Applied Optoelectronics Reports Sixth Consecutive Quarter of Record Revenue
Third Quarter 2014 Highlights
- Record revenue of
$36.5 million grew 76% year-over-year and 12% sequentially - Data center revenue grew 12% sequentially to reach a new record of
$20.1 million - CATV revenue of
$12.2 million increased 15% sequentially
"We are very pleased to report our sixth consecutive quarter of record revenue that was primarily driven by demand for our 10G and 40G data center products," said Dr.
Third Quarter 2014 Financial Summary
- Total revenue grew to
$36.5 million , up 76% year-over-year compared with$20.8 million in the same quarter last year and up 12% compared with$32.7 million in the previous quarter.
- GAAP gross margin was 33.2%, compared with 30.4% in the same quarter last year and 34.3% in the previous quarter. Non-GAAP gross margin was 33.3%, compared with 30.5% in the same quarter last year and 34.4% in the previous quarter. Gross margin was slightly below our expected range due to annual price negotiations on our 10G data center products and somewhat higher costs in the early stages of the rapid ramp of our 40G data center products.
- GAAP net income was
$1.6 million or$0.10 per diluted share, compared with net income of$0.4 million or$0.04 per diluted share in the same quarter last year and net income of$1.9 million or$0.12 per diluted share in the previous quarter.
- Non-GAAP net income was
$3.1 million or$0.20 per diluted share, compared with a non-GAAP net income of$0.6 million or$0.07 per diluted share in the same quarter last year and non-GAAP net income of$2.4 million or$0.15 per diluted share in the previous quarter.
- On
September 30, 2014 , cash, cash equivalents and short-term investments totaled$45.8 million , up from theJune 30, 2014 balance of$43.0 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 2014 Business Outlook (+)
For the fourth quarter of 2014, the company currently expects:
- Revenue in the range of
$39.5 million to$41.5 million - Non-GAAP gross margin in the range of 33.5% to 34.5%
- Non-GAAP net income in the range of
$4.3 million to$4.8 million , and non-GAAP fully diluted earnings per share in the range of$0.28 to$0.31 using approximately 15.6 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 CATV, internet data center 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 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 Q3 non-recurring expenses are items related to the relocation of our
- We believe that elimination of items such as stock-based compensation expense, 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.
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For additional information, visit www.ao-inc.com.
Preliminary Condensed Consolidated Balance Sheets | ||
(In thousands, except per share data) | ||
(Unaudited) | ||
ASSETS | ||
CURRENT ASSETS | ||
Cash, Cash Equivalents and Short term investments | $ 45,779 | $ 30,751 |
Accounts Receivable, Net | 24,181 | 22,089 |
Inventories | 33,129 | 19,608 |
Notes Receivable | 358 | -- |
Other Receivables | 1,785 | 742 |
Prepaid Expenses and Other Current Assets | 5,704 | 4,746 |
Total Current Assets | 110,936 | 77,936 |
Property, Plant And Equipment, Net | 51,267 | 31,134 |
Land Use Rights, Net | 931 | 959 |
Intangible Assets, net | 3,830 | 851 |
Other Assets | 1,190 | 177 |
TOTAL ASSETS | $ 168,154 | $ 111,057 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
CURRENT LIABILITIES | ||
Accounts Payable | $ 22,616 | $ 15,010 |
