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NeoPhotonics Reports First Quarter Financial Results and Updated Outlook for Second Quarter 2014
-
Quarterly Revenue of
$68.2 million - First Quarter 2014-over-First Quarter 2013 Revenue Growth of 22%
- First Quarter 2014-over-First Quarter 2013 40/100G Revenue Growth of 29%
“We are pleased to announce the highest first quarter revenue in the
Company’s history, and with the anticipated filing of our Form 10-Q
later this month, we will be returning to compliance with
First Quarter Summary
Following is a summary of certain key financial measures for the first quarter of 2014.
-
Revenue was
$68.2 million , a decrease of$6.2 million , or 8%, from the fourth quarter of 2013 and up$12.1 million , or 22%, from the first quarter of 2013. - Gross margin was 20.2%, down from 26.4% in the fourth quarter of 2013, and down from 21.0% in the first quarter of 2013.
- Non-GAAP gross margin was 22.0%, down from 27.5% in the fourth quarter of 2013 and down from 23.1% in the first quarter of 2013.
-
Net loss was
$12.6 million , an increase from a net loss of$4.5 million in the fourth quarter of 2013 and slightly up from a net loss of$12.2 million in the first quarter of 2013. -
Non-GAAP net loss was
$9.5 million , an increase from a net loss of$1.8 million in the fourth quarter of 2013 and up from a net loss of$5.3 million in the first quarter of 2013. -
Diluted net loss per share was
$0.40 , an increase from a diluted net loss per share of$0.14 in the fourth quarter of 2013 and even with a diluted net loss per share of$0.40 in the first quarter of 2013. -
Non-GAAP diluted net loss per share was
$0.30 , an increase from a diluted net loss per share of$0.06 in the fourth quarter of 2013 and up from a diluted net loss per share of$0.17 in the first quarter of 2013. -
Adjusted EBITDA was a loss of
$4.2 million , compared to$3.0 million positive EBITDA in the fourth quarter of 2013 and a loss of$1.8 million in the first quarter of 2013.
At
Non-GAAP and Adjusted EBITDA measures vs. GAAP Financial Measures
Our Non-GAAP and Adjusted EBITDA measures exclude certain GAAP financial measures, and a reconciliation of the Non-GAAP and Adjusted EBITDA financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release.
Outlook for the Second Quarter of 2014 Ending
The Company’s updated outlook for the second quarter of 2014 is:
-
Revenue in the range of
$73 million to $78 million ; - Non-GAAP gross margin in the range of 20% to 25%; and
- Diluted net loss per share in the range of $0.13 to $0.23, and on a Non-GAAP basis in the range of a net loss of $0.16 to $0.26 per diluted share
The Company did not provide expectations previously on diluted net loss per share, or on diluted Non-GAAP net loss per share.
The Non-GAAP outlook for the second quarter of 2014 excludes
approximately
Conference Call
The Company will host a conference call today,
A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.
