FINANCIAL HIGHLIGHTS-THIRD QUARTER ENDED January 30, 2011
Third Quarter Third Quarter Second Quarter
Ended Ended Ended
Summary Results per GAAP January 30, January 31, October 31,
2011 2010 2010
------------- ------------- -------------
(in thousands, except per share amounts)
Continuing operations
Revenues $ 263,016 $ 166,935 $ 240,943
Gross margin 32.0% 31.0% 34.2%
Operating expenses $ 59,412 $ 42,569 $ 46,295
Operating income $ 24,653 $ 9,126 $ 36,105
Operating margin 9.4% 5.5% 15.0%
Net Income $ 18,821 $ 5,616 $ 33,796
Earnings per share-basic $ 0.24 $ 0.09 $ 0.44
Earnings per share-diluted $ 0.22 $ 0.08 $ 0.39
Basic shares 80,080 65,113 76,766
Diluted shares 93,388 66,719 89,521
Third Quarter Third Quarter Second Quarter
Ended Ended Ended
Non-GAAP Results (a) January 30, January 31, October 31,
2011 2010 2010
------------- ------------- -------------
(in thousands, except per share amounts)
Continuing operations
Revenues $ 263,016 $ 166,935 $ 240,943
Gross margin 34.7% 32.2% 35.5%
Operating expenses $ 46,423 $ 39,664 $ 44,594
Operating income $ 44,735 $ 14,172 $ 40,897
Operating margin 17.0% 8.5% 17.0%
Net Income $ 42,521 $ 11,468 $ 38,302
Earnings per share-basic $ 0.53 $ 0.18 $ 0.50
Earnings per share-diluted $ 0.47 $ 0.17 $ 0.44
Basic shares 80,080 65,113 76,766
Diluted shares 93,388 76,082 89,521
(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.
Highlights for the second quarter of fiscal 2011 under GAAP:
-- Revenues increased to $263.0 million, up $22.1 million, or 9.2%, from
$240.9 million in the preceding quarter and up $96.1 million, or 57.6%,
from $166.9 million in the third quarter of the prior year.
-- Compared to the preceding quarter, the sale of 10 Gbps or faster
products increased by $10.4 million, or 9.7%, the sale of less than
10 Gbps products increased by $2.6 million, or 2.8%, the sale of
WSS/ROADM line card products increased by $8.8 million, or 22.7%, and
the sale of products for analog and cable television (CATV)
applications increased by $0.3 million, or 7.4%.
-- Compared to the third quarter of the prior year, the sale of 10 Gbps or
faster products increased by $50.3 million, or 74.7%, the sale of less
than 10 Gbps products increased by $19.2 million, or 25.7%, the sale of
WSS/ROADM line card products increased by $28.5 million, or 148.9%, and
the sale of products for analog and CATV applications decreased by
$1.9 million, or (33.2)%.
-- Gross margin decreased to 32.0% of revenues from 34.2% in the preceding
quarter and increased from 31.0% in the third quarter of the prior
year.
-- Operating income decreased to $24.7 million, or 9.4% of revenues, from
$36.1 million, or 15.0% of revenues, in the preceding quarter. This
decrease in GAAP operating income was primarily the result of a charge
of $3.5 million in the third quarter representing the adverse judgment
amount due related to the previously disclosed patent litigation with
Emcore as compared to a gain of $2.5 million in the preceding quarter
related to a patent settlement with Source Photonics, a non-cash charge
of $5.9 million in the third quarter for induced conversion expense
related to the exchange of convertible notes for common stock; and a
$620,000 non-cash charge in the third quarter for acceleration of the
amortization of previously paid fees associated with the original
issuance of the exchanged portion of the notes. Operating income
increased $15.5 million compared to operating income of $9.1 million,
or 5.5% of revenues, in the third quarter of the prior year.
-- Net income from continuing operations was $18.8 million, or $0.22 per
diluted share, compared to $33.8 million, or $0.39 per diluted share,
in the preceding quarter and $5.6 million, or $0.08 per share, in the
third quarter of the prior year.
-- Cash and cash equivalents totaled $310.2 million at the end of the
third quarter compared to $184.9 million at the end of the preceding
quarter.
-- On December 27, 2010, Finisar completed a common stock offering for net
proceeds of approximately $117.9 million. In addition, during the
quarter, Finisar repaid approximately $17.3 million of bank debt
associated with its Asian subsidiaries.
