Finisar Corporation Announces First Quarter Financial ResultsRetires Additional Notes Following Completion of Exchange Offer
SUNNYVALE, CA -- (Marketwire - September 10, 2009) - Finisar Corporation (NASDAQ: FNSR), a global technology leader for fiber optic subsystems and components for communication applications, today announced financial results for its first fiscal quarter ended August 2, 2009. In an earlier announcement dated August 4, 2009, Finisar indicated that its preliminary revenues for the quarter, including revenues from the operations of the Network Tools Division prior to its sale, would total approximately $134 million. Final revenues for the quarter totaled $135.5 million including $6.7 million from the operations of the Network Tools Division. In reporting financial results for the first quarter, the Company noted that current quarter results and previously reported periods have been adjusted to reflect the following:
- -- During the three months ended August 2, 2009, the Company completed
the sale of substantially all of the assets of its Network Tools Division
to JDS Uniphase Corporation. Accordingly, the operating results of this
business, through the date of its disposition and for all applicable prior
periods are reported as discontinued operations in the condensed
consolidated financial statements for the period ended August 2, 2009, and
the prior period comparative financial statements have been restated to
exclude assets, liabilities and results of operations (including revenues,
associated cost of goods sold and operating expenses) related to the
discontinued operations; and
- -- Effective at the beginning of the first quarter, the Company adopted
FSP APB 14-1 under which the issuer of certain convertible debt instruments
that may be settled in cash (or other assets) on conversion to separately
account for the liability (debt) and equity (conversion option) components
of the instrument in a manner that reflects the issuer's non-convertible
debt borrowing rate. The separation of the conversion option creates an
original issue discount in the bond component which is to be accreted as
interest expense over the term of the instrument using the interest method,
resulting in an increase in interest expense and a decrease in net income
and earnings per share. Due to the modification of $100 million of the
Company's 2.5% convertible notes in October 2006, the Company has accounted
for the debt and equity components of the notes to reflect the estimated
nonconvertible debt borrowing rate at the date of issuance of 8.59%.
Because FSP APB 14-1 requires retrospective application of the financial
statement for all periods presented, prior period balances have been
restated to effectively record a debt discount equal to the fair value of
the equity component and an increase to paid-in capital for the fair value
of the equity component as of the date of issuance of the underlying
notes. Prior period balances have also been adjusted to provide for the
amortization of the debt discount through interest expense (non-cash
interest cost).
FINISAR FINANCIAL HIGHLIGHTS - FIRST QUARTER ENDED AUGUST 2, 2009
First First Fourth
GAAP Results Quarter Quarter Quarter
August 2, August 3, April 30,
2009 2008 2009
--------- ---------- ---------
(in thousands, except per share
amounts)
--------- ---------- ---------
Continuing operations
Total optics revenues $ 128,725 $ 115,774 $ 107,457
Gross margin 22.8 % 35.2% 21.6 %
Before impairment charges
Operating expenses $ 38,188 $ 32,929 $ 34,094
Operating income (loss) $ (8,786) $ 7,860 $ (10,871)
Operating margin (deficit) (6.8)% 6.8% (10.1)%
Goodwill impairment $ - $ - $ 13,205
Income (loss) $ (11,116) $ 2,942 $ (27,004)
Income (loss) per share-basic $ (0.02) $ 0.01 $ (0.06)
Income (loss) per share-diluted $ (0.02) $ 0.01 $ (0.06)
Basic shares 481,444 310,133 476,972
Diluted shares 481,444 311,614 476,972
Discontinued operations
Income (loss) $ 37,079 $ (125) $ 1,246
Income (loss) per share-basic $ 0.08 $ (0.00) $ 0.00
Income (loss) per share-diluted $ 0.07 $ (0.00) $ 0.00
