Finisar Corporation
Sep 5, 2013
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Finisar Announces Record Revenue for First Fiscal Quarter

SUNNYVALE, CA--(Marketwired - Sep 5, 2013) -  Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its first fiscal quarter ended July 28, 2013. 

COMMENTARY

"I am pleased to report first quarter revenues were $266.1 million, an all-time record for Finisar. This was an increase of $22.7 million, or 9.3%, over the prior quarter and an increase of $45.5 million, or 20.7% over the first quarter of the prior year. Revenues exceeded the guidance of $245 million to $260 million that we provided early in the first quarter and grew for the fourth consecutive quarter. The growth in revenues in the first quarter came primarily from increased sales of 10G, 40G and 100G Ethernet transceivers for datacom applications. As a result of these higher than expected revenues, a favorable product mix and operating leverage, we also were able to achieve gross margin and earnings per diluted share that exceeded our original guidance range," said Jerry Rawls, Finisar's executive Chairman of the Board.

"During the quarter, we continued to invest significantly in technology and product development. Our new products for 100 gigabit parallel and serial applications for either single mode and multi mode fiber applications continue to have strong customer demand. We also expect our new platform of high density dual and single WSS will extend our leadership in the WSS market in both the component and ROADM linecard form," said Eitan Gertel, Finisar's Chief Executive Officer.

FINANCIAL HIGHLIGHTS - FIRST QUARTER ENDED July 28, 2013

Summary GAAP Results   First     Fourth  
  Quarter     Quarter  
  Ended     Ended  
    July 28,
2013
    April 28,
2013
 
    (in thousands, except per share amounts)  
             
Revenues   $ 266,068     $ 243,417  
Gross margin     34.3 %     27.7 %
Operating expenses   $ 64,270     $ 66,941  
Operating income   $ 27,103     $ 385  
Operating margin     10.2 %     0.2 %
Net income   $ 26,011     $ 3,879  
Income per share-basic   $ 0.27     $ 0.04  
Income per share-diluted   $ 0.26     $ 0.04  
                 
Basic shares     94,609       93,567  
Diluted shares     101,125       96,192  
                 
Summary Non-GAAP Results (a)   First     Fourth  
  Quarter     Quarter  
  Ended     Ended  
    July 28,
2013
    April 28,
2013
 
    (in thousands, except per share amounts)  
                 
Revenues   $ 266,068     $ 243,417  
Gross margin     35.1 %     32.2 %
Operating expenses   $ 60,903     $ 58,295  
Operating income   $ 32,397     $ 20,032  
Operating margin     12.2 %     8.2 %
Net income   $ 31,269     $ 19,789  
Income per share-basic   $ 0.33     $ 0.21  
Income per share-diluted   $ 0.31     $ 0.20  
                 
Basic shares     94,609       93,567  
Diluted shares     101,125       99,941  
                 
   
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.
   

Financial Statement Highlights for the first quarter of fiscal 2014:

OUTLOOK

The Company indicated that it currently expects revenues for the second quarter of fiscal 2014 to be in the range of $277 to $292 million; GAAP operating margin to be in the range of approximately 9.7% to 10.7%; non-GAAP operating margin to be in the range of approximately 13.7% to 14.7% and non-GAAP earnings per diluted share to be in the range of approximately $0.37 to $0.41.

CONFERENCE CALL

Finisar will discuss its financial results for the first quarter and current business outlook during its regular quarterly conference call scheduled for Thursday, September 5, 2013, at 2:00 pm PDT (5:00 pm EDT). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com/ or dial 1-877-852-6575 (domestic) or (719) 325-4826 (international) and enter conference ID 6969862.

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 6969862 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.

SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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; 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 24, 2013) and quarterly SEC filings.

ABOUT FINISAR

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 25 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth. Finisar is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. For additional information, visit www.finisar.com.

FINISAR FINANCIAL STATEMENTS

The following financial tables are presented in accordance with GAAP.

 
Finisar Corporation 
Consolidated Statements of Operations 
(in thousands, except per share data) 
 
    Three Months Ended  
    July 28, 2013     July 29, 2012     April 28, 2013  
    (Unaudited)  
Revenues   $ 266,068     $ 220,526     $ 243,417  
Cost of revenues     173,102       161,457       166,093  
Impairment of acquired developed technology and other long-lived assets     -       -       8,156  
Amortization of acquired developed technology     1,593       1,272       1,842  
Gross profit     91,373       57,797       67,326  
Gross margin     34.3 %     26.2 %     27.7 %
Operating expenses:                        
  Research and development     43,530       38,169       41,270  
  Sales and marketing     11,805       10,674       11,056  
  General and administrative     8,340       13,342       6,279  
  Amortization of purchased intangibles     595       809       734  
  Impairment of long-lived assets     -       -       7,602  
    Total operating expenses     64,270       62,994       66,941  
Income (loss) from operations     27,103       (5,197 )     385  
Interest income     217       196       211  
Interest expense     (552 )     (647 )     (544 )
Other income (expenses), net     488       81       (154 )
Income (loss) before income taxes and non-controlling interest     27,256       (5,567 )     (102 )
Provision (benefits) for income taxes     1,421