SOURCE: Infinera

Infinera

February 11, 2016 16:15 ET

Infinera Corporation Reports Fourth Quarter and Fiscal Year 2015 Financial Results

SUNNYVALE, CA--(Marketwired - February 11, 2016) -  Infinera Corporation, provider of Intelligent Transport Networks, today released financial results for the fourth quarter and fiscal year ended December 26, 2015.

GAAP revenue for the quarter was $260.0 million compared to $232.5 million in the third quarter of 2015 and $186.3 million in the fourth quarter of 2014.

GAAP gross margin for the quarter was 44.5% compared to 44.2% in the third quarter of 2015 and 45.3% in the fourth quarter of 2014. GAAP operating margin for the quarter was 5.3% compared to 6.1% in the third quarter of 2015 and 6.9% in the fourth quarter of 2014.

GAAP net income for the quarter was $12.6 million, or $0.08 per diluted share, compared to $8.5 million, or $0.06 per diluted share, in the third quarter of 2015, and $8.4 million, or $0.06 per diluted share, in the fourth quarter of 2014.

Non-GAAP revenue for the quarter was $260.6 million compared to $233.2 million in the third quarter of 2015 and $186.3 million in the fourth quarter of 2014.

Non-GAAP gross margin for the quarter was 48.3% compared to 47.5% in the third quarter of 2015 and 46.1% in the fourth quarter of 2014. Non-GAAP operating margin for the quarter was 12.7% compared to 14.4% in the third quarter of 2015 and 11.0% in the fourth quarter of 2014.

Non-GAAP net income for the quarter was $32.0 million, or $0.21 per diluted share, compared to $32.2 million, or $0.22 per diluted share, in the third quarter of 2015, and $18.0 million, or $0.13 per diluted share, in the fourth quarter of 2014. 

GAAP revenue for the year was $886.7 million compared to $668.1 million in 2014.

GAAP gross margin for the year was 45.5% compared to 43.2% in 2014. GAAP operating margin for the year was 6.7% compared to 4.1% in 2014. GAAP net income for the year was $51.4 million, or $0.36 per diluted share, compared to $13.7 million, or $0.11 per diluted share in 2014.

Non-GAAP revenue for the year was $888.0 million compared to $668.1 million in 2014.

Non-GAAP gross margin for the year was 47.8% compared to 44.0% in 2014. Non-GAAP operating margin for the year was 13.1% compared to 8.3% in 2014. Non-GAAP net income for the year was $112.0 million, or $0.78 per diluted share, compared to $49.8 million, or $0.39 per diluted share in 2014. 

A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP equivalents can be found at the end of this release.

"Our fourth quarter performance capped off an exceptional year of revenue and profitability growth, expansion of our product portfolio to serve the end-to-end market and the continuation of our commitment to deliver the Infinera Experience to our customers," said Tom Fallon, Infinera's Chief Executive Officer. 

"With customers increasingly relying on optical transport as the foundation of their next generation networks, Infinera will continue to deliver the most innovative, scalable and programmable Intelligent Transport solutions in the industry. We exited 2015 on a $1 billion annual revenue run rate and are well positioned to address the significant future opportunities associated with this optical networking transformation."

Conference Call Information

Infinera will host a conference call for analysts and investors to discuss its fourth quarter and fiscal year 2015 results and its outlook for the first quarter of 2016 today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties may join the conference call by dialing 1-866-270-1533 (toll free) or 1-412-317-0797 (international). A live webcast of the conference call will also be accessible from the Events & Webcasts section of Infinera's website at investors.infinera.com. Replay of the audio webcast will be available at investors.infinera.com approximately two hours after the end of the live call.

About Infinera

Infinera (NASDAQ: INFN) provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and simplify optical network operations. Infinera's end-to-end packet-optical portfolio is designed for long-haul, subsea, datacenter interconnect and metro applications. Infinera's unique large scale photonic integrated circuits enable innovative optical networking solutions for the most demanding networks. To learn more about Infinera visit www.infinera.com, follow us on Twitter @Infinera and read our latest blog posts at blog.infinera.com.