Basic shares 481,444 310,133 476,972
Diluted shares 502,106 310,133 482,227
First First Fourth
NonGAAP Results (a) Quarter Quarter Quarter
August 2, August 3, April 30,
2009 2008 2009
--------- ---------- ---------
(in thousands, except per share
amounts)
--------- ---------- ---------
Continuing operations
Total optics revenues $ 128,725 $ 115,774 $ 107,457
Gross margin 28.8 % 36.6% 27.2 %
Operating expenses $ 33,760 $ 30,953 $ 30,837
Operating income (loss) $ 3,260 $ 11,428 $ (1,633)
Operating margin (deficit) 2.5 % 9.9% (1.5)%
Income (loss) $ 1,765 $ 8,955 $ (3,426)
Income (loss) per share-basic $ 0.00 $ 0.03 $ (0.01)
Income (loss) per share-diluted $ 0.00 $ 0.03 $ (0.01)
Basic shares 481,444 310,133 476,972
Diluted shares 488,611 311,614 476,972
Discontinued operations
Income $ 733 $ 1,964 $ 1,911
Income per share-basic $ 0.00 $ 0.01 $ 0.00
Income per share-diluted $ 0.00 $ 0.01 $ 0.00
Basic shares 481,444 310,133 476,972
Diluted shares 488,611 311,614 482,227
(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 quarter per GAAP include the following:
- -- Total optics revenues increased to $128.7 million, up $21.3 million,
or 19.8%, from $107.5 million in the preceding quarter and up $13.0
million, or 11.2%, from $115.8 million in the first quarter of the prior
year; the increase from the first quarter of the prior year includes the
impact of the Optium merger completed on August 29, 2008;
- -- Excluding approximately $28.8 million of additional revenues in the
quarter as a result of the Optium merger, optics revenues were $99.9
million, up $17.6 million, or 21.3% from $82.3 million in the preceding
quarter and down $15.9 million, or 13.7%, from $115.7 million in the first
quarter of the prior year prior to the merger (a revenue record for the
Company at that time); Revenues from the sale of products for 10/40 Gbps
applications increased to $51.9 million, up $11.3 million, or 27.8%, from
$40.6 million in the preceding quarter and up $19.7 million, or 61.1%, from
$32.2 million in the first quarter of the prior year primarily due to the
Optium merger;
- -- Gross margin from continuing operations was 22.8%, an increase from
21.6% in the preceding quarter and a decrease from 35.2% in the first
quarter of the prior year;
- -- Operating loss from continuing operations was $8.8 million, or (6.8)%
of revenues, compared to an operating loss of $10.9 million, or (10.1)% of
revenues in the preceding quarter (before a charge for the impairment of
goodwill and current technology) and operating income of $7.9 million, or
6.8% of revenues, in the first quarter of the prior year;
- -- A loss of $11.1 million, or $(0.02) per share, from continuing
operations compared to a loss of $27.0 million, or $(0.06) per share, in
the preceding quarter including a $13.2 million charge for the impairment
of goodwill and current technology in the preceding quarter, and income of
$2.9 million, or $0.01 per share, in the first quarter of the prior year;
- -- Income net of taxes from discontinued operations was $37.1 million, or
$.07 per diluted share, reflecting the gain on the sale of the assets of
the Network Tools Division in the quarter and compared to $1.2 million, or
$0.00 per share, in the preceding quarter and a loss of $125,000, or
$(0.00) per share, in the first quarter of the prior year; and
- -- Cash and short-term investments, plus other long-term investments that
can be readily converted into cash, totaled $60.4 million at the end of the
first quarter compared to $37.2 million at the end of the prior quarter
reflecting the sale of the Network Tools business in the quarter for $40.6
million in cash and the lack of sales of accounts receivable under the
Company's credit accounts receivable credit facility which sales totaled
$15.7 million in the prior quarter. The Company continues to maintain a
secured credit facility totaling $45.0 million under which $3.4 million was
used for letters of credit while no borrowings were outstanding at the end
of 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.
