-- GAAP revenues for the first quarter of 2009 were $66.6 million
compared to $86.2 million on an adjusted GAAP basis for the fourth quarter
of 2008 and $95.5 million on an invoiced shipment basis in the first
quarter of 2008.
-- GAAP gross margins for the quarter were 30%. Excluding non-cash stock-
based compensation, non-GAAP gross margins were 31% in the first quarter of
2009 compared to 36% on an adjusted GAAP basis for the fourth quarter of
2008 and 45% on an invoiced shipments basis in the first quarter of 2008.
-- The GAAP net loss for the quarter was $24.3 million, or $0.26 per
share. Excluding non-cash stock-based compensation, the net loss on a non-
GAAP basis was $17.6 million or $0.19 per share, in the first quarter of
2009 compared to a net loss of $9.0 million, or $0.10 per share, on an
adjusted GAAP basis in the fourth quarter of 2008 and net income of $12.6
million, or $0.13 per diluted share, on an invoiced shipments basis, for
the first quarter of 2008.
Management Commentary
"The combination of macroeconomic effects and timing associated with some
large deployments put downward pressure on our revenue and gross margins
for the first quarter," said Jagdeep Singh, president and chief executive
officer of Infinera. "However, we saw continued momentum with tier-one
carriers, as Infinera was selected by two additional European PTTs.
"In addition, we continue to experience a robust level of DWDM activity
with carriers worldwide and see additional evidence that our unique
PIC-based value proposition is resonating with existing customers and
prospects," said Singh. "We also continue to make significant strides in
advancing our technology lead. As a result, we believe that we are
well-positioned to resume top-line growth and improved bottom-line
performance as the macroeconomic environment improves."
The company noted the following Q1 highlights:
-- The selection of Infinera by the two new European-based Tier 1
carriers continues the company's string of successes in Europe, begun
almost 11 months ago with its win at Deutsche Telecom.
-- At the OFC tradeshow last month, Infinera successfully demonstrated
its 400 Gbps PIC integrating ten 40Gbps channels.
-- Enabled by its new ILS2 line system, the company also won new deals
that included submarine network routes, an important growth segment in the
DWDM space.
Footnote: For an explanation of our use of Non-GAAP, Invoiced Shipments and
Adjusted GAAP measures and a full reconciliation of these measures to our
GAAP results, please see the section of the accompanying tables titled
"GAAP to Non-GAAP, Invoiced Shipment and Adjusted GAAP Reconciliations." We
have not shown comparisons to our first quarter 2008 GAAP results because
those results were significantly affected by the recognition of ratable
product and related support and services revenue from shipments made prior
to the first quarter of 2008, which we believe makes those comparisons less
useful for investors. See our GAAP Condensed Consolidated Statements of
Operations attached to this release for these GAAP to GAAP comparisons.
Conference Call Information:
Infinera will host a conference call for analysts and investors to discuss
its first quarter results and second quarter outlook today at 5:00 p.m.
Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference
call will also be accessible from the "Investor Relations" section of the
company's website at www.infinera.com. Following the webcast, an archived
version will be available on the website for 30 days. To hear the replay,
parties in the United States and Canada should call 1-866-457-5717.
International parties can access the replay at +1-203-369-1295.
About Infinera
Infinera provides Digital Optical Networking systems to telecommunications
carriers worldwide. Infinera's systems are unique in their use of a
breakthrough semiconductor technology: the Photonic Integrated Circuit
(PIC). Infinera's systems and PIC technology are designed to provide
optical networks with simpler and more flexible engineering and operations,
faster time-to-service, and the ability to rapidly deliver differentiated
services without reengineering their optical infrastructure. For more
information, please visit www.infinera.com.
