FINISAR FINANCIAL HIGHLIGHTS - THIRD QUARTER ENDED JAN. 31, 2010
Third Third Second
Quarter Quarter Quarter
GAAP Results Ended Ended Ended
Jan. 31, Feb. 1, Nov. 1,
2010 2009 2009
----------- ---------- ----------
(in thousands, except per share amounts)
----------- ---------- ----------
Continuing operations
Total optics revenues $ 166,935 $ 126,081 $ 145,730
Gross margin 31.0% 27.6% 27.3%
Before impairment-restructuring-
retirement:
Operating expenses $ 42,569 $ 84,510 $ 37,583
Operating income (loss) $ 9,126 $ (49,673) $ 2,210
Operating margin (deficit) 5.5% (39.4)% 1.5%
Impairment-restructuring $ -- $ (46,534) $ (6,173)
Gain (loss) on retirement of notes $ 28 $ 3,295 $ (25,067)
Income (loss) $ 5,616 $ (49,295) $ (31,417)
Income (loss) per share-basic $ 0.09 $ (0.83) $ (0.49)
Income (loss) per share-diluted $ 0.08 $ (0.83) $ (0.49)
Basic shares 65,113 59,350 64,198
Diluted shares 66,719 59,350 64,198
Discontinued operations
Loss $ (131) $ (87) $ (67)
Income (loss) per share-basic $ 0.00 $ 0.00 $ 0.00
Income (loss) per share-diluted $ 0.00 $ 0.00 $ 0.00
Basic shares 65,113 59,350 64,198
Diluted shares 66,719 59,350 64,198
Third Third Second
Quarter Quarter Quarter
Non-GAAP Results (a) Ended Ended Ended
Jan. 31, Feb. 1, Nov. 1,
2010 2009 2009
----------- ----------- ----------
(in thousands, except per share amounts)
----------- ----------- ----------
Continuing operations
Total optics revenues $ 166,935 $ 126,081 $ 145,730
Gross margin 32.2% 28.7% 29.6%
Operating expenses $ 39,664 $ 33,822 $ 34,201
Operating income $ 14,172 $ 2,417 $ 8,912
Operating margin 8.5% 1.9% 6.1%
Income $ 11,468 $ 1,615 $ 7,544
Income per share-basic $ 0.18 $ 0.03 $ 0.12
Income per share-diluted $ 0.17 $ 0.03 $ 0.11
Basic shares 65,113 59,350 64,198
Diluted shares 76,082 59,796 65,655
Discontinued operations
Income (loss) $ 34 $ 659 $ (67)
Income (loss) per share-basic and
diluted $ 0.00 $ 0.01 $ 0.00
Basic shares 65,113 59,350 64,198
Diluted shares 76,082 59,796 65,655
(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 third quarter under GAAP include the following:
-- Total revenues from continuing operations increased to $166.9 million, up $21.2 million, or 14.6%, from $145.7 million in the preceding quarter and $40.8 million, or 32.4%, from $126.1 million in the third quarter of the prior year; the last three quarters have seen revenues increase sequentially by 19.8%, 13.2% and 14.6%, respectively; -- Of the $21.2 million increase in revenues from the preceding quarter, the sale of products for applications greater than 10 Gbps increased $12.1 million, the sale of products applications less than 10 Gbps applications increased $4.5 million and the sale of ROADM products increased $3.7 million; -- Of the $40.8 million increase in revenues from the third quarter of the prior year, the sale of products for applications greater than 10 Gbps increased $18.3 million, the sale of ROADM products increased $12.9 million, and the sale of products for applications less than 10 Gbps increased $7.2 million; -- Gross margin from continuing operations increased to 31.0% from 27.3% in the preceding quarter and 27.6% in the third quarter of the prior year; -- Operating income from continuing operations increased to $9.1 million, or 5.5% of revenues, compared to $2.2 million, or 1.5% of revenues, in the preceding quarter (before a charge for restructuring) and an operating loss of $3.1 million, or (2.5)% of revenues, in the third quarter of the prior year; -- Net income from continuing operations was $5.6 million, or $0.08 per diluted share, compared to a loss of $31.4 million, or $(0.49) per share, in the preceding quarter and a loss of $49.3 million, or $(0.83) per share, in the third quarter of the prior year, which included a $46.5 million charge for the impairment of goodwill; -- Cash and short-term investments, plus other long-term investments that can be readily converted into cash, totaled $79.0 million at the end of the third quarter compared to $80.7 million at the end of the preceding quarter, reflecting net proceeds of $4.5 million from a loan tied to certain foreign operations and $10.0 million in borrowings under a