Alliance Fiber Optic Products, Inc. Reports First Quarter Financial Results.Business Editors SUNNYVALE--(BUSINESS WIRE)--April 24, 2002 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 and integrated modules for the optical network equipment market, today reported its financial results for the first quarter ended March 31, 2002. Revenues for the first quarter totaled $3,532,000 as compared to $4,170,000 in the previous quarter, and $7,369,000 in the first quarter of 2001. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the first quarter of 2002 was $2,981,000, or $0.09 per share based on 34.4 million shares outstanding. Pro forma net loss for the fourth quarter of 2001 was $1,832,000, or $0.05 per share based on 34.1 million shares outstanding, and pro forma net income for the first quarter of 2001 was $230,000, or $0.01 per share based on 36.2 million shares outstanding. Due to the continued adverse effects of the industry slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. and the current economic outlook, the Company recorded an additional inventory reserve of $2,208,000 in the first quarter of 2002. The inventory reserve is not expected to impact AFOP's cash position or pro forma statement Pro forma statement A financial statement showing the forecast or projected operating results and balance sheet, as in pro forma income statements, balance sheets, and statements of cash flows. of operations. The pro forma calculations exclude the amortization of deferred stock-based compensation, as well as the non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $2,208,000 for the inventory reserve provision recorded in the first quarter of 2002. The number of shares used in the calculation of the pro forma net income/loss per share includes the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). , if any, of stock options and shares subject to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. . Without the pro forma adjustments, the Company recorded a net loss under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting for the first quarter of 2002 of $5,691,000, or $0.17 per share based on 34.4 million shares outstanding. This compares to a net loss for the fourth quarter of 2001 of $2,610,000, or $0.08 per share based on 34.1 million shares outstanding, and a net loss for the first quarter of 2001 of $2,776,000, or $0.09 per share based on 31.9 million shares outstanding. 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, "While our first quarter financial results were impacted by the challenging business and economic environment, we exited the quarter with positive momentum. Toward the end of the quarter we saw demand increase from our customers, especially from the broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). segment, which contributed to our book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can exceeding 1 to 1 for the quarter, and drove an increase in our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of DWDM-related products. Additionally, we reduced our cash burn rate from $3 million in the fourth quarter of 2001 to $2 million in the first quarter of 2002." "As for additional achievements during the quarter, we attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. Telcordia qualification status on several products and developed a new packaging technology for our filter-based 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 product line. Additionally, we received approval on two additional patents. We also strengthened our management team with the recent appointments of Dr. Yao Li  This article or section may fail to make a clear distinction between fact and .Please [ edit this article], according to the fiction guidelines, to meet Wikipedia's . as Chief Technologist, and Dan T. Hoang as Quality Assurance Director," continued Mr. Chang. Mr. Chang concluded, "While challenges still remain for AFOP and the industry, we see areas where our market share is improving, positive bookings momentum, and sustained customer interest in our new products. We believe this momentum will continue and will pave PAVE Cardiology A clinical trial–Post AV Node Ablation Evaluation the way for our growth in the future as the market recovers." Conference Call Management will host a conference call at 2:00 p.m. Pacific Time on April 24, 2002 to discuss AFOP's first quarter 2002 financial results. To participate in AFOP's conference call, please call (212) 699-6810 at least ten minutes prior to the call in order for the operator to connect you. The confirmation number for the call is 459680. AFOP will also provide a live webcast of its first quarter 2002 conference call at AFOP's website www.afop.com. A replay will be available beginning at approximately 4:00 p.m. Pacific Time on April 24, 2001 through 4:00 p.m. Pacific Time on May 8th on both the AFOP website, and by dialing (303) 590-3000; confirmation number 459680. 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, 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 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 the impact of the inventory reserve on AFOP's cash position and pro forma statement of operations, continued momentum in the industry, including in the areas of positive bookings and sustained customer interest in AFOP's new products, the factors contributing to AFOP's future growth, the recovery of the market for AFOP's products, the existence of future opportunities and growth, 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, the economy remaining the same or worsening wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. Noun 1. worsening - process of changing to an inferior state decline in quality, deterioration, declension , the impact of competitive products and pricing, timely design acceptance by our customers, the level of order cancellations, the need for and magnitude of future inventory write downs or 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. charges, timely introduction of new technologies, 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-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2001. 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)
March 31, Dec. 31,
2002 2001
------- -------
ASSETS
Current assets:
Cash and short-term investments $47,929 $50,065
Accounts receivable, net 2,078 2,645
Inventories, net 5,211 7,419
Other current assets 1,359 1,291
------- -------
Total current assets 56,577 61,420
Property and equipment, net 7,146 7,381
Other assets 598 575
------- -------
Total assets $64,321 $69,376
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,300 $ 1,425
Accrued expenses and other liabilities 2,078 1,819
------- -------
Total current liabilities 3,378 3,244
Long-term liabilities 206 182
Stockholders' equity 60,737 65,950
------- -------
Total liabilities and
stockholders' equity $64,321 $69,376
======= =======
ALLIANCE FIBER OPTIC PRODUCTS, INC.
Pro Forma Condensed Consolidated Statements of Operations
Excluding Stock-Based Compensation and Non-Recurring Items
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
----------------------------------
March 31, Dec. 31, March 31,
2002 2001 2001
-------- -------- --------
Revenues $ 3,532 $ 4,170 $ 7,369
Cost of revenues 2,961 2,873 4,557
-------- -------- --------
Gross profit 571 1,297 2,812
Operating expenses:
Research and development 2,110 1,977 1,674
Sales and marketing 919 567 809
General and administrative 836 916 959
-------- -------- --------
Total operating expenses 3,865 3,460 3,442
-------- -------- --------
Loss from operations (3,294) (2,163) (630)
Interest and other income, net 313 331 983
-------- -------- --------
Income/(loss) before income taxes (2,981) (1,832) 353
Income tax provision -- -- 123
-------- -------- --------
Net income/(loss) $ (2,981) $ (1,832) $ 230
======== ======== ========
Net income/(loss) per share
- diluted $ (0.09) $ (0.05) $ 0.01
Shares used in computing net
loss per share - diluted 34,362 34,113 36,200
Reconciliation from GAAP
results to pro forma results:
GAAP net loss $ (5,691) $ (2,610) $ (2,776)
Stock-based compensation charge
Cost of revenues (215) 404 485
Operating expenses 717 374 2,521
Provision for excess and
obsolete inventory 2,208 -- --
-------- -------- --------
Pro forma net income/(loss) $ (2,981) $ (1,832) $ 230
======== ======== ========
ALLIANCE FIBER OPTIC PRODUCTS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
----------------------------------
March 31, Dec. 31, March 31,
2002 2001 2001
-------- -------- --------
Revenues $ 3,532 $ 4,170 $ 7,369
Cost of revenues 5,169 2,873 4,557
Stock-based compensation charge (215) 404 485
-------- -------- --------
Total cost of revenues 4,954 3,277 5,042
-------- -------- --------
Gross profit/(loss) (1,422) 893 2,327
Operating expenses:
Research and development 2,110 1,977 1,674
Sales and marketing 919 567 809
General and administrative 836 916 959
Stock-based compensation charge 717 374 2,521
-------- -------- --------
Total operating expenses 4,582 3,834 5,963
-------- -------- --------
Loss from operations (6,004) (2,941) (3,636)
Interest and other income, net 313 331 983
-------- -------- --------
Loss before income taxes (5,691) (2,610) (2,653)
Income tax provision -- -- 123
-------- -------- --------
Net loss $ (5,691) $ (2,610) $ (2,776)
======== ======== ========
Net loss per share - basic
and diluted $ (0.17) $ (0.08) $ (0.09)
Shares used in computing net
loss per share - basic and
diluted 34,362 34,113 31,876
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