-- 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 (Contact Information: Contact: Steve Workman Chief Financial Officer 408-548-1000 Investor Relations 408-542-5050 investor.relations@Finisar.com