UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 28, 2015
ALLIANCE
FIBER OPTIC PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware |
0-31857 |
77-0554122 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification
No.) |
275 Gibraltar Drive, Sunnyvale,
California |
94089 |
(Address of principal executive
offices) |
(Zip Code) |
Registrants telephone number, including area
code: (408) 736-6900
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
The information in this Current Report is being furnished and shall not be deemed “filed”
for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to
the liabilities of that Section. The information in this Current Report shall not be incorporated by
reference into any registration statement or other document filed pursuant to the Securities Act of
1933, except as shall be expressly set forth by specific reference in such a filing.
On October 28, 2015, Alliance Fiber Optic Products, Inc. issued a press release
announcing its financial results for the quarter ended September 30, 2015. A copy of the
earnings release is furnished herewith as Exhibit 99.1.
Item 9.01. Financial
Statements and Exhibits.
Exhibit |
|
Description |
|
99.1 |
|
Press Release dated October 28, 2015 announcing third quarter 2015 results. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated:
October 28, 2015 |
|
|
|
|
ALLIANCE FIBER OPTIC
PRODUCTS, INC. |
|
|
|
|
By
|
/s/Anita K. Ho |
|
|
Name: |
Anita K. Ho |
|
|
Title: |
Acting Chief Financial
Officer |
|
EXHIBIT INDEX
Exhibit
Number |
|
Description |
|
99.1 |
|
Press release dated October 28, 2015 announcing third quarter 2015 results. |
Contact: Keting
Lin, IR Associate Alliance Fiber Optic
Products, Inc. 408-736-6900 x188 Email: klin@afop.com |
October 28,
2015
|
AFOP REPORTS THIRD
QUARTER, 2015 FINANCIAL RESULTS
Sunnyvale, CA October 28,
2015 - Alliance Fiber Optic Products, Inc. (Nasdaq GM: AFOP), an innovative
supplier of fiber optic components, subsystems and integrated modules for the
optical network equipment market, today reported its financial results for the
third quarter ended September 30, 2015.
Revenues for the third
quarter of 2015 were $18,060,000, similar to revenues of $18,096,000 reported in
the third quarter of 2014, and a 28% decrease from revenues of $25,045,000
reported in the second quarter of 2015.
Net income for the quarter
ended September 30, 2015, was $3,653,000, or $0.20 per share, compared to net
income of $4,303,000, or $0.23 per share, for the third quarter of 2014, and net
income of $5,040,000, or $0.28 per share, for the second quarter of
2015.
Gross margin for the
quarter ended September 30, 2015 was 39.3%, compared to 39.5% in the year ago
quarter and 41.9% in the second quarter of 2015. Operating margin for the
quarter ended September 30, 2015 was 20.6%, compared to 22.9% in the year ago
quarter and 27.0% in the second quarter of 2015.
Non-GAAP net income for the
quarter ended September 30, 2015 was $4,197,000, or $0.24 per share, compared to
non-GAAP net income of $4,571,000, or $0.25 per share, for the third quarter of
2014, and non-GAAP net income of $6,705,000, or $0.38 per share, for the second
quarter of 2015.
Non-GAAP gross margin for
the quarter ended September 30, 2015 was 40.1%, compared to 39.9% in the year
ago quarter and 42.5% in the second quarter of 2015. Non-GAAP operating margin
for the quarter ended September 30, 2015 was 25.3%, compared to 25.3% in the
year ago quarter and 30.1% in the second quarter of 2015.
Peter Chang, President and
Chief Executive Officer, commented, During the third quarter, we experienced
the effect of inventory control by our largest Web 2.0 customer, which resulted
in a sequential decrease in our third quarter revenue. Despite that, our revenue
from other customers grew on a year over year basis to help us achieve a similar
level of revenues compared with the year ago quarter. We believe we adjusted to
this temporary shortfall well and continued to deliver strong financial
performance within our industry peer group. Most importantly, we made good
progress meeting our customers needs, extending our product technology and
improving our operations during the quarter.
Regarding forward
guidance, we expect revenues in the remaining quarter of 2015 to be higher
sequentially. Data bandwidth demands continue to increase and the conversion
from copper technology to fiber technology in data center applications continues
accelerating. We are encouraged by growing demands for our products and the
prospect of delivering record sales and profits in the coming years. concluded
Mr. Chang.
Conference
Call
A more detailed review of
third quarter financial results as well as the outlook for the fourth quarter of
2015 will be provided when the complete third quarter results are discussed on a
conference call at 1:30 p.m. (Pacific) on October 28, 2015. To participate in
AFOPs conference call, please call 877-675-3572 at least ten minutes prior to
the call in order for the operator to connect you. The confirmation number for
the call is 56988049. AFOP will also provide a live webcast of its third quarter
2015 conference call at AFOPs website: www.AFOP.com. The webcast replay will be
available on AFOPs website 90 minutes after the live conference call.
