Welcome!

News Feed Item

NeoPhotonics Reports Fourth Quarter and Annual 2013 Financial Results and Updated Outlook for First Quarter 2014

NeoPhotonics Corporation (NYSE: NPTN), a leading designer and manufacturer of photonic integrated circuits, or PIC, based optoelectronic modules and subsystems for bandwidth-intensive, high speed communications networks, today announced financial results for its fourth quarter and year ended December 31, 2013.

“We are pleased to note the growing momentum behind global 100G deployments, notably in China and in North America, and we are confident that our new 100G products, coupled with our recent 100G capacity expansion, will put us in a strong position to benefit from this coming wave of 100G adoption,” said Tim Jenks, Chairman and CEO of NeoPhotonics. “Our recent product introductions span both line side and data center applications and include next generation, smaller lower power lasers, transmitters and receivers for 100G coherent transmission, 100G CFP2 transceivers for use in data centers and 100G semiconductor laser arrays as well as drivers for modulators and lasers,” he concluded.

Fourth Quarter Summary

Following is a summary of certain key financial measures for the fourth quarter of 2013.

  • Revenue was $74.4 million, a decrease of $2.4 million, or 3%, from the third quarter of 2013 and up $12.4 million, or 20%, from the fourth quarter of 2012.
  • Gross margin was 26.4%, up from 23.7% in the third quarter of 2013, and up from 22.7% in the fourth quarter of 2012.
  • Non-GAAP gross margin was 27.5%, flat with 27.5% in the third quarter of 2013 and up from 24.5% in the fourth quarter of 2012.
  • Net loss was $4.5 million, a decrease from a net loss of $9.4 million in the third quarter of 2013 and up from a net loss of $3.0 million in the fourth quarter of 2012.
  • Non-GAAP net loss was $1.8 million, a decrease from a net loss of $3.2 million in the third quarter of 2013 and up from a net loss of $0.2 million in the fourth quarter of 2012.
  • Diluted net loss per share was $0.14, a decrease from a diluted net loss per share of $0.30 in the third quarter of 2013 and up from a diluted net loss per share of $0.10 in the fourth quarter of 2012.
  • Non-GAAP diluted net loss per share was $0.06, a decrease from a diluted net loss per share of $0.10 in the third quarter of 2013 and up from a diluted net loss per share of $0.01 in the fourth quarter of 2012.
  • Adjusted EBITDA was $3.0 million, an increase from $1.9 million in the third quarter of 2013 and down from $3.4 million in the fourth quarter of 2012.

At December 31, 2013, combined cash, cash equivalents and short-term investments was $75.0 million, up from $70.6 million at September 30, 2013. Combined notes payable and debt was $44.2 million at December 31, 2013, which is down from $44.9 million at September 30, 2013.

Annual Summary

Following is a summary of certain key financial measures for 2013.

  • Revenue was $282.2 million, an increase of $36.8 million, or 15%, from $245.4 million in 2012.
  • Gross margin was 23.1%, down from 25.0 % in 2012.
  • Non-GAAP gross margin was 26.0%, down from 27.0% in 2012.
  • Net loss was $34.3 million, an increase from a net loss of $17.5 million in 2012.
  • Non-GAAP net loss was $14.2 million, an increase from a net loss of $4.5 million in 2012.
  • Diluted net loss per share was $1.11, an increase from a diluted net loss per share of $0.62 in 2012.
  • Non-GAAP diluted net loss per share was $0.46, an increase from a diluted net loss per share of $0.16 in 2012.
  • Adjusted EBITDA was $4.4 million, a decrease from $9.5 million in 2012.

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.

Updated Outlook for the First Quarter of 2014 Ending March 31, 2014

The Company’s updated outlook for the first quarter of 2014 is:

  • Revenue in the range of $67.5 million to $68.5 million versus the Company’s prior outlook range (announced in April 2014) of $67 to $69 million;
  • Non-GAAP gross margin in the range of 20% to 23%; and
  • Diluted net loss per share in the range of $0.38 to $0.42, and on a Non-GAAP basis in the range of a net loss of $0.28 to $0.32 per diluted share

The Company did not provide expectations previously on Non-GAAP gross margin, on diluted net loss per share, or on diluted Non-GAAP net loss per share.