Forward-Looking Statements
This press release contains forward-looking statements, including
statements about our products and business and statements about our
experiencing a robust level of DWDM activity with carriers worldwide, our
seeing evidence that our PIC-based value proposition is resonating with
existing customers and prospects, our continuing to make significant
strides in advancing our technology lead, and our belief that we are
well-positioned to resume top-line growth and improved bottom-line
performance as the macroeconomic environment improves. These
forward-looking statements involve risks and uncertainties, as well as
assumptions that if they do not fully materialize or prove incorrect, could
cause our results to differ materially from those expressed or implied by
such forward-looking statements. The risks and uncertainties that could
cause our results to differ materially from those expressed or implied by
such forward-looking statements include our ability to react to trends and
challenges in our business and the markets in which we operate; our ability
to anticipate market needs and develop new or enhanced products to meet
those needs; the adoption rate of our products; our ability to establish
and maintain successful relationships with our customers; our ability to
reduce customer concentration; our ability to compete in our industry;
fluctuations in demand, sales cycles and prices for our products and
services; shortages or price fluctuations in our supply chain; our ability
to protect our intellectual property rights; general political, economic
and market conditions and events; and other risks and uncertainties
described more fully in our documents filed with or furnished to the
Securities and Exchange Commission (SEC). More information about these and
other risks that may impact Infinera's business are set forth in our annual
report on Form 10-K, which was filed with the SEC on February 17, 2009, as
well as subsequent reports filed with the SEC. All forward-looking
statements in this press release are based on information available to us
as of the date hereof, and we assume no obligation to update these
forward-looking statements.
Non-GAAP and other Financial Measures
In addition to disclosing financial measures prepared in accordance with
United States Generally Accepted Accounting Principles (GAAP), this press
release and the accompanying tables contain certain non-GAAP and other
financial measures that reflect invoiced shipments, adjusted GAAP revenue
and exclude non-GAAP non-cash stock-based compensation. For a description
of these non-GAAP financial measures, including the reasons why management
uses each measure, and reconciliations of these non-GAAP financial measures
to the most directly comparable GAAP financial measures, please see the
section of the accompanying tables titled "GAAP to Non-GAAP, Invoiced
Shipments and Adjusted GAAP Reconciliations" as well as the accompanying
notes on the use of certain non-GAAP measures. We anticipate disclosing
forward-looking non-GAAP and other financial information in our conference
call to discuss our first quarter of 2009 results, including an estimate of
non-GAAP earnings for the second quarter of 2009 that excludes non-cash
stock-based compensation expenses related to our equity awards and the
right to purchase common stock under our Employee Stock Purchase Plan in
the period.
A copy of this press release can be found on the investor relations page of
Infinera's website at www.infinera.com.
Infinera Corporation and the Infinera logo are trademarks or registered
trademarks of Infinera Corporation. All other trademarks used or mentioned
herein belong to their respective owners.
Infinera Corporation
GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
--------------------
March 28, March 29,
2009 2008
--------- ---------
Revenue:
Product $ 59,148 $ 64,128
Ratable product and related support and services 1,469 72,386
Services 5,963 1,739
--------- ---------
Total revenue 66,580 138,253
Cost of revenue (1):
Cost of product 43,865 39,665
Cost of ratable product and related support
and services 730 35,831
Cost of services 2,015 1,190
--------- ---------
Total cost of revenue 46,610 76,686
Gross profit 19,970 61,567
Operating expenses (1):
Sales and marketing 11,123 10,246
Research and development 21,997 18,293
General and administrative 10,127 8,417
Amortization of intangible assets 37 37
--------- ---------
Total operating expenses 43,284 36,993
Income (loss) from operations (23,314) 24,574
Other income (expense), net:
Interest income 918 3,303
Interest expense - (3)
Other gain (loss), net: (1,814) 880
--------- ---------
Total other income (expense), net (896) 4,180
Income (loss) before provision of income taxes (24,210) 28,754
Provision for income taxes 118 1,160
--------- ---------
Net income (loss) $ (24,328) $ 27,594
========= =========
Net income (loss) per common share
Basic $ (0.26) $ 0.30
========= =========
Diluted $ (0.26) $ 0.29
========= =========
Weighted average shares used in computing net
income (loss) per common share
Basic 94,275 91,250
========= =========
Diluted 94,275 96,692
========= =========
(1) The following table summarizes the effects of stock-based compensation
related to employees and non-employees for the three months ended March 28,
2009 and March 29, 2008:
Three Months Ended
--------------------
March 28, March 29,
2009 2008
--------- ---------
Cost of revenue $ 379 $ 208
Research and development 1,732 1,223
Sales and marketing 1,414 850
General and administration 2,645 1,502
--------- ---------
6,170 3,783
Cost of revenue - amortization from balance sheet* 566 1,150
--------- ---------
Total stock-based compensation expense $ 6,736 $ 4,933
========= =========
* Stock-based compensation expense deferred to inventory and deferred
inventory costs in prior periods and recognized in the current period.
