Exhibit 99.1
Oclaro Announces First Quarter Fiscal Year 2014 Financial Results
SAN JOSE, Calif., – November 7, 2013 – Oclaro, Inc. (NASDAQ: OCLR), a leading provider and innovator of optical communications solutions, today announced the financial results for its first quarter of fiscal year 2014, which ended September 28, 2013.
As previously disclosed, on September 12, 2013, Oclaro completed the sale of its Zurich business to II-VI, Inc. In addition, on November 1, 2013, the sale of Oclaro’s Amplifier and Micro-Optics business to II-VI was completed.
The following financial results for the first quarter of fiscal 2014 include a full quarter of Amplifier sales and approximately eleven weeks of Zurich sales.
| | • | | Revenues were $138.9 million in the first quarter of fiscal 2014, compared with $136.1 million in the fourth quarter of fiscal 2013. |
| | • | | Adjusted EBITDA was negative $15.5 million in the first quarter of fiscal 2014, compared with negative $21.1 million in the fourth quarter of fiscal 2013. |
“Our results for the first quarter of fiscal 2014 were in line with our expectations and demonstrate evidence of our progress,” said Greg Dougherty, CEO, Oclaro. “As a company, we are focused on creating a culture that delivers on the commitments we make. We have now completed the first phase of our turnaround plan by closing our previously announced sales of our Zurich and Amplifier businesses. We have started the restructuring process, which has required some hard choices and decisions, including a reduction of our global workforce, the closing of additional sites and a simplification of our organization structure. While our work will take several quarters to complete, I am pleased with our progress so far. I am enthusiastic about the potential for Oclaro in the future as we emerge from our restructuring process a more focused and stronger company.”
Results for the First Quarter of Fiscal 2014
Except where expressly noted, all reported results and second quarter fiscal 2014 guidance exclude the results from the Zurich and Amplifier and Micro-Optics businesses, and are reclassified to discontinued operations in the financial tables.
| | • | | Revenues were $96.6 million for the first quarter of fiscal 2014, compared with revenues of $95.4 million in the fourth quarter of fiscal 2013. |
| | • | | GAAP gross margin was 12% for the first quarter of fiscal 2014, compared with a GAAP gross margin of 6% in the fourth quarter of fiscal 2013. |
| | • | | Non-GAAP gross margin was 13% for the first quarter of fiscal 2014, compared with a non-GAAP gross margin of 7% in the fourth quarter of fiscal 2013. |
| | • | | GAAP operating loss was $31.7 million for the first quarter of fiscal 2014. This compares with a GAAP operating loss of $42.8 million for the fourth quarter of fiscal 2014, which included $18.9 million of flood-related income, net of expenses, and an impairment of goodwill and intangible assets of $26.2 million. |
| | • | | Non-GAAP operating loss was $26.7 million for the first quarter of fiscal 2014, compared with a non-GAAP operating loss of $29.2 million in the fourth quarter of fiscal 2013. |
| | • | | GAAP net income for the first quarter of fiscal 2014 was $33.3 million, and included approximately $63.5 million related to the discontinued operations. This compares with a GAAP net loss of $47.4 million in the fourth quarter of fiscal 2013. |
| | • | | Non-GAAP net loss for the first quarter of fiscal 2014 was $27.5 million. This compares with a non-GAAP net loss of $29.5 million in the fourth quarter of fiscal 2013. |
| | • | | Adjusted EBITDA was negative $19.7 million for the first quarter of fiscal 2014, compared with negative $22.4 million in the fourth quarter of fiscal 2013. |
| | • | | Cash, cash equivalents, restricted cash, and short-term investments were $94.7 million at September 29, 2013. |
Second Quarter Fiscal Year 2014 Outlook
The guidance for the second quarter of fiscal 2014, which ends December 28, 2013, is:
| | • | | Revenues in the range of $92 million to $102 million. |
| | • | | Non-GAAP gross margin in the range of 10% to 14%. |
| | • | | Adjusted EBITDA in the range of negative $20 million to negative $15 million. |
The outlook for the second quarter of fiscal 2014 does not include approximately $7 million of revenue and associated results from the Amplifier business, which was sold on November 1, 2013.