About
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This press release includes statements that qualify as forward-looking
statements under the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements about the following
topics: future financial results, and the nature and extent of
macro-economic and industry trends. Forward-looking statements are
subject to certain risks and uncertainties that could cause the actual
results to differ materially. Those risks and uncertainties include, but
are not limited to, such factors as: possible reduction in or volatility
of customer orders or delays in shipments of products to customers;
subsequent events, timing of customer drawdowns of vendor-managed
inventory; possible disruptions in the supply chain or in demand for the
Company’s products due to industry developments, the ability of the
Company's vendors and subcontractors to supply or manufacture the
Company's products in a timely manner; economic conditions or natural
disasters; volatility in utilization of manufacturing operations and
other manufacturing costs; reductions in the Company’s rate of new
design wins, and/or the rate at which design wins go into production,
and the rate of customer acceptance of new product introductions; the
Company’s reliance on a small number of customers for a substantial
portion of its revenues; potential pricing pressure that may arise from
changing supply or demand conditions in the industry; the impact of any
previous or future acquisitions; challenges involving integration of
acquired businesses and utilization of acquired technology, the
© 2014
| NeoPhotonics Corporation | ||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| (In thousands) | ||||||||
| As of | ||||||||
|
Mar. 31, |
Dec. 31, |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 61,341 | $ | 75,017 | ||||
| Accounts receivable, net | 70,647 | 64,533 | ||||||
| Inventories | 67,949 | 64,908 | ||||||
| Prepaid expenses and other current assets | 15,456 | 12,115 | ||||||
| Total current assets | 215,393 | 216,573 | ||||||
| Property, plant and equipment, net | 66,115 | 68,851 | ||||||
| Purchased intangible assets, net | 13,972 | 15,005 | ||||||
| Other long-term assets | 1,820 | 1,798 | ||||||
| Total assets | $ | 297,300 | $ | 302,227 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 83,091 | $ | 72,212 | ||||
| Notes payable | 11,210 | 9,738 | ||||||
| Current portion of long-term debt | 10,395 | 10,325 | ||||||
| Total current liabilities | 104,696 | 92,275 | ||||||
| Long-term debt, net of current portion | 19,145 | 24,150 | ||||||
| Other noncurrent liabilities | 8,649 | 8,991 | ||||||
| Total liabilities | 132,490 | 125,416 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 80 | 79 | ||||||
| Additional paid-in capital | 449,531 | 447,467 | ||||||
| Accumulated other comprehensive income | 10,209 | 11,687 | ||||||
| Accumulated deficit | (295,010 | ) | (282,422 | ) | ||||
| Total stockholders' equity | 164,810 | 176,811 | ||||||
| Total liabilities and stockholders' equity | $ | 297,300 | $ | 302,227 | ||||
| NeoPhotonics Corporation | ||||||||||||
| Consolidated Statements of Operations (Unaudited) | ||||||||||||
| (In thousands, except percentages and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
Mar. 31, |
Dec. 31, |
Mar. 31, |
||||||||||
| Revenue | $ | 68,168 | $ | 74,375 | $ | 56,063 | ||||||
| Cost of goods sold (1) | 54,368 | 54,739 | 44,306 | |||||||||
| Gross profit | 13,800 | 19,636 | 11,757 | |||||||||
| 20.2 | % | 26.4 | % | 21.0 | % | |||||||
| Operating expenses: | ||||||||||||
| Research and development (1) | 12,056 | 12,832 | 9,707 | |||||||||
| Sales and marketing (1) | 3,411 | 3,727 | 3,586 | |||||||||
| General and administrative (1) | 8,987 | 8,159 | 5,059 | |||||||||
| Amortization of purchased intangible assets | 379 | 404 | 321 | |||||||||
| Restructuring charges | - | - | 325 | |||||||||
| Acquisition-related transaction costs | - | 89 | 4,510 | |||||||||
| Total operating expenses | 24,833 | 25,211 | 23,508 | |||||||||
| Loss from operations | (11,033 | ) | (5,575 | ) | (11,751 | ) | ||||||