GAAP to Non-GAAP, Invoiced Shipment and Adjusted GAAP Reconciliations:
Infinera Corporation
GAAP to Non-GAAP Reconciliation
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 28, 2009
-------------------------------------
Stock
GAAP Comp(1) Non-GAAP
---------- ---------- ----------
Revenue
Product and ratable revenue $ 60,617 $ - $ 60,617
Services revenue 5,963 - (a) 5,963
---------- ---------- ----------
Total revenue 66,580 - 66,580
Cost of revenue 46,610 (945)(d) 45,665
---------- ---------- ----------
Gross profit 19,970 945 20,915
Gross margin 30% 31%
Operating expenses 43,284 (5,791) 37,493
---------- ---------- ----------
Loss from operations (23,314) 6,736 (16,578)
Other income (expense), net (896) - (896)
---------- ---------- ----------
Loss before provision for income
taxes (24,210) 6,736 (17,474)
Provision for income taxes 118 - 118
---------- ---------- ----------
Net loss $ (24,328) $ 6,736 $ (17,592)
========== ========== ==========
Net loss per common share:
Basic $ (0.26) $ (0.19)
========== ==========
Diluted $ (0.26) $ (0.18)*
========== ==========
Weighted average shares used in
computing net loss per common
share:
Basic 94,275 94,275
========== ==========
Diluted 94,275 97,592*
========== ==========
(1) See footnote to the Condensed Consolidated Statements of Operations for
a summary of the effects of stock-based compensation related to employees
and non-employees for the three months ended March 28, 2009.
* Diluted shares used to calculate net loss per share on a non-GAAP basis
provided for informational purposes only.
Infinera Corporation
GAAP to Adjusted GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
Three Months Ended December 27, 2008
-----------------------------------------------------
Adjusted
Adjusted GAAP
Adjusted GAAP Excluding
Deferral GAAP Stock Stock
GAAP Adjustments Results Comp Comp
-------- -------- -------- --------- --------
Revenue
Product and ratable
revenue $ 92,288 $(13,102)(b)$ 79,186 $ - $ 79,186
Services revenue 7,056 - 7,056 - 7,056
-------- -------- -------- --------- --------
Total revenue 99,344 (13,102) 86,242 - 86,242
Cost of revenue 61,378 (4,951)(e) 56,427 (904)(f) 55,523
-------- -------- -------- --------- --------
Gross profit 37,966 (8,151) 29,815 904 30,719
Gross margin 38% 36%
Operating expenses 44,930 - 44,930 (4,930)(f) 40,000
-------- -------- -------- --------- --------
Income (loss) from
operations (6,964) (8,151) (15,115) 5,834 (9,281)
Other income
(expense), net (428) - (428) - (428)
-------- -------- -------- --------- --------
Income (loss) before
income taxes (7,392) (8,151) (15,543) 5,834 (9,709)
Provision for
(benefit from)
income taxes (704) - (704) - (704)
-------- -------- -------- --------- --------
Net income (loss) $ (6,688) $ (8,151) $(14,839) $ 5,834 $ (9,005)
======== ======== ======== ========= ========
Net income (loss) per
common share:
Basic $ (0.07) $ (0.10)
======== ========
Diluted $ (0.07) $ (0.09)*
======== ========
Weighted average
shares used in
computing net
income (loss) per
common share:
Basic 93,449 93,449
======== ========
Diluted 93,449 97,167*
======== ========
* Diluted shares used to calculate net loss per share on an Adjusted GAAP
basis provided for informational purposes only.
