| DE | 000-27999 | 94-3038428 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
| 1389 Moffett Park Drive, Sunnyvale, CA | 94089 | |
| (Address of principal executive offices) | (Zip Code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: September 10, 2015 |
Finisar Corporation By: /s/ Kurt Adzema Kurt Adzema Chief Financial Officer |
| Exhibit No. | Description | |
| 99.1 | Press Release of Finisar Corporation dated September 10, 2015 |
SUNNYVALE, CA -- (Marketwired - September 10, 2015) - Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its first quarter of fiscal 2016, ended August 2, 2015.
COMMENTARY
"Revenues for our first fiscal quarter were $314.0 million compared to $320.0 million in the prior quarter; however, the prior quarter had the benefit of an additional week. Taking that into consideration, the first fiscal quarter had a higher average weekly revenue relative to the prior quarter," said Jerry Rawls, Finisar's executive Chairman of the Board. "Strength in revenue was primarily driven by 40 gigabit transceivers for datacom applications".
FINANCIAL HIGHLIGHTS - First Quarter Ended August 2, 2015
Summary GAAP Results First Fourth
Quarter Quarter
Ended Ended
August 2,
2015 May 3, 2015
----------- -----------
(in thousands, except
per share amounts)
Revenues $ 314,030 $ 320,042
Gross margin 27.8% 27.9%
Operating expenses $ 80,316 $ 78,933
Operating income (loss) $ 7,061 $ 10,284
Operating margin 2.2% 3.2%
Net income (loss) $ 3,393 $ 7,327
Income per share-basic $ 0.03 $ 0.07
Income per share-diluted $ 0.03 $ 0.07
Basic shares 105,286 104,005
Diluted shares 108,107 107,535
Summary Non-GAAP Results (a) First Fourth
Quarter Quarter
Ended Ended
August 2,
2015 May 3, 2015
----------- -----------
(in thousands, except
per share amounts)
Revenues $ 314,030 $ 320,042
Gross margin 30.2% 30.3%
Operating expenses $ 68,406 $ 68,167
Operating income $ 26,511 $ 28,831
Operating margin 8.4% 9.0%
Net income $ 24,532 $ 26,873
Income per share-basic $ 0.23 $ 0.26
Income per share-diluted $ 0.23 $ 0.25
Basic shares 105,286 104,005
Diluted shares 108,107 107,535
----------------
(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.
Financial Statement Highlights for the First Quarter of Fiscal 2016:
-- Revenues decreased to $314.0 million, a decrease of $6.0 million, or
(1.9)%, from $320.0 million in the preceding quarter, as the result of
the impact of one fewer week than the prior quarter.
-- Sales of products for datacom applications decreased by $8.7 million, or
(3.6)%, compared to the preceding quarter, primarily as the result of
the impact of one fewer week than the prior quarter.
-- Sales of products for telecom applications increased by $2.7 million, or
3.4%, compared to the preceding quarter.
-- GAAP gross margin was 27.8% compared to 27.9% in the preceding quarter.
-- Non-GAAP gross margin was 30.2% compared to 30.3% in the prior quarter.
-- GAAP operating expenses were $80.3 million compared to $78.9 million in
the prior quarter.
-- Non-GAAP operating expenses were $68.4 million compared to $68.2 million
in the prior quarter.
-- GAAP operating income decreased by $3.2 million, to $7.1 million or 2.2%
of revenues, compared to $10.3 million or 3.2% of revenues in the
preceding quarter, primarily due to the lower revenue level.
-- Non-GAAP operating income decreased by $2.3 million to $26.5 million, or
8.4% of revenues, compared to $28.8 million, or 9.0% of revenues, in the
preceding quarter.
-- Cash, cash equivalents and short term investments increased $5.5 million
to $495.7 million at the end of the first quarter, compared to $490.2
million at the end of the preceding quarter.
