SOURCE: FINISAR CORPORATION

November 08, 2007 16:05 ET

Finisar Pre-Announces Second Quarter Revenues

SUNNYVALE, CA--(Marketwire - November 8, 2007) - Finisar Corporation (NASDAQ: FNSR), a technology leader in gigabit fiber optic solutions for high-speed data networks, today reported that, on the basis of preliminary financial results, it expects that its revenues for the second quarter ended October 28, 2007, will be approximately $101 million, compared to $105.7 million in the prior quarter and $108.2 million in the second quarter of fiscal 2007 and will fall below the low end of its earlier guidance for the quarter of $106 million. The shortfall in revenue as compared to the Company's earlier guidance is due in part to the following factors:

--  Revenues for 10/40 Gbps applications were approximately $18 million, or
    the same as the previous quarter, due to the following:

    --  Firmware changes were requested for the Company's recently
        qualified 10 Gbps X2-SR transceiver which reduced our ability to
        ship this product during the quarter. The changes were
        successfully made by the end of the quarter.

    --  Test set-up changes were needed for 40 Gbps transponders which
        limited our capacity to ship. This problem was resolved shortly
        after the end of the quarter.

    --  Supplier issues limited production levels for 10 Gbps 40/80 km XFP
        transceivers.

--  Excess inventory of SAN transceivers at a large customer limited
    shipments.

The Company noted that the items above negatively impacted revenue by approximately $6 million in the second quarter.

While revenues are expected to be down from the previous quarter, the Company expects non-GAAP gross margins to be in the range of 35%-36%, or approximately the same as the first quarter due to an improvement in yields associated with ramping production of several new products.

The Company deferred its revenue guidance for the last half of the fiscal year until the next quarterly conference call, but reiterated that sequential revenue growth should resume in the third and fourth fiscal quarters as a result of:

--  Increased shipments of 10/40 Gbps products due to resolution of the
    firmware and test set-up issues which restricted 10/40 Gbps shipments in
    the second quarter.
    
--  Resolution of capacity constraints for 40/80 km 10 Gbps XFP
    transceivers.
    
--  Qualification of 40 Gbps transponders at several customers.
    
--  Increased shipments of SFP+ transceivers for 8/10 Gbps LAN and SAN
    applications.
    
--  Qualification of an XFP-SR product for 10 Gbps applications at several
    customers.
    
--  Design wins for GPON and 10/40 Gbps products at a large telecom
    customer for shipment in CY2008.
    

Finisar plans to review its second quarter results and discuss its business outlook during a conference call for investors at 5:00 p.m. EST (2:00 p.m. PST) on December 5, 2007. The call will be broadcast live over the Internet on the Investor Relations section of Finisar's web site, located at www.Finisar.com. To listen to the Webcast, interested investors are encouraged to log onto the broadcast at least 15 minutes prior to the call. Participating in the call will be Jerry Rawls, Finisar's President and CEO, and Steve Workman, Finisar's CFO.

NASDAQ DETERMINATION OF NON-COMPLIANCE

As previously reported, the Company has been notified by Nasdaq that it is not in compliance with Marketplace Rule 4310(c)(14) because it did not timely file its periodic reports for the quarters ended October 29, 2006, January 31, 2007, and July 31, 2007 and for the fiscal year ended April 30, 2007 and, therefore, that its common stock was subject to delisting from the Nasdaq Global elect Market. On October 5, 2007, the Nasdaq Listing Council granted the Company an exception until December 4, 2007 to file its delinquent periodic reports and restatement.

SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACTS 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, including statements regarding Finisar's expectations, beliefs, intentions, or strategies regarding the future. 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. These risks include those associated with 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. These risks and uncertainties also include the extent to which additional stock-based compensation expense will be recognized as a result of the ongoing review of the Company's stock option granting practices; the timing of the Company's filings relating to restated financial information; the impact of any regulatory review of the disclosures in those documents; and the potential impact of related civil litigation. Further information regarding these and other risks relating to Finisar's business is set forth in Finisar's Annual Report on Form 10-K and other reports as filed with the Securities and Exchange Commission.

ABOUT FINISAR

Finisar Corporation (NASDAQ: FNSR) is a technology leader for fiber optic components and subsystems and network test and monitoring systems. These products enable high-speed data communications for networking and storage applications over Gigabit Ethernet Local Area Networks (LANs), Fibre Channel Storage Area Networks (SANs), and Metropolitan Area Networks (MANs) using Fibre Channel, IP, SAS, SATA and SONET/SDH protocols. The Company's headquarters is in Sunnyvale, California, USA. www.finisar.com.

Contact Information