About AFOP
Founded in 1995, Alliance
Fiber Optic Products, Inc. designs, manufactures and markets a broad range of
high performance fiber optic components and integrated modules. AFOP's products
are used by leading and emerging communications equipment manufacturers to
deliver optical networking systems to the long-haul, enterprise, data center,
metropolitan and last mile access segments of the communications network. AFOP
offers a broad product line of passive optical components including interconnect
systems, splitters, thin film CWDM and DWDM components and modules, and optical
attenuators. AFOP is headquartered in Sunnyvale, California, with manufacturing
and product development capabilities in the United States, Taiwan and China.
AFOP's website is located at http://www.afop.com.
Except for the
historical information contained herein, the matters set forth in this press
release, including statements as to our expectations regarding future revenue
and profit levels and the time periods thereof, our business prospects, demand
for our products and sources of demand, our expectations regarding future orders
by customers, and our expectations for growth in the fiber optic industry, are
forward looking statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties that may cause actual results
to differ materially, including, but not limited to general economic conditions
and trends, trends in demand for bandwidth, the impact of competitive products
and pricing, timely introduction of new technologies, timely design acceptance
by our customers, the acceptance of new products and technologies by our
customers, customer demand for our products, the timing of customer orders, loss
of key customers or customer orders, our ability to ramp new products into
volume production, the mix of products sold and product pricing, the costs
associated with running our operations, industry-wide shifts in supply and
demand for optical components and modules, the success of cost control efforts,
our ability to obtain and maintain operational efficiencies, financial stability
in foreign markets, and other risks detailed from time to time in our SEC
reports, including AFOP's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2015. These forward-looking statements speak only as of the date
hereof. AFOP disclaims any intention or obligation to update or revise any
forward-looking statements.
ALLIANCE FIBER OPTIC
PRODUCTS, INC.
Condensed
Consolidated Balance Sheets
(in thousands)
(Unaudited)
|
|
Sep. 30, |
|
Dec. 31, |
|
|
2015 |
|
2014 |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash
and short-term investments |
|
$
|
48,484 |
|
$
|
54,580 |
Accounts receivable, net |
|
|
10,549 |
|
|
10,806 |
Inventories |
|
|
10,184 |
|
|
9,305 |
Deferred tax asset |
|
|
3,955 |
|
|
3,690 |
Other
current assets |
|
|
2,265 |
|
|
2,077 |
Total current assets |
|
|
75,437 |
|
|
80,458 |
|
Long-term investments |
|
|
10,774 |
|
|
10,635 |
Property and equipment, net |
|
|
16,117 |
|
|
13,868 |
Other assets |
|
|
245 |
|
|
212 |
Total assets |
|
$ |
102,573 |
|
$ |
105,173 |
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
7,014 |
|
$ |
9,236 |
Accrued
expenses and other current liabilities |
|
|
7,927 |
|
|
8,699 |
Total current liabilities |
|
|
14,941 |
|
|
17,935 |
Long-term liabilities |
|
|
966 |
|
|
978 |
Total liabilities |
|
|
15,907 |
|
|
18,913 |
Stockholders' equity |
|
|
86,666 |
|
|
86,260 |
Total liabilities and stockholders' equity |
|
$ |
102,573 |
|
$ |
105,173 |
ALLIANCE FIBER OPTIC
PRODUCTS, INC.
