Alliance Fiber Optic Products, Inc. (Nasdaq:AFOP), an innovative
supplier of fiber optic components, subsystems and integrated
modules for the optical network equipment market, today reported
its financial results for the third quarter ended September 30,
2015.
Revenues for the third quarter of 2015 were $18,060,000, similar
to revenues of $18,096,000 reported in the third quarter of 2014,
and a 28% decrease from revenues of $25,045,000 reported in the
second quarter of 2015.
Net income for the quarter ended September 30, 2015, was
$3,653,000, or $0.20 per share, compared to net income of
$4,303,000, or $0.23 per share, for the third quarter of 2014, and
net income of $5,040,000, or $0.28 per share, for the second
quarter of 2015.
Gross margin for the quarter ended September 30, 2015 was 39.3%,
compared to 39.5% in the year ago quarter and 41.9% in the second
quarter of 2015. Operating margin for the quarter ended September
30, 2015 was 20.6%, compared to 22.9% in the year ago quarter and
27.0% in the second quarter of 2015.
Non-GAAP net income for the quarter ended September 30, 2015 was
$4,197,000, or $0.24 per share, compared to non-GAAP net income of
$4,571,000, or $0.25 per share, for the third quarter of 2014, and
non-GAAP net income of $6,705,000, or $0.38 per share, for the
second quarter of 2015.
Non-GAAP gross margin for the quarter ended September 30, 2015
was 40.1%, compared to 39.9% in the year ago quarter and 42.5% in
the second quarter of 2015. Non-GAAP operating margin for the
quarter ended September 30, 2015 was 25.3%, compared to 25.3% in
the year ago quarter and 30.1% in the second quarter of 2015.
Peter Chang, President and Chief Executive Officer, commented,
"During the third quarter, we experienced the effect of inventory
control by our largest Web 2.0 customer, which resulted in a
sequential decrease in our third quarter revenue. Despite that, our
revenue from other customers grew on a year over year basis to help
us achieve a similar level of revenues compared with the year ago
quarter. We believe we adjusted to this temporary shortfall well
and continued to deliver strong financial performance within our
industry peer group. Most importantly, we made good progress
meeting our customers' needs, extending our product technology and
improving our operations during the quarter."
"Regarding forward guidance, we expect revenues in the remaining
quarter of 2015 to be higher sequentially. Data bandwidth demands
continue to increase and the conversion from copper technology to
fiber technology in data center applications continues
accelerating. We are encouraged by growing demands for our products
and the prospect of delivering record sales and profits in the
coming years." concluded Mr. Chang.
Conference Call
A more detailed review of third quarter financial results as
well as the outlook for the fourth quarter of 2015 will be provided
when the complete third quarter results are discussed on a
conference call at 1:30 p.m. (Pacific) on October 28, 2015. To
participate in AFOP's conference call, please call 877-675-3572 at
least ten minutes prior to the call in order for the operator to
connect you. The confirmation number for the call is 56988049. AFOP
will also provide a live webcast of its third quarter 2015
conference call at AFOP's website: www.AFOP.com. The webcast replay
will be available on AFOP's website 90 minutes after the live
conference call.
About AFOP
Founded in 1995, Alliance Fiber Optic Products, Inc. designs,
manufactures and markets a broad range of high performance fiber
optic components and integrated modules. AFOP's products are used
by leading and emerging communications equipment manufacturers to
deliver optical networking systems to the long-haul, enterprise,
data center, metropolitan and last mile access segments of the
communications network. AFOP offers a broad product line of passive
optical components including interconnect systems, splitters, thin
film CWDM and DWDM components and modules, and optical attenuators.
AFOP is headquartered in Sunnyvale, California, with manufacturing
and product development capabilities in the United States, Taiwan
and China. AFOP's website is located at http://www.afop.com.
Except for the historical information contained herein, the
matters set forth in this press release, including statements as to
our expectations regarding future revenue and profit levels and the
time periods thereof, our business prospects, demand for our
products and sources of demand, our expectations regarding future
orders by customers, and our expectations for growth in the fiber
optic industry, are forward looking statements within the meaning
of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including, but not limited to general economic
conditions and trends, trends in demand for bandwidth, the impact
of competitive products and pricing, timely introduction of new
technologies, timely design acceptance by our customers, the
acceptance of new products and technologies by our customers,
customer demand for our products, the timing of customer orders,
loss of key customers or customer orders, our ability to ramp new
products into volume production, the mix of products sold and
product pricing, the costs associated with running our operations,
industry-wide shifts in supply and demand for optical components
and modules, the success of cost control efforts, our ability to
obtain and maintain operational efficiencies, financial stability
in foreign markets, and other risks detailed from time to time in
our SEC reports, including AFOP's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2015. These forward-looking statements
speak only as of the date hereof. AFOP disclaims any intention or
obligation to update or revise any forward-looking statements.
