AFOP Reports Improved First Quarter, 2010 Results with 10% Sequential Growth Guidance

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SUNNYVALE, Calif.--(Business Wire)--
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 first
quarter ended March 31, 2010.

Revenues for the first quarter of 2010 totaled $8,406,000, a 12% increase from
revenues of $7,517,000 reported in the previous quarter, and a 10% increase from
revenues of $7,643,000 reported in the first quarter of 2009. The Company
recorded net income for the first quarter of 2010 of approximately $641,000, or
$0.02 per share based on 42.5 million shares outstanding, compared to $428,000,
or $0.01 per share based on 42.2 million shares outstanding, for the fourth
quarter of 2009. This compares to net income for the first quarter of 2009 of
$302,000, or $0.01 per share based on 41.9 million shares outstanding.

Included in expenses for the quarter ended March 31, 2010 was approximately
$33,000 of stock-based compensation, compared to $28,000 of stock-based
compensation charges for the quarter ended March 31, 2009.

Peter Chang, President and Chief Executive Officer, commented, "We are pleased
to begin the new decade with a demanding and growing quarter. Besides sequential
revenue growth and improved gross margin, operating profits and net profits, we
have seen many encouraging activities with our key customers. Even with more
capital investment to meet increasing customer demands during the quarter, our
balance sheet remains strong. At the end of the first quarter, our cash and
short-term investments, together with our ARS Right, was about $41 million,
after the cash dividend payment in January, 2010."

"Going forward, we feel that demand remains strong across all our businesses.
Based on current backlog, we expect that revenues for the coming quarter will
grow by ten percent. Additionally, with our continued focus on operational
efficiencies, we are optimistic about both revenue and profit growth in the
remainder of 2010." concluded Mr. Chang.

Conference Call

Management will host a conference call at 1:30 p.m. Pacific Time on April 22,
2010 to discuss AFOP`s first quarter 2010 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 is 349010. AFOP will also provide a live webcast of its first quarter
2010 conference call at AFOP`s website www.afop.com. An audio replay will be
available until May 5, 2010. The dial in number for the replay is 877-660-6853
or 201-612-7415. The replay passcodes (account # 286; conference ID#: 349010)
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 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, and growth, and the potential timing thereof, our
beliefs regarding business conditions, our customer base and customer demand,
our expectations regarding current or future orders and the impact of those
orders on our business, and our ability to continue to focus on our operational
efficiencies or our successes in doing so, 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 quarterly
report on Form 10-K for the year ended December 31, 2009. 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)

Mar. 31 Dec. 31,
2010 2009
(Unaudited)
ASSETS
Current assets:
Cash and short-term investments $ 39,418 $ 40,493
Other current asset - ARS 1,762 1,778
Accounts receivable 5,430 4,952
Inventories 5,861 4,984
Other current assets 615 515
Total current assets 53,086 52,722

Property and equipment, net 4,797 4,434
Other assets 126 233
Total assets $ 58,009 $ 57,389

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,611 $ 3,701
Accrued expenses and other liabilities 2,804 3,936
Total current liabilities 7,415 7,637

Long-term liability 812 813
Total liabilities 8,227 8,450

Stockholders' equity 49,782 48,939

Total liabilities and stockholders' equity $ 58,009 $ 57,389

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

Three Months Ended
Mar. 31, Dec. 31, Mar. 31,
2010 2009 2009

Revenues $ 8,406 $ 7,517 $ 7,643

Cost of revenues 5,711 5,151 5,345
Gross profit 2,695 2,366 2,298

Operating expenses:
Research and development 709 760 729
Sales and marketing 561 535 634
General and administrative 933 817 845
Total operating expenses 2,203 2,112 2,208

Income from operations 492 254 90
Interest and other income, net 150 196 222
Net income before tax 642 $ 450 312
Income tax 1 22 10
Net income $ 641 $ 428 $ 302

Net income per share:
Basic $ 0.02 $ 0.01 $ 0.01
Diluted $ 0.01 $ 0.01 $ 0.01

Shares used in per share calculation:
Basic 42,467 42,213 41,872
Diluted 43,241 42,876 41,897

Included in costs and expenses above:
Stock based compensation charges
Cost of revenue $ 12 $ 12 $ 14
Research and development 5 5 6
Sales and marketing 4 3 4
General and administrative 12 13 4
Total $ 33 $ 33 $ 28

Alliance Fiber Optic Products, Inc.
Anita Ho, 408-736-6900 ext. 168
Acting Chief Financial Officer

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