OUTLOOK
The Company indicated that for the second quarter of fiscal 2016 it currently expects revenues in the range of $304 to $324 million, non-GAAP gross margin of approximately 30%, non-GAAP operating margin of approximately 8% to 9%, and non-GAAP earnings per diluted share in the range of approximately $0.20 to $0.26.
CONFERENCE CALL
Finisar will discuss its financial results for the first quarter and current business outlook during its regular quarterly conference call scheduled for Thursday, September 10, 2015, at 2:00 pm PT (5:00 pm ET). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com/ or dial 877-741-4244 (domestic) or +719-325-4849 (international) and enter conference ID 8055566.
An audio replay will be available for two weeks following the call by dialing 1-888-203-1112 (domestic) or +1-719-457-0820 and then following the prompts: enter conference ID 8055566 and provide your name, affiliation, and contact number. A replay of the webcast will be available shortly after the conclusion of the call on the Company's website until the next regularly scheduled earnings conference call.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains forward-looking statement concerning Finisar's expected financial performance. These statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations, estimates, assumptions and projections about our business and industry, and the markets and customers we serve, and they are subject to numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. 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. 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 June 19, 2015) and quarterly SEC filings.
ABOUT FINISAR
Finisar Corporation (NASDAQ: FNSR) is a global technology leader for fiber optic subsystems and components that enable high-speed voice, video and data communications for telecommunications, networking, storage, wireless, and cable TV applications. For 25 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth. 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
(Unaudited, in thousands, except per share data)
Three Months Ended
-------------------------------
Aug 02, July 27, May 03,
2015 2014 2015
--------- --------- ---------
Revenues $ 314,030 $ 327,638 $ 320,042
Cost of revenues 224,147 227,385 229,390
Impairment of long-lived assets 1,071 - -
Amortization of acquired developed
technology 1,435 1,434 1,435
--------- --------- ---------
Gross profit 87,377 98,819 89,217
Gross margin 27.8% 30.2% 27.9%
Operating expenses:
Research and development 52,408 51,006 51,117
Sales and marketing 11,202 11,965 11,800
General and administrative 15,208 14,719 15,303
Impairment of long-lived assets 830 - -
Amortization of purchased intangibles 668 761 713
--------- --------- ---------
Total operating expenses 80,316 78,451 78,933
--------- --------- ---------
Income from operations 7,061 20,368 10,284
Interest income 365 612 536
Interest expense (2,883) (3,134) (3,335)
Other income (expenses), net 881 (2,026) 4,041
--------- --------- ---------
Income before income taxes 5,424 15,820 11,526
Provision for income taxes 2,031 1,577 4,199
--------- --------- ---------
Net income $ 3,393 $ 14,243 $ 7,327
========= ========= =========
Net income per share attributable to
Finisar Corporation common stockholders:
Basic $ 0.03 $ 0.14 $ 0.07
Diluted $ 0.03 $ 0.14 $ 0.07
Shares used in computing net income per
share - basic 105,286 98,241 104,005
Shares used in computing net income per 107,535
share - diluted 108,107 102,287
Finisar Corporation
Consolidated Balance Sheets
(in thousands)
Aug 02, May 03,
2015 2015
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 232,997 $ 197,443
Short-term held-to-maturity investments 262,695 292,748
Accounts receivable, net 234,798 213,234
Accounts receivable, other 40,807 40,650
Inventories 282,093 283,670
Prepaid expenses and other assets 22,649 36,518
----------- -----------
Total current assets 1,076,039 1,064,263
Property, equipment and improvements, net 322,043 315,777
Purchased intangible assets, net 25,086 27,188
Goodwill 106,735 106,735
Minority investments 2,997 2,847
Other assets 34,960 35,072
----------- -----------
Total assets $ 1,567,860 $ 1,551,882
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 139,600 $ 131,510
Accrued compensation 26,392 24,918
Other accrued liabilities 39,753 39,238
Deferred revenue 11,480 9,850
----------- -----------
Total current liabilities 217,225 205,516
Long-term liabilities:
Convertible notes, net of current portion 223,760 221,406
Other non-current liabilities 21,545 21,167
----------- -----------
Total liabilities 462,530 448,089
Stockholders' equity:
Common stock 107 104
Additional paid-in capital 2,564,506 2,551,114
Accumulated other comprehensive income (14,390) 861
Accumulated deficit (1,444,893) (1,448,286)
----------- -----------
Total stockholders' equity 1,105,330 1,103,793
----------- -----------
Total liabilities and stockholders' equity $ 1,567,860 $ 1,551,882
=========== ===========
Note - Balance sheet amounts as of May 3, 2015 are derived from the audited
consolidated financial statements as of the date.
