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NeoPhotonics Reports Record First Quarter 2016 Financial Results
-
Record Revenue of
$99.1 million for the quarter - Non-GAAP Gross Margin of 32.8% for the quarter
-
Adjusted EBITDA of
$12.3 million for the quarter - Full Year Revenue Outlook Revised Upward to 20-25% growth
“In our first quarter
First Quarter Summary
-
Revenue was
$99.1 million , up$17.8 million , or 21.8%, from the first quarter of 2015, and up$10.0 million , or 11.2%, from the prior quarter - GAAP Gross margin was 31.4%, up from 29.6% in the first quarter of 2015, and up from 28.2% in the prior quarter
- Non-GAAP Gross margin was 32.8%, up from 31.3% in the first quarter of 2015, and up from 32.4% in the prior quarter
-
GAAP Net income was
$2.3 million , up from$0.1 million in the first quarter of 2015, and up from$0.4 million in the prior quarter -
Non-GAAP Net income was
$7.0 million , up from earnings of$4.2 million in the first quarter of 2015, up from$6.9 million in the prior quarter -
GAAP Diluted earnings per share was
$0.05 , up from$0.00 in the first quarter of 2015, and up from$0.01 in the prior quarter -
Non-GAAP Diluted earnings per share was
$0.15 , up from$0.13 in the first quarter of 2015, and down from earnings of$0.16 in the prior quarter -
Adjusted EBITDA was
$12.3 million , up from$9.9 million in the first quarter of 2015, and up from$11.8 million in the prior quarter
Non-GAAP results exclude
At
Outlook for the Quarter Ending
The Company’s expectations for the second quarter 2016 are:
-
Revenue in the range of
$97 million to $102 million - Non-GAAP Gross margin in the range of 29% to 31%
-
Diluted net income (loss) per share in the range of a
2 cent loss to earnings of5 cents , and -
Non-GAAP diluted earnings per share in the range of
8 cents to 15 cents
The Non-GAAP outlook for the second quarter of 2016 excludes the impact
of expected amortization of intangibles 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. 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 after the conclusion of the call and remain available for approximately 30 calendar days.
About
© 2016
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
acquisition of EMCORE’s tunable laser product line and EigenLight’s
precision optical power monitor business in 2015; 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
|
NeoPhotonics Corporation Condensed Consolidated Balance Sheets (Unaudited) (In thousands) | ||||||||
| As of | ||||||||
|
Mar. 31, 2016 |
Dec. 31, 2015 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 62,739 | $ | 76,088 | ||||
| Short-term investments | 38,364 | 23,294 | ||||||
| Restricted cash | 2,659 | 2,660 | ||||||
| Accounts receivable, net | 87,174 | 83,161 | ||||||
| Inventories, net | 62,525 | 65,602 | ||||||
| Prepaid expenses and other current assets | 15,035 | 12,393 | ||||||
| Total current assets | 268,496 | 263,198 | ||||||
| Property, plant and equipment, net | 66,078 | 62,618 | ||||||
| Purchased intangible assets, net | 8,699 | 9,852 | ||||||
| Goodwill | 1,115 | 1,115 | ||||||
| Other long-term assets | 4,895 | 5,095 | ||||||
| Total assets | $ | 349,283 | $ | 341,878 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 55,104 | $ | 50,620 | ||||
| Notes payable and short-term borrowing | 32,650 | 32,657 | ||||||
| Current portion of long-term debt | 815 | 760 | ||||||
| Accrued and other current liabilities | 21,356 | 27,950 | ||||||
| Total current liabilities | 109,925 | 111,987 | ||||||
| Long-term debt, net of current portion | 11,318 | 10,759 | ||||||
| Other noncurrent liabilities | 7,953 | 7,476 | ||||||
| Total liabilities | 129,196 | 130,222 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 103 | 102 | ||||||
| Additional paid-in capital | 515,777 | 511,750 | ||||||
| Accumulated other comprehensive income (loss) | 370 | (1,723 | ) | |||||