Infinera Corporation
GAAP to Non-GAAP Invoiced Shipment Reconciliation
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 29, 2008
-----------------------------------------------------
Non-GAAP
Invoiced
Shipments
Non-GAAP Excluding
Deferral Invoiced Stock Stock
GAAP Adjustments Shipments Comp Comp
-------- -------- -------- --------- --------
Revenue
Product and
ratable revenue $136,514 $(42,747)(c)$ 93,767 $ - $ 93,767
Services revenue 1,739 1,739 - 1,739
-------- -------- -------- --------- --------
Total revenue 138,253 (42,747) 95,506 - 95,506
Cost of revenue 76,686 (23,022)(e) 53,664 (1,141)(f) 52,523
-------- -------- -------- --------- --------
Gross profit 61,567 (19,725) 41,842 1,141 42,983
Gross margin 45% 45%
Operating expenses 36,993 - 36,993 (3,575)(f) 33,418
-------- -------- -------- --------- --------
Income (loss) from
operations 24,574 (19,725) 4,849 4,716 9,565
Other income
(expense), net 4,180 - 4,180 - 4,180
-------- -------- -------- --------- --------
Income (loss) before
provision for income
taxes 28,754 (19,725) 9,029 4,716 13,745
Provision for income
taxes 1,160 - 1,160 - 1,160
-------- -------- -------- --------- --------
Net income (loss) $ 27,594 $(19,725) $ 7,869 $ 4,716 $ 12,585
======== ======== ======== ========= ========
Net income (loss) per
common share:
Basic $ 0.30 $ 0.14
======== ========
Diluted $ 0.29 $ 0.13
======== ========
Weighted average
shares used in
computing net income
(loss) per common
share:
Basic 91,250 91,250
======== ========
Diluted 96,692 96,692
======== ========
Use of Non-GAAP, Invoiced Shipments and Adjusted GAAP Information:
As described below, Infinera uses various non-GAAP, invoiced shipments and
adjusted GAAP financial measures to supplement our condensed consolidated
financial statements presented on a GAAP basis. We believe these
adjustments are appropriate to enhance an overall understanding of our
underlying financial performance and also our prospects for the future and
are considered by management for the purpose of making operational
decisions. In addition, these results are the primary indicators management
uses as a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for net income or basic and diluted net
income per share prepared in accordance with GAAP. Non-GAAP financial
measures are not based on a comprehensive set of accounting rules or
principles and are subject to limitations.
Our usage of these non-GAAP, invoiced shipments and adjusted GAAP measures
are further explained below:
-- Prior to the second quarter of 2008, in order to supplement our
condensed consolidated financial statements presented on a GAAP basis,
Infinera used invoiced shipment measures of operating results, net income
and net income per share, which are adjusted to reflect invoiced shipments
and exclude non-GAAP stock-based compensation and warrant revaluation
expenses. Invoiced shipment measures reflected GAAP results adjusted for
changes in our deferred revenue and deferred cost of inventory balances
from the prior period. These adjustments to our GAAP results were made to
provide both management and investors with an understanding of Infinera's
underlying operating results and trends as they would have been reflected
had we established vendor specific objective evidence (VSOE) of fair value
for our service offerings and not been required to recognize revenue
ratably.
-- Effective April 2008, we had established VSOE of fair value for most
of our service offerings. From the second quarter of 2008 to the fourth
quarter of 2008, we have used adjusted GAAP measures of operating results,
net income and net income per share. Adjusted GAAP results reflected our
GAAP results reduced for amounts released from deferred revenue and
deferred cost of inventory balances recorded prior to the second quarter of
2008 and previously reported in our invoiced shipment results. Deferred
services and deferred ratable and product revenue and cost amounts recorded
after March 29, 2008 were not adjusted and were recognized on a GAAP basis
in arriving at the adjusted GAAP results. We presented these non-GAAP
measures of operating results, net income and net income per share, which
included adjusted GAAP results and excluded non-GAAP stock-based
compensation expense for these periods.
-- Beginning in the first quarter of 2009, we will use non-GAAP financial
measures, which reflect our GAAP results and exclude stock-based
compensation related expenses. All material deferred revenue and deferred
cost of inventory balances recorded prior to the second quarter of 2008 and
previously reported in our invoiced shipment results have been recognized
in our GAAP results prior to December 27, 2008. Therefore, no further
adjustments, other than the exclusion of stock-based compensation expense
as described above, will be made to our GAAP revenue and cost of revenue on
a go-forward basis.
(a) As described above, no adjustments have been made to our GAAP revenue
as recorded in our condensed consolidated statements of operations for the
period ended March 28, 2009.