secured credit line with Wells Fargo Foothill, LLC, which helped to fund the retirement of $5.5 million aggregate principal amount of 2.5% convertible notes and the early retirement of an equipment lease totaling approximately $2.6 million. Excluding the impact of these financing transactions, the Company's cash position decreased by approximately $8.7 million due primarily to the growth in working capital such as accounts receivable and inventory, which increased by approximately $30.0 million in the quarter. Finisar has classified certain of its investments as long-term based on its intent to hold these securities until maturity, although they can be readily sold if required; and -- Under Finisar's $70.0 million secured credit facility with Wells Fargo Foothill, LLC, $54.9 million was available to borrow at the end of the third quarter. -- 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, impairments and financing transactions. For the third quarter of fiscal 2010, these excluded items related to continuing operations totaled $5.9 million of which $3.5 million is non-cash stock-based compensation expense; $1.6 million is a non-cash amortization charge related to acquired developed technology and purchased intangibles arising from previous acquisitions; $441,000 is a non-cash charge related to foreign currency translation; and $383,000 is a non-cash charge for imputed interest expense on the Company's debt obligations. Other items are as described in Finisar Non-GAAP Financial Measures below.Excluding these items:
-- Non-GAAP gross margin from continuing operations was 32.2% in the third quarter compared to 29.6% in the preceding quarter and 28.7% in the third quarter of the prior year reflecting the cost benefit of spreading fixed manufacturing costs over a larger number of units and a more favorable product mix; -- Non-GAAP operating expenses for continuing operations were $39.7 million in the third quarter, an increase of $5.5 million from the preceding quarter and $5.8 million from the third quarter of the prior year. The increase in the current quarter reflects in part the restoration of salary cuts taken during the previous year as well as variable compensation associated with the company's improved performance. Approximately $2 million of the increase from the preceding quarter was for items other than those related to compensation; -- Non-GAAP operating income from continuing operations was $14.1 million, or 8.5% of revenues, in the third quarter, up $5.3 million from $8.9 million, or 6.1% of revenues, in the preceding quarter, and $11.8 million from $2.4 million, or 1.9% of revenues, in the third quarter of the prior year; -- Non-GAAP net income from continuing operations was $11.5 million, or $0.17 per diluted share, compared to net income of $7.5 million, or $0.11 per diluted share, in the preceding quarter and net income of $1.6 million, or $0.03 per basic and diluted share, in the third quarter of the prior year; and -- Non-GAAP EBITDA from continuing operations rose to $21.6 million in the third quarter compared to $16.0 million in the preceding quarter and $10.4 million in the third quarter of the prior year.COMMENTARY "This marks our third consecutive quarter of growth in revenues at double digit rates," said Jerry Rawls, Finisar's executive Chairman of the Board. "This is a result of a winning product portfolio and strong customer support as we worked to meet a surge in product demand. A robust order trend and healthy backlog have continued into our fourth fiscal quarter which should enable us to make a strong finish to this fiscal year." "I am delighted with our progress in manufacturing operations and the improvements we were able to achieve in manufacturing yields," said Eitan Gertel, Finisar's Chief Executive Officer. "Our ongoing efforts to reduce product costs and transition production to our off-shore locations during the fourth fiscal quarter should position us well for realizing our previous target of 10% operating margin on a non-GAAP basis in the near future." OUTLOOK The Company indicated that it currently expects that revenues for its fourth fiscal quarter ending