| Accumulated deficit | (296,163 | ) | (298,473 | ) | ||||
| Total stockholders' equity | 220,087 | 211,656 | ||||||
| Total liabilities and stockholders' equity | $ | 349,283 | $ | 341,878 | ||||
|
NeoPhotonics Corporation Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except percentages and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 | ||||||||||
| Revenue | $ | 99,145 | $ | 89,123 | $ | 81,384 | ||||||
| Cost of goods sold (1) | 68,023 | 64,013 | 57,331 | |||||||||
| Gross profit | 31,122 | 25,110 | 24,053 | |||||||||
| Gross margin | 31.4 | % | 28.2 | % | 29.6 | % | ||||||
| Operating expenses: | ||||||||||||
| Research and development (1) | 12,952 | 11,831 | 10,482 | |||||||||
| Sales and marketing (1) | 3,931 | 4,384 | 3,744 | |||||||||
| General and administrative (1) | 9,084 | 8,636 | 8,196 | |||||||||
| Amortization of purchased intangible assets | 453 | 447 | 449 | |||||||||
| Acquisition-related costs | - | 467 | 140 | |||||||||
| Restructuring charges | - | - | 6 | |||||||||
| Total operating expenses | 26,420 | 25,765 | 23,017 | |||||||||
| Income (loss) from operations | 4,702 | (655 | ) | 1,036 | ||||||||
| Interest income | 55 | 37 | 30 | |||||||||
| Interest expense | (102 | ) | (110 | ) | (506 | ) | ||||||
| Other (expense) income, net | (1,304 | ) | 1,533 | (46 | ) | |||||||
| Total interest and other (expense) income, net | (1,351 | ) | 1,460 | (522 | ) | |||||||
| Income before income taxes | 3,351 | 805 | 514 | |||||||||
| Provision for income taxes | (1,041 | ) | (406 | ) | (414 | ) | ||||||
| Net income | $ | 2,310 | $ | 399 | $ | 100 | ||||||
| Basic net income per share | $ | 0.06 | $ | 0.01 | $ | 0.00 | ||||||
| Diluted net income per share | $ | 0.05 | $ | 0.01 | $ | 0.00 | ||||||
| Weighted averages shares used to compute basic net income per share | 41,121 | 40,739 | 32,780 | |||||||||
| Weighted averages shares used to compute diluted net income per share | 43,648 | 42,668 | 33,031 | |||||||||
| (1) Includes stock-based compensation expense as follows for the periods presented: | ||||||||||||
| Cost of goods sold | $ | 589 | $ | 216 | $ | 370 | ||||||
| Research and development | 971 | 692 | 493 | |||||||||
| Sales and marketing | 887 | 619 | 453 | |||||||||
| General and administrative | 992 | 818 | 740 | |||||||||
| Total stock-based compensation expense | $ | 3,439 | $ | 2,345 | $ | 2,056 | ||||||
|
NeoPhotonics Corporation Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) (In thousands, except percentages and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 | ||||||||||
| NON-GAAP GROSS PROFIT: | ||||||||||||
| GAAP gross profit | $ | 31,122 | $ | 25,110 | $ | 24,053 | ||||||
| Stock-based compensation expense | 589 | 216 | 370 | |||||||||
| Amortization of purchased intangible assets | 841 | 837 | 839 | |||||||||
| Depreciation of acquisition-related fixed asset step-up | (62 | ) | (61 | ) | 172 | |||||||
| Amortization of acquisition-related inventory step-up | - | (5 | ) | 78 | ||||||||
| End-of-life related inventory write-down | - | 2,768 | - | |||||||||
| Non-GAAP gross profit | $ | 32,490 | $ | 28,865 | $ | 25,512 | ||||||
| Non-GAAP gross margin as a % of revenue | 32.8 | % | 32.4 | % | 31.3 | % | ||||||
| NON-GAAP TOTAL OPERATING EXPENSES: | ||||||||||||
| GAAP Total operating expenses | $ | 26,420 | $ | 25,765 | $ | 23,017 | ||||||
| Stock-based compensation expense | (2,850 | ) | (2,129 | ) | (1,686 | ) | ||||||
| Amortization of purchased intangible assets | (453 | ) | (447 | ) | (449 | ) | ||||||
| Depreciation of acquisition-related fixed asset step-up | (93 | ) | (101 | ) | (290 | ) | ||||||
| Acquisition-related costs | - | (467 | ) | (140 | ) | |||||||
| Restructuring charges | - | - | (6 | ) | ||||||||
| Litigation | - | - | (278 | ) | ||||||||
| Non-GAAP total operating expenses | $ | 23,024 | $ | 22,621 | $ | 20,168 | ||||||
