“We are pleased to announce record fourth quarter revenue, and more
importantly, we have achieved profitability on both a GAAP and non-GAAP
basis. This is a direct result of our focus on cost control and product
portfolio optimization. During the quarter, we generated sufficient cash
from operations that, coupled with subsequent debt restructuring
achievements, we significantly strengthened our balance sheet,” said
Fourth Quarter Summary
At
Subsequent to
Annual Summary
Outlook for the Quarter Ending
The Company’s expectations for the first quarter 2015 are:
The Non-GAAP outlook for the first quarter of 2015 excludes the expected
amortization of intangibles and other assets of approximately
Non-GAAP and Adjusted EBITDA Measures vs. GAAP Financial Measures
The Company’s 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. These non-GAAP financial measures differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Company uses these non-GAAP financial measures to analyze its
operating performance and future prospects, develop internal budgets and
financial goals, and to facilitate period-to-period comparisons.
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
© 2015
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, the Company’s market position 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; 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, supporting utility services 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, including the recent
acquisition of EMCORE’s tunable laser product line, market adoption,
revenue growth and margins of acquired products; changes in demand for
the Company's products; the impact of competitive products and pricing
and alternative technological advances; the accuracy of estimates used
to prepare the Company's financial statements and forecasts; the timely
and successful development and market acceptance of new products and
upgrades to existing products; the difficulty of predicting future cash
needs; the nature of other investment opportunities available to the
Company from time to time; the Company’s operating cash flow, changes in
economic and industry projections; a decline in general conditions in
the telecommunications equipment industry or the world economy
generally; and the effects of seasonality. For further discussion of
these risks and uncertainties, please refer to the documents the Company
files with the SEC from time to time, including the Company's Annual
Report on Form 10-K for the year ended
NeoPhotonics Corporation | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
(In thousands) | ||||||||
As of | ||||||||
Dec. 31, |
Dec. 31, | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 43,035 | $ | 57,101 | ||||
Short-term investments | - | 17,916 | ||||||
Restricted cash and investments | 10,754 | 2,138 | ||||||
Accounts receivable, net | 77,597 | 64,533 | ||||||
Inventories, net | 57,347 | 64,908 | ||||||
Prepaid expenses and other current assets | 15,540 | 9,977 | ||||||
Total current assets | 204,273 | 216,573 | ||||||
Property, plant and equipment, net | 57,657 | 68,851 | ||||||
Restricted cash and investments, non-current | 10,500 | - | ||||||
Purchased intangible assets, net | 10,263 | 15,005 | ||||||
Other long-term assets | 3,591 | 1,798 | ||||||
Total assets | $ | 286,284 | $ | 302,227 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 48,949 | $ | 48,569 | ||||
Notes payable and short-term borrowing | 22,771 | 9,738 | ||||||