April 30, 2010 will likely range from $175 to $185 million. On a GAAP basis, gross margin is expected to be approximately the same as the third quarter with operating margin in the range of 4.5% to 6%. Additional non-cash and infrequently occurring charges excluded in calculating non-GAAP operating income are expected to total approximately $6 to $8 million. As a result, on a non-GAAP basis, gross margin is also expected to be approximately the same as the third quarter with non-GAAP operating margin in the range of 8.5% to 10%. ORGANIZATION CHANGE It was announced today that Steve Workman, Finisar's Chief Financial Officer, will assume the role of Sr. Vice President of Corporate Development and Investor Relations. Steve has served as Finisar's CFO since joining the company in 1999 prior to its initial public offering. Kurt Adzema, who has served as Finisar's Vice President of Strategy & Corporate Development since joining the Company in 2005, will become Finisar's CFO. The change is expected to be effective upon the filing of the Company's Form 10-Q for the quarter ending January 31, 2010. "During Steve's tenure our optic revenues have grown more than 30X and he has successfully guided us through two financial crises," said Jerry Rawls, Finisar's executive Chairman of the Board. "We felt that this redefinition of roles will help in managing the next phase of growth here at Finisar and that now was an optimal time for this transition with the former-Optium business largely integrated with the rest of Finisar. Steve helped coordinate our corporate development efforts in the early days including Infineon and Honeywell. Since joining in 2005, Kurt has led our corporate development initiatives including the merger with Optium and the divestiture of the Network Tools division. The experience he gained though his current role and his strong finance background will serve him well in his new role. And with Steve's continued role at Finisar, I think this will be a smooth transition as we seek to capitalize on the talents of both of these individuals." CONFERENCE CALL Finisar will discuss its financial results for the third quarter and its current business outlook during its regular quarterly conference call scheduled for today, March 3, 2010, at 2:00 p.m. PST/5:00 EST. To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com or dial 866-393-6455 (domestic) or 706-643-4465 (international) and enter conference ID 55256537. 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 9, 2009) and quarterly SEC filings. ABOUT FINISAR Finisar Corporation (
Finisar Corporation
Consolidated Statements of Operations
Three Months
Three Months Ended Nine Months Ended Ended
------------------- -------------------- ----------
January February January February November
31, 2010 1, 2009 31, 2010 1, 2009 1, 2009
-------- --------- -------- ---------- ----------
(Unaudited)
(in thousands, except per share data)
Revenues $166,935 $ 126,081 $441,390 $ 389,601 $ 145,730
Cost of revenues 114,048 89,789 316,923 270,460 104,745
Amortization of
acquired developed
technology 1,192 1,455 3,577 3,558 1,192
-------- --------- -------- ---------- ----------
Gross profit 51,695 34,837 120,890 115,583 39,793
Gross margin 31.0% 27.6% 27.4% 29.7% 27.3%
Operating expenses:
Research and
development 24,892 21,181 67,514 60,368 21,575
Sales and
marketing 7,922 7,043 22,054 21,822 7,313
General and
administrative 9,329 9,050 27,127 28,099 8,177
Acquired
in-process
research and
development - - - 10,500 -
Amortization of
purchased
intangibles 426 702 1,645 1,445 518
Impairment of
goodwill and
intangible
assets - 46,534 - 225,302 -
Restructuring
costs - - 4,173 - 4,173
-------- --------- -------- ---------- ----------
Total operating
expenses 42,569 84,510 122,513 347,536 41,756
-------- --------- -------- ---------- ----------
Income (loss) from
operations 9,126 (49,673) (1,623) (231,953) (1,963)
Interest income 85 119 104 1,744 9
Interest expense (2,241) (2,724) (6,842) (12,080) (2,167)
Gain (loss) on
repayment/purchase
of convertible notes 28 3,295 (25,039) 3,064 (25,067)
Other income
(expense), net (961) (744) (2,899) (3,692) (2,191)
