SUGAR LAND, Texas, Feb. 25, 2015 (GLOBE NEWSWIRE) -- Applied
Optoelectronics, Inc. (Nasdaq:AAOI), a leading provider of fiber-optic
access network products for the internet data center, cable broadband
and fiber-to-the-home markets, today announced financial results for its
fourth quarter and year ended December 31, 2014.
"Fourth quarter revenue grew 53% year-over-year and we achieved record
gross margin. As we reported in January, fourth quarter production was
below our initial expectations due to a supply issue with an externally
sourced optical sub-assembly for a new 40 Gbps data center transceiver,"
said Dr. Thompson Lin, Applied Optoelectronics, Inc. (AOI) founder and
CEO. "Outside of this supply issue, demand for our data center products
remained very high with sales inline with our expectations."
Dr. Lin continued, "Overall for the full year our total revenue grew
66%, driven primarily by our rapid expansion in the data center optical
market. We are proud to have achieved this above market growth while
also improving our gross margin and significantly increasing our net
income."
Fourth Quarter 2014 Financial Summary
-
Total revenue grew to $36.4 million, up 53% compared with $23.7 million
in the fourth quarter 2013 and relatively unchanged compared with $36.5
million in the third quarter 2014.
-
GAAP gross margin was 33.7%, compared with 28.1% in the fourth quarter
2013 and 33.2% in the third quarter 2014. Non-GAAP gross margin
increased to 36.0%, compared with 28.2% in the fourth quarter 2013 and
33.3% in the third quarter 2014.
-
GAAP net income was $0.7 million or $0.05 per diluted share, compared
with a net loss of $0.5 million or a $0.04 loss per diluted share in the
fourth quarter 2013 and net income of $1.6 million or $0.10 per diluted
share in the third quarter 2014.
-
Non-GAAP net income was $4.0 million or $0.27 per diluted share,
compared with a non-GAAP net income of $0.3 million or $0.02 per diluted
share in the fourth quarter 2013 and non-GAAP net income of $3.1
million or $0.20 per diluted share in third quarter 2014.
Full Year 2014 Financial Summary
-
Total revenue grew to $130.4 million, up 66% compared with $78.4 million in 2013.
-
GAAP gross margin was 33.9%, compared with 29.4% in 2013. Non-GAAP gross margin was 34.6%, compared with 29.4% in 2013.
-
GAAP net income was $4.3 million or $0.28 per diluted share, compared
with a net loss of $1.4 million or a $0.14 loss per diluted share in
2013. Non-GAAP net income was $10.4 million or $0.68 per diluted share,
compared with a non-GAAP net income of $0.1 million or $0.01 per diluted
share in 2013.
-
On December 31, 2014, cash, cash equivalents and short-term investments
totaled $40.9 million, an increase from the December 31, 2013 balance of
$30.8 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.
First Quarter 2015 Business Outlook (+)
For the first quarter of 2015, the company currently expects:
-
Revenue in the range of $35.0 million to $36.5 million
-
Non-GAAP gross margin in the range of 34.0% to 35.0%
-
Non-GAAP net income in the range of $2.0 million to $3.2 million, and
non-GAAP fully diluted earnings per share in the range of $0.13 to $0.21
using approximately 15.3 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
Applied Optoelectronics will host a conference call today, February 25,
2015 at 4:30 p.m. Eastern time / 3:30 p.m. Central time for analysts and
investors to discuss its fourth quarter and year 2014 results and
outlook for its first quarter of 2015. Open to the public, investors may
access the call by dialing (719) 457-2648. A live audio webcast of the
conference call along with supplemental financial information will also
be accessible on 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
two hours after the call and will run for five business days and may be
accessed by dialing (719) 457-0820 and entering passcode 2788995.
