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): February 2, 2011

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 February 2, 2011, Alliance Fiber Optic Products, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2010.  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) 2011 Annual Meeting of Stockholders will be held on April 28, 2011 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 2011 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 ann ual 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 2011 Annual Meeting of Stockholders, stockholders must submit written notice to the Secretary in accordance with the foregoing Bylaw provisions no earlier than January 28, 2011 and no later than February 27, 2011.

Item 9.01.  Financial Statements and Exhibits.

Exhibit        Description

99.1 Press Release dated February 2, 2011 announcing fourth quarter and year end 2010 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:  February 2, 2011

ALLIANCE FIBER OPTIC PRODUCTS, INC.

By           /s/ Anita K. Ho                                                      

Name:        Anita K. Ho

Title:       Acting Chief Financial Officer

EXHIBIT INDEX

Exhibit

Number                      Description

99.1                             Press release dated February 2, 2011 announcing fourth quarter and year end 2010 results.

EX-99.1

Contact:

Anita Ho

Acting Chief Financial Officer

Alliance Fiber Optic Products, Inc.                                                                                                                                         0;                               February 2, 2011

Phone: 408-736-6900 x168

AFOP REPORTS RECORD YEAR 2010 SALES AND PROFITS

Sunnyvale, CA - February 2, 2011 - 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, 2010.

Revenues for the fourth quarter of 2010 totaled $11,638,000, a 55% increase from revenues of $7,517,000 reported in the fourth quarter of 2009, and a decrease from revenues of $13,276,000 reported in the previous quarter. Operating income for the fourth quarter of 2010 rose to $1,823,000, compared with $254,000 in the year ago quarter and $2,210,000 in the previous quarter. The Company recorded net income for the fourth quarter of 2010 of $1,701,000, or $0.20 per share based on 8.7 million shares outstanding, compared to $428,000, or $0.05 per share based on 8.5 million shares outstanding, for the fourth quarter of 2009. This compares to net income for the third quarter of 2010 of $2,064,000, or $0.24 per share based on 8.6 million shares outstanding.

Revenues for fiscal year 2010 rose to $45,406,000, a 52% increase over revenues of $29,834,000 reported in the previous fiscal year.  Operating income for the year ended December 31, 2010 rose to $6,099,000, compared with $751,000 for the year ended December 31, 2009.The Company recorded a net profit for fiscal year 2010 of $6,012,000, or $0.70 per share based on 8.6 million shares outstanding.  This represents a substantial increase compared with a net profit of $1,433,000, or $0.17 per share for the  year ended December 31, 2009.

Included in expenses for the quarter ended December 31, 2010 was $85,000 of stock-based compensation charges under ASC 718, compared with $33,000 of stock based compensation charges for the comparable quarter in 2009. Included in expenses for the year ended December 31, 2010 was $256,000 of stock-based compensation charges under ASC 718, compared with $112,000 of stock-based compensation charges for the year ended December 31, 2009.

"Fiscal year 2010 represented another significant growth milestone for AFOP," commented Peter Chang, President and Chief Executive Officer.  "Despite the fourth quarter sequential revenue decrease, 2010 overall revenues grew 52% to new record annual sales for the Company. With our operational efficiency improvements, gross margin remained above 35% in the fourth quarter, while our annual gross margin improved from 31% to over 34%. Operating profits and net profits also improved from the comparable quarter of 2009 and fiscal year 2009 levels. Most importantly, our balance sheet grew stronger in 2010. Our cash and short-term investments increased to over $45 million at year end."

"With the solid progress we made serving our customers, extending our product technology and improving our operations in calendar year 2010, and the growing demand we have seen in the fiber optic industry, we are excited with our prospects for the growth this year. We expect that revenues and profits will continue to improve on a year over year basis in YR2011." concluded Mr. Chang.

Conference Call

Management will host a conference call at 1:30 p.m. Pacific Time on February 2, 2011 to discuss AFOP's fourth quarter  and fiscal year 2010 financial results.  To participate in AFOP's conference call, 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 35689456.  AFOP will also provide a live webcast of its fourth quarter and fiscal year 2010 conference call at AFOP's website, www.afop.com.  An audio replay will be available until March 2, 2011.  The dial in number for the replay is 800-642-1687 or 706-645-9291.  The replay conference ID is 35689456.

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 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 and profit levels, our beliefs regarding business conditions and growing demand, our customer base, our product portfolio, and our expectations regarding future sales, 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 produ cts 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, our ability to achieve cost control initiatives, 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 September 30, 2010. 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)
(Unaudited)
		Dec 31,	Dec. 31,
		2010	2009
ASSETS
Current assets:
	Cash and short-term investments	$           45,360	$             40,492
	Other current asset - ARS Right	-	1,779
	Accounts receivable, net	7,224	4,952
	Inventories	7,439	4,984
	Other current assets	733	515
	Total current assets	60,756	52,722
Property and equipment, net		7,523	4,434
Other assets		170	233
	Total assets	$           68,449	$             57,389
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$            4,931	$              3,701
	Accrued expenses and other liabilities	4,737	3,936
	Total current liabilities	9,668	7,637
Long-term liabilities		777	813
	Total liabilities	10,445	8,450
Stockholders' equity		58,004	48,939
	Total liabilities and stockholders' equity	$          68,449	$           57,389




 

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,	Sept. 30,	Dec. 31,	Dec. 31,	Dec. 31,
		2010	2010	2009	2010	2009
Revenues		$       11,638	$       13,276	$        7,517	$     45,406	$     29,834
Cost of revenues		7,563	8,563	5,151	29,872	20,504
	Gross profit	4,075	4,713	2,366	15,534	9,330
Operating expenses:
	Research and development	757	882	760	3,218	2,972
	Sales and marketing	566	643	535	2,406	2,276
	General and administrative	929	978	817	3,811	3,331
	Total operating expenses	2,252	2,503	2,112	9,435	8,579
Income from operations		1,823	2,210	254	6,099	751
Interest and other income, net		110	102	196	468	766
Net income before tax		$        1,933	$        2,312	$       450	$      6,567	$      1,517
Income tax		232	248	22	555	84
Net income		$        1,701	$        2,064	$       428	$      6,012	$      1,433
Net income per share
Basic		$          0.20	$          0.24	$      0.05	$       0.70	$       0.17
Diluted		$          0.19	$          0.23	$      0.05	$       0.69	$       0.17
Weighted average shares outstanding
Basic		8,707	8,575	8,443	8,580	8,405
Diluted		9,041	8,826	8,575	8,759	8,456
Included in costs and expenses above:
Stock based compensation charges
	Cost of revenue	$           23	$           28	$        12	$         85	$         49
	Research and development	10	11	5	32	22
	Sales and marketing	15	13	3	38	10
	General and administrative	37	35	13	101	31
	Total	$           85	$           87	$        33	$       256	$     112