AFOP Reports 2nd Quarter 2005 Results; Revenues Up 59% Year-Over-Year.SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif. -- Alliance Fiber Optic Products, Inc. (Nasdaq:AFOP AFOP Alliance Fiber Optic Products, Inc. AFOP Association of Farmworker Opportunity Programs AFOP Association Française des industries de l'Optique et de la Photonique AFOP and for other purposes AFOP acute fibrinous and organizing pneumonia ), an innovative supplier of fiber optic components, subsystems and integrated modules for the optical network equipment market, today reported its financial results for the second quarter ended June June: see month. 30, 2005. Revenues for the second quarter of 2005 totaled $5,178,000, which represents a 3% increase over revenues of $5,006,000 reported in the previous quarter, and an increase of 59% over revenues of $3,252,000 reported in the second quarter of 2004. The Company recorded a net loss for the second quarter of 2005 of $720,000, or $0.02 per share based on 39.3 million shares outstanding. This compares to a net loss for the first quarter of 2005 of $812,000, or $0.02 per share based on 39.0 million shares outstanding, and a net loss for the second quarter of 2004 of $2,557,000, or $0.07 per share based on 38.7 million shares outstanding. There were no deferred stock compensation charges for either the quarter ended June 30, 2005 or the quarter ended March 31, 2005. Included in the net loss for the quarter ended June 30, 2004 are deferred stock compensation charges of $87,000. Peter Chang Chang (chăng) or Yangtze (yăng`sē`, yäng`dzŭ`), Mandarin Chang Jiang, longest river of China and of Asia, c.3,880 mi (6,245 km) long, rising in the Tibetan highlands, SW Qinghai prov. , President and Chief Executive Officer, commented, "The second quarter of 2005 marked our 5th consecutive quarter of revenue growth and improved financial results. Second quarter 2005 revenue of $5.2 million grew by 59% from the year ago quarter, and by 3% sequentially. While revenues increased almost 60% from a year ago, our cost of revenues increased at approximately half of that rate, leading to a greatly improved gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. of 21.3% in Q2 2005, versus 2.1% in Q2 2004. Also contributing to our quarterly results was a further reduction in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Total second quarter operating expenses fell by 22% from a year ago, resulting in a net loss of $0.02 per share, which is an improvement of 72% from a year ago. "We are pleased with our performance this quarter as our results reflect an improved sales environment for our products and our careful control of expenses. As we see evidence of major telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. providers committing to large FTTX (Fiber To The X) Refers to all the "fiber-to-the-wherever" technologies. See FTTC and FTTP. See also FTX. deployments, we are encouraged by our future prospects. We believe our order trends and customer activity point to modest revenue growth and continuing bottom line improvement in the quarters ahead," concluded Mr. Chang. Conference Call Management will host a conference call at 1:30 p.m. Pacific Time on July July: see month. 26, 2005 to discuss AFOP's second quarter 2005 financial results. To participate in AFOP's conference call, please call (800) 374-0514 at least ten minutes prior to the call in order for the operator to connect you. The confirmation number for the call is 7523298. AFOP will also provide a live webcast of its second quarter 2005 conference call at AFOP's website www.afop.com. The dial in for the instant replay is (800) 642-1687; confirmation number 7523298. About AFOP Founded in 1995, Alliance Fiber Optic Products, Inc. designs, manufactures and markets a broad range of high performance fiber optic components and integrated modules. AFOP's products are used by leading and emerging communications equipment manufacturers to deliver optical networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. systems to the long-haul, enterprise, metropolitan and last mile access segments of the communications network The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. . AFOP offers a broad product line of passive optical components including interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. systems, couplers and splitters, thin film DWDM (Dense WDM) The term given to wavelength division multiplexing (WDM) when significantly more channels were being added. Since WDM is increasingly more "dense" all the time, both terms are used synonymously. See WDM. DWDM - wavelength division multiplexing components and modules, fixed and variable optical attenuators An optical attenuator is a device used to reduce the power level of an optical signal, either in free space or in an optical fiber. They are commonly used in fiber optic communications. , and depolarizers. AFOP is headquartered in Sunnyvale, California Sunnyvale ([sʌniveil]) is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley. As of the 2000 census, the city population was 131,760. , with manufacturing and product development capabilities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Taiwan and China. AFOP's website is located at http://www.afop.com. Except for the historical information contained herein, the matters set forth in this press release, including statements as to our future prospects, our order trends and customer activity, and expected revenue growth and bottom-line improvement, are forward looking statements within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to general economic conditions and trends, the impact of competitive products and pricing, timely introduction of new technologies, timely design acceptance by our customers, the acceptance of new products and technologies by our customers, customer demand, the timing of customer orders, loss of key customers, ability to ramp new products into volume production, industry-wide shifts in supply and demand for optical components and modules, industry overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. , failure of cost control initiatives, financial stability in foreign markets, and other risks detailed from time to time in SEC reports, including AFOP's most recent Form 10-QSB for the quarter ended March 31, 2005. These forward-looking statements speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . AFOP disclaims any intention or obligation to update or revise any forward-looking statements.
ALLIANCE FIBER OPTIC PRODUCTS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
Jun. 30 Dec. 31,
2005 2004
--------- ---------
ASSETS
Current assets:
Cash and short-term investments $29,599 $31,456
Accounts receivable 2,805 2,322
Inventories 3,404 3,998
Other current assets 619 653
--------- ---------
Total current assets 36,427 38,429
Property and equipment, net 5,197 5,603
Other assets 145 121
--------- ---------
Total assets $41,769 $44,153
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,685 $ 2,205
Accrued expenses and other liabilities 2,110 2,480
--------- ---------
Total current liabilities 3,795 4,685
Long-term liabilities 931 826
--------- ---------
Total liabilities 4,726 5,511
Stockholders' equity 37,043 38,642
--------- ---------
Total liabilities and stockholders' equity $41,769 $44,153
========= =========
ALLIANCE FIBER OPTIC PRODUCTS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
--------------------------- -----------------
Jun. 30 Mar. 31, Jun. 30 Jun. 30 Jun. 30
2005 2005 2004 2005 2004
-------- -------- -------- -------- --------
Revenues $5,178 $5,006 $ 3,252 $10,184 $ 6,241
Cost of revenues 4,077 4,075 3,185 8,152 6,299
-------- -------- -------- -------- --------
Gross profit/(loss) 1,101 931 67 2,032 (58)
-------- -------- -------- -------- --------
Operating expenses:
Research and
development 882 952 1,472 1,834 3,003
Sales and marketing 560 574 525 1,134 1,015
General and
administrative 713 750 770 1,463 1,671
-------- -------- -------- -------- --------
Total operating
expenses 2,155 2,276 2,767 4,431 5,689
Loss from operations (1,054) (1,345) (2,700) (2,399) (5,747)
Interest and other
income, net 334 533 143 867 384
-------- -------- -------- -------- --------
Net loss $ (720) $ (812) $(2,557) $(1,532) $(5,363)
======== ======== ======== ======== ========
Net loss per share --
basic and diluted $(0.02) $(0.02) $ (0.07) $ (0.04) $ (0.14)
Weighted average shares
outstanding 39,259 39,017 38,702 39,138 38,251
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