarters are located in Sunnyvale,
California. Sales and engineering offices are located throughout the world. For
further information regarding AppliedMicro, visit the company's Web site at
http://www.apm.com.

This news release contains forward-looking statements that reflect the Company's
current view with respect to future events and financial performance, including
statements regarding the Company's focus, product cycles, design-win pipeline,
strategic re-focus and future revenues. 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, increased supplier lead times and other
supply chain constraints, 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, successful integration and
management of recently acquired businesses, market acceptance of new products,
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, 2011, 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. 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)
(unaudited)

--------- --------
September March
30, 31,

ASSETS 2011 2011
--------- --------

Current assets:
Cash, cash equivalents
and short-term
investments $113,697 $168,051
Accounts receivable, net 28,083 19,997
Inventories 18,727 26,561

Other current assets 24,856 16,784
--------- --------
Total current assets 185,363 231,393
Property and equipment,
net 36,854 32,023
Goodwill 13,183 13,183
Purchased intangibles,
net 19,292 23,388

Other assets 11,381 8,670
--------- --------

Total assets $266,073 $308,657
========= ========

LIABILITIES AND
STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $17,560 $24,431
Other current
liabilities 20,059 22,416
--------- --------
Total current
liabilities 37,619 46,847

Stockholders' equity 228,454 261,810
--------- --------
Total liabilities and
stockholders' equity $266,073 $308,657
========= ========

APPLIED MICRO CIRCUITS CORPORATION

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

Three Months Ended Six
Months Ended
-------------------------------
--------------------
September September
September September
30, June 30, 30, 30,
30,

2011 2011 2010
2011 2010
--------- --------- ---------
--------- ---------

Net revenues $64,929 $60,844 $65,953
$125,773 $126,763

Cost of revenues 27,704 26,331 23,435
54,035 45,920
--------- --------- ---------
--------- ---------
Gross profit 37,225 34,513 42,518
71,738 80,843
Operating expenses:

Research and development 29,609 28,368 27,339
57,977 53,116
Selling, general and administrative 8,941 12,556 13,087
21,497 24,711
Amortization of purchased

intangibles 803 1,099 1,079
1,902 2,084
Restructuring (recoveries) charges,

net (40) 913 164
873 533
--------- --------- ---------
--------- ---------

Total operating expenses 39,313 42,936 41,669
82,249 80,444
--------- --------- ---------
--------- ---------
Operating (loss) income (2,088) (8,423) 849
(10,511) 399

Interest and other income, net 1,517 1,356 3,102
2,873 5,183
--------- --------- ---------
--------- ---------
(Loss) income before income taxes (571) (7,067) 3,951
(7,638) 5,582

Income tax expense (benefit) 581 (190) 376
391 616
--------- --------- ---------
--------- ---------

Net (loss) income $ (1,152) $(6,877) $ 3,575
$(8,029) $4,966
========= ========= =========
========= =========

Basic (loss) income per share:

Basic net (loss) income per share $(0.02) $(0.11) $0.05
$(0.13) $0.08
========= ========= =========
========= =========
Shares used in calculating basic

(loss) income per share 62,526 63,878 65,752
63,202 65,879
========= ========= =========
========= =========

Diluted (loss) income per share:

Diluted net (loss) income per share $(0.02) $(0.11) $0.05
$(0.13) $0.07
========= ========= =========
========= =========
Shares used in calculating diluted

(loss) income per share 62,526 63,878 68,021
63,202 68,378
========= ========= =========
========= =========

APPLIED MICRO CIRCUITS CORPORATION

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME
(LOSS)
(in thousands, except per share data)

(unaudited)

Three Months Ended
Six Months Ended
-------------------------------
--------------------
September September
September September
30, June 30, 30,
30, 30,

2011 2011 2010
2011 2010
--------- --------- ---------
--------- ---------

GAAP net (loss) income $(1,152) $(6,877) $3,575
$(8,029) $4,966
Adjustments:

Stock-based compensation charges 3,124 4,178 3,975
7,302 7,821
Amortization of purchased intangibles 1,482 2,614 3,802
4,096 7,432
Acquisition related (recoveries)

expenses (2,267) -- 859
(2,267) 859
Restructuring (recoveries) charges, net (40) 913 164
873 533
Other-than-temporary investment

impairment (593) (12) (1,688)
(605) (2,596)
Payroll taxes on certain stock option

exercises -- -- 4
-- 4

Income tax adjustments 547 (209) 44
338 27
--------- --------- ---------
--------- ---------

Total GAAP to Non-GAAP adjustments 2,253 7,484 7,160
9,737 14,080
--------- --------- ---------
--------- ---------

Non-GAAP net income $1,101 $607 $10,735
$1,708 $19,046
========= ========= =========
========= =========

Diluted income per share $0.02 $0.01 $0.16
$0.03 $0.28
========= ========= =========
========= =========

Shares used in calculating diluted

income per share 62,665 65,003 68,021
63,834 68,378
========= ========= =========
========= =========

Net (loss) income per share:

GAAP (loss) income per share $(0.02) $(0.11) $0.05
$(0.13) $0.07

GAAP to non-GAAP adjustments 0.04 0.12 0.11
0.16 0.21
--------- --------- ---------
--------- ---------

Non-GAAP net income per share $0.02 $0.01 $0.16
$0.03 $0.28
========= ========= =========
========= =========

Reconciliation of shares used in calculating

non-GAAP income per share:

Shares used in calculating the basic

(loss) income per share 62,526 63,878 65,752
63,202 65,879

Adjustment for dilutive securities 139 1,125 2,269
632 2,499
--------- --------- ---------
--------- ---------
Shares used in calculating diluted

non-GAAP income per share 62,665 65,003 68,021
63,834 68,378
========= ========= =========
========= =========

APPLIED MICRO CIRCUITS CORPORATION

SCHEDULE OF SELECTED GAAP TO NON-GAAP ADJUSTMENTS

(in thousands)

(unaudited)

The following schedule reconciles selected line items from the GAAP basis

statements of operations to the non-GAAP statements of operations:

Three Months Ended Six
Months Ended
------------------------------
--------------------
September September
September September
30, June 30, 30,
30, 30,

2011 2011 2010
2011 2010
--------- -------- ---------
--------- ---------
GROSS PROFIT:

GAAP gross profit $37,225 $34,513 $42,518
$71,738 $80,843
Amortization of purchased intangibles 679 1,515 2,723
2,194 5,348

Stock-based compensation expense 98 111 180
209 333
--------- -------- ---------
--------- ---------

Non-GAAP gross profit $38,002 $36,139 $45,421
$74,141 $86,524
========= ======== =========
========= =========

OPERATING EXPENSES:

GAAP operating expenses $39,313 $42,936 $41,669
$82,249 $80,444
Stock-based compensation expense (3,026) (4,067) (3,795)
(7,093) (7,488)
Amortization of purchased intangibles (803) (1,099) (1,079)
(1,902) (2,084)
Acquisition related recoveries

(expenses) 2,267 -- (859)
2,267 (859)
Restructuring recoveries (charges),

net 40 (913) (164)
(873) (533)
Payroll taxes on certain stock option

exercises -- -- (4)
-- (4)
--------- -------- ---------
--------- ---------

Non-GAAP operating expenses $37,791 $36,857 $35,768
$74,648 $69,476
========= ======== =========
========= =========

INTEREST AND OTHER INCOME, NET

AND OTHER-THAN-TEMPORARY IMPAIRMENT:

GAAP interest and other income, net $1,517 $1,356 $3,102
$2,873 $5,183
Other-than-temporary investment

impairment (593) (12) (1,688)
(605) (2,596)
--------- -------- ---------
--------- ---------
Non-GAAP interest and other income,

net $924 $1,344 $1,414
$2,268 $2,587
========= ======== =========
========= =========

INCOME TAX EXPENSE (BENEFIT):

