Exhibit 99.1
| | |
Contacts: | | |
Press: Jeff Ferry | | Investors/Analysts: Bob Blair |
jferry@infinera.com | | bblair@infinera.com |
Infinera Corporation | | Infinera Corporation |
408-572-5213 | | 408-716-4879 |
Infinera Corporation Reports Fourth Quarter and Fiscal Year 2009 Financial Results
Q4 Revenues of $90.2 Million, Including Record Bookings and Higher TAM Shipments
Sunnyvale, CA, January 26, 2010 – Infinera Corporation (Nasdaq: INFN), a leading provider of digital optical communications systems, today released financial results for the fourth quarter and fiscal year ended December 26, 2009.
Results for Q4 2009:
| | • | | GAAP revenues for the fourth quarter of 2009 were $90.2 million compared to $83.4 million in the third quarter of 2009 and $86.2 million on an adjusted GAAP basis in the fourth quarter of 2008. |
| | • | | GAAP gross margins for the quarter were 38%. Excluding restructuring and other related costs and non-cash stock-based compensation, non-GAAP gross margins were 40% compared to 38% in the third quarter of 2009 and 36% on an adjusted GAAP basis in the fourth quarter of 2008. |
| | • | | GAAP net loss for the quarter was $18.7 million, or $0.19 per share. Excluding restructuring and other related costs and non-cash stock-based compensation, the net loss on a non-GAAP basis was $6.5 million, or $0.07 per share, compared to net loss of $3.1 million, or $0.03 per share in the third quarter of 2009 and net loss on an adjusted GAAP basis of $9.0 million, or $0.10 per share, in the fourth quarter of 2008. |
Results for Fiscal 2009:
| | • | | GAAP revenues for the year ended December 26, 2009 were $309.1 million compared to $353.4 million on an adjusted GAAP basis in 2008. |
| | • | | GAAP gross margins for the year were 33%. Excluding restructuring and other related costs and non-cash stock-based compensation, gross margins were 36% in 2009 compared to 43% on an adjusted GAAP basis in 2008. |
| | • | | GAAP net loss for the year was $86.6 million, or $0.91 per share. Excluding restructuring and other related costs and non-cash stock-based compensation, the net loss on a non-GAAP basis was $45.4 million or $0.48 per share in 2009, compared to net income on an adjusted GAAP basis of $14.3 million or $0.15 per diluted share in 2008. |
Management Commentary
“We are pleased with the continuation of our sequential growth in revenues and gross margins in the fourth quarter as well as our record bookings for the quarter and year, reflecting our success in expanding our customer footprint throughout fiscal year 2009,” said Tom Fallon, president and chief executive officer. “In the fourth quarter, we invoiced our highest level of tributary adapter modules (TAMs) in six quarters and saw continued strength in our common equipment sales.
“We are seeing good opportunities with both current and prospective customers across all served markets,” said Fallon. “The market continues to embrace Infinera’s disruptive PIC-based approach of providing the best, most cost-effective and most flexible optical networks to address their bandwidth needs—both with our existing products and the new products on our roadmap. To meet these needs, we are committed to continuing to invest in technologies and products that will advance Infinera’s technology leadership position across our expanded addressable markets of submarine, ultra long haul, long haul, metro core, and metro edge.”
The company noted the following additional developments:
| | • | | The addition of three new customers bringing the company’s total customer count to 69. |
| | • | | Among the new customers was Tiscali, one of the leading telecommunications companies in Italy, which selected both the Infinera DTN and ATN for its nationwide Italian backbone and metro networks. |
| | • | | Shipment of Infinera equipment for a nationwide build-out for an unnamed leading internet content provider in the fourth quarter—for a win that was achieved and for which initial orders were received in Q3. As a result of this rapid deployment, the customer finished as Infinera’s top customer for the first time in Q4. |
| | • | | The other large Q4 customer was Level 3, which contributed 12% of revenues vs. slightly less than 10% in Q3. |
| | • | | The top 5 customers for the quarter included two of the largest internet content providers in the world, two established European customers as well as Level 3. |
| | • | | In addition to previously announced submarine network wins in the Americas with Global Crossing and Telefonica, the company recently won a 6,000 kilometer Trans-Atlantic submarine route with an existing customer. |
Note: For an explanation of our use of Non-GAAP and Adjusted GAAP measures and a full reconciliation of these measures to our GAAP results, please see the section of the accompanying tables titled “GAAP to Non-GAAP and Adjusted GAAP Reconciliations.” We have not shown comparisons to our fourth quarter and fiscal 2008 GAAP results in the body of this press release because those results were significantly affected by the recognition of ratable product and related support and services revenue from shipments made prior to the fourth quarter of 2008, which we believe makes those comparisons less useful for investors. See our GAAP Condensed Consolidated Statements of Operations attached to this release for these GAAP to GAAP comparisons.
Conference Call Information:
Infinera will host a conference call for analysts and investors to discuss its fourth quarter results and first quarter outlook today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be accessible from the “Investor Relations” section of the company’s website at www.infinera.com. Following the webcast, an archived version will be available on the website for 30 days. To hear the replay, parties in the United States and Canada should call 1-866-416-4355. International parties can access the replay at 1-203-369-0719.
About Infinera
Infinera provides Digital Optical Networking systems to telecommunications carriers worldwide. Infinera’s systems are unique in their use of a breakthrough semiconductor technology: the Photonic Integrated Circuit (PIC). Infinera’s systems and PIC technology are designed to provide optical networks with simpler and more flexible engineering and operations, faster time-to-service, and the ability to rapidly deliver differentiated services without reengineering their optical infrastructure. For more information, please visit www.infinera.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about our belief that we are seeing good opportunities with both current and prospective customers across all served markets, our belief that our PIC-based approach of providing the best, most cost-effective and most flexible optical networks to address our customer’s bandwidth needs, our commitment to continuing to invest in technologies and products that will advance Infinera’s technology leadership position. These forward-looking statements involve risks and uncertainties, as well as assumptions that if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs and develop new or enhanced products to meet those needs; the adoption rate of our products; our ability to establish and maintain successful relationships with our customers; our ability to reduce customer concentration; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; shortages or price fluctuations in our supply chain; our ability to protect our intellectual property rights; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission (SEC). More information about these and other risks that may impact Infinera’s business are set forth in our annual report on Form 10-K, which was filed with the SEC on February 17, 2009, as well as subsequent reports filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
Non-GAAP and other Financial Measures
In addition to disclosing financial measures prepared in accordance with United States Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP and other financial measures that reflect adjusted GAAP revenue and exclude non-cash stock-based compensation expenses and non-recurring restructuring and other related costs. For a description of these non-GAAP financial measures, including the reasons why management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled “GAAP to Non-GAAP and Adjusted GAAP Reconciliations” as well as the accompanying notes on the use of certain non-GAAP measures. We anticipate disclosing forward-looking non-GAAP and other financial information in our conference call to discuss our fourth quarter 2009 results, including an estimate of non-GAAP earnings for the first quarter of 2010 that excludes non-cash stock-based compensation expenses.
