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NeoPhotonics Reports Second Quarter 2012 Financial Results Including Record Quarterly Revenue
- Second Quarter 2012 Results Exceed Projections
- Revenue Driven by Strong Demand in High Speed Coherent & Access Products
- Gross Margin Continues to Expand
“We are very pleased with our performance for the second quarter, which
exceeded our financial projections for revenue, gross margin and
profitability,” said
Highlights for the Second Quarter of 2012
-
Revenue was
$63.0 million , up$8.8 million , or 16%, from the prior quarter & up$12.0 million , or 24%, from the second quarter 2011 - Gross margin was 24.8%, up from 21.0% in the prior quarter & compares to 26.7% in the second quarter 2011
- Non-GAAP gross margin was 26.5%, up from 23.9% in the prior quarter & 26.4% in the second quarter 2011
-
Loss from continuing operations was
$3.7 million , an improvement of$8.1 million , or 69%, from the prior quarter and compares to income of$13.7 million in the second quarter 2011 -
Non-GAAP loss from continuing operations was
$1.7 million , an improvement of$3.7 million , or 68%, from the prior quarter and compares to income of$0.2 million in the second quarter 2011 -
Diluted loss per share from continuing operations was
$0.13 , an improvement from a loss of$0.47 in the prior quarter & compares to income of$0.54 in the second quarter 2011 -
Non-GAAP diluted loss per share from continuing operations was
$0.06 , an improvement from a loss of$0.22 in the prior quarter & compares to income of$0.01 in the second quarter 2011 -
Adjusted EBITDA was
$1.8 million , up from a loss of$2.4 million in the prior quarter & compares to adjusted EBITDA of$3.1 million in the second quarter 2011.
Total cash, cash equivalents and short-term investments was
A reconciliation of GAAP financial measures to Non-GAAP financial measures is included at the end of this press release. See “Use of Non-GAAP Financial Information” later in this press release for a description of these Non-GAAP financial measures.
Outlook for the Quarter Ending
The company’s current expectation for the third quarter 2012 is:
-
Revenue in the range of
$60 million to $66 million - Non-GAAP gross margin in the range of 26% to 28%, primarily depending on volume and product mix
-
Diluted loss per share from continuing operations in the range of
$0.12 to $0.17 & Non-GAAP diluted loss per share from continuing operations in the range of$0.02 to $0.10 .
The Non-GAAP outlook excludes the expected amortization of intangibles
and other assets of approximately
Conference Call
The company will discuss these financial results in a conference call at
About
© 2012
Forward Looking Statements
The statements in this press release under the heading “Outlook for the
Quarter Ending
Use of Non-GAAP Financial Information
The company provides Non-GAAP gross margin, Non-GAAP net income, Non-GAAP diluted net income per share and adjusted EBITDA, as supplemental information. In computing certain of these Non-GAAP financial measures, the company excludes certain items included under GAAP, including the amortization of purchased intangible assets, stock-based compensation expense, acquisition-related costs, restructuring charges, the fair value adjustment to contingent consideration, gain on sale of shares of an unconsolidated investee, and the related tax effects. In computing adjusted EBITDA, the company also excludes interest income and expense, provision for income taxes and depreciation expense.
Management uses these Non-GAAP financial measures to evaluate the operating performance of the business and aid in the period-to-period comparability. Management also uses the Non-GAAP financial measures for planning and forecasting and measuring results against its forecast. Using several measures to evaluate the business allows the company and investors to assess the company’s relative performance and ultimately monitor the company’s capacity to generate returns for its stockholders. The Non-GAAP financial measures provided herein may not provide information that is directly comparable to that provided by other companies in the company’s industry, as other companies may calculate such financial results differently. The company’s Non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be considered as alternatives to the financial measures derived in accordance with GAAP. The company does not consider these Non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of the Non-GAAP financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion of this press release.