-- Days sales outstanding, or DSOs, were 61 days compared to 66 days in
the prior quarter. Inventory turns increased to 4.0 compared to 3.8
in the preceding quarter.
-- Capital expenditures were $19.0 million compared to $13.4 million in
the preceding quarter.
-- Under Finisar's $70.0 million secured credit facility with Wells Fargo
Foothill, LLC, no borrowings were outstanding and $66.6 million was
available to borrow at the end of the third quarter.
-- In several privately-negotiated transactions completed during the
quarter, Finisar exchanged an aggregate of approximately $42.2 million
of its outstanding 5% Convertible Senior Notes due 2029 for
approximately 3.9 million shares of the Company common stock, based on
the conversion price of the notes of approximately $10.68 per share,
plus a total of approximately 188,000 additional shares, including
approximately 16,000 shares issued in payment of accrued and unpaid
interest. At the end of the quarter, there was approximately
$57.9 million in principal amount of the notes remaining outstanding.
-- Subsequent to the end of the quarter, Finisar exchanged an aggregate
of an additional $17.8 million of the notes for approximately
1.7 million shares of the Company common stock, based on the conversion
price of the notes of approximately $10.68, plus a total of
approximately 75,000 additional shares including approximately 8,000
shares issued in payment of accrued and unpaid interest. After such
additional exchanges, there was approximately $40.0 million in
principal amount of the notes remaining outstanding.
In addition to reporting financial results in accordance with U.S.
generally accepted accounting principles, or GAAP, Finisar provides
supplemental information regarding its operating performance on a non-GAAP
basis. Finisar believes this supplemental information provides investors
and management with additional insight into its underlying core operating
performance by excluding a number of non-cash and cash charges, as well as
infrequently occurring gains or losses principally related to acquisitions,
the sale of minority investments, restructuring or other transition
activities, legal settlements, impairments and financing transactions. For
the third quarter of fiscal 2011, items related to continuing operations
representing a net charge of approximately $23.7 million were excluded.
Excluded benefits and charges included a charge of $3.5 million
representing the adverse judgment amount due related to previously
disclosed patent litigation with Emcore; $4.7 million in non-cash
stock-based compensation expenses; $1.6 million in non-cash amortization
charges related to acquired developed technology and purchased intangibles
arising from previous acquisitions; a benefit of $416,000 representing the
difference between cash payments for income taxes and the related GAAP tax
provision, less non-recurring items; $2.4 million non-cash charge related
to foreign exchange losses; $4.6 million in non-cash charges related to
slow-moving and excess inventory; a non-cash charge of $5.9 million for
induced conversion expense related to the exchange of convertible notes for
common stock; and a $620,000 non-cash charge for acceleration of the
amortization of previously paid fees associated with the original issuance
of the exchanged portion of the notes. Other excluded items are described
in Finisar Non-GAAP Financial Measures below.
Highlights for the third quarter of fiscal 2011 on a non-GAAP basis:
-- Non-GAAP gross margin decreased to 34.7% of revenues from 35.5% in the
preceding quarter but increased from 32.2% in the third quarter of the
prior year. The decrease in gross margin compared to the preceding
quarter was due primarily to unexpected under-utilization in our
Allen, Texas VCSEL laser fabrication facility due to a shortage of
wafer availability. The improvement in gross margin compared to the
prior year reflects both a favorable shift in product mix and a
reduction in manufacturing unit costs due to higher shipment volumes.
-- Non-GAAP operating expenses increased to $46.4 million from
$44.6 million in the preceding quarter and $39.7 million in the third
quarter of the prior year. Operating expenses as a percent of revenues
declined to 17.7% of revenues in the third quarter from 18.5% in the
preceding quarter and 23.8% in the third quarter of the prior year due
primarily to revenues growing faster than expenses.
-- Non-GAAP operating income was $44.7 million, or 17.0% of revenues, up
$3.8 million from $40.9 million, or 17.0% of revenues, in the preceding
quarter, and up $30.6 million from $14.2 million, or 8.5% of revenues,
in the third quarter of the prior year.
-- Non-GAAP net income from continuing operations was $42.5 million, or
$0.47 per diluted share, compared to $38.3 million, or $0.44 per
diluted share, in the preceding quarter and $11.5 million, or $0.17
per diluted share, in the third quarter of the prior year.
-- Non-GAAP EBITDA rose to $53.6 million from $49.5 million in the
preceding quarter and $21.6 million in the third quarter of the prior
year.
