Applied Optoelectronics, Inc. Files 10-Q for Q1 2024

TL;DR

<b>Applied Optoelectronics, Inc. reported a decrease in net sales and gross profit for Q1 2024, with a significant drop in operating margin and a net loss per share.</b>

AI Summary

APPLIED OPTOELECTRONICS, INC. (AAOI) filed a Quarterly Report (10-Q) with the SEC on May 9, 2024. Net sales for Q1 2024 were $38.7 million, a decrease from $38.1 million in Q1 2023. Gross profit for Q1 2024 was $10.7 million, down from $15.5 million in Q1 2023. Operating margin for Q1 2024 was 4.35%, compared to 28.19% in Q1 2023. The company reported a net loss of $0.001 per share for Q1 2024. Total debt as of March 31, 2024, was $0.

Why It Matters

For investors and stakeholders tracking APPLIED OPTOELECTRONICS, INC., this filing contains several important signals. The decline in gross profit and operating margin suggests potential pricing pressures or increased cost of goods sold, impacting profitability. The absence of total debt indicates a strong balance sheet, providing financial flexibility.

Risk Assessment

Risk Level: high — APPLIED OPTOELECTRONICS, INC. shows elevated risk based on this filing. The company experienced a significant decrease in operating margin from 28.19% in Q1 2023 to 4.35% in Q1 2024, indicating potential challenges in maintaining profitability.

Analyst Insight

Investors should monitor the company's cost management strategies and pricing power in upcoming quarters to assess the sustainability of its margins.

Revenue Breakdown

Key Numbers

• 38,729,000 — Net Sales (Q1 2024)
• 10,712,000 — Gross Profit (Q1 2024)
• 4.35 — Operating Margin % (Q1 2024)
• 0.001 — EPS (Q1 2024)
• 0 — Total Debt (March 31, 2024)

Key Players & Entities

• APPLIED OPTOELECTRONICS, INC. (company) — Filer name
• 2024-03-31 (date) — Period of report
• 2024-05-09 (date) — Filing date
• Chih-Hsiang (Thompson) Lin (person) — CEO
• SUGAR LAND (location) — Business address city
• 281-295-1800 (phone) — Business phone

FAQ

Risk Factors

• Revenue Decline [medium — financial]: The company's net sales for Q1 2024 were $38.7 million, a slight increase from $38.1 million in Q1 2023, but gross profit decreased significantly.
• Margin Compression [high — financial]: Operating margin decreased from 28.19% in Q1 2023 to 4.35% in Q1 2024, indicating a substantial reduction in profitability.

Key Financial Figures

• $0.001 — ich registered Common Stock, Par value $0.001 AAOI NASDAQ Global Market Indicate

Filing Documents

• aaoi20240331c_10q.htm (10-Q) — 1262KB
• ex_633445.htm (EX-31.1) — 13KB
• ex_633446.htm (EX-31.2) — 13KB
• ex_633447.htm (EX-32.1) — 7KB
• 0001437749-24-015696.txt (&nbsp;) — 7025KB
• aaoi-20240331.xsd (EX-101.SCH) — 72KB
• aaoi-20240331_cal.xml (EX-101.CAL) — 62KB
• aaoi-20240331_def.xml (EX-101.DEF) — 446KB
• aaoi-20240331_lab.xml (EX-101.LAB) — 386KB
• aaoi-20240331_pre.xml (EX-101.PRE) — 499KB
• aaoi20240331c_10q_htm.xml (XML) — 1101KB

Financial Information

Part I. Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) 3 Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023 3 Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2024 and 2023 (Unaudited) 4 Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months ended March 31, 2024 and 2023 (Unaudited) 5 Condensed Consolidated Statements of Stockholders' Equity for the Three Months ended March 31, 2024 and 2023 (Unaudited) 6 Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2024 and 2023 (Unaudited) 7 Notes To Condensed Consolidated Financial Statements (Unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 Item 4.

Controls and Procedures

Controls and Procedures 27

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 27 Item 1A.

Risk Factors

Risk Factors 27 Item 5. Other Information 28 Item 6. Exhibits 28

Signatures

Signatures 29 2 Table of Contents

Financial Information

Part I. Financial Information

Condensed Consolidated Financial Statements

Item 1. Condensed Consolidated Financial Statements Applied Optoelectronics, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands) March 31, December 31, 2024 2023 ASSETS Current Assets Cash and cash equivalents $ 8,433 $ 45,366 Restricted cash 8,972 9,731 Accounts receivable - trade, net of allowance of $ 0 and $ 3 , respectively 57,476 48,071 Notes receivable 352 219 Inventories 54,322 63,866 Prepaid income tax 2 3 Prepaid expenses and other current assets 4,078 5,349 Total current assets 133,635 172,605 Property, plant and equipment, net 199,941 200,317 Land use rights, net 4,991 5,030 Operating right of use asset 4,552 5,026 Intangible assets, net 3,610 3,628 Other assets, net 4,187 2,580 TOTAL ASSETS $ 350,916 $ 389,186 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 23,639 $ 32,892 Bank acceptance payable 10,712 15,482 Accrued liabilities 13,345 18,549 Unearned revenue 1,689 1,803 Current lease liability - operating 1,095 1,149 Current portion of notes payable and long-term debt 24,129 23,197 Current portion of convertible senior notes — 286 Total current liabilities 74,609 93,358 Non-current lease liability - operating 4,250 4,726 Convertible senior notes 76,331 76,233 TOTAL LIABILITIES 155,190 174,317 Stockholders' equity: Preferred Stock; 5,000 shares authorized at $ 0.001 par value; no shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively — — Common Stock; 80,000 shares authorized at $ 0.001 par value; 38,729 and 38,148 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively 39 38 Additional paid-in capital 484,663 478,972 Accumulated other comprehensive income ( 688 ) 975 Accumulated deficit ( 288,288 ) ( 265,116 ) TOTAL STOCKHOLDERS' EQUITY 195,726 214,869 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 350,916 $ 389,186 Th

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