Forward-Looking Statements

This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. Such forward-looking statements include, without limitation, Infinera's ability to continue to deliver the most innovative, scalable and programmable Intelligent Transport solutions in the industry; and Infinera's ability to address future opportunities in the optical networking market. Forward-looking statements can also be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. These statements are based on information available to Infinera as of the date hereof and actual results could differ materially from those stated or implied due to risks and uncertainties. The risks and uncertainties that could cause Infinera's results to differ materially from those expressed or implied by such forward-looking statements include delays in the development and introduction of new products or updates to existing products and market acceptance of these products; Infinera's ability to successfully integrate the Infinera and Transmode businesses; the effect that changes in product pricing or mix, and/or increases in component costs could have on Infinera's gross margin; Infinera's ability to respond to rapid technological changes; Infinera's reliance on single-source suppliers; aggressive business tactics by Infinera's competitors; Infinera's ability to protect Infinera's intellectual property; claims by others that Infinera infringes their intellectual property; global macroeconomic conditions; war, terrorism, public health issues, natural disasters and other circumstances that could disrupt supply, delivery or demand of products; and other risks and uncertainties detailed in Infinera's SEC filings from time to time. More information on potential factors that may impact Infinera's business are set forth in its Quarterly Report on Form 10-Q for the quarter ended on September 26, 2015 as filed with the SEC on November 5, 2015, as well as subsequent reports filed with or furnished to the SEC from time to time. These reports are available on Infinera's website at www.infinera.com and the SEC's website at www.sec.gov. Infinera assumes no obligation to, and does not currently intend to, update any such forward-looking statements.

Use of Non-GAAP Financial Information

In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP measures that exclude non-cash stock-based compensation expenses, acquisition-related costs, certain purchase accounting adjustments and amortization of debt discount on Infinera's convertible senior notes. Infinera believes these adjustments are appropriate to enhance an overall understanding of its underlying financial performance and also its 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 its 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, basic and diluted net income per share, gross margin or operating margin 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. For a description of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures, please see the section titled, "GAAP to Non-GAAP Reconciliations." Infinera anticipates disclosing forward-looking non-GAAP information in its conference call to discuss its fourth quarter and fiscal year 2015 results, including an estimate of certain non-GAAP financial measures for the first quarter of 2016 that excludes non-cash stock-based compensation expenses, acquisition-related costs, certain purchase accounting adjustments and amortization of debt discount on Infinera's convertible senior notes.

A copy of this press release can be found on the Investor Relations page of Infinera's website at www.infinera.com.

Infinera 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     Twelve Months Ended  
    December 26,     December 27,     December 26,     December 27,  
    2015     2014     2015     2014  
Revenue:                                
  Product   $ 227,040     $ 158,492     $ 769,230     $ 572,276  
  Services     32,994       27,814       117,484       95,803  
    Total revenue     260,034       186,306       886,714       668,079  
                                 
Cost of revenue:                                
  Cost of product     130,765       89,809       436,916       340,856  
  Cost of services     13,505       12,154       46,321       38,919  
    Total cost of revenue     144,270       101,963       483,237       379,775  
                                 
Gross profit     115,764       84,343       403,477       288,304  
                                 
Operating expenses:                                
  Research and development     52,559       37,349       180,703       133,484  
  Sales and marketing     34,100       22,288       101,398       79,026  
  General and administrative     15,316       11,840       61,640       48,452  
    Total operating expenses     101,975       71,477       343,741       260,962  
                                 
Income from operations     13,789       12,866       59,736       27,342  
                                 
Other income (expense), net:                                
  Interest income     466       410       1,837       1,456  
  Interest expense     (3,090 )     (2,835 )     (11,941 )     (11,021 )
  Other gain (loss), net     611       (348 )     2,399       (1,365 )
    Total other income (expense), net     (2,013 )     (2,773 )     (7,705 )     (10,930 )
                                 
Income before income taxes     11,776       10,093       52,031       16,412  
Provision for (benefit from) income taxes     (392 )     1,683       1,081       2,753  
  Net income     12,168       8,410       50,950       13,659  
    Less: Net loss attributable to noncontrolling interest     (463 )     -       (463 )     -  
  Net income attributable to Infinera Corporation   $ 12,631     $ 8,410     $ 51,413     $ 13,659  
                                 
Net income per common share attributable                                
to Infinera Corporation:                                
  Basic   $ 0.09     $ 0.07     $ 0.39     $ 0.11  
  Diluted   $ 0.08     $ 0.06     $ 0.36     $ 0.11  
                                 