Accrued Expenses | 4,960 | 4,515 |
Bank Acceptance Payable | 2,115 | 2,347 |
Bank Loan-Short Term | 8,734 | 13,260 |
Current Portion of Long Term Debt | 658 | 3,925 |
Total Current Liabilities | 39,083 | 39,057 |
Notes Payable and Long Term Debt | 14,000 | 8,923 |
Other Long Term liabilities | 1,250 | -- |
TOTAL LIABILITIES | 54,333 | 47,980 |
STOCKHOLDERS' EQUITY | ||
TOTAL STOCKHOLDERS' EQUITY | 113,821 | 63,077 |
Total Liabilities, redeemable preferred stock and stockholders' equity | $ 168,154 | $ 111,057 |
Preliminary Condensed Consolidated Statements of Operations | |||||
(In thousands, except per share data) | |||||
(Unaudited) | |||||
Three Months Ended |
Nine Months Ended |
||||
2014 | 2013 | 2014 | 2013 | ||
CATV | $ 12,246 | $ 14,559 | $ 32,640 | $ 33,332 | |
Datacenter | 20,056 | 3,216 | 49,530 | 13,476 | |
FTTH | 2,616 | 982 | 7,928 | 2,774 | |
Telecom | 1,294 | 703 | 2,904 | 1,057 | |
Other | 337 | 1,306 | 1,056 | 4,041 | |
Total Revenues | 36,549 | 20,766 | 94,058 | 54,680 | |
Total Cost of Goods Sold | 24,403 | 14,445 | 62,071 | 38,327 | |
Total Gross Profit | 12,146 | 6,321 | 31,987 | 16,353 | |
Operating Expenses: | |||||
Research & Development | 4,194 | 2,210 | 11,749 | 6,112 | |
Sales and Marketing | 1,622 | 1,034 | 4,452 | 2,994 | |
General and administrative | 4,458 | 2,436 | 11,964 | 7,257 | |
Total Operating Expenses | 10,274 | 5,680 | 28,165 | 16,363 | |
Operating Income (Loss) | 1,872 | 641 | 3,822 | (10) | |
Other Income (Expense): | |||||
Interest Income | 95 | 15 | 280 | 50 | |
Interest Expense | (55) | (323) | (277) | (925) | |
Other Income | (38) | 66 | 94 | 266 | |
Other Expense | (220) | (8) | (151) | (266) | |
Total Other Income (Expenses): | (218) | (250) | (54) | (875) | |
Net Income (loss) before Income Taxes | 1,654 | 391 | 3,768 | (885) | |
Income Tax | (77) | -- | (187) | -- | |
Net Income (loss) after Income Taxes | $ 1,577 | $ 391 | $ 3,581 | $ (885) | |
Net income (loss) per share attributable to common stockholders | |||||
basic | $ 0.11 | $ 0.04 | $ 0.25 | $ (3.24) | |
diluted | $ 0.10 | $ 0.04 | $ 0.24 | $ (3.24) | |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders |
|||||
basic | 14,806 | 8,996 | 14,135 | 273 | |
diluted | 15,595 | 9,155 | 14,950 | 273 |
Preliminary Condensed Consolidated NON GAAP Statements of Operations | |||||
(In thousands, except per share data) | |||||
(Unaudited) | |||||
Three Months Ended |
Nine Months Ended |
||||
2014 | 2013 | 2014 | 2013 | ||
CATV | $ 12,246 | $ 14,559 | $ 32,640 | $ 33,332 | |
Datacenter | 20,056 | 3,216 | 49,530 | 13,476 | |
FTTH | 2,616 | 982 | 7,928 | 2,774 | |
Telecom | 1,294 | 703 | 2,904 | 1,057 | |
Other | 337 | 1,306 | 1,056 | 4,041 | |
Total Revenues | 36,549 | 20,766 | 94,058 | 54,680 | |
Total Cost of Goods Sold | 24,396 | 14,432 | 62,009 | 38,288 | |
Total Gross Profit | 12,153 | 6,334 | 32,049 | 16,392 | |
Operating Expenses: | |||||
Research & Development | 4,165 | 2,198 | 11,665 | 6,075 | |
Sales and Marketing | 1,598 | 1,023 | 4,380 | 2,961 | |
General and administrative | 3,164 | 2,320 | 9,657 | 6,905 | |
Total Operating Expenses | 8,927 | 5,541 | 25,702 | 15,941 | |
Operating Income (Loss) | 3,226 | 793 | 6,347 | 451 | |
Other Income (Expense): | |||||
Interest Income | 95 | 15 | 280 | 50 | |
Interest Expense | (55) | (323) | (277) | (925) | |
Other Income / Expense | (55) | 123 | 148 | 259 | |
Total Other Income (Expenses): | (15) | (185) | 151 | (616) | |
Net Income (loss) before Income Taxes | 3,211 | 608 | 6,498 | (165) | |
