APPLIED MICRO CIRCUITS CORPORATION COMMON STOCK-NE (AMCC, Financial) filed Quarterly Report for the period ended 2012-12-31.
Applied Micro Circuits Corporation has a market cap of $562.4 million; its shares were traded at around $8.62 with and P/S ratio of 2.8.
The gross profit percentage for each of the three and nine months ended December 31, 2012 was 55.6% compared to 57.8% and 57.3% for the three and nine months ended December 31, 2011, respectively. The decrease in our gross profit percentage, excluding the impact of amortization of purchased intangibles, was 56.9% and 57.0%, and 59.0% and 58.8%, respectively, for the three and nine months ended December 31, 2012 and 2011, respectively. The decrease in our gross profit percentage was primarily due to lower licensing revenues, unfavorable product mix, lower overall revenues that have an impact on the absorption of fixed costs, and declining average selling prices.
Selling, General and Administrative. Selling, general and administrative (“SG&A”) expenses consist primarily of personnel related expenses (including stock-based compensation), professional and legal fees, corporate branding and facilities expenses. The increase in SG&A expenses of 11.1% for the three months ended December 31, 2012 compared to the three months ended December 31, 2011, was primarily due to $1.5 million in stock-based compensation charges and $0.6 million in professional and other service fees offset by a decrease of $0.3 million each in provision for doubtful debts and general administration costs and $0.2 million in corporate allocation expenses. The increase in SG&A expenses of 17.5% for the nine months ended December 31, 2012 compared to the nine months ended December 31, 2011, was primarily due to $5.5 million in stock-based compensation charges, $2.1 million relating to the reversal of previously accrued liabilities associated with an acquisition in the nine months ended December 31, 2011 (none in the nine months ended December 31, 2012) and $0.8 million in professional and other service fees offset by a decrease of $0.7 million in corporate allocation expenses, $0.6 million in marketing and travel costs, $0.5 million in provision for doubtful debts and $0.4 million each in personnel cost and sales commission cost. Future acquisitions of products, technologies or businesses may result in substantial additional on-going SG&A costs.
For the nine months ended December 31, 2012, we used $30.9 million of cash in our operations compared to $3.0 million used for our operations for the nine months ended December 31, 2011. Our net loss of $116.5 million for the nine months ended December 31, 2012 included $93.4 million of non-cash charges consisting of $7.2 million of depreciation, $3.6 million of amortization of purchased intangibles, $22.8 million of stock-based compensation, $56.6 million of additional Veloce compensation cost and $4.7 million of restructuring costs offset by $1.3 million gain on asset disposals, $0.1 million relating to the tax effect on other comprehensive income and $0.1 million in acquisition related adjustment (relating to our TPack acquisition in fiscal 2011). Our net loss of $15.1 million for the nine months ended December 31, 2011 included $20.9 million of non-cash charges consisting of $6.0 million of depreciation, $5.5 million of amortization of purchased intangibles and $11.7 million of stock-based compensation, offset by a $2.3 million reduction to the estimated fair value of our contingent consideration. The remaining change in operating cash flows for the nine months ended December 31, 2012 primarily reflected decreases in accounts receivable, inventories, other assets, accounts payable and deferred revenue and increases in Veloce accrued liability, accrued payroll and related expenses and other accrued liabilities. Our overall quarterly days sales outstanding was 31 days and 50 days for the three months ended December 31, 2012 and 2011, respectively. Decrease in the revenues generated during the last month of the quarter ended December 31, 2012 as compared to the same period for the quarter ended March 31, 2012 was the primary reason for the decrease in our days sales outstanding.
We provided $17.0 million in cash from our investing activities during the nine months ended December 31, 2012, compared to using $1.2 million during the nine months ended December 31, 2011. During the nine months ended December 31, 2012, we used $8.5 million for the purchase of property and equipment, $0.5 million for purchase of strategic investment and $0.5 million for the issuance of a note receivable offset by net proceeds of $17.5 million from short-term investment activities, $7.1 million from sales of strategic equity investment and $1.8 million from the sale of equipment and other assets. During the nine months ended December 31, 2011, we generated $15.4 million for net short-term investment activities offset by $11.9 million for the purchase of property and equipment and $4.7 million for purchases of strategic investments.
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Applied Micro Circuits Corporation has a market cap of $562.4 million; its shares were traded at around $8.62 with and P/S ratio of 2.8.