-------- --------- -------- ---------- ----------
Income (loss) from
continuing
operations before
income taxes 6,037 (49,727) (36,299) (242,917) (31,379)
Provision for
(benefit from)
income taxes 421 (432) 618 (7,429) 38
-------- --------- -------- ---------- ----------
Income (loss) from
continuing
operations 5,616 (49,295) (36,917) (235,488) (31,417)
Income (loss) from
discontinued
operations, net of
taxes (131) (87) 36,881 903 (67)
-------- --------- -------- ---------- ----------
Net income (loss) $ 5,485 $ (49,382) $ (36) $ (234,585) $ (31,484)
======== ========= ======== ========== ==========
Income (loss) per
share from
continuing
operations - basic $ 0.09 $ (0.83) $ (0.58) $ (4.20) $ (0.49)
Income (loss) per
share from
continuing
operations -
diluted $ 0.08 $ (0.83) $ (0.58) $ (4.20) $ (0.49)
Income (loss) per
share from
discontinued
operations - basic $ (0.00) $ (0.00) $ 0.58 $ 0.02 $ (0.00)
Income (loss) per
share from
discontinued
operations -
diluted $ (0.00) $ (0.00) $ 0.58 $ 0.02 $ (0.00)
Shares used in
computing net loss
per share from
continuing
operations - basic 65,113 59,350 63,131 56,039 64,198
Shares used in
computing net loss
per share from
continuing
operations -
diluted 66,719 59,350 63,131 56,039 64,198
Shares used in
computing net
income (loss) per
share from
discontinued
operations - basic 65,113 59,350 63,131 56,039 64,198
Shares used in
computing net
income (loss) per
share from
discontinued
operations -
diluted 66,719 59,350 63,131 56,039 64,198
Finisar Corporation
Consolidated Balance Sheets
(In thousands)
January November August 2, April 30,
31, 2010 1, 2009 2009 2009
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash
equivalents $ 78,914 $ 80,595 $ 60,327 $ 37,129
Short-term available-
for-sale investments 67 79 92 92
Accounts receivable,
net 116,399 95,924 99,466 81,820
Accounts receivable,
other 8,456 9,747 8,512 10,033
Inventories 122,680 113,133 108,686 107,764
Prepaid expenses 7,024 6,738 5,568 6,795
Current assets
associated with
discontinued operations - - - 4,863
---------- ---------- ---------- ----------
Total current assets 333,540 306,216 282,651 248,496
Property, plant and
improvements, net 83,926 81,077 79,492 81,606
Purchased technology, net 12,882 14,074 15,267 16,459
Other intangible assets, net 12,115 12,559 13,102 13,427
Minority investments 12,289 12,289 14,289 14,289
Other assets 5,961 6,183 2,427 2,584
Non-current assets
associated with
discontinued operations - - - 3,527
---------- ---------- ---------- ----------
Total assets $ 460,713 $ 432,398 $ 407,228 $ 380,388
========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 65,124 $ 54,915 $ 52,264 $ 48,421
Accrued compensation 12,698 10,885 9,048 11,428
Other accrued
liabilities 21,059 25,403 25,102 30,513
Deferred revenue 5,516 2,079 2,073 1,703
Current portion of
Convertible notes 28,480 33,334 - -
Current portion of
long-term debt 4,000 6,241 6,173 6,107
Short-term debt 14,500 - - -
Non-cancelable purchase
obligations 521 596 657 2,965
Current liabilities
associated with
discontinued operations - - - 3,160
---------- ---------- ---------- ----------
Total current
liabilities 151,898 133,453 95,317 104,297
Long-term liabilities:
Convertible notes 100,000 100,000 135,490 134,255
Long-term debt 10,750 12,151 13,737 15,305
Other long-term
liabilities 6,008 5,832 2,352 2,511
Deferred income taxes 1,136 1,136 973 1,149
Non-current liabilities
associated with
discontinued operations - - - 650
---------- ---------- ---------- ----------
Total long-term
liabilities 117,894 119,119 152,552 153,870
Stockholders' equity:
Common stock 65 65 61 60
Additional paid-in
capital 1,892,186 1,887,167 1,838,508 1,831,224
Accumulated other
comprehensive income 10,431 9,840 6,552 2,662
Accumulated deficit (1,711,761) (1,717,246) (1,685,762) (1,711,725)
---------- ---------- ---------- ----------
Total stockholders'
equity 190,921 179,826 159,359 122,221
---------- ---------- ---------- ----------
Total liabilities and
stockholders' equity $ 460,713 $ 432,398 $ 407,228 $ 380,388
========== ========== ========== ==========
