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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 8, 2000
APPLIED MICRO CIRCUITS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-23193 94-2586591
(Commission File No.) (IRS Employer Identification No.)
6290 SEQUENCE DRIVE
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (858) 450-9333
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
The audited financial statements of YuniNetworks for the period from
October 8, 1999 (inception) through March 31, 2000 are incorporated
herein by reference to AMCC's Registration Statement on Form S-4 (No.
333-37372) filed with the Securities and Exchange Commission on May 19,
2000.
(b) PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma condensed consolidated
financial information is being filed herewith:
Unaudited Pro Forma Combined Condensed Balance Sheet at March
31, 2000.
Unaudited Pro Forma Combined Condensed Statement of Operations
for the year ended March 31, 2000.
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
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AMCC AND YUNINETWORKS
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial information gives
effect to the acquisition by AMCC of YuniNetworks which was accounted for as a
purchase. The unaudited pro forma combined condensed balance sheet is based on
the individual historical balance sheets of AMCC and YuniNetworks and has been
prepared to reflect the acquisition by AMCC of YuniNetworks as if the
acquisition had occurred as of March 31, 2000. The unaudited pro forma combined
condensed statement of operations is based on the individual historical
statements of operations of AMCC and YuniNetworks and combines the results of
operations of AMCC for the year ended March 31, 2000 with the results of
operations for YuniNetworks for the period from October 8, 1999 (inception)
through March 31, 2000 as if the acquisition had occurred as of October 8, 1999.
The pro forma combined condensed financial information is presented for
illustrative purposes only and is not necessarily indicative of the financial
position or operating results that would have been achieved if the acquisition
had been completed as of the beginning of the period presented, nor is it
necessarily indicative of the future financial position or operating results of
AMCC. The pro forma combined condensed financial information does not give
effect to any cost savings or restructuring and integration costs that may
result from the integration of AMCC's and YuniNetworks' operations. The costs
related to restructuring and integration have not yet been determined, and AMCC
expects to charge these costs to operations during the quarter incurred.
The unaudited pro forma combined condensed financial information should be read
in conjunction with the audited financial statements and accompanying notes of
AMCC included in AMCC's Annual Report on Form 10-K for the year ended March 31,
2000, and the audited financial statements and accompanying notes of
YuniNetworks which are included in the Registration Statement on Form S-4 filed
with the Securities and Exchange Commission on May 19, 2000.
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AMCC AND YUNINETWORKS
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AT MARCH 31, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AMCC YUNINETWORKS ADJUSTMENTS NOTES COMBINED
----------- ------------ ----------- ----------- -----------
A S S E T S
-----------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents .................. $ 170,102 $ 4,482 $ (8,908) (A) $ 165,676
Short-term investments--available-for-sale . 784,449 -- -- 784,449
Accounts receivable, net of allowance ...... 25,459 -- -- 25,459
Inventories ................................ 10,925 -- -- 10,925
Deferred income taxes ...................... 4,148 -- -- 4,148
Notes receivable from officers and
employees ................................ 81 -- -- 81
Other current assets ....................... 10,240 5 -- 10,245
----------- ------------ ----------- -----------
Total current assets ................... 1,005,404 4,487 (8,908) 1,000,983
Property and equipment, net ..................... 37,842 739 -- 38,581
Intangible assets ............................... -- -- 189,060 (B) 189,060
Other assets .................................... 3,636 130 -- 3,766
----------- ------------ ----------- -----------
Total assets ........................... $ 1,046,882 $ 5,356 $ 180,152 $ 1,232,390
=========== ============ =========== ===========
L I A B I L I T I E S A N D
S T O C K H O L D E R S' E Q U I T Y
-------------------------------------
Current liabilities:
Accounts payable ........................... $ 8,818 $ 537 $ 850 (C) $ 10,205
Accrued payroll and related expenses ....... 7,618 -- -- 7,618
Other accrued liabilities .................. 6,448 47 -- 6,495
