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)
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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