OUTLOOK
During the fourth quarter ending April 30, 2011, the Company will be
impacted by the full three months of the annual price negotiations with
telecom customers that typically take effect on January 1, the 10-day long
shutdown at certain customers for Chinese New Year in February, the
adjustment of inventory levels at some telecom customers, particularly for
products which had previously been on allocation and long lead times,
including WSS and ROADM line cards, and a slowdown in business in China
overall. Primarily as a result of these factors, the Company indicated that
it currently expects revenues for the fourth quarter to be in the range of
$235 to $250 million. On a GAAP basis, operating margin is expected to be
in the range of approximately 10 to 12%. Additional non-cash and
infrequently occurring charges and benefits excluded when calculating
non-GAAP operating income are expected to total a net charge of
approximately $7 to $9 million. As a result, on a non-GAAP basis, operating
margin is expected to be in the range of 13 to 15%. Weighted average
fully-diluted shares are expected to increase from 93.4 million in the
third quarter to approximately 98.0 million in the fourth quarter due to
the shares issued in the common stock offering that closed on December 27,
2010 and options exercised during the third quarter being outstanding for
the full fourth quarter. Non-GAAP earnings per diluted share is expected to
be in the range of approximately $0.31 to $0.35.
CONFERENCE CALL
Finisar will discuss its financial results for the second quarter and
current business outlook during its regular quarterly conference call
scheduled for Tuesday, March 8, 2011, at 2:00pm PST (5:00pm EST). To
listen to the call you may connect through the Finisar investor relations
page at http://investor.finisar.com/ or dial 1-888-609-5698 (domestic) or
(913) 312-1477 (international) and enter conference ID 9631182.
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 9631182 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 July 1, 2010) and quarterly SEC filings.
ABOUT FINISAR
Finisar Corporation (
Finisar Corporation
Consolidated Statements of Operations
Three
Months
Three Months Ended Nine Months Ended Ended
-------------------- -------------------- ---------
January January January January October
30, 2011 31, 2010 30, 2011 31, 2010 31, 2010
--------- --------- --------- --------- ---------
(Unaudited)
(in thousands, except per share data)
Revenues $ 263,016 $ 166,935 $ 711,841 $ 441,390 $ 240,943
Cost of revenues 177,730 114,048 470,865 316,923 157,343
Amortization of
acquired developed
technology 1,221 1,192 3,613 3,577 1,200
--------- --------- --------- --------- ---------
Gross profit 84,065 51,695 237,363 120,890 82,400
Gross margin 32.0% 31.0% 33.3% 27.4% 34.2%
Operating expenses:
Research and
development 29,607 24,892 84,372 67,514 28,148
Sales and
marketing 8,818 7,922 27,140 22,054 9,247
General and
administrative 20,604 9,329 40,197 27,127 8,517
Amortization of
purchased
intangibles 383 426 1,149 1,645 383
Restructuring
costs - - - 4,173 -
--------- --------- --------- --------- ---------
Total
operating
expenses 59,412 42,569 152,858 122,513 46,295
--------- --------- --------- --------- ---------
Income (loss) from
operations 24,653 9,126 84,505 (1,623) 36,105
Interest income 204 85 439 104 143
Interest expense (1,465) (2,241) (5,697) (6,842) (2,077)
Gain (loss) on
repayment/purchase
of convertible
notes - 28 - (25,039) -
Other income
(expense), net (3,404) (961) (3,404) (2,899) 192
--------- --------- --------- --------- ---------
Income (loss) from
continuing
operations before
income taxes 19,988 6,037 75,843 (36,299) 34,363
Provision for
income taxes 1,167 421 3,816 618 567
--------- --------- --------- --------- ---------
Income (loss) from
continuing
operations 18,821 5,616 72,027 (36,917) 33,796
Income (loss) from
discontinued
operations, net of
taxes - (131) (284) 36,881 -
--------- --------- --------- --------- ---------
Net income (loss) $ 18,821 $ 5,485 $ 71,743 $ (36) $ 33,796
========= ========= ========= ========= =========
Income (loss) per
share from
continuing
operations - basic $ 0.24 $ 0.09 $ 0.93 $ (0.58) $ 0.44
Income (loss) per
share from
continuing
operations -
diluted $ 0.22 $ 0.08 $ 0.84 $ (0.58) $ 0.39
Income (loss) per
share from
discontinued
operations - basic $ - $ (0.00) $ (0.00) $ 0.58 $ -
Income (loss) per
share from
discontinued
operations -
diluted $ - $ (0.00) $ (0.00) $ 0.58 $ -
Shares used in
