CORRECTION – Applied Optoelectronics Reports Fourth Quarter and Full Year 2023 Results
In a release issued under the same headline earlier today by
The corrected release follows:
“We’re pleased by the continued progress we have made in improving our gross margin, which combined with expense management, allowed us to generate a small non-GAAP net income in the fourth quarter for the first time in many years,” said Dr.
Fourth Quarter 2023 Financial Summary
- GAAP revenue was
$60.5 million , compared$61.6 million in the fourth quarter of 2022 and$62.5 million in the third quarter of 2023. - GAAP gross margin was 35.7%, compared with 10.1% in the fourth quarter of 2022 and 32.3% in the third quarter of 2023. Non-GAAP gross margin was 36.4%, compared with 21.4% in the fourth quarter of 2022 and 32.5% in the third quarter of 2023.
- GAAP net loss was
$13.9 million , or$0.38 per basic share, compared with net loss of$20.3 million , or$0.71 per basic share in the fourth quarter of 2022, and a net loss of$9.0 million , or$0.27 per basic share in the third quarter of 2023. - Non-GAAP net income was
$1.6 million , or$0.04 per diluted share, compared with non-GAAP net loss of$5.4 million , or$0.19 per basic share in the fourth quarter of 2022, and a non-GAAP net loss of$1.7 million , or$0.05 per basic share in the third quarter of 2023.
Full Year 2023 Financial Summary
- GAAP revenue was $217.6 million, compared with $222.8 million in 2022.
- GAAP gross margin was 27.1%, compared with 15.1% in 2022. Non-GAAP gross margin was 29.8% compared to 18.5% in 2022.
- GAAP net loss was $56.0 million, or $1.75 per basic share, compared with net loss of $66.4 million, or $2.38 per basic share in 2022.
- Non-GAAP net loss was $13.3 million, or $0.42 per basic share, compared with non-GAAP net loss of $28.0 million, or $1.01 per basic share in 2022.
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.
First Quarter 2024 Business Outlook (+)
For first quarter of 2024, the company currently expects:
- Revenue in the range of
$41 million to$46 million . - Non-GAAP gross margin in the range of 21% to 23%.
- Non-GAAP net profit in the range of a loss of
$10.9 million to a loss of$12.6 million , and non-GAAP earnings per share in the range of a loss of$0.28 to loss of$0.33 using approximately 38.4 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
The company will host a conference call and webcast for analysts and investors on today,
Forward-Looking Information
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "could," "would," "target," "seek," "aim," "predicts," "think," "objectives," "optimistic," "new," "goal," "strategy," "potential," "is likely," "will," "expect," "plan" "project," "permit" or by other similar expressions that convey uncertainty of future events or outcomes. These statements include management’s beliefs and expectations related to our outlook for the first quarter of 2024. 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: the impact of the COVID-19 pandemic on our business and financial results; 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, cable television (CATV) broadband, telecom, or fiber-to-the-home (FTTH) markets; changes in the world economy (particularly in
Non-GAAP Financial Measures
We provide non-GAAP gross margin, non-GAAP net income (loss), adjusted EBITDA, 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 margin, we exclude stock-based compensation expense, expenses associated with discontinued products, and non-recurring (income) expenses, if any, from our GAAP gross margin. To arrive at our non-GAAP net income (loss), we exclude all amortization of intangible assets, stock-based compensation expense, non-recurring expenses, unrealized foreign exchange loss (gain), losses from the disposal of idle assets, if any, non-GAAP tax benefit (expenses), and expenses associated with discontinued products, from our GAAP net income (loss). Included in our non-recurring expenses in Q4 2023, Q4 2022 and Q3 2023 are certain non-recurring expenses related to pandemic events (if any), non-recurring tax expenses or benefits (if any), certain non-recurring legal expenses associated with litigation and certain legal and advisory expenses associated with the termination of the purchase agreement with
- We believe that elimination of items such as amortization of intangible assets, stock-based compensation expense, non-recurring revenue and expenses, losses from the disposal of idle assets, unrealized foreign exchange gain or loss, and depreciation on certain equipment undergoing reconfiguration is appropriate because treatment of these items may vary for reasons unrelated to our overall operating performance;
- We believe that elimination of expenses associated with discontinued products, including depreciation and inventory obsolescence is appropriate because these expenses are not indicative of our ongoing operations;
- We believe that estimating non-GAAP income taxes allows comparison with prior periods and provides additional information regarding the generation of potential future deferred tax assets;
- 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 as a supplement to GAAP measures to evaluate our overall operating performance.
