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NeoPhotonics Reports First Quarter 2013 Financial Results
-
Record First Quarter Revenue of
$56.1 Million - Record 39% of Revenue from 40/100G Products
- Completed the Acquisition of Laser Specialist LAPIS Optical Components Unit
“We are pleased with the success we are experiencing in our portfolio of
100G products for telecom and datacom applications, which grew
approximately 41% quarter-on-quarter and are poised for further growth
as the 100G upgrade cycle continues,” said
First Quarter Summary
-
Revenue was
$56.1 million , down$6.0 million , or 9.6%, from the prior quarter and up$1.8 million , or 3.4%, from the first quarter 2012 - Gross margin was 20.9%, down from 22.7% in the prior quarter and 21.0% in the first quarter 2012
- Non-GAAP gross margin was 23.1%, down from 24.5% in the prior quarter and 23.9% in the first quarter 2012
-
Loss from continuing operations was
$10.5 million , up from a loss of$3.0 million in the prior quarter and an improvement from a loss of$11.8 million in the first quarter 2012 -
Non-GAAP loss from continuing operations was
$4.4 million , up from a loss of$0.1 million in the prior quarter and an improvement from a loss of$5.4 million in the first quarter 2012 -
Diluted loss per share from continuing operations was
$0.34 , up from a loss of$0.10 in the prior quarter and an improvement from a loss of$0.47 in the first quarter 2012 -
Non-GAAP diluted loss per share from continuing operations was
$0.14 , up from$0.00 in the prior quarter and an improvement from a loss of$0.22 in the first quarter 2012 -
Adjusted EBITDA was a loss of
$1.7 million , down from income of$3.5 million in the prior quarter and an improvement from a loss of$2.4 million in the first quarter 2012 -
On
March 29, 2013 , completed the acquisition of LAPIS Optical Components Unit (OCU), a leading designer and manufacturer of high speed lasers, laser drivers, photodiodes and amplifiers for high speed networks, which included the business, a portfolio of more than 150 patents and patents applications, the associated real estate and high speed semiconductor, laser and detector fabrication facility.
At
The company intends to file its quarterly report on Form 10-Q on or
before
Outlook for the Quarter Ending
The company’s expectations for the second quarter 2013 are:
-
Revenue in the range of
$70 million to $75 million - Non-GAAP gross margin in the range of 21% to 25%
-
Diluted loss per share from continuing operations in the range of
$0.16 to $0.27 , and on a Non-GAAP basis in the range of a loss of$0.08 to $0.18 per share
The Non-GAAP outlook for the second quarter of 2013 excludes the
expected amortization of intangibles and other assets, including
relating to the acquisition of LAPIS OCU, of approximately
Conference Call
The company will discuss these financial results in a conference call at
About
© 2013
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 (loss) from continuing operations, Non-GAAP diluted net income (loss) 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 stock-based compensation expense, amortization of purchased intangible assets, amortization of acquisition-related fixed asset and inventory step-ups, acquisition-related costs, restructuring charges, and fair value adjustment to contingent consideration. In computing adjusted EBITDA, the company also excludes interest (income) expense, net, provision for (benefit from) 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 | ||||||||||||
Mar. 31, |
Dec. 31, |
Mar. 31, | ||||||||||