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 data
center, CATV or FTTH markets; changes in the world economy
(particularly in the United States and China); the negative effects of
seasonality; and other risks and uncertainties described more fully in
the company's documents filed with or furnished to the Securities and
Exchange Commission. More information about these and other risks that
may impact the company's business are set forth in the "Risk Factors"
section of the company's quarterly and annual reports on file with the
Securities and Exchange Commission. In some cases, you can identify
forward-looking statements by terminology such as ''may,'' ''will,''
''should,'' ''expects,'' ''plans,'' ''anticipates,'' ''believes,'' or
''estimates" or by other similar expressions that convey uncertainty of
future events or outcomes. You should not rely on forward-looking
statements as predictions of future events. All forward-looking
statements in this press release are based upon information available to
us as of the date hereof, and qualified in their entirety by this
cautionary statement. Except as required by law, we assume no obligation
to update forward-looking statements for any reason after the date of
this press release to conform these statements to actual results or to
changes in the company's expectations.
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 Q4 non-recurring
expenses are items related to the relocation of our Taiwan plant and
certain non-recurring expenses related to our fiber-to-the-home
business. To arrive at Adjusted EBITDA, we exclude these same items and,
additionally, exclude asset impairment charges, loss (gain) from
disposal of idle assets, unrealized exchange loss (gain), interest
(income) expense, on a net basis, provision for (benefit from) income
taxes and depreciation expense, from our GAAP net income (loss). 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, 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.
About Applied Optoelectronics
Applied Optoelectronics, Inc. (AOI) is a leading developer and
manufacturer of advanced optical products, including components, modules
and equipment. AOI's products are the building blocks for broadband
fiber access networks around the world, where they are used in the
internet data center, CATV broadband and fiber-to-the-home markets. AOI
supplies optical networking lasers, components and equipment to tier-1
customers in all three of these markets. In addition to its corporate
headquarters, wafer fab and advanced engineering and production
facilities in Sugar Land, TX, AOI has engineering and manufacturing
facilities in Taipei, Taiwan and Ningbo, China.
For additional information, visit
www.ao-inc.com. Applied Optoelectronics, Inc. and the related AOI logo are trademarks of Applied Optoelectronics, Inc.
Applied Optoelectronics, Inc.
|
Preliminary Condensed Consolidated Balance Sheets
|
(In thousands, except per share data)
|
(Unaudited)
|
|
December 31, 2014
|
December 31, 2013
|
|
|
|
ASSETS
|
|
|
CURRENT ASSETS
|
|
|
Cash, Cash Equivalents and Short term investments
|
$ 40,873
|
$ 30,751
|
Accounts Receivable, Net
|
31,589
|
22,089
|
Inventories
|
33,780
|
19,608
|
Notes Receivable
|
980
|
--
|
Prepaid Expenses and Other Current Assets
|
6,017
|
5,488
|
Total Current Assets
|
113,239
|
77,936
|
|
|
|
Property, Plant And Equipment, Net
|
64,808
|
31,134
|
Land Use Rights, Net
|
930
|
959
|
Intangible Assets, net
|
3,833
|
851
|
Other Assets
|
860
|
177
|
TOTAL ASSETS
|
$ 183,670
|
$ 111,057
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
Accounts Payable
|
$ 30,799
|
$ 15,010
|
Accrued Expenses
|
6,940
|
4,515
|
Bank Acceptance Payable
|
1,271
|
2,347
|
Bank Loan-Short Term
|
8,205
|
13,260
|
Current Portion of Long Term Debt
|
1,386
|
3,925
|
Total Current Liabilities
|
48,601
|
39,057
|
|
|
|
Notes Payable and Long Term Debt
|
19,057
|
8,923
|
Other Long Term liabilities
|
1,000
|
--
|
TOTAL LIABILITIES
|
68,658
|
47,980
|
|
|
TOTAL STOCKHOLDERS' EQUITY
|
115,012
|
63,077
|
|
|
|
Total Liabilities, redeemable preferred stock and stockholders' equity
|
$ 183,670
|
$ 111,057
|
|
Applied Optoelectronics, Inc.
