UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: December 05, 2012
(Date of earliest event reported)
Finisar Corporation
(Exact name of registrant as specified in its charter)
DE
(State or other jurisdiction
of incorporation)
000-27999
(Commission File Number)
94-3038428
(IRS Employer
Identification Number)
1389 Moffett Park Drive, Sunnyvale, CA
(Address of principal executive offices)
94089-1133
(Zip Code)
4085425051
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
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Item 2.02. Results of Operations and Financial Condition On December 5, 2012, Finisar Corporation issued a press release announcing its financial results for the second quarter of fiscal 2013 ended October 28, 2012. A copy of the press release is attached hereto as Exhibit 99.1. In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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.
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Dated: December 05, 2012 |
FINISAR CORPORATION
By: /s/ Kurt Adzema |
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| Exhibit No. | Description |
| 99.1 | Press Release of Finisar Corporation dated December 05, 2012 |
SUNNYVALE, CA -- (Marketwire - December 05, 2012) - Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its second fiscal quarter ended October 28, 2012.
COMMENTARY
"I am pleased to report fiscal second quarter revenues of $232.0 million, which is $11.5 million, or 5.2%, greater than the prior quarter. Our growth in revenues came primarily from sales of tunable XFP transceivers and wavelength selective switches, including ROADM line cards," said Jerry Rawls, Finisar's executive Chairman of the Board. "In addition, operating income increased at a faster rate than revenues because we were able to hold operating expenses relatively flat. This was accomplished in spite of the impact of a full quarter of operating expenses from operation of our RED-C subsidiary, which we acquired during the first quarter."
"During the quarter, we continued to invest significantly in technology and product development and made substantial progress on a number of new products including tunable SFP+ transceivers, 100G coherent transponders, and next generation 100G client CFP and CFP2 transponders. We expect these new products to drive our future revenue growth and market share expansion in calendar 2013 and beyond," said Eitan Gertel, Finisar's Chief Executive Officer.
FINANCIAL HIGHLIGHTS -SECOND QUARTER ENDED October 28, 2012
Summary GAAP Results Second First
Quarter Quarter
Ended Ended
October 28, July 29,
2012 2012
----------- -----------
(in thousands, except
per share amounts)
Revenues $ 232,041 $ 220,526
Gross margin 27.5% 26.2%
Operating expenses $ 63,820 $ 62,994
Operating income (loss) $ 54 $ (5,197)
Operating margin 0.0% (2.4)%
Income (loss) $ 271 $ (6,197)
Income (loss) per share-basic $ 0.00 $ (0.07)
Income (loss) per share-diluted $ 0.00 $ (0.07)
Basic shares 92,780 91,988
Diluted shares 94,735 91,988
Summary Non-GAAP Results (a) Second First
Quarter Quarter
Ended Ended
October 28, July 29,
2012 2012
----------- -----------
(in thousands, except
per share amounts)
Revenues $ 232,041 $ 220,526
Gross margin 30.5% 30.3%
Operating expenses $ 54,846 $ 54,710
Operating income $ 15,838 $ 12,000
Operating margin 6.8% 5.4%
Income $ 14,205 $ 10,871
Income per share-basic $ 0.15 $ 0.12
Income per share-diluted $ 0.15 $ 0.12
Basic shares 92,780 91,988
Diluted shares 98,483 94,204
_____________
(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.
Operating Statement Highlights for the second quarter of fiscal 2013:
Balance Sheet Highlights for the second quarter of fiscal 2013:
OUTLOOK
The Company currently expects revenues for the third quarter of fiscal 2013 to be in the range of $230 to $245 million; GAAP operating margin to in the range of approximately 0.0% to 1.5%; non-GAAP operating margin to be in the range of approximately 6.5% to 8.0%; and non-GAAP earnings per diluted share to be in the range of approximately $0.14 to $0.18.
CONFERENCE CALL
Finisar will discuss its financial results for the second quarter and current business outlook during its regular quarterly conference call scheduled for Wednesday, December 5, 2012, at 2:00 pm PST (5:00 pm EST). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com/ or dial 1-888-516-2377 (domestic) or (719) 457-2637 (international) and enter conference ID 7734918.
