Acacia Communications, Inc. (NASDAQ:ACIA), a leading provider of
high-speed coherent optical interconnect products, today announced
certain preliminary financial results for the quarter
ended June 30, 2017 and provided preliminary guidance for its
third quarter ending September 30, 2017.
“Our second quarter results were adversely affected by the
quality issue identified at one of our three contract manufacturers
that we announced on May 31. As we previously announced, we
identified a circuit board cleaning process as the likely root
cause of the quality issue. This cleaning process was
eliminated and manufacturing at the impacted contract manufacturer
resumed. Although we began to ramp manufacturing capacity
with our contract manufacturers during the quarter, we experienced
supply constraints as capacity was used to both build replacement
units and to meet new demand from customers for our AC400 and CFP
units,” said Raj Shanmugaraj, President and Chief Executive Officer
of Acacia Communications. “We anticipate completing our remediation
efforts with respect to the remaining impacted units during the
third quarter of 2017.”
“While we are disappointed with the impact that the quality
issue had on second quarter results, looking ahead to the third
quarter, we believe we are well positioned to meet customer demand
for our products, which we believe continues to be driven by the
strength of our product capabilities,” said John Gavin, Chief
Financial Officer of Acacia Communications. “We remain excited
about Acacia’s future growth opportunities, and believe that the
new products we are currently ramping up will be contributors to
our anticipated growth in the second half of 2017 over the first
half of 2017.”
Preliminary Results for the Second Quarter of
2017
- Revenue of $77.0 million to $79.0 million
- GAAP net (loss) of $(7.5) million to $(5.5) million
- Non-GAAP net income of $7.0 million to $8.5 million
- GAAP diluted (net loss) per share of $(0.19) to $(0.14)
- Non-GAAP diluted EPS of $0.17 to $0.20
These preliminary financial results are inherently uncertain and
subject to revision in connection with the finalization of the
Company’s financial statements for its quarter ended June 30,
2017. Acacia Communications plans to release its complete
financial results for the second quarter of 2017 after U.S. markets
close on Thursday, August 3, 2017.
Preliminary Outlook for the Third Quarter of
2017
The following statements are preliminary and based on current
expectations. These statements are forward-looking and actual
results may differ materially, as a result of, among other things,
the important factors discussed at the end of this press release.
Acacia Communications disclaims any obligation to update these
forward-looking statements.
Acacia Communications’ preliminary guidance for its third
quarter ending September 30, 2017 is:
Quarter Ending September 30, 2017 |
|
|
|
|
|
|
|
Revenue (millions) |
|
$ |
95.0 |
|
to |
|
$ |
110.0 |
|
Non-GAAP Net Income*
(millions) |
|
$ |
10.0 |
|
to |
|
$ |
16.0 |
|
Non-GAAP Diluted
EPS* |
|
$ |
0.25 |
|
to |
|
$ |
0.40 |
|
*Non-GAAP net income and non-GAAP diluted EPS are non-GAAP
financial measures that are not prepared in accordance with
generally accepted accounting principles (GAAP). Please refer
below to Use of Non-GAAP Financial Information for descriptions of
these non-GAAP financial measures and to the Reconciliation of GAAP
Measures to Non-GAAP Measures, attached as Schedule A, for
reconciliations of these non-GAAP financial measures to the closest
GAAP measures.
With respect to its third quarter guidance, Acacia
Communications has not reconciled the above guidance as to non-GAAP
net income or non-GAAP diluted EPS to GAAP net income or GAAP EPS
because the expected tax benefits derived from any employee equity
awards during the third quarter of 2017 cannot be reasonably
calculated or predicted at this time. Accordingly, a reconciliation
is not available without unreasonable effort.
Use of Non-GAAP Financial Information
This press release includes non-GAAP financial measures that are
not prepared in accordance with, nor an alternative to, generally
accepted accounting principles (GAAP). In addition, these non-GAAP
financial measures are not based on any standardized methodology
prescribed by GAAP and are not necessarily comparable to
similarly-titled measures presented by other companies.
Schedule A of this press release provides reconciliations of
Acacia Communications’ preliminary non-GAAP net income and non-GAAP
diluted EPS for the quarter ended June 30, 2017 to their most
comparable preliminary GAAP financial measure.
