AFOP Reports Improved 4th Quarter and Full Year 2004 Results; Revenues up 27% Sequentially and 34% 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 fourth quarter ended December December: see month. 31, 2004. Revenues for the fourth quarter of 2004 totaled $4,653,000, which represents a 27% increase over revenues of $3,665,000 reported in the previous quarter, and an increase of 34% over revenues of $3,476,000 reported in the fourth quarter of 2003. The Company recorded a net loss for the fourth quarter of 2004 of $1,587,000, or $0.04 per share based on 38.7 million shares outstanding. This compares to a net loss for the third quarter of 2004 of $2,390,000, or $0.06 per share based on 39.0 million shares outstanding, and a net loss for the fourth quarter of 2003 of $1,788,000, or $0.05 per share based on 36.1 million shares outstanding. Revenues for fiscal year 2004 totaled $14,558,000 as compared to $11,470,000 in the previous year. The Company recorded a net loss for fiscal year 2004 of $9,343,000 or $0.24 per share based on 38.5 million shares outstanding. This compares to a net loss for the previous year of $8,519,000 or $0.24 per share based on 35.6 million shares outstanding. Included in the net loss for the quarter ended December 31, 2004 are deferred stock compensation charges of $1,000 and an asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $331,000. Included in the net loss for the quarter ended September September: see month. 30, 2004 are deferred stock compensation charges of $69,000. Included in the net loss for the quarter ended December 30, 2003 are deferred stock compensation charges of $109,000. Included in the net loss for the year ended December 31, 2004 are deferred stock compensation charges of $286,000 and an asset impairment charge of $331,000. Included in the net loss for the year ended December 31, 2003 are deferred stock compensation charges of $905,000. 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, "2004 was a year of consistent growth and improvement for AFOP, ending with an exceptional fourth quarter of 27% sequential and 34% year-over-year improvement in revenues. Not only did sales improve every quarter of the year, but the gross margin also improved consistently throughout the year, ending with Q4 at a 20.2% gross margin. "Our performance reflects the strength in demand from key customers, particularly in the area of CWDM (Course WDM) An optical transmission method that is used for shorter distances than dense WDM (DWDM). Also known as "wide WDM," CWDM transmits fewer channels and uses wider spacing between the channels for distances up to 60 km. Wider spacing up to 25 nm, compared to 1. and FTTX (Fiber To The X) Refers to all the "fiber-to-the-wherever" technologies. See FTTC and FTTP. See also FTX. (Fiber to the home), and the improvement of our operations in China. We completed the year with cash and cash equivalents at a healthy level of $31.5 million, and our quarterly cash burn rate was a modest $0.3 million in Q4. Based on current visibility, we believe that demand for our products will continue to fuel revenue growth in 2005," concluded Mr. Chang. Conference Call Management will host a conference call at 2:30 p.m. Pacific Time on January January: see month. 31, 2005 to discuss AFOP's fourth quarter and full year 2004 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 3520635. AFOP will also provide a live webcast of its fourth quarter and full year 2004 conference call at AFOP's website www.afop.com. The dial in for the instant replay is (800) 642-1687 or (706) 645-9291. 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 long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. , 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 Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) 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 the anticipated demand for our products and revenue growth in 2005, are 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. 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 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, 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 September 30, 2004. 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)
Dec. 31, Dec. 31,
2004 2003
--------- ---------
ASSETS
Current assets:
Cash and short-term investments $31,456 $35,898
Accounts receivable, net 2,322 2,008
Inventories 3,998 3,408
Other current assets 653 948
--------- ---------
Total current assets 38,429 42,262
Property and equipment, net 5,603 4,459
Other assets 121 362
--------- ---------
Total assets $44,153 $47,083
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,205 $ 1,501
Accrued expenses and other liabilities 2,480 2,963
--------- ---------
Total current liabilities 4,685 4,464
Long-term liabilities 826 294
--------- ---------
Total liabilities 5,511 4,758
Stockholders' equity 38,642 42,325
--------- ---------
Total liabilities and stockholders'
equity $44,153 $47,083
========= =========
ALLIANCE FIBER OPTIC PRODUCTS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
---------------------------- -------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2004 2004 2003 2004 2003
-------- --------- --------- --------- --------
Revenues $ 4,653 $ 3,665 $ 3,476 $14,558 $11,470
Cost of revenues 3,715 3,159 2,806 13,174 9,720
-------- --------- --------- --------- --------
Gross profit 938 506 670 1,384 1,750
-------- --------- --------- --------- --------
Operating expenses:
Research and
development 1,078 1,474 1,220 5,555 5,562
Sales and marketing 564 469 476 2,048 1,997
General and
administrative 823 927 851 3,422 3,410
Asset impairment
charge 331 -- -- 331 --
-------- --------- --------- --------- --------
Total operating
expenses 2,796 2,870 2,547 11,356 10,969
Loss from operations (1,858) (2,364) (1,877) (9,972) (9,219)
Interest and other
income, net 271 (26) 89 629 700
-------- --------- --------- --------- --------
Loss before income
taxes (1,587) (2,390) (1,788) (9,343) (8,519)
Income tax provision -- -- -- -- --
-------- --------- --------- --------- --------
Net loss $(1,587) $(2,390) $(1,788) $(9,343) $(8,519)
======== ========= ========= ========= ========
Net loss per share -
basic and diluted $ (0.04) $ (0.06) $ (0.05) $ (0.24) $ (0.24)
Weighted average
shares outstanding 38,670 38,970 36,081 38,537 35,612
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