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 additional 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 gains or losses principally related to acquisitions, the sale of minority investments, restructuring or other transition activities, impairments and financing transactions. For the first quarter of fiscal 2010, these excluded items included, among other items described in Finisar Non-GAAP Financial Measures below, a non-cash charge of $5.3 million for slow moving and obsolete inventory; $4.2 million in non-cash stock-based compensation expense; $1.9 million in non-cash amortization charges related to acquired developed technology and purchased intangibles arising from previous acquisitions; and a $1.2 million non-cash charge for imputed interest expense on the Company's debt obligations, offset by non-recurring gains of $36.0 million from the sale of the Network Tools division and $1.6 million from the sale of minority investments in two separate entities.
Excluding these items:
- -- Non-GAAP gross margin from continuing operations increased to 28.8%
compared to 27.2% in the preceding quarter but decreased from 36.6% in the
first quarter of the prior year. The sequential increase in non-GAAP gross
margin reflects the impact of higher product shipment levels and the
incremental contribution margin thereon, while the decrease compared to the
prior year reflects the impact of lower revenues and lower yields
associated with making certain of our higher speed components as well as
the impact of the Optium merger ahead of additional manufacturing cost
synergies expected to be realized over the next three quarters;
- -- Non-GAAP operating expenses related to continuing operations were
$33.8 million in the first quarter, an increase of $2.9 million, or 9.5%,
from the preceding quarter and an increase of $2.8 million, or 9.1%, from
the first quarter of the prior year. The increase in operating expenses
from the preceding quarter reflects $1.3 million in higher research and
development expenses, $0.8 million related to higher sales and marketing
expense on higher revenue levels and $0.8 million in higher general and
administrative expense primarily related to an increase in the estimated
allowance for doubtful accounts. The increase as compared to the prior
year was primarily a result of the Optium merger, which is not reflected in
the prior year results. In this regard, the Company notes that Optium's
operating expenses in the same prior year period prior to the merger
totaled approximately $11.5 million whereas total Company operating
expenses in the most recent quarter increased just $2.8 million from the
prior year period;
- -- Non-GAAP operating income from continuing operations was $3.3 million,
or 2.5% of revenues, up $4.9 million from an operating loss of $1.6
million, or (1.5%) of revenues, in the preceding quarter, and down $8.1
million from operating income of $11.4 million, or 9.9% of revenues, in the
first quarter of the prior year. The increase in operating income from the
previous quarter was due primarily to higher gross profit levels on higher
revenues partially offset by higher operating expenses. The decline from
the prior year was primarily related to lower gross profit levels and
higher operating expenses resulting from the Optium merger;
- -- Non-GAAP income from continuing operations was $1.8 million, or $0.00
per share, compared to a loss of $3.4 million, or $(0.01) per share, in the
preceding quarter and net income of $9.0 million, or $0.03 per share, in
the first quarter of the prior year;
- -- Non-GAAP EBITDA from continuing operations was $10.4 million as
compared to$6.1 million in the preceding quarter and $17.5 million in the
first quarter of the prior year; and
- -- Non-GAAP income from discontinued operations was $0.7 million, or
$0.00 per share, as compared to $1.9 million, or $0.00 per share in the
preceding quarter and $2.0 million, or $0.01 per share, in the first
quarter of the prior year.
"Order trends continue to underscore healthy customer demand for ROADMs and products capable of transmitting at 10 Gbps for use in datacom and telecom applications," said Jerry Rawls, Finisar's executive Chairman of the Board. "I was also pleased to see the first orders arrive and revenue recognized for our QuadWire™ product for 40 Gbps parallel optics applications. This product marks our first foray into that new market for us."
"While gross margins for optics were up from last quarter and a little better than we expected, we can look for additional improvement in the near term as our top line continues to improve, product mix turns favorable and additional synergies are realized with respect to manufacturing costs," said Eitan Gertel, Finisar's Chief Executive Officer.
ADDITIONAL CONVERTIBLE NOTE REDUCTIONS FOLLOWING COMPLETION OF EXCHANGE OFFER
The Company also announced that, following the completion of an exchnage offer on August 6, 2009, where it retired $47.5 million in principal amount of its convertible subordinated notes due October 15, 2010, that it had retired an additional $15.2 million principal value of its notes in an all cash, privately negotiated transaction.
