Applied Optoelectronics Reports Third Quarter 2015 Results
"We achieved record revenue that exceeded the high end of our guidance for the third quarter. Our strong topline results were driven by accelerated shipments for our 40G datacenter products, partially offset by lower than expected revenue for our CATV products," said Dr.
"Revenue for our datacenter products grew 30% sequentially and 92% year-over-year, bringing our year-to-date growth to 71%, which is well above our initial annual target. Looking into the fourth quarter, given the accelerated datacenter demand in the third quarter and consolidation activities in CATV, we expect revenue to decline sequentially and to return to more normalized order patterns in the first quarter of 2016."
Lin continued, "We believe AOI is very well positioned to continue to grow from the move to advanced optics in the datacenter as 40G deployments continue and the transition to 100G is just beginning. AOI was recently awarded two 100G design wins from two hyperscale datacenter customers. Leveraging our vertically integrated manufacturing model to internally source key components such as 25G laser diodes and 100G light engines helped enable us to rapidly bring 100G transceivers to market," continued Lin.
Third Quarter 2015 Financial Summary
- Total revenue grew to
$57.1 million , up 56% compared with$36.5 million in the third quarter 2014 and up 15% compared with$49.6 million in the second quarter 2015.
- GAAP gross margin was 31.6%, compared with 33.2% in the third quarter 2014 and 33.7% in the second quarter 2015. Non-GAAP gross margin was 31.7%, compared with 33.3% in the third quarter 2014 and 33.7% in the second quarter 2015.
- GAAP net income was
$2.7 million or$0.16 per diluted share, compared with net income of$1.6 million or$0.10 per diluted share in the third quarter 2014 and net income of$6.1 million or$0.38 per diluted share in the second quarter 2015.
- Non-GAAP net income was
$6.7 million or$0.40 per diluted share, compared with non-GAAP net income of$3.1 million or$0.20 per diluted share in the third quarter 2014 and non-GAAP net income of$6.1 million or$0.38 per diluted share in the second quarter 2015.
- On
September 30, 2015 , cash, cash equivalents, short-term investments and restricted cash totaled$50.1 million , compared with theJune 30, 2015 balance of$44.3 million .
A reconciliation between all GAAP and non-GAAP information referenced above is contained in the tables below. Please also refer to "Non-GAAP Financial Measures" below for a description of these non-GAAP financial measures.
Fourth Quarter 2015 Business Outlook (+)
For the fourth quarter of 2015, the company currently expects:
- Revenue in the range of
$49.0 million to$52.0 million - Non-GAAP gross margin in the range of 33.5% to 34.5%
- Non-GAAP net income in the range of
$4.9 million to$5.9 million , and non-GAAP fully diluted earnings per share in the range of$0.28 to$0.33 using approximately 17.7 million shares
(+) 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.
Conference Call Information
Forward-Looking Information
This press release contains forward-looking statements. 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 or FTTH markets; changes in the world economy (particularly in
Non-GAAP Financial Measures
We provide non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP earnings per share, and other non-GAAP measures like Adjusted EBITDA 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) from operations, we exclude all amortization of intangible assets, stock-based compensation expense and non-recurring expenses, if any, from our GAAP net income (loss) from operations. Included in our non-recurring expenses for the periods from 4Q14 to 3Q15 are items related to the relocation of our
- We believe that elimination of items such as stock-based compensation expense, non-recurring expenses, amortization and tax 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.
Adjusted EBITDA and other non-GAAP measures should not be considered as an alternative to gross profit, income (loss) from operations, net income (loss) or any other measure of financial performance calculated and presented in accordance with GAAP. Our Adjusted EBITDA and other non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate Adjusted EBITDA or such other non-GAAP measures in the same manner. We have not reconciled the non-GAAP measures included in our guidance to the appropriate GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. GAAP measures that impact our non-GAAP financial measures may include stock-based compensation expense, non-recurring expenses, amortization of intangible assets, unrealized exchange loss (gain), asset impairment charges, and loss (gain) from disposal of idle assets. These GAAP measures cannot be reasonably predicted and may directly impact our non-GAAP gross margin, our non-GAAP net income and our non-GAAP fully-diluted earnings per share, although changes with respect to certain of these measures may offset other changes. In addition, certain of these measures are out of our control. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort.