computing net loss
per share from
continuing
operations - basic 80,080 65,113 77,638 63,131 76,766
Shares used in
computing net loss
per share from
continuing
operations -
diluted 93,388 66,719 90,694 63,131 89,521
Shares used in
computing net
income (loss) per
share from
discontinued
operations - basic 80,080 65,113 77,638 63,131 76,766
Shares used in
computing net
income (loss) per
share from
discontinued
operations -
diluted 93,388 66,719 90,694 63,131 89,521
Finisar Corporation
Consolidated Balance Sheets
(In thousands)
January 30, October 31, August 1, April 30,
2011 2010 2010 2010
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash
equivalents $ 310,232 $ 184,928 $ 192,152 $ 207,024
Accounts
receivable, net 175,173 173,243 152,477 127,617
Accounts
receivable, other 13,910 11,826 9,885 12,855
Inventories 176,811 167,021 154,586 139,525
Deferred tax assets 2,437 1,559 852 2,238
Prepaid expenses 11,253 9,571 7,306 6,956
----------- ----------- ----------- -----------
Total current
assets 689,816 548,148 517,258 496,215
Property, equipment and
improvements, net 112,324 100,960 93,386 89,214
Purchased technology,
net 8,403 9,576 10,497 11,689
Other intangible
assets, net 10,509 10,910 11,312 11,713
Minority investments 18,610 18,169 12,289 12,289
Other assets 4,178 4,995 5,131 5,610
----------- ----------- ----------- -----------
Total assets $ 843,840 $ 692,758 $ 649,873 $ 626,730
=========== =========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 83,263 $ 86,598 $ 79,121 $ 76,838
Accrued
compensation 21,872 21,861 14,479 18,289
Other accrued
liabilities 25,101 20,739 20,206 21,798
Deferred revenue 7,186 8,475 6,290 6,571
Current portion of
convertible notes - - 29,214 28,839
Current portion of
long-term debt - 4,000 4,000 4,000
----------- ----------- ----------- -----------
Total current
liabilities 137,422 141,673 153,310 156,335
Long-term liabilities:
Convertible notes,
net of current
portion 57,850 100,000 100,000 100,000
Long-term debt, net
of current portion - 13,250 14,250 15,250
Other non-current
liabilities 12,706 12,762 6,102 6,260
Deferred tax
liabilities 387 328 255 239
----------- ----------- ----------- -----------
Total
liabilities 208,365 268,013 273,917 278,084
Stockholders' equity:
Common stock 87 77 76 76
Additional paid-in
capital 2,239,726 2,048,708 2,038,636 2,030,373
Accumulated other
comprehensive
income 21,513 20,632 15,712 15,791
Accumulated deficit (1,625,851) (1,644,672) (1,678,468) (1,697,594)
----------- ----------- ----------- -----------
Total
stockholders'
equity 635,475 424,745 375,956 348,646
----------- ----------- ----------- -----------
Total liabilities and
stockholders' equity $ 843,840 $ 692,758 $ 649,873 $ 626,730
=========== =========== =========== ===========
FINISAR NON-GAAP FINANCIAL MEASURES In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides supplemental information regarding the Company's operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and which management considers to be outside our core operating results. Some of these non-GAAP measures also exclude the ongoing impact of historical business decisions made in different business and economic environments. Management believes that tracking non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share provides management and the investment community with valuable insight into our current operations, our ability to generate cash and the underlying business trends which 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 non-recurring and infrequently incurred 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:
-- Changes in excess and obsolete inventory reserve (predominantly
non-cash charges or non-cash benefits);
-- Amortization of acquired technology (non-cash charges related to
technology obtained in acquisitions);
-- Stock-based compensation expense (non-cash charges);
-- The cost of covering employee and employer tax liabilities
(non-recurring cash charges) arising from the special investigation
into our historical stock option granting practices;
-- Purchase accounting adjustment for sale of acquired inventory
(non-cash charges); and
-- Reduction in force costs (non-recurring 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:
-- Gain or loss on settlement of lawsuits (non-recurring charges);
-- Debt conversion inducement expense (non-cash charges associated with
the issuance of additional shares in connection with the exchange of
convertible notes); and
-- Restructuring costs (non-recurring charges).