GAAP income tax expense (benefit) $581 $(190) $376
$391 $616

Income tax adjustments (547) 209 (44)
(338) (27)
--------- -------- ---------
--------- ---------

Non-GAAP income tax expense $34 $19 $332
$53 $589
========= ======== =========
========= =========

RESEARCH AND DEVELOPMENT :

GAAP research and development $29,609 $28,368 $27,339
$57,977 $53,116
Stock-based compensation expense (1,726) (2,388) (1,931)
(4,114) (3,902)
Payroll taxes on certain stock option

exercises -- -- (2)
-- (2)
--------- -------- ---------
--------- ---------

Non-GAAP research and development $27,883 $25,980 $25,406
$53,863 $49,212
========= ======== =========
========= =========

SELLING, GENERAL AND ADMINISTRATIVE :

GAAP selling, general and

administrative $8,941 $12,556 $13,087
$21,497 $24,711
Stock-based compensation expense (1,300) (1,679) (1,864)
(2,979) (3,586)
Acquisition related recoveries

(expenses) 2,267 -- (859)
2,267 (859)
Payroll taxes on certain stock option

exercises -- -- (2)
-- (2)
--------- -------- ---------
--------- ---------
Non-GAAP selling, general and

administrative $9,908 $10,877 $10,362
$20,785 $20,264
========= ======== =========
========= =========

APPLIED MICRO CIRCUITS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

Six Months Ended
September 30,
---------------------

2011 2010
---------- ---------
Operating activities:
Net (loss) income $ (8,029) $ 4,966
Adjustments to reconcile net (loss) income to net
cash (used for) provided by operating activities:
Depreciation 3,840 3,639
Amortization of purchased intangibles 4,096 7,432
Stock-based compensation expense:
Stock options 2,579 2,076
Restricted stock units 4,723 5,745
Contingent consideration adjustment (2,267) --
Capitalization of prior years mask set
costs -- (1,177)
Net loss (gain) on disposals of
property 10 (320)
Changes in operating assets and
liabilities, net of amounts acquired:
Accounts receivable (8,086) 850
Inventories 7,834 (2,170)
Other assets (7,159) (1,515)
Accounts payable (5,908) 321
Accrued payroll and other accrued
liabilities 55 2,503
Deferred tax liability -- --

Deferred revenue (560) 186
---------- ---------
Net cash (used for) provided by
operating activities (8,872) 22,536
---------- ---------
Investing activities:
Purchases of short-term investments (67,735) (90,012)
Proceeds from sales and maturities of
short-term investments 87,746 36,132
Purchase of property and equipment (9,757) (5,987)
Proceeds from sale of property and
equipment -- 345
Purchase of strategic investment (2,500) --
Proceeds from sale of strategic
investment -- 4,991
Funding of a note receivable (1,000) --
Purchase of a business, net of cash
acquired -- (31,484)
---------- ---------
Net cash provided by (used for)
investing activities 6,754 (86,015)
---------- ---------
Financing activities:
Proceeds from issuances of common stock 2,952 4,036
Funding of restricted stock units
withheld for taxes (2,441) (2,361)
Repurchases of common stock (20,852) (23,112)
Funding of structured stock repurchase
agreements (10,000) (10,000)
Funds received from structured stock
repurchase agreements -- 15,512

Other (160) (356)
---------- ---------
Net cash used for financing
activities (30,501) (16,281)
---------- ---------
Net decrease in cash and cash equivalents (32,619) (79,760)
Cash and cash equivalents at the
beginning of the period 84,402 122,526
---------- ---------
Cash and cash equivalents at the end of
the period 51,783 42,766
========== =========

CONTACT: Investor Relations Contact:

Applied Micro Circuits Corporation
Bob Gargus
Phone: (408) 542-8752
E-Mail: rgargus@apm.com

Media Contact:

Applied Micro Circuits Corporation
Tally Kaplan-Porat
Phone: (408) 702-3139
E-Mail: tkaplan@apm.com