Deferred revenue ........................... 2,776 -- -- 2,776
Current portion of long-term debt .......... 1,394 -- -- 1,394
Current portion of capital lease obligations 729 -- -- 729
----------- ------------ ----------- -----------
Total current liabilities .............. 27,783 584 850 29,217
Long-term debt, less current portion ............ 3,599 -- -- 3,599
Long-term capital lease obligations, less current
portion ...................................... 1,695 -- -- 1,695
Stockholders' equity:
Preferred stock, $0.01 par value: .......... -- 11 (11) (D),(E) --
Common stock, $0.01 par value: ............. 1,218 11 8 (D),(E) 1,237
Additional paid-in capital ................. 944,512 8,827 200,166 (D),(E) 1,153,505
Deferred compensation, net ................. (1,443) (3,138) -- (4,581)
Accumulated other comprehensive loss ....... (166) -- -- (166)
Retained earnings .......................... 70,139 (939) (20,861) (F) 48,339
Notes receivable from stockholders ......... (455) -- -- (455)
----------- ------------ ----------- -----------
Total stockholders' equity ............. 1,013,805 4,772 179,302 1,197,879
----------- ------------ ----------- -----------
Total liabilities and stockholders'
equity .............................. $ 1,046,882 $ 5,356 $ 180,152 $ 1,232,390
=========== ============ =========== ===========
</TABLE>
The above pro forma combined condensed balance sheet does not include the
effect of amortization of purchased intangible assets to be recorded by AMCC in
conjunction with the acquisition.
See accompanying notes to the unaudited pro forma combined condensed financial
information.
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AMCC AND YUNINETWORKS
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AMCC YUNINETWORKS
12 MONTHS ENDED INCEPTION TO PRO FORMA PRO FORMA
MARCH 31, 2000 MARCH 31, 2000 ADJUSTMENTS NOTES COMBINED
--------------- -------------- ----------- ----- ---------
<S> <C> <C> <C> <C> <C>
Net revenues.............................. $ 172,352 $ -- $ -- $ 172,352
Cost of revenues.......................... 50,218 -- -- 50,218
----------- -------------- ----------- ---------
Gross Profit.............................. 122,134 -- -- 122,134
Operating expenses:
Research and development............. 32,815 758 -- 33,573
Selling, general and administrative.. 28,199 252 -- 28,451
Amortization of intangible assets.... -- -- 15,755 (G) 15,755
----------- -------------- ----------- ---------
Total operating expenses......... 61,014 1,010 15,755 77,779
----------- -------------- ----------- ---------
Operating income.......................... 61,120 (1,010) (15,755) 44,355
Interest income, net...................... 12,872 71 (267) (H) 12,676
----------- -------------- ----------- ---------
Income before income taxes................ 73,992 (939) (16,022) 57,031
Provision for income taxes................ 25,367 -- (366) (I) 25,001
----------- -------------- ----------- ---------
Net income................................ $ 48,625 $ (939) $ (15,656) $ 32,030
=========== ============== =========== =========
Basic earnings per share:
Earnings per share................... $ 0.45 $ 0.29
=========== =========
Shares used in calculating basic
earnings per share................. 107,820 109,844
=========== =========
Diluted earnings per share:
Earnings per share................... $ 0.41 $ 0.26
=========== =========
Shares used in calculating diluted
earnings per share................. 119,152 121,310
=========== =========
</TABLE>
The above pro forma combined condensed statement of operations does not
include an estimated $21.8 million in-process research and development charge to
be recorded by AMCC in conjunction with the acquisition for the estimated fair
value of the in-process research and development of YuniNetworks.
See accompanying notes to the unaudited pro forma combined condensed
financial information.
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AMCC AND YUNINETWORKS
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. PRO FORMA BASIS OF PRESENTATION AND ADJUSTMENTS
The unaudited pro forma combined condensed financial information assumes
the acquisition by AMCC of YuniNetworks in a transaction to be accounted for as
a purchase. The unaudited pro forma combined condensed balance sheet is based on
the individual balance sheets of AMCC and YuniNetworks and has been prepared to
reflect the acquisition by AMCC of YuniNetworks as if the acquisition had
occurred as of March 31, 2000. The unaudited pro forma combined condensed
statement of operations is based on the individual statements of operations of
AMCC and YuniNetworks and combines the results of operations of AMCC for the
year ended March 31, 2000 with the results of operations of YuniNetworks for the
period from October 8, 1999 (inception) through March 31, 2000 as if the
acquisition occurred as of October 8, 1999.
