8-K

UNITED STATES

     SECURITIES AND EXCHANGE COMMISSION
     Washington, D.C. 20549

     ____________

     FORM 8-K

     CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

     Date of Report (Date of earliest event reported): January 2008, 2009

     ALLIANCE FIBER OPTIC PRODUCTS, INC.

     (Exact name of registrant as specified in its charter)

     Delaware                                   0-31857                             77-0554122     
(State or other jurisdiction                (Commission                          (IRS Employer
     of incorporation)                               File Number)                         Identification No.)
 

     275 Gibraltar Drive, Sunnyvale, California      94089

     (Address of principal executive offices)     (Zip Code)

     Registrant's telephone number, including area code: (408) 736-6900

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.
 
     The information in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.
 

On January 28, 2009, Alliance Fiber Optic Products, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2008. A copy of the earnings release is furnished herewith as Exhibit 99.1.

Item 8.01. Other Events.

Alliance Fiber Optic Products, Inc.'s (the Company) 2009 Annual Meeting of Stockholders will be held on May 15, 2009 at such place and time as will be set forth in the Company's proxy statement relating to that meeting. A stockholder proposal not included in the proxy statement for the 2009 Annual Meeting will be ineligible for presentation at the meeting unless the stockholder gives timely notice of the proposal in writing to the Company's Secretary at the Company's principal executive offices and otherwise complies with the provisions of the Company's Bylaws. To be timely, the Company's Bylaws provide that the Company must have received the stockholder's notice not less than 60 days nor more than 90 days prior to the scheduled date of such meeting. However, if notice or prior public disclosure of the date of the annual meeting is given or made to stockholders less than 75 days prior to the meeting date, the Company must receive the stockholder's notice by the earlier of (i) the close of business on the 15th day after the earlier of the day the Company mailed notice of the annual meeting date or provided such public disclosure of the meeting date and (ii) two days prior to the scheduled date of the annual meeting. For the Company's 2009 Annual Meeting of Stockholders, stockholders must submit written notice to the Secretary in accordance with the foregoing Bylaw provisions no earlier than February 14, 2009 and no later than March 16, 2009.

Item 9.01. Financial Statements and Exhibits.

Exhibit          Description               
          

99.1     Press Release dated January 28, 2009 announcing fourth quarter and year end 2008 results.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

     Dated: January 28, 2009
 

ALLIANCE FIBER OPTIC PRODUCTS, INC.
 
 
 
By     /s/ Anita K. Ho               
Name:     Anita K. Ho

Title:     Acting Chief Financial Officer

EXHIBIT INDEX

Exhibit

NumberDescription

99.1        Press release dated January 28, 2009 announcing fourth quarter and year end 2008 results.

EX-99

Contact:                               
Anita Ho
Acting Chief Financial Officer
Alliance Fiber Optic Products, Inc.                                                                                  January 28, 2009
Phone: 408-736-6900 x168

AFOP REPORTS RECORD YEAR 2008 SALES AND PROFITS

Sunnyvale, CA - January 28, 2009 - Alliance Fiber Optic Products, Inc. (Nasdaq CM: 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 fourth quarter and year ended December 31, 2008.

Revenues for the fourth quarter of 2008 totaled $8,201,000, a 11% decrease from revenues of $9,214,000 reported in the fourth quarter of 2007, and are lower than the revenues of $10,829,000 reported in the previous quarter. The Company recorded net income for the fourth quarter of 2008 of $899,000, or $0.02 per share based on 41.8 million shares outstanding, compared to $1,045,000, or $0.03 per share based on 41.2 million shares outstanding, for the fourth quarter of 2007. This compares to net income for the third quarter of 2008 of $1,345,000, or $0.03 per share based on 41.6 million shares outstanding.

Revenues for fiscal year 2008 rose to $38,754,000, a 15% increase over revenues of $33,786,000 reported in the previous year. The Company recorded a net profit for fiscal year 2008 of $ 4,145,000 or $0.10 per share based on 41.6 million shares outstanding. This represents a 23% improvement compared with a net profit of $3,363,000 or $0.08 per share for the previous year. On an annual operating income basis, the Company improved significantly from a profit of $1,605,000 in fiscal year 2007 to a profit of $2,950,000 in fiscal year 2008.

Included in expenses for the quarter ended December 31, 2008 was $30,000 of stock-based compensation charges under SFAS 123(R), compared to $80,000 of stock-based compensation charges for the quarter ended December 31, 2007.

Included in expenses for the year ended December 31, 2008 was $161,000 of stock-based compensation charges under SFAS 123(R), compared to $398,000 of stock-based compensation charges for the year ended December 31, 2007.