An audio replay will be available for two weeks following the call by dialing 1-888-203-1112 (domestic) or (719) 457-0820 and then following the prompts: enter conference ID 7734918 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
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements included in this press release are based upon information available to Finisar as of the date hereof, and Finisar assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those projected. Examples of such risks include those associated with: the uncertainty of customer demand for Finisar's products; the rapidly evolving markets for Finisar's products and uncertainty regarding the development of these markets; Finisar's historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; ongoing new product development and introduction of new and enhanced products; challenges related to the integration of the recently completed RED-C acquisition; 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 29, 2012) 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 more than 20 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth and storage. Finisar is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. For additional information, visit www.finisar.com.
FINISAR FINANCIAL STATEMENTS
The following financial tables are presented in accordance with GAAP.
Finisar Corporation
Consolidated Statements of Operations
Three
Months
Three Months Ended Six Months Ended Ended
-------------------- -------------------- ---------
October October October October July 29,
28, 2012 30, 2011 28, 2012 30, 2011 2012
--------- --------- --------- --------- ---------
(Unaudited)
-----------------------------------------------------
( in thousands, except per share data)
-----------------------------------------------------
Revenues $ 232,041 $ 241,489 $ 452,567 $ 469,715 $ 220,526
Cost of revenues 166,167 169,571 327,624 329,794 161,457
Amortization of
acquired developed
technology 2,000 1,637 3,272 3,159 1,272
--------- --------- --------- --------- ---------
Gross profit 63,874 70,281 121,671 136,762 57,797
Gross margin 27.5% 29.1% 26.9% 29.1% 26.2%
Operating expenses:
Research and
development 39,620 36,707 77,789 72,103 38,169
Sales and marketing 10,219 10,125 20,893 19,711 10,674
General and
administrative 12,919 13,773 26,261 27,725 13,342
Amortization of
purchased
intangibles 1,062 859 1,871 1,638 809
Restructuring
recoveries - - - (322) -
--------- --------- --------- --------- ---------
Total operating
expenses 63,820 61,464 126,814 120,855 62,994
--------- --------- --------- --------- ---------
Income (loss) from
operations 54 8,817 (5,143) 15,907 (5,197)
Interest income 162 100 358 260 196
Interest expense (750) (1,138) (1,397) (2,049) (647)
Loss on debt
extinguishment - - - (419) -
Other income
(expenses), net (101) (140) (20) 4,523 81
--------- --------- --------- --------- ---------
Income (loss) before
income taxes and
non-controlling
interest (635) 7,639 (6,202) 18,222 (5,567)
Provision (benefits)
for income taxes (1,062) 1,369 (420) 1,917 642
--------- --------- --------- --------- ---------
Income (loss) before
non-controlling
interest 427 6,270 (5,782) 16,305 (6,209)
Adjust for net income
(loss) attributable
to non-controlling
interest (156) (343) (144) (236) 12
--------- --------- --------- --------- ---------
Net income (loss)
attributable to
Finisar Corporation $ 271 $ 5,927 $ (5,926) $ 16,069 $ (6,197)
========= ========= ========= ========= =========
Net income (loss) per
share attributable
to Finisar
Corporation common
stockholders:
Basic $ 0.00 $ 0.07 $ (0.06) $ 0.18 $ (0.07)
Diluted $ 0.00 $ 0.06 $ (0.06) $ 0.17 $ (0.07)
Shares used in
computing net income
(loss) per share -
basic 92,780 90,715 92,386 90,470 91,988
Shares used in
computing net income
(loss) per share -
diluted 94,735 93,599 92,386 93,712 91,988
Finisar Corporation
Consolidated Balance Sheets
(in thousands)
October 28, July 29, April 30,