A reconciliation of our GAAP net income (loss) and GAAP earnings (loss) per share for Q4 2023 and FY 2023 to our non-GAAP net income (loss) and earnings (loss) per share is provided below, together with corresponding reconciliations for Q4 2022 and FY 2022. A reconciliation of our GAAP net income (loss) and GAAP earnings (loss) per share for Q3 2023 to our non-GAAP net income (loss) and earnings (loss) per share was provided in our Q3 2023 earnings release.
Non-GAAP measures should not be considered as an alternative to net income (loss), earnings (loss) 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. We have not reconciled the non-GAAP measures included in our guidance to the appropriate GAAP financial measures because the GAAP measures are not readily determinable 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
Investor Relations Contacts:
+1-212-331-8417
ir@ao-inc.com
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ir@ao-inc.com
| Applied Optoelectronics, Inc. | ||||||
| Preliminary Condensed Consolidated Balance Sheets | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash, Cash Equivalents and Restricted Cash | $ | 55,097 | $ | 35,587 | ||
| Accounts Receivable, Net | 48,071 | 61,175 | ||||
| Notes receivable | 219 | 339 | ||||
| Inventories | 63,866 | 79,679 | ||||
| Prepaid Income Tax | 3 | - | ||||
| Prepaid Expenses and Other Current Assets | 5,349 | 6,384 | ||||
| Total Current Assets | 172,605 | 183,164 | ||||
| Property, Plant And Equipment, Net | 200,317 | 210,184 | ||||
| Land Use Rights, Net | 5,030 | 5,238 | ||||
| Operating Right of Use Asset | 5,026 | 5,566 | ||||
| Financing Right of Use Asset | - | 26 | ||||
| Intangible Assets, Net | 3,628 | 3,699 | ||||
| Other Assets | 2,580 | 386 | ||||
| TOTAL ASSETS | $ | 389,186 | $ | 408,263 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts Payable | $ | 32,892 | $ | 47,845 | ||
| Bank Acceptance Payable | 15,482 | 12,337 | ||||
| Accrued Expenses | 18,549 | 17,222 | ||||
| Deferred Revenue | 1,803 | 3,000 | ||||
| Current Lease Liability-Operating | 1,149 | 1,041 | ||||
| Current Lease Liability-Financing | - | 63 | ||||
| Current Portion of Notes Payable and Long Term Debt | 23,197 | 57,074 | ||||
| Current Portion of Convertible Debt | 286 | - | ||||
| Total Current Liabilities | 93,358 | 138,582 | ||||
| Convertible Senior Notes | 76,233 | 79,506 | ||||
| Other Long-Term Liabilities | 4,726 | 5,505 | ||||
| TOTAL LIABILITIES | 174,317 | 223,593 | ||||
| STOCKHOLDERS' EQUITY | ||||||
| Total Preferred Stock | ||||||
| Common Stock | 38 | 29 | ||||
| 478,972 | 391,526 | |||||
| Cumulative Translation Adjustment | 975 | 2,183 | ||||
| Retained Earnings | (265,116 | ) | (209,068 | ) | ||
| TOTAL STOCKHOLDERS' EQUITY | 214,869 | 184,670 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 389,186 | $ | 408,263 | ||
| Preliminary Condensed Consolidated Statements of Operations | |||||||||||||