About
Applied Optoelectronics, Inc. | ||
Preliminary Condensed Consolidated Balance Sheets | ||
(In thousands, except per share data) | ||
(Unaudited) | ||
ASSETS | ||
CURRENT ASSETS | ||
Cash, Cash Equivalents and Short term investments | $ 49,107 | $ 40,873 |
Accounts Receivable, Net | 41,069 | 31,589 |
Inventories | 60,237 | 33,780 |
Notes Receivable | -- | 980 |
Other Receivables | 3,426 | 1,659 |
Prepaid Expenses and Other Current Assets | 6,355 | 4,358 |
Total Current Assets | 160,194 | 113,239 |
Cash restricted for Construction in Progress | 953 | -- |
Property, Plant And Equipment, Net | 87,836 | 64,808 |
Land Use Rights, Net | 877 | 930 |
Intangible Assets, net | 3,858 | 3,833 |
Other Assets | 3,231 | 860 |
TOTAL ASSETS | $ 256,949 | $ 183,670 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
CURRENT LIABILITIES | ||
Accounts Payable | $ 31,518 | $ 30,799 |
Accrued Expenses | 9,941 | 6,940 |
Banker's Acceptance Payable | 3,109 | 1,271 |
Bank Loan-Short Term | 17,561 | 8,205 |
Current Portion of Long Term Debt | 3,232 | 1,386 |
Total Current Liabilities | 65,361 | 48,601 |
Notes Payable and Long Term Debt | 28,436 | 19,057 |
Other Long Term Liability | 250 | 1,000 |
TOTAL LIABILITIES | 94,047 | 68,658 |
STOCKHOLDERS' EQUITY | ||
TOTAL STOCKHOLDERS' EQUITY | 162,902 | 115,012 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 256,949 | $ 183,670 |
Preliminary Condensed Consolidated Statements of Operations | ||||
(In thousands, except per share data) | ||||
(Unaudited) | ||||
Three Months Ended |
Nine Months Ended |
|||
Revenue | 2015 | 2014 | 2015 | 2014 |
CATV | $ 14,233 | $ 12,246 | $ 42,675 | $ 32,640 |
Datacenter | 38,591 | 20,056 | 84,517 | 49,530 |
FTTH | 962 | 2,616 | 2,371 | 7,928 |
Other | 3,299 | 1,631 | 7,388 | 3,960 |
Total Revenue | 57,085 | 36,549 | 136,951 | 94,058 |
Total Cost of Goods Sold | 39,032 | 24,403 | 92,116 | 62,071 |
Total Gross Profit | 18,053 | 12,146 | 44,835 | 31,987 |
Operating Expenses: | ||||
Research & Development | 5,386 | 4,194 | 14,892 | 11,749 |
Sales and Marketing | 1,582 | 1,622 | 4,748 | 4,452 |
General and administrative | 4,963 | 4,458 | 14,500 | 11,964 |
Total Operating Expenses | 11,931 | 10,274 | 34,140 | 28,165 |
Operating Income | 6,122 | 1,872 | 10,695 | 3,822 |
Other Income (Expense): | ||||
Interest Income | 82 | 95 | 236 | 280 |
Interest Expense | (351) | (55) | (776) | (277) |
Other Income (Expense) | 20 | (38) | 217 | 94 |
Foreign Exchange Gain (Loss) | (2,767) | (220) | (1,717) | (151) |
Total Other Income (Expenses): | (3,016) | (218) | (2,040) | (54) |
Net Income before Income Taxes | 3,106 | 1,654 | 8,655 | 3,768 |
Income Tax | (406) | (77) | (541) | (187) |
Net Income | 2,700 | 1,577 | 8,114 | 3,581 |
Net income per share attributable to common stockholders | ||||
basic | $ 0.17 | $ 0.11 | $ 0.53 | $ 0.25 |
diluted | $ 0.16 | $ 0.10 | $ 0.50 | $ 0.24 |
Weighted-average shares used to compute net income per share attributable to common stockholders |
||||
basic | 15,869 | 14,806 | 15,220 | 14,135 |
diluted | 16,694 | 15,595 | 16,185 | 14,950 |
Preliminary Condensed Consolidated NON GAAP Statements of Operations | ||||
(In thousands, except per share data) | ||||
(Unaudited) | ||||
Three Months Ended |
Nine Months Ended |
|||
Revenue | 2015 | 2014 | 2015 | 2014 |
CATV | $ 14,233 | $ 12,246 | $ 42,675 | $ 32,640 |
Datacenter | 38,591 | 20,056 | 84,517 | 49,530 |
FTTH | 962 | 2,616 | 2,371 | 7,928 |
Other | 3,299 | 1,631 | 7,388 | 3,960 |
Total Revenue | 57,085 | 36,549 | 136,951 | 94,058 |
Total Cost of Goods Sold | 38,970 | 24,396 | 92,019 | 62,009 |
Total Gross Profit | 18,115 | 12,153 | 44,932 | 32,049 |
Operating Expenses: | ||||
Research & Development | 5,331 | 4,165 | 14,726 | 11,665 |
Sales and Marketing | 1,524 | 1,598 | 4,586 | 4,380 |
General and administrative | 4,335 | 3,164 | 12,435 | 9,657 |
