Tuesday, May 22, 2012

NeoPhotonics Reports First Quarter 2012 Financial Results

  • Record First Quarter Revenue of $54.2 Million
  • 40/100G Products Exceed 10% of Revenue for Second Consecutive Quarter
  • Outlook for Second Quarter Includes Expected Increasing Revenue and Expected Lower Net Loss from Continuing Operations
SAN JOSE, Calif.--(BUSINESS WIRE)-- NeoPhotonics Corporation (NYSE: NPTN), a leading designer and manufacturer of photonic integrated circuit, or PIC, based modules and subsystems for bandwidth-intensive, high speed communications networks, recently announced financial results for its first quarter ended March 31, 2012.
“We are pleased with our results for the first quarter of 2012, which exceeded our projected ranges for revenue, gross margin and earnings per share,” said Tim Jenks, Chairman, President and CEO of NeoPhotonics. “We experienced continued strong demand in our speed and agility product categories, particularly for coherent 40G and 100G products, as deployments of faster networks continue to proliferate globally,” continued Mr. Jenks.
“We are also pleased with the demand for products we acquired from Santur Corporation, particularly indium-phosphide-based PIC products such as tunable lasers. Revenue and gross profit from those products continued to grow from the prior quarter as new customer engagements since the acquisition have started to generate revenue and existing customer engagements have continued to expand,” concluded Mr. Jenks.
Financial Highlights for the First Quarter of 2012
For the first quarter of 2012, NeoPhotonics reported record first quarter revenue of $54.2 million, a decrease of $3.0 million, or 5% from the fourth quarter of 2011, and an increase of $4.2 million, or 8%, from the first quarter of 2011. Gross margin for the first quarter of 2012 was 21.0%, as compared to 21.5% in the fourth quarter of 2011 and 24.3% in the first quarter of 2011. Non-GAAP gross margin for the first quarter of 2012 was 23.9%, up from 23.5% for the fourth quarter of 2011 and compares to 25.8% for the first quarter of 2011.
Loss from continuing operations for the first quarter of 2012 was $11.8 million, an improvement compared to a loss of $22.8 million in the fourth quarter of 2011 and compares to a loss of $2.1 million in the first quarter of 2011. Non-GAAP loss from continuing operations for the first quarter of 2012 was $5.4 million, a 15% improvement compared to a loss of $6.4 million in the fourth quarter of 2011 and compares to break-even in the first quarter of 2011.
Diluted loss per share from continuing operations for the first quarter of 2012 was $0.47, an improvement compared to a loss per share of $0.92 in the fourth quarter of 2011 and a loss per share of $1.27 in the first quarter of 2011. Non-GAAP diluted loss per share from continuing operations for the first quarter of 2012 was $0.22, an improvement compared to a loss per share of $0.26 in the fourth quarter of 2011 and compares to break-even in the first quarter of 2011. Adjusted EBITDA for the first quarter of 2012 was a loss of $2.4 million, an improvement compared to a loss of $3.0 million in the fourth quarter of 2011 and compares to Adjusted EBITDA of $3.1 million in the first quarter of 2011.
A reconciliation of GAAP financial measures to Non-GAAP financial measures is included at the end of this press release. See “Use of Non-GAAP Financial Information” later in this press release for a description of these Non-GAAP financial measures.
Total cash, cash equivalents and short-term investments at March 31, 2012 was $83.8 million, as compared to $86.4 million at December 31, 2011, primarily due to cash used in operations, partially offset by strong collections, and scheduled debt payments.
Business Highlights
  • NeoPhotonics announced completion of phase one in its plan to significantly increase production capacity of narrow linewidth tunable lasers (NLW-TL) in support of rapidly growing demand. The company has doubled NLW-TL output since initiating the production plan in the fourth quarter of 2011. Demand for these products has outstripped industry capacity due to the rapid uptake of coherent optical technology coupled with industry supply constraints attributable to the flooding in Thailand in 2011.
  • NeoPhotonics announced the sample availability of its PIC-based Multicast Switch for next generation ROADM (Reconfigurable Optical Add/Drop Multiplexer) applications. The Multicast Switch is intended to build on current WSS (Wavelength Selective Switch) and ROADM technology to enable next-generation “colorless, directionless and contentionless” (CDC) networks.
  • NeoPhotonics announced that it has received an investment of $39.8 million in gross proceeds from RUSNANO, a $10 billion sovereign investment corporation located in Moscow, Russia. RUSNANO acquired 4.97 million newly-issued common shares of NeoPhotonics Corporation in a private placement transaction at a price per share of $8.00. The company intends to use the net proceeds to establish design and production capabilities in Russia for the benefit of its global organization and for general corporate purposes.
  • As of the end of the first quarter of 2012, NeoPhotonics had substantially completed the integration of Santur Corporation. Since the October 2011 acquisition, the company has combined the respective organizations, consolidated certain operations, merged ERP systems, eliminated redundancies, and trained and engaged the respective companies’ sales channels to support the expanded product offerings.
Outlook for the Quarter Ending June 30, 2012
During the quarter ending June 30, 2012, NeoPhotonics currently expects revenue to be in the range of $55 million to $61 million and Non-GAAP gross margin to be in the range of 23% to 25%. The company currently expects diluted loss per share from continuing operations to be in the range of $0.27 to $0.36 and Non-GAAP diluted loss per share from continuing operations to be in the range of $0.14 to $0.22. The Non-GAAP outlook excludes the expected amortization of purchased intangibles and other assets of approximately of $1.6 million and the anticipated impact of stock-based compensation of approximately $2.2 million. Of these amounts, approximately $1.2 million is estimated to relate to cost of goods sold.

About NeoPhotonics
NeoPhotonics is a leading designer and manufacturer of photonic integrated circuit, or PIC, based modules and subsystems for bandwidth-intensive, high-speed communications networks. The company’s products enable cost-effective, high-speed data transmission and efficient allocation of bandwidth over communications networks. NeoPhotonics maintains headquarters in San Jose, California and ISO 9001:2000 certified engineering and manufacturing facilities in Silicon Valley (USA) and Shenzhen, China. NeoPhotonics has been included in the Russell 3000® Index since its reconstitution in June 2011. For additional information, visit www.neophotonics.com.

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