Applied Optoelectronics Announces Preliminary Third Quarter 2017 Results
“Our preliminary results for the third quarter fell short of prior estimates and were negatively impacted by lower than expected sales to one of our large datacenter customers. Despite this shortfall, we maintained a strong gross margin profile in the quarter, and continued to experience solid demand with our other top datacenter customers,” said Dr. Thompson Lin,
Third Quarter 2017 Preliminary Unaudited Financial Results+
- Revenue in the range of
$88 million to $89 million, compared to the prior outlook of $107 million to $115 million.
- GAAP and non-GAAP gross margin in the range of 43.5% to 44.5%, within the prior non-GAAP outlook of 43.0% to 44.5%.
- GAAP net income in the range of
$18.6 million to $19.6 millionand non-GAAP net income after tax in the range of $21.2 million to $22.2 million, compared to the prior non-GAAP outlook of $26.6 million to $29.4 million.
- GAAP fully diluted earnings per share in the range of
$0.91 to $0.96and non-GAAP fully diluted earnings per share in the range of $1.04 to $1.09, using a weighted-average fully diluted share count of approximately 20.4 million shares. This compares to the prior non-GAAP outlook of $1.30 to $1.43per share, using approximately 20.5 million shares.
These are preliminary financial results and remain subject to the completion of the company's customary quarterly close and review procedures. Material adjustments may arise between the date of this press release and the dates on which
(+)Please refer to the note below on forward-looking statements and the risks involved with such statements as well as the note on non-GAAP financial measures. The prior outlook referenced above was provided in the company’s press release on
Conference Call Information
The company will host a conference call and webcast for analysts and investors today,
A live webcast of the conference call and supplemental financials will be accessible from the company's website at investors.ao-inc.com. Following the webcast, an archived version will be available on the website for one year. A telephonic replay of the call will be available one hour after the call and will run for five business days and may be accessed by dialing (412) 317-0088 and entering passcode 10113458.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made. These forward-looking statements involve risks and uncertainties, as well as assumptions and current expectations, which could cause the company's actual results to differ materially from those anticipated in such forward-looking statements. These risks and uncertainties include but are not limited to: reduction in the size or quantity of customer orders; change in demand for the company's products due to industry conditions; changes in manufacturing operations; volatility in manufacturing costs; delays in shipments of products; disruptions in the supply chain; change in the rate of design wins or the rate of customer acceptance of new products; the company's reliance on a small number of customers for a substantial portion of its revenues; potential pricing pressure; a decline in demand for our customers' products or their rate of deployment of their products; general conditions in the internet datacenter, CATV, FTTH or Telecom markets; changes in the world economy (particularly in
Non-GAAP Financial Measures
We provide non-GAAP gross margin, non-GAAP net income (loss) after tax, and non-GAAP earnings per share to eliminate the impact of items that we do not consider indicative of our overall operating performance. To arrive at our non-GAAP gross profit, we exclude stock-based compensation expense and non-recurring expenses, if any, from our GAAP gross profit. To arrive at our non-GAAP income (loss) after tax, we exclude all amortization of intangible assets, stock-based compensation expense, tax effects of stock-based compensation, and non-recurring expenses, if any, from our GAAP net income (loss) after tax. Included in our non-recurring expenses in Q3 2017 are certain consulting fees, employee severance expenses, and certain non-recurring expenses related to hurricane Harvey. Our non-GAAP earnings per share is calculated by dividing our non-GAAP net income by the fully diluted share count. We believe that our non-GAAP measures are useful to investors in evaluating our operating performance for the following reasons:
- We believe that elimination of items such as stock-based compensation expense and non-recurring expenses is appropriate because treatment of these items may vary for reasons unrelated to our overall operating performance;
- We believe that non-GAAP measures provide better comparability with our past financial performance, period-to-period results and with our peer companies, many of which also use similar non-GAAP financial measures; and
- We anticipate that investors and securities analysts will utilize non-GAAP measures to evaluate our overall operating performance.
A reconciliation of our preliminary GAAP income (loss) after tax and GAAP earnings per share for Q3 2017 to our preliminary non-GAAP income (loss) after tax and earnings per share is provided below.
Non-GAAP measures should not be considered as an alternative to income (loss) after tax, earnings per share, or any other measure of financial performance calculated and presented in accordance with GAAP. Our non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate such other non-GAAP measures in the same manner.
|Applied Optoelectronics, Inc.|
|Reconciliation of Net Income under GAAP and Non-GAAP|
|Three months ended September 30, 2017|
|Low end of range||High end of range|
|GAAP net income||$||18.6||$||19.6|
|GAAP earnings per share (1)||$||0.91||$||0.96|
|Amortization of intangible assets||0.1||0.1|
|Share-based compensation expense||2.1||2.1|
|Unrealized exchange gain||0.1||0.1|
|Non-GAAP net income||$||21.2||$||22.2|
|Non-GAAP earnings per share (1)||$||1.04||$||1.09|
|(1) calculated using a weighted-average fully diluted share count of approximately 20.4 million shares|
Investor Relations Contacts:
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Source: Applied Optoelectronics, Inc.