| Revenue | $ | 56,063 | $ | 62,023 | $ | 54,223 | ||||||
| Cost of goods sold (1) | 44,333 | 47,973 | 42,817 | |||||||||
| Gross profit | 11,730 | 14,050 | 11,406 | |||||||||
| 20.9 | % | 22.7 | % | 21.0 | % | |||||||
| Operating expenses: | ||||||||||||
| Research and development (1) | 9,707 | 8,535 | 10,538 | |||||||||
| Sales and marketing (1) | 3,586 | 3,458 | 3,023 | |||||||||
| General and administrative (1) | 8,545 | 5,351 | 6,995 | |||||||||
| Amortization of purchased intangible assets | 321 | 320 | 354 | |||||||||
| Adjustment to fair value of contingent consideration | - | (308 | ) | 1,907 | ||||||||
| Restructuring charges | 325 | (91 | ) | 130 | ||||||||
| Total operating expenses | 22,484 | 17,265 | 22,947 | |||||||||
| Loss from operations | (10,754 | ) | (3,215 | ) | (11,541 | ) | ||||||
| Interest income | 131 | 168 | 132 | |||||||||
| Interest expense | (163 | ) | (134 | ) | (154 | ) | ||||||
| Other expense, net | (274 | ) | 696 | (275 | ) | |||||||
| Total interest and other income (expense), net | (306 | ) | 730 | (297 | ) | |||||||
| Loss before income taxes | (11,060 | ) | (2,485 | ) | (11,838 | ) | ||||||
| Benefit from (provision for) income taxes | 596 | (476 | ) | 60 | ||||||||
| Loss from continuing operations | (10,464 | ) | (2,961 | ) | (11,778 | ) | ||||||
| Income from discontinued operations, net of tax | - | (28 | ) | 170 | ||||||||
| Net loss | $ | (10,464 | ) | $ | (2,989 | ) | $ | (11,608 | ) | |||
| Basic and diluted net loss per share: | ||||||||||||
Continuing operations | $ | (0.34 | ) | $ | (0.10 | ) | $ | (0.47 | ) | |||
| Discontinued operations | $ | - | $ | - | $ | 0.01 | ||||||
| Net loss | $ | (0.34 | ) | $ | (0.10 | ) | $ | (0.46 | ) | |||
| Weighted average shares used to compute basic and diluted net loss per share: | 30,574,032 | 30,414,735 | 24,870,684 | |||||||||
| (1) Includes stock-based compensation expense as follows for the periods presented: | ||||||||||||
| Cost of goods sold | $ | 243 | $ | 248 | $ | 188 | ||||||
| Research and development | 418 | 475 | 469 | |||||||||
| Sales and marketing | 238 | 279 | 209 | |||||||||
| General and administrative | 303 | 341 | 278 | |||||||||
| Total stock-based compensation expense | $ | 1,202 | $ | 1,343 | $ | 1,144 | ||||||
| NeoPhotonics Corporation | ||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||
| (In thousands) | ||||||||
Mar. 31, |
Dec. 31, | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 99,760 | $ | 101,241 | ||||
| Restricted cash | 2,108 | 2,626 | ||||||
| Accounts receivable, net | 63,267 | 70,354 | ||||||
| Inventories | 68,818 | 43,793 | ||||||
| Prepaid expenses and other current assets | 8,053 | 7,630 | ||||||
| Total current assets | 242,006 | 225,644 | ||||||
| Long-term investments | 331 | 188 | ||||||
| Property, plant and equipment, net | 65,079 | 54,440 | ||||||
| Goodwill | 2,188 | - | ||||||
| Other intangible assets, net | 17,176 | 14,213 | ||||||
| Other long-term assets | 4,206 | 1,147 | ||||||
| Total assets | $ | 330,986 | $ | 295,632 | ||||
| LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 40,963 | $ | 36,308 | ||||
| Notes payable | 10,431 | 12,003 | ||||||
| Current portion of long-term debt | 10,710 | 5,000 | ||||||
| Accrued and other current liabilities | 23,520 | 19,959 | ||||||
| Total current liabilities | 85,624 | 73,270 | ||||||
| Long-term debt, net of current portion | 40,420 | 17,167 | ||||||
| Deferred income tax liabilities | 655 | 653 | ||||||
| Other noncurrent liabilities | 10,506 | 1,724 | ||||||
| Total liabilities | 137,205 | 92,814 | ||||||