"Fiscal year 2008 culminated in significant milestones for AFOP," commented Peter Chang, President and Chief Executive Officer.  "Despite the Q4 revenue drop, 2008 overall sales grew 15% to a new record annual sales for the company. Operating profits and net profits continued to improve as well from fiscal year 2007 levels. With 15% annual revenue growth in 2008, we generated 84% more profits from operations than in 2007. As a result, we achieved both record operating profits and record net profits in 2008."

"Our balance sheet grew stronger in 2008. At the end of 2008, Inventory, Accounts Receivable and Accounts Payable all improved from the previous quarter. Most importantly, our cash and cash equivalent assets, together with our short-term and long-term investments, increased by $1.2 million from the year ago to $37.7 million.  The net value does not include $2.6 million of other assets resulting from the right to require UBS to repurchase our auction rate securities at par value beginning on June 30, 2010."

"While we made solid progress with customers, product technology and in operations in calendar year 2008, we recognize that difficult economic conditions globally will represent a strong headwind in our efforts to grow. We expect that revenues for the coming quarter will be in the same range as this most recent quarter. Additionally, with continued focus on operational efficiencies, we expect to keep generating profits from operations in the coming quarter while continuing to invest in growth opportunities for our business." concluded Mr. Chang.

Conference Call
Management will host a conference call at 1:30 p.m. Pacific Time on January 28, 2009 to discuss AFOP's fourth quarterand f iscal year2008 financial results.  To participate in AFOP's conference call, please call 877-407-9210 at least ten minutes prior to the call in order for the operator to connect you.  The confirmation number for the call is308646. AFOP will also provide a live webcast of itsfourth quarter and fiscal year2008 conference call at AFOP's website www.afop.com .  An audio replay will be available until February 11, 2009.  The dial in number for the replay is 877-660-6853 or 201-612-7415.  The replay passcodes (account # 286; conference ID#: 308646) are both required for the replay.

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 filmCWDM 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 http://www.afop.com .

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, our ability to continue generating profits from operations, our beliefs regarding business conditions, our ability to continue to focus on our operational efficiencies or our successes in doing so, and our ability to continue to invest in growth opportunities, 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, 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, ability to ramp new products into volume production, the costs associated with running our operations, industry-wide shifts in supply and demand for optical components and modules, industry overcapacity, failure of cost control initiatives, financial stability in foreign markets, and other risks detailed from time to time in our SEC reports, including AFOP's Form 10-Q for the quarter ended September 30, 2008. 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.

ALLIANCE FIBER OPTIC PRODUCTS, INC.
Condensed Consolidated Balance Sheets
(in thousands)

	Dec. 31, 2008		Dec. 31, 2007
ASSETS
Current assets:
Cash and short-term investments	$	23,954	$	36,480
Accounts receivable, net		4,708		5,393
Inventories		5,614		5,003
Other current assets		379		481
Total current assets		34,655		47,357
Long-term investments		13,718		-
Property and equipment, net		4,653		4,373
Other assets		2,772		226
Total assets	$	55,798	$	51,956
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,572	$	4,523
Accrued expenses and other liabilities		3,295		3,519
Total current liabilities		6,867		8,042
Long-term liabilities		891		1,007
Total liabilities		7,758		9,049
Stockholders' equity		48,040		42,907
Total liabilities and stockholders' equity	$	55,798	$	51,956

ALLIANCE FIBER OPTIC PRODUCTS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Twelve Months Ended
	Dec. 31, 2008		Sep. 30, 2008		Dec. 31, 2007		Dec. 31, 2008		Dec. 31, 2007
Revenues	$	8,201	$	10,829	$	9,214	$	38,754	$	33,786
Cost of revenues		5,662		7,403		6,336		26,589		23,158
Gross profit		2,539		3,426		2,878		12,165		10,628
Operating expenses:
Research and development		645		884		804		3,322		3,217
Sales and marketing		485		608		590		2,406		2,349
General and administrative		812		888		864		3,487		3,457
Total operating expenses		1,942		2,380		2,258		9,215		9,023
Income from operations		597		1,046		620		2,950		1,605
Interest and other income, net		319		319		425		1,315		1,758
Net income before tax	$	916	$	1,365	$	1,045	$	4,265	$	3,363
Income tax		17		20		-		120		-
Net income	$	899	$	1,345	$	1,045	$	4,145	$	3,363
Net income per share:
Basic	$	0.02	$	0.03	$	0.03	$	0.10	$	0.08
Diluted	$	0.02	$	0.03	$	0.02	$	0.10	$	0.08
Weighted average shares outstanding:
Basic		41,796		41,641		41,187		41,601		40,897
Diluted		41,827		42,542		45,010		41,657		44,720
Included in costs and expenses above:
Stock based compensation charges
Cost of revenue	$	15	$	17	$	28	$	74	$	149
Research and development		6		7		13		32		63
Sales and marketing		4		5		9		22		42
General and administrative		5		5		30		33		144
Total	$	30	$	34	$	80	$	161	$	398