Current portion of long-term debt | 9,918 | 10,325 | ||||||
Accrued and other current liabilities | 22,728 | 23,643 | ||||||
Total current liabilities | 104,366 | 92,275 | ||||||
Long-term debt, net of current portion | 13,418 | 24,150 | ||||||
Deferred income tax liabilities | 1,818 | 1,004 | ||||||
Other noncurrent liabilities | 7,226 | 7,987 | ||||||
Total liabilities | 126,828 | 125,416 | ||||||
Stockholders' equity: | ||||||||
Common stock | 82 | 79 | ||||||
Additional paid-in capital | 456,189 | 447,467 | ||||||
Accumulated other comprehensive income | 5,326 | 11,687 | ||||||
Accumulated deficit | (302,141 | ) | (282,422 | ) | ||||
Total stockholders' equity | 159,456 | 176,811 | ||||||
Total liabilities and stockholders' equity | $ | 286,284 | $ | 302,227 | ||||
NeoPhotonics Corporation | ||||||||||||||||||||
Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||||
(In thousands, except percentages and per share data) | ||||||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||||||
Dec. 31, |
Sep. 30, |
Dec. 31, |
Dec. 31, |
Dec. 31, | ||||||||||||||||
Revenue | $ | 78,982 | $ | 81,576 | $ | 74,375 | $ | 306,177 | $ | 282,242 | ||||||||||
Cost of goods sold (1) | 56,296 | 61,512 | 54,739 | 235,059 | 217,069 | |||||||||||||||
Gross profit | 22,686 | 20,064 | 19,636 | 71,118 | 65,173 | |||||||||||||||
Gross margin | 28.7 | % | 24.6 | % | 26.4 | % | 23.2 | % | 23.1 | % | ||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development (1) | 9,976 | 11,842 | 12,832 | 45,959 | 45,853 | |||||||||||||||
Sales and marketing (1) | 3,668 | 3,075 | 3,727 | 13,725 | 14,242 | |||||||||||||||
General and administrative (1) | 7,671 | 6,712 | 8,159 | 31,570 | 30,012 | |||||||||||||||
Amortization of purchased intangible assets | 366 | 378 | 404 | 1,502 | 1,532 | |||||||||||||||
Asset impairment charge | 1,130 | - | - | 1,130 | - | |||||||||||||||
Acquisition-related costs | 622 | - | 89 | 615 | 5,406 | |||||||||||||||
Restructuring charges | 158 | 504 | - | 662 | 775 | |||||||||||||||
Escrow settlement gain | (1,027 | ) | - | - | (4,913 | ) | - | |||||||||||||
Adjustment to fair value of contingent consideration | - | - | - | - | 1,026 | |||||||||||||||
Total operating expenses | 22,564 | 22,511 | 25,211 | 90,250 | 98,846 | |||||||||||||||
Income (loss) from operations | 122 | (2,447 | ) | (5,575 | ) | (19,132 | ) | (33,673 | ) | |||||||||||
Interest income | 34 | 52 | 79 | 189 | 348 | |||||||||||||||
Interest expense | (332 | ) | (375 | ) | (240 | ) | (1,269 | ) | (996 | ) | ||||||||||
Other income, net | 2,519 | 1,735 | 1,618 | 3,012 | 1,186 | |||||||||||||||
Total interest and other income, net | 2,221 | 1,412 | 1,457 | 1,932 | 538 | |||||||||||||||
Income (loss) before income taxes | 2,343 | (1,035 | ) | (4,118 | ) | (17,200 | ) | (33,135 | ) | |||||||||||
Provision for income taxes | (758 | ) | (902 | ) | (334 | ) | (2,519 | ) | (1,204 | ) | ||||||||||
Net income (loss) | $ | 1,585 | $ | (1,937 | ) | $ | (4,452 | ) | $ | (19,719 | ) | $ | (34,339 | ) | ||||||
Basic and diluted net income (loss) per share | $ | 0.05 | $ | (0.06 | ) | $ | (0.14 | ) | $ | (0.61 | ) | $ | (1.11 | ) | ||||||
Weighted averages shares used to compute basic net income (loss) per share | 32,640 | 32,383 | 31,451 | 32,109 | 31,000 | |||||||||||||||
Weighted averages shares used to compute diluted net income per share | 32,710 | 32,383 | 31,451 | 32,109 | 31,000 | |||||||||||||||
(1) Includes stock-based compensation expense as follows for the periods presented: | ||||||||||||||||||||