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, 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); -- Duplicate facility costs during facility move (non-recurring charges); -- Stock-based compensation expense (non-cash charges); -- Purchase accounting adjustment for sale of acquired inventory (non-cash and non-recurring charges); and -- Reduction in force costs (non-recurring charges).In calculating non-GAAP operating income, 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:
-- Options investigation costs included in general and administrative expense (non-recurring cash charges related to the special investigation into our historical stock option granting practices) and the cost of covering employee and employer tax liabilities (non-recurring cash charges) arising from that investigation recorded in each line of the income statement; -- Disposal of a product line (non-recurring charges); -- Gain or loss on settlement of lawsuits (non-recurring charges); -- Acquired in-process research and development expense (non-recurring and non-cash charges); -- Amortization of purchased intangibles (non-cash charges related to prior acquisitions); -- Restructuring charges associated with the abandonment of certain facilities (non-recurring charges); and -- Impairment charges associated with intangible assets (non-cash and non-recurring charges).In calculating non-GAAP net income from continuing operations and non-GAAP net income from continuing operations per share, we have also excluded the following items in applicable periods:
-- Amortization of discount on convertible debt and imputed interest expense (non-cash charges); -- Gains and losses on debt extinguishment (non-recurring and non-cash charges or income); -- 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); -- Foreign exchange transaction losses (non-recurring and non-cash charges); -- Tax charges arising from timing difference related to asset purchases (non-cash provision); and -- Cumulative effect of a change in accounting principle (non-recurring and non-cash charges or income).In calculating non-GAAP income (loss) from discontinued operations and non-GAAP net income (loss) from discontinued operations per share, 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 February January February November
31, 2010 1, 2009 31, 2010 1, 2009 1, 2009
------- -------- -------- --------- ---------
(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 $51,695 $ 34,837 $120,890 $ 115,583 $ 39,793
Gross margin, GAAP 31.0% 27.6% 27.4% 29.7% 27.3%
Adjustments:
Cost of revenues
Change in excess and
obsolete inventory
reserve (24) (957) 6,035 3,543 805
Amortization of
acquired technology 1,192 1,455 3,576 3,558 1,192
Duplicate facility
costs during
facility move - - - 287 -
Stock compensation 909 776 3,228 2,437 1,288
Purchase accounting
adjustment for sale
of acquired
inventory - - - 1,402 -
Reduction in force
costs 64 128 240 164 35
------- -------- -------- --------- ---------
Total cost of
revenue
adjustments 2,141 1,402 13,079 11,391 3,320
Gross profit, non-GAAP 53,836 36,239 133,969 126,974 43,113
Gross margin, non-GAAP 32.2% 28.7% 30.4% 32.6% 29.6%
Reconciliation of GAAP
operating income (loss)
to non-GAAP operating
income (loss):
Operating loss per GAAP 9,126 (49,673) (1,623) (231,953) (1,963)
Operating margin, GAAP 5.5% -39.4% -0.4% -59.5% -1.3%
Adjustments:
Total cost of revenue
adjustments 2,141 1,402 13,079 11,391 3,320
Research and development
Reduction in force
costs 20 111 49 187 -
Stock compensation 1,363 1,661 4,378 4,030 1,490
Sales and marketing
Reduction in force
costs - 118 - 118 -
Stock compensation 463 455 1,472 1,222 431
General and
administrative
Reduction in force
costs 54 217 303 217 200
Stock compensation 779 891 2,541 2,092 726
Payroll taxes
related to options
investigation - - 200 - 17
Costs related to
options
investigation - (1) - 275 -
IPO Laddering
Settlement (200) - 127 - -
Amortization of
purchased intangibles 426 702 1,645 1,444 518
Acquired in-process R&D - - - 10,500 -
Restructuring costs - - 4,173 - 4,173
Impairment of intangible
assets - 46,534 - 225,302 -
------- -------- -------- --------- ---------
Total cost of
revenue and
operating
expense
adjustments 5,046 52,090 27,967 256,778 10,875