| Non-GAAP total operating expenses as a % of revenue | 23.2 | % | 25.4 | % | 24.8 | % | ||||||
| NON-GAAP OPERATING INCOME: | ||||||||||||
| GAAP operating income (loss) | $ | 4,702 | $ | (655 | ) | $ | 1,036 | |||||
| Stock-based compensation expense | 3,439 | 2,345 | 2,056 | |||||||||
| Amortization of purchased intangible assets | 1,294 | 1,284 | 1,288 | |||||||||
| Depreciation of acquisition-related fixed asset step-up | 31 | 40 | 462 | |||||||||
| Amortization of acquisition-related inventory step-up | - | (5 | ) | 78 | ||||||||
| Acquisition-related costs | - | 467 | 140 | |||||||||
| End-of-life related inventory write-down | - | 2,768 | - | |||||||||
| Restructuring charges | - | - | 6 | |||||||||
| Litigation | - | - | 278 | |||||||||
| Non-GAAP operating income | $ | 9,466 | $ | 6,244 | $ | 5,344 | ||||||
| Non-GAAP operating margin as a % of revenue | 9.5 | % | 7.0 | % | 6.6 | % | ||||||
|
NeoPhotonics Corporation Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) (Continued) (In thousands, except percentages and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 | ||||||||||
| NON-GAAP NET INCOME: | ||||||||||||
| GAAP net income | $ | 2,310 | $ | 399 | $ | 100 | ||||||
| Stock-based compensation expense | 3,439 | 2,345 | 2,056 | |||||||||
| Amortization of purchased intangible assets | 1,294 | 1,284 | 1,288 | |||||||||
| Depreciation of acquisition-related fixed asset step-up | 31 | 40 | 462 | |||||||||
| Amortization of acquisition-related inventory step-up | - | (5 | ) | 78 | ||||||||
| Acquisition-related costs | - | 467 | 140 | |||||||||
| End-of-life related inventory write-down | - | 2,768 | - | |||||||||
| Restructuring charges | - | - | 6 | |||||||||
| Litigation | - | - | 278 | |||||||||
| Income tax effect of Non-GAAP adjustments | (124 | ) | (375 | ) | (249 | ) | ||||||
| Non-GAAP net income | $ | 6,950 | $ | 6,923 | $ | 4,159 | ||||||
| Non-GAAP net income as a % of revenue | 7.0 | % | 7.8 | % | 5.1 | % | ||||||
| ADJUSTED EBITDA: | ||||||||||||
| GAAP net income | $ | 2,310 | $ | 399 | $ | 100 | ||||||
| Stock-based compensation expense | 3,439 | 2,345 | 2,056 | |||||||||
| Amortization of purchased intangible assets | 1,294 | 1,284 | 1,288 | |||||||||
| Depreciation of acquisition-related fixed asset step-up | 31 | 40 | 462 | |||||||||
| Amortization of acquisition-related inventory step-up | - | (5 | ) | 78 | ||||||||
| Acquisition-related costs | - | 467 | 140 | |||||||||
| End-of-life related inventory write-down | - | 2,768 | - | |||||||||
| Restructuring charges | - | - | 6 | |||||||||
| Litigation | - | - | 278 | |||||||||
| Interest expense, net | 47 | 73 | 476 | |||||||||
| Provision for income taxes | 1,041 | 406 | 414 | |||||||||
| Depreciation expense | 4,128 | 4,040 | 4,556 | |||||||||
| Adjusted EBITDA | $ | 12,290 | $ | 11,817 | $ | 9,854 | ||||||
| Adjusted EBITDA as a % of revenue | 12.4 | % | 13.3 | % | 12.1 | % | ||||||
| BASIC AND DILUTED NET INCOME PER SHARE: | ||||||||||||
| GAAP basic net income per share | $ | 0.06 | $ | 0.01 | $ | 0.00 | ||||||
| GAAP diluted net income per share | $ | 0.05 | $ | 0.01 | $ | 0.00 | ||||||
| Non-GAAP basic net income per share | $ | 0.17 | $ | 0.17 | $ | 0.13 | ||||||
| Non-GAAP diluted net income per share | $ | 0.15 | $ | 0.16 | $ | 0.13 | ||||||
| SHARES USED TO COMPUTE GAAP AND NON-GAAP BASIC NET INCOME PER SHARE | 41,121 | 40,739 | 32,780 | |||||||||
| SHARES USED TO COMPUTE GAAP DILUTED NET INCOME PER SHARE | 43,648 | 42,668 | 33,031 | |||||||||
| SHARES USED TO COMPUTE NON-GAAP DILUTED NET INCOME PER SHARE | 45,113 | 44,289 | 33,240 | |||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160428006889/en/
Source:
NeoPhotonics Corporation
Clyde R. Wallin, +1-408-678-1852
Chief
Financial Officer
ray.wallin@neophotonics.com
or
Sapphire
Investor Relations, LLC
Erica Mannion, +1-617-542-6180
Investor
Relations
ir@neophotonics.com