The foregoing guidance is based on current expectations. These statements are forward looking, and actual results may differ materially. Please see the Safe Harbor Statement in this earnings release for a description of certain important risk factors that could cause actual results to differ, and refer to Oclaro’s most recent annual and quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of these risks. Furthermore, our outlook excludes items that may be required by GAAP, including, but not limited to, restructuring and related costs, acquisition or disposal related costs, any additional flood-related expenses, expenses or income from certain legal actions, settlements and related costs outside our normal course of business, impairments of other long-lived assets, depreciation and amortization, extraordinary items, as well as the expensing of stock options and restricted stock grants. We do not intend to update this guidance as a result of developments occurring after the date of this release.
Management Appointment
The Company also announced today that Mike Fernicola has been appointed Principal Accounting Officer, effective November 8, 2013. Fernicola, will report directly to Pete Mangan CFO, and has more than 15 years of public accounting and corporate finance experience. He most recently served as Corporate Controller for Aptina Imaging, Inc from 2010 to 2013. Please refer to the Securities and Exchange Commission Form 8-K filing today for more information.
Conference Call
Oclaro will hold a conference call to discuss financial results for the first quarter of fiscal year 2014 today at 2:00 p.m. PT/5:00 p.m. ET. To listen to the live conference call, please dial (480) 629-9712. A replay of the conference call will be available through November 14, 2013. To access the replay, dial (858) 384-5517. The passcode for the replay is 4646347. A webcast of this call and a supplemental presentation will be available in the investor section of Oclaro’s website atwww.oclaro.com.
About Oclaro
Oclaro, Inc. (NASDAQ: OCLR) is a leading provider and innovator of optical communications solutions. The company is dedicated to photonics innovation, with cutting-edge research and development (R&D) and chip fabrication facilities in the U.K., Italy, Japan and Korea. It has in-house and contract manufacturing sites in the U.S., China, Malaysia and Thailand, with design, sales and service organizations in most of the major regions around the world. For more information, visithttp://www.oclaro.com.
Copyright 2013. All rights reserved. Oclaro, the Oclaro logo, and certain other Oclaro trademarks and logos are trademarks and/or registered trademarks of Oclaro, Inc. or its subsidiaries in the U.S. and other countries. Information in this release is subject to change without notice.
Safe Harbor Statement
This press release, in association with Oclaro’s first quarter fiscal year 2014 financial results conference call, contains statements about management’s future expectations, plans or prospects of Oclaro and its business, and together with the assumptions underlying these statements, constitute forward-looking statements for the purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements concerning (i) financial targets and expectations and progress toward Oclaro’s target business model, including financial guidance for the fiscal quarter ending December 28, 2013 regarding revenue, non-GAAP gross margin and Adjusted EBITDA, (ii) Oclaro’s restructuring plans and that status of those efforts, (iii) simplifying Oclaro’s operating footprint, and (iv) Oclaro’s market position and future operating prospects. Such statements can be identified by the fact that they do not relate strictly to historical or current facts and may contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” “should,” “outlook,” “could,” “target,” “model,” and other words and terms of similar meaning in connection with any discussion of future operations or financial performance. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including (i) the effect of receiving a “going concern” statement in our auditors report on our 2013 consolidated financial statements, (ii) the future performance of Oclaro and its ability to effectively restructure its operations and business following the sale of its Zurich and Amplifier businesses in accordance with its business plan, (iii) our ability to effectively and efficiently transition to an outsourced back-end assembly and test model, (iv) the potential inability to realize the expected benefits of asset dispositions, (v) the sale of businesses which may or may not arise in connection with executing our restructuring plans, (vi) the impact of continued uncertainty in world financial markets and any resulting reduction in demand for our products, (vii) our ability to meet or exceed our gross margin expectations, (viii) the effects of fluctuating product mix on our results, (ix) our ability to timely develop and commercialize new products, (x) our ability to reduce costs and operating expenses, (xi) our ability to respond to evolving technologies and customer requirements and demands, (xii) our dependence on a limited number of customers for a significant percentage of our