| Redeemable common stock | 5,000 | 5,000 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 76 | 76 | ||||||
| Additional paid-in capital | 435,282 | 433,996 | ||||||
| Accumulated other comprehensive income | 11,970 | 11,829 | ||||||
| Accumulated deficit | (258,547 | ) | (248,083 | ) | ||||
| Total stockholders' equity | 188,781 | 197,818 | ||||||
| Total liabilities, redeemable convertible preferred stock and stockholders' equity | $ | 330,986 | $ | 295,632 | ||||
| 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 | ||||||||||||
March 31, |
December 31, |
March 31, | ||||||||||
| NON-GAAP GROSS PROFIT: | ||||||||||||
| GAAP gross profit | $ | 11,730 | $ | 14,050 | $ | 11,406 | ||||||
| Stock-based compensation expense | 243 | 248 | 188 | |||||||||
| Amortization of purchased intangible assets | 428 | 642 | 598 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 534 | 225 | 786 | |||||||||
| Acquisition-related costs | - | 50 | (12 | ) | ||||||||
| Non-GAAP gross profit | $ | 12,935 | $ | 15,215 | $ | 12,966 | ||||||
| Non-GAAP gross margin (% of revenue) | 23.1 | % | 24.5 | % | 23.9 | % | ||||||
| NON-GAAP LOSS FROM CONTINUING OPERATIONS: | ||||||||||||
| GAAP loss from continuing operations | $ | (10,464 | ) | $ | (2,961 | ) | $ | (11,778 | ) | |||
| Stock-based compensation expense | 1,202 | 1,343 | 1,144 | |||||||||
| Amortization of purchased intangible assets | 749 | 963 | 952 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 661 | 356 | 1,319 | |||||||||
| Acquisition-related costs | 3,205 | 629 | 924 | |||||||||
| Restructuring charges | 325 | (91 | ) | 130 | ||||||||
| Fair value adjustment to contingent consideration | - | (308 | ) | 1,907 | ||||||||
| Income tax effect of Non-GAAP adjustments | (37 | ) | (56 | ) | (37 | ) | ||||||
| Non-GAAP loss from continuing operations | $ | (4,359 | ) | $ | (125 | ) | $ | (5,439 | ) | |||
| ADJUSTED EBITDA: | ||||||||||||
| GAAP loss from continuing operations | $ | (10,464 | ) | $ | (2,961 | ) | $ | (11,778 | ) | |||
| Stock-based compensation expense | 1,202 | 1,343 | 1,144 | |||||||||
| Amortization of purchased intangible assets | 749 | 963 | 952 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 661 | 356 | 1,319 | |||||||||
| Acquisition-related costs | 3,205 | 629 | 924 | |||||||||
| Restructuring charges | 325 | (91 | ) | 130 | ||||||||
| Fair value adjustment to contingent consideration | - | (308 | ) | 1,907 | ||||||||
| Interest (income) expense, net | 32 | (34 | ) | 22 | ||||||||
| Provision for (benefit from) income taxes | (596 | ) | 476 | (60 | ) | |||||||
| Depreciation expense | 3,180 | 3,095 | 3,082 | |||||||||
| Adjusted EBITDA | $ | (1,706 | ) | $ | 3,468 | $ | (2,358 | ) | ||||
| NON-GAAP DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS: | ||||||||||||
| GAAP diluted loss per share from continuing operations | $ | (0.34 | ) | $ | (0.10 | ) | $ | (0.47 | ) | |||
| Non-GAAP diluted loss per share from continuing operations | $ | (0.14 | ) | $ | (0.00 | ) | $ | (0.22 | ) | |||
| SHARES USED TO COMPUTE NON-GAAP DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS: | ||||||||||||
| Shares used to compute GAAP diluted loss per share from continuing operations | 30,574,032 | 30,414,735 | 24,870,684 | |||||||||
| Shares used to compute Non-GAAP diluted loss per share from continuing operations | 30,574,032 | 30,414,735 | 24,870,684 | |||||||||
Source:
NeoPhotonics Corporation
JD Fay, 408-895-6086
Chief Financial
Officer
or
Sapphire Investor Relations, LLC
Erica
Mannion, 415-471-2700
Investor Relations
ir@neophotonics.com