The Non-GAAP outlook for the first quarter of 2014 excludes approximately $3.2 million of combined expenses related to the expected amortization of intangibles and anticipated impact of stock-based compensation. Of these expenses, $1.2 million is estimated to relate to cost of goods sold.

Outlook for the Quarter Ending June 30, 2014

The Company’s outlook for the second quarter of 2014 is:

  • Revenue in the range of $73 million to $78 million; and
  • Non-GAAP gross margin in the range of 20% to 25%.

Conference Call

The Company will host a conference call today, May 19, 2014, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). President and Chief Executive Officer, Tim Jenks, and Chief Financial Officer, Ray Wallin, will present an overview of the 2013 fourth quarter and annual financial results, discuss current business conditions, and respond to questions. The call will be available, live, to interested parties by dialing +1 (888) 417-8533. For international callers, please dial +1 (719) 325-2494. The Conference ID number is 2076202. A live webcast will also be available in the Investors Relations section of NeoPhotonics website at: www.neophotonics.com.

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 NeoPhotonics

NeoPhotonics is a leading designer and manufacturer of photonic integrated circuits, or PIC, based optoelectronic modules and subsystems for bandwidth-intensive, high-speed communications networks. The Company’s products enable cost-effective, high-speed data transmission and efficient allocation of bandwidth over communications networks. NeoPhotonics maintains headquarters in San Jose, California and ISO 9001:2000 certified engineering and manufacturing facilities in Silicon Valley (USA), Japan and China. For additional information, visit www.neophotonics.com.

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 New York Stock Exchange may initiate delisting proceedings, which would result in the Company’s common stock being delisted by the Exchange; 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 December 31, 2012 and the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2013. All forward-looking statements are made as of the date of this press release, and the Company disclaims any duty to update such statements.

© 2014 NeoPhotonics Corporation. All rights reserved. NeoPhotonics and the red dot logo are trademarks of NeoPhotonics Corporation. All other marks are the property of their respective owners.

 
NeoPhotonics Corporation
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
                         
As of

Dec. 31,

2013

 

Sep 30,

2013

Dec. 31,

2012

ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 75,017 $ 70,564 $ 101,241
Accounts receivable, net 64,533 78,898 70,354
Inventories 64,908 63,687 43,793
Prepaid expenses and other current assets   12,115     10,285     10,256  
Total current assets 216,573 223,434 225,644
Property, plant and equipment, net 68,851 70,818 54,440
Purchased intangible assets, net 15,005 16,309 14,213
Other long-term assets   1,798     1,836     1,335  
 
Total assets $ 302,227   $ 312,397   $ 295,632  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 72,212 $ 78,879 $ 56,267
Notes payable 9,738 7,954 12,003
Current portion of long-term debt   10,325     10,570     5,000  
Total current liabilities 92,275 97,403 73,270
Long-term debt, net of current portion 24,150 26,390 17,167
Other noncurrent liabilities   8,991     8,772     2,515  
 
Total liabilities   125,416     132,565     92,952  
Stockholders' equity:
Common stock 79 78 76
Additional paid-in capital 447,467 444,552 438,858
Accumulated other comprehensive income 11,687 13,172 11,829
Accumulated deficit   (282,422 )   (277,970 )   (248,083 )
Total stockholders' equity   176,811     179,832     202,680  
 
Total liabilities and stockholders' equity $ 302,227   $ 312,397   $ 295,632  
 
 
NeoPhotonics Corporation
Consolidated Statements of Operations (Unaudited)
(In thousands, except percentages, share and per share data)
                               
 
Three Months Ended Year Ended

Dec. 31,

2013

Sep. 30,

2013

Dec. 31,

2012

Dec. 31,

2013

 