revenues, (xiii) our ability to maintain strong relationships with certain customers, (xiv) our ability to effectively compete with companies that have greater name recognition, broader customer relationships and substantially greater financial, technical and marketing resources than we do, (xv) our ability to timely capitalize on any increase in market demand, (xvi) increased costs related to downsizing and compliance with regulatory and legal requirements in connection with such downsizing, (xvii) competition and pricing pressure, (xviii) the risks associated with our international operations, (xix) the outcome of tax audits or similar proceedings, (xx) the outcome of pending litigation against the company, (xxi) Oclaro’s ability to maintain or increase its cash reserves and obtain debt or equity-based financing on terms acceptable to it or at all, and (xxii) other factors described in Oclaro’s most recent annual report on Form 10-K, quarterly report on Form 10-Q and other documents it periodically files with the SEC. The forward-looking statements included in this announcement represent Oclaro’s view as of the date of this announcement. Oclaro anticipates that subsequent events and developments may cause Oclaro’s views and expectations to change. Oclaro specifically disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.
Non-GAAP Financial Measures
Oclaro provides certain supplemental non-GAAP financial measures to its investors as a complement to the most comparable GAAP measures. The GAAP measure most directly comparable to non-GAAP gross margin rate is gross margin rate. The GAAP measure most directly comparable to non-GAAP operating income/loss is operating income/loss. The GAAP measure most directly comparable to non-GAAP net income/loss and Adjusted EBITDA is net income/loss. An explanation and reconciliation of each of these non-GAAP financial measures to GAAP information is set forth below.
Oclaro believes that providing these non-GAAP measures to its investors, in addition to corresponding income statement measures, provides investors the benefit of viewing Oclaro’s performance using the same financial metrics that the management team uses in making many key decisions and evaluating how Oclaro’s “core operating performance” and its results of operations may look in the future. Oclaro defines “core operating performance” as its ongoing performance in the ordinary course of its operations. Items that are non-recurring or do not involve cash expenditures, such as impairment charges, income taxes, restructuring and severance programs, costs relating to specific major projects (such as acquisitions), gain on bargain purchase, non-cash compensation related to stock and options and certain income, purchase accounting adjustments related to the fair market value of acquired inventories, costs to outsource our back-end manufacturing activities, write-offs and expenses related to flooding in Thailand, including advance payments received from insurers, impairment of fixed assets and inventory and related expenses, are not included in Oclaro’s view of “core operating performance.” Management does not believe these items are reflective of Oclaro’s ongoing core operations and accordingly excludes those items from non-GAAP gross margin rate, non-GAAP operating income/loss, non-GAAP net income/loss and Adjusted EBITDA. Additionally, each non-GAAP measure has historically been presented by Oclaro as a complement to its most comparable GAAP measure, and Oclaro believes that the continuation of this practice increases the consistency and comparability of Oclaro’s earnings releases.
Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States of America. Non-GAAP measures should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.
Adjusted EBITDA
Adjusted EBITDA is calculated as net income/loss excluding the impact of income taxes, net interest income/expense, depreciation and amortization, net foreign currency translation gains/losses, as well as restructuring, acquisition and related costs, non-cash compensation related to stock and options, gain on bargain purchase, purchase accounting adjustments related to the fair market value of acquired inventories, impairment of intangible assets and goodwill and certain other one-time charges and credits, including flood related advance payments received from insurers, impairment of fixed assets and inventory and related expenses, specifically identified in the non-GAAP reconciliation schedules set forth below. Oclaro uses Adjusted EBITDA in evaluating Oclaro’s historical and prospective cash usage, as well as its cash usage relative to its competitors. Specifically, management uses this non-GAAP measure to further understand and analyze the cash used in/generated from Oclaro’s core operations. Oclaro believes that by excluding these non-cash and non-recurring charges, more accurate expectations of its future cash needs can be assessed in addition to providing a better understanding of the actual cash used in or generated from core operations for the periods presented. Oclaro further believes that providing this information allows Oclaro’s investors greater transparency and a better understanding of Oclaro’s core cash position.