Condensed Consolidated Statements of
Operations
(In thousands,
except per share amounts)
(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
Sep. 30, |
|
Jun. 30, |
|
Sep. 30, |
|
Sep. 30, |
|
Sep. 30, |
|
|
2015 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Revenues |
|
$ |
18,060 |
|
|
$ |
25,045 |
|
|
$ |
18,096 |
|
|
$ |
64,768 |
|
|
$ |
67,177 |
|
|
Cost of revenues |
|
|
10,963 |
|
|
|
14,550 |
|
|
|
10,957 |
|
|
|
38,384 |
|
|
|
40,429 |
|
Gross
profit |
|
|
7,097 |
|
|
|
10,495 |
|
|
|
7,139 |
|
|
|
26,384 |
|
|
|
26,748 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
1,009 |
|
|
|
1,169 |
|
|
|
1,068 |
|
|
|
3,321 |
|
|
|
3,243 |
|
Selling,
marketing and administrative |
|
|
2,373 |
|
|
|
2,567 |
|
|
|
1,924 |
|
|
|
7,171 |
|
|
|
6,321 |
|
Total operating expenses |
|
|
3,382 |
|
|
|
3,736 |
|
|
|
2,992 |
|
|
|
10,492 |
|
|
|
9,564 |
|
|
Income from operations |
|
|
3,715 |
|
|
|
6,759 |
|
|
|
4,147 |
|
|
|
15,892 |
|
|
|
17,184 |
|
Interest and other income, net |
|
|
148 |
|
|
|
192 |
|
|
|
226 |
|
|
|
536 |
|
|
|
559 |
|
Net income before tax |
|
|
3,863 |
|
|
|
6,951 |
|
|
$ |
4,373 |
|
|
$ |
16,428 |
|
|
$ |
17,743 |
|
Provision for income taxes |
|
|
(210 |
) |
|
|
(1,911 |
) |
|
|
(70 |
) |
|
|
(4,177 |
) |
|
|
(4,643 |
) |
Net income |
|
$ |
3,653 |
|
|
$ |
5,040 |
|
|
$ |
4,303 |
|
|
$ |
12,251 |
|
|
$ |
13,100 |
|
|
Net
income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.20 |
|
|
$ |
0.28 |
|
|
$ |
0.23 |
|
|
$ |
0.69 |
|
|
$ |
0.71 |
|
Diluted |
|
$ |
0.20 |
|
|
$ |
0.27 |
|
|
$ |
0.23 |
|
|
$ |
0.67 |
|
|
$ |
0.69 |
|
|
Shares used in per share calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
17,850 |
|
|
|
17,822 |
|
|
|
18,629 |
|
|
|
17,848 |
|
|
|
18,529 |
|
Diluted |
|
|
18,227 |
|
|
|
18,422 |
|
|
|
19,103 |
|
|
|
18,199 |
|
|
|
19,036 |
|
|
Included in costs and expenses above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation
charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
$ |
137 |
|
|
$ |
137 |
|
|
$ |
87 |
|
|
$ |
395 |
|
|
$ |
379 |
|
Research
and development |
|
|
51 |
|
|
|
58 |
|
|
|
44 |
|
|
|
155 |
|
|
|
191 |
|
Selling,
marketing and administrative |
|
|
666 |
|
|
|
575 |
|
|
|
305 |
|
|
|
1,570 |
|
|
|
1,113 |
|
Total |
|
$ |
854 |
|
|
$ |
770 |
|
|
$ |
436 |
|
|
$ |
2,120 |
|
|
$ |
1,683 |
|
ALLIANCE FIBER OPTIC
PRODUCTS, INC.
Reconciliations from GAAP to Non-GAAP
(In thousands, except
per share amounts)
(Unaudited)
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
Sep. 30, |
|
Jun. 30, |
|
Sep. 30, |
|
Sep. 30, |
|
|
Sep. 30, |
|
|
2015 |
|
2015 |
|
2014 |
|
2015 |
|
|
2014 |
Gross Profit
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
gross profit |
|
$
|
7,097 |
|
|
|
$
|
10,495 |
|
|
|
$
|
7,139 |
|
|
|
$
|
26,384 |
|
|
|
$
|
26,748 |
|
|
Stock-based compensation expense |
|
|
137 |
|
|
|
|
137 |
|
|
|
|
87 |
|
|
|
|
395 |
|
|
|
|
379 |
|
|
Adjusted (non-GAAP) gross profit |
|
$ |
7,234 |
|
|
|
$ |
10,632 |
|
|
|
$ |
7,226 |
|
|
|
$ |
26,779 |
|
|
|
$ |
27,127 |
|
|
Adjusted (non-GAAP) gross margin |
|
|
40.1 |
|
% |
|
|
42.5 |
|
% |
|
|
39.9 |
|
% |
|
|
41.3 |
|
% |
|
|
40.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
operating expenses |
|
$ |
3,382 |
|
|
|
$ |
3,736 |
|
|
|
$ |
2,992 |
|
|
|
$ |
10,492 |
|
|
|
$ |
9,564 |
|
|
Stock-based compensation expense |
|
|
717 |
|
|
|
|
633 |
|
|
|
|
349 |
|
|
|
|
1,725 |
|
|
|
|
1,304 |
|
|
Adjusted (non-GAAP) operating expenses |
|
$ |
2,665 |
|
|
|
$ |
3,103 |
|
|
|
$ |
2,643 |
|
|
|
$ |
8,767 |
|
|
|
$ |
8,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
income from operations |
|
$ |
3,715 |
|
|
|
$ |
