<PAGE>
EXHIBIT 99.1
INDEX TO FINANCIAL STATEMENTS
Page
----
MMC Networks, Inc.
Interim Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at September 30, 2000
(unaudited) and December 31, 1999.................................... F-2
Condensed Consolidated Statements of Operations (unaudited) for the
three and nine months ended September 30, 2000 and 1999.............. F-3
Condensed Consolidated Statements of Cash Flow (unaudited) for the
nine months ended September 30, 2000 and 1999........................ F-4
Notes to the Condensed Consolidated Financial Statements (unaudited)... F-5
F-1
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MMC NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Sept. 30, Dec. 31,
2000 1999
(unaudited)
--------- ----------
<S> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents............................. $ 43,151 $13,484
Short-term investments................................ 34,591 58,511
Accounts receivable, net of allowances of $420 and
$422 ............................................... 12,707 6,358
Inventories........................................... 7,704 3,216
Prepaid expenses and other current assets............. 6,064 6,374
-------- -------
Total current assets................................ 104,217 87,943
Property and equipment, net............................. 12,380 8,222
Other assets............................................ 1,363 230
-------- -------
$117,960 $96,395
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable...................................... $ 8,940 $ 4,725
Accrued expenses...................................... 9,011 3,710
-------- -------
Total current liabilities........................... 17,951 8,435
-------- -------
Stockholders' equity:
Preferred Stock: $0.001 par value; 10,000 shares
authorized; no shares issued or outstanding.......... -- --
Common Stock: $0.001 par value; 100,000 shares
authorized; 33,267 and 31,871 shares issued and
outstanding.......................................... 29 28
Additional paid-in capital............................ 77,681 68,771
Notes receivable from stockholders.................... (47) (47)
Retained earnings..................................... 22,413 19,343
Accumulated other comprehensive loss.................. (67) (135)
-------- -------
Total stockholders' equity.......................... 100,009 87,960
-------- -------
$117,960 $96,395
======== =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-2
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MMC NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2000 1999 2000 1999
------- ------- ------- --------
<S> <C> <C> <C> <C>
Revenues..................................... $22,477 $23,149 $52,146 $58,582
Cost of revenues............................. 5,994 6,868 14,854 17,336
------- ------- ------- -------
Gross profit............................. 16,483 16,281 37,292 41,246
------- ------- ------- -------
Gross profit as a percent of revenue......... 73.3% 70.3% 71.5% 70.4%
Operating expenses:
Research and development................... 9,484 6,360 24,566 16,070
Selling, general and administrative........ 4,452 3,136 11,401 8,211
------- ------- ------- -------
Total operating expenses................. 13,936 9,496 35,967 24,281
Operating income............................. 2,547 6,785 1,325 16,965
Interest income, net....................... 1,137 844 3,187 2,189
------- ------- ------- -------
Income before income taxes................... 3,684 7,629 4,512 19,154
Provision for income taxes................... 1,178 2,745 1,442 6,890
------- ------- ------- -------
Net income................................... $ 2,506 $ 4,884 $ 3,070 $12,264
======= ======= ======= =======
Basic income per share....................... $ 0.08 $ 0.16 $ 0.09 $ 0.40
======= ======= ======= =======
Shares used to compute basic income per
share....................................... 33,119 31,417 32,694 30,821
======= ======= ======= =======
Diluted income per share..................... $ 0.07 $ 0.14 $ 0.08 $ 0.36
======= ======= ======= =======
Shares used to compute diluted income per
share....................................... 36,988 35,283 36,136 34,456
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-3
<PAGE>
MMC NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income...................................................... $ 3,070 $ 12,264
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................. 3,783 2,300
Tax benefit from the exercise of stock options................ -- 4,798
Changes in assets and liabilities:
Accounts receivable......................................... (6,350) (1,602)
Inventories................................................. (4,488) (1,658)
Prepaid expenses and other current assets................... 310 (630)
Accounts payable............................................ 4,215 1,832
Accrued expenses............................................ 5,301 (1,471)
---------- ----------
Net cash provided by operating activities................. 5,841 15,833
---------- ----------
Cash flows from investing activities:
Sale (purchase) of short-term investments....................... 23,988 (21,439)
Acquisition of property and equipment........................... (7,940) (3,780)
Investment in convertible debenture............................. (1,000) --
Other assets.................................................... (133) --
---------- ----------
Net cash provided by (used for) investing activities...... 14,915 (25,219)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of Common Stock, net..................... 8,911 4,931
Principal payments on capital lease obligations................. -- (234)
---------- ----------
Net cash provided by financing activities................. 8,911 4,697
---------- ----------
Net increase (decrease) in cash and cash equivalents.............. 29,667 (4,689)
Cash and cash equivalents at beginning of period.................. 13,484 31,452
---------- ----------
Cash and cash equivalents at end of period........................ $ 43,151 $ 26,763
========== ==========
Supplemental disclosure:
Cash paid for interest.......................................... $ -- $ 29
Cash paid for income taxes...................................... $ 64 $ 3,377
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-4
<PAGE>
MMC NETWORKS, INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1--BASIS OF PRESENTATION
The accompanying interim condensed consolidated financial statements and
notes to the interim condensed consolidated financial statements of MMC
Networks, Inc. ("MMC") are unaudited. In the opinion of management, these
statements and notes have been prepared on the same basis as the audited
consolidated financial statements and include all adjustments, consisting only
of normal recurring adjustments, necessary for the fair presentation of the
financial position, results of operations and cash flows for MMC for the periods
presented. Results for the interim periods presented are not necessarily
indicative of results for the entire year.
The accompanying interim condensed consolidated financial statements and
notes do not include certain information and footnote disclosures normally
required under generally accepted accounting principles. Therefore, these
condensed consolidated financial statements and notes should be read in
conjunction with the audited consolidated financial statements and notes
included in MMC Networks' Annual Report on Form 10-K filed with the Securities
and Exchange Commission for the year ended December 31, 1999.
NOTE 2--EARNINGS PER SHARE
The computations of basic and diluted earnings per share for the periods
presented are as follows:
<TABLE>
<CAPTION>
Three Nine
Months Ended Months Ended
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net income available to common
stockholders.......................... $2,506 $4,884 $3,070 $12,264
====== ====== ====== =======
Shares used to compute basic income per
share................................. 33,119 31,417 32,694 30,821
Effect of dilutive securities:
Stock options........................ 3,869 3,866 3,442 3,635
------ ------ ------ ------
Shares used to compute diluted income
per share............................. 36,988 35,283 36,136 34,456
====== ====== ====== ======
Basic income per share................. $ 0.08 $ 0.16 $ 0.09 $ 0.40
====== ====== ====== ======
Diluted income per share............... $ 0.07 $ 0.14 $ 0.08 $ 0.36
====== ====== ====== ======
</TABLE>
NOTE 3--COMPOSITION OF INVENTORIES
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(in thousands)
<S> <C> <C>
Inventories:
Work in process...................................... $4,243 $1,541
Finished goods....................................... 3,461 1,675
------ ------
$7,704 $3,216
====== ======
</TABLE>
F-5
<PAGE>
MMC NETWORKS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(4) Subsequent Events
On October 25, 2000, the Company completed the merger with Applied Micro
Circuits Corporation ("AMCC"). Under the terms of the merger agreement, AMCC
issued 1.238 shares of AMCC common stock for each outstanding share of the
Company stock. Based on the number of shares of Company common stock and
options to purchase shares of Company common stock outstanding, AMCC issued
41,392,404 shares of AMCC stock and options to purchase 7,981,595 shares of
AMCC's stock.
F-6