|
ALLIANCE FIBER OPTIC
PRODUCTS, INC. |
Condensed Consolidated
Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
Sep. 30, |
Dec. 31, |
|
2015 |
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and short-term investments |
$ 48,484 |
$ 54,580 |
Accounts receivable, net |
10,549 |
10,806 |
Inventories |
10,184 |
9,305 |
Deferred tax asset |
3,955 |
3,690 |
Other current assets |
2,265 |
2,077 |
Total current assets |
75,437 |
80,458 |
|
|
|
Long-term investments |
10,774 |
10,635 |
Property and equipment, net |
16,117 |
13,868 |
Other assets |
245 |
212 |
Total assets |
$ 102,573 |
$ 105,173 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 7,014 |
$ 9,236 |
Accrued expenses and other current
liabilities |
7,927 |
8,699 |
Total current liabilities |
14,941 |
17,935 |
|
|
|
Long-term liabilities |
966 |
978 |
Total liabilities |
15,907 |
18,913 |
|
|
|
Stockholders' equity |
86,666 |
86,260 |
Total liabilities and stockholders'
equity |
$ 102,573 |
$ 105,173 |
|
ALLIANCE FIBER OPTIC
PRODUCTS, INC. |
Condensed Consolidated
Statements of Operations |
(In thousands, except per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
Sep. 30, |
Jun. 30, |
Sep. 30, |
Sep. 30, |
Sep. 30, |
|
2015 |
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
|
Revenues |
$ 18,060 |
$ 25,045 |
$ 18,096 |
$ 64,768 |
$ 67,177 |
|
|
|
|
|
|
Cost of revenues |
10,963 |
14,550 |
10,957 |
38,384 |
40,429 |
Gross profit |
7,097 |
10,495 |
7,139 |
26,384 |
26,748 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Research and development |
1,009 |
1,169 |
1,068 |
3,321 |
3,243 |
Selling, marketing and
administrative |
2,373 |
2,567 |
1,924 |
7,171 |
6,321 |
Total operating expenses |
3,382 |
3,736 |
2,992 |
10,492 |
9,564 |
Income from operations |
3,715 |
6,759 |
4,147 |
15,892 |
17,184 |
Interest and other income, net |
148 |
192 |
226 |
536 |
559 |
Net income before tax |
3,863 |
6,951 |
$ 4,373 |
$ 16,428 |
$ 17,743 |
Provision for income taxes |
(210) |
(1,911) |
(70) |
(4,177) |
(4,643) |
Net income |
$ 3,653 |
$ 5,040 |
$ 4,303 |
$ 12,251 |
$ 13,100 |
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
Basic |
$ 0.20 |
$ 0.28 |
$ 0.23 |
$ 0.69 |
$ 0.71 |
Diluted |
$ 0.20 |
$ 0.27 |
$ 0.23 |
$ 0.67 |
$ 0.69 |
|
|
|
|
|
|
Shares used in per share calculation: |
|
|
|
|
|
Basic |
17,850 |
17,822 |
18,629 |
17,848 |
18,529 |
Diluted |
18,227 |
18,422 |
19,103 |
18,199 |
19,036 |
|
|
|
|
|
|
Included in costs and expenses above: |
|
|
|
|
|
Stock based compensation charges |
|
|
|
|
|
Cost of revenue |
$ 137 |
$ 137 |
$ 87 |
$ 395 |
$ 379 |
Research and development |
51 |
58 |
44 |
155 |
191 |
Selling, marketing and
administrative |
666 |
575 |
305 |
1,570 |
1,113 |
Total |
$ 854 |
$ 770 |
$ 436 |
$ 2,120 |
$ 1,683 |
|
ALLIANCE FIBER OPTIC
PRODUCTS, INC. |
Reconciliations from
GAAP to Non-GAAP |
(In thousands, except
per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
Sep. 30, |
Jun. 30, |
Sep. 30, |
Sep. 30, |
Sep. 30, |
|
2015 |
2015 |
2014 |
2015 |
2014 |
Gross Profit
Reconciliation |
|
|
|
|
|
GAAP gross profit |
$ 7,097 |
$ 10,495 |
$ 7,139 |
$ 26,384 |
$ 26,748 |
Stock-based compensation expense |
137 |
137 |
87 |
395 |
379 |
Adjusted (non-GAAP) gross profit |
$ 7,234 |
$ 10,632 |
$ 7,226 |
$ 26,779 |
$ 27,127 |
Adjusted (non-GAAP) gross margin |
40.1 % |
42.5 % |
39.9 % |
41.3 % |
40.4 % |
|
|
|
|
|
|
Operating Expense
Reconciliation |
|
|
|
|
|
GAAP operating expenses |
$ 3,382 |
$ 3,736 |
$ 2,992 |
$ 10,492 |
$ 9,564 |
Stock-based compensation expense |
717 |
633 |
349 |
1,725 |
1,304 |
Adjusted (non-GAAP) operating expenses |
$ 2,665 |
$ 3,103 |
$ 2,643 |
$ 8,767 |
$ 8,260 |
|
|
|
|
|
|
Income from Operations
Reconciliation |