The table below provides a breakdown of our deferred revenue balance as
recorded on our balance sheet as of March 28, 2009 for informational
purposes only:
Three Months Ended March 28, 2009
----------------------------------------------
Pre Mar Post Mar
29, 2008 29, 2008
Ratable and Ratable and
Product Product
Deferred Revenue Revenue Revenue Services Total
----------- ----------- --------- ---------
(In thousands)
Beginning balance $ 8,650 $ 4,177 $ 9,580 $ 22,407
Additions to deferred
revenue - 209 5,453 5,662
Amortization to revenue (1,944) (945) (4,586) (7,475)
----------- ----------- --------- ---------
Ending balance $ 6,706 $ 3,441 $ 10,447 $ 20,594
=========== =========== ========= =========
Change in deferred revenue
balance $ (1,944) $ (736) $ 867 $ (1,813)
=========== =========== ========= =========
(b) Adjustment amount represents the release of ratable and product
deferred revenue amounts related to periods prior to March 29, 2008 as
these amounts have been previously reported as invoiced shipments. No
adjustment has been made for changes in deferred services revenue as these
amounts relate to future service deliverables and are appropriately
deferred. Deferred ratable and product amounts recorded after March 29,
2008 have not been adjusted as these amounts are recognized on a GAAP basis
in arriving at the adjusted GAAP results.
The deferred revenue adjustments recorded above are reconciled to the
deferred revenue balance on our balance sheet in the table below:
Three Months Ended December 27, 2008
----------------------------------------------
Pre Mar Post Mar
29, 2008 29, 2008
Ratable and Ratable and
Product Product
Deferred Revenue Revenue Revenue Services Total
----------- ----------- --------- ---------
(In thousands)
Beginning balance $ 21,752 $ 4,296 $ 6,408 $ 32,456
Additions to deferred
revenue - 1,086 7,577 8,663
Amortization to revenue (13,102) (1,205) (4,405) (18,712)
----------- ----------- --------- ---------
Ending balance $ 8,650 $ 4,177 $ 9,580 $ 22,407
=========== =========== ========= =========
----------- ----------- -----------
Change in deferred revenue
balance $ (13,102) $ (119) $ 3,172 $ (10,049)
=========== =========== ========= =========
(c) Adjustment amount represents the release of ratable and deferred
product revenue amounts related to periods prior to March 29, 2008 as these
amounts have been previously reported as invoiced shipments. No
adjustment has been made for changes in deferred services revenue as these
amounts relate to future service deliverables and are appropriately
deferred.
The deferred revenue adjustments recorded above are reconciled to the
deferred revenue balance on our balance sheet in the table below:
Three Months Ended March 29, 2008
-------------------------------------
Ratable and
Product Services
Deferred Revenue Revenue Revenue Total
----------- ----------- -----------
(In thousands)
Beginning balance $ 174,437 $ - $ 174,437
Additions to deferred revenue 29,639 4,561 34,200
Amortization to revenue (72,386) (756) (73,142)
----------- ----------- -----------
Ending balance $ 131,690 $ 3,805 $ 135,495
=========== =========== ===========
----------- ----------- -----------
Change in deferred revenue balance $ (42,747) $ 3,805 $ (38,942)
=========== =========== ===========
(d) No adjustments, other than the exclusion of stock-based compensation
expense, as described above have been made to our GAAP cost of revenue as
recorded in our condensed consolidated statements of operations for the
period ended March 28, 2009.
The table below provides a breakdown of our deferred inventory cost balance
as recorded on our balance sheet as of March 28, 2009 for informational
purposes only:
Three Months Ended March 28, 2009
-------------------------------------
Pre Mar Post Mar
29, 2008 29, 2008
Ratable and Ratable and
Product Product
Deferred Inventory Cost Cost Cost Total
----------- ----------- -----------
(In thousands)
Beginning balance $ 3,221 $ 1,016 $ 4,237
Additions to deferred cost of
revenue - 1 1
Amortized to cost of revenue (419) (317) (736)
----------- ----------- -----------
Ending balance $ 2,802 $ 700 $ 3,502
=========== =========== ===========
----------- ----------- -----------
Change in deferred inventory cost
balance $ (419) $ (316) $ (735)
=========== =========== ===========
(e) Adjustment amount represents the release of ratable and deferred
product cost amounts related to periods prior to March 29, 2008 as these
amounts have been previously included as invoiced shipments. Deferred
ratable and product amounts recorded after March 29, 2008 have not been
adjusted as these amounts are recognized on a GAAP basis in arriving at the
adjusted GAAP results.
