New Focus Announces Second Quarter Financial Results and Highlights Strong Revenue Growth
TUESDAY, JULY 25, 2000 4:58:00 PM EST
SANTA CLARA, Calif., Jul 25, 2000 /PRNewswire via COMTEX/ -- New Focus, Inc. NUFO, 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 second fiscal quarter ended July 2, 2000. The company reported strong demand for both its fiber optic and advanced photonics tool products. The second quarter represents the company's first reporting period since the completion of its initial public offering on May 18, 2000.
Second Quarter Review:
Net revenue for the second quarter of 2000 was $14.5 million, a sequential increase of 48% over the $9.8 million in revenue for the company's first fiscal quarter ended April 2, 2000. Second quarter revenue from the company's fiber optic products totaled $8.5 million, up 73% from $4.9 million in the first quarter of 2000. Second quarter revenue from the company's photonics tool products totaled $6.0 million, up 22% from $4.9 million in the first quarter of 2000. Net revenue for the second quarter of 1999 was $4.6 million composed of $0.5 million from fiber optic products and $4.1 million from photonics tool products.
On a pro forma basis, the net loss for the second quarter of 2000, excluding a non-cash charge for the amortization of deferred stock compensation, was $6.6 million, or $0.13 per share based on 52.4 million shares outstanding. This net loss was slightly less than the pro forma net loss of $6.9 million, or $0.14 per share based on 47.8 million shares outstanding in the first quarter of 2000. The pro forma net loss for the second quarter of 1999 was $1.5 million, or $0.06 per share based on 25.2 million shares outstanding. The number of shares used for the pro forma net loss per share calculation for each reporting period assumes the conversion of the company's convertible preferred stock into common stock. Such conversion was completed in conjunction with the company's initial public offering. The deferred stock compensation charges excluded from the second and first quarters of 2000 were $7.5 million and $5.6 million, respectively. The deferred stock compensation charge in the second quarter of 1999 was negligible.
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 the second quarter of 2000 was $14.1 million, or $0.45 per share based on 31.7 million shares outstanding. The net loss for the first quarter of 2000 was $12.5 million, or $2.12 per share based on 5.9 million shares outstanding. For the second quarter of 1999 the net loss was $1.5 million, or $0.61 per share based on 2.4 million shares outstanding.
"We are pleased with our second quarter financial results and proud of other significant accomplishments during our inaugural quarter as a public company. Revenues in our two business segments-fiber optic products for the telecommunications industry and advanced photonics tools for the research and commercial marketplaces-exhibited strong sequential revenue growth during the quarter. Our overall gross margin for the quarter turned positive and reached 9.7%. Our successful initial public offering in mid-May provided over $100 million to finance our product development programs and our aggressive plans to expand manufacturing capacity in both the U.S. and the Peoples Republic of China. Importantly, our first manufacturing facility in Shenzhen, China commenced production in June within weeks of the original schedule set in November 1999. The market opportunity in front of us is tremendous and our success will largely depend on the quality and crispness of our internal execution," said Ken Westrick, president and chief executive officer of New Focus, Inc.
On May 18, 2000 the common shares of New Focus, Inc. issued through the company's initial public offering began trading on the Nasdaq National Market. In its initial public offering the company offered 5,650,000 common shares, including the exercise of an over-allotment option of 650,000 shares, at $20 per share. Cash proceeds from the offering, net of the underwriters' discount and other expenses, totaled approximately $104 million. Net proceeds from this offering are being used for general corporate purposes, including capital expenditures for product development and increases in manufacturing capacity.
First Half 2000 Results:
Net revenue for six months ended July 2, 2000 was $24.2 million, an increase of 160% over $9.3 million in revenue for the first half of 1999. First half revenue from fiber optic products totaled $13.3 million in 2000 and $0.5 million in 1999. First half revenue from photonics tool products totaled $10.9 million in 2000 and $8.8 million in 1999.
On a pro forma basis, the net loss for the first half of 2000 was $13.5 million, or $0.27 per share based on 51.0 million shares outstanding. The pro forma net loss for the first half of 1999 was $3.1 million, or $0.13 per share based on 24.2 million shares outstanding. The deferred stock compensation charge excluded from the first half of 2000 was $13.1 million. The deferred stock compensation charge in the first half of 1999 was negligible.
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 the first half of 2000 was $26.6 million, or $1.36 per share based on 19.5 million shares outstanding. The net loss for the first half of 1999 was $3.1 million, or $1.27 per share based on 2.4 million shares outstanding.
Business Outlook:
"Based on our order backlog and expanded manufacturing capacity, we believe that the company will experience solid sequential growth between the second and third quarters. The incremental revenue will most likely be derived from our passive fiber optic products. Our first manufacturing facility in Shenzhen began limited production of passives in June. Volume shipments from this new 20,000 square-foot facility remain dependent on the timing of site qualifications by our customers. We believe that initial customer shipments from this site should commence in early August based on the current status of these qualifications," said Westrick.