Acacia Communications believes that providing these non-GAAP
financial measures to investors, in addition to providing the
corresponding GAAP measures, provides investors the benefit of
viewing the Company’s performance using the same financial metrics
that its management team uses in making many key decisions and
evaluating how its results of operations may look in the
future. Acacia Communications’ management does not believe
that items not involving cash expenditures, such as non-cash
compensation related to equity awards and redeemable convertible
preferred stock warrant liability changes derived from
mark-to-market adjustments, are part of its critical decision
making process. Also, Acacia Communications' management does not
believe that warranty charges arising from a manufacturing process
quality issue are reflective of the Company's underlying operating
performance. Therefore, Acacia Communications excludes
those items, as applicable, from non-GAAP net income and non-GAAP
diluted EPS.
Acacia Communications’ non-GAAP financial measures reflect
adjustments based on the metrics described below, as well as the
related income tax effects. The income tax effect of these non-GAAP
adjustments is determined by recalculating income tax expense
excluding these adjustments.
Non-GAAP net income and non-GAAP diluted EPS. Acacia
Communications defines non-GAAP net income as net income
(loss) as reported on the Company’s consolidated income statements,
excluding the impact of stock-based compensation and the change in
fair value of the Company’s preferred stock warrant liability, both
of which are non-cash charges, as well as warranty charges arising
from a manufacturing process quality issue, and the tax effects of
those excluded items.
In order to calculate non-GAAP diluted EPS, Acacia
Communications uses a non-GAAP weighted-average share count.
The Company defines non-GAAP weighted-average shares used to
compute non-GAAP diluted EPS as GAAP weighted-average shares used
to compute diluted earnings (loss) per share, adjusted for any
incrementally dilutive shares, and also adjusted to reflect the
conversion of its redeemable convertible preferred stock into
common stock and the conversion of its redeemable convertible
preferred stock warrants into common stock warrants, both as if
they had occurred at the beginning of the period.
Acacia Communications has presented non-GAAP net income and
non-GAAP diluted EPS because the Company believes that the
exclusion of the items discussed above facilitates comparisons of
its results of operations to other companies in its industry.
Acacia Communications uses these non-GAAP financial
measures to evaluate its operating performance and trends, and make
planning decisions. Acacia Communications believes that each
of these non-GAAP financial measures helps identify underlying
trends in its business that could otherwise be masked by the effect
of the items that the Company excludes. Accordingly, Acacia
Communications believes that these financial measures provide
useful information to investors and others in understanding and
evaluating its operating results, enhancing the overall
understanding of the Company’s past performance and future
prospects, and allowing for greater transparency with respect to
key financial metrics used by its management in its financial and
operational decision-making.
Acacia Communications’ non-GAAP financial measures are not
prepared in accordance with GAAP, and should not be considered in
isolation of, or as an alternative to, measures prepared in
accordance with GAAP. There are a number of limitations related to
the use of these non-GAAP financial measures rather than net income
(loss) or diluted earnings (net loss) per share, which are the
nearest GAAP equivalents. Some of these limitations are:
- Acacia Communications excludes stock-based compensation expense
from each of its non-GAAP financial measures, as it has recently
been, and will continue to be for the foreseeable future, a
significant recurring expense for its business and an important
part of the Company’s compensation strategy;
- Acacia Communications excludes the tax benefits generated from
the exercise of non-qualified stock options, the disqualifying
disposition of incentive stock options and ESPP shares, and the
vesting of restricted stock units, including any excess tax
benefits and shortfalls recognized by the Company in the year of
the taxable transaction, in calculating its non-GAAP net income and
non-GAAP diluted EPS. Without excluding these tax benefits,
investors would not see the full effect that excluding stock-based
compensation expense had on our operating results. These
benefits are tied to the exercise or vesting of underlying employee
equity awards and the price of our common stock at the time of
exercise or vesting, which factors may vary from period to period
independent of the operating performance of our business.
Similar to stock-based compensation expense, we believe that
excluding these tax benefits provides investors and management with
greater visibility to the underlying performance of our business
operations and facilitates comparison with other periods as well as
the results of other companies in our industry; and
- Acacia Communications excludes the change in fair value of its
preferred stock warrant liability from its non-GAAP net income and
non-GAAP diluted EPS, as it has historically been a recurring
non-cash charge but it will not recur in the periods following the
Company’s initial public offering.
Because of these limitations, non-GAAP financial measures should
be considered along with other operating and financial performance
measures presented in accordance with GAAP.
Acacia Communications’ use of non-GAAP financial measures, and
the underlying methodology when excluding certain items, is not
necessarily an indication of the results of operations that may be
expected in the future, or that Acacia Communications will not, in
fact, record such items in future periods.
Investors should consider Acacia Communications’ non-GAAP
financial measures in conjunction with the corresponding GAAP
financial measures.