Weighted average shares used in computing                                
net income per common share:                                
  Basic     140,015       125,830       133,259       123,672  
  Diluted     149,439       133,072       143,171       128,565  
   
Infinera Corporation  
GAAP to Non-GAAP Reconciliations  
(In thousands, except percentages and per share data)  
(Unaudited)  
   
    Three Months Ended     Twelve Months Ended  
    December 26,
2015
    September 26,
2015
    December 27,
2014
    December 26,
2015
    December 27,
2014
 
Reconciliation of Revenue:                                                                  
U.S. GAAP as reported   $ 260,034           $ 232,472           $ 186,306         $ 886,714           $ 668,079      
Acquisition-related deferred revenue adjustment(1)     605             721             -           1,326             -      
Non-GAAP as adjusted   $ 260,639           $ 233,193           $ 186,306         $ 888,040           $ 668,079      
                                                                   
Reconciliation of Gross Profit:                                                                  
U.S. GAAP as reported   $ 115,764     44.5 %   $ 102,805     44.2 %   $ 84,343   45.3 %   $ 403,477     45.5 %   $ 288,304   43.2 %
Stock-based compensation(2)     1,733             1,621             1,472           6,090             5,607      
Acquisition-related deferred revenue adjustment(1)     605             721             -           1,326             -      
Amortization of acquired intangible assets(3)     4,640             1,922             -           6,562             -      
Acquisition-related inventory step-up expense(4)     3,090             3,620             -           6,710             -      
Acquisition-related costs(5)     39             -             -           39             -      
Non-GAAP as adjusted   $ 125,871     48.3 %   $ 110,689     47.5 %   $ 85,815   46.1 %   $ 424,204     47.8 %   $ 293,911   44.0 %
                                                                   
Reconciliation of Operating Expenses:                                                                  
U.S. GAAP as reported   $ 101,975           $ 88,545           $ 71,477         $ 343,741           $ 260,962      
Stock-based compensation(2)     6,979             6,830             6,075           26,490             22,787      
Amortization of acquired intangible assets(3)     1,656             686             -           2,342             -      
Acquisition-related costs(5)     565             3,950             -           7,241             -      
Non-GAAP as adjusted   $ 92,775           $ 77,079           $ 65,402         $ 307,668           $ 238,175      
                                                                   
Reconciliation of Income                                                                  
from Operations:                                                                  
U.S. GAAP as reported   $ 13,789     5.3 %   $ 14,260     6.1 %   $ 12,866   6.9 %   $ 59,736     6.7 %   $ 27,342   4.1 %
Stock-based compensation(2)     8,712             8,451             7,547           32,580             28,394      
Acquisition-related deferred revenue adjustment(1)     605             721             -           1,326             -      
Amortization of acquired intangible assets(3)     6,296             2,608             -           8,904             -      
Acquisition-related inventory step-up expense(4)     3,090             3,620             -           6,710             -      
Acquisition-related costs(5)     604             3,950             -           7,280             -      
Non-GAAP as adjusted   $ 33,096     12.7 %   $ 33,610     14.4 %   $ 20,413   11.0 %   $ 116,536     13.1 %   $ 55,736   8.3 %
                                                                   
Reconciliation of Net Income Attributable                                                                  
to Infinera Corporation:                                                                  
U.S. GAAP as reported   $ 12,631           $ 8,510           $ 8,410         $ 51,413           $ 13,659      
Stock-based compensation(2)     8,712             8,451             7,547           32,580             28,394      
Acquisition-related deferred revenue adjustment(1)     605             721             -           1,326             -      
Amortization of acquired intangible assets(3)     6,296             2,608             -           8,904             -      
Acquisition-related inventory step-up expense(4)     3,090             3,620             -           6,710             -      
Acquisition-related costs(5)     604             3,950             -           7,280             -      
Acquisition-related forward contract (gain) loss(6)     -             3,728             -           (1,054 )           -      
Amortization of debt discount(7)     2,217             2,162             2,006           8,545             7,730      
Income tax effects(8)     (2,197 )           (1,529 )           -           (3,726 )           -      
Non-GAAP as adjusted   $ 31,958           $ 32,221           $ 17,963         $ 111,978           $ 49,783      
                                                                   