| | |
| Oclaro, Inc. Contact | | Investor Contact |
| Pete Mangan | | Jim Fanucchi |
| Chief Financial Officer | | Darrow Associates, Inc. |
| (408) 383-1400 | | (408) 404-5400 |
| ir@oclaro.com | | ir@oclaro.com |
OCLARO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | |
| | | Three Months Ended | |
| | | September 28,
2013 | | | June 29,
2013 | | | September 29,
2012 | |
Revenues | | $ | 96,648 | | | $ | 95,383 | | | $ | 95,635 | |
Cost of revenues | | | 85,430 | | | | 90,094 | | | | 91,173 | |
| | | | | | | | | | | | |
Gross profit | | | 11,218 | | | | 5,289 | | | | 4,462 | |
Operating expenses: | | | | | | | | | | | | |
Research and development | | | 18,102 | | | | 18,823 | | | | 20,527 | |
Selling, general and administrative | | | 21,051 | | | | 18,613 | | | | 21,603 | |
Amortization of intangible assets | | | 424 | | | | 1,206 | | | | 1,232 | |
Restructuring, acquisition and related costs | | | 2,877 | | | | 2,250 | | | | 11,594 | |
Flood-related (income) expense | | | — | | | | (18,867 | ) | | | 264 | |
Impairment of goodwill, other intangible assets and long-lived assets | | | — | | | | 26,157 | | | | 864 | |
(Gain) loss on sale of property and equipment | | | 452 | | | | (142 | ) | | | (18 | ) |
| | | | | | | | | | | | |
Total operating expenses | | | 42,906 | | | | 48,040 | | | | 56,066 | |
| | | | | | | | | | | | |
Operating loss | | | (31,688 | ) | | | (42,751 | ) | | | (51,604 | ) |
Other income (expense): | | | | | | | | | | | | |
Interest income (expense), net | | | (553 | ) | | | (1,041 | ) | | | (478 | ) |
Gain (loss) on foreign currency translation | | | 1,777 | | | | (3,760 | ) | | | 38 | |
Other income (expense) | | | 521 | | | | 1,233 | | | | 24,866 | |
| | | | | | | | | | | | |
Total other income (expense) | | | 1,745 | | | | (3,568 | ) | | | 24,426 | |
| | | | | | | | | | | | |
Loss before income taxes | | | (29,943 | ) | | | (46,319 | ) | | | (27,178 | ) |
Income tax provision (benefit) | | | 302 | | | | (761 | ) | | | 918 | |
| | | | | | | | | | | | |
Loss from continuing operations | | | (30,245 | ) | | | (45,558 | ) | | | (28,096 | ) |
Income (loss) from discontinued operations, net of tax | | | 63,523 | | | | (1,818 | ) | | | 2,988 | |
| | | | | | | | | | | | |
Net income (loss) | | $ | 33,278 | | | $ | (47,376 | ) | | $ | (25,108 | ) |
| | | | | | | | | | | | |
Net income (loss) per share—basic and diluted: | | | | | | | | | | | | |
Loss from continuing operations | | $ | (0.33 | ) | | $ | (0.50 | ) | | $ | (0.35 | ) |
Income (loss) from discontinued operations | | | 0.70 | | | | (0.02 | ) | | | 0.04 | |
| | | | | | | | | | | | |
| | $ | 0.37 | | | $ | (0.52 | ) | | $ | (0.31 | ) |
Shares used in computing net income (loss) per share: | | | | | | | | | | | | |
Basic | | | 90,966 | | | | 90,771 | | | | 80,219 | |
Diluted | | | 90,966 | | | | 90,771 | | | | 80,219 | |
OCLARO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
| | | | | | | | |
| | | September 28, 2013 | | | June 29, 2013 | |
| ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash, cash equivalents and short-term investments | | $ | 92,157 | | | $ | 84,835 | |
Restricted cash | | | 2,571 | | | | 2,719 | |
Accounts receivable, net | | | 105,925 | | | | 100,774 | |
Inventories | | | 88,291 | | | | 86,112 | |
Prepaid expenses and other current assets | | | 46,483 | | | | 33,307 | |
Assets of discontinued operations held for sale | | | 14,233 | | | | 55,627 | |
| | | | | | | | |
Total current assets | | | 349,660 | | | | 363,374 | |
| | | | | | | | |
Property and equipment, net | | | 65,882 | | | | 71,842 | |
Other intangible assets, net | | | 9,907 | | | | 10,233 | |
Other non-current assets | | | 10,418 | | | | 4,445 | |
| | | | | | | | |
Total assets | | $ | 435,867 | | | $ | 449,894 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 114,138 | | | $ | 94,157 | |
Accrued expenses and other liabilities | | | 62,438 | | | | 53,227 | |
Capital lease obligations, current | | | 8,300 | | | | 8,281 | |
Note payable | | | — | | | | 24,647 | |
Credit line payable | | | — | | | | 39,964 | |
Liabilities of discontinued operations held for sale | | | — | | | | 16,253 | |
| | | | | | | | |
Total current liabilities | | | 184,876 | | | | 236,529 | |
| | | | | | | | |
Deferred gain on sale-leaseback | | | 10,823 | | | | 10,477 | |
Convertible notes payable | | | 23,091 | | | | 22,990 | |
Capital lease obligations, non-current | | | 8,383 | | | | 9,914 | |
Other long-term liabilities | | | 17,375 | | | | 15,852 | |
| | | | | | | | |
Total liabilities | | | 244,548 | | | | 295,762 | |
| | | | | | | | |
Stockholders’ equity: | | | | | | | | |
Common stock | | | 931 | | | | 928 | |
Additional paid-in capital | | | 1,430,161 | | | | 1,429,155 | |
Accumulated other comprehensive income | | | 42,268 | | | | 39,368 | |
Accumulated deficit | | | (1,282,041 | ) | | | (1,315,319 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 191,319 | | | | 154,132 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 435,867 | | | $ | 449,894 | |
| | | | | | | | |
OCLARO, INC.
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
CONTINUING OPERATIONS
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | |
| | | Three Months Ended | |
| | | September 28,
2013 | | | June 29,
2013 | | | September 29,
2012 | |
Reconciliation of GAAP gross margin rate to non-GAAP gross margin rate: | |
GAAP gross profit | | $ | 11,218 | | | $ | 5,289 | | | $ | 4,462 | |
Opnext FMV inventory adjustment | | | — | | | | — | | | | 1,462 | |
Outsource transition costs | | | 749 | | | | 1,293 | | | | — | |
Stock-based compensation in cost of revenues | | | 252 | | | | 410 | | | | 274 | |
| | | | | | | | | | | | |
Non-GAAP gross profit | | $ | 12,219 | | | $ | 6,992 | | | $ | 6,198 | |
| | | | | | | | | | | | |
GAAP gross margin rate | | | 11.6 | % | | | 5.5 | % | | | 4.7 | % |
Non-GAAP gross margin rate | | | 12.6 | % | | | 7.3 | % | | | 6.5 | % |
Reconciliation of GAAP operating loss to non-GAAP operating loss: | | | | | | | | | | | | |
