New Focus Announces Strong Fourth Quarter Financial
Results And Raises Revenue Expectations for Fiscal Year 2001
SAN JOSE, Calif., Jan. 30 /PRNewswire/ -- New Focus, Inc., (Nasdaq: NUFO - news), a leading supplier of innovative fiber optic
products for next-generation optical networks under the Smart Optics for Networks(TM) brand, today announced financial results for its
fourth quarter and fiscal year ended December 31, 2000. The company's revenue expanded sharply during the fourth quarter, marking
the third consecutive quarter of strong sequential growth in the company's fiber optic and photonics tool businesses. The company also
increased revenue guidance for fiscal year 2001 based upon higher revenue expectations for its current businesses and incremental
revenue from its new wholly-owned subsidiary, JCA Technology, Inc. The company's financial results will incorporate JCA beginning
with the first quarter of 2001.
Fourth Quarter Review:
Net revenue for the fourth quarter of 2000 was $33.9 million, a sequential increase of 52% over the $22.2 million in revenue for the
company's third fiscal quarter ended October 1, 2000. In the fourth quarter of 1999 net revenue was $6.8 million.
Net revenue from the company's fiber optic products in the fourth quarter of 2000 totaled $25.3 million, up 70% from $14.9 million in
the third quarter of 2000. In the fourth quarter of 1999 fiber optic products accounted for $2.5 million of the company's net revenue. Net
revenue from the company's photonics tool products in the fourth quarter of 2000 totaled $8.6 million, up 17% from $7.3 million in the
third quarter of 2000. In the fourth quarter of 1999 photonics tool products accounted for $4.3 million of the company's net revenue.
The company recorded pro forma net income in the fourth quarter of 2000 of $2.6 million, or $0.04 per share based on 64.1 million
diluted shares outstanding. The pro forma net income was attributable to a narrower operating loss and significant interest income derived
from the company's cash position. The company reported a pro forma net loss of $1.3 million, or $0.02 per share based on 58.1 million
basic shares outstanding in the third quarter of 2000. The pro forma net loss for the fourth quarter of 1999 was $4.3 million, or $0.11
per share based on 37.5 million basic shares outstanding.
The pro forma calculations for the fourth and third quarters of 2000 excluded non-cash charges for the amortization of deferred stock
compensation of $4.8 million and $5.9 million, respectively. The deferred stock compensation charge in the fourth quarter of 1999 was
$0.1 million. The number of shares used in the calculation of the pro forma net income or loss per share for each reporting period
assumes the conversion of the company's convertible preferred stock into common stock, if applicable. Such conversion was completed
in conjunction with the company's initial public offering in May 2000.
Without the pro forma adjustments to eliminate the deferred stock compensation charges and to convert the company's preferred stock
into common stock, the company recorded a net loss for the fourth quarter of 2000 of $2.3 million, or $0.04 per share based on 60.5
million basic shares outstanding. The net loss for the third quarter of 2000 was $7.1 million, or $0.12 per share based on 58.1 million
basic shares outstanding. For the fourth quarter of 1999 the net loss was $4.4 million, or $1.74 per share based on 2.5 million basic
shares outstanding.
``We were extremely pleased with our fourth quarter financial results. Increased revenue, coupled with further improvements in our
manufacturing efficiencies, pushed our fourth quarter gross margin to 31.3%, a sequential improvement of approximately nine percentage
points over the third quarter. On the sales side, we experienced strong demand for all of our products throughout the quarter. On the
production side, we began production in the first phase of our larger manufacturing facility in Shenzhen, China toward the end of the
quarter and achieved a high level of utilization at our smaller Shenzhen manufacturing facility during the entire quarter. In addition to this
tremendous internal momentum, we completed our acquisition of JCA Technology, Inc. in mid-January,'' said Ken Westrick, president
and chief executive officer of New Focus, Inc.