Net Income per Common                                                                  
Share Attributable to Infinera Corporation - Basic:                                                                  
U.S. GAAP as reported   $ 0.09           $ 0.06           $ 0.07         $ 0.39           $ 0.11      
Non-GAAP as adjusted   $ 0.23           $ 0.24           $ 0.14         $ 0.84           $ 0.40      
                                                                   
Net Income per Common                                                                  
Share Attributable to Infinera Corporation - Diluted:                                                                  
U.S. GAAP as reported   $ 0.08           $ 0.06           $ 0.06         $ 0.36           $ 0.11      
Non-GAAP as adjusted   $ 0.21           $ 0.22           $ 0.13         $ 0.78           $ 0.39      
                                                                   
Weighted Average Shares                                                                  
Used in Computing Net Income                                                                  
per Common Share:                                                                  
Basic     140,015             134,834             125,830           133,259             123,672      
Diluted     149,439             145,300             133,072           143,171             128,565      
                                                                   
                                                                    
Infinera Corporation    
GAAP to Non-GAAP Reconciliations    
(In thousands, except percentages and per share data)    
(Unaudited)  

(1) Business combination accounting principles require Infinera to write down to fair value its maintanence support contracts assumed in the Transmode acquisition. The revenue for these support contracts is deferred and typically recognized over a one year period, so Infinera's GAAP revenue for the one year period after the acquisition will not reflect the full amount of revenue that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP adjustment eliminates the effect of the deferred revenue write-down. Management believes these adjustments to the revenue from these support contracts are useful to investors as an additional means to reflect revenue trends of Infinera's business.

(2) Stock-based compensation expense is calculated in accordance with the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation effective January 1, 2006. The following table summarizes the effects of stock-based compensation related to employees and non-employees (in thousands):

                     
    Three Months Ended   Twelve Months Ended
    December 26,   September 26,   December 27,   December 26,   December 27,
    2015   2015   2014   2015   2014
Cost of revenue   $ 665   $ 645   $ 500   $ 2,405   $ 1,921
Research and development     2,872     2,788     2,439     11,055     8,927
Sales and marketing     2,159     2,131     1,960     8,081     7,477
General and administration     1,948     1,911     1,676     7,354     6,383
      7,644     7,475     6,575     28,895     24,708
Cost of revenue - amortization from balance sheet*     1,068     976     972     3,685     3,686
Total stock-based compensation expense   $ 8,712   $ 8,451   $ 7,547   $ 32,580   $ 28,394
                               
* Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period.            

(3) Amortization of acquisition-related intangible assets consists of amortization of developed technology, trade names, and customer relationships acquired in connection with the Transmode acquisition. U.S. GAAP accounting requires that acquired intangible assets are recorded at fair value and amortized over their useful lives. As this amortization is non-cash, Infinera has excluded it from its non-GAAP operating expenses, gross margin and net income measures. Management believes the amortization of acquired intangible assets is not indicative of ongoing operating performance and its exclusion provide a better indication of Infinera's underlying business performance.

(4) Business combination accounting principles require Infinera to measure acquired inventory at fair value as of the date of the acquisition. The fair value of inventory reflects the acquired company's cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustment to Infinera's cost of sales excludes the amortization of the step-up in carrying value for units sold in the quarter. Management believes the adjustment is useful to investors as an additional means to reflect cost of sales and gross margin trends of Infinera's business.

(5) Acquisition-related costs related to Transmode acquisition, which closed during the third quarter of 2015, include legal, financial, employee retention costs and other professional fees incurred in connection with the transaction. These amounts have been adjusted in arriving at Infinera's non-GAAP results because management believes that these expenses are non-recurring, not indicative of ongoing operating performance and their exclusion provides a better indication of Infinera's underlying business performance.

(6) In April 2015, Infinera entered into a foreign currency forward contract and in July 2015, Infinera entered into a series of foreign currency exchange option contracts to hedge currency exposures associated with the cash portion of the offer to acquire Transmode. The forward contract and option contracts were subsequently closed during the third quarter of 2015. Management has excluded the impact of these gains and losses from Infinera's non-GAAP results because they are non-recurring and management believes that these gains are not indicative of ongoing operating performance.

