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): December 3, 2018

 

Finisar Corporation

(Exact Name of Registrant as Specified in Charter)

 

Delaware

 

000-27999

 

94-3038428

(State or Other Jurisdiction
of Incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

1389 Moffett Park Drive, Sunnyvale, California 94089

(Address of Principal Executive Offices and Zip Code)

 

Registrant’s telephone number, including area code: (408) 548-1000

 

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:

 

x                  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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 


 

Item 2.02                                           Results of Operations and Financial Condition.

 

On December 3, 2018, Finisar Corporation issued a press release announcing its financial results for the second fiscal quarter of 2019, ended October 28, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 8.01                                           Other Events

 

The information set forth under Item 2.02 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 9.01.                                        Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number

 

Description

99.1

 

Press Release dated December 3, 2018

 

2


 

SIGNATURES

 

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

 

Date:                  December 3, 2018

 

 

 

FINISAR CORPORATION

 

 

 

 

 

 

 

By:

/s/ Kurt Adzema

 

 

Kurt Adzema

 

 

Chief Financial Officer

 

3


Exhibit 99.1

 

Finisar Announces Second Quarter of Fiscal 2019 Financial Results

 

SUNNYVALE, Calif., Dec. 03, 2018 (GLOBE NEWSWIRE) — 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 2019, ended October 28, 2018. Finisar will not hold an earnings call, nor provide forward guidance for the third quarter of fiscal 2019, due to the previously announced proposed acquisition by II-VI Incorporated (NASDAQ: IIVI).

 

COMMENTARY

 

“I am pleased to report that revenues grew over the prior quarter and gross margins also improved over the prior quarter and were above our guidance estimate, primarily due to favorable product mix and continued focus on reducing manufacturing overhead,” said Michael Hurlston, Finisar’s Chief Executive Officer.  “In addition, we were able to accelerate the process of improving efficiencies and reducing relative operating expense levels faster than expected.  In combination, this led to increased earnings per share, exceeding the high end of our guidance range.”

 

FINANCIAL HIGHLIGHTS — Second Quarter Ended October 28, 2018

 

Summary GAAP Results

 

 

 

Second

 

 

 

 

 

Quarter

 

First

 

 

 

Ended

 

Quarter

 

 

 

October 28,
2018

 

Ended
July 29, 2018

 

 

 

(in thousands, except per share
amounts)

 

 

 

 

 

 

 

Revenues

 

$

325,423

 

$

317,336

 

Gross margin

 

26.3

%

25.4

%

Operating expenses

 

$

89,788

 

$

96,376

 

Operating loss

 

$

(4,105

)

$

(15,691

)

Operating margin

 

(1.3

)%

(4.9

)%

Net loss

 

$

(5,275

)

$

(18,489

)

Loss per share-basic

 

$

(0.04

)

$

(0.16

)

Loss per share-diluted

 

$

(0.04

)

$

(0.16

)

 

 

 

 

 

 

Basic shares

 

117,284

 

115,867

 

Diluted shares

 

117,284

 

115,867

 

 


 

Summary Non-GAAP Results (a)

 

 

 

Second

 

 

 

 

 

Quarter

 

First

 

 

 

Ended

 

Quarter

 

 

 

October 28,
2018

 

Ended
July 29, 2018

 

 

 

(in thousands, except per share
amounts)

 

 

 

 

 

 

 

Revenues

 

$

325,423

 

$

317,336

 

Non-GAAP Gross margin

 

28.3

%

27.5

%

Non-GAAP Operating expenses

 

$

63,559

 

$

68,311

 

Non-GAAP Operating income

 

$

28,626

 

$

18,841

 

Non-GAAP Operating margin

 

8.8

%

5.9

%

Non-GAAP Net income

 

30,600

 

21,297

 

Non-GAAP Income per share-basic

 

$

0.26

 

$

0.18

 

Non-GAAP Income per share-diluted

 

$

0.26

 

$

0.18

 

 

 

 

 

 

 

Basic shares

 

117,284

 

115,867

 

Diluted shares

 

118,290

 

117,191

 

 

 

 


 

 

(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 of Finisar’s core ongoing operating resultsA 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.

