Applied Optoelectronics, Inc. (NASDAQ:AAOI), a
leading provider of fiber-optic access network products for the
internet datacenter, cable broadband, and fiber-to-the-home
markets, today announced updated guidance for its third quarter
ended Sept. 30, 2016.
Revised Third Quarter 2016 Guidance+
- Revenue in the range of $63.0 million to $65.0 million, above
the prior outlook of $56.0 million to $59.0 million.
- Non-GAAP gross margin in the range of 30.5% to 32.0%, the same
as the prior outlook of 30.5% to 32.0%.
- Non-GAAP net income in the range from $4.7 million to $5.2
million, above the prior outlook of $2.9 million to $3.8
million.
- Non-GAAP fully diluted earnings per share in the range of $0.26
to $0.29, using a weighted-average fully diluted share count of
approximately 18.0 million shares. This is above the prior outlook
of $0.16 to $0.21 per share.
"Customer demand for our market-leading datacenter products has
accelerated in the quarter and has outpaced our prior
expectations," said Dr. Thompson Lin, Applied Optoelectronics, Inc.
founder, president and CEO. “We are increasing our third quarter
guidance in order to reflect the increased demand."
(+) Please refer to the note below on
forward-looking statements and the risks involved with such
statements as well as the note on non-GAAP financial measures. The
prior outlook referenced above was provided in the company’s press
release on Aug. 4, 2016.
Forward-Looking Information
This press release contains forward-looking statements. These
forward-looking statements involve risks and uncertainties, as well
as assumptions and current expectations, which could cause the
company’s actual results to differ materially from those
anticipated in such forward-looking statements. These risks and
uncertainties include but are not limited to: reduction in the size
or quantity of customer orders; change in demand for the company’s
products due to industry conditions; changes in manufacturing
operations; volatility in manufacturing costs; delays in shipments
of products; disruptions in the supply chain; change in the rate of
design wins or the rate of customer acceptance of new products; the
company’s reliance on a small number of customers for a substantial
portion of its revenues; potential pricing pressure; a decline in
demand for our customers’ products or their rate of deployment of
their products; general conditions in the internet datacenter, CATV
or FTTH markets; changes in the world economy (particularly in the
United States and China); the negative effects of seasonality; and
other risks and uncertainties described more fully in the company’s
documents filed with or furnished to the Securities and Exchange
Commission. More information about these and other risks that may
impact the company’s business are set forth in the “Risk Factors”
section of the company’s quarterly and annual reports on file with
the Securities and Exchange Commission. In some cases, you can
identify forward-looking statements by terminology such as
"believe," "may," "estimate," "continue," "anticipate," "intend,"
"should," "could," "would," "target," "seek," "aim," "believe,"
"predicts," "think," "objectives," "optimistic," "new," "goal,"
"strategy," "potential," "is likely," "will," "expect," "plan"
"project," "permit" or by other similar expressions that convey
uncertainty of future events or outcomes. You should not rely on
forward-looking statements as predictions of future events. All
forward-looking statements in this press release are based upon
information available to us as of the date hereof, and qualified in
their entirety by this cautionary statement. Except as required by
law, we assume no obligation to update forward-looking statements
for any reason after the date of this press release to conform
these statements to actual results or to changes in the company’s
expectations.
Non-GAAP Financial Measures
We provide non-GAAP gross margin, non-GAAP operating income
(loss), non-GAAP net income (loss), non-GAAP earnings per share,
and other non-GAAP measures like Adjusted EBITDA to eliminate the
impact of items that we do not consider indicative of our overall
operating performance. To arrive at our non-GAAP gross profit, we
exclude stock-based compensation expense and non-recurring
expenses, if any, from our GAAP gross profit. To arrive at our
non-GAAP income (loss) from operations, we exclude all amortization
of intangible assets, stock-based compensation expense and
non-recurring expenses, if any, from our GAAP net income (loss)
from operations. Included in our non-recurring expenses for the
periods from 1Q16 to 2Q16 are certain consulting fees, items
related to the relocation of our plant in Texas, and realized loss
on the maturity of foreign currency investment. To arrive at
Adjusted EBITDA, we exclude these same items and, additionally,
exclude asset impairment charges, loss (gain) from disposal of idle
assets, unrealized exchange loss (gain), interest (income) expense,
on a net basis, provision for (benefit from) income taxes and
depreciation expense, from our GAAP net income (loss). Our non-GAAP
earnings per share is calculated by dividing our non-GAAP net
income by the fully diluted share count. We believe that our
non-GAAP measures are useful to investors in evaluating our
operating performance for the following reasons:
- We believe that elimination of items such as stock-based
compensation expense, non-recurring expenses, amortization and tax
is appropriate because treatment of these items may vary for
reasons unrelated to our overall operating performance;
- We believe that non-GAAP measures provide better comparability
with our past financial performance, period-to-period results and
with our peer companies, many of which also use similar non-GAAP
financial measures; and
- We anticipate that investors and securities analysts will
utilize non-GAAP measures to evaluate our overall operating
performance.
Adjusted EBITDA and other non-GAAP measures should not be
considered as an alternative to gross profit, income (loss) from
operations, net income (loss) or any other measure of financial
performance calculated and presented in accordance with GAAP. Our
Adjusted EBITDA and other non-GAAP measures may not be comparable
to similarly titled measures of other organizations because other
organizations may not calculate Adjusted EBITDA or such other
non-GAAP measures in the same manner. We have not reconciled the
non-GAAP measures included in our guidance to the appropriate GAAP
financial measures because the GAAP measures are not accessible on
a forward-looking basis. GAAP measures that impact our non-GAAP
financial measures may include stock-based compensation expense,
non-recurring expenses, amortization of intangible assets,
unrealized exchange loss (gain), asset impairment charges, and loss
(gain) from disposal of idle assets. These GAAP measures cannot be
reasonably predicted and may directly impact our non-GAAP gross
margin, our non-GAAP net income and our non-GAAP fully-diluted
earnings per share, although changes with respect to certain of
these measures may offset other changes. In addition, certain of
these measures are out of our control. Accordingly, a
reconciliation of the non-GAAP financial measure guidance to the
corresponding GAAP measures is not available without unreasonable
effort.
About Applied Optoelectronics
Applied Optoelectronics, Inc. (AOI) is a leading developer and
manufacturer of advanced optical products, including components,
modules and equipment. AOI's products are the building blocks for
broadband fiber access networks around the world, where they are
used in the internet datacenter, CATV broadband and
fiber-to-the-home markets. AOI supplies optical networking lasers,
components and equipment to tier-1 customers in all three of these
markets. In addition to its corporate headquarters, wafer fab and
advanced engineering and production facilities in Sugar Land, TX,
AOI has engineering and manufacturing facilities in Taipei, Taiwan
and Ningbo, China. For additional information, visit
www.ao-inc.com.
Investor Relations Contacts:
The Blueshirt Group, Investor Relations
Maria Riley & Chelsea Lish
+1-415-217-7722
ir@ao-inc.com
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