CONFERENCE CALL
Finisar will discuss these financial statements and its current business outlook during its regular quarterly conference call scheduled for today, September 10, 2009, at 2:00 p.m. PDT/5:00 EDT. To listen to the call you may connect through the investor page of Finisar at www.finisar.com or dial 866-393-6455 (domestic) or 706-643-4465 (international) and enter conference ID 23224474.
A replay of the webcast will be available shortly after the conclusion of the call on the Company's website until the next conference call to be held approximately 90 days from today. An audio replay of the call will be accessible to the public by calling (800) 642-1687 (domestic) or (706) 645-9291 (international) and then, following the prompts, enter conference ID 23224474 and record your name, affiliation, and contact number. The audio replay will be available for two weeks following the 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. Additional risks include the potential impact of pending civil litigation arising from the investigation of Finisar's historical option granting practices. 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).
ABOUT FINISAR
Finisar Corporation (NASDAQ: FNSR) is a global technology leader for fiber optic subsystems and network test systems that enable high-speed voice, video and data communications for networking, storage, wireless, and cable TV applications. For more than 20 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth and storage. Finisar is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. For additional information, visit www.finisar.com.
FINISAR FINANCIAL STATEMENTS
The following financial tables are presented in accordance with GAAP.
Finisar Corporation
Consolidated Statements of Operations
Three Months Ended
August 2, August 3, April 30,
2009 2008 2009
------------- ------------- -------------
(Unaudited) (Unaudited)
(in thousands, except share and
per share data)
Revenues 128,725 115,774 107,457
Cost of revenues 98,130 74,135 81,636
Impairment of acquired
developed technology - - 1,248
Amortization of acquired
developed technology 1,193 850 1,350
------------- ------------- -------------
Gross profit 29,402 40,789 23,223
Gross margin 22.8% 35.2% 21.6%
Operating expenses:
Research and development 21,047 17,413 19,767
Sales and marketing 6,819 6,876 5,908
General and administrative 9,621 8,511 7,719
Amortization of purchased
intangibles 701 129 700
Impairment of goodwill and
intangible assets - - 13,205
------------- ------------- -------------
Total operating
expenses 38,188 32,929 47,299
------------- ------------- -------------
Income (loss) from operations (8,786) 7,860 (24,076)
Interest income 10 968 18
Interest expense (2,434) (5,243) (2,517)
Other income 253 103 38
------------- ------------- -------------
Income (loss) from continuing
operations before income
taxes (10,957) 3,688 (26,537)
Provision for income taxes 159 746 467
------------- ------------- -------------
Income (loss) from continuing
operations (11,116) 2,942 (27,004)
Income (loss) from
discontinued operations, net
of taxes 37,079 (125) 1,246
------------- ------------- -------------
Net income (loss) $ 25,963 $ 2,817 $ (25,758)
============= ============= =============
Income (loss) per share from
continuing operations - basic $ (0.02) $ 0.01 $ (0.06)
============= ============= =============
Income (loss) per share from
continuing operations -
diluted $ (0.02) $ 0.01 $ (0.06)
============= ============= =============
Income (loss) per share from
discontinued operations -
basic $ 0.08 $ (0.00) $ 0.00
============= ============= =============
Income (loss) per share from
discontinued operations -
diluted $ 0.07 $ (0.00) $ 0.00
============= ============= =============
Shares used in computing net
income (loss) per share from
continuing operations- basic 481,444 310,133 476,972
Shares used in computing net
income (loss) per share from
continuing operations-
diluted 481,444 311,614 476,972
Shares used in computing net
income (loss) per share from
discontinued operations-
basic 481,444 310,133 476,972
Shares used in computing net
income (loss) per share from
discontinued operations-
diluted 502,106 310,133 482,227
Finisar Corporation
Consolidated Balance Sheets