GAAP operating loss | | $ | (31,688 | ) | | $ | (42,751 | ) | | $ | (51,604 | ) |
Stock-based compensation | | | 963 | | | | 1,611 | | | | 1,373 | |
Amortization of intangible assets | | | 424 | | | | 1,206 | | | | 1,232 | |
Restructuring, acquisition and related costs | | | 2,877 | | | | 1,973 | | | | 11,594 | |
Flood-related (income) expense, net | | | — | | | | (18,867 | ) | | | 264 | |
Impairment charges | | | — | | | | 26,157 | | | | 864 | |
Opnext FMV inventory adjustment | | | — | | | | — | | | | 1,462 | |
Outsource transition costs | | | 749 | | | | 1,462 | | | | — | |
| | | | | | | | | | | | |
Non-GAAP operating loss | | $ | (26,675 | ) | | $ | (29,209 | ) | | $ | (34,815 | ) |
| | | | | | | | | | | | |
Reconciliation of GAAP loss from continuing operations to non-GAAP loss from continuing operations and adjusted EBITDA: | | | | | | | | | | | | |
GAAP loss from continuing operations | | $ | (30,245 | ) | | $ | (45,558 | ) | | $ | (28,096 | ) |
Stock-based compensation included in: | | | 963 | | | | 1,611 | | | | 1,373 | |
Amortization expense | | | 424 | | | | 1,206 | | | | 1,232 | |
Restructuring, acquisition and related costs | | | 2,877 | | | | 1,973 | | | | 11,594 | |
Flood-related expense | | | — | | | | (18,867 | ) | | | 264 | |
Impairment charges | | | — | | | | 26,157 | | | | 864 | |
Opnext FMV inventory adjustment | | | — | | | | — | | | | 1,462 | |
Other (income) expense items, net | | | (521 | ) | | | (1,233 | ) | | | (24,866 | ) |
Outsource transition costs | | | 749 | | | | 1,462 | | | | — | |
(Gain) loss on foreign currency translation | | | (1,777 | ) | | | 3,760 | | | | (38 | ) |
| | | | | | | | | | | | |
Non-GAAP loss from continuing operations | | | (27,530 | ) | | | (29,489 | ) | | | (36,211 | ) |
| | | | | | | | | | | | |
Income tax provision | | | 302 | | | | (761 | ) | | | 918 | |
Depreciation expense | | | 6,984 | | | | 6,771 | | | | 9,219 | |
Interest (income) expense, net | | | 553 | | | | 1,041 | | | | 478 | |
| | | | | | | | | | | | |
Adjusted EBITDA | | $ | (19,691 | ) | | $ | (22,438 | ) | | $ | (25,596 | ) |
| | | | | | | | | | | | |
Non-GAAP loss per share—continuing operations: | | | | | | | | | | | | |
Basic | | $ | (0.30 | ) | | $ | (0.32 | ) | | $ | (0.45 | ) |
Diluted | | $ | (0.30 | ) | | $ | (0.32 | ) | | $ | (0.45 | ) |
Shares used in computing Non-GAAP loss per share—continuing operations: | | | | | | | | | | | | |
Basic | | | 90,966 | | | | 90,771 | | | | 80,219 | |
Diluted | | | 90,966 | | | | 90,771 | | | | 80,219 | |
Stock-based compensation for the above included the following: | | | | | | | | | | | | |
Cost of revenues | | $ | 252 | | | $ | 410 | | | $ | 274 | |
Research and development | | | 246 | | | | 320 | | | | 319 | |
Selling, general and administrative | | | 465 | | | | 604 | | | | 780 | |
Restructuring, acquisition and related costs | | | — | | | | 277 | | | | — | |
| | | | | | | | | | | | |
Total | | $ | 963 | | | $ | 1,611 | | | $ | 1,373 | |
| | | | | | | | | | | | |
OCLARO, INC.