The deferred cost of inventory adjustments recorded above are reconciled to
the deferred cost of inventory balance on our balance sheet in the table
below:
Three Months
Ended
Three Months Ended March 29,
December 27, 2008 2008
------------------------------- ---------
Pre Mar Post Mar
29, 2008 29, 2008
Ratable Ratable
and and
Product Product
Deferred Inventory Cost Cost Cost Total Total
--------- --------- --------- ---------
(In thousands)
Beginning balance $ 8,172 $ 1,120 $ 9,292 $ 81,622
Additions to deferred cost of
revenue - 32 32 11,162
Amortized to cost of revenue (4,951) (136) (5,087) (34,184)
--------- --------- --------- ---------
Ending balance $ 3,221 $ 1,016 $ 4,237 $ 58,600
========= ========= ========= =========
--------- --------- --------- ---------
Change in deferred inventory
cost balance $ (4,951) $ (104) $ (5,055) $ (23,022)
========= ========= ========= =========
(f) Excluded amount represents stock-based compensation expense on a
non-GAAP basis. Stock-based compensation is a non-cash expense accounted
for in accordance with the fair value recognition provisions of Statement
of Financial Accounting Standards No. 123(R). While this is a large
component of our expense, we believe investors want to evaluate our
financial results both including and excluding the effects of stock-based
compensation expense in order to compare our financial performance with
that of other companies and between time periods.
The stock-based compensation expense excluded from cost of revenue is a
non-GAAP financial measure and is reconciled to the corresponding GAAP
amount in the table below:
Three Months Ended
------------------------
December 27, March 29,
2008 2008
----------- -----------
(In thousands)
GAAP stock-based compensation in cost of revenue $ 308 $ 208
GAAP stock-based compensation in cost of revenue
- amortization from balance sheet 739 1,150
Stock-based compensation not deferred to
deferred inventory cost - 215
Stock-based compensation previously recognized
on invoiced shipment basis (143) (432)
----------- -----------
Non-GAAP stock-based compensation in cost of
revenue $ 904 $ 1,141
=========== ===========
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 28, December 27,
2009 2008
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 153,371 $ 166,770
Short-term investments 79,927 68,232
Short-term restricted cash 31 720
Accounts receivable, net of allowance for
doubtful accounts of $1,700 as of
March 28, 2009 and December 27, 2008 44,837 69,354
Other receivables 952 1,085
Inventory 64,481 58,986
Deferred inventory costs 1,321 1,744
Prepaid expenses and other current assets 6,751 6,311
----------- -----------
Total current assets 351,671 373,202
Property, plant and equipment, net 48,583 46,820
Intangible assets 1,209 1,276
Deferred inventory costs, non-current 2,181 2,493
Long-term investments 70,651 74,684
Long-term restricted cash 2,483 2,179
Other non-current assets 6,341 6,413
----------- -----------
Total assets $ 483,119 $ 507,067
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 28,258 $ 34,048
Accrued expenses 16,275 16,092
Accrued compensation and related benefits 9,453 13,472
Accrued warranty 5,392 5,205
Deferred revenue 13,708 14,683
----------- -----------
Total current liabilities 73,086 83,500
Accrued warranty, non-current 4,310 4,735
Deferred revenue, non-current 6,886 7,724
Other long-term liabilities 6,551 5,645
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized shares - 25,000 and no shares issued
and outstanding - -
Common stock, $0.001 par value
Authorized shares - 500,000 as of March 28,
2009 and December 27, 2008
Issued and outstanding shares - 95,077 as of
March 28, 2009 and 94,163 as of December 27,
2008 95 94
Additional paid-in capital 711,510 699,705
Accumulated other comprehensive loss (4,253) (3,598)
Accumulated deficit (315,066) (290,738)
----------- -----------
Total stockholders' equity 392,286 405,463
----------- -----------
Total liabilities and stockholders' equity $ 483,119 $ 507,067