 

Financial Statement Highlights for the Second Quarter of Fiscal 2019:

 

·                  Revenues increased by $8.1 million, or 2.5%, compared to the first quarter of fiscal 2019, as a result of increased sales of wavelength selective switches and VCSEL arrays for 3D applications.

·                  GAAP gross margin improved from 25.4% in the first quarter to 26.3%, primarily due to favorable product mix and continued focus on reducing manufacturing overhead.

 

·                  Non-GAAP gross margin improved from 27.5% in the first quarter to 28.3%.

 

·                  GAAP operating expenses decreased from 30.4% of revenue in the first quarter to 27.6%, as we were able to accelerate the process of improving efficiencies and reducing relative operating expense levels faster than expected.

 


 

·                  Non-GAAP operating expenses decreased from 21.5% of revenue in the first quarter to 19.5%, which is within the range of our operating model target of 18 to 20%.

 

·                  GAAP operating loss decreased $11.6 million, or 73.8%, compared to the first quarter.

 

·                  Non-GAAP operating income increased $9.8 million, or 51.9%, compared to the first quarter.

 

·                  GAAP operating margin improved from (4.9)% of revenue in the first quarter to (1.3)% due to the combination of higher revenues, better gross margins and lower operating expense levels.

 

·                  Non-GAAP operating margin improved from 5.9% in the first quarter to 8.8%.

 

·                  GAAP diluted earnings per share improved from $(0.16) in the first quarter to $(0.04).

 

·                  Non-GAAP diluted earnings per share increased from $0.18 in the first quarter to $0.26.

 

·                  Cash, cash equivalents and short-term investments increased approximately $11 million from the first quarter despite higher than typical levels of capital expenditures associated with the continued progress on our new Sherman fab for VCSEL arrays for 3D sensing applications and the construction of the third building at our Wuxi, China manufacturing site.

 

SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

 

This press release contains forward-looking statement concerning Finisar’s expected financial performance. These statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements are based on our current expectations, estimates, assumptions and projections about our business and industry, and the markets and customers we serve, and they are subject to numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. 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; the challenges of rapid growth followed by periods of contraction; intensive competition; the risk that our pending merger with II-VI does not close, due to the failure of one or more conditions to closing; uncertainty as to the market value of the II-VI merger consideration to be paid in the merger; the risk that required governmental or stockholder approvals of the merger (including China antitrust approval) will not be obtained or that such approvals will be delayed beyond current expectations; the risk of litigation in respect of either Finisar or II-VI or the merger; disruption from the merger making it more difficult to maintain our customer, supplier, key personnel and other strategic relationships.  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 15, 2018) and quarterly SEC filings.

 


 

ABOUT FINISAR

 

Finisar Corporation (NASDAQ: FNSR) is a global technology leader in optical communications, providing components and subsystems to networking equipment manufacturers, data center operators, telecom service providers, consumer electronics and automotive companies.  Founded in 1988, Finisar designs products that meet the increasing demands for network bandwidth, data storage and 3D sensing subsystems. The company is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. Visit our website at www.finisar.com.

 

FINISAR FINANCIAL STATEMENTS The following financial tables are presented in accordance with GAAP.

 

Finisar Corporation

Consolidated Balance Sheets

(in thousands)

 

 

 

Oct 28, 2018

 

Jul 29, 2018

 

Apr 29,
2018

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

332,138

 

$

326,189

 

$

312,257

 

Short-term investments

 

837,658

 

832,681

 

884,838

 

Accounts receivable, net

 

247,688

 

248,138

 

233,529

 

Inventories

 

309,500

 

325,846

 

348,527

 

Other current assets

 

51,232

 

54,863

 

56,001

 

Total current assets

 

1,778,216

 

1,787,717

 

1,835,152

 

Property, equipment and improvements, net

 

600,972

 

587,203

 

520,849

 

Purchased intangible assets, net

 

5,810

 

6,742

 

7,878

 

Goodwill

 

106,735

 

106,735

 

106,735

 

Other assets

 

12,250

 

25,179

 

31,721

 

Deferred tax assets

 

89,202

 

85,873

 

80,850

 

Total assets

 

$

2,593,185

 

$

2,599,449

 

$

2,583,185

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

133,539

 

$

149,876

 

$

132,161

 

Accrued compensation

 

36,152

 

35,349

 