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
CONTINUING OPERATIONS AND DISCONTINUED OPERATIONS
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | |
| | | Three Months Ended | |
| | | September 28,
2013 | | | June 29,
2013 | | | September 29,
2012 | |
Reconciliation of GAAP revenues to non-GAAP revenues: | | | | | | | | | | | | |
GAAP revenues | | $ | 96,648 | | | $ | 95,383 | | | $ | 95,635 | |
Revenues from discontinued operations | | | 42,212 | | | | 40,725 | | | | 53,178 | |
| | | | | | | | | | | | |
Non-GAAP Revenues | | $ | 138,860 | | | $ | 136,108 | | | $ | 148,813 | |
| | | | | | | | | | | | |
Reconciliation of GAAP gross margin rate to non-GAAP gross margin rate: | | | | | | | | | | | | |
GAAP gross profit: | | | | | | | | | | | | |
Continuing operations | | $ | 11,218 | | | $ | 5,289 | | | $ | 4,462 | |
Discontinued operations | | | 9,904 | | | | 7,599 | | | | 11,576 | |
Opnext FMV inventory adjustment | | | — | | | | — | | | | 1,462 | |
Outsource transition costs | | | 749 | | | | 1,293 | | | | — | |
Stock-based compensation in cost of revenues | | | | | | | | | | | | |
Continuing operations | | | 252 | | | | 410 | | | | 274 | |
Discontinued operations | | | 52 | | | | 45 | | | | 64 | |
| | | | | | | | | | | | |
Non-GAAP gross profit | | $ | 22,175 | | | $ | 14,636 | | | $ | 17,838 | |
| | | | | | | | | | | | |
GAAP gross margin rate | | | 15.2 | % | | | 9.5 | % | | | 10.8 | % |
Non-GAAP gross margin rate | | | 16.0 | % | | | 10.8 | % | | | 12.0 | % |
Reconciliation of GAAP operating loss to non-GAAP operating loss: | | | | | | | | | | | | |
GAAP operating loss | | | | | | | | | | | | |
Continuing operations | | $ | (31,688 | ) | | $ | (42,751 | ) | | $ | (51,604 | ) |
Discontinued operations | | | 2,552 | | | | (1,333 | ) | | | 3,095 | |
Stock-based compensation | | | | | | | | | | | | |
Continuing operations | | | 963 | | | | 1,611 | | | | 1,373 | |
Discontinued operations | | | 188 | | | | 161 | | | | 227 | |
Amortization of intangible assets | | | | | | | | | | | | |
Continuing operations | | | 424 | | | | 1,206 | | | | 1,232 | |
Discontinued operations | | | | | | | 69 | | | | 69 | |
Restructuring, acquisition and related costs | | | | | | | | | | | | |
Continuing operations | | | 2,877 | | | | 1,973 | | | | 11,594 | |
Discontinued operations | | | 26 | | | | 257 | | | | 178 | |
Flood-related (income) expense, net | | | — | | | | (18,867 | ) | | | 264 | |
Impairment charges | | | | | | | | | | | | |
Continuing operations | | | — | | | | 26,157 | | | | 864 | |
Discontinued operations | | | | | | | 540 | | | | | |
Opnext FMV inventory adjustment | | | — | | | | — | | | | 1,462 | |
Outsource transition costs | | | 749 | | | | 1,462 | | | | — | |
| | | | | | | | | | | | |
Non-GAAP operating loss | | $ | (23,909 | ) | | $ | (29,515 | ) | | $ | (31,246 | ) |
| | | | | | | | | | | | |
Reconciliation of GAAP net loss to non-GAAP net loss and adjusted EBITDA: | | | | | | | | | | | | |
GAAP net loss | | | | | | | | | | | | |
Continuing operations | | $ | (30,245 | ) | | $ | (45,558 | ) | | $ | (28,096 | ) |
Discontinued operations | | | 63,523 | | | | (1,818 | ) | | | 2,988 | |
Stock-based compensation included in: | | | | | | | | | | | | |
Continuing operations | | | 963 | | | | 1,611 | | | | 1,373 | |