| NeoPhotonics Corporation | ||||||||||||
| Consolidated Statements of Operations (Unaudited) | ||||||||||||
| (In thousands, except percentages, share and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
Jun. 30, 2012 |
Mar. 31, 2012 |
Jun. 30, 2011 | ||||||||||
| Revenue | $ | 63,025 | $ | 54,223 | $ | 50,977 | ||||||
| Cost of goods sold (1) | 47,420 | 42,817 | 37,346 | |||||||||
| Gross profit | 15,605 | 11,406 | 13,631 | |||||||||
| 24.8 | % | 21.0 | % | 26.7 | % | |||||||
| Operating expenses: | ||||||||||||
| Research and development (1) | 9,322 | 10,538 | 6,365 | |||||||||
| Sales and marketing (1) | 3,406 | 3,023 | 2,233 | |||||||||
| General and administrative (1) | 6,721 | 7,125 | 4,625 | |||||||||
| Amortization of purchased intangible assets | 321 | 354 | 272 | |||||||||
| Earn out adjustment | (1,303 | ) | 1,907 | - | ||||||||
| Total operating expenses | 18,467 | 22,947 | 13,495 | |||||||||
| Income (loss) from operations | (2,862 | ) | (11,541 | ) | 136 | |||||||
| Interest income | 145 | 132 | 44 | |||||||||
| Interest expense | (145 | ) | (154 | ) | (60 | ) | ||||||
| Other income (expense), net | (417 | ) | (275 | ) | 14,134 | |||||||
| Total interest and other income (expense), net | (417 | ) | (297 | ) | 14,118 | |||||||
| Income (loss) before income taxes | (3,279 | ) | (11,838 | ) | 14,254 | |||||||
| Benefit from (provision for) income taxes | (377 | ) | 60 | (547 | ) | |||||||
| Income (loss) from continuing operations | (3,656 | ) | (11,778 | ) | 13,707 | |||||||
| Income (loss) from discontinued operations, net of tax | - | 170 | (127 | ) | ||||||||
| Net income (loss) | $ | (3,656 | ) | $ | (11,608 | ) | $ | 13,580 | ||||
| Net income (loss) per share—Basic: | ||||||||||||
| Continuing operations | $ | (0.13 | ) | $ | (0.47 | ) | $ | 0.56 | ||||
| Discontinued operations | $ | - | $ | 0.01 | $ | (0.01 | ) | |||||
| Net income (loss) | $ | (0.13 | ) | $ | (0.46 | ) | $ | 0.55 | ||||
| Net income (loss) per share—Diluted: | ||||||||||||
| Continuing operations | $ | (0.13 | ) | $ | (0.47 | ) | $ | 0.54 | ||||
| Discontinued operations | $ | - | $ | 0.01 | $ | (0.01 | ) | |||||
| Net income (loss) | $ | (0.13 | ) | $ | (0.46 | ) | $ | 0.53 | ||||
| Weighted averages shares used to compute net income (loss) per share: | ||||||||||||
| Basic | 28,402,929 | 24,870,684 | 24,694,577 | |||||||||
| Diluted | 28,402,929 | 24,870,684 | 25,561,980 | |||||||||
| (1) Includes stock-based compensation expense (credit) as follows for the periods presented: | ||||||||||||
| Cost of goods sold | $ | 136 | $ | 188 | $ | (169 | ) | |||||
| Research and development | 395 | 469 | (46 | ) | ||||||||
| Sales and marketing | 205 | 209 | 55 | |||||||||
| General and administrative | 273 | 278 | 115 | |||||||||
| Total stock-based compensation expense (credit) | $ | 1,009 | $ | 1,144 | $ | (45 | ) | |||||
| NeoPhotonics Corporation | ||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||
| (In thousands) | ||||||||
| As of | ||||||||
|
Jun. 30, 2012 |
Dec. 31, 2011 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 107,087 | $ | 86,384 | ||||
| Restricted cash | 2,570 | 3,227 | ||||||
| Accounts receivable, net | 75,305 | 68,877 | ||||||
| Inventories | 40,074 | 35,341 | ||||||
| Prepaid expenses and other current assets | 6,571 | 5,882 | ||||||
| Short-term assets held-for-sale | - | 1,687 | ||||||
| Total current assets | 231,607 | 201,398 | ||||||
| Long-term investments | 144 | 92 | ||||||
| Property, plant and equipment, net | 53,637 | 56,344 | ||||||
| Other intangible assets, net | 16,093 | 17,999 | ||||||
| Other long-term assets | 1,045 | 1,049 | ||||||
| Long-term assets held-for-sale | - | 167 | ||||||
| Total assets | $ | 302,526 | $ | 277,049 | ||||
| LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 41,773 | $ | 37,599 | ||||
| Short-term loans and notes payable | 11,268 | 14,620 | ||||||
| Current portion of long-term debt | 5,000 | 5,000 | ||||||
| Accrued and other current liabilities | 21,198 | 18,299 | ||||||
| Current liabilities held-for-sale | - | 1,681 | ||||||