A copy of this press release can be found on the investor relations page of Infinera’s website at www.infinera.com.
Infinera Corporation and the Infinera logo are trademarks or registered trademarks of Infinera Corporation. All other trademarks used or mentioned herein belong to their respective owners.
Infinera Corporation
GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 26,
2009 | | | December 27,
2008 | | | December 26,
2009 | | | December 27,
2008 | |
Revenue: | | | | | | | | | | | | | | | | |
Product | | $ | 82,100 | | | $ | 80,045 | | | $ | 276,012 | | | $ | 306,808 | |
Ratable product and related support and services | | | 1,025 | | | | 12,243 | | | | 4,231 | | | | 193,705 | |
Services | | | 7,056 | | | | 7,056 | | | | 28,858 | | | | 18,699 | |
| | | | | | | | | | | | | | | | |
Total revenue | | | 90,181 | | | | 99,344 | | | | 309,101 | | | | 519,212 | |
| | | | |
Cost of revenue (1): | | | | | | | | | | | | | | | | |
Cost of product | | | 52,686 | | | | 52,306 | | | | 189,723 | | | | 184,234 | |
Cost of ratable product and related support and services | | | 399 | | | | 5,088 | | | | 1,931 | | | | 91,625 | |
Cost of services | | | 2,627 | | | | 3,984 | | | | 12,308 | | | | 9,798 | |
Restructuring and other costs related to cost of revenue | | | 302 | | | | — | | | | 3,038 | | | | — | |
| | | | | | | | | | | | | | | | |
Total cost of revenue | | | 56,014 | | | | 61,378 | | | | 207,000 | | | | 285,657 | |
| | | | |
Gross profit | | | 34,167 | | | | 37,966 | | | | 102,101 | | | | 233,555 | |
| | | | |
Operating expenses(1): | | | | | | | | | | | | | | | | |
Sales and marketing | | | 13,446 | | | | 10,985 | | | | 48,391 | | | | 43,262 | |
Research and development | | | 26,829 | | | | 23,256 | | | | 97,178 | | | | 80,428 | |
General and administrative | | | 13,291 | | | | 10,650 | | | | 45,269 | | | | 36,282 | |
Restructuring and other costs | | | 213 | | | | — | | | | 814 | | | | — | |
Amortization of intangible assets | | | 14 | | | | 39 | | | | 110 | | | | 150 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 53,793 | | | | 44,930 | | | | 191,762 | | | | 160,122 | |
| | | | |
Income (loss) from operations | | | (19,626 | ) | | | (6,964 | ) | | | (89,661 | ) | | | 73,433 | |
| | | | |
Other income (expense), net: | | | | | | | | | | | | | | | | |
Interest income | | | 732 | | | | 1,313 | | | | 2,688 | | | | 8,549 | |
Interest expense | | | — | | | | — | | | | — | | | | (3 | ) |
Net impairment losses recognized in earnings(2) | | | — | | | | — | | | | (1,094 | ) | | | — | |
Other gain (loss), net | | | (288 | ) | | | (1,741 | ) | | | (426 | ) | | | (528 | ) |
| | | | | | | | | | | | | | | | |
Total other income (expense), net | | | 444 | | | | (428 | ) | | | 1,168 | | | | 8,018 | |
| | | | |
Income (loss) before income taxes | | | (19,182 | ) | | | (7,392 | ) | | | (88,493 | ) | | | 81,451 | |
Provision for (benefit from) income taxes | | | (531 | ) | | | (704 | ) | | | (1,871 | ) | | | 2,723 | |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (18,651 | ) | | $ | (6,688 | ) | | $ | (86,622 | ) | | $ | 78,728 | |
| | | | | | | | | | | | | | | | |
Net income (loss) per common share: | | | | | | | | | | | | | | | | |
Basic | | $ | (0.19 | ) | | $ | (0.07 | ) | | $ | (0.91 | ) | | $ | 0.85 | |
| | | | | | | | | | | | | | | | |
Diluted | | $ | (0.19 | ) | | $ | (0.07 | ) | | $ | (0.91 | ) | | $ | 0.81 | |
| | | | | | | | | | | | | | | | |
Weighted average shares used in computing net income (loss) per common share: | | | | | | | | | | | | | | | | |
Basic | | | 96,573 | | | | 93,449 | | | | 95,468 | | | | 92,427 | |
| | | | | | | | | | | | | | | | |
Diluted | | | 96,573 | | | | 93,449 | | | | 95,468 | | | | 97,088 | |
| | | | | | | | | | | | | | | | |
(1) The following table summarizes the effects of stock-based compensation related to employees and non-employees for the three and twelve months ended December 26, 2009 and December 27, 2008: | |
| | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 26,
2009 | | | December 27,
2008 | | | December 26,
2009 | | | December 27,
2008 | |
Cost of revenue | | $ | 515 | | | $ | 308 | | | $ | 1,861 | | | $ | 1,086 | |
Sales and marketing | | | 1,782 | | | | 1,176 | | | | 6,505 | | | | 4,440 | |
Research and development | | | 3,236 | | | | 1,821 | | | | 10,302 | | | | 6,543 | |
General and administration | | | 4,919 | | | | 1,933 | | | | 15,061 | | | | 7,463 | |
| | | | | | | | | | | | | | | | |
| | | 10,452 | | | | 5,238 | | | | 33,729 | | | | 19,532 | |
Cost of revenue - amortization from balance sheet* | | | 1,189 | | | | 738 | | | | 3,646 | | | | 4,287 | |
| | | | | | | | | | | | | | | | |
Total stock-based compensation expense | | $ | 11,641 | | | $ | 5,976 | | | $ | 37,375 | | | $ | 23,819 | |
| | | | | | | | | | | | | | | | |
* Stock-based compensation expense deferred to inventory and to deferred inventory costs in prior periods and recognized in the current period. (2) The following table summarizes the components of net impairment losses recognized in earnings: | |
| | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 26,
2009 | | | December 27,
2008 | | | December 26,
2009 | | | December 27,
2008 | |
Total other-than-temporary impairment loss | | $ | — | | | $ | — | | | $ | (2,747 | ) | | $ | — | |
Portion of gain (loss) recognized in other comprehensive loss | | | — | | | | — | | | | 1,653 | | | | — | |
| | | | | | | | | | | | | | | | |
Net impairment losses recognized in earnings | | $ | — | | | $ | — | | | $ | (1,094 | ) | | $ | — | |
| | | | | | | | | | | | | | | | |
Infinera Corporation
GAAP to Non-GAAP and Adjusted GAAP Reconciliations:
Infinera Corporation
GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 26, 2009 | |
| | | GAAP | | | Restructuring