In calculating non-GAAP income from continuing operations and non-GAAP
income from continuing operations per share in this release, we have also
excluded the following items in applicable periods:
-- Amortization of discount on convertible debt and imputed interest
expense (non-cash charges);
-- Losses on repayment/purchase/exchange of convertible notes
(non-recurring and non-cash charges);
-- Imputed interest related to restructuring (amortization of imputed
interest expense associated with previously incurred restructuring
costs);
-- Gains and losses on sales of assets (non-recurring or non-cash losses
and cash gains related to the periodic disposal of assets no longer
required for current activities);
-- Gains and losses on minority investments (infrequently occurring and
principally non-cash gains and losses related to the disposal of
investments in other companies and non-cash income or loss from these
investments accounted for under the equity method);
-- Other miscellaneous income;
-- Dollar denominated foreign exchange transaction losses (gains)
(non-recurring and non-cash charges);
-- Debt conversion inducement expense (acceleration of the amortization of
previously paid fees associated with the original issuance of the
exchanged portion of convertible notes); and
-- Differences between cash payable for tax and GAAP provision, less
non-recurring items.
In calculating non-GAAP income from discontinued operations and non-GAAP
income from discontinued operations per share in this release, we have also
excluded gains on disposal of a product line and disposal of discontinued
operations.
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
Three
Months
Three Months Ended Nine Months Ended Ended
-------------------- -------------------- ---------
January January January January October
30, 2011 31, 2010 30, 2011 31, 2010 31, 2010
--------- --------- --------- --------- ---------
(Unaudited)
(in thousands, except per share data)
Reconciliation of
GAAP income (loss)
to non-GAAP income
(loss) from
continuing
operations
Reconciliation of
GAAP Gross Profit
to non-GAAP Gross
Profit:
Gross profit per
GAAP $ 84,065 $ 51,695 $ 237,363 $ 120,890 $ 82,400
Gross margin, GAAP 32.0% 31.0% 33.3% 27.4% 34.2%
Adjustments:
Cost of revenues
Change in excess
and obsolete
inventory
reserve 4,589 (24) 5,569 6,035 575
Amortization of
acquired
technology 1,222 1,192 3,614 3,576 1,200
Stock
compensation 1,353 909 3,409 3,228 1,310
Payroll taxes
related to
options
investigation (83) - (83) - -
Purchase
accounting
adjustment for
sale of
acquired
inventory 11 - 11 - -
Reduction in
force costs 1 64 43 240 6
--------- --------- --------- --------- ---------
Total cost
of revenue
adjustments 7,093 2,141 12,563 13,079 3,091
Gross profit,
non-GAAP 91,158 53,836 249,926 133,969 85,491
Gross margin,
non-GAAP 34.7% 32.2% 35.1% 30.4% 35.5%
Reconciliation of
GAAP operating
income (loss) to
non-GAAP operating
income (loss):
Operating income
(loss) per GAAP 24,653 9,126 84,505 (1,623) 36,105
Operating margin
(deficit), GAAP 9.4% 5.5% 11.9% -0.4% 15.0%
Adjustments:
Total cost of
revenue adjustments 7,093 2,141 12,563 13,079 3,091
Research and
development
Reduction in
force costs 25 20 30 49 -
Stock
compensation 1,608 1,363 4,347 4,378 1,702
Payroll taxes
related to
options
investigation (118) - (118) - -
Sales and marketing
Reduction in
force costs 69 - 224 - 81
Stock
compensation 536 463 1,515 1,472 528
Payroll taxes
related to
options
investigation (42) - (42) - -
General and
administrative
Reduction in
force costs 29 54 121 303 50
Stock
compensation 1,189 779 3,636 2,541 1,422
Payroll taxes
related to
options
investigation (73) - (73) 200 -
Litigation
settlement 3,437 (200) 872 127 (2,465)
Debt conversion
expense 5,946 - 5,946 - -
Amortization of
purchased
intangibles 383 426 1,149 1,645 383
Restructuring costs - - - 4,173 -
--------- --------- --------- --------- ---------
Total cost
of revenue
and operating
expense
adjustments 20,082 5,046 30,170 27,967 4,792
Operating income,
non-GAAP 44,735 14,172 114,675 26,344 40,897
Operating margin,
non-GAAP 17.0% 8.5% 16.1% 6.0% 17.0%
Reconciliation of
