Welcome!

News Feed Item

NeoPhotonics Reports First Quarter Financial Results and Updated Outlook for Second 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 first quarter ended March 31, 2014.

“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 SEC filing requirements,” said Tim Jenks, NeoPhotonics Chairman and CEO. “While the first quarter was a challenging one as we added 100G capacity and announced several new PIC based 100G products, we are increasingly confident that NeoPhotonics is well positioned to benefit from the rapid growth in deployment of 100G systems worldwide.”

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 March 31, 2014, combined cash, cash equivalents and short-term investments was $61.3 million, down from $75.0 million at December 31, 2013. Combined notes payable and debt was $40.8 million at March 31, 2014, which is down from $44.2 million at December 31, 2013.

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 June 30, 2014

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 $2.9 million of estimated combined expenses related to the expected amortization of intangibles and anticipated impact of stock-based compensation, plus $3.8 million income related to our settlement with Santur. Of these expenses, $1.2 million is estimated to relate to cost of goods sold.

Conference Call

The Company will host a conference call today, June 17, 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 first quarter 2014 financial results, discuss current business conditions, and respond to questions. The call will be available, live, to interested parties by dialing +1 (888) 438-5519. For international callers, please dial +1 (719) 325-2435. The Conference ID number is 3996961. 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 9001:2008 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, 2013 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

Mar. 31,
2014

Dec. 31,
2013

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,
2014

 

Dec. 31,
2013

 

Mar. 31,
2013

 
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,
2014

Dec. 31,
2013

Mar. 31,
2013

 
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  

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
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, discussed recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model for ...
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effici...
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
"MathFreeOn.com is a line coding platform for engineers and scientists. When they want to solve an engineering problem and they have to use software - they have to pay a lot of money for licenses - but with MathFreeOn you don't have to pay a lot of money. Just go to our site and write the code and you can check the result right away," explained Simon Lee, CMO of MathFreeOn, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Cla...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
In his session at Cloud Expo, Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, provideed economic scenarios that describe how the rapid adoption of software-defined everything including cloud services, SDDC and open networking will change GDP, industry growth, productivity and jobs. This session also included a drill down for several industries such as finance, social media, cloud service providers and pharmaceuticals.
"Dice has been around for the last 20 years. We have been helping tech professionals find new jobs and career opportunities," explained Manish Dixit, VP of Product and Engineering at Dice, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.