(7) Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. Accordingly, for GAAP purposes, Infinera is required to amortize as a debt discount an amount equal to the fair value of the conversion option that was recorded in equity as interest expense on its $150 million 1.75% convertible debt issuance in May 2013 over the term of the notes. Interest expense has been excluded from Infinera's non-GAAP results because management believes that this non-cash expense is not indicative of ongoing operating performance and provides a better indication of Infinera's underlying business performance.

(8) The difference between the GAAP and non-GAAP tax is due to the net tax effects of the purchase accounting adjustments related to the Transmode acquisition, which closed during the third quarter of 2015.

 
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
 
        December 26,   December 27,
        2015   2014
ASSETS        
         
Current assets:            
    Cash and cash equivalents   $ 149,101   $ 86,495
    Short-term investments     125,561     239,628
    Accounts receivable, net of allowance for doubtful accounts            
    of $624 in 2015 and $38 in 2014     186,243     154,596
    Inventory     174,699     146,500
    Prepaid expenses and other current assets     29,511     24,636
      Total current assets     665,115     651,855
             
Property, plant and equipment, net     110,861     81,566
Intangible assets, net     156,319     361
Goodwill     191,560     -
Long-term investments     76,507     59,233
Cost-method investment     14,500     14,500
Long-term restricted cash     5,310     5,460
Other non-current assets     6,122     5,041
      Total assets   $ 1,226,294   $ 818,016
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
             
Current liabilities:            
    Accounts payable   $ 92,554   $ 61,533
    Accrued expenses     33,736     26,441
    Accrued compensation and related benefits     49,887     38,795
    Accrued warranty     17,889     12,241
    Deferred revenue     42,977     35,321
      Total current liabilities     237,043     174,331
             
    Long-term debt, net     125,440     116,894
    Accrued warranty, non-current     20,955     14,799
    Deferred revenue, non-current     13,881     10,758
    Deferred tax Iiability, non-current     35,731     2,132
    Other long-term liabilities     16,183     17,195
             
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 December 26, 2015 and December 27, 2014      
      Issued and outstanding shares - 140,196 as of December 26, 2015 and 126,160      
      as of December 27, 2014     140     126
    Additional paid-in capital     1,300,301     1,077,225
    Accumulated other comprehensive income (loss)     1,123     (4,618)
    Accumulated deficit     (539,413)     (590,826)
    Total Infinera Corporation stockholders' equity     762,151     481,907
Noncontrolling interest     14,910     -
    Total stockholder's equity     777,061     481,907
      Total liabilities and stockholders' equity   $ 1,226,294   $ 818,016
   
Infinera Corporation  
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
(Unaudited)  
   
    Twelve Months Ended  
    December 26,     December 27,  
    2015     2014  
Cash Flows from Operating Activities:                
Net income   $ 50,950     $ 13,659  
Adjustments to reconcile net income to net cash                
provided by operating activities:                
  Depreciation and amortization     35,777       25,917  
  Amortization of debt discount and issuance costs     9,281       8,395  
  Provision for (recovery of) doubtful accounts     592       (2 )
  Amortization of premium on investments     2,917       3,772  
  Realized gain from forward contract     (1,053 )     -  
  Stock-based compensation expense     32,580       28,394  
  Other loss (gain)     19       (7 )
  Changes in assets and liabilities:                
    Accounts receivable     (15,971 )     (53,951 )
    Inventory     (17,116 )     (25,486 )
    Prepaid expenses and other assets     (3,248 )     (8,324 )
    Accounts payable     19,223       18,810  
    Accrued liabilities and other expenses     (2,369 )     11,866  
    Deferred revenue     10,777       8,788  
    Accrued warranty     10,817       4,132  
      Net cash provided by operating activities     133,176       35,963  
                 
Cash Flows from Investing Activities:                
  Purchase of available-for-sale investments     (186,737 )     (302,398 )
  Acquisition of business, net of cash acquired     (144,445 )     -  
  Realized gain from forward contract for business acquisition     1,053       -  
  Purchase of cost-method investment     -       (5,500 )
  Proceeds from sales of available-for-sale investments     67,303       28,481  
  Proceeds from maturities and calls of investments     213,234       208,051  
  Purchase of property and equipment     (42,018 )     (23,122 )
  Change in restricted cash     135       (1,571 )
    Net cash used in investing activities     (91,475 )     (96,059 )
                 
