NeoPhotonics Corporation ( NPTN), a leading designer and manufacturer of photonic integrated circuits, or PIC, based optoelectronic modules and subsystems for bandwidth-intensive, high speed communications networks, today announced financial results for its second quarter ended June 30, 2014.
“We are pleased to announce the highest quarterly revenue in the history of NeoPhotonics, driven principally by our 100G products, and we believe our new products are well positioned to continue to benefit from the rapid growth in worldwide 100G deployments,” said Tim Jenks, NeoPhotonics Chairman and CEO. “At the same time, we are taking significant actions to address operational and profitability challenges while continuing our focus on key growth markets such as 100G,” continued Mr. Jenks.
Second Quarter Summary
Following is a summary of certain key financial measures for the second quarter of 2014.
Revenue was $77.5 million, an increase of $9.3 million, or 13.6%, from the first quarter of 2014 and up $2.5 million, or 3.3%, from the second quarter of 2013.Gross margin on a GAAP basis was 18.8%, down from 20.2% in the first quarter of 2014, and down from 20.8% in the second quarter of 2013.Non-GAAP gross margin was 20.8%, down from 22.0% in the first quarter of 2014 and down from 25.1% in the second quarter of 2013.Net loss was $6.8 million, a decrease from a net loss of $12.6 million in the first quarter of 2014 and a decrease from a net loss of $8.3 million in the second quarter of 2013. Net loss in the second quarter of 2014 included an escrow settlement gain of $3.9 million related to the Santur acquisition.Non-GAAP net loss was $7.5 million, a decrease from a net loss of $9.5 million in the first quarter of 2014 and an increase from a net loss of $3.8 million in the second quarter of 2013.Diluted net loss per share was $0.21, a decrease from a diluted net loss per share of $0.40 in the first quarter of 2014 and a decrease from a diluted net loss per share of $0.27 in the second quarter of 2013. Diluted net loss per share in the second quarter of 2014 included a $0.12 benefit from an escrow settlement gain related to the Santur acquisition.Non-GAAP diluted net loss per share was $0.24, a decrease from a diluted net loss per share of $0.30 in the first quarter of 2014 and up from a diluted net loss per share of $0.12 in the second quarter of 2013.Adjusted EBITDA was a loss of $2.6 million, an improvement from a loss of $4.2 million in the first quarter of 2014 and a decrease from $1.4 million positive EBITDA in the second quarter of 2013.During the second quarter of 2014, the Company executed an amendment to its term loan agreement with its principal lender in the U.S. that waived the testing of certain financial covenants for compliance, provided the Company maintains restricted cash and investments equal to outstanding amounts under the agreement. At June 30, 2014, the Company reported restricted cash and investments totaling $26.4 million as required under its term loan in the U.S. and under its line of credit facilities in China. On a comparable basis, combined cash, cash equivalents and restricted cash and investments was $54.4 million, down from $64.3 million of cash, cash equivalents, short-term investments and restricted cash at March 31, 2014. Combined notes payable and debt was $48.0 million at June 30, 2014, which is up from $40.8 million at March 31, 2014.
Non-GAAP and Adjusted EBITDA Measures vs. GAAP Financial Measures
The Company’s Non-GAAP and Adjusted EBITDA measures exclude certain GAAP financial measures, and a reconciliation of the Non-GAAP and Adjusted EBITDA financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release.
Outlook for the Third Quarter of 2014 Ending September 30, 2014
The Company’s outlook for the third quarter of 2014 is:
Revenue in the range of $78 million to $82 million;Non-GAAP gross margin in the range of 22% to 26%; andDiluted net loss per share in the range of $0.14 to $0.24, and on a Non-GAAP basis in the range of a net loss of $0.04 to $0.14 per diluted share.The Non-GAAP outlook for the third quarter of 2014 excludes approximately $3.3 million of estimated combined expenses related to the expected amortization of intangibles and anticipated impact of stock-based compensation. Of these expenses, $1.2 million is estimated to relate to cost of goods sold. |