Discontinued operations | | | 188 | | | | 161 | | | | 227 | |
Amortization expense | | | | | | | | | | | | |
Continuing operations | | | 424 | | | | 1,206 | | | | 1,232 | |
Discontinued operations | | | | | | | 69 | | | | 69 | |
Restructuring, acquisition and related costs | | | | | | | | | | | | |
Continuing operations | | | 2,877 | | | | 1,973 | | | | 11,594 | |
Discontinued operations | | | 26 | | | | 257 | | | | 178 | |
Flood-related expense | | | — | | | | (18,867 | ) | | | 264 | |
Impairment charges | | | | | | | | | | | | |
Continuing operations | | | — | | | | 26,157 | | | | 864 | |
Discontinued operations | | | | | | | 540 | | | | | |
Opnext FMV inventory adjustment | | | — | | | | — | | | | 1,462 | |
Other (income) expense items, net | | | | | | | | | | | | |
Continuing operations | | | (521 | ) | | | (1,233 | ) | | | (24,866 | ) |
Discontinued operations | | | (62,811 | ) | | | | | | | | |
Outsource transition costs | | | 749 | | | | 1,462 | | | | — | |
(Gain) loss on foreign currency translation | | | | | | | | | | | | |
Continuing operations | | | (1,777 | ) | | | 3,760 | | | | (38 | ) |
Discontinued operations | | | (3,101 | ) | | | (30 | ) | | | (158 | ) |
| | | | | | | | | | | | |
Non-GAAP net loss | | | (29,705 | ) | | | (30,310 | ) | | | (32,907 | ) |
| | | | | | | | | | | | |
Income tax provision | | | | | | | | | | | | |
Continuing operations | | | 302 | | | | (761 | ) | | | 918 | |
Discontinued operations | | | 163 | | | | (713 | ) | | | 265 | |
Depreciation expense | | | | | | | | | | | | |
Continuing operations | | | 6,984 | | | | 6,771 | | | | 9,219 | |
Discontinued operations | | | 1,472 | | | | 1,691 | | | | 1,724 | |
Interest (income) expense, net | | | | | | | | | | | | |
Continuing operations | | | 553 | | | | 1,041 | | | | 478 | |
Discontinued operations | | | 4,762 | | | | 1,228 | | | | | |
| | | | | | | | | | | | |
Adjusted EBITDA | | $ | (15,469 | ) | | $ | (21,053 | ) | | $ | (20,303 | ) |
| | | | | | | | | | | | |
Non-GAAP net loss per share: | | | | | | | | | | | | |
Basic | | $ | (0.33 | ) | | $ | (0.33 | ) | | $ | (0.41 | ) |
Diluted | | $ | (0.33 | ) | | $ | (0.33 | ) | | $ | (0.41 | ) |
Shares used in computing Non-GAAP net loss per share: | | | | | | | | | | | | |
Basic | | | 90,966 | | | | 90,771 | | | | 80,219 | |
Diluted | | | 90,966 | | | | 90,771 | | | | 80,219 | |
Stock-based compensation for the above included the following: | | | | | | | | | | | | |
Cost of revenues | | | | | | | | | | | | |
Continuing operations | | $ | 252 | | | $ | 410 | | | $ | 274 | |
Discontinued operations | | | 52 | | | | 45 | | | | 64 | |
Research and development | | | | | | | | | | | | |
Continuing operations | | | 246 | | | | 320 | | | | 319 | |
Discontinued operations | | | 48 | | | | 41 | | | | 57 | |
Selling, general and administrative | | | | | | | | | | | | |
Continuing operations | | | 465 | | | | 604 | | | | 780 | |
Discontinued operations | | | 88 | | | | 75 | | | | 106 | |
Restructuring, acquisition and related costs | | | | | | | | | | | | |
Continuing operations | | | | | | | 277 | | | | | |
Discontinued operations | | | | | | | — | | | | | |
| | | | | | | | | | | | |
Total | | $ | 1,151 | | | $ | 1,772 | | | $ | 1,600 | |
| | | | | | | | | | | | |