Cash Flows from Financing Activities:                
  Proceeds from issuance of common stock     25,351       24,707  
  Minimum tax withholding paid on behalf of                
  employees for net share settlement     (5,227 )     (1,846 )
  Excess tax benefit from stock option transactions     859       -  
      Net cash provided by financing activities     20,983       22,861  
                 
Effect of exchange rate changes on cash     (78 )     (600 )
                 
Net change in cash and cash equivalents     62,606       (37,835 )
Cash and cash equivalents at beginning of period     86,495       124,330  
Cash and cash equivalents at end of period   $ 149,101     $ 86,495  
                 
Supplemental disclosures of cash flow information:                
  Cash paid for income taxes, net of refunds   $ 4,570     $ 1,697  
  Cash paid for interest   $ 2,647     $ 2,625  
Supplemental schedule of non-cash investing and financing activities:                
  Transfer of inventory to fixed assets   $ 9,314     $ 2,569  
  Common stock issued in connection with acquisition   $ 169,507     $ -  
                   
  
Infinera Corporation 
Supplemental Financial Information 
(Unaudited) 
   
    Q1'14     Q2'14     Q3'14     Q4'14     Q1'15     Q2'15     Q3'15     Q4'15  
Revenue ($ Mil)   $ 142.8     $ 165.4     $ 173.6     $ 186.3     $ 186.9     $ 207.3     $ 232.5     $ 260.0  
GAAP Gross Margin %     40.9 %     42.5 %     43.4 %     45.3 %     47.2 %     46.7 %     44.2 %     44.5 %
Non-GAAP Gross Margin % (1)     41.8 %     43.3 %     44.2 %     46.1 %     47.8 %     47.4 %     47.5 %     48.3 %
Revenue Composition:                                                                
  Domestic %     78 %     82 %     70 %     58 %     68 %     75 %     68 %     62 %
  International %     22 %     18 %     30 %     42 %     32 %     25 %     32 %     38 %
  Customers >10% of Revenue     2       2       1       1       2       3       2       2  
Cash Related Information:                                                                
  Cash from (Used in) Operations ($ Mil)   $ (15.4 )     10.3     $ 22.3     $ 18.7     $ 19.8     $ 55.0     $ 32.5     $ 25.8  
  Capital Expenditures ($ Mil)   $ 5.6     $ 4.4     $ 4.4     $ 8.8     $ 7.4     $ 8.7     $ 10.6     $ 15.3  
  Depreciation & Amortization ($ Mil)   $ 6.3     $ 6.5     $ 6.5     $ 6.6     $ 6.6     $ 6.3     $ 9.2     $ 13.7  
  DSO's     68       66       71       76       64       48       55       65  
Inventory Metrics:                                                                
  Raw Materials ($ Mil)   $ 13.2     $ 11.2     $ 11.6     $ 15.2     $ 22.4     $ 30.2     $ 24.2     $ 27.9  
  Work in Process ($ Mil)   $ 47.8     $ 40.6     $ 44.4     $ 50.0     $ 45.9     $ 43.9     $ 48.5     $ 52.6  
  Finished Goods ($ Mil)   $ 65.5     $ 79.1     $ 74.8     $ 81.3     $ 88.9     $ 83.1     $ 97.2     $ 94.2  
Total Inventory ($ Mil)   $ 126.5     $ 130.9     $ 130.8     $ 146.5     $ 157.2     $ 157.2     $ 169.9     $ 174.7  
Inventory Turns (2)     2.6       2.9       3.0       2.7       2.5       2.8       2.9       3.1  
Worldwide Headcount     1,346       1,396       1,456       1,495       1,530       1,598       1,978       2,056  
                                                                 

(1) Non-GAAP adjustments include non-cash stock-based compensation expense, certain purchase accounting adjustments and amortization of acquired intangible assets. For a description of this non-GAAP financial measure, please see the section titled, "GAAP to Non-GAAP Reconciliations" of the press release dated February 11, 2016 for a reconciliation to the most directly comparable GAAP financial measures.
(2) Infinera calculates non-GAAP inventory turns as annualized non-GAAP cost of revenue before adjustments for non-cash stock-based compensation expense and certain purchase accounting adjustments, divided by the average inventory for the quarter.

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