Cost of goods sold | $ | 160 | $ | 203 | $ | 79 | $ | 1,148 | $ | 924 | ||||||||||
Research and development | 557 | 339 | 625 | 2,269 | 2,060 | |||||||||||||||
Sales and marketing | 554 | 417 | 332 | 1,429 | 1,167 | |||||||||||||||
General and administrative | 758 | 229 | 435 | 1,995 | 1,585 | |||||||||||||||
Total stock-based compensation expense | $ | 2,029 | $ | 1,188 | $ | 1,471 | $ | 6,841 | $ | 5,736 | ||||||||||
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 | Years Ended | |||||||||||||||||||
Dec. 31, |
Sep. 30, |
Dec. 31, |
Dec. 31, |
Dec. 31, | ||||||||||||||||
NON-GAAP GROSS PROFIT: | ||||||||||||||||||||
GAAP gross profit | $ | 22,686 | $ | 20,064 | $ | 19,636 | $ | 71,118 | $ | 65,173 | ||||||||||
Stock-based compensation expense | 160 | 203 | 79 | 1,148 | 924 | |||||||||||||||
Amortization of purchased intangible assets | 696 | 709 | 605 | 2,833 | 2,543 | |||||||||||||||
Amortization of acquisition-related fixed asset step-up | 289 | 323 | 208 | 1,071 | 1,120 | |||||||||||||||
Amortization of acquisition-related inventory step-up | - | - | (176 | ) | - | 2,897 | ||||||||||||||
Restructuring charges | 132 | 292 | 71 | 424 | 699 | |||||||||||||||
Non-GAAP gross profit | $ | 23,963 | $ | 21,591 | $ | 20,423 | $ | 76,594 | $ | 73,356 | ||||||||||
Non-GAAP gross margin (% of revenue) | 30.3 | % | 26.5 | % | 27.5 | % | 25.0 | % | 26.0 | % | ||||||||||
NON-GAAP TOTAL OPERATING EXPENSES: | ||||||||||||||||||||
GAAP Total operating expenses | $ | 22,564 | $ | 22,511 | $ | 25,211 | $ | 90,250 | $ | 98,846 | ||||||||||
Stock-based compensation expense | (1,869 | ) | (985 | ) | (1,392 | ) | (5,693 | ) | (4,812 | ) | ||||||||||
Amortization of purchased intangible assets | (366 | ) | (378 | ) | (404 | ) | (1,502 | ) | (1,532 | ) | ||||||||||
Amortization of acquisition-related fixed asset step-up | (272 | ) | (304 | ) | (107 | ) | (994 | ) | (468 | ) | ||||||||||
Amortization of acquisition-related inventory step-up | - | - | - | - | - | |||||||||||||||
Asset Impairment charges | (1,130 | ) | - | - | (1,130 | ) | - | |||||||||||||
Acquisition-related costs | (622 | ) | - | (89 | ) | (615 | ) | (5,406 | ) | |||||||||||
Restructuring charges | (158 | ) | (504 | ) | (1 | ) | (662 | ) | (775 | ) | ||||||||||
Escrow settlement gain | 1,027 | - | - | 4,913 | - | |||||||||||||||
Fair value adjustment to contingent consideration | - | - | - | - | (1,026 | ) | ||||||||||||||
Non-GAAP total operating expenses | $ | 19,174 | $ | 20,340 | $ | 23,218 | $ | 84,567 | $ | 84,827 | ||||||||||
NON-GAAP OPERATING INCOME (LOSS): | ||||||||||||||||||||
GAAP operating income (loss) | $ | 122 | $ | (2,447 | ) | $ | (5,575 | ) | $ | (19,132 | ) | $ | (33,673 | ) | ||||||
Stock-based compensation expense | 2,029 | 1,188 | 1,471 | 6,841 | 5,736 | |||||||||||||||
Amortization of purchased intangible assets | 1,063 | 1,086 | 1,009 | 4,335 | 4,075 | |||||||||||||||
Amortization of acquisition-related fixed asset step-up | 560 | 628 | 315 | 2,065 | 1,588 | |||||||||||||||
Amortization of acquisition-related inventory step-up | - | - | (176 | ) | - | 2,897 | ||||||||||||||
Asset Impairment charges | 1,130 | - | - | 1,130 | - | |||||||||||||||
Acquisition-related costs | 622 | - | 89 | 615 | 5,406 | |||||||||||||||
Restructuring charges | 290 | 796 | 72 | 1,086 | 1,474 | |||||||||||||||
Escrow settlement gain | (1,027 | ) | - | - | (4,913 | ) | - | |||||||||||||
Fair value adjustment to contingent consideration | - | - | - | - | 1,026 | |||||||||||||||
