Form 8-K
0001094739 False 0001094739 2019-09-04 2019-09-04 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

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):  September 4, 2019

_______________________________

FINISAR CORP

(Exact name of registrant as specified in its charter)

_______________________________

Delaware000-2799994-3038428
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

1389 Moffett Park Drive

Sunnyvale, CA 94089

(Address of Principal Executive Offices) (Zip Code)

(408) 548-1000

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

_______________________________

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:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $.001 par valueFNSRNASDAQ Stock Market (NASDAQ Global Select Market)

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

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.

 
 
Item 2.02. Results of Operations and Financial Condition.

On September 4, 2019, Finisar Corporation issued a press release announcing its financial results for the first quarter of fiscal 2020, ended July 28, 2019. 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 September 4, 2019
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

SIGNATURE

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.

 FINISAR CORP
   
  
Date: September 4, 2019By: /s/ Kurt Adzema        
  Kurt Adzema
  Chief Financial Officer
  

 

EdgarFiling

EXHIBIT 99.1

Finisar Announces First Quarter of Fiscal 2020 Financial Results

SUNNYVALE, Calif., Sept. 04, 2019 (GLOBE NEWSWIRE) -- Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its first quarter of fiscal 2020, ended July 28, 2019. Finisar will not hold an earnings call nor provide forward guidance for the second quarter of fiscal 2020 due to the previously announced proposed acquisition by II-VI Incorporated (NASDAQ: IIVI).

        
FINANCIAL HIGHLIGHTS – First Quarter Ended July 28, 2019
        
Summary GAAP ResultsFirst
 Fourth
 Quarter
 Quarter
 Ended
 Ended
 July 28, 2019
 April 28, 2019
  
 (in thousands, except per share amounts)
        
Revenues$285,028  $310,085 
Gross margin 29.9%  28.2%
Operating expenses$94,798  $98,579 
Operating income (loss)$(9,533) $(11,278)
Operating margin (3.3)%  (3.6)%
Net loss$(8,717) $(14,151)
Loss per share-basic$(0.07) $(0.12)
Loss per share-diluted$(0.07) $(0.12)
        
Basic shares 119,216   117,953 
Diluted shares 119,216   117,953 
        


Summary Non-GAAP Results (a)First
 Fourth
 Quarter
 Quarter
 Ended Ended
 July 28, 2019
 April 28, 2019
  
 (in thousands, except per share amounts)
        
Revenues$285,028  $310,085 
Non-GAAP Gross margin 31.1%  30.8%
Non-GAAP Operating expenses$63,557  $64,642 
Non-GAAP Operating income$25,083  $30,895 
Non-GAAP Operating margin 8.8%  10.0%
Non-GAAP Net income$27,631  $32,960 
Non-GAAP Income per share-basic$0.23  $0.28 
Non-GAAP Income per share-diluted$0.23  $0.27 
        
Basic shares 119,216   117,953 
Diluted shares 121,797   120,795 

_____________

(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.

Revenue Details for the First Quarter of Fiscal 2020: 

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 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 14, 2019) 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 Statements of Operations
(Unaudited, in thousands, except per share data)
      
 Three Months Ended Three Months Ended
 July 28, 2019 July 29, 2018 Apr 28, 2019
Revenues$285,028  $317,336  $310,085 
Cost of revenues 197,627   236,155   218,513 
Amortization of acquired developed technology 471   496   471 
Impairment of long-lived assets 1,665   -   3,800 
Gross profit 85,265   80,685   87,301 
Gross margin 29.9%  25.4%  28.2%
Operating expenses:     
Research and development 52,151   62,874   51,133 
Sales and marketing 12,107   12,480   12,000 
General and administrative 13,234   12,643   14,396 
Amortization of purchased intangibles 230   640   324 
Impairment of long-lived assets -   186   317 
Startup costs 17,076   7,553   20,409 
Total operating expenses 94,798   96,376   98,579 
Income (loss) from operations (9,533)  (15,691)  (11,278)
Interest income 4,424   5,155   4,731 
Interest expense (6,423)  (9,386)  (6,447)
Other income (expenses), net (2,132)  (1,789)  325 
Loss before income taxes (13,664)  (21,711)  (12,669)
Provision (benefit) for income taxes (4,947)  (3,222)  1,482 
Net loss$(8,717) $(18,489) $(14,151)
      
Net loss per share attributable to Finisar Corporation common stockholders:     
      
Basic$(0.07) $(0.16) $(0.12)
Diluted$(0.07) $(0.16) $(0.12)
      
Shares used in computing net loss per share - basic 119,216   115,867   117,953 
Shares used in computing net loss per share - diluted 119,216   115,867   117,953 


     
Finisar Corporation
Consolidated Balance Sheets
(in thousands)
     