Charges(1) | | | Non-GAAP excluding
Restructuring | | | Stock Comp(2) | | | Non-GAAP | |
Revenue | | | | | | | | | | | | | | | | | | | | |
Product and ratable revenue | | $ | 83,125 | | | $ | — | | | $ | 83,125 | | | $ | — | | | $ | 83,125 | |
Services revenue | | | 7,056 | | | | — | | | | 7,056 | | | | — | | | | 7,056 | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue | | | 90,181 | | | | — | | | | 90,181 | | | | — | | | | 90,181 | |
Cost of revenue | | | 56,014 | | | | (302 | )(a) | | | 55,712 | | | | (1,704 | ) | | | 54,008 | |
| | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 34,167 | | | | 302 | | | | 34,469 | | | | 1,704 | | | | 36,173 | |
Gross margin | | | 38 | % | | | | | | | | | | | | | | | 40 | % |
Operating expenses | | | 53,793 | | | | (213 | )(a) | | | 53,580 | | | | (9,937 | ) | | | 43,643 | |
| | | | | | | | | | | | | | | | | | | | |
Loss from operations | | | (19,626 | ) | | | 515 | | | | (19,111 | ) | | | 11,641 | | | | (7,470 | ) |
Other income (expense), net | | | 444 | | | | — | | | | 444 | | | | — | | | | 444 | |
| | | | | | | | | | | | | | | | | | | | |
Loss before income taxes | | | (19,182 | ) | | | 515 | | | | (18,667 | ) | | | 11,641 | | | | (7,026 | ) |
Benefit from income taxes | | | (531 | ) | | | — | | | | (531 | ) | | | — | | | | (531 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (18,651 | ) | | $ | 515 | | | $ | (18,136 | ) | | $ | 11,641 | | | $ | (6,495 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | (0.19 | ) | | | | | | | | | | | | | | $ | (0.07 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | $ | (0.19 | ) | | | | | | | | | | | | | | $ | (0.06 | )* |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares used in computing net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 96,573 | | | | | | | | | | | | | | | | 96,573 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | 96,573 | | | | | | | | | | | | | | | | 100,297 | * |
| | | | | | | | | | | | | | | | | | | | |
| (1) | In the fourth quarter of 2009, we recorded restructuring and other related costs of $0.5 million pursuant to our plan announced on July 21, 2009, involving the closure of our Maryland based semi-conductor fabrication plant (“FAB”) and the consolidation of these activities into our primary FAB location in Sunnyvale, California. |
| (2) | See footnote to the Condensed Consolidated Statements of Operations for a summary of the effects of stock-based compensation related to employees and non-employees for the three months ended December 26, 2009. |
| * | Diluted shares used to calculate net loss per share on a non-GAAP basis provided for informational purposes only. |
Infinera Corporation
GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 26, 2009 | |
| | | GAAP | | | Restructuring
Charges(1) | | | Non-GAAP excluding
Restructuring | | | Stock Comp | | | Non-GAAP | |
Revenue | | | | | | | | | | | | | | | | | | | | |
Product and ratable revenue | | $ | 74,582 | | | $ | — | | | $ | 74,582 | | | $ | — | | | $ | 74,582 | |
Services revenue | | | 8,826 | | | | — | | | | 8,826 | | | | — | | | | 8,826 | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue | | | 83,408 | | | | — | | | | 83,408 | | | | — | | | | 83,408 | |
Cost of revenue | | | 55,702 | | | | (2,736 | )(b) | | | 52,966 | | | | (1,477 | )(c) | | | 51,489 | |
| | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 27,706 | | | | 2,736 | | | | 30,442 | | | | 1,477 | | | | 31,919 | |
Gross margin | | | 33 | % | | | | | | | | | | | | | | | 38 | % |
Operating expenses | | | 46,949 | | | | (601 | )(b) | | | 46,348 | | | | (8,609 | )(c) | | | 37,739 | |
| | | | | | | | | | | | | | | | | | | | |
Loss from operations | | | (19,243 | ) | | | 3,337 | | | | (15,906 | ) | | | 10,086 | | | | (5,820 | ) |
Other income (expense), net | | | 1,150 | | | | — | | | | 1,150 | | | | — | | | | 1,150 | |
| | | | | | | | | | | | | | | | | | | | |
Loss before income taxes | | | (18,093 | ) | | | 3,337 | | | | (14,756 | ) | | | 10,086 | | | | (4,670 | ) |
Benefit from income taxes | | | (1,561 | ) | | | — | | | | (1,561 | ) | | | — | | | | (1,561 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (16,532 | ) | | $ | 3,337 | | | $ | (13,195 | ) | | $ | 10,086 | | | $ | (3,109 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | (0.17 | ) | | | | | | | | | | | | | | $ | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | $ | (0.17 | ) | | | | | | | | | | | | | | $ | (0.03 | )* |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares used in computing net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 95,864 | | | | | | | | | | | | | | | | 95,864 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | 95,864 | | | | | | | | | | | | | | | | 99,293 | * |
| | | | | | | | | | | | | | | | | | | | |
| (1) | In the third quarter of 2009, we recorded restructuring and other related costs of $3.3 million pursuant to our plan announced on July 21, 2009, involving the closure of our Maryland based semi-conductor fabrication plant (“FAB”) and the consolidation of these activities into our primary FAB location in Sunnyvale, California. |
| * | Diluted shares used to calculate net loss per share on a non-GAAP basis provided for informational purposes only. |
Infinera Corporation
GAAP to Non-GAAP and Adjusted GAAP Reconciliations (Continued):
Infinera Corporation
GAAP to Adjusted GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 27, 2008 | |
| | | GAAP | | | Deferral
Adjustments | | | Adjusted GAAP
Results | | | Adjusted GAAP
Stock Comp(1) | | | Adjusted
GAAP
Excluding
Stock Comp | |
Revenue | | | | | | | | | | | | | | | | | | | | |
Product and ratable revenue | | $ | 92,288 | | | $ | (13,102 | )(d) | | $ | 79,186 | | | $ | — | | | $ | 79,186 | |