32,525

 

Other accrued liabilities

 

54,746

 

50,944

 

32,824

 

Deferred revenue

 

 

 

9,535

 

Current portion of convertible debt

 

257,067

 

254,150

 

251,278

 

Total current liabilities

 

481,504

 

490,319

 

458,323

 

Long-term liabilities:

 

 

 

 

 

 

 

Convertible debt, net of current portion

 

499,838

 

494,316

 

488,877

 

Other non-current liabilities

 

11,558

 

11,366

 

12,368

 

Total liabilities

 

992,900

 

996,001

 

959,568

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock

 

117

 

117

 

115

 

Additional paid-in capital

 

2,885,319

 

2,869,657

 

2,850,195

 

Accumulated other comprehensive loss

 

(57,906

)

(44,356

)

(14,659

)

Accumulated deficit

 

(1,227,245

)

(1,221,970

)

(1,212,034

)

Total stockholders’ equity

 

1,600,285

 

1,603,448

 

1,623,617

 

Total liabilities and stockholders’ equity

 

$

2,593,185

 

$

2,599,449

 

$

2,583,185

 

 

Note - Balance sheet amounts as of April 29, 2018 are derived from the audited consolidated financial statements as of that date.

 


 

Finisar Corporation

Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

Three
Months
Ended

 

 

 

Oct 28,
2018

 

Oct 29, 2017

 

Oct 28,
2018

 

Oct 29, 2017

 

Jul 29,
2018

 

Revenues

 

$

325,423

 

$

332,205

 

$

642,759

 

$

674,011

 

$

317,336

 

Cost of revenues

 

239,244

 

235,389

 

475,399

 

461,285

 

236,155

 

Amortization of acquired developed technology

 

496

 

611

 

992

 

1,222

 

496

 

Gross profit

 

85,683

 

96,205

 

166,368

 

211,504

 

80,685

 

Gross margin

 

26.3

%

29.0

%

25.9

%

31.4

%

25.4

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

52,674

 

60,560

 

115,734

 

118,600

 

63,060

 

Sales and marketing

 

12,427

 

12,230

 

24,907

 

24,581

 

12,480

 

General and administrative

 

12,832

 

13,282

 

25,475

 

27,571

 

12,643

 

Start-up costs

 

11,419

 

 

18,972

 

 

7,553

 

Amortization of purchased intangibles

 

436

 

666

 

1,076

 

1,373

 

640

 

Total operating expenses

 

89,788

 

86,738

 

186,164

 

172,125

 

96,376

 

Income (loss) from operations

 

(4,105

)

9,467

 

(19,796

)

39,379

 

(15,691

)

Interest income

 

5,981

 

3,746

 

11,136

 

7,186

 

5,155

 

Interest expense

 

(9,490

)

(9,131

)

(18,876

)

(18,144

)

(9,386

)

Other income (expenses), net

 

784

 

1,111

 

(1,005

)

(1,583

)

(1,789

)

Income (loss) before income taxes

 

(6,830

)

5,193

 

(28,541

)

26,838

 

(21,711

)

Provision (benefit) for income taxes

 

(1,555

)

(664

)

(4,777

)

1,122

 

(3,222

)

Net income (loss)

 

$

(5,275

)

$

5,857

 

$

(23,764

)

$

25,716

 

$

  (18,489

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.04

)

$

0.05

 

$

  (0.20

)

$

  0.23

 

$

(0.16

)

Diluted

 

$

(0.04

)

$

0.05

 

$

  (0.20

)

$

  0.22

 

$

(0.16

)

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income (loss) per share - basic

 

117,284

 

113,960

 

116,575

 

113,252

 

115,867

 

Shares used in computing net income (loss) per share - diluted

 

117,284

 

115,443

 

116,575

 

115,973

 

115,867

 

 


 

FINISAR NON-GAAP FINANCIAL MEASURES

 

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission: non-GAAP gross profit, non-GAAP operating income, non-GAAP income and non-GAAP net income per share. These non-GAAP financial measures are supplemental information regarding Finisar’s operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently and/or that management considers to be outside of our ongoing core operating results.   Management believes that tracking non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share provides management and the investment community with valuable insight into our ongoing core current operations, our ability to generate cash and the underlying business trends that 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 certain 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 in this release:

 

·                  Amortization of acquired technology (non-cash charges related to technology obtained in acquisitions);

·                  Stock-based compensation expense (non-cash charges);

·                  Impairment of long-lived/intangible assets (non-cash charges);

·                  Reduction in force costs and other restructuring charges (non-core cash charges);

·                  Acquisition related retention payments (non-core cash charges); and

·                  Inventory write-off related to discontinued products (non-cash 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 in this release:

 

·                  Discontinued product services fee (non-core cash charges);

·                  Duplicate facility costs during facility move (non-core charges);

·                  Acquisition related costs (non-core cash charges);

·                  Litigation settlements and resolutions and related costs (non-core cash charges);

·                  Amortization of purchased intangibles (non-cash charges); and

·                  Start-up cash costs related to our Sherman VCSEL fab until we begin commercial production.

 

In calculating non-GAAP income and non-GAAP income per share in this release, we have also excluded the following items in applicable periods in this release:

 

·                  Imputed interest expenses on convertible debt (non-cash charges);

·                  Imputed interest related to restructuring (non-cash charges);

·                  Other interest income (non-core benefits);

·                  Gains and losses on sales of assets and other miscellaneous (non-cash losses and cash gains related to the periodic disposal of assets no longer required for current activities);

·                  Loss (gain) related to minority investment (non-core charges or benefits);

·                  Dollar denominated foreign exchange transaction losses (gains) (non-cash charges or benefits); and

·                  Amortization of debt issuance costs (non-cash charges).

 

In addition, in this release we have adjusted non-GAAP income and non-GAAP income per share for the difference between GAAP income taxes and non-GAAP income taxes.

 

A reconciliation of this non-GAAP financial information to the corresponding GAAP information is set forth below:

 


 

Finisar Corporation

Reconciliation of Results of Operations under GAAP and non-GAAP

(Unaudited, in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

Three
Months
Ended

 

 

 

Oct 28,
2018

 

Oct 29,
2017

 

Oct 28,
2018

 

Oct 29,
2017

 

Jul 29, 2018

 

GAAP to non-GAAP reconciliation of gross profit:

 

 

 

 

 

 

 

 

 

 

 

Gross profit - GAAP

 

$

85,683

 

$

96,205

 

$

166,368

 

$

211,504

 

$

80,685

 

Gross margin - GAAP

 

26.3

%

29.0

%

25.9

%

31.4

%

25.4

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquired technology

 

496

 

611

 

992

 

1,222

 

496

 

Stock compensation

 

3,493

 

3,724

 

7,299

 

6,294

 

3,806

 

Impairment of long-lived/intangible assets

 

17

 

 

17

 

 

 

Reduction in force costs

 

1,659

 

(9

)

2,141

 

625

 

482

 

Acquisition related retention payment

 

21

 

26

 

33

 

67

 

12

 

Write off of discontinued product inventory

 

816

 

 

2,487

 

 

1,671

 

Total cost of revenues adjustments

 

6,502

 

4,352

 

12,969

 

8,208

 

6,467

 

Gross profit - non-GAAP

 

92,185

 

100,557

 

179,337

 

219,712

 

87,152

 

Gross margin - non-GAAP

 

28.3

%

30.3

%

27.9

%

32.6

%

27.5

%

 

 

 

 

 

 

 

 

 

 

 

 

GAAP to non-GAAP reconciliation of operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) - GAAP

 

(4,105

)

9,467

 

(19,796

)

39,379

 

(15,691

)

Operating margin - GAAP

 

-1.3

%

2.8

%

-3.1

%

5.8

%

-4.9

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Total cost of revenues adjustments

 

6,502

 

4,352

 

12,969

 

8,208

 

6,467

 

Total operating expense adjustments

 

 

 

 

 

 

 

 

 

 

 

Operating expenses - GAAP

 

89,788

 

86,738

 

186,164

 

172,125

 

96,376

 

Research and development

 

 

 

 

 

 

 

 

 

 

 

Reduction in force costs and other restructuring

 

972

 

22

 

7,996

 

115

 

7,024

 

Acquisition related retention payment

 

17

 

32

 

46

 

64

 

29

 

Stock compensation

 

5,962

 

6,147

 

12,137

 

12,229

 