Operating income,
non-GAAP 14,172 2,417 26,344 24,825 8,912
Operating margin,
non-GAAP 8.5% 1.9% 6.0% 6.4% 6.1%
Reconciliation of GAAP
income (loss) to
non-GAAP income (loss)
from continuing
operations:
Income (loss) per GAAP
from continuing
operations before
cumulative effect of
change in accounting
principle 5,616 (49,295) (36,917) (235,488) (31,417)
Total cost of revenue
and operating expense
adjustments 5,046 52,090 27,967 256,778 10,875
Amortization of discount
on convertible debt - - - 1,817 -
No cash imputed interest
expenses on convertible
debt 383 1,255 2,674 3,725 1,056
Loss on repayment/purchase
of convertible notes (28) (3,295) 25,039 (3,064) 25,067
Other income (expense),
net
Loss (gain) on sale
of assets 10 104 285 497 254
Loss (gain) on
minority investments - - 1,625 797 2,000
Other misc income - - (2) (558) -
Foreign exchange
transaction
loss/(gain) 441 756 106 2,485 (291)
Provision for income tax - -
Timing difference
related to asset
purchases - - - (7,847) -
------- -------- -------- --------- ---------
Total adjustments 5,852 50,910 57,694 254,630 38,961
------- -------- -------- --------- ---------
Income, non-GAAP, from
continuing operations 11,468 1,615 20,777 19,142 7,544
------- -------- -------- --------- ---------
Reconciliation of GAAP
income (loss) to
non-GAAP income (loss)
from discontinued
operations:
Income (loss) per GAAP
from discontinued
operations (131) (87) 36,881 903 (67)
Adjustments:
Reduction in force
costs - 8 6 127 -
Stock compensation - 349 704 1,180 -
Amortization of
acquired technology - 250 170 896 -
Amortization of
purchased
intangibles - 139 77 417 -
Gain (loss) on
disposal of a
product line - - (1,250) 919 -
Gain on disposal of
discontinued
operations 165 - (35,888) - -
------- -------- -------- --------- ---------
Total adjustments 165 746 (36,181) 3,539 -
------- -------- -------- --------- ---------
Income (loss) from
discontinued
operations, non-GAAP 34 659 700 4,442 (67)
------- -------- -------- --------- ---------
Reconciliation of GAAP
net income (loss) to
non-GAAP net income
(loss):
Net loss per GAAP 5,485 (49,382) (36) (234,585) (31,484)
Total adjustments from
continuing operations 5,852 50,910 57,694 254,630 38,961
Total adjustments from
discontinuing operations 165 746 (36,181) 3,539 -
Cumulative Effect
Cumulative effect of
change in accounting
principle - - - - -
------- -------- -------- --------- ---------
Total adjustments 6,017 51,656 21,513 258,169 38,961
------- -------- -------- --------- ---------
Net income, non-GAAP $11,502 $ 2,274 $ 21,477 $ 23,584 $ 7,477
======= ======== ======== ========= =========
Income per share from
continuing operations -
basic $ 0.18 $ 0.03 $ 0.33 $ 0.34 $ 0.12
Income per share from
continuing operations -
diluted $ 0.17 $ 0.03 $ 0.32 $ 0.34 $ 0.11
Income (loss) per share
from discontinued
operations - basic $ 0.00 $ 0.01 $ 0.01 $ 0.08 $ (0.00)
Income (loss) per share
from discontinued
operations - diluted $ 0.00 $ 0.01 $ 0.01 $ 0.08 $ (0.00)
Shares used in computing
net income per share -
basic 65,113 59,350 63,131 56,039 64,198
Shares used in computing
net income per share -
diluted 76,082 59,796 64,615 56,526 65,655
Continuing operations
Net income, non-GAAP $11,468 $ 1,615 $ 20,777 $ 19,142 $ 7,544
Depreciation expense 7,638 7,708 21,992 21,121 7,182
Amortization 291 173 599 641 181
Interest expense 1,773 1,350 4,064 4,794 1,102
Income tax expense 421 (432) 618 418 38
------- -------- -------- --------- ---------
Non-GAAP EBITDA $21,591 $ 10,414 $ 48,050 $ 46,116 $ 16,047
------- -------- -------- --------- ---------
Discontinued operations
Net income (loss),
non-GAAP 34 659 700 4,442 (67)
Depreciation expense - 196 119 619 -
------- -------- -------- --------- ---------
Non-GAAP EBITDA $ 34 $ 855 $ 819 $ 5,061 $ (67)
------- -------- -------- --------- ---------
------- -------- -------- --------- ---------
Total Non-GAAP EBITDA $21,625 $ 11,269 $ 48,869 $ 51,177 $ 15,980
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Contact Information: Contact: Steve Workman Chief Financial Officer 408-548-1000 Victoria McDonald Senior Manager, Corporate Communications 408-542-4261 investor.relations@Finisar.com