Services revenue | | | 7,056 | | | | — | | | | 7,056 | | | | — | | | | 7,056 | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue | | | 99,344 | | | | (13,102 | ) | | | 86,242 | | | | — | | | | 86,242 | |
Cost of revenue | | | 61,378 | | | | (4,951 | )(e) | | | 56,427 | | | | (904 | )(f) | | | 55,523 | |
| | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 37,966 | | | | (8,151 | ) | | | 29,815 | | | | 904 | | | | 30,719 | |
Gross margin | | | 38 | % | | | | | | | | | | | | | | | 36 | % |
Operating expenses | | | 44,930 | | | | — | | | | 44,930 | | | | (4,930 | ) | | | 40,000 | |
| | | | | | | | | | | | | | | | | | | | |
Loss from operations | | | (6,964 | ) | | | (8,151 | ) | | | (15,115 | ) | | | 5,834 | | | | (9,281 | ) |
Other income (expense), net | | | (428 | ) | | | — | | | | (428 | ) | | | — | | | | (428 | ) |
| | | | | | | | | | | | | | | | | | | | |
Loss before income taxes | | | (7,392 | ) | | | (8,151 | ) | | | (15,543 | ) | | | 5,834 | | | | (9,709 | ) |
Benefit from income taxes | | | (704 | ) | | | — | | | | (704 | ) | | | — | | | | (704 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (6,688 | ) | | $ | (8,151 | ) | | $ | (14,839 | ) | | $ | 5,834 | | | $ | (9,005 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | (0.07 | ) | | | | | | | | | | | | | | $ | (0.10 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | $ | (0.07 | ) | | | | | | | | | | | | | | $ | (0.09 | )* |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares used in computing net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 93,449 | | | | | | | | | | | | | | | | 93,449 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | 93,449 | | | | | | | | | | | | | | | | 97,167 | * |
| | | | | | | | | | | | | | | | | | | | |
| (1) | See footnote to the Condensed Consolidated Statements of Operations for a summary of the effects of stock-based compensation related to employees and non-employees for the three months ended December 27, 2008. |
| * | Diluted shares used to calculate net loss per share on an Adjusted GAAP basis provided for informational purposes only. |
Infinera Corporation
GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 26, 2009 | |
| | | GAAP | | | Restructuring
Charges | | | Non-GAAP excluding
Restructuring | | | Stock Comp(1) | | | Non-GAAP | |
Revenue | | | | | | | | | | | | | | | | | | | | |
Product and ratable revenue | | $ | 280,243 | | | $ | — | | | $ | 280,243 | | | $ | — | | | $ | 280,243 | |
Services revenue | | | 28,858 | | | | — | | | | 28,858 | | | | — | | | | 28,858 | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue | | | 309,101 | | | | — | | | | 309,101 | | | | — | | | | 309,101 | |
Cost of revenue | | | 207,000 | | | | (3,038 | )(g) | | | 203,962 | | | | (5,507 | ) | | | 198,455 | |
| | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 102,101 | | | | 3,038 | | | | 105,139 | | | | 5,507 | | | | 110,646 | |
Gross margin | | | 33 | % | | | | | | | | | | | | | | | 36 | % |
Operating expenses | | | 191,762 | | | | (814 | )(g) | | | 190,948 | | | | (31,868 | ) | | | 159,080 | |
| | | | | | | | | | | | | | | | | | | | |
Loss from operations | | | (89,661 | ) | | | 3,852 | | | | (85,809 | ) | | | 37,375 | | | | (48,434 | ) |
Other income (expense), net | | | 1,168 | | | | — | | | | 1,168 | | | | — | | | | 1,168 | |
| | | | | | | | | | | | | | | | | | | | |
Loss before income taxes | | | (88,493 | ) | | | 3,852 | | | | (84,641 | ) | | | 37,375 | | | | (47,266 | ) |
Benefit from income taxes | | | (1,871 | ) | | | — | | | | (1,871 | ) | | | — | | | | (1,871 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (86,622 | ) | | $ | 3,852 | | | $ | (82,770 | ) | | $ | 37,375 | | | $ | (45,395 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | (0.91 | ) | | | | | | | | | | | | | | $ | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | $ | (0.91 | ) | | | | | | | | | | | | | | $ | (0.46 | )* |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares used in computing net loss per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 95,468 | | | | | | | | | | | | | | | | 95,468 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | 95,468 | | | | | | | | | | | | | | | | 99,036 | * |
| | | | | | | | | | | | | | | | | | | | |
| (1) | See footnote to the Condensed Consolidated Statements of Operations for a summary of the effects of stock-based compensation related to employees and non-employees for the twelve months ended December 26, 2009. |
| * | Diluted shares used to calculate net loss per share on an Adjusted GAAP basis provided for informational purposes only. |
Infinera Corporation
GAAP to Non-GAAP and Adjusted GAAP Reconciliations (Continued):
Infinera Corporation
GAAP to Adjusted GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 27, 2008 | |
| | | GAAP | | | Deferral
Adjustments | | | Adjusted GAAP
Results | | | Adjusted GAAP
Stock Comp(1) | | | Adjusted
GAAP
Excluding
Stock Comp | |
Revenue | | | | | | | | | | | | | | | | | | | | |
Product and ratable revenue | | $ | 500,513 | | | $ | (165,787 | )(h) | | $ | 334,726 | | | $ | — | | | $ | 334,726 | |
Services revenue | | | 18,699 | | | | — | | | | 18,699 | | | | — | | | | 18,699 | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue | | | 519,212 | | | | (165,787 | ) | | | 353,425 | | | | — | | | | 353,425 | |
Cost of revenue | | | 285,657 | | | | (78,401 | )(i) | | | 207,256 | | | | (4,491 | )(f) | | | 202,765 | |
| | | | | | | | | | | | | | | | | | | | |
Gross profit | | | 233,555 | | | | (87,386 | ) | | | 146,169 | | | | 4,491 | | | | 150,660 | |
Gross margin | | | 45 | % | | | | | | | | | | | | | | | 43 | % |
Operating expenses | | | 160,122 | | | | — | | | | 160,122 | | | | (18,446 | ) | | | 141,676 | |
| | | | | | | | | | | | | | | | | | | | |
