AMCC Reports Q1

SAN DIEGO -- Applied Micro Circuits Corporation (Nasdaq: AMCC - News) today reported its financial results for the first quarter of fiscal 2006.

Net revenues for the first quarter of fiscal 2006 were $64.7 million compared to the $64.2 million reported in the fourth quarter of fiscal 2005 and $67.4 million reported in the first quarter of fiscal 2005.

The net loss on a GAAP basis for the first quarter of fiscal 2006 was $4.2 million or $(0.01) per share, compared with a net loss of $5.3 million or $(0.02) per share for the fourth quarter of fiscal 2005 and a net loss of $21.8 million or $(0.07) per share for the first quarter of fiscal 2005.

The pro forma net income for the first quarter of fiscal 2006 was $3.1 million or $0.01 per share, compared to the pro forma net income of $3.6 million or $0.01 per share in the fourth quarter of fiscal 2005 and the pro forma net income of $2.1 million or $0.01 per share in the first quarter of fiscal 2005.

"I'm pleased with our results for this quarter in that we delivered our third consecutive quarter of revenue growth and our second consecutive quarter of pro forma operating profitability," said Kambiz Hooshmand, President and Chief Executive Officer. "This represents my first full quarter at AMCC and I am very excited about the opportunities that lie ahead. AMCC's legacy of technical innovation remains strong. In each of our businesses, we have unique and relevant differentiators that set us apart from our competition. We are keenly focused on leveraging these strengths in the growing segments of our served markets."

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 they 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 certain items which are required by GAAP such as restructuring costs, amortization of purchased intangibles, acquired in-process research and development charges, stock-based compensation charges related to acquired companies, litigation settlement costs and payroll tax effects of stock option exercises. Income taxes are adjusted to an estimated pro forma effective tax rate. See the attached reconciliation of the GAAP net loss to the pro forma net income, which quantifies the amounts excluded from pro forma basis results.

In addition, AMCC announced plans to restructure and reorganize its operations. The plan includes reducing approximately 5% of the current headcount by eliminating job redundancies. The company expects to incur a charge of approximately $2 million to $3 million in the second quarter of fiscal 2006 and anticipates that the restructuring plan will reduce ongoing operating expenses by approximately $1 million per quarter commencing in the third quarter of fiscal 2006.

Applied Micro Circuits Corp. (AMCC)