| (In thousands, except per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended |
Twelve Months Ended |
||||||||||||
| Revenue | 2023 | 2022 | 2023 | 2022 | |||||||||
| CATV | $ | 12,551 | $ | 38,216 | $ | 59,942 | $ | 118,169 | |||||
| Datacenter | 44,481 | 16,485 | 141,213 | 77,094 | |||||||||
| Telecom | 2,818 | 6,365 | 13,831 | 24,727 | |||||||||
| FTTH | - | 4 | 56 | 129 | |||||||||
| Other | 603 | 514 | 2,604 | 2,699 | |||||||||
| Total Revenue | $ | 60,453 | $ | 61,584 | $ | 217,646 | $ | 222,818 | |||||
| Total Cost of Goods Sold | $ | 38,849 | $ | 55,359 | $ | 158,725 | $ | 189,191 | |||||
| Total Gross Profit | $ | 21,604 | $ | 6,225 | $ | 58,921 | $ | 33,627 | |||||
| Operating Expenses: | |||||||||||||
| Research and Development | $ | 9,341 | $ | 9,224 | $ | 35,975 | $ | 36,244 | |||||
| Sales and Marketing | 3,438 | 2,616 | 11,069 | 9,723 | |||||||||
| General and Administrative | 13,356 | 12,749 | 53,226 | 46,658 | |||||||||
| Total Operating Expenses | $ | 26,135 | $ | 24,589 | $ | 100,270 | $ | 92,625 | |||||
| Operating Loss | $ | (4,531 | ) | $ | (18,364 | ) | $ | (41,349 | ) | $ | (58,998 | ) | |
| Other Income (Expense): | |||||||||||||
| Interest Income | $ | 475 | $ | 36 | $ | 609 | $ | 126 | |||||
| Interest Expense | (3,127 | ) | (1,888 | ) | (9,428 | ) | (6,319 | ) | |||||
| Other Income (Expense), net | (6,674 | ) | (34 | ) | (5,871 | ) | (1,205 | ) | |||||
| Total Other Income (Expense): | $ | (9,326 | ) | $ | (1,886 | ) | $ | (14,690 | ) | $ | (7,398 | ) | |
| Net loss before Income Taxes | $ | (13,857 | ) | $ | (20,250 | ) | $ | (56,039 | ) | $ | (66,396 | ) | |
| Income Tax Expense | (1 | ) | (1 | ) | (9 | ) | (1 | ) | |||||
| Net loss | $ | (13,858 | ) | $ | (20,251 | ) | $ | (56,048 | ) | $ | (66,397 | ) | |
| Net loss per share attributable to common stockholders | |||||||||||||
| basic | $ | (0.38 | ) | $ | (0.71 | ) | $ | (1.75 | ) | $ | (2.38 | ) | |
| diluted | $ | (0.38 | ) | $ | (0.71 | ) | $ | (1.75 | ) | $ | (2.38 | ) | |
| Weighted-average shares used to compute net loss per share attributable to common stockholders | |||||||||||||
| basic | 36,549 | 28,460 | 31,944 | 27,846 | |||||||||
| diluted | 36,549 | 28,460 | 31,944 | 27,846 | |||||||||
| Reconciliation of Statements of Operations under GAAP and Non-GAAP | |||||||||||||
| (In thousands, except per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended |
Twelve Months Ended |
||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| GAAP revenue | $ | 60,453 | $ | 61,584 | $ | 217,646 | $ | 222,818 | |||||
| Non-recurring customer credit | - | - | - | - | |||||||||
| Non-GAAP revenue | $ | 60,453 | $ | 61,584 | $ | 217,646 | $ | 222,818 | |||||
| GAAP total gross profit (a) | $ | 21,604 | $ | 6,225 | $ | 58,921 | $ | 33,627 | |||||
| Share-based compensation expense | 131 | 118 | 524 | 489 | |||||||||
| Non-recurring expense | - | 5 | - | 261 | |||||||||
| Expenses associated with discontinued products | 275 | 6,802 | 5,520 | 6,858 | |||||||||