  7/28/2019 4/28/2019
  (Unaudited)  
ASSETS    
Current assets:    
Cash and cash equivalents $882,269  $814,185 
Short-term held-to-maturity investments  -   100,000 
Accounts receivable, net  256,605   263,394 
Inventories  320,555   299,028 
Other current assets  40,179   44,224 
Total current assets  1,499,608   1,520,831 
Property, equipment and improvements, net  633,323   622,979 
Purchased intangible assets, net  3,631   4,182 
Goodwill  106,736   106,736 
Other assets  62,413   15,462 
Deferred tax assets  89,218   81,977 
Total assets $2,394,929  $2,352,167 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $119,628  $132,440 
Accrued compensation  33,343   31,804 
Other accrued liabilities  66,163   49,495 
Total current liabilities  219,134   213,739 
Long-term liabilities:    
Convertible notes  516,746   512,105 
Other non-current liabilities  44,906   12,162 
Total liabilities  780,786   738,006 
Stockholders' equity:    
Common stock  120   118 
Additional paid-in capital  2,933,917   2,919,305 
Accumulated other comprehensive income (loss)  (54,480)  (48,565)
Accumulated deficit  (1,265,414)  (1,256,697)
Total stockholders' equity  1,614,143   1,614,161 
Total liabilities and stockholders' equity $2,394,929  $2,352,167 
     
Note - Balance sheet amounts as of April 28, 2019 are derived from the audited consolidated financial statements as of that date.
     

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:

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:

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:

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 Three Months Ended
 July 28, 2019 July 29, 2018 Apr 28, 2019
GAAP to non-GAAP reconciliation of gross profit:     
Gross profit - GAAP$85,265  $80,685  $87,301 
Gross margin - GAAP 29.9%  25.4%  28.2%
Adjustments:     
Cost of revenues     
Amortization of acquired technology 471   496   471 
Stock compensation 2,926   3,806   4,527 
Impairment of long-lived/intangible assets 1,665   -   3,800 
Reduction in force costs 24   482   27 
Acquisition related retention payment -   12   - 
Write off of discontinued product inventory (1,711)  1,671   (589)
Total cost of revenues adjustments 3,375   6,467   8,236 
Gross profit - non-GAAP 88,640   87,152   95,537 
Gross margin - non-GAAP 31.1%  27.5%  30.8%
      
GAAP to non-GAAP reconciliation of operating income (loss):    
Operating income (loss) - GAAP (9,533)  (15,691)  (11,278)
Operating margin - GAAP -3.3%  -4.9%  -3.6%
Adjustments:     
Total cost of revenues adjustments 3,375   6,467   8,236 
Total operating expense adjustments     
Operating expenses - GAAP 94,798   96,376   98,579 
Research and development     
Reduction in force costs and other restructuring 61   7,024   558 
Acquisition related retention payment -   29   (2)
Stock compensation 6,317   6,175   5,230 
Discontinued product service fees -   313   - 
Sales and marketing     
Reduction in force costs and other restructuring -   402   (18)
Acquisition related retention payment -   -   - 
Stock compensation 2,335   2,146   2,034 
General and administrative     
Reduction in force costs and other restructuring -   519   15 
Stock compensation 4,143   3,017   4,194 
Acquisition related costs 1,054   (2)  876 
Litigation settlements and resolutions and related costs 25   63   - 
Amortization of purchased intangibles 230   640   324 
Startup costs 17,076   7,553   20,409 
Impairment of long-lived assets/intangible assets -   186   317 
Total operating expense adjustments 31,241   28,065   33,937 
Operating expenses - non-GAAP 63,557   68,311   64,642 
Operating income - non-GAAP 25,083   18,841   30,895 
Operating margin - non-GAAP 8.8%  5.9%  10.0%
      
GAAP to non-GAAP reconciliation of income (loss) before income taxes:     
Loss before income taxes - GAAP (13,664)  (21,711)  (12,669)
Adjustments:     
Total cost of revenues adjustments 3,375   6,467   8,236 
Total operating expense adjustments 31,241   28,065   33,937 
Other interest income -   -   - 
Non-cash imputed interest expenses on convertible debt 5,464   7,927   5,420 
Imputed interest related to restructuring 10   20   12 
Other (income) expense, net     
Loss (gain) on sale of assets 1   (77)  (75)
Foreign exchange transaction (gain) or loss 2,433   1,921   (332)
Amortization of debt issuance cost 231   385   231 
Total interest and other adjustments 8,139   10,176   5,256 
Income before income taxes - non-GAAP 29,091   22,997   34,760 
      
GAAP to non-GAAP reconciliation of net income (loss):     
Net loss - GAAP (8,717)  (18,489)  (14,151)
Total cost of revenues adjustments 3,375   6,467   8,236 
Total operating expense adjustments 31,241   28,065   33,937 
Total interest and other adjustments 8,139   10,176   5,256 
Income tax provision adjustments (6,407)  (4,922)  (318)
Total adjustments 36,348   39,786   47,111 
Net income - non-GAAP$27,631  $21,297  $32,960 
      
Basic non-GAAP income per share      
GAAP earnings per share$(0.07) $(0.16) $(0.12)
Impact of all non-GAAP adjustments$0.30  $0.34  $0.40 
Non-GAAP earnings per share$0.23  $0.18  $0.28 
      
Diluted non-GAAP income per share      
GAAP earnings per share$(0.07) $(0.16) $(0.12)
Impact of all non-GAAP adjustments$0.30  $0.34  $0.39 
Non-GAAP earnings per share$0.23  $0.18  $0.27 
      
Shares used in computing non-GAAP income per share     
Basic 119,216   115,867   117,953 
Diluted 121,797   117,191   120,795 
      

Finisar-F

Investor Contact:
Kurt Adzema
Chief Financial Officer
408-542-5050 or Investor.relations@finisar.com

Press contact:
Victoria McDonald
Director, Corporate Communications
408-542-4261