FINISAR NON-GAAP FINANCIAL MEASURES
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission: non-GAAP gross profit, non-GAAP operating income and non-GAAP income per share. These non-GAAP financial measures are 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 certain 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 in this release, we have excluded the following items from cost of revenues in applicable periods in this release:
-- 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 facilities costs during facilities move (non-recurring cash
charges)
-- Stock-based compensation expense (non-cash charges);
-- Abandonment of fixed assets (non-recurring non-cash charges);
-- Impairment of long-lived assets (non-recurring non-cash charges);
-- Acquisition method accounting adjustment for sale of acquired inventory
(non-recurring non-cash charges);
-- Reduction in force costs (non-recurring cash charges); and
-- Acquisition related retention payments (non-recurring cash charges).
In calculating non-GAAP operating income in this release, 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 in this release:
-- Gain or loss on litigation settlements and resolutions and related costs
(non-recurring cash charges or benefits);
-- Shareholder class action and derivative litigation costs (non-recurring
cash charges associated with the derivative litigation related to our
historical stock option granting practices and related to the class
action and derivative litigation related to our March 8, 2011 earnings
announcement);Acquisition related costs (non-recurring cash charges);
-- Impairment of acquired R&D reimbursement receivable (non-recurring non-
cash charges);
-- Amortization of purchased intangibles (non-cash charges);
-- Abandonment of fixed assets (non-cash charges); and
-- Impairment of long-lived assets (non-recurring non-cash charges).
In calculating non-GAAP income and non-GAAP income per share in this release, we have also excluded the following items in applicable periods in this release:
-- Imputed interest expenses on convertible debt (non-cash charges);
-- Imputed interest related to restructuring (non-cash charges);
-- Gains and losses on sales of assets (non-recurring and/or non-cash
losses and cash gains related to the periodic disposal of assets no
longer required for current activities);
-- Gains and losses related to minority investments (non-cash or non-
recurring benefits or charges);
-- Other miscellaneous expenses (income) (non-recurring charges or
benefits);
-- Dollar denominated foreign exchange transaction losses (gains) (non-cash
charges or benefits);
-- Amortization of debt issuance costs (non-cash charges);
-- Non-controlling interest non-GAAP adjustment (non-cash and/or non-
recurring charges or benefits attributable to the non-controlling
interest in majority-controlled subsidiaries); and
-- Differences between cash payable for income taxes and the provision for
income taxes in accordance with GAAP, less discrete items.