GAAP income (loss)
to non-GAAP income
(loss) from
continuing
operations:
Income (loss) per
GAAP from
continuing
operations 18,821 5,616 72,027 (36,917) 33,796
Total cost of
revenue and
operating expense
adjustments 20,082 5,046 30,170 27,967 4,792
Non-cash imputed
interest expenses
on convertible debt - 383 742 2,674 367
Loss on
repayment/purchase
of convertible
notes - (28) - 25,039 -
Imputed interest
related to
restructuring 74 - 74 - -
Other income
(expense), net
Loss (gain) on
sale of assets 154 10 161 285 (9)
Loss on minority
investments - - - 1,625 -
Other misc
income (3) - (61) (2) (58)
Foreign exchange
transaction
loss/(gain) 2,357 441 1,819 106 (471)
Debt conversion
expense 620 - 620 - -
Provision for income
tax
Difference
between cash
payable for
taxes and GAAP
provision, less
non-recurring
items 416 - 1,083 - (115)
--------- --------- --------- --------- ---------
Total adjustments 23,700 5,852 34,608 57,694 4,506
--------- --------- --------- --------- ---------
Income, non-GAAP,
from continuing
operations 42,521 11,468 106,635 20,777 38,302
--------- --------- --------- --------- ---------
Reconciliation of
GAAP income (loss)
to non-GAAP income
(loss) from
discontinued
operations:
Income (loss) per
GAAP from
discontinued
operations - (131) (284) 36,881 -
Adjustments:
Reduction in
force costs - - - 6 -
Stock
compensation - - - 704 -
Amortization of
acquired
technology - - - 170 -
Amortization of
purchased
intangibles - - - 77 -
Gain on disposal
of a product
line - - - (1,250) -
Gain on disposal
of discontinued
operations - 165 - (35,888) -
--------- --------- --------- --------- ---------
Total adjustments - 165 - (36,181) -
--------- --------- --------- --------- ---------
Income (loss) from
discontinued
operations,
non-GAAP - 34 (284) 700 -
--------- --------- --------- --------- ---------
Reconciliation of
GAAP net income
(loss) to non-GAAP
net income (loss):
Net income (loss)
per GAAP 18,821 5,485 71,743 (36) 33,796
Total
adjustments
from continuing
operations 23,700 5,852 34,608 57,694 4,506
Total
adjustments
from
discontinuing
operations - 165 - (36,181) -
--------- --------- --------- --------- ---------
Total adjustments 23,700 6,017 34,608 21,513 4,506
--------- --------- --------- --------- ---------
Net income, non-GAAP $ 42,521 $ 11,502 $ 106,351 $ 21,477 $ 38,302
========= ========= ========= ========= =========
Income from
continuing
operations $ 42,521 $ 11,468 $ 106,635 $ 20,777 $ 38,302
Add: interest
expense for
dilutive
convertible notes 1,283 1,349 4,035 1,349 1,374
--------- --------- --------- --------- ---------
Adjusted income from
continuing
operations $ 43,804 $ 12,817 $ 110,670 $ 22,126 $ 39,676
========= ========= ========= ========= =========
Income per share
from continuing
operations - basic $ 0.53 $ 0.18 $ 1.37 $ 0.33 $ 0.50
Income per share
from continuing
operations -
diluted $ 0.47 $ 0.17 $ 1.22 $ 0.34 $ 0.44
Shares used in
computing net
income per share
from continuing
operations - basic 80,080 65,113 77,638 63,131 76,766
Shares used in
computing net
income per share
from continuing
operations -
diluted 93,388 76,082 90,694 64,615 89,521
Continuing
operations
Net income, non-GAAP $ 42,521 $ 11,468 $ 106,635 $ 20,777 $ 38,302
Depreciation expense 8,922 7,638 25,772 21,992 8,684
Amortization 264 291 842 599 289
Interest expense 1,187 1,773 4,442 4,064 1,567
Income tax expense 751 421 2,734 618 682
--------- --------- --------- --------- ---------
Non-GAAP EBITDA $ 53,645 $ 21,591 $ 140,425 $ 48,050 $ 49,524
--------- --------- --------- --------- ---------
Discontinued
operations
Net income (loss),
non-GAAP - 34 (284) 700 -
Depreciation expense - - - 119 -
--------- --------- --------- --------- ---------
Non-GAAP EBITDA $ - $ 34 $ (284) $ 819 $ -
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Non-GAAP
EBITDA $ 53,645 $ 21,625 $ 140,141 $ 48,869 $ 49,524
========= ========= ========= ========= =========
Contact Information: Investor Contact: Kurt Adzema Chief Financial Officer 408-542-5050 or Investor.relations@finisar.com Press contact: Victoria McDonald Sr. Manager, Corporate Communications 408-542-4261