| Non-GAAP total gross profit (a) | $ | 22,010 | $ | 13,150 | $ | 64,965 | $ | 41,235 | |||||
| GAAP net loss | $ | (13,858 | ) | $ | (20,251 | ) | $ | (56,048 | ) | $ | (66,397 | ) | |
| Share-based compensation expense | 3,297 | 2,357 | 11,885 | 9,602 | |||||||||
| Expenses associated with discontinued products | 274 | 6,802 | 5,519 | 6,859 | |||||||||
| Non-cash expenses associated with discontinued products | 816 | 1,147 | 3,990 | 4,625 | |||||||||
| Amortization of intangible assets | 171 | 157 | 659 | 616 | |||||||||
| Non-recurring (income) expense | 9,603 | 15 | 11,907 | 233 | |||||||||
| Unrealized exchange loss (gain) | (635 | ) | (434 | ) | (1,387 | ) | 1,809 | ||||||
| Non-GAAP tax benefit | 1,908 | 4,793 | 10,146 | 14,638 | |||||||||
| Non-GAAP net loss | $ | 1,576 | $ | (5,414 | ) | $ | (13,329 | ) | $ | (28,015 | ) | ||
| GAAP net loss | $ | (13,858 | ) | $ | (20,251 | ) | $ | (56,048 | ) | $ | (66,397 | ) | |
| Share-based compensation expense | 3,297 | 2,358 | 11,885 | $ | 9,602 | ||||||||
| Expenses associated with discontinued products | 274 | 6,802 | 5,519 | $ | 6,859 | ||||||||
| Non-cash expenses associated with discontinued products | 816 | 1,147 | 3,990 | $ | 4,625 | ||||||||
| Amortization of intangible assets | 171 | 158 | 659 | $ | 616 | ||||||||
| Non-recurring expense (income) | 9,603 | 14 | 11,907 | $ | 233 | ||||||||
| Unrealized exchange loss (gain) | (635 | ) | (434 | ) | (1,387 | ) | $ | 1,809 | |||||
| Tax (benefit) expense related to the above | - | (1 | ) | 8 | (1 | ) | |||||||
| Depreciation expense | 3,894 | 4,200 | 15,730 | $ | 17,960 | ||||||||
| Interest (income) expense, net | 1,206 | 1,852 | 7,373 | $ | 6,191 | ||||||||
| Adjusted EBITDA | $ | 4,768 | $ | (4,155 | ) | $ | (364 | ) | $ | (18,503 | ) | ||
| GAAP diluted net loss per share | $ | (0.31 | ) | $ | (0.71 | ) | $ | (1.75 | ) | $ | (2.38 | ) | |
| Share-based compensation expense | 0.07 | 0.08 | 0.37 | 0.34 | |||||||||
| Expenses associated with discontinued products | 0.01 | 0.24 | 0.17 | 0.24 | |||||||||
| Non-cash expenses associated with discontinued products | 0.02 | 0.04 | 0.12 | 0.17 | |||||||||
| Amortization of intangible assets | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||
| Non-recurring (income) expense | 0.21 | - | 0.37 | 0.01 | |||||||||
| Unrealized exchange loss (gain) | (0.01 | ) | (0.02 | ) | (0.04 | ) | 0.07 | ||||||
| Non-GAAP tax benefit | 0.04 | 0.17 | 0.32 | 0.53 | |||||||||
| Non-GAAP diluted net gain/(loss) per share | $ | 0.04 | $ | (0.19 | ) | (0.42 | ) | (1.01 | ) | ||||
| Shares used to compute diluted loss per share | 44,778 | 28,460 | 31,944 | 27,846 | |||||||||
| Shares used to compute diluted earnings per share | 44,778 | 28,460 | 31,944 | 27,846 | |||||||||
| (a) Provided for the purpose of calculating gross profit as a percentage of revenue (gross margin). | |||||||||||||
Source: Applied Optoelectronics, Inc.