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
(Unaudited, in thousands, except per share data)
Three Months Ended
-------------------------------
Aug 02, July 27, May 03,
2015 2014 2015
--------- --------- ---------
GAAP to non-GAAP reconciliation of gross
profit:
Gross profit - GAAP $ 87,377 $ 98,819 $ 89,217
Gross margin - GAAP 27.8% 30.2% 27.9%
Adjustments:
Cost of revenues
Change in excess and obsolete inventory
reserve 1,430 1,721 2,752
Amortization of acquired technology 1,435 1,434 1,435
Duplicate facility costs related to
facility move 82 - 4
Stock compensation 2,692 2,276 2,692
Impairment of long-lived assets 1,282 - 420
Reduction in force costs 554 475 406
Acquisition related retention payment 65 118 72
--------- --------- ---------
Total cost of revenue adjustments 7,540 6,024 7,781
--------- --------- ---------
Gross profit - non-GAAP 94,917 104,843 96,998
--------- --------- ---------
Gross margin - non-GAAP 30.2% 32.0% 30.3%
GAAP to non-GAAP reconciliation of
operating income:
Operating income - GAAP 7,061 20,368 10,284
Operating margin - GAAP 2.2% 6.2% 3.2%
Adjustments:
Total cost of revenue adjustments 7,540 6,024 7,781
Research and development
Reduction in force costs 288 332 82
Acquisition related retention payment 91 193 104
Stock compensation 4,838 4,436 5,084
Duplicate facility costs related to
facility move 221 - 143
Impairment of long-lived assets 287 - -
Impairment of acquired R&D reimbursement
receivable - - 87
Sales and marketing
Reduction in force costs 63 - -
Acquisition related retention payment 10 20 12
Stock compensation 1,707 1,529 1,749
General and administrative
Reduction in force costs 352 (5) -
Duplicate facility costs related to
facility move 9 - -
Acquisition related retention payment (5) 16 8
Stock compensation 2,760 2,812 2,894
Acquisition related costs 18 230 18
Litigation settlements and resolutions
and related costs (benefits) 16 (1,312) (6)
Shareholder class action and derivative
litigation costs (benefits) - - (121)
Amortization of purchased intangibles 668 761 713
Impairment of long-lived assets 587 - (1)
--------- --------- ---------
Total cost of revenue and operating
expense adjustments 19,450 15,036 18,547
--------- --------- ---------
Operating income - non-GAAP 26,511 35,404 28,831
--------- --------- ---------
Operating margin - non-GAAP 8.4% 10.8% 9.0%
GAAP to non-GAAP reconciliation of income:
Net income - GAAP 3,393 14,243 7,327
Adjustments:
Total cost of revenue and operating expense
adjustments 19,450 15,036 18,547
Non-cash imputed interest expenses on
convertible debt 2,354 2,243 2,334
Imputed interest related to restructuring 45 51 47
Other (income) expense, net
Loss (gain) on sale of assets (185) 238 (559)
Gain related to minority investments - - (1,470)
Other miscellaneous income (17) (1) (850)
Foreign exchange transaction (gain) or
loss (693) 1,991 (607)
Amortization of debt issuance costs 154 154 154
Provision for income taxes
Income tax provision (benefits)
adjustments 31 (623) 1,950
--------- --------- ---------
Total adjustments 21,139 19,089 19,546
--------- --------- ---------
Net income - non-GAAP $ 24,532 $ 33,332 $ 26,873
========= ========= =========
Non-GAAP income $ 24,532 $ 33,332 $ 26,873
Add: interest expense for dilutive
convertible notes - 539 -
--------- --------- ---------
Adjusted non-GAAP income $ 24,532 $ 33,871 $ 26,873
========= ========= =========
Non-GAAP income per share common
stockholders
Basic $ 0.23 $ 0.34 $ 0.26
Diluted $ 0.23 $ 0.32 $ 0.25
Shares used in computing non-GAAP income
per share common stockholders
Basic 105,286 98,241 104,005
Diluted 108,107 106,036 107,535
Non-GAAP EBITDA
Non-GAAP income $ 24,532 $ 33,332 $ 26,873
Depreciation expense 21,365 19,648 20,488
Amortization - 39 -
Interest expense (income) (35) 228 (197)
Income tax expense 2,000 2,200 2,249
--------- --------- ---------
Non-GAAP EBITDA $ 47,862 $ 55,447 $ 49,413
========= ========= =========
Finisar-F
Investor Contact: Kurt Adzema Chief Financial Officer 408-542-5050 Investor.relations@finisar.com Press contact: Victoria McDonald Director, Corporate Communications 408-542-4261