|
Preliminary Condensed Consolidated Statements of Operations
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
Revenue
|
2014
|
2013
|
2014
|
2013
|
CATV
|
$ 14,749
|
$ 14,041
|
$ 47,389
|
$ 47,373
|
Datacenter
|
14,923
|
5,910
|
64,453
|
19,386
|
FTTH
|
5,663
|
1,603
|
13,591
|
4,377
|
Other
|
1,056
|
2,190
|
5,016
|
7,288
|
Total Revenue
|
36,391
|
23,744
|
130,449
|
78,424
|
|
|
|
|
|
Total Cost of Goods Sold
|
24,132
|
17,068
|
86,203
|
55,396
|
|
|
|
|
|
Total Gross Profit
|
12,259
|
6,676
|
44,246
|
23,028
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Research & Development
|
4,221
|
2,400
|
15,970
|
8,512
|
Sales and Marketing
|
1,591
|
1,198
|
6,043
|
4,191
|
General and administrative
|
5,131
|
3,375
|
17,095
|
10,632
|
Total Operating Expenses
|
10,943
|
6,973
|
39,108
|
23,335
|
|
|
|
|
|
Operating Income (Loss)
|
1,316
|
(297)
|
5,138
|
(307)
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
Interest Income
|
89
|
55
|
369
|
104
|
Interest Expense
|
(50)
|
(200)
|
(326)
|
(1,125)
|
Other Income
|
208
|
69
|
302
|
334
|
Other Expense
|
(849)
|
(147)
|
(1,001)
|
(412)
|
Total Other Income (Expenses):
|
(602)
|
(223)
|
(656)
|
(1,099)
|
|
|
|
Net Income (loss) before Income Taxes
|
714
|
(520)
|
4,482
|
(1,406)
|
|
|
|
|
|
Income Tax
|
(12)
|
--
|
(199)
|
--
|
|
|
|
Net Income (loss)
|
$ 702
|
$ (520)
|
$ 4,283
|
$ (1,406)
|
Net income (loss) per share attributable to common stockholders
|
|
|
basic
|
$ 0.05
|
$ (0.04)
|
$ 0.30
|
$ (0.14)
|
diluted
|
$ 0.05
|
$ (0.04)
|
$ 0.28
|
$ (0.14)
|
|
|
|
|
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders
|
|
|
basic
|
14,819
|
12,631
|
14,307
|
9,965
|
diluted
|
15,207
|
12,631
|
15,187
|
9,965
|
|
Applied Optoelectronics, Inc.
|
Preliminary Condensed Consolidated NON GAAP Statements of Operations
|
(In thousands, except per share data)
|
(Unaudited)
|
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
Revenue
|
2014
|
2013
|
2014
|
2013
|
CATV
|
$ 14,749
|
$ 14,041
|
$ 47,389
|
$ 47,373
|
Datacenter
|
14,923
|
5,910
|
64,453
|
19,386
|
FTTH
|
5,663
|
1,603
|
13,591
|
4,377
|
Other
|
1,056
|
2,190
|
5,016
|
7,288
|
Total Revenue
|
36,391
|
23,744
|
130,449
|
78,424
|
|
|
|
|
|
Total Cost of Goods Sold
|
23,308
|
17,052
|
85,317
|
55,340
|
|
|
|
|
|
Total Gross Profit
|
13,083
|
6,692
|
45,132
|
23,084
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Research & Development
|
4,190
|
2,383
|
15,855
|
8,459
|
Sales and Marketing
|
1,566
|
1,178
|
5,946
|
4,139
|
General and administrative
|
3,762
|
2,718
|
13,419
|
9,622
|
Total Operating Expenses
|
9,518
|
6,279
|
35,220
|
22,220
|
|
|
|
|
|
Operating Income (Loss)
|
3,565
|
413
|
9,912
|
864
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
Interest Income
|
89
|
55
|
369
|
104
|
Interest Expense
|
(50)
|
(200)
|
(326)
|
(1,125)
|
Other Income / Expense
|
453
|
7
|
601
|
264
|
Total Other Income (Expenses):
|
492
|
(138)
|
644
|
(757)
|
|
|
|
Net Income (loss) before Income Taxes
|
4,057
|
275
|
10,556
|
107
|
|
|
|
|
|
Income Tax
|
(12)
|
--
|
(199)
|
--
|
|
|
|
Net Income (loss)
|
$ 4,045
|
$ 275
|
$ 10,357
|
$ 107
|
Net income (loss) per share attributable to common stockholders
|
|
|
basic
|
$ 0.27
|
$ 0.02
|
$ 0.72
|
$ 0.01
|
diluted
|
$ 0.27
|
$ 0.02
|
$ 0.68
|
$ 0.01
|
|
|
|
|
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders
|
|
|
basic
|
14,819
|
12,631
|
14,307
|
9,965
|
diluted
|
15,207
|
13,291
|
15,187
|
10,626
|
|
Applied Optoelectronics, Inc.