2011 2012 2012
------------ ------------ ------------
(Unaudited) (Unaudited)
------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 262,432 $ 220,409 $ 234,544
Accounts receivable, net 155,949 179,441 167,760
Accounts receivable, other 15,240 14,972 21,004
Inventories 203,554 208,168 218,432
Prepaid expenses 25,183 24,430 25,482
------------ ------------ ------------
Total current assets 662,358 647,420 667,222
Property, equipment and
improvements, net 173,284 165,837 163,817
Purchased intangible assets, net 53,300 43,049 45,177
Goodwill 91,098 97,994 81,431
Minority investments 884 884 884
Other assets 7,263 7,393 10,896
------------ ------------ ------------
Total assets $ 988,187 $ 962,577 $ 969,427
============ ============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 72,844 $ 71,295 $ 72,339
Accrued compensation 27,901 22,210 27,090
Other accrued liabilities 22,774 21,456 20,871
Deferred revenue 7,868 9,775 8,970
Current portion of long-term
debt - - 3,150
------------ ------------ ------------
Total current liabilities 131,387 124,736 132,420
Long-term liabilities:
Convertible notes, net of
current portion 40,015 40,015 40,015
Other non-current liabilities 21,171 16,274 15,175
Deferred tax liabilities 2,459 2,433 1,972
------------ ------------ ------------
Total liabilities 195,032 183,458 189,582
Stockholders' equity:
Common stock 93 93 91
Additional paid-in capital 2,330,683 2,321,064 2,309,219
Accumulated other comprehensive
income 26,346 22,356 28,720
Accumulated deficit (1,572,432) (1,572,703) (1,566,506)
------------ ------------ ------------
Finisar Corporation
stockholders' equity 784,690 770,810 771,524
Non-controlling interest 8,465 8,309 8,321
------------ ------------ ------------
Total stockholders' equity 793,155 779,119 779,845
------------ ------------ ------------
Total liabilities and
stockholders' equity $ 988,187 $ 962,577 $ 969,427
============ ============ ============
Note - Balance sheet amounts as of April 30, 2012 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 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 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 calculating non-GAAP income and non-GAAP income per share in this release, we have also excluded the following items in applicable periods:
In calculating non-GAAP income per share in this release, we have included the shares issuable upon conversion of our outstanding convertible notes and excluded the interest expenses associated with such notes in such periods where such treatment is dilutive to non-GAAP income (loss) per share.
A reconciliation of this non-GAAP financial information to the corresponding GAAP information is set forth below:
Finisar Corporation
Reconciliation of Results of Operations under GAAP and non-GAAP
Three
Months
Three Months Ended Six Months Ended Ended
-------------------- -------------------- ---------
October October October October July 29,
28, 2012 30, 2011 28, 2012 30, 2011 2012
--------- --------- --------- --------- ---------
(Unaudited)
-----------------------------------------------------
( in thousands, except per share data)
-----------------------------------------------------
GAAP to non-GAAP
reconciliation of
gross profit:
Gross profit - GAAP $ 63,874 $ 70,281 $ 121,671 $ 136,762 $ 57,797
Gross margin - GAAP 27.5% 29.1% 26.9% 29.1% 26.2%
Adjustments:
Cost of revenues
Change in excess
and obsolete
inventory reserve 2,003 2,521 6,869 3,611 4,866
Amortization of
acquired
technology 2,000 1,637 3,272 3,159 1,272
Stock compensation 1,876 1,687 3,362 3,546 1,486
Acquisition method
accounting
adjustment for
sale of acquired
inventory 722 1,229 1,363 - 641
Flood-related
expense - - - 3,083 -
Reduction in force
costs 136 49 784 601 648
Acquisition related
retention payment 73 - 73 - -
--------- --------- --------- --------- ---------
Total cost of
revenue
adjustments 6,810 7,123 15,723 14,000 8,913
--------- --------- --------- --------- ---------