=========== ===========
Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
--------------------
March 28, March 29,
2009 2008
--------- ---------
Cash Flows from Operating Activities:
Net income (loss) $ (24,328) $ 27,594
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 3,878 2,616
Accretion of investment discount 14 (461)
Stock-based compensation expense 6,736 4,933
Put Rights 1,967 -
Unrealized holding gains for trading securities (972) -
Tax benefit from stock option transactions - 235
Excess tax benefit from stock option transactions - (71)
Gain on disposal of assets (15) (332)
Other gain - (33)
Changes in assets and liabilities:
Accounts receivable 24,659 (3,989)
Inventory (4,880) (1,023)
Prepaid expenses and other current assets (491) 410
Deferred inventory costs 668 22,805
Other non-current assets 59 (1,220)
Accounts payable (5,276) 5,792
Accrued liabilities and other expenses (2,899) (9,529)
Deferred revenue (1,813) (38,943)
Accrued warranty (238) 1,035
--------- ---------
Net cash provided by (used in) operating
activities (2,931) 9,819
Cash Flows from Investing Activities:
Purchases of available-for-sale investments and
restricted cash (31,629) (78,300)
Proceeds from sales of investments - 58,636
Proceeds from maturities of investments 22,804 36,600
Proceeds from disposal of assets 49 332
Purchase of property and equipment (5,960) (2,481)
--------- ---------
Net cash provided by (used in) investing
activities (14,736) 14,787
Cash Flows from Financing Activities:
Proceeds from issuance of common stock 4,335 6,044
Excess tax benefit from stock option transactions - 71
Repurchase of common stock (8) (3)
--------- ---------
Net cash provided by financing activities 4,327 6,112
--------- ---------
Effect of exchange rate changes on cash (59) 3
--------- ---------
Net change in cash and cash equivalents (13,399) 30,721
Cash and cash equivalents at beginning of period 166,770 91,209
--------- ---------
Cash and cash equivalents at end of period $ 153,371 $ 121,930
========= =========
Supplemental disclosures of cash flow information:
Cash paid for interest $ - $ 3
Cash paid for income taxes $ 942 $ 63
Infinera Corporation
Supplemental Financial Information
Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09
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Revenue $66.7 $69.0 $80.4 $93.4 $95.5 $90.8 $80.9 $86.2 $66.6
Gross
Margin % 35% 37% 43% 47% 45% 47% 42% 36% 31%
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Invoiced
Shipment
Composition:
Domestic % 89% 84% 81% 81% 82% 78% 81% 73% 74%
International
% 11% 16% 19% 19% 18% 22% 19% 27% 26%
Largest
Customer % 57% 48% 28% 18% 31% 21% 27% 23% 30%
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Cash Related
Information:
Cash from
Operations $ 6.9 ($0.8) ($2.0) $18.9 $ 9.8 $ 5.6 $ 9.9 ($5.4) ($2.9)
Capital
Expenditures $ 5.2 $ 3.6 $ 3.0 $ 8.5 $ 4.5 $ 4.8 $ 5.9 $ 7.8 $ 6.0
Depreciation
&
Amortization $ 2.1 $ 2.0 $ 2.7 $ 2.7 $ 2.6 $ 2.9 $ 3.4 $ 4.1 $ 3.9
DSO's 27 36 47 39 42 57 55 74 61
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Inventory
Metrics:
Raw
Materials $ 7.4 $ 8.8 $ 7.5 $10.5 $ 7.9 $ 9.2 $10.0 $ 9.1 $ 7.7
Work in
Process $31.6 $36.0 $34.8 $35.1 $40.6 $34.6 $35.8 $37.9 $43.2
Finished
Goods $18.4 $13.7 $14.8 $13.0 $10.7 $13.8 $12.8 $12.0 $13.6
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Total
Inventory $57.3 $58.5 $57.1 $58.6 $59.2 $57.6 $58.6 $59.0 $64.5
Inventory
Turns 3.0 3.0 3.2 3.4 3.5 3.3 3.2 3.8 2.8
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Worldwide
Headcount 617 646 668 711 799 853 889 937 962
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Periods prior to Q2'08 reflect invoiced shipments results; periods from
Q2'08 through Q4'08 reflect adjusted GAAP results; and Q1'09 reflects
non-GAAP results.
Contact Information: Contacts: Press: Jeff Ferry jferry@infinera.com Infinera Corporation 408-572-5213 Investors/Analysts: Bob Blair bblair@infinera.com Infinera Corporation 408-716-4879