| Total current liabilities | 79,239 | 77,199 | ||||||
| Long-term debt, net of current portion | 19,667 | 22,166 | ||||||
| Deferred income tax liabilities | 651 | 927 | ||||||
| Other noncurrent liabilities | 1,733 | 3,103 | ||||||
| Total liabilities | 101,290 | 103,395 | ||||||
| Redeemable common stock | 5,000 | - | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 75 | 62 | ||||||
| Additional paid-in capital | 430,736 | 392,792 | ||||||
| Accumulated other comprehensive income | 11,242 | 11,353 | ||||||
| Accumulated deficit | (245,817 | ) | (230,553 | ) | ||||
| Total stockholders' equity | 196,236 | 173,654 | ||||||
| Total liabilities, redeemable common stock and stockholders' equity | $ | 302,526 | $ | 277,049 | ||||
| NeoPhotonics Corporation | ||||||||||||
| Reconciliation of Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) | ||||||||||||
| (In thousands, except percentages, share and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
Jun. 30, 2012 |
Mar. 31, 2012 |
Jun. 30, 2011 | ||||||||||
| NON-GAAP GROSS PROFIT: | ||||||||||||
| GAAP gross profit | 15,605 | 11,406 | 13,631 | |||||||||
| Stock-based compensation expense | 136 | 188 | (169 | ) | ||||||||
| Amortization of purchased intangible assets | 616 | 598 | 8 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 259 | 786 | - | |||||||||
| Acquisition-related costs | 70 | (12 | ) | - | ||||||||
| Non-GAAP gross profit | $ | 16,686 | $ | 12,966 | $ | 13,470 | ||||||
| Non-GAAP gross margin (% of revenue) | 26.5 | % | 23.9 | % | 26.4 | % | ||||||
| NON-GAAP INCOME (LOSS) FROM CONTINUING OPERATIONS: | ||||||||||||
| GAAP income (loss) from continuing operations | (3,656 | ) | (11,778 | ) | 13,707 | |||||||
| Stock-based compensation expense | 1,009 | 1,144 | (45 | ) | ||||||||
| Amortization of purchased intangible assets | 937 | 952 | 280 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 420 | 1,319 | - | |||||||||
| Acquisition-related costs | 858 | 924 | - | |||||||||
| Restructuring charges | 27 | 130 | - | |||||||||
| Fair value adjustment to contingent consideration | (1,303 | ) | 1,907 | - | ||||||||
| Gain on sale of shares of an unconsolidated investee, net of direct cost | - | - | (13,829 | ) | ||||||||
| Income tax effect of Non-GAAP adjustments | (31 | ) | (37 | ) | 68 | |||||||
| Non-GAAP income (loss) from continuing operations | $ | (1,739 | ) | $ | (5,439 | ) | $ | 181 | ||||
| ADJUSTED EBITDA: | ||||||||||||
| GAAP income (loss) from continuing operations | (3,656 | ) | (11,778 | ) | 13,707 | |||||||
| Stock-based compensation expense | 1,009 | 1,144 | (45 | ) | ||||||||
| Amortization of purchased intangible assets | 937 | 952 | 280 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 420 | 1,319 | - | |||||||||
| Acquisition-related costs | 858 | 924 | - | |||||||||
| Restructuring charges | 27 | 130 | - | |||||||||
| Fair value adjustment to contingent consideration | (1,303 | ) | 1,907 | - | ||||||||
| Interest (income) expense, net | - | 22 | 16 | |||||||||
| Provision for (benefit from) income taxes | 377 | (60 | ) | 547 | ||||||||
| Depreciation expense | 3,117 | 3,082 | 2,430 | |||||||||
| Gain on sale of shares of an unconsolidated investee, net of direct cost | - | - | (13,829 | ) | ||||||||
| Adjusted EBITDA | $ | 1,786 | $ | (2,358 | ) | $ | 3,106 | |||||
| NON-GAAP DILUTED INCOME (LOSS) PER SHARE FROM CONTINUING OPERATIONS: | ||||||||||||
| GAAP diluted income (loss) per share from continuing operations | $ | (0.13 | ) | $ | (0.47 | ) | $ | 0.54 | ||||
| Non-GAAP diluted income (loss) per share from continuing operations | $ | (0.06 | ) | $ | (0.22 | ) | $ | 0.01 | ||||
| SHARES USED TO COMPUTE NON-GAAP DILUTED INCOME (LOSS) PER SHARE FROM CONTINUING OPERATIONS: | ||||||||||||
| Shares used to compute GAAP and non-GAAP diluted income (loss) per share from continuing operations | 28,402,929 | 24,870,684 | 25,561,980 | |||||||||
Source:
NeoPhotonics Corporation
JD Fay, Chief Financial Officer
408-895-6086
or
Sapphire
Investor Relations, LLC
Erica Mannion, Investor Relations
415-471-2700
ir@neophotonics.com