Dec. 31,

2012

 
Revenue $ 74,375 $ 76,814 $ 62,023 $ 282,242 $ 245,423
Cost of goods sold (1)   54,739     58,635     47,973     217,069     184,163  
Gross profit 19,636 18,179 14,050 65,173 61,260
26.4 % 23.7 % 22.7 % 23.1 % 25.0 %
Operating expenses:
Research and development (1) 12,832 12,227 8,535 45,853 38,288
Sales and marketing (1) 3,727 3,580 3,458 14,242 13,241
General and administrative (1) 8,159 8,905 4,814 30,012 24,361
Adjustment to fair value of contingent consideration - 1,026 (308 ) 1,026 (554 )
Amortization of purchased intangible assets 404 381 320 1,532 1,316
Restructuring charges - 450 (91 ) 775 68
Acquisition- related transaction costs   89     126     537     5,406     1,447  
Total operating expenses   25,211     26,695     17,265     98,846     78,167  
Loss from operations   (5,575 )   (8,516 )   (3,215 )   (33,673 )   (16,907 )
 
Interest income 79 66 168 348 592
Interest expense (240 ) (251 ) (134 ) (996 ) (568 )
Other income (expense), net   1,618     115     696     1,186     575  
Total interest and other income (expense), net   1,457     (70 )   730     538     599  
 
Loss before income taxes (4,118 ) (8,586 ) (2,485 ) (33,135 ) (16,308 )
Provision for income taxes   (334 )   (777 )   (476 )   (1,204 )   (1,364 )
Loss from continuing operations (4,452 ) (9,363 ) (2,961 ) (34,339 ) (17,672 )
Income (loss) from discontinued operations, net of tax   -     -     (28 )   -     142  
Net loss   (4,452 )   (9,363 )   (2,989 )   (34,339 )   (17,530 )
Basic and diluted net loss per share:
Continuing operations $ (0.14 ) $ (0.30 ) $ (0.10 ) $ (1.11 ) $ (0.62 )
Discontinued operations $ -   $ -   $ -   $ -   $ -  
Net loss $ (0.14 ) $ (0.30 ) $ (0.10 ) $ (1.11 ) $ (0.62 )
 
Weighted averages shares used to compute net loss per share:
Basic   31,450,916     31,184,958     30,414,735     31,000,325     28,529,849  
Diluted   31,450,916     31,184,958     30,414,735     31,000,325     28,529,849  
 
(1 ) Includes stock-based compensation expense as follows for the periods presented:
Cost of goods sold $ 79 $ 471 $ 247 $ 924 $ 800
Research and development 625 417 476 2,060 1,744
Sales and marketing 332 253 278 1,167 934
General and administrative   435     449     341     1,585     1,299  
Total stock-based compensation expense $ 1,471   $ 1,590   $ 1,342   $ 5,736   $ 4,777  
 
 
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 Year Ended
Dec. 31,

2013

  Sep. 30,

2013

  Dec. 31,

2012

  Dec. 31,

2013

  Dec. 31,

2012

 
NON-GAAP GROSS PROFIT:
GAAP gross profit $ 19,636 $ 18,179 $ 14,050 $ 65,173 $ 61,260
Stock-based compensation expense 79 471 247 924 800
Amortization of purchased intangible assets 605 738 642 2,543 2,472
Amortization of acquisition-related fixed asset step-up 208 188 225 1,120 1,512
Amortization of acquisition-related inventory step-up (176 ) 928 - 2,897 -
Acquisition-related retention costs - - 50 - 148
Restructuring charges   71     628     -     699     -  
Non-GAAP gross profit $ 20,423   $ 21,132   $ 15,214   $ 73,356   $ 66,192  
Non-GAAP gross margin (% of revenue) 27.5 % 27.5 % 24.5 % 26.0 % 27.0 %
 