6,759 |
|
|
|
$ |
4,147 |
|
|
|
$ |
15,892 |
|
|
|
$ |
17,184 |
|
|
Adjustments related to gross profit |
|
|
137 |
|
|
|
|
137 |
|
|
|
|
87 |
|
|
|
|
395 |
|
|
|
|
379 |
|
|
Adjustments related to operating expense |
|
|
717 |
|
|
|
|
633 |
|
|
|
|
349 |
|
|
|
|
1,725 |
|
|
|
|
1,304 |
|
|
Adjusted (non-GAAP) income from operations |
|
$ |
4,569 |
|
|
|
$ |
7,529 |
|
|
|
$ |
4,583 |
|
|
|
$ |
18,012 |
|
|
|
$ |
18,867 |
|
|
Adjusted (non-GAAP) operating margin |
|
|
25.3 |
|
% |
|
|
30.1 |
|
% |
|
|
25.3 |
|
% |
|
|
27.9 |
|
% |
|
|
28.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
net income |
|
$ |
3,653 |
|
|
|
$ |
5,040 |
|
|
|
$ |
4,303 |
|
|
|
$ |
12,251 |
|
|
|
$ |
13,100 |
|
|
Adjustments related to gross profit |
|
|
137 |
|
|
|
|
137 |
|
|
|
|
87 |
|
|
|
|
395 |
|
|
|
|
379 |
|
|
Adjustments related to operating expense |
|
|
717 |
|
|
|
|
633 |
|
|
|
|
349 |
|
|
|
|
1,725 |
|
|
|
|
1,304 |
|
|
Income tax provision adjustments |
|
|
(310 |
) |
|
|
|
895 |
|
|
|
|
(168 |
) |
|
|
|
1,754 |
|
|
|
|
2,625 |
|
|
Adjusted (non-GAAP) net income |
|
$ |
4,197 |
|
|
|
$ |
6,705 |
|
|
|
$ |
4,571 |
|
|
|
$ |
16,125 |
|
|
|
$ |
17,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
17,850 |
|
|
|
|
17,822 |
|
|
|
|
18,629 |
|
|
|
|
17,848 |
|
|
|
|
18,529 |
|
|
Diluted |
|
|
18,227 |
|
|
|
|
18,422 |
|
|
|
|
19,103 |
|
|
|
|
18,199 |
|
|
|
|
19,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income per Common
Share - Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as
reported |
|
$ |
0.20 |
|
|
|
$ |
0.28 |
|
|
|
$ |
0.23 |
|
|
|
$ |
0.69 |
|
|
|
$ |
0.71 |
|
|
Non-GAAP as
adjusted |
|
$ |
0.24 |
|
|
|
$ |
0.38 |
|
|
|
$ |
0.25 |
|
|
|
$ |
0.90 |
|
|
|
$ |
0.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income per Common
Share - Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as
reported |
|
$ |
0.20 |
|
|
|
$ |
0.27 |
|
|
|
$ |
0.23 |
|
|
|
$ |
0.67 |
|
|
|
$ |
0.69 |
|
|
Non-GAAP as
adjusted |
|
$ |
0.23 |
|
|
|
$ |
0.36 |
|
|
|
$ |
0.24 |
|
|
|
$ |
0.89 |
|
|
|
$ |
0.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
4,197 |
|
|
|
$ |
6,705 |
|
|
|
$ |
4,571 |
|
|
|
$ |
16,125 |
|
|
|
$ |
17,408 |
|
|
Depreciation expense |
|
|
685 |
|
|
|
|
680 |
|
|
|
|
748 |
|
|
|
|
2,023 |
|
|
|
|
2,139 |
|
|
Interest income |
|
|
(182 |
) |
|
|
|
(200 |
) |
|
|
|
(198 |
) |
|
|
|
(575 |
) |
|
|
|
(559 |
) |
|
Income tax expense |
|
|
520 |
|
|
|
|
1,016 |
|
|
|
|
238 |
|
|
|
|
2,424 |
|
|
|
|
2,018 |
|
|
Non-GAAP EBITDA |
|
$ |
5,220 |
|
|
|
$ |
8,201 |
|
|
|
$ |
5,359 |
|
|
|
$ |
19,997 |
|
|
|
$ |
21,006 |
|
|
Use of Non-GAAP
Financial Information
The company provides
Non-GAAP gross margin, Non-GAAP operating margin, Non-GAAP net income, Non-GAAP
basic and diluted net income per share and EBITDA as supplemental information.
In computing these non-GAAP financial measures, the company excludes certain
items included under GAAP, including stock-based compensation expense and income
tax provision adjustments. In computing EBITDA, the company also excludes
interest income, income tax expense and depreciation expense.
Management uses these
Non-GAAP financial measures to evaluate the operating performance of the
business and aid in 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 companys relative performance. The Non-GAAP
financial measures provided herein may not provide information that is directly
comparable to that provided by other companies in our industry, as other
companies may calculate such financial results differently. The companys
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.
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