6,175

 

Discontinued product service fees

 

608

 

 

921

 

 

313

 

Sales and marketing

 

 

 

 

 

 

 

 

 

 

 

Reduction in force costs

 

282

 

 

684

 

(12

)

402

 

Acquisition related retention payment

 

 

 

 

(2

)

 

Stock compensation

 

2,021

 

2,039

 

4,167

 

4,083

 

2,146

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

Reduction in force costs and other restructuring

 

257

 

150

 

776

 

370

 

519

 

Stock compensation

 

3,202

 

2,999

 

6,219

 

6,068

 

3,017

 

Acquisition related costs

 

997

 

40

 

995

 

44

 

(2

)

Litigation settlements and resolutions and related costs

 

25

 

 

88

 

 

63

 

Amortization of purchased intangibles

 

436

 

666

 

1,076

 

1,373

 

640

 

Startup costs

 

11,419

 

 

18,972

 

 

7,553

 

Impairment of long-lived assets/intangible assets

 

31

 

 

217

 

 

186

 

Total operating expense adjustments

 

26,229

 

12,095

 

54,294

 

24,332

 

28,065

 

Operating expenses - non-GAAP

 

63,559

 

74,643

 

131,870

 

147,793

 

68,311

 

Operating income - non-GAAP

 

28,626

 

25,914

 

47,467

 

71,919

 

18,841

 

Operating margin - non-GAAP

 

8.8

%

7.8

%

7.4

%

10.7

%

5.9

%

 

 

 

 

 

 

 

 

 

 

 

 

GAAP to non-GAAP reconciliation of income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes - GAAP

 

(6,830

)

5,193

 

(28,541

)

26,838

 

(21,711

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Total cost of revenues adjustments

 

6,502

 

4,352

 

12,969

 

8,208

 

6,467

 

Total operating expense adjustments

 

26,229

 

12,095

 

54,294

 

24,332

 

28,065

 

Non-cash imputed interest expenses on convertible debt

 

8,054

 

7,676

 

15,981

 

15,231

 

7,927

 

Imputed interest related to restructuring

 

18

 

28

 

38

 

58

 

20

 

Other (income) expense, net

 

 

 

 

 

 

 

 

 

 

 

(Gain) / loss on sale of assets and other miscellaneous

 

(50

)

38

 

(127

)

(79

)

(77

)

Loss related to impairment of minority investments

 

399

 

 

399

 

2,347

 

 

Foreign exchange transaction (gain) or loss

 

(1,307

)

(1,478

)

614

 

(1,016

)

1,921

 

Amortization of debt issuance cost

 

385

 

385

 

770

 

770

 

385

 

Total interest and other adjustments

 

7,499

 

6,649

 

17,675

 

17,311

 

10,176

 

Income before income taxes - non-GAAP

 

33,400

 

28,289

 

56,397

 

76,689

 

22,997

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP to non-GAAP reconciliation of net income (loss):

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) - GAAP

 

(5,275

)

5,857

 

(23,764

)

25,716

 

(18,489

)

Total cost of revenues adjustments

 

6,502

 

4,352

 

12,969

 

8,208

 

6,467

 

Total operating expense adjustments

 

26,229

 

12,095

 

54,294

 

24,332

 

28,065

 

Total interest and other adjustments

 

7,499

 

6,649

 

17,675

 

17,311

 

10,176

 

Income tax provision adjustments

 

(4,355

)

(2,864

)

(9,277

)

(3,728

)

(4,922

)

Total adjustments

 

35,875

 

20,232

 

75,661

 

46,123

 

39,786

 

Net income - non-GAAP

 

$

  30,600

 

$

  26,089

 

$

  51,897

 

$

  71,839

 

$

  21,297

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income for diluted earnings per share calculation

 

 

 

 

 

 

 

 

 

 

 

Net income - non-GAAP

 

$

  30,600

 

$

  26,089

 

$

  51,897

 

$

  71,839

 

$

  21,297

 

Add: interest expense for dilutive convertible notes

 

 

 

 

 

 

Adjusted net income - non-GAAP

 

$

  30,600

 

$

  26,089

 

$

  51,897

 

$

  71,839

 

$

  21,297

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic non-GAAP income per share

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings per share

 