NON-GAAP LOSS FROM CONTINUING OPERATIONS:
GAAP loss from continuing operations $ (4,452 ) $ (9,363 ) $ (2,961 ) $ (34,339 ) $ (17,672 )
Stock-based compensation expense 1,471 1,590 1,342 5,736 4,777
Amortization of purchased intangible assets 1,009 1,119 963 4,041 3,788
Amortization of acquisition-related fixed asset step-up 315 302 356 1,588 2,480
Amortization of acquisition-related inventory step-up (176 ) 928 - 2,897 -
Acquisition-related retention costs - - 92 - 1,201
Acquisition-related transaction costs 89 126 537 5,406 1,447
Restructuring charges 71 1,077 (91 ) 1,474 68
Fair value adjustment to contingent consideration - 1,026 (308 ) 1,026 (554 )
Income tax effect of Non-GAAP adjustments   (170 )   (39 )   (56 )   (2,041 )   (202 )
Non-GAAP loss from continuing operations $ (1,843 ) $ (3,234 ) $ (126 ) $ (14,212 ) $ (4,667 )
 
ADJUSTED EBITDA FROM CONTINUING OPERATIONS:
GAAP loss from continuing operations $ (4,452 ) $ (9,363 ) $ (2,961 ) $ (34,339 ) $ (17,672 )
Stock-based compensation expense 1,471 1,590 1,342 5,736 4,777
Amortization of purchased intangible assets 1,009 1,119 963 4,041 3,788
Amortization of acquisition-related fixed asset step-up 315 302 356 1,588 2,480
Amortization of acquisition-related inventory step-up (176 ) 928 - 2,897 -
Acquisition-related retention costs - - 92 - 1,201
Acquisition-related transaction costs 89 126 537 5,406 1,447
Restructuring charges 71 1,077 (91 ) 1,474 68
Fair value adjustment to contingent consideration - 1,026 (308 ) 1,026 (554 )
Interest (income) expense, net 161 185 (34 ) 648 (24 )
Provision for income taxes 334 777 476 1,204 1,364
Depreciation expense   4,194     4,156     3,095     14,752     12,444  
Adjusted EBITDA from continuing operations $ 3,016   $ 1,923   $ 3,467   $ 4,433   $ 9,319  
 
DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS:
GAAP diluted loss per share from continuing operations $ (0.14 ) $ (0.30 ) $ (0.10 ) $ (1.11 ) $ (0.62 )
Non-GAAP diluted loss per share from continuing operations $ (0.06 ) $ (0.10 ) $ (0.00 ) $ (0.46 ) $ (0.16 )
 
SHARES USED TO COMPUTE NON-GAAP DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS:
Shares used to compute GAAP diluted income (loss) per share from continuing operations   31,450,916     31,184,958     30,414,735     31,000,325     28,529,849  
Shares used to compute non-GAAP diluted income (loss) per share from continuing operations   31,450,916     31,184,958     30,414,735     31,000,325     28,529,849  

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Is the ongoing quest for agility in the data center forcing you to evaluate how to be a part of infrastructure automation efforts? As organizations evolve toward bimodal IT operations, they are embracing new service delivery models and leveraging virtualization to increase infrastructure agility. Therefore, the network must evolve in parallel to become equally agile. Read this essential piece of Gartner research for recommendations on achieving greater agility.
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
With over 720 million Internet users and 40–50% CAGR, the Chinese Cloud Computing market has been booming. When talking about cloud computing, what are the Chinese users of cloud thinking about? What is the most powerful force that can push them to make the buying decision? How to tap into them? In his session at 18th Cloud Expo, Yu Hao, CEO and co-founder of SpeedyCloud, answered these questions and discussed the results of SpeedyCloud’s survey.
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
Actian Corporation has announced the latest version of the Actian Vector in Hadoop (VectorH) database, generally available at the end of July. VectorH is based on the same query engine that powers Actian Vector, which recently doubled the TPC-H benchmark record for non-clustered systems at the 3000GB scale factor (see tpc.org/3323). The ability to easily ingest information from different data sources and rapidly develop queries to make better business decisions is becoming increasingly importan...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Kubernetes, Docker and containers are changing the world, and how companies are deploying their software and running their infrastructure. With the shift in how applications are built and deployed, new challenges must be solved. In his session at @DevOpsSummit at19th Cloud Expo, Sebastian Scheele, co-founder of Loodse, will discuss the implications of containerized applications/infrastructures and their impact on the enterprise. In a real world example based on Kubernetes, he will show how to ...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...