Under the terms of the merger agreement, in exchange for all YuniNetworks
shares of common and preferred stock and the assumption of stock options of
YuniNetworks, AMCC issued 2,024,323 shares of its common stock and assumed
133,722 options to purchase common stock. Pursuant to a separate agreement, AMCC
purchased 10% of the YuniNetworks shares held by the majority stockholder of
YuniNetworks, Raza Foundries Canada, for $8.9 million cash. Raza Foundries
Canada is managed by S. Atiq Raza, a board member and stockholder of both
YuniNetworks and AMCC.
Based on the consideration issued in the transaction and the liabilities
assumed, the total purchase price is approximately $220 million. AMCC conducted
an independent valuation of the tangible and intangible assets acquired in order
to allocate the purchase price in accordance with Accounting Principles Board
opinion No. 16, for pro forma purposes, the purchase price was allocated as
follows based upon management's best estimate of the tangible and intangible
assets, including acquired technology and in-process research and development
(in thousands):
Current assets acquired.................... $ 4,487
Property, equipment and other assets....... 869
Assembled workforce........................ 1,200
In-process research and development........ 21,800
Goodwill................................... 187,860
Liabilities assumed........................ (584)
Liabilities for merger-related costs....... (850)
Deferred compensation...................... 3,138
--------
Total consideration ....................... $217,920
========
2. PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
(A) Reflects $8.9 million cash used to purchase 10% of the YuniNetworks
shares held by Raza Foundries Canada.
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(B) The residual amount of the purchase price over the net book value of
the assets and liabilities assumed and in-process research and
development charges have been allocated to intangible assets. The
intangible assets consist of assembled workforce and goodwill.
(C) To increase the accrued expenses by $850,000 for acquisition-related
expenses such as legal, accounting, registration and miscellaneous
fees.
(D) To eliminate the YuniNetworks equity accounts.
(E) To reflect the value of the shares of AMCC common stock to be issued
in connection with the merger.
(F) To eliminate the YuniNetworks accumulated deficit of $939,000 and
reflect the charge for the YuniNetworks in-process research and
development.
(G) To record six months of amortization expense of the acquired
intangibles related to the purchase of YuniNetworks based on a
useful life of six years.
(H) To eliminate six months of interest income which would not have
been earned on the cash expended for the transaction.
(I) To record a tax benefit for YuniNetworks net loss which would have
been absorbed by AMCC's taxable income.
(c) EXHIBITS.
*2.1 Agreement and Plan of Merger and Reorganization dated
as of April 18, 2000 by and among Applied Micro
Circuits Corporation, OLI Acquisition Corp. and
YuniNetworks, Inc. is incorporated herein by
reference to AMCC's Registration Statement on Form
S-4 filed with the Securities and Exchange Commission
on May 19, 2000.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
*99.1 Stock Purchase Agreement dated as of June 8, 2000
by and between Raza Foundries Canada, Inc. and
Applied Micro Circuits Corporation.
*99.2 Press Release dated June 9, 2000.
---------------------
* Previously filed as an exhibit to the Form 8-K filed on June 23, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
APPLIED MICRO CIRCUITS CORPORATION
Dated: July 14, 2000 By: /S/ WILLIAM E. BENDUSH
----------------------------
William E. Bendush
Vice President, Finance and
Administration and Chief
Financial Officer
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INDEX TO EXHIBITS
*2.1 Agreement and Plan of Merger and Reorganization dated
as of April 18, 2000 by and among Applied Micro
Circuits Corporation, OLI Acquisition Corp. and
YuniNetworks, Inc. is incorporated herein by
reference to AMCC's Registration Statement on Form
S-4 filed with the Securities and Exchange Commission
on May 19, 2000.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
*99.1 Stock Purchase Agreement dated as of June 8, 2000 by
and between Raza Foundries Canada, Inc. and Applied
Micro Circuits Corporation.
*99.2 Press Release dated June 9, 2000.
---------------------
* Previously filed as an exhibit to the Form 8-K on June 23, 2000.
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