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: September 05, 2013
(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)
Item 2.02. Results of Operations and Financial Condition On September 5, 2013, Finisar Corporation issued a press release announcing its financial results for the first quarter of fiscal year 2014 ended July 28, 2013. 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: September 05, 2013 |
FINISAR CORPORATION
By: /s/ Kurt Adzema |
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Exhibit No. | Description |
99.1 | Press Release of Finisar Corporation dated September 05, 2013 |
SUNNYVALE, CA -- (Marketwired - September 05, 2013) - Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its first fiscal quarter ended July 28, 2013.
COMMENTARY
"I am pleased to report first quarter revenues were $266.1 million, an all-time record for Finisar. This was an increase of $22.7 million, or 9.3%, over the prior quarter and an increase of $45.5 million, or 20.7% over the first quarter of the prior year. Revenues exceeded the guidance of $245 million to $260 million that we provided early in the first quarter and grew for the fourth consecutive quarter. The growth in revenues in the first quarter came primarily from increased sales of 10G, 40G and 100G Ethernet transceivers for datacom applications. As a result of these higher than expected revenues, a favorable product mix and operating leverage, we also were able to achieve gross margin and earnings per diluted share that exceeded our original guidance range," said Jerry Rawls, Finisar's executive Chairman of the Board.
"During the quarter, we continued to invest significantly in technology and product development. Our new products for 100 gigabit parallel and serial applications for either single mode and multi mode fiber applications continue to have strong customer demand. We also expect our new platform of high density dual and single WSS will extend our leadership in the WSS market in both the component and ROADM linecard form," said Eitan Gertel, Finisar's Chief Executive Officer.
FINANCIAL HIGHLIGHTS - FIRST QUARTER ENDED July 28, 2013
Summary GAAP Results First Fourth Quarter Quarter Ended Ended July 28, April 28, 2013 2013 ----------- ----------- (in thousands, except per share amounts) Revenues $ 266,068 $ 243,417 Gross margin 34.3% 27.7% Operating expenses $ 64,270 $ 66,941 Operating income $ 27,103 $ 385 Operating margin 10.2% 0.2% Net income $ 26,011 $ 3,879 Income per share-basic $ 0.27 $ 0.04 Income per share-diluted $ 0.26 $ 0.04 Basic shares 94,609 93,567 Diluted shares 101,125 96,192 Summary Non-GAAP Results (a) First Fourth Quarter Quarter Ended Ended July 28, April 28, 2013 2013 ----------- ----------- (in thousands, except per share amounts) Revenues $ 266,068 $ 243,417 Gross margin 35.1% 32.2% Operating expenses $ 60,903 $ 58,295 Operating income $ 32,397 $ 20,032 Operating margin 12.2% 8.2% Net income $ 31,269 $ 19,789 Income per share-basic $ 0.33 $ 0.21 Income per share-diluted $ 0.31 $ 0.20 Basic shares 94,609 93,567 Diluted shares 101,125 99,941 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 2014:
OUTLOOK
The Company indicated that it currently expects revenues for the second quarter of fiscal 2014 to be in the range of $277 to $292 million; GAAP operating margin to be in the range of approximately 9.7% to 10.7%; non-GAAP operating margin to be in the range of approximately 13.7% to 14.7% and non-GAAP earnings per diluted share to be in the range of approximately $0.37 to $0.41.
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 5, 2013, at 2:00 pm PDT (5:00 pm EDT). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com/ or dial 1-877-852-6575 (domestic) or (719) 325-4826 (international) and enter conference ID 6969862.
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 6969862 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; 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 24, 2013) 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 (in thousands, except per share data) Three Months Ended --------------------------------------- July 28, July 29, April 28, 2013 2012 2013 ----------- ----------- ----------- (Unaudited) --------------------------------------- Revenues $ 266,068 $ 220,526 $ 243,417 Cost of revenues 173,102 161,457 166,093 Impairment of acquired developed technology and other long-lived assets - - 8,156 Amortization of acquired developed technology 1,593 1,272 1,842 ----------- ----------- ----------- Gross profit 91,373 57,797 67,326 Gross margin 34.3% 26.2% 27.7% Operating expenses: Research and development 43,530 38,169 41,270 Sales and marketing 11,805 10,674 11,056 General and administrative 8,340 13,342 6,279 Amortization of purchased intangibles 595 809 734 Impairment of long-lived assets - - 7,602 ----------- ----------- ----------- Total operating expenses 64,270 62,994 66,941 ----------- ----------- ----------- Income (loss) from operations 27,103 (5,197) 385 Interest income 217 196 211 Interest expense (552) (647) (544) Other income (expenses), net 488 81 (154) ----------- ----------- ----------- Income (loss) before income taxes and non-controlling interest 27,256 (5,567) (102) Provision (benefits) for income taxes 1,421 642 (1,506) ----------- ----------- ----------- Income (loss) before non- controlling interest 25,835 (6,209) 1,404 Adjust for net loss attributable to non-controlling interest 176 12 2,475 ----------- ----------- ----------- Net income (loss) attributable to Finisar Corporation $ 26,011 $ (6,197) $ 3,879 =========== =========== =========== Net income (loss) per share attributable to Finisar Corporation common stockholders: Basic $ 0.27 $ (0.07) $ 0.04 Diluted $ 0.26 $ (0.07) $ 0.04 Shares used in computing net income (loss) per share - basic 94,609 91,988 93,567 Shares used in computing net income (loss) per share - diluted 101,125 91,988 96,192 Finisar Corporation Consolidated Balance Sheets (in thousands) July 28, April 28, 2013 2013 ----------- ----------- (Unaudited) ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 288,433 $ 289,076 Accounts receivable, net 171,823 149,612 Accounts receivable, other 34,386 16,538 Inventories 207,029 200,670 Prepaid expenses 19,533 18,402 ----------- ----------- Total current assets 721,204 674,298 Property, equipment and improvements, net 213,044 201,442 Purchased intangible assets, net 25,416 30,457 Goodwill 90,986 90,986 Minority investments 1,711 884 Other assets 12,954 9,780 ----------- ----------- Total assets $ 1,065,315 $ 1,007,847 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 90,488 $ 77,630 Accrued compensation 32,001 31,492 Other accrued liabilities 31,542 23,533 Deferred revenue 12,582 9,182 ----------- ----------- Total current liabilities 166,613 141,837 Long-term liabilities: Convertible notes, net of current portion 40,015 40,015 Other non-current liabilities 12,908 13,480 ----------- ----------- Total liabilities 219,536 195,332 Stockholders' equity: Common stock 96 94 Additional paid-in capital 2,363,514 2,350,146 Accumulated other comprehensive income 22,397 28,525 Accumulated deficit (1,545,949) (1,571,960) ----------- ----------- Finisar Corporation stockholders' equity 840,058 806,805 Non-controlling interest 5,721 5,710 ----------- ----------- Total stockholders' equity 845,779 812,515 ----------- ----------- Total liabilities and stockholders' equity $ 1,065,315 $ 1,007,847 =========== =========== Note - Balance sheet amounts as of April 28, 2013 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 (Unaudited, in thousands, except per share data) Three Months Ended ------------------------------------- July 28, July 29, April 28, 2013 2012 2013 ----------- ----------- ----------- GAAP to non-GAAP reconciliation of gross profit: Gross profit - GAAP $ 91,373 $ 57,797 $ 67,326 Gross margin - GAAP 34.3% 26.2% 27.7% Adjustments: Cost of revenues Change in excess and obsolete inventory reserve (1,528) 4,866 390 Amortization of acquired technology 1,593 1,272 1,842 Stock compensation 1,777 1,486 1,731 Impairment of acquired developed technology and other long-lived assets - - 8,156 Acquisition method accounting adjustment for sale of acquired inventory - 641 - Flood-related expense (recovery) - - (1,197) Reduction in force costs 23 648 17 Acquisition related retention payment 62 - 62 ----------- ----------- ----------- Total cost of revenue adjustments 1,927 8,913 11,001 ----------- ----------- ----------- Gross profit - non-GAAP 93,300 66,710 78,327 ----------- ----------- ----------- Gross margin - non-GAAP 35.1% 30.3% 32.2% GAAP to non-GAAP reconciliation of operating income: Operating income (loss) - GAAP 27,103 (5,197) 385 Operating margin - GAAP 10.2% -2.4% 0.2% Adjustments: Total cost of revenue adjustments 1,927 8,913 11,001 Research and development Reduction in force costs 12 177 52 Acquisition related retention payment 191 - 204 Stock compensation 3,525 2,986 2,856 Sales and marketing Acquisition related retention payment 17 - 17 Stock compensation 1,184 1,077 1,015 General and administrative Reduction in force costs 67 15 24 Acquisition related retention payment 217 - 220 Stock compensation 2,423 2,829 2,586 Acquisition related costs 225 325 322 Litigation settlements and resolutions and related costs 5 23 - Shareholder class action and derivative litigation costs (5,094) 43 144 Gain on fair value remeasurement of contingent consideration liability - - (7,130) Amortization of purchased intangibles 595 809 734 Impairment purchased intangibles and other long-lived assets - - 7,602 ----------- ----------- ----------- Total cost of revenue and operating expense adjustments 5,294 17,197 19,647 ----------- ----------- ----------- Operating income - non-GAAP 32,397 12,000 20,032 ----------- ----------- ----------- Operating margin - non-GAAP 12.2% 5.4% 8.2% GAAP to non-GAAP reconciliation of income attributable to Finisar Corporation: Net income (loss) attributable to Finisar Corporation - GAAP 26,011 (6,197) 3,879 Adjustments: Total cost of revenue and operating expense adjustments 5,294 17,197 19,647 Imputed interest related to restructuring 57 62 146 Other (income) expense, net Gain on sale of assets (110) (19) (1,160) Gain related to minority investments (743) - - Other miscellaneous income - (160) (2) Foreign exchange transaction (gain) or loss 567 (4) 1,034 Provision for income taxes Income tax provision adjustments 126 (8) (1,506) Non-controlling interest non-GAAP adjustment 67 - (2,249) ----------- ----------- ----------- Total adjustments 5,258 17,068 15,910 ----------- ----------- ----------- Net income attributable to Finisar Corporation - non-GAAP 31,269 10,871 19,789 ----------- ----------- ----------- Non-GAAP income attributable to Finisar Corporation $ 31,269 $ 10,871 $ 19,789 Add: interest expense for dilutive convertible notes 539 - 539 ----------- ----------- ----------- Adjusted non-GAAP income attributable to Finisar Corporation $ 31,808 $ 10,871 $ 20,328 =========== =========== =========== Non-GAAP income per share attributable to Finisar Corporation common stockholders Basic $ 0.33 $ 0.12 $ 0.21 Diluted $ 0.31 $ 0.12 $ 0.20 Shares used in computing non-GAAP income per share attributable to Finisar Corporation common stockholders Basic 94,609 91,988 93,567 Diluted 101,125 94,204 99,941 Non-GAAP EBITDA Non-GAAP income attributable to Finisar Corporation $ 31,269 $ 10,871 $ 19,789 Depreciation expense 13,927 12,711 13,692 Amortization 94 236 94 Interest expense 278 389 187 Income tax expense 1,295 650 - ----------- ----------- ----------- Non-GAAP EBITDA $ 46,863 $ 24,857 $ 33,762 =========== =========== ===========
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