-- Revenues of $107.5 million were approximately the same as in the prior
quarter and up 16.3% from the third quarter of the prior fiscal year. These
results compare to management's revenue guidance of $108-$112 million for
the quarter.
-- Revenues continued to be impacted by excess inventories of short
wavelength transceivers on hand at certain customers, primarily for SAN
applications, and sales of those products were down $7.1 million from the
previous quarter; however, sales of products for metro-telecom applications
rose by a like amount in the third quarter.
-- Non-GAAP gross margins improved significantly in comparison to the
first half of the fiscal year due to a favorable shift in the optics
product mix toward 10Gig and metro-telecom applications. Non-GAAP gross
margins exclude stock compensation expense and certain other charges,
mostly of a non-cash nature.
-- Cash and short-term investments, plus other long-term investments
which can be readily converted into cash, totaled $135.9 million at January
28, 2007, up from $130.0 million at the end of last quarter. The Company
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.
"We are disappointed that for the first time in 14 quarters our revenues
did not grow sequentially," said Jerry Rawls, Finisar's President and CEO.
"The culprits were excess inventory of short wavelength transceivers and
10G parts supply limitations. Nevertheless, we were pleased with the strong
demand for our 10G, 40Gig, and metro-telecom products. Shipments of 10G and
40Gig products totaled $11.6 million in the third quarter, up 44% from the
second quarter and more than double from one year ago. More importantly,
the favorable shift in product mix helped us significantly improve our
third quarter gross margins over both the first half of the year and the
previous quarter."
NASDAQ LISTING UPDATE
As previously announced, on December 14, 2006, the Company received a Staff
Determination letter from the Nasdaq Stock Market indicating that the
Company was not in compliance with Nasdaq's continued listing requirements
due to the delay in the filing of its quarterly report on Form 10-Q for the
period ended October 29, 2006 and, therefore, that its common stock was
subject to delisting from the Nasdaq Global Select Market. On February 15,
2007, the Company appeared before a Nasdaq Listing Qualifications Panel to
present a plan for regaining compliance. The Panel has not yet rendered a
decision. Pending the Panel's decision, Finisar's common stock will
continue to be traded on the Nasdaq Global Select Market.
While the Company is committed to completing the voluntary review of its
stock option grant practices as quickly as possible, it will not be able to
complete this review in time to file by March 9, 2007 its quarterly report
on Form 10-Q for the quarter ended January 28, 2007. As a result, the
Company intends to file a Form 12b-25 with the Securities and Exchange
Commission stating that it will be unable to file until its review has been
completed.
CONFERENCE CALL
Finisar plans to review its preliminary third quarter results and discuss
its current business outlook during a conference call for investors at 5:00
p.m. EST (2:00 p.m. PST) today, March 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.
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 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
any 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.
NON-GAAP FINANCIAL MEASURES
The Company provides supplemental information regarding the Company's
operational performance on a non-GAAP basis which excludes various non-cash
and cash charges, principally related to acquisitions, restructuring
activities and financing transactions. Non-GAAP gross profit and non-GAAP
net income (loss), as reported by the Company, give an indication of the
Company's baseline performance before gains, losses or other charges that
are considered by management to be outside of our core operating results.
While non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles in the United
States, the Company's management uses this information for the purpose of
evaluating the Company's historical and prospective financial performance
in the ordinary course of business. The Company believes that providing
this information to its investors, in addition to the GAAP presentation,
allows investors to better evaluate the Company's progress over time and
its financial results in comparison to other companies with whom it
competes.
ABOUT FINISAR
Finisar Corporation (Contact Information: Contact: Steve Workman Chief Financial Officer 408-548-1000 Investor Relations 408-542-5050 investor.relations@Finisar.com