Non-GAAP operating income (loss) | $ | 4,789 | $ | 1,251 | $ | (2,795 | ) | $ | (7,973 | ) | $ | (11,471 | ) | |||||||
Non-GAAP operating margin (% of revenue) | 6.1 | % | 1.5 | % | -3.8 | % | -2.6 | % | -4.1 | % | ||||||||||
NON-GAAP NET INCOME (LOSS): | ||||||||||||||||||||
GAAP net income (loss) | $ | 1,585 | $ | (1,937 | ) | $ | (4,452 | ) | $ | (19,719 | ) | $ | (34,339 | ) | ||||||
Stock-based compensation expense | 2,029 | 1,188 | 1,471 | 6,841 | 5,736 | |||||||||||||||
Amortization of purchased intangible assets | 1,063 | 1,086 | 1,009 | 4,335 | 4,075 | |||||||||||||||
Amortization of acquisition-related fixed asset step-up | 560 | 628 | 315 | 2,065 | 1,588 | |||||||||||||||
Amortization of acquisition-related inventory step-up | - | - | (176 | ) | - | 2,897 | ||||||||||||||
Asset Impairment charges | 1,130 | - | - | 1,130 | - | |||||||||||||||
Acquisition-related costs | 622 | - | 89 | 615 | 5,406 | |||||||||||||||
Restructuring charges | 290 | 796 | 72 | 1,086 | 1,474 | |||||||||||||||
Escrow settlement gain | (1,027 | ) | - | - | (4,913 | ) | - | |||||||||||||
Fair value adjustment to contingent consideration | - | - | - | - | 1,026 | |||||||||||||||
Income tax effect of Non-GAAP adjustments | 85 | (343 | ) | (170 | ) | (680 | ) | (2,041 | ) | |||||||||||
Non-GAAP net income (loss) | $ | 6,337 | $ | 1,418 | $ | (1,842 | ) | $ | (9,240 | ) | $ | (14,178 | ) | |||||||
ADJUSTED EBITDA: | ||||||||||||||||||||
GAAP net income (loss) | $ | 1,585 | $ | (1,937 | ) | $ | (4,452 | ) | $ | (19,719 | ) | $ | (34,339 | ) | ||||||
Stock-based compensation expense | 2,029 | 1,188 | 1,471 | 6,841 | 5,736 | |||||||||||||||
Amortization of purchased intangible assets | 1,063 | 1,086 | 1,009 | 4,335 | 4,075 | |||||||||||||||
Amortization of acquisition-related fixed asset step-up | 560 | 628 | 315 | 2,065 | 1,588 | |||||||||||||||
Amortization of acquisition-related inventory step-up | - | - | (176 | ) | - | 2,897 | ||||||||||||||
Asset Impairment charges | 1,130 | - | - | 1,130 | - | |||||||||||||||
Acquisition-related costs | 622 | - | 89 | 615 | 5,406 | |||||||||||||||
Restructuring charges | 290 | 796 | 72 | 1,086 | 1,474 | |||||||||||||||
Escrow settlement gain | (1,027 | ) | - | - | (4,913 | ) | - | |||||||||||||
Fair value adjustment to contingent consideration | - | - | - | - | 1,026 | |||||||||||||||
Interest expense, net | 298 | 323 | 161 | 1,080 | 648 | |||||||||||||||
Provision for income taxes | 758 | 902 | 334 | 2,519 | 1,204 | |||||||||||||||
Depreciation expense | 4,277 | 4,323 | 4,194 | 17,003 | 14,752 | |||||||||||||||
Adjusted EBITDA | $ | 11,585 | $ | 7,309 | $ | 3,017 | $ | 12,042 | $ | 4,467 | ||||||||||
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE: | ||||||||||||||||||||
GAAP basic and diluted net income (loss) per share | $ | 0.05 | $ | (0.06 | ) | $ | (0.14 | ) | $ | (0.61 | ) | $ | (1.11 | ) | ||||||
Non-GAAP basic and diluted net income (loss) per share | $ | 0.19 | $ | 0.04 | $ | (0.06 | ) | $ | (0.29 | ) | $ | (0.46 | ) | |||||||
SHARES USED TO COMPUTE GAAP AND NON-GAAP BASIC NET INCOME (LOSS) PER SHARE: | 32,640 | 32,383 | 31,451 | 32,109 | 31,000 | |||||||||||||||
SHARES USED TO COMPUTE GAAP DILUTED NET INCOME PER SHARE: | 32,710 | 32,383 | 31,451 | 32,109 | 31,000 | |||||||||||||||
SHARES USED TO COMPUTE NON-GAAP DILUTED NET INCOME PER SHARE: | 32,821 | 32,700 | 31,451 | 32,109 | 31,000 | |||||||||||||||
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