Income Tax | (77) | -- | (187) | -- | |
Net Income (loss) after Income Taxes | $ 3,134 | $ 608 | 6,311 | (165) | |
Net income (loss) per share attributable to common stockholders | |||||
basic | $ 0.21 | $ 0.07 | $ 0.45 | $ (0.60) | |
diluted | $ 0.20 | $ 0.07 | $ 0.42 | $ (0.60) | |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders |
|||||
basic | 14,806 | 8,996 | 14,135 | 273 | |
diluted | 15,595 | 9,155 | 14,950 | 273 |
Preliminary Condensed Consolidated Statements of Operations | |||||
(In thousands, except per share data) | |||||
(Unaudited) | |||||
Three Months Ended |
Nine Months Ended |
||||
2014 | 2013 | 2014 | 2013 | ||
GAAP total gross profit | $ 12,146 | $ 6,321 | $ 31,987 | $ 16,353 | |
Share-based compensation expense | 7 | 13 | 62 | 39 | |
Non-GAAP income (loss) from gross profit | 12,153 | 6,334 | 32,049 | 16,392 | |
GAAP research and development expense | 4,194 | 2,210 | 11,749 | 6,112 | |
Share-based compensation expense | 29 | 12 | 84 | 37 | |
Non-GAAP research and development expense | 4,165 | 2,198 | 11,665 | 6,075 | |
GAAP sales and marketing expense | 1,622 | 1,034 | 4,452 | 2,994 | |
Share-based compensation expense | 24 | 11 | 72 | 33 | |
Non-GAAP sales and marketing expense | 1,598 | 1,023 | 4,380 | 2,961 | |
GAAP general and administrative expense | 4,458 | 2,436 | 11,964 | 7,257 | |
Share-based compensation expense | 427 | 99 | 1,276 | 267 | |
Amortization expense | 94 | 17 | 258 | 51 | |
Non Recurring expense | 773 | -- | 773 | 34 | |
Non-GAAP general and administrative expense | 3,164 | 2,320 | 9,657 | 6,905 | |
GAAP total operating expense | 10,274 | 5,680 | 28,165 | 16,363 | |
Share-based compensation expense | 480 | 122 | 1,432 | 337 | |
Amortization expense | 94 | 17 | 258 | 51 | |
Non Recurring expense | 773 | -- | 773 | 34 | |
Non-GAAP total operating expense | 8,927 | 5,541 | 25,702 | 15,941 | |
GAAP operating income (loss) | 1,872 | 641 | 3,822 | (10) | |
Share-based compensation expense | 487 | 135 | 1,494 | 376 | |
Amortization expense | 94 | 17 | 258 | 51 | |
Non Recurring expense | 773 | -- | 773 | 34 | |
Non-GAAP operating income (loss) | 3,226 | 793 | 6,347 | 451 | |
GAAP other income (loss) | (218) | (250) | (54) | (875) | |
Unrealized exchange loss (gain) | 203 | 65 | 205 | 259 | |
Non-GAAP other income (loss) | (15) | (185) | 151 | (616) | |
GAAP net income (loss) | 1,577 | 391 | 3,581 | (885) | |
Amortization of intangible assets | 94 | 17 | 258 | 51 | |
Share-based compensation expense | 487 | 135 | 1,494 | 376 | |
Non Recurring charges | 773 | -- | 773 | 34 | |
Unrealized exchange loss (gain) | 203 | 65 | 205 | 259 | |
Non-GAAP net income (loss) | 3,134 | 608 | 6,311 | (165) | |
GAAP net income (loss) | 1,577 | 391 | 3,581 | (885) | |
Amortization of intangible assets | 94 | 17 | 258 | 51 | |
Share-based compensation expense | 487 | 136 | 1,494 | 376 | |
Depreciation expense | 1,585 | 859 | 4,091 | 2,385 | |
Non Recurring charges | 773 | -- | 773 | 34 | |
Unrealized exchange loss (gain) | 203 | 65 | 205 | 259 | |
Interest (income) expense, net | (40) | 308 | (4) | 876 | |
Taxes related to the above | 77 | -- | 187 | -- | |
Adjusted EBITDA | $ 4,756 | $ 1,776 | $ 10,585 | $ 3,096 |
CONTACT: Investor Relations Contacts:Source:Applied Optoelectronics, Inc. Stefan J. Murry Chief Financial Officer ir@ao-inc.comThe Blueshirt Group , Investor RelationsMaria Riley +1-415-217-7722 ir@ao-inc.com
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