|
Preliminary Condensed Consolidated Statements of Operations
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Twelve Months Ended December 31,
|
|
2014
|
2013
|
2014
|
2013
|
GAAP total gross profit
|
$ 12,259
|
$ 6,676
|
$ 44,246
|
$ 23,028
|
Share-based compensation expense
|
27
|
16
|
89
|
56
|
Non Recurring expense
|
797
|
--
|
797
|
--
|
Non-GAAP income (loss) from gross profit
|
13,083
|
6,692
|
45,132
|
23,084
|
|
|
|
|
|
GAAP research and development expense
|
4,221
|
2,400
|
15,970
|
8,512
|
Share-based compensation expense
|
31
|
17
|
115
|
53
|
Non-GAAP research and development expense
|
4,190
|
2,383
|
15,855
|
8,459
|
|
|
|
|
|
GAAP sales and marketing expense
|
1,591
|
1,198
|
6,043
|
4,191
|
Share-based compensation expense
|
25
|
20
|
97
|
52
|
Non-GAAP sales and marketing expense
|
1,566
|
1,178
|
5,946
|
4,139
|
|
|
|
|
|
GAAP general and administrative expense
|
5,131
|
3,375
|
17,095
|
10,632
|
Share-based compensation expense
|
483
|
640
|
1,759
|
907
|
Amortization expense
|
98
|
17
|
356
|
68
|
Non Recurring expense
|
788
|
--
|
1,561
|
35
|
Non-GAAP general and administrative expense
|
3,762
|
2,718
|
13,419
|
9,622
|
|
|
|
|
|
GAAP total operating expense
|
10,943
|
6,973
|
39,108
|
23,335
|
Share-based compensation expense
|
539
|
677
|
1,971
|
1,012
|
Amortization expense
|
98
|
17
|
356
|
68
|
Non Recurring expense
|
788
|
--
|
1,561
|
35
|
Non-GAAP total operating expense
|
9,518
|
6,279
|
35,220
|
22,220
|
|
|
|
|
|
GAAP operating income (loss)
|
1,316
|
(297)
|
5,138
|
(307)
|
Share-based compensation expense
|
566
|
693
|
2,060
|
1,068
|
Amortization expense
|
98
|
17
|
356
|
68
|
Non Recurring expense
|
1,585
|
--
|
2,358
|
35
|
Non-GAAP operating income (loss)
|
3,565
|
413
|
9,912
|
864
|
|
|
|
|
|
GAAP other income (loss)
|
(602)
|
(223)
|
(656)
|
(1,099)
|
Unrealized exchange loss (gain)
|
1,094
|
85
|
1,300
|
342
|
Non-GAAP other income (loss)
|
492
|
(138)
|
644
|
(757)
|
|
|
|
|
|
GAAP net income (loss)
|
702
|
(520)
|
4,283
|
(1,406)
|
Amortization of intangible assets
|
98
|
17
|
356
|
68
|
Share-based compensation expense
|
566
|
693
|
2,060
|
1,068
|
Non Recurring charges
|
1,585
|
--
|
2,358
|
35
|
Unrealized exchange loss (gain)
|
1,094
|
85
|
1,300
|
342
|
Non-GAAP net income (loss)
|
4,045
|
275
|
10,357
|
107
|
|
|
|
|
|
GAAP net income (loss)
|
702
|
(520)
|
4,283
|
(1,406)
|
Amortization of intangible assets
|
98
|
17
|
356
|
68
|
Share-based compensation expense
|
566
|
693
|
2,060
|
1,068
|
Depreciation expense
|
1,722
|
954
|
5,813
|
3,339
|
Non Recurring charges
|
1,585
|
--
|
2,358
|
35
|
Unrealized exchange loss (gain)
|
1,094
|
85
|
1,300
|
342
|
Interest (income) expense, net
|
(39)
|
145
|
(43)
|
1,021
|
Taxes related to the above
|
12
|
--
|
199
|
--
|
Adjusted EBITDA
|
$ 5,740
|
$ 1,374
|
$ 16,326
|
$ 4,467
|