Income from operations | | | 73,433 | | | | (87,386 | ) | | | (13,953 | ) | | | 22,937 | | | | 8,984 | |
Other income (expense), net | | | 8,018 | | | | — | | | | 8,018 | | | | — | | | | 8,018 | |
| | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 81,451 | | | | (87,386 | ) | | | (5,935 | ) | | | 22,937 | | | | 17,002 | |
Provision for income taxes | | | 2,723 | | | | — | | | | 2,723 | | | | — | | | | 2,723 | |
| | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 78,728 | | | $ | (87,386 | ) | | $ | (8,658 | ) | | $ | 22,937 | | | $ | 14,279 | |
| | | | | | | | | | | | | | | | | | | | |
Net income per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.85 | | | | | | | | | | | | | | | $ | 0.15 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | $ | 0.81 | | | | | | | | | | | | | | | $ | 0.15 | |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares used in computing net income per common share: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 92,427 | | | | | | | | | | | | | | | | 92,427 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | 97,088 | | | | | | | | | | | | | | | | 97,088 | |
| | | | | | | | | | | | | | | | | | | | |
| (1) | See footnote to the Condensed Consolidated Statements of Operations for a summary of the effects of stock-based compensation related to employees and non-employees for the twelve months ended December 27, 2008. |
Use of Non-GAAP and Adjusted GAAP Information:
As described below, Infinera uses various non-GAAP and adjusted GAAP financial measures to supplement our condensed consolidated financial statements presented on a GAAP basis. We believe these adjustments are appropriate to enhance an overall understanding of our underlying financial performance and also our prospects for the future and are considered by management for the purpose of making operational decisions. In addition, these results are the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or basic and diluted net income per share prepared in accordance with GAAP. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations.
Our usage of these non-GAAP and adjusted GAAP measures are further explained below:
| | • | | Effective April 2008, we had established VSOE of fair value for most of our service offerings. From the second quarter of 2008 to the fourth quarter of 2008, we used adjusted GAAP measures of operating results, net income and net income per share. Adjusted GAAP results reflected our GAAP results reduced for amounts released from deferred revenue and deferred cost of inventory balances recorded prior to the second quarter of 2008 and previously reported in our invoiced shipment results. Deferred services and deferred ratable and product revenue and cost amounts recorded after March 29, 2008 were not adjusted and were recognized on a GAAP basis in arriving at the adjusted GAAP results. We presented these non-GAAP measures of operating results, net income and net income per share, which included adjusted GAAP results and excluded non-GAAP stock-based compensation expense for these periods. |
| | • | | In the first quarter of 2009, we began using more traditional non-GAAP financial measures, which reflect our GAAP results and exclude non-recurring restructuring and other related costs and stock-based compensation related expenses. All material deferred revenue and deferred cost of |
Use of Non-GAAP and Adjusted GAAP Information (Continued):
| | inventory balances recorded prior to the second quarter of 2008 and previously reported in our invoiced shipment results were recognized in our GAAP results prior to December 27, 2008. Therefore, no further adjustments, other than the exclusion of non-recurring restructuring and other related costs and stock-based compensation expense will be made to our GAAP results on a go-forward basis. |
| (a) | Adjustment amount represents restructuring and other related costs recorded in the fourth quarter of 2009 related to the closure of our Maryland FAB announced on July 21, 2009. These amounts have been adjusted in arriving at our non-GAAP results as they are non-recurring in nature and the adjusted numbers provide a better indication of our underlying business performance. |
| | | | | | | | | | | | |
| | | Three Months Ended
December 26, 2009 | |
| | | Cost of
Revenue | | | Operating
Expenses | | | Total | |
| (In thousands) | | | | | | | | | |
Severance and related expenses | | $ | (157 | ) | | $ | 57 | | | $ | (100 | ) |
Equipment and facility-related costs | | | 459 | | | | (255 | ) | | | 204 | |
Lease termination | | | — | | | | 411 | | | | 411 | |
Other | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
Total | | $ | 302 | | | $ | 213 | | | $ | 515 | |
| | | | | | | | | | | | |
Restructuring and other related costs in the fourth quarter of 2009 include non-cash charges of $0.6 million.
| (b) | Adjustment amount represents restructuring and other related costs recorded in the third quarter of 2009 related to the closure of our Maryland FAB announced on July 21, 2009. These amounts have been adjusted in arriving at our non-GAAP results as they are non-recurring in nature and the adjusted numbers provide a better indication of our underlying business performance. |
| | | | | | | | | |
| | | Three Months Ended
September 26, 2009 |
| | | Cost of
Revenue | | Operating
Expenses | | Total |
| (In thousands) | | | | | | |
Severance and related expenses | | $ | 804 | | $ | 97 | | $ | 901 |
Equipment and facility-related costs | | | 1,900 | | | 415 | | | 2,315 |
Other | | | 32 | | | 89 | | | 121 |
| | | | | | | | | |
Total | | $ | 2,736 | | $ | 601 | | $ | 3,337 |
| | | | | | | | | |
Restructuring and other related costs in the third quarter of 2009 include non-cash charges of $2.4 million.