Fiscal Year Results:
Net revenue for the twelve months ended December 31, 2000 was $80.4 million, an increase of 252% over $22.8 million in net revenue
for the twelve months ended December 31, 1999. Net revenue from fiber optic products totaled $53.6 million and $5.0 million in the
twelve months of 2000 and 1999, respectively. Net revenue from photonics tool products totaled $26.8 million and $17.8 million in the
twelve months of 2000 and 1999, respectively.
On a pro forma basis, the net loss for fiscal 2000 was $12.2 million, or $0.22 per share based on 54.7 million basic shares outstanding.
The pro forma net loss for the twelve months of 1999 was $9.1 million, or $0.30 per share based on 30.0 million basic shares
outstanding. The deferred stock compensation charges excluded from the twelve months of 2000 and 1999 were $23.7 million and $0.1
million, respectively.
Without the pro forma adjustments to eliminate the deferred stock compensation charges and to convert the company's preferred stock
into common stock, the net loss for fiscal 2000 was $36.0 million, or $0.92 per share based on 38.9 million basic shares outstanding. The
net loss for the twelve months of 1999 was $9.3 million, or $3.78 per share based on 2.5 million basic shares outstanding.
Business Outlook:
``We expect that fiscal year 2001 will represent another significant chapter in the growth of New Focus. On December 19, 2000 we
announced our decision to proceed with the second phase of the expansion of our manufacturing facilities in Shenzhen, China based on
the strength of our existing fiber optics business. With the completion of the acquisition of JCA Technology, Inc. earlier this month, we
added a new product line of fiber optic products to our product portfolio. This new product line includes high-speed clock amplifiers and
broadband data driver amplifiers for OC-48 and OC-192 modulators. Combining the expected revenue contributions from our existing
businesses and JCA's products, we are raising our revenue guidance for fiscal year 2001 from $150 million to $240 million,'' said
Westrick.
The company is planning to expand manufacturing capacity at its recently acquired subsidiary, JCA Technology, Inc., due to the demand
outlook for JCA's products. In light of the JCA expansion and the company's previously announced expansion plans for its U.S. and
China facilities, the company is raising its projected capital expenditures for fiscal 2001 to $90-100 million from an earlier estimate of
$70-80 million. With a cash balance of $485 million at the end of fiscal 2000, the company has more than sufficient cash resources to
execute its expansion plans. In fiscal 2000 the company's capital spending totaled approximately $52 million.
``We again saw significant improvement in our gross margin percentage in the recently completed quarter and expect further
improvement throughout fiscal 2001. With the addition of the JCA product family, we now expect that our gross margin performance in
the fourth quarter of 2001 will increase to 43-48% from our previously targeted margin range of 40-45%. Our targeted gross margin and
revenue performance for fiscal 2001 should allow us to record positive pro forma operating income during the third and fourth quarters
of 2001 and put us in position to move the breakeven point for operating income into the first half of 2001 should revenue growth
accelerate beyond the targeted level,'' said Westrick.
Forward-Looking Statements:
This press release, and in particular the material in the section labeled ``Business Outlook,'' contains predictions, estimates and other
forward-looking statements regarding the expansion of manufacturing capacity, revenue growth, gross margin improvement, capital
spending, the adequacy of cash reserves, and financial performance. These statements are subject to risks and uncertainties and actual
results may differ materially from any future performance suggested. The risks and uncertainties include the supply-demand conditions in
the company's markets, the company's ability to deliver products with price-performance characteristics comparable or better than the
competition, the company's ability to launch new products into production, and the company's ability to successfully execute on
aggressive manufacturing ramps, particularly in its new facilities in the People's Republic of China, which in turn depends on the
company's ability to timely fit up manufacturing facilities, rapidly hire and train large numbers of people, and successfully complete
customer qualifications of new production sites. The company's ability to achieve better gross margin and financial performance is
subject to the company's ability to achieve improved manufacturing efficiencies, particularly in the manufacture of its fiber optic
products, which in turn depends on the company's ability to obtain higher manufacturing yields, improved labor productivity and better
material utilization. As the company's fiber optic products account for a larger proportionate share of the company's total revenue due to
the high customer demand for such products, the company's overall gross margin performance will become increasingly dependent on
the rate of improvement in the manufacturing efficiencies for these products. The company's ability to achieve better gross margin and
financial performance is also subject to the successful integration, expansion and operation of JCA Technology, Inc., the company's
recent acquisition. Other risk factors that may affect the company's financial performance are listed in the company's S-1 registration
statement for its follow-on public offering and its most recent 10-Q quarterly report on file with the SEC. New Focus undertakes no
obligation to publicly release any revisions to these forward-looking statements, which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
About New Focus:
New Focus designs, manufactures and markets innovative fiber optic products for next-generation optical networks. The company's
Smart Optics for Networks(TM) products enhance the performance of next-generation optical networks by enabling higher channel
counts, faster data rates, longer reach lengths, new service capabilities, and lower costs of ownership. Founded in 1990, the company
remains a leader in the creation of advanced optical products for the commercial and research marketplaces. The company is
headquartered in San Jose, California and has operations in Santa Clara and Camarillo, California, Madison, Wisconsin, and Shenzhen,
People's Republic of China that employ over 1,800 people.