| Interest income | 65 | 79 | 131 | |||||||||
| Interest expense | (251 | ) | (240 | ) | (163 | ) | ||||||
| Other income (expense), net | (607 | ) | 1,618 | (274 | ) | |||||||
| Total interest and other income (expense), net | (793 | ) | 1,457 | (306 | ) | |||||||
| Loss before income taxes | (11,826 | ) | (4,118 | ) | (12,057 | ) | ||||||
| Provision for income taxes | (762 | ) | (334 | ) | (183 | ) | ||||||
| Net loss | $ | (12,588 | ) | $ | (4,452 | ) | $ | (12,240 | ) | |||
| Basic and diluted net loss per share | $ | (0.40 | ) | $ | (0.14 | ) | $ | (0.40 | ) | |||
| Weighted averages shares used to compute basic and diluted net loss per share | 31,610 | 31,451 | 30,574 | |||||||||
|
(1) Includes stock-based compensation expense as follows for the periods presented: |
||||||||||||
| Cost of goods sold | $ | 330 | 79 | $ | 243 | |||||||
| Research and development | 707 | 625 | 418 | |||||||||
| Sales and marketing | 373 | 332 | 238 | |||||||||
| General and administrative | 491 | 435 | 303 | |||||||||
| Total stock-based compensation expense | $ | 1,901 | $ | 1,471 | $ | 1,202 | ||||||
| NeoPhotonics Corporation | ||||||||||||
| Reconciliation of Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) | ||||||||||||
| (In thousands, except percentages and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
Mar. 31, |
Dec. 31, |
Mar. 31, |
||||||||||
| NON-GAAP GROSS PROFIT: | ||||||||||||
| GAAP gross profit | 13,800 | 19,636 | 11,757 | |||||||||
| Stock-based compensation expense | 330 | 79 | 243 | |||||||||
| Amortization of purchased intangible assets | 714 | 605 | 428 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 122 | 208 | 526 | |||||||||
| Amortization of acquisition-related inventory step-up | - | (176 | ) | - | ||||||||
| Restructuring charges | - | 71 | - | |||||||||
| Non-GAAP gross profit | $ | 14,966 | $ | 20,423 | $ | 12,954 | ||||||
| Non-GAAP gross margin (% of revenue) | 22.0 | % | 27.5 | % | 23.1 | % | ||||||
| NON-GAAP NET LOSS : | ||||||||||||
| GAAP net loss | (12,588 | ) | (4,452 | ) | (12,240 | ) | ||||||
| Stock-based compensation expense | 1,901 | 1,471 | 1,202 | |||||||||
| Amortization of purchased intangible assets | 1,093 | 1,009 | 749 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 219 | 315 | 653 | |||||||||
| Amortization of acquisition-related inventory step-up | - | (176 | ) | - | ||||||||
| Acquisition-related transaction costs | (7 | ) | 89 | 4,510 | ||||||||
| Restructuring charges | - | 71 | 325 | |||||||||
| Income tax effect of Non-GAAP adjustments | (124 | ) | (170 | ) | (455 | ) | ||||||
| Non-GAAP net loss | $ | (9,506 | ) | $ | (1,843 | ) | $ | (5,256 | ) | |||
| ADJUSTED EBITDA: | ||||||||||||
| GAAP net loss | (12,588 | ) | (4,452 | ) | (12,240 | ) | ||||||
| Stock-based compensation expense | 1,901 | 1,471 | 1,202 | |||||||||
| Amortization of purchased intangible assets | 1,093 | 1,009 | 749 | |||||||||
| Amortization of acquisition-related fixed asset step-up | 219 | 315 | 653 | |||||||||
| Amortization of acquisition-related inventory step-up | - | (176 | ) | - | ||||||||
| Acquisition-related transaction costs | (7 | ) | 89 | 4,510 | ||||||||
| Restructuring charges | - | 71 | 325 | |||||||||
| Interest expense, net | 186 | 161 | 32 | |||||||||
| Provision for income taxes | 762 | 334 | 183 | |||||||||
| Depreciation expense | 4,216 | 4,194 | 2,750 | |||||||||
| Adjusted EBITDA | $ | (4,218 | ) | $ | 3,016 | $ | (1,836 | ) | ||||
| BASIC AND DILUTED NET LOSS PER SHARE: | ||||||||||||
| GAAP basic and diluted net loss per share | $ | (0.40 | ) | $ | (0.14 | ) | $ | (0.40 | ) | |||
| Non-GAAP basic and diluted net loss per share | $ | (0.30 | ) | $ | (0.06 | ) | $ | (0.17 | ) | |||
|
SHARES USED TO COMPUTE GAAP and NON-GAAP BASIC AND DILUTED NET LOSS PER SHARE: |
31,610 | 31,451 | 30,574 | |||||||||
Source:
NeoPhotonics Corporation
Clyde R. Wallin, +1-408-895-6020
Chief
Financial Officer
ray.wallin@neophotonics.com
or
Sapphire
Investor Relations, LLC
Erica Mannion, +1-415-471-2700
Investor
Relations
ir@neophotonics.com