| (c) | The following table summarizes the effects of stock-based compensation related to employees and non-employees for the three months ended September 26, 2009: |
| | | |
| | | Three Months Ended
September 26, 2009 |
| (In thousands) | | |
Cost of revenue | | $ | 490 |
Sales and marketing | | | 1,710 |
Research and development | | | 2,915 |
General and administration | | | 3,984 |
| | | |
| | | 9,099 |
Cost of revenue - amortization from balance sheet* | | | 987 |
| | | |
Total stock-based compensation expense | | $ | 10,086 |
| | | |
|
* Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period. |
| (d) | Adjustment amount represents the release of ratable and product deferred revenue amounts related to periods prior to March 29, 2008 as these amounts have been previously reported as invoiced |
Use of Non-GAAP and Adjusted GAAP Information (Continued):
| | shipments. No adjustment has been made for changes in deferred services revenue as these amounts relate to future service deliverables and are appropriately deferred. Deferred ratable and product amounts recorded after March 29, 2008 have not been adjusted as these amounts are recognized on a GAAP basis in arriving at the adjusted GAAP results. |
The deferred revenue adjustments recorded above are reconciled to the deferred revenue balance on our balance sheet in the table below:
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 27, 2008 | |
Deferred Revenue | | Pre Mar 29, 2008
Ratable and
Product Revenue | | | Post Mar 29, 2008
Ratable and Product
Revenue | | | Services | | | Total | |
| (In thousands) | | | | | | | | | | | | |
Beginning balance | | $ | 21,752 | | | $ | 4,296 | | | $ | 6,408 | | | $ | 32,456 | |
Additions to deferred revenue | | | — | | | | 1,086 | | | | 7,577 | | | | 8,663 | |
Amortization to revenue | | | (13,102 | ) | | | (1,205 | ) | | | (4,405 | ) | | | (18,712 | ) |
| | | | | | | | | | | | | | | | |
Ending balance | | $ | 8,650 | | | $ | 4,177 | | | $ | 9,580 | | | $ | 22,407 | |
| | | | | | | | | | | | | | | | |
Change in deferred revenue balance | | $ | (13,102 | ) | | $ | (119 | ) | | $ | 3,172 | | | $ | (10,049 | ) |
| | | | | | | | | | | | | | | | |
| (e) | Adjustment amount represents the release of ratable and deferred product cost amounts related to periods prior to March 29, 2008 as these amounts were previously included as invoiced shipments. Deferred ratable and product amounts recorded after March 29, 2008 have not been adjusted as these amounts are recognized on a GAAP basis in arriving at the adjusted GAAP results. |
The deferred cost of inventory adjustments recorded above are reconciled to the deferred cost of inventory balance on our balance sheet in the table below:
| | | | | | | | | | | | |
| | | Three Months Ended December 27, 2008 | |
Deferred Inventory Cost | | Pre Mar 29, 2008
Ratable and
Product Cost | | | Post Mar 29, 2008
Ratable and Product
Cost | | | Total | |
| (In thousands) | | | | | | | | | |
Beginning balance | | $ | 8,172 | | | $ | 1,120 | | | $ | 9,292 | |
Additions to deferred cost of revenue | | | — | | | | 32 | | | | 32 | |
Amortized to cost of revenue | | | (4,951 | ) | | | (136 | ) | | | (5,087 | ) |
| | | | | | | | | | | | |
Ending balance | | $ | 3,221 | | | $ | 1,016 | | | $ | 4,237 | |
| | | | | | | | | | | | |
Change in deferred inventory cost balance | | $ | (4,951 | ) | | $ | (104 | ) | | $ | (5,055 | ) |
| | | | | | | | | | | | |
| (f) | Excluded amount represents stock-based compensation expense on a non-GAAP basis. Stock-based compensation is a non-cash expense accounted for in accordance with the fair value recognition provisions of the fair value provisions of the Equity Topic of the Accounting Standards Codification. While this is a large component of our expense, we believe investors want to evaluate our financial results both including and excluding the effects of stock-based compensation expense in order to compare our financial performance with that of other companies and between time periods. |
Use of Non-GAAP and Adjusted GAAP Information (Continued):
The stock-based compensation expense excluded from cost of revenue is a non-GAAP financial measure and is reconciled to the corresponding GAAP amount in the table below:
| | | | | | | | |
| | | Three Months
Ended | | | Twelve Months
Ended | |
| | | December 27,
2008 | |
| (In thousands) | | | | | | |
GAAP stock-based compensation in cost of revenue | | $ | 308 | | | $ | 1,086 | |
GAAP stock-based compensation in cost of revenue - amortization from balance sheet | | | 738 | | | | 4,287 | |
Stock-based compensation not deferred to deferred inventory cost | | | — | | | | 215 | |
Stock-based compensation previously recognized on invoiced shipment basis | | | (142 | ) | | | (1,097 | ) |
| | | | | | | | |
Non-GAAP stock-based compensation in cost of revenue | | $ | 904 | | | $ | 4,491 | |
| | | | | | | | |
| (g) | Adjustment amount represents restructuring and other related costs recorded in the twelve months ended December 26, 2009 related to the closure of our Maryland FAB announced on July 21, 2009. These amounts have been adjusted in arriving at our non-GAAP results as they are non-recurring in nature and the adjusted numbers provide a better indication of our underlying business performance. |
| | | | | | | | | |
| | | Twelve Months Ended
December 26, 2009 |
| | | Cost of
Revenue | | Operating
Expenses | | Total |
| (In thousands) | | | | | | |
Severance and related expenses | | $ | 647 | | $ | 154 | | $ | 801 |
Equipment and facility-related costs | | | 2,359 | | | 160 | | | 2,519 |
Lease termination | | | — | | | 411 | | | 411 |
Other | | | 32 | | | 89 | | | 121 |
| | | | | | | | | |
Total | | $ | 3,038 | | $ | 814 | | $ | 3,852 |
| | | | | | | | | |
Restructuring and other related costs in the twelve months ended December 26, 2009 include non-cash charges of $3.0 million.