|
|
|
|
|
GAAP income from operations |
$ 3,715 |
$ 6,759 |
$ 4,147 |
$ 15,892 |
$ 17,184 |
Adjustments related to gross profit |
137 |
137 |
87 |
395 |
379 |
Adjustments related to operating expense |
717 |
633 |
349 |
1,725 |
1,304 |
Adjusted (non-GAAP) income from
operations |
$ 4,569 |
$ 7,529 |
$ 4,583 |
$ 18,012 |
$ 18,867 |
Adjusted (non-GAAP) operating margin |
25.3 % |
30.1 % |
25.3 % |
27.9 % |
28.1 % |
|
|
|
|
|
|
Net
Income Reconciliation |
|
|
|
|
|
GAAP net income |
$ 3,653 |
$ 5,040 |
$ 4,303 |
$ 12,251 |
$ 13,100 |
Adjustments related to gross profit |
137 |
137 |
87 |
395 |
379 |
Adjustments related to operating expense |
717 |
633 |
349 |
1,725 |
1,304 |
Income tax provision adjustments |
(310) |
895 |
(168) |
1,754 |
2,625 |
Adjusted (non-GAAP) net income |
$ 4,197 |
$ 6,705 |
$ 4,571 |
$ 16,125 |
$ 17,408 |
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
Basic |
17,850 |
17,822 |
18,629 |
17,848 |
18,529 |
Diluted |
18,227 |
18,422 |
19,103 |
18,199 |
19,036 |
|
|
|
|
|
|
Net Income per Common Share -
Basic: |
|
|
|
|
|
GAAP as reported |
$ 0.20 |
$ 0.28 |
$ 0.23 |
$ 0.69 |
$ 0.71 |
Non-GAAP as adjusted |
$ 0.24 |
$ 0.38 |
$ 0.25 |
$ 0.90 |
$ 0.94 |
|
|
|
|
|
|
Net Income per Common Share -
Diluted: |
|
|
|
|
|
GAAP as reported |
$ 0.20 |
$ 0.27 |
$ 0.23 |
$ 0.67 |
$ 0.69 |
Non-GAAP as adjusted |
$ 0.23 |
$ 0.36 |
$ 0.24 |
$ 0.89 |
$ 0.91 |
|
|
|
|
|
|
Non-GAAP EBITDA |
|
|
|
|
|
Non-GAAP net income |
$ 4,197 |
$ 6,705 |
$ 4,571 |
$ 16,125 |
$ 17,408 |
Depreciation expense |
685 |
680 |
748 |
2,023 |
2,139 |
Interest income |
(182) |
(200) |
(198) |
(575) |
(559) |
Income tax expense |
520 |
1,016 |
238 |
2,424 |
2,018 |
Non-GAAP EBITDA |
$ 5,220 |
$ 8,201 |
$ 5,359 |
$ 19,997 |
$ 21,006 |
Use of Non-GAAP Financial Information
The company provides Non-GAAP gross margin, Non-GAAP operating
margin, Non-GAAP net income, Non-GAAP basic and diluted net income
per share and EBITDA as supplemental information. In computing
these non-GAAP financial measures, the company excludes certain
items included under GAAP, including stock-based compensation
expense and income tax provision adjustments. In computing EBITDA,
the company also excludes interest income, income tax expense and
depreciation expense.
Management uses these Non-GAAP financial measures to evaluate
the operating performance of the business and aid in
period-to-period comparability. Management also uses the Non-GAAP
financial measures for planning and forecasting and measuring
results against its forecast. Using several measures to evaluate
the business allows the company and investors to assess the
company's relative performance. The Non-GAAP financial measures
provided herein may not provide information that is directly
comparable to that provided by other companies in our industry, as
other companies may calculate such financial results differently.
The company's Non-GAAP financial measures are not measurements of
financial performance under GAAP, and should not be considered as
alternatives to the financial measures derived in accordance with
GAAP. The company does not consider these Non-GAAP financial
measures to be a substitute for, or superior to, the information
provided by GAAP financial results. A reconciliation of the
Non-GAAP financial measures to the most directly comparable GAAP
financial measures is provided in the financial schedules portion
of this press release.
CONTACT: Keting Lin, IR Associate
Alliance Fiber Optic Products, Inc.
408-736-6900 x188
Email: klin@afop.com
Alliance Fiber Optic (NASDAQ:AFOP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Alliance Fiber Optic (NASDAQ:AFOP)
Historical Stock Chart
From Jul 2023 to Jul 2024