(In thousands)
August 2, April 30,
2009 2009
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 60,327 $ 37,129
Short-term available-for-sale investments 92 92
Accounts receivable, net 99,466 81,820
Accounts receivable, other 8,512 10,033
Inventories 108,686 112,300
Prepaid expenses 5,568 7,122
------------ ------------
Total current assets 282,651 248,496
Property, plant and improvements, net 79,492 84,040
Purchased technology, net 15,267 16,663
Other intangible assets, net 13,102 14,316
Minority investments 14,289 14,289
Other assets 2,427 2,584
------------ ------------
Total assets $ 407,228 $ 380,388
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 52,264 $ 48,421
Accrued compensation 9,048 11,428
Other accrued liabilities 25,102 30,713
Deferred revenue 2,073 4,663
Current portion of long-term debt 6,173 6,107
Non-cancelable purchase obligations 657 2,965
------------ ------------
Total current liabilities 95,317 104,297
Long-term liabilities:
Convertible notes 135,490 134,255
Long-term debt 13,737 15,305
Other long-term liabilities 2,352 3,161
Deferred income taxes 973 1,149
------------ ------------
Total long-term liabilities 152,552 153,870
Stockholders' equity:
Common stock 486 477
Additional paid-in capital 1,838,083 1,830,807
Accumulated other comprehensive income 6,552 2,662
Accumulated deficit (1,685,762) (1,711,725)
------------ ------------
Total stockholders' equity 159,359 122,221
------------ ------------
Total liabilities and stockholders' equity $ 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);
- -- 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;
- -- Purchase accounting adjustment for sale of acquired inventory (non-
cash and non-recurring charges);
- -- Impairment of acquired developed technology (non-cash charges); and
- -- Reduction in force costs (non-recurring charges).
In calculating non-GAAP operating income (loss), 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:
- -- Disposal of a product line (non-recurring charges);
- -- Acquired in-process research and development expense (non-recurring
and non-cash charges);
- -- Litigation settlement payments (non-recurring charges);
- -- Amortization of purchased intangibles (non-cash charges related to
prior acquisitions); and
- -- Impairment charges associated with intangible assets (non-cash and non-
recurring).
In calculating non-GAAP net income (loss) and non-GAAP net income (loss) per share, we have also excluded the following items in applicable periods:
- -- Amortization of discount on convertible debt (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 loss (non-recurring and non-cash
charges);
- -- Tax charges arising from timing difference related to asset purchases
(non-cash provision); and
- -- Cumulative effect of change in accounting principle (non-recurring and
non-cash charges or income).
In calculating non-GAAP net income (loss) and non-GAAP net income (loss) per share, in each case from discontinued operations, we have also excluded gain on disposal of discontinued operations (non-recurring gain).
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 Ended
August 2, August 3, April 30,
2009 2008 2009
------------ ------------ ------------
(Unaudited) (Unaudited) (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 29,402 40,789 23,223
Gross margin, GAAP 22.8% 35.2% 21.6%
Adjustments:
Cost of revenues
Change in excess and obsolete
inventory reserve 5,254 (285) 2,495
Amortization of acquired
technology 1,192 850 1,349
Duplicate facility costs
during facility move - 170 -
Stock compensation 1,031 821 830
Costs related to options
investigation - - (247)
Impairment of acquired
developed technology - - 1,248
Reduction in force costs 141 36 306
------------ ------------ ------------
Total cost of revenue
adjustments 7,618 1,592 5,981
Gross profit, non-GAAP 37,020 42,381 29,204
Gross margin, non-GAAP 28.8% 36.6% 27.2%
Reconciliation of GAAP operating
loss to non-GAAP operating
income (loss):
Operating income (loss) per GAAP (8,786) 7,860 (24,076)
Operating margin, GAAP -6.9% 6.8% -22.4%
Adjustments:
Total cost of revenue adjustments 7,618 1,592 5,981
Research and development
Reduction in force costs 29 - 267
Stock compensation 1,525 860 1,546
Costs related to options
investigation - - (273)