| (h) | Adjustment amount represents the release of ratable and product deferred revenue amounts related to periods prior to March 29, 2008 as these amounts have been previously reported as invoiced shipments. No adjustment has been made for changes in deferred services revenue as these amounts relate to future service deliverables and are appropriately deferred. Deferred ratable and product amounts recorded after March 29, 2008 have not been adjusted as these amounts are recognized on a GAAP basis in arriving at the adjusted GAAP results. |
The deferred revenue adjustments recorded above are reconciled to the deferred revenue balance on our balance sheet in the table below:
| | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 27, 2008 | |
Deferred Revenue | | Pre Mar 29, 2008
Ratable and
Product Revenue | | | Post Mar 29, 2008
Ratable and Product
Revenue | | | Services | | | Total | |
| (In thousands) | | | | | | | | | | | | |
Beginning balance | | $ | 174,437 | | | $ | — | | | $ | — | | | $ | 174,437 | |
Additions to deferred revenue | | | 29,639 | | | | 8,140 | | | | 19,356 | | | | 57,135 | |
Amortization to revenue | | | (195,426 | ) | | | (3,963 | ) | | | (9,776 | ) | | | (209,165 | ) |
| | | | | | | | | | | | | | | | |
Ending balance | | $ | 8,650 | | | $ | 4,177 | | | $ | 9,580 | | | $ | 22,407 | |
| | | | | | | | | | | | | | | | |
Change in deferred revenue balance | | $ | (165,787 | ) | | $ | 4,177 | | | $ | 9,580 | | | $ | (152,030 | ) |
| | | | | | | | | | | | | | | | |
Use of Non-GAAP and Adjusted GAAP Information (Continued):
| (i) | Adjustment amount represents the release of ratable and deferred product cost amounts related to periods prior to March 29, 2008 as these amounts have been previously included as invoiced shipments. Deferred ratable and product amounts recorded after March 29, 2008 have not been adjusted as these amounts are recognized on a GAAP basis in arriving at the adjusted GAAP results. |
The deferred cost of inventory adjustments recorded above are reconciled to the deferred cost of inventory balance on our balance sheet in the table below:
| | | | | | | | | | | | |
| | | Twelve Months Ended December 27, 2008 | |
Deferred Inventory Cost | | Pre Mar 29, 2008
Ratable and
Product Cost | | | Post Mar 29, 2008
Ratable and Product
Cost | | | Total | |
| (In thousands) | | | | | | | | | |
Beginning balance | | $ | 81,622 | | | $ | — | | | $ | 81,622 | |
Additions to deferred cost of revenue | | | 11,162 | | | | 1,202 | | | | 12,364 | |
Amortized to cost of revenue | | | (89,563 | ) | | | (186 | ) | | | (89,749 | ) |
| | | | | | | | | | | | |
Ending balance | | $ | 3,221 | | | $ | 1,016 | | | $ | 4,237 | |
| | | | | | | | | | | | |
Change in deferred inventory cost balance | | $ | (78,401 | ) | | $ | 1,016 | | | $ | (77,385 | ) |
| | | | | | | | | | | | |
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
| | | | | | | | |
| | | December 26,
2009 | | | December 27,
2008 | |
ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 109,859 | | | $ | 166,770 | |
Short-term investments | | | 143,350 | | | | 68,232 | |
Short-term restricted cash | | | 1,533 | | | | 720 | |
Accounts receivable, net of allowance for doubtful accounts of $0 in 2009 and $1,700 in 2008 | | | 69,483 | | | | 69,354 | |
Other receivables | | | 927 | | | | 1,085 | |
Inventories, net | | | 68,872 | | | | 58,986 | |
Deferred inventory costs | | | 5,891 | | | | 1,744 | |
Prepaid expenses and other current assets | | | 8,313 | | | | 6,311 | |
| | | | | | | | |
Total current assets | | | 408,228 | | | | 373,202 | |
| | |
Property, plant and equipment, net | | | 43,656 | | | | 46,820 | |
Intangible assets | | | 961 | | | | 1,276 | |
Deferred inventory costs, non-current | | | 4,438 | | | | 2,493 | |
Long-term investments | | | 18,255 | | | | 74,684 | |
Long-term restricted cash | | | 2,480 | | | | 2,179 | |
Deferred tax asset | | | 12,449 | | | | 5,743 | |
Other non-current assets | | | 1,478 | | | | 670 | |
| | | | | | | | |
Total assets | | $ | 491,945 | | | $ | 507,067 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 31,129 | | | $ | 34,048 | |
Accrued expenses | | | 13,929 | | | | 10,349 | |
Accrued compensation and related benefits | | | 19,248 | | | | 13,472 | |
Accrued warranty | | | 6,091 | | | | 5,205 | |
Deferred revenue | | | 18,295 | | | | 14,683 | |
Deferred tax liability | | | 12,649 | | | | 5,743 | |
| | | | | | | | |
Total current liabilities | | | 101,341 | | | | 83,500 | |
| | |
Accrued warranty, non-current | | | 5,049 | | | | 4,735 | |
Deferred revenue, non-current | | | 8,080 | | | | 7,724 | |
Other long-term liabilities | | | 8,968 | | | | 5,645 | |
| | |
Commitments and contingencies | | | | | | | | |
| | |
Stockholders’ equity: | | | | | | | | |
Preferred stock, $0.001 par value | | | | | | | | |
Authorized shares - 25,000 and no shares issued and outstanding | | | — | | | | — | |
Common stock, $0.001 par value | | | | | | | | |
Authorized shares - 500,000 in 2009 and 2008 | | | | | | | | |
Issued and outstanding shares - 96,874 in 2009 and 94,163 in 2008 | | | 97 | | | | 94 | |
Additional paid-in capital | | | 747,580 | | | | 699,705 | |
Accumulated other comprehensive loss | | | (1,810 | ) | | | (3,598 | ) |
Accumulated deficit | | | (377,360 | ) | | | (290,738 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 368,507 | | | | 405,463 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 491,945 | | | $ | 507,067 | |
| | | | | | | | |
Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | | | | | | | |
| | | Twelve Months Ended | |
| | | December 26,
2009 | | | December 27,
2008 | |
Cash Flows from Operating Activities: | | | | | | | | |
Net income (loss) | | $ | (86,622 | ) | | $ | 78,728 | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | | | | | | |
Depreciation and amortization | | | 16,547 | | | | 12,975 | |
