Finisar Announces Second Quarter Fiscal 2012 Financial Results
Revenues of $241.5 Million, 5.8% Quarter-Over-Quarter Growth Non-GAAP Operating Income of $23.6 Million, 12.5% Quarter-Over-Quarter Growth Non-GAAP Earnings per Diluted Share of $0.23
(firmenpresse) - SUNNYVALE, CA -- (Marketwire) -- 11/30/11 -- Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its second quarter of fiscal 2012 ended October 30, 2011.
"In our just completed fiscal second quarter, our revenues were $241.5 million, 5.8% greater than the preceding first quarter, primarily driven by growth in sales of our WSS and ROADM line card products, tunable XFP transceivers, and the consolidation of a full quarter of the financial results of our Ignis subsidiary. We achieved a non-GAAP gross margin of 32.1%. Non-GAAP operating income increased 12.5% from the preceding quarter, and non-GAAP operating margin increased to 9.8% from 9.2% in the preceding quarter. Our non-GAAP earnings per diluted share were $0.23," said Jerry Rawls, Finisar's executive Chairman of the Board.
"We continued to execute well on our product development plan and have delivered to customers a number of innovative products in the WSS and pluggable product lines during the second quarter," said Eitan Gertel, Finisar's Chief Executive Officer. "Production of our tunable XFP transceiver products began to ramp during the second quarter of fiscal 2012. Tunable XFPs were qualified at several additional customers during the second quarter and we expect more qualifications in the third quarter. In addition, we have qualified our next generation edge or access WSS modules with multiple customers and expect revenue from these products to continue to ramp in the first half of calendar 2012."
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(a) In evaluating the operating performance of Finisar's business, Finisar management utilizes financial measures that exclude certain charges and credits required by U.S. generally accepted accounting principles, or GAAP, that are considered by management to be outside Finisar's core operating results. A reconciliation of Finisar's non-GAAP financial measures to the most directly comparable GAAP measures, as well as additional related information, can be found under the heading "Finisar Non-GAAP Financial Measures" below.
Revenues increased to $241.5 million, up $13.3 million, or 5.8%, from $228.2 million in the preceding quarter, primarily driven by growth in sales of our WSS/ROADM line card products and tunable XFP transceiver products, as well as the consolidation of a full quarter of the financial results of our Ignis subsidiary.
Compared to the preceding quarter, the sale of products for datacom applications decreased by $0.6 million, or (0.4%), and the sale of products for telecom applications increased by $13.8 million, or 13.9%.
Gross margin was unchanged from the preceding quarter at 29.1% of revenues as the benefits of the increased revenue levels were offset by the consolidation of a full quarter of the financial results of Ignis, which has a lower average gross margin than the overall corporate average.
Operating income increased $1.7 million to $8.8 million, or 3.7% of revenues, compared to $7.1 million, or 3.1% of revenues, in the preceding quarter as revenue grew faster than operating expenses despite the consolidation of a full quarter of the operating expenses of Ignis.
Income from continuing operations was $5.9 million, or $0.06 per diluted share, compared to $10.1 million, or $0.11 per diluted share, in the preceding quarter.
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides supplemental information regarding its operating performance on a non-GAAP basis. For the second quarter of fiscal 2011, items related to continuing operations representing a net charge of approximately $15.6 million were excluded. The excluded items are described in Finisar Non-GAAP Financial Measures below.
Non-GAAP gross margin was unchanged from the preceding quarter at 32.1% of revenues as the benefits of the increased revenue levels were offset by the consolidation of a full quarter of the financial results of Ignis, which has a lower average gross margin than the overall corporate average.
Non-GAAP operating income increased $2.6 million to $23.6 million, or 9.8% of revenues, compared to $20.9 million, or 9.2% of revenues, in the preceding quarter as revenue grew faster than operating expenses despite the consolidation of a full quarter of the operating expenses of Ignis.
Non-GAAP income from continuing operations was $21.6 million, or $0.23 per diluted share, compared to $19.5 million, or $0.21 per diluted share in the preceding quarter.
Non-GAAP EBITDA increased $2.7 million to $34.3 million, or 14.2% of revenues, compared to $31.6 million, or 13.8% of revenues in the preceding quarter.
Cash and cash equivalents totaled $228.0 million at the end of the second quarter compared to $238.1 million at the end of the preceding quarter. The decline was primarily the result of the repayment of $5.6 million of Ignis debt and increases in accounts receivable and inventory as detailed below.
Days sales outstanding increased to 67 days from 65 days in the preceding quarter. The combination of higher DSOs and higher revenue levels resulted in an increase in the balance of accounts receivable of $10.0 million.
Inventory turns were 3.2, the same as the preceding quarter, while overall inventory at the end of the second quarter increased $6.4 million over the preceding quarter.
At the end of the second quarter, Finisar had approximately $40.0 million in principal amount of convertible notes outstanding with a conversion price of $10.675 per share.
At the end of the second quarter, Ignis also had outstanding debt equivalent to approximately $4.3 million, which is reflected in Finisar's consolidated balance sheet.
Under Finisar's $70.0 million secured credit facility with Wells Fargo Foothill, LLC, no borrowings were outstanding and $66.6 million was available to borrow at the end of the second quarter.
The Company indicated that it currently expects third fiscal quarter revenues to be in the range of $235 to $250 million; GAAP operating margin to be in the range of approximately 3.5% to 5.0%; non-GAAP operating margin to be in the range of 8.5% to 10.0% and non-GAAP earnings per diluted share to be in the range of approximately $0.20 to $0.24.
Finisar will discuss its financial results for the second quarter and current business outlook during its regular quarterly conference call scheduled for Wednesday, November 30, 2011, at 2:00 pm PST (5:00 pm EST). To listen to the call you may connect through the Finisar investor relations page at or dial 1-888-542-1102 (domestic) or (719) 325-2373 (international) and enter conference ID 4696405.
An audio replay will be available for two weeks following the call by dialing 1-888-203-1112 (domestic) or (719) 457-0820 and then following the prompts: enter conference ID 4696405 and provide your name, affiliation, and contact number. A replay of the webcast will be available shortly after the conclusion of the call on the Company's website until the next regularly scheduled earnings conference call.
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements included in this press release are based upon information available to Finisar as of the date hereof, and Finisar assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those projected. Examples of such risks include those associated with: the uncertainty of customer demand for Finisar's products; the rapidly evolving markets for Finisar's products and uncertainty regarding the development of these markets; Finisar's historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; ongoing new product development and introduction of new and enhanced products; challenges related to the integration of the Ignis acquisition and realizing anticipated benefits of improved access to a supply of tunable lasers; the challenges of rapid growth followed by periods of contraction; and intensive competition. Further information regarding these and other risks relating to Finisar's business is set forth in Finisar's annual report on Form 10-K (filed June 28, 2011) and quarterly SEC filings.
Finisar Corporation (NASDAQ: FNSR) is a global technology leader for fiber optic subsystems and components that enable high-speed voice, video and data communications for telecommunications, networking, storage, wireless, and cable TV applications. For more than 20 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth and storage. Finisar is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. For additional information, visit .
FINISAR FINANCIAL STATEMENTS
The following financial tables are presented in accordance with GAAP.
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides supplemental information regarding the Company's operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and which management considers to be outside our core operating results. Some of these non-GAAP measures also exclude the ongoing impact of historical business decisions made in different business and economic environments. Management believes that tracking non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share provides management and the investment community with valuable insight into our current operations, our ability to generate cash and the underlying business trends which are affecting our performance. These non-GAAP measures are used by both management and our Board of Directors, along with the comparable GAAP information, in evaluating our current performance and planning our future business activities. In particular, management finds it useful to exclude non-cash charges in order to better correlate our operating activities with our ability to generate cash from operations and to exclude non-recurring and infrequently incurred cash charges as a means of more accurately predicting our liquidity requirements. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry.
In calculating non-GAAP gross profit in this release, we have excluded the following items from cost of revenues in applicable periods:
Changes in excess and obsolete inventory reserve (predominantly non-cash charges or non-cash benefits);
Amortization of acquired technology (non-cash charges related to technology obtained in acquisitions);
Stock-based compensation expense (non-cash charges);
Acquisition method accounting adjustment for sale of acquired inventory (non-cash charges); and
Reduction in force costs (non-recurring charges).
In calculating non-GAAP operating income in this release, we have excluded the same items to the extent they are classified as operating expenses, and have also excluded the following items in applicable periods:
Transaction fees associated with acquisitions (non-recurring charges);
Gain or loss on litigation settlements and resolutions and related costs (non-recurring charges);
Amortization of purchased intangibles (non-cash charges);and
Restructuring costs (non-recurring charges).
In calculating non-GAAP income from continuing operations and non-GAAP income from continuing operations per share in this release, we have also excluded the following items in applicable periods:
Amortization of discount on convertible debt and imputed interest expense (non-cash charges);
Imputed interest expense related to restructuring (amortization of imputed interest expense associated with previously incurred restructuring costs);
Gains and losses on sales of assets (non-recurring or non-cash losses and cash gains related to the periodic disposal of assets no longer required for current activities);
Dollar denominated foreign exchange transaction losses (gains) (non-cash charges);
Charges related to the non-controlling equity interest in the net loss of an investee (non-cash charges);
Debt extinguishment loss (non-recurring charges);
Fair value remeasurement of equity investment (non-cash gain from remeasurement of value of prior investment in an investee);
Differences between cash payable for income taxes and the provision for income taxes in accordance with GAAP, less discrete items; and
Other miscellaneous income and expenses (non-recurring charges).
In calculating non-GAAP income (loss) per share in this release, we have included the shares issuable upon conversion of our outstanding convertible notes and excluded the interest expenses associated with such notes in such periods where such treatment is dilutive to non-GAAP income (loss) per share.
A reconciliation of this non-GAAP financial information to the corresponding GAAP information is set forth below:
Kurt Adzema
Chief Financial Officer
408-542-5050
or
Victoria McDonald
Sr. Manager, Corporate Communications
408-542-4261
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Datum: 30.11.2011 - 15:00 Uhr
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