Total Operating Expenses | 11,190 | 8,927 | 31,747 | 25,702 |
Operating Income | 6,925 | 3,226 | 13,185 | 6,347 |
Other Income (Expense): | ||||
Interest Income | 82 | 95 | 236 | 280 |
Interest Expense | (351) | (55) | (776) | (277) |
Other Income (Expense) | 20 | (38) | 370 | 94 |
Foreign Exchange Gain (Loss) | 393 | (17) | 551 | 54 |
Total Other Income (Expenses): | 144 | (15) | 381 | 151 |
Net Income before Income Taxes | 7,069 | 3,211 | 13,566 | 6,498 |
Income Tax | (406) | (77) | (541) | (187) |
Net Income | 6,663 | 3,134 | 13,025 | 6,311 |
Net income per share attributable to common stockholders | ||||
basic | $ 0.42 | $ 0.21 | $ 0.86 | $ 0.45 |
diluted | $ 0.40 | $ 0.20 | $ 0.80 | $ 0.42 |
Weighted-average shares used to compute net income per share attributable to common stockholders |
||||
basic | 15,869 | 14,806 | 15,220 | 14,135 |
diluted | 16,694 | 15,595 | 16,185 | 14,950 |
Applied Optoelectronics, Inc. | ||||
Reconciliation of Statements of Operations under GAAP and Non-GAAP | ||||
(In thousands, except per share data) | ||||
(Unaudited) | ||||
Three Months Ended |
Nine Months Ended |
|||
2015 | 2014 | 2015 | 2014 | |
GAAP total gross profit | $ 18,053 | $ 12,146 | $ 44,835 | $ 31,987 |
Share-based compensation expense | 17 | 7 | 52 | 62 |
Non Recurring expense | 45 | 0 | 45 | 0 |
Non-GAAP income from gross profit | 18,115 | 12,153 | 44,932 | 32,049 |
GAAP research and development expense | 5,386 | 4,194 | 14,892 | 11,749 |
Share-based compensation expense | 55 | 29 | 166 | 84 |
Non-GAAP research and development expense | 5,331 | 4,165 | 14,726 | 11,665 |
GAAP sales and marketing expense | 1,582 | 1,622 | 4,748 | 4,452 |
Share-based compensation expense | 58 | 24 | 162 | 72 |
Non-GAAP sales and marketing expense | 1,524 | 1,598 | 4,586 | 4,380 |
GAAP general and administrative expense | 4,964 | 4,458 | 14,500 | 11,964 |
Share-based compensation expense | 387 | 427 | 1,188 | 1,276 |
Amortization expense | 104 | 94 | 305 | 258 |
Non Recurring expense | 137 | 773 | 572 | 773 |
Non-GAAP general and administrative expense | 4,335 | 3,164 | 12,435 | 9,657 |
GAAP total operating expense | 11,931 | 10,274 | 34,140 | 28,165 |
Share-based compensation expense | 500 | 480 | 1,516 | 1,432 |
Amortization expense | 104 | 94 | 305 | 258 |
Non Recurring expense | 137 | 773 | 572 | 773 |
Non-GAAP total operating expense | 11,190 | 8,927 | 31,747 | 25,702 |
GAAP operating income | 6,122 | 1,872 | 10,695 | 3,822 |
Share-based compensation expense | 517 | 487 | 1,568 | 1,494 |
Amortization expense | 104 | 94 | 305 | 258 |
Non Recurring expense | 182 | 773 | 617 | 773 |
Non-GAAP operating income | 6,925 | 3,226 | 13,185 | 6,347 |
GAAP other income (loss) | (3,016) | (218) | (2,040) | (54) |
Unrealized exchange loss | 3,160 | 203 | 2,268 | 205 |
Non Recurring expense | 0 | 0 | 153 | 0 |
Non-GAAP other income (loss) | 144 | (15) | 381 | 151 |
GAAP net income | 2,700 | 1,577 | 8,114 | 3,581 |
Amortization of intangible assets | 104 | 94 | 305 | 258 |
Share-based compensation expense | 517 | 487 | 1,568 | 1,494 |
Non Recurring charges | 182 | 773 | 770 | 773 |
Unrealized exchange loss | 3,160 | 203 | 2,268 | 205 |
Non-GAAP net income | 6,663 | 3,134 | 13,025 | 6,311 |
GAAP net income | 2,700 | 1,577 | 8,114 | 3,581 |
Amortization of intangible assets | 104 | 94 | 305 | 258 |
Share-based compensation expense | 517 | 487 | 1,568 | 1,494 |
Depreciation expense | 2,317 | 1,585 | 6,428 | 4,091 |
Non Recurring charges | 182 | 773 | 770 | 773 |
Unrealized exchange loss | 3,160 | 203 | 2,268 | 205 |
Interest (income) expense, net | 269 | (40) | 540 | (4) |
Taxes related to the above | 406 | 77 | 541 | 187 |
Adjusted EBITDA | $ 9,655 | $ 4,756 | $ 20,534 | $ 10,585 |
CONTACT: Investor Relations Contacts:Source:The Blueshirt Group , Investor RelationsMaria Riley +1-415-217-7722 ir@ao-inc.com
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