About Acacia Communications
Acacia Communications develops, manufactures and sells
high-speed coherent optical interconnect products that are designed
to transform communications networks through improvements in
performance, capacity and cost. By leveraging silicon
technology to build optical interconnects, a process Acacia
Communications refers to as the “siliconization of optical
interconnect,” Acacia Communications is able to offer products at
higher speeds and density with lower power consumption, that meet
the needs of cloud and service providers and can be easily
integrated in a cost-effective manner with existing network
equipment. www.acacia-inc.com.
Forward Looking Statements
This press release includes statements concerning Acacia
Communications and its future expectations, plans and
prospects that constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding preliminary financial results for
the second quarter of 2017, preliminary third quarter 2017 guidance
and the anticipated timing of its release of certain financial
information. For this purpose, any statements contained herein that
are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the
words “may,” “should,” “expects,” “plans,” “anticipates,” “could,”
“intends,” “target,” “projects,” “contemplates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative
of these terms or other similar expressions are intended to
identify forward-looking statements. Acacia Communications has
based these forward-looking statements largely on its current
expectations and projections about future events and financial
trends that the Company believes may affect its business, financial
condition and results of operations. These forward-looking
statements speak only as of the date of this press release and are
subject to a number of risks, uncertainties and assumptions
including, without limitation, the finalization of its financial
statements for the second quarter ended June 30, 2017, any
adjustments identified by the Company’s auditors in the course of
their review of such financial statements, the Company’s ability to
remediate the product quality issue referenced above, the capacity
and stability of its supply chain and manufacturing, customer
demand for the Company’s products, and other risks set forth under
the caption “Risk Factors” in the Company’s public reports filed
with the SEC, including the Company’s Annual Report on Form 10-K
for the year ended December 31, 2016 filed with the SEC and its
Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2017 filed with the SEC. The Company assumes no obligation
to update any forward-looking statements contained in this press
release as a result of new information, future events or
otherwise.
SCHEDULE A |
ACACIA COMMUNICATIONS, INC. |
RECONCILIATION OF GAAP MEASURES TO NON-GAAP
MEASURES |
(in thousands, except per share data) |
(unaudited) |
|
|
|
Quarter EndedJune 30,
2017 |
|
|
Low End of Range |
|
High End of Range |
Non-GAAP Net
Income |
|
|
|
|
GAAP net loss |
|
$ |
(7,500 |
) |
|
$ |
(5,500 |
) |
Stock-based compensation |
|
6,100 |
|
|
6,100 |
|
Warranty
charges due to manufacturing process quality issue |
|
16,000 |
|
|
15,000 |
|
Tax
effect of excluded items |
|
(7,600 |
) |
|
(7,100 |
) |
Non-GAAP net
income |
|
$ |
7,000 |
|
|
$ |
8,500 |
|
|
|
|
|
|
Non-GAAP
diluted EPS |
|
|
|
|
GAAP diluted net loss
per share attributable to common stockholders |
|
$ |
(0.19 |
) |
|
$ |
(0.14 |
) |
Stock-based compensation |
|
0.16 |
|
|
0.16 |
|
Warranty
charges due to manufacturing process quality issue |
|
0.41 |
|
|
0.39 |
|
Tax
effect of excluded items |
|
(0.20 |
) |
|
(0.19 |
) |
Effect of
incremental share dilution |
|
(0.01 |
) |
|
(0.02 |
) |
Non-GAAP diluted
EPS |
|
$ |
0.17 |
|
|
$ |
0.20 |
|
|
|
|
|
|
Weighted-average shares
used to compute GAAP diluted net loss per share attributable to
common shareholders |
|
38,800 |
|
|
38,800 |
|
Incremental stock options, unvested restricted stock, restricted
stock units, and employee stock purchase plan (a) |
|
2,800 |
|
|
2,900 |
|
Weighted-average shares
used to compute non-GAAP diluted EPS |
|
41,600 |
|
|
41,700 |
|
(a) This adjustment represents weighted-average potentially
dilutive securities excluded from the computation of diluted net
loss per share attributable to common stockholders on GAAP basis
because the effect would have been antidilutive. This adjustment
amount is added for the computation of diluted earnings per share
on non-GAAP basis as we had a net income on non-GAAP basis for the
period.
For further information:
Investor Relations Contact:
Monica Gould
Office: (212) 871-3927
Email: IR@acacia-inc.com
Lindsay Savarese
Office: (212) 331-8417
Email: IR@acacia-inc.com
Public Relations Contact:
Ed Harrison
Office: (781) 966-4158
Email: PR@inkhouse.com
Acacia Communications (NASDAQ:ACIA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Acacia Communications (NASDAQ:ACIA)
Historical Stock Chart
From Apr 2023 to Apr 2024