Sales and marketing
Reduction in force costs - - 99
Stock compensation 578 327 460
Costs related to options
investigation - - (48)
General and administrative
Reduction in force costs 49 - 111
Stock compensation 1,036 515 824
Costs related to options
investigation 183 146 (429)
IPO Laddering Settlement 327 - -
Amortization of purchased
intangibles 701 128 702
Impairment of intangible assets - - 13,205
------------ ------------ ------------
Total cost of revenue and
operating expense
adjustments 12,046 3,568 22,445
Operating income (loss), non-GAAP 3,260 11,428 (1,631)
Operating margin, non-GAAP 2.2% 9.9% -1.5%
Reconciliation of GAAP income
(loss) to non-GAAP income (loss)
from continuing operations:
Income (loss) per GAAP from
continuing operations (11,116) 2,942 (27,004)
Total cost of revenue and
operating expense adjustments 12,046 3,568 22,445
Amortization of discount on
convertible debt - 1,146 -
Non-cash imputed interest expenses
on convertible debt 1,235 1,235 1,185
Other expense, net
Loss (gain) on sale of assets 21 413 497
Loss (gain) on minority
investments (375) (400) -
Other misc income (2) (500) (17)
Foreign exchange transaction
loss (44) - (532)
Provision for income tax
Timing difference related to
asset purchases - 551 -
------------ ------------ ------------
Total adjustments 12,881 6,013 23,578
Income (loss), non-GAAP, from
continuing operations 1,765 8,955 (3,426)
Reconciliation of GAAP income
(loss) to non-GAAP income (loss)
from discontinued operations:
Income (loss) per GAAP from
discontinued operations 37,079 (125) 1,246
Adjustments:
Reduction in force costs 6 100 131
Stock compensation 704 535 359
Payroll taxes related to
options investigation - - (184)
Amortization of acquired
technology 170 396 235
Amortization of purchased
intangibles 77 139 124
Disposal of a product line (1,250) 919 -
Gain on disposal of
discontinued operations (36,053) - -
------------ ------------ ------------
Total adjustments (36,346) 2,089 665
------------ ------------ ------------
Income from discontinued
operations, non-GAAP 733 1,964 1,911
------------ ------------ ------------
Reconciliation of GAAP net income
(loss) to non-GAAP net income
(loss):
Net income (loss) per GAAP 25,963 2,817 (25,758)
Total adjustments from continuing
operations 12,881 6,013 23,578
Total adjustments from
discontinuing operations (36,346) 2,089 665
------------ ------------ ------------
Total adjustments (23,465) 8,102 24,243
------------ ------------ ------------
Net income (loss), non-GAAP $ 2,498 $ 10,919 $ (1,515)
============ ============ ============
Income (loss) per share from
continuing operations - basic $ 0.00 $ 0.03 $ (0.01)
Income (loss) per share from
continuing operations - diluted $ 0.00 $ 0.03 $ (0.01)
Income (loss) per share from
discontinued operations - basic $ 0.00 $ 0.01 $ 0.00
Income (loss) per share from
discontinued operations -
diluted $ 0.00 $ 0.01 $ 0.00
Shares used in computing net
income (loss) per share from
continuing operations- basic 481,444 310,133 476,972
Shares used in computing net
income (loss) per share from
continuing operations- diluted 488,611 311,614 476,972
Shares used in computing net
income (loss) per share from
discontinued operations- basic 481,444 310,133 476,972
Shares used in computing net
income (loss) per share from
discontinued operations- diluted 488,611 311,614 482,227
Continuing operations
Net income (loss), non-GAAP $ 1,765 $ 8,955 $ (3,426)
Depreciation expense 7,172 6,168 7,626
Amortization 127 256 127
Interest expense 1,189 1,894 1,314
Income tax expense/(benefit) 159 195 468
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Non-GAAP EBITDA $ 10,412 $ 17,468 $ 6,109
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Discontinued operations
Net income (loss), non-GAAP 733 1,964 1,911
Depreciation expense 119 223 207
------------ ------------ ------------
Non-GAAP EBITDA $ 852 $ 2,187 $ 2,118
------------ ------------ ------------
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Total Non-GAAP EBITDA $ 11,264 $ 19,655 $ 8,227
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Contact:
Steve Workman
Chief Financial Officer
408-548-1000
Victoria McDonald
Senior Manager, Corporate Communications
408-542-4261
investor.relations@Finisar.com