"To support higher anticipated revenues in the future, we will accelerate manufacturing overhead spending to build the proper infrastructure for our rapidly growing worldwide operations. This additional spending will dampen the favorable impact of expected improvements in manufacturing efficiencies on our fiber optic products, thus affecting the rate of improvement in our gross margin percentage for the near term. Operating expenses, excluding deferred stock compensation charges, will also expand this quarter, particularly for research and development. Additionally, in response to strong customer demand we will increase our capital spending significantly during the second half of this year to further accelerate the growth of our manufacturing capacity," said Westrick.
The company is expanding its manufacturing capacity in multiple locations. In addition to its smaller first Shenzhen facility, the company secured in April 2000 a second Shenzhen factory site with total floor space of 250,000 square feet. The company has already begun the first phase of construction that will fit up approximately one-half of the floor space in this shell facility. Approximately 70,000 square feet of manufacturing space is scheduled for completion before the end of 2000. Production is expected to start in a portion of this space in the fourth quarter. The company also expects to move its corporate headquarters and add additional manufacturing capacity in a 130,000 square-foot building in San Jose, California in late 2000 or early 2001.
Forward-Looking Statements:
The above information and in particular the material in the section labeled "Business Outlook" contain predictions, estimates and other forward-looking statements regarding anticipated revenue growth, initial customer shipments, gross margins, capital spending 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 company's ability to successfully execute on aggressive manufacturing ramps, particularly in its new facilities in the Peoples 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; and 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. Other risk factors that may affect the company's financial performance are listed in the company's S-1 registration statement for its initial public offering 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, Inc. 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. With over 900 worldwide employees, the company is headquartered in Santa Clara, California and has operations in San Jose, California, Madison, Wisconsin, and Shenzhen, Peoples Republic of China.
For more information about New Focus visit the company's Internet home page at newfocus.com , call our Investors Relations Department at 408-919-2700, 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 EndedSix Months Ended
Jul 2,Apr 2,Jun 30,Jul 2,Jun 30,
20002000199920001999
Net revenues$14,451$9,782$4,581$24,233$9,322
Cost of net
revenues13,05610,7862,82123,8425,421
Gross profit1,395(1,004)1,7603913,901
9.7%(10.3)%38.4%1.6%41.8%
Operating expenses:
Research and
development, net4,8923,6091,5928,5013,721
Sales and
marketing1,4651,1009262,5651,800
General and
administrative2,3681,4246053,7921,241
Deferred stock
compensation7,5085,548913,0569
Total operating
expenses16,23311,6813,13227,9146,771
Loss from
operations(14,838)(12,685)(1,372)(27,523)(2,870)
(102.7)%(129.7)%(29.9)%(113.6)%(30.8)%
Interest and
other income
(expense), net711224(95)935(191)
Loss before
provision for
income taxes(14,127)(12,461)(1,467)(26,588)(3,061)
Provision for
income taxes--------2
Net loss$(14,127)$(12,461)$(1,467)$(26,588)$(3,063)
(97.8)%(127.4)%(32.0)%(109.7)%(32.9)%
Basic and
diluted net loss
per share$(0.45)$(2.12)$(0.61)$(1.36)$(1.27)
Shares used to
compute basic
and diluted net
loss per share31,6915,8912,41919,5462,413
Pro forma basic
and diluted net
loss per share
excluding
amortization of
deferred stock
compensation$(0.13)$(0.14)$(0.06)$(0.27)$(0.13)
Shares used to
compute pro forma
basic and diluted
net loss per
share (A)52,43047,83025,18451,00024,191
(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
(In thousands)
Jul 2, 2000Dec 31, 1999
(unaudited)(see note)
ASSETS
Current Assets:
Cash and cash equivalents$94,998$28,067
Accounts receivable, net5,8863,223
Inventories13,2946,217
Other current assets1,575243
Total current assets115,75337,750
Property and equipment, net19,3816,895
Other assets, net5,105207
Total assets$140,239$44,852
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable$8,278$5,658
Accrued Expenses3,6782,540
Deferred research and development funding343250
Current portion of long-term debt288276
Total current liabilities12,5878,724
Long-term debt, less current portion239368
Deferred rent1,022747
Stockholders' equity126,39135,013
Total liabilities and
stockholders' equity$140,239$44,852
Note:The Condensed Consolidated Balance Sheet at December 31, 1999 has
been derived from the audited financial statements.
SOURCE New Focus, Inc.
CONTACT:William L. Potts, Jr., Chief Financial Officer of New Focus,
Inc., 408-919-5384 |
