AFOP Reports Quarterly Year-Over-Year Revenue Increases of 86%; Guidance for Year-Over-Year Increases of 80% in Fourth Quarter

AFOP Reports Quarterly Year-Over-Year Revenue Increases of 86%; Guidance for
Year-Over-Year Increases of 80% in Fourth Quarter 2013

SUNNYVALE, Calif., Oct. 24, 2013 (GLOBE NEWSWIRE) -- Alliance Fiber Optic
Products, Inc. (Nasdaq:AFOP), an innovative supplier of fiber optic
components, subsystems and integrated modules for the optical network
equipment market, today reported its financial results for the third quarter
ended September 30, 2013.

Revenues for the third quarter of 2013 totaled $23,074,000, an 86% increase
from revenues of $12,390,000 reported in the third quarter of 2012, and a 21%
increase from revenues of $19,039,000 reported in the previous quarter. The
Company recorded net income for the third quarter of 2013 of $5,621,000, or
$0.31 per share, based on 18.1 million shares outstanding, compared to
$1,892,000, or $0.11 per share, based on 17.6 million shares outstanding for
the third quarter of 2012. This compares to net income for the second quarter
of 2013 of $4,282,000, or $0.24 per share, based on 17.5 million shares

Included in expenses was stock-based compensation of $563,000 for the quarter
ended September 30, 2013, $268,000 for the quarter ended September 30, 2012
and $411,000 for the quarter ended June 30, 2013.

Peter Chang, President and Chief Executive Officer, commented, "With the
growing demand in data communication, we continued making progress in the
business in the last quarter, and delivered record quarterly revenue exceeding
the previous guidance. In addition, profit margins improved and resulted in
record profits. The balance sheet continued to strengthen with improved
inventory turns and a higher net cash balance."

"Data bandwidth demands continue to increase and the next growth cycle in the
fiber optics industry is emerging. While we are pleased with delivering record
financial performance for this year, we are excited with the business
prospects in the coming years. Even with year-end seasonal effects in the
fourth quarter of 2013, we expect revenues in the quarter to be at a similar
level, between $21.5M and $23.5M, which would represent 77% to 93% growth on a
year over year basis. With this range of quarterly revenue, we believe we will
end the year of 2013 with record sales and record profits as well," concluded
Mr. Chang.

Conference Call

Management will host a conference call at 1:30 p.m. (Pacific) on October 24,
2013 to discuss AFOP's third quarter 2013 financial results. Please call
877-675-3572 at least ten minutes prior to the call in order for the operator
to connect you. The confirmation number for the call is 75814791. AFOP will
also provide a live webcast of its third quarter 2013 conference call at
AFOP's website: The webcast replay will be available on AFOP's
website 90 minutes after the live conference call.

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 systems
to the long-haul, enterprise, metropolitan and last mile access segments of
the communications network. AFOP offers a broad product line of passive
optical components including interconnect systems, couplers and splitters,
thin film CWDM and DWDM components and modules, optical attenuators, and
micro-optics devices. AFOP is headquartered in Sunnyvale, California, with
manufacturing and product development capabilities in the United States,
Taiwan and China. AFOP's website is located at

Except for the historical information contained herein, the matters set forth
in this press release, including statements as to our expectations regarding
future revenue levels, profits, margins, and sales and the time periods
thereof and our beliefs regarding demand for data communications and growth in
the fiber optics industry are forward looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including,
but not limited to general economic conditions and trends, trends in demand
for bandwith, the impact of competitive products and pricing, timely
introduction of new technologies, timely design acceptance by our customers,
the acceptance of new products and technologies by our customers, customer
demand for our products, the timing of customer orders, loss of key customers,
our ability to ramp new products into volume production, the mix of products
sold and product pricing, the costs associated with running our operations,
industry-wide shifts in supply and demand for optical components and modules,
industry overcapacity and demand for bandwith, the success of cost control
initiatives, our ability to obtain and maintain operational efficiencies,
financial stability in foreign markets, and other risks detailed from time to
time in our SEC reports, including AFOP's quarterly report on Form 10-Q for
the quarter ended June 30, 2013. These forward-looking statements speak only
as of the date hereof. AFOP disclaims any intention or obligation to update or
revise any forward-looking statements.

Condensed Consolidated Balance Sheets
(in thousands)
                                          Sept. 30,   Dec. 31,
                                          2013        2012
Current assets                                        
Cash and short-term investments            $45,674     $33,275
Accounts receivable, net                   12,365      8,046
Inventories, net                           10,236      6,933
Deferred tax asset                         1,234       1,234
Other current assets                       2,122       1,166
Total current assets                       71,631      50,654
Long-term investments                      10,408      10,274
Property and equipment, net                10,292      7,708
Deferred tax asset                         2,468       2,468
Other assets                               197         249
Total assets                               $94,996     $71,353
Current liabilities                                   
Accounts payable                           $12,242     $6,591
Accrued expenses and other liabilities     6,038       4,115
Total current liabilities                  18,280      10,706
Long-term liability                        604         616
Total liabilities                          18,884      11,322
Stockholders' equity                       76,112      60,031
Total liabilities and stockholders' equity $94,996     $71,353

The condensed consolidated balance sheets and statements of operations reflect
the 2-for-1 split of Common Stock in the form of a stock dividend effected on
August 30, 2013.

Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
                            Three Months Ended            Nine Months Ended
                            Sept. 30  Jun. 30   Sept. 30  Sept. 30  Sept. 30
                            2013      2013      2012      2013      2012
Revenues                     $23,074 $19,039 $12,390 $54,266 $34,452
Cost of revenues             14,218   11,759   7,979    33,722   22,688
Gross profit                 8,856    7,280    4,411    20,544   11,764
Operating expenses:                                              
Research and development     1,024    859      819      2,696    2,465
Sales and marketing          835      791      614      2,338    1,951
General and administrative   1,339    1,185    1,079    3,640    3,281
Total operating expenses     3,198    2,835    2,512    8,674    7,697
Income from operations       5,658    4,445    1,899    11,870   4,067
Interest and other income,   173      163      194      469      504
Net income before taxes      $5,831  $4,608  $2,093  $12,339 $4,571
Income tax                   (210)    (326)    (201)    (586)    (526)
Net income                   $5,621  $4,282  $1,892  $11,753 $4,045
Net income per share:                                            
Basic                        $0.31   $0.24   $0.11   $0.67   $0.23
Diluted                      $0.30   $0.23   $0.11   $0.65   $0.22
Weighted average shares                                          
Basic                        18,056   17,498   17,581   17,584   17,638
Diluted                      18,754   18,413   17,977   18,107   18,000
Included in costs and                                            
expenses above:
Stock based compensation                                         
Cost of revenue              $116    $64     $28     $215    $86
Research and development     71       46       32       149      92
Sales and marketing          132      96       65       295      188
General and administrative   244      205      143      595      420
Total                        $563    $411    $268    $1,254  $786

         Acting Chief Financial Officer
         Alliance Fiber Optic Products, Inc.
         Phone: 408-736-6900 x168

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