Provision for (recovery of) doubtful accounts | | | (1,700 | ) | | | 1,700 | |
Non-cash restructuring and other costs | | | 2,973 | | | | — | |
Net credit impairment losses in earnings | | | 1,094 | | | | — | |
Amortization of premium (accretion of discount) on investments | | | 604 | | | | (893 | ) |
Stock-based compensation expense | | | 37,375 | | | | 23,819 | |
Unrealized (gain) loss on Put Rights | | | 3,761 | | | | (15,866 | ) |
Unrealized holding (gain) loss for trading securities | | | (4,584 | ) | | | 16,762 | |
Tax benefit (reversal) from stock option transactions | | | (593 | ) | | | 593 | |
(Excess) reduction of tax benefit from stock option transactions | | | 248 | | | | (248 | ) |
Non-cash tax benefit | | | (315 | ) | | | — | |
Gain on disposal of assets | | | (284 | ) | | | (1,107 | ) |
Other (gain) loss | | | (134 | ) | | | 7 | |
Changes in assets and liabilities: | | | | | | | | |
Accounts receivable | | | 1,834 | | | | (31,796 | ) |
Inventories, net | | | (8,618 | ) | | | (821 | ) |
Prepaid expenses and other current assets | | | (2,244 | ) | | | (2,463 | ) |
Deferred inventory costs | | | (6,180 | ) | | | 76,538 | |
Other non-current assets | | | (7,345 | ) | | | (6,081 | ) |
Accounts payable | | | (2,594 | ) | | | 16,767 | |
Accrued liabilities and other expenses | | | 18,874 | | | | 3,387 | |
Deferred revenue | | | 3,968 | | | | (152,030 | ) |
Accrued warranty | | | 1,199 | | | | (53 | ) |
| | | | | | | | |
Net cash provided by (used in) operating activities | | | (32,736 | ) | | | 19,918 | |
| | |
Cash Flows from Investing Activities: | | | | | | | | |
Purchase of available-for-sale investments | | | (163,870 | ) | | | (226,014 | ) |
Proceeds from sale of available-for-sale investments | | | 1,536 | | | | 108,190 | |
Proceeds from maturities and call of investments and restricted cash | | | 143,682 | | | | 183,778 | |
Proceeds from disposal of assets | | | 699 | | | | 1,192 | |
Purchase of property and equipment | | | (15,961 | ) | | | (22,941 | ) |
| | | | | | | | |
Net cash provided by (used in) investing activities | | | (33,914 | ) | | | 44,205 | |
| | |
Cash Flows from Financing Activities: | | | | | | | | |
Proceeds from issuance of common stock | | | 9,310 | | | | 11,482 | |
Excess (reduction of) tax benefit from stock option transactions | | | (248 | ) | | | 248 | |
Repurchase of common stock | | | (31 | ) | | | (29 | ) |
Proceeds from purchase of assets under financing arrangement | | | 657 | | | | | |
Payments for purchase of assets under financing arrangement | | | (87 | ) | | | — | |
| | | | | | | | |
Net cash provided by financing activities | | | 9,601 | | | | 11,701 | |
| | | | | | | | |
Effect of exchange rate changes on cash | | | 138 | | | | (263 | ) |
Net change in cash and cash equivalents | | | (56,911 | ) | | | 75,561 | |
Cash and cash equivalents at beginning of period | | | 166,770 | | | | 91,209 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 109,859 | | | $ | 166,770 | |
| | | | | | | | |
Supplemental disclosures of cash flow information: | | | | | | | | |
Cash paid for interest | | $ | 5 | | | $ | 3 | |
Cash paid (received) for income taxes | | $ | (316 | ) | | $ | 1,036 | |
Infinera Corporation
Supplemental Financial Information
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| | | Q1’08 | | | Q2’08 | | | Q3’08 | | | Q4’08 | | | Q1’09 | | | Q2’09 | | | Q3’09 | | | Q4’09 | |
Revenue | | $ | 95.5 | | | $ | 90.8 | | | $ | 80.9 | | | $ | 86.2 | | | $ | 66.6 | | | $ | 68.9 | | | $ | 83.4 | | | $ | 90.2 | |
Gross Margin % | | | 45 | % | | | 47 | % | | | 42 | % | | | 36 | % | | | 31 | % | | | 31 | % | | | 38 | % | | | 40 | % |
Invoiced Shipment Composition: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Domestic % | | | 82 | % | | | 78 | % | | | 81 | % | | | 73 | % | | | 74 | % | | | 64 | % | | | 63 | % | | | 74 | % |
International % | | | 18 | % | | | 22 | % | | | 19 | % | | | 27 | % | | | 26 | % | | | 36 | % | | | 37 | % | | | 26 | % |
Largest Customer % | | | 31 | % | | | 21 | % | | | 27 | % | | | 23 | % | | | 30 | % | | | 20 | % | | | 15 | % | | | 17 | % |
Cash Related Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash from Operations | | $ | 9.8 | | | $ | 5.6 | | | $ | 9.9 | | | $ | (5.4 | ) | | $ | (2.9 | ) | | $ | (18.8 | ) | | $ | (8.3 | ) | | $ | (2.7 | ) |
Capital Expenditures | | $ | 4.5 | | | $ | 4.8 | | | $ | 5.9 | | | $ | 7.8 | | | $ | 6.0 | | | $ | 2.8 | | | $ | 2.8 | | | $ | 4.4 | |
Depreciation & Amortization | | $ | 2.6 | | | $ | 2.9 | | | $ | 3.4 | | | $ | 4.1 | | | $ | 3.9 | | | $ | 4.0 | | | $ | 4.2 | | | $ | 4.5 | |
DSO’s | | | 42 | | | | 57 | | | | 55 | | | | 74 | | | | 61 | | | | 72 | | | | 61 | | | | 71 | |
Inventory Metrics: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Raw Materials | | $ | 7.9 | | | $ | 9.2 | | | $ | 10.0 | | | $ | 9.1 | | | $ | 7.7 | | | $ | 10.1 | | | $ | 7.4 | | | $ | 6.9 | |
Work in Process | | $ | 40.6 | | | $ | 34.6 | | | $ | 35.8 | | | $ | 37.9 | | | $ | 43.2 | | | $ | 40.1 | | | $ | 36.2 | | | $ | 32.1 | |
Finished Goods | | $ | 10.7 | | | $ | 13.8 | | | $ | 12.8 | | | $ | 12.0 | | | $ | 13.6 | | | $ | 22.3 | | | $ | 29.3 | | | $ | 29.9 | |
Total Inventory | | $ | 59.2 | | | $ | 57.6 | | | $ | 58.6 | | | $ | 59.0 | | | $ | 64.5 | | | $ | 72.5 | | | $ | 72.9 | | | $ | 68.9 | |
Inventory Turns | | | 3.5 | | | | 3.3 | | | | 3.2 | | | | 3.8 | | | | 2.8 | | | | 2.6 | | | | 3.0 | | | | 3.2 | |
Worldwide Headcount | | | 799 | | | | 853 | | | | 889 | | | | 937 | | | | 962 | | | | 973 | | | | 970 | | | | 974 | |
Periods prior to Q2’08 reflect invoiced shipments results; periods from Q2’08 through Q4’08 reflect adjusted GAAP results; and Q1’09 going forward reflects non-GAAP results.
Non-GAAP results exclude restructuring and other related costs and non-cash stock-based compensation.