Highlight of Business Operations:
Net Revenues. Net revenues for the three and nine months ended December 31, 2012 were $51.7 million and $139.3 million, representing a decrease of 8.3% and 23.5% from net revenues of $56.3 million and $182.1 million for the three and nine months ended December 31, 2011, respectively. We classify our revenues into two categories based on the markets that the underlying products serve. The categories are Computing and Connectivity. We use this information to analyze our performance and success in these markets. See the following tables (dollars in thousands):The gross profit percentage for each of the three and nine months ended December 31, 2012 was 55.6% compared to 57.8% and 57.3% for the three and nine months ended December 31, 2011, respectively. The decrease in our gross profit percentage, excluding the impact of amortization of purchased intangibles, was 56.9% and 57.0%, and 59.0% and 58.8%, respectively, for the three and nine months ended December 31, 2012 and 2011, respectively. The decrease in our gross profit percentage was primarily due to lower licensing revenues, unfavorable product mix, lower overall revenues that have an impact on the absorption of fixed costs, and declining average selling prices.
Selling, General and Administrative. Selling, general and administrative (“SG&A”) expenses consist primarily of personnel related expenses (including stock-based compensation), professional and legal fees, corporate branding and facilities expenses. The increase in SG&A expenses of 11.1% for the three months ended December 31, 2012 compared to the three months ended December 31, 2011, was primarily due to $1.5 million in stock-based compensation charges and $0.6 million in professional and other service fees offset by a decrease of $0.3 million each in provision for doubtful debts and general administration costs and $0.2 million in corporate allocation expenses. The increase in SG&A expenses of 17.5% for the nine months ended December 31, 2012 compared to the nine months ended December 31, 2011, was primarily due to $5.5 million in stock-based compensation charges, $2.1 million relating to the reversal of previously accrued liabilities associated with an acquisition in the nine months ended December 31, 2011 (none in the nine months ended December 31, 2012) and $0.8 million in professional and other service fees offset by a decrease of $0.7 million in corporate allocation expenses, $0.6 million in marketing and travel costs, $0.5 million in provision for doubtful debts and $0.4 million each in personnel cost and sales commission cost. Future acquisitions of products, technologies or businesses may result in substantial additional on-going SG&A costs.
For the nine months ended December 31, 2012, we used $30.9 million of cash in our operations compared to $3.0 million used for our operations for the nine months ended December 31, 2011. Our net loss of $116.5 million for the nine months ended December 31, 2012 included $93.4 million of non-cash charges consisting of $7.2 million of depreciation, $3.6 million of amortization of purchased intangibles, $22.8 million of stock-based compensation, $56.6 million of additional Veloce compensation cost and $4.7 million of restructuring costs offset by $1.3 million gain on asset disposals, $0.1 million relating to the tax effect on other comprehensive income and $0.1 million in acquisition related adjustment (relating to our TPack acquisition in fiscal 2011). Our net loss of $15.1 million for the nine months ended December 31, 2011 included $20.9 million of non-cash charges consisting of $6.0 million of depreciation, $5.5 million of amortization of purchased intangibles and $11.7 million of stock-based compensation, offset by a $2.3 million reduction to the estimated fair value of our contingent consideration. The remaining change in operating cash flows for the nine months ended December 31, 2012 primarily reflected decreases in accounts receivable, inventories, other assets, accounts payable and deferred revenue and increases in Veloce accrued liability, accrued payroll and related expenses and other accrued liabilities. Our overall quarterly days sales outstanding was 31 days and 50 days for the three months ended December 31, 2012 and 2011, respectively. Decrease in the revenues generated during the last month of the quarter ended December 31, 2012 as compared to the same period for the quarter ended March 31, 2012 was the primary reason for the decrease in our days sales outstanding.
We provided $17.0 million in cash from our investing activities during the nine months ended December 31, 2012, compared to using $1.2 million during the nine months ended December 31, 2011. During the nine months ended December 31, 2012, we used $8.5 million for the purchase of property and equipment, $0.5 million for purchase of strategic investment and $0.5 million for the issuance of a note receivable offset by net proceeds of $17.5 million from short-term investment activities, $7.1 million from sales of strategic equity investment and $1.8 million from the sale of equipment and other assets. During the nine months ended December 31, 2011, we generated $15.4 million for net short-term investment activities offset by $11.9 million for the purchase of property and equipment and $4.7 million for purchases of strategic investments.
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