Gross profit - non-
GAAP 70,684 77,404 137,394 150,762 66,710
--------- --------- --------- --------- ---------
Gross margin - non-
GAAP 30.5% 32.1% 30.4% 32.1% 30.3%
GAAP to non-GAAP
reconciliation of
operating income:
Operating income
(loss) - GAAP 54 8,817 (5,143) 15,907 (5,197)
Operating margin -
GAAP 0.0% 3.7% -1.1% 3.4% -2.4%
Adjustments:
Total cost of revenue
adjustments 6,810 7,123 15,723 14,000 8,913
Research and
development
Reduction in force
costs - 73 177 73 177
Acquisition related
retention payment 222 - 222 - -
Stock compensation 3,353 2,274 6,339 4,635 2,986
Sales and marketing
Acquisition related
retention payment 20 - 20 - -
Stock compensation 1,002 767 2,079 1,631 1,077
General and
administrative
Reduction in force
costs 54 865 69 963 15
Acquisition related
retention payment 253 - 253 - -
Stock compensation 2,956 1,945 5,785 3,953 2,829
Acquisition related
costs 96 209 421 1,298 325
Litigation
settlements and
resolutions and
related costs (10) (8) 13 92 23
Shareholder class
action and
derivative
litigation costs (34) 635 9 635 43
Amortization of
purchased
intangibles 1,062 859 1,871 1,638 809
Restructuring
recoveries - - - (322) -
--------- --------- --------- --------- ---------
Total cost of
revenue and
operating
expense
adjustments 15,784 14,742 32,981 28,596 17,197
--------- --------- --------- --------- ---------
Operating income -
non-GAAP 15,838 23,559 27,838 44,503 12,000
--------- --------- --------- --------- ---------
Operating margin -
non-GAAP 6.8% 9.8% 6.2% 9.5% 5.4%
GAAP to non-GAAP
reconciliation of
income attributable
to Finisar
Corporation:
Income (loss)
attributable to
Finisar Corporation
- GAAP 271 5,927 (5,926) 16,069 (6,197)
Adjustments:
Total cost of revenue
and operating
expense adjustments 15,784 14,742 32,981 28,596 17,197
Imputed interest
related to
restructuring 164 396 226 466 62
Other (income)
expense, net
Loss (gain) on sale
of assets (170) 221 (189) 222 (19)
Loss related to
minority and
equity method
investments - - - 619 -
Other miscellaneous
income - 250 (160) 250 (160)
Foreign exchange
transaction loss
(gain) (607) (494) (611) (642) (4)
Debt extinguishment
loss 573 - 573 419 -
Fair value
remeasurement of
equity investment - - - (5,429) -
Provision for income
taxes
Income tax
provision
adjustments (1,810) 495 (1,818) 495 (8)
--------- --------- --------- --------- ---------
Total adjustments 13,934 15,610 31,002 24,996 17,068
--------- --------- --------- --------- ---------
Net income
attributable to
Finisar Corporation
- non-GAAP 14,205 21,537 25,076 41,065 10,871
--------- --------- --------- --------- ---------
Non-GAAP income
attributable to
Finisar Corporation $ 14,205 $ 21,537 $ 25,076 $ 41,065 $ 10,871
Add: interest expense
for dilutive
convertible notes 539 539 - 1,078 -
--------- --------- --------- --------- ---------
Adjusted non-GAAP
income attributable
to Finisar
Corporation $ 14,744 $ 22,076 $ 25,076 $ 42,143 $ 10,871
========= ========= ========= ========= =========
Non-GAAP income per
share attributable
to Finisar
Corporation common
stockholders
Basic $ 0.15 $ 0.24 $ 0.27 $ 0.45 $ 0.12
Diluted $ 0.15 $ 0.23 $ 0.26 $ 0.43 $ 0.12
Shares used in
computing non-GAAP
income per share
attributable to
Finisar Corporation
common stockholders
Basic 92,780 90,715 92,386 90,470 91,988
Diluted 98,483 97,347 94,780 97,460 94,204
Non-GAAP EBITDA
Non-GAAP income
attributable to
Finisar Corporation $ 14,205 $ 21,537 $ 25,076 $ 41,065 $ 10,871
Depreciation expense 13,106 10,995 25,817 21,590 12,711
Amortization 237 208 473 416 236
Interest expense 424 642 813 1,323 389
Income tax expense 748 874 1,398 1,422 650
--------- --------- --------- --------- ---------
Non-GAAP EBITDA $ 28,720 $ 34,256 $ 53,577 $ 65,816 $ 24,857
========= ========= ========= ========= =========
Investor Contact: Kurt Adzema Chief Financial Officer 408-542-5050 or Investor.relations@finisar.com Press contact: Victoria McDonald Sr. Manager, Corporate Communications 408-542-4261