For more information about New Focus visit the company's Internet home page at newfocus.com , call our Investors
Relations Department at 408-284-NUFO, or e-mail us at investor@newfocus.com.
NEW FOCUS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
Dec 31, Oct 1, Dec 31, Dec 31, Dec 31,
2000 2000 1999 2000 1999
Net revenues $33,875 $22,250 $6,845 $80,358 $22,842
Cost of net revenues 23,256 17,248 5,337 64,346 15,125
Gross profit 10,619 5,002 1,508 16,012 7,717
31.3% 22.5% 22.0% 19.9% 33.8%
Operating expenses:
Research and development,
net 10,620 7,270 3,501 26,391 9,481
Sales and marketing 1,789 1,526 1,126 5,880 3,856
General and administrative 3,483 2,538 1,159 9,813 3,340
Deferred stock
compensation 4,812 5,879 94 23,747 132
Total operating expenses 20,704 17,213 5,880 65,831 16,809
Loss from operations (10,085) (12,211) (4,372) (49,819) (9,092)
(29.8)% (54.9)% (63.9)% (62.0)% (39.8)%
Interest and other income
(expense), net 7,834 5,082 (19) 13,851 (177)
Loss before provision for
income taxes (2,251) (7,129) (4,391) (35,968) (9,269)
Provision for income taxes 4 2 2 6 4
Net loss $(2,255) $(7,131) $(4,393) $(35,974) $(9,273)
(6.7)% (32.0)% (64.2)% (44.8)% (40.6)%
Basic and diluted net loss
per share $(0.04) $(0.12) $(1.74) $(0.92) $(3.78)
Shares used to compute basic
and diluted net loss
per share 60,463 58,140 2,530 38,914 2,455
Pro forma basic and diluted
net income (loss) per
share excluding amortization
of deferred stock
compensation $0.04 $(0.02) $(0.11) $(0.22) $(0.30)
Shares used to compute pro
forma basic and
diluted net income (loss)
per share (A) 64,124 58,140 37,514 54,727 29,986
(A) Number of shares used for the pro forma net loss per share calculation for each reporting period assumes the conversion of
convertible preferred stock into common stock. Such conversion was completed in conjunction with the May 2000 initial public offering.
NEW FOCUS, INC.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
Dec 31, 2000 Dec 31, 1999
ASSETS
Current Assets:
Cash, cash equivalents and
short-term investments $485,493 $28,067
Trade accounts receivable, net 13,835 3,102
Inventories 30,385 6,217
Other current assets 4,805 364
Total current assets 534,518 37,750
Property and equipment, net 54,744 6,895
Other assets, net 11,682 207
Total assets $600,944 $44,852
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $21,556 $5,658
Accrued Expenses 10,355 2,540
Deferred research and development
funding 343 250
Current portion of long-term debt 281 276
Total current liabilities 32,535 8,724
Long-term debt, less current portion 111 368
Deferred rent 1,188 747
Stockholders' equity 567,110 35,013
Total liabilities and
stockholders' equity $600,944 $44,852 |
