Expects Results to Exceed GuidanceSchedules
Fourth Quarter Conference Call Feb. 23, 2017
Applied Optoelectronics, Inc.
(NASDAQ:AAOI)
, a leading provider of fiber-optic
network products for the internet datacenter, cable broadband,
fiber-to-the-home and telecom markets, today announced certain
preliminary unaudited financial results for its fourth quarter
ended Dec. 31, 2016.
“We delivered a strong fourth quarter with top and bottom-line
results expected to exceed our guidance,” said Dr. Thompson Lin,
Applied Optoelectronics, Inc. founder, president and CEO.
“Accelerated demand for our market-leading datacenter products and
increased capacity fueled our results. Additionally, we continued
to drive manufacturing efficiencies, which contributed to a record
gross margin. We are excited by the good close to the year and look
forward to sharing the additional details of our fourth quarter
performance on our conference call in February.”
Fourth Quarter 2016 Preliminary Unaudited Financial
Results+
- Revenue in the range of $84.5 million to $84.8 million, above
the prior outlook of $75.0 million to $79.0 million.
- GAAP and non-GAAP gross margin in the range of 37.6% to 38.0%,
above the prior non-GAAP outlook of 34.0% to 35.5%.
- GAAP net income after tax in the range from $13.0 million to
$14.0 million and non-GAAP net income after tax in the range from
$14.2 million to $15.2 million, above the prior non-GAAP outlook of
$8.5 million to $9.5 million.
- GAAP fully diluted earnings per share in the range of $0.70 to
$0.75 and non-GAAP fully diluted earnings per share in the range of
$0.77 to $0.82, using a weighted-average fully diluted share count
of approximately 18.5 million shares. This is above the prior
non-GAAP outlook of $0.46 to $0.51 per share, using approximately
18.6 million shares.
These are preliminary financial results and remain subject to
the completion of the company's customary quarterly close and
review procedures. Material adjustments may arise between the date
of this press release and the dates on which Applied
Optoelectronics announces its fourth quarter and year 2016 results
and files its Form 10-K with the SEC.
(+)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 Nov. 3, 2016.
Conference Call Information
Applied Optoelectronics will release its full financial results
for the fourth quarter and year 2016 after U.S. markets close on
Thursday, Feb. 23, 2017.
The company will host a conference call and webcast for analysts
and investors on Feb. 23, 2017 to discuss its fourth quarter and
year 2016 results and outlook for its first quarter of 2017 at 4:30
p.m. Eastern time / 3:30 p.m. Central time. Open to the public,
investors may access the call by dialing (412) 317-6789.
A live audio webcast of the conference call along with
supplemental financial information will also be accessible on the
company's website at investors.ao-inc.com. Following the webcast,
an archived version will be available on the website for one year.
A telephonic replay of the call will be available one hour after
the call and will run for five business days and may be accessed by
dialing (412) 317-0088 and entering passcode 10098914.
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, FTTH or Telecom 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 net income (loss),
and non-GAAP earnings per share 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
4Q16 are certain consulting fees, items related to the relocation
of our plant in Texas, realized loss on the maturity of certain
foreign currency investments, and a tax benefit arising from the
removal of our valuation allowance. 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 and non-recurring expenses 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.
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 non-GAAP measures may not be
comparable to similarly titled measures of other organizations
because other organizations may not calculate 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 were 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, fiber-to-the-home
and telecom markets. AOI supplies optical networking lasers,
components and equipment to tier-1 customers in all four 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.
Applied Optoelectronics, Inc. |
Reconciliation of Net income under GAAP and
Non-GAAP |
(In millions) |
(Unaudited) |
|
Three months ended December 31,
2016 |
|
|
Low end of range |
|
High end of range |
|
GAAP net
income |
$ |
13.0 |
|
$ |
14.0 |
|
Adjustments: |
|
|
|
|
Amortization of intangible assets |
|
0.1 |
|
|
0.1 |
|
Share-based compensation expense |
|
1.0 |
|
|
1.0 |
|
Other |
|
0.1 |
|
|
0.1 |
|
Non-GAAP net
income |
$ |
14.2 |
|
$ |
15.2 |
|
|
|
|
|
|
|
|
Investor Relations Contacts:
The Blueshirt Group, Investor Relations
Maria Riley & Chelsea Lish
+1-415-217-7722
ir@ao-inc.com
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