$

  (0.04

)

$

  0.05

 

$

  (0.20

)

$

  0.23

 

$

  (0.16

)

Impact of all non-GAAP adjustments

 

$

  0.30

 

$

  0.18

 

$

  0.65

 

$

  0.40

 

$

  0.34

 

Non-GAAP earnings per share

 

$

  0.26

 

$

  0.23

 

$

  0.45

 

$

  0.63

 

$

  0.18

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted non-GAAP income per share

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings per share

 

$

  (0.04

)

$

  0.05

 

$

  (0.20

)

$

  0.22

 

$

  (0.16

)

Impact of all non-GAAP adjustments

 

$

  0.30

 

$

  0.18

 

$

  0.64

 

$

  0.40

 

$

  0.34

 

Non-GAAP earnings per share

 

$

  0.26

 

$

  0.23

 

$

  0.44

 

$

  0.62

 

$

  0.18

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing non-GAAP income per share

 

 

 

 

 

 

 

 

 

 

 

Basic

 

117,284

 

113,960

 

116,575

 

113,252

 

115,867

 

Diluted

 

118,290

 

115,443

 

117,954

 

115,973

 

117,191

 

 

Finisar-F

 


 

Investor Contact:

Press contact:

Kurt Adzema

Victoria McDonald

Chief Financial Officer

Director, Corporate Communications

408-542-5050 or
Investor.relations@finisar.com

408-542-4261

 

Additional Information and Where to Find It

 

In connection with the proposed acquisition of Finisar Corporation (the “Company”) by II-VI Incorporation (“Parent”) pursuant to the terms of an Agreement and Plan of Merger by and among the Company, Parent and Mutation Merger Sub Inc. (“Merger Subsidiary”), Parent will file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (the “Form S-4”) that will contain a proxy statement of the Company and a proxy statement and prospectus of Parent, which joint proxy statement/prospectus will be mailed or otherwise disseminated to the Company’s stockholders when it becomes available.  Investors are urged to read the joint proxy statement/prospectus (including all amendments and supplements) because they will contain important information.  Investors may obtain free copies of the joint proxy statement/prospectus when it becomes available, as well as other filings containing information about the Company and Parent, without charge, at the SEC’s Internet site (http://www.sec.gov). Copies of these documents may also be obtained for free from the companies’ web sites at www.finisar.com and www.ii-vi.com.

 

Participants in Solicitation

 

The Company, Parent and their respective officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed transaction.  Information about the Company’s executive officers and directors is set forth in its Annual Report on Form 10-K, which was filed with the SEC on June 15, 2018, and the proxy statement for its 2018 annual meeting of stockholders, which was filed with the SEC on July 26, 2018. Investors may obtain more detailed information regarding the direct and indirect interests of Parent, the Company and their respective executive officers and directors in the acquisition by reading the preliminary and definitive joint proxy statement/prospectus regarding the transaction, which will be filed with the SEC.

 

Forward Looking Statements

 

This written communication contains forward-looking statements that involve risks and uncertainties concerning Parent’s proposed acquisition of the Company, the Company’s expected financial performance, as well as the Company’s strategic and operational plans. Actual events or results may differ materially from those described in this written communication due to a number of risks and uncertainties. The potential risks and uncertainties include, among others, the possibility that the Company may be unable to obtain required stockholder approval or that other conditions to closing the transaction may not be satisfied, such that the transaction will not close or that the closing may be delayed; the reaction of customers to the transaction; general economic conditions; the transaction may involve unexpected costs, liabilities or delays; risks that the transaction disrupts current plans and operations of the parties to the transaction; the ability to recognize the benefits of the transaction; the amount of the costs, fees, expenses and charges related to the transaction and the actual terms of any financings that will be obtained for the transaction; the outcome of any legal proceedings related to the transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the transaction agreement.  In addition, please refer to the documents that the Company files with the SEC on Forms 10-K, 10-Q and 8-K. The filings by the Company identify and address other important factors that could cause its financial and operational results to differ materially from those contained in the forward-looking statements set forth in this written communication. All forward-looking statements speak only as of the date of this written communication or, in the case of any document incorporated by reference, the date of that